Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information
In accordance with the NX Group’s corporate philosophy, we believe that it is important to establish appropriate corporate governance and a group management system in order to solve social issues through logistics, support the sustainable development of society, and achieve the ideal of the corporate group set out for 2037 in our long-term vision. Based on these ideas, we have established the following basic policy for NX Group governance.
【NX Group Basic Policy on Governance】
［NX Group Corporate Philosophy］
［2037 Vision］
Business growth: A logistics company with a strong presence in the global market Customers & Society: A company that contributes to achieve a sustainable society through logistics
Shareholders: A company that achieves sustainable growth by establishing corporate governance
Employees: A company whose employees come from a variety of backgrounds, are proud of their work, support customers and society, and play active roles
＜Basic Concept Oriented Towards Realizing the Long-term Vision＞
＜Basic Concept Oriented Towards Establishing Corporate Governance＞
To realize increased corporate value and sustainable growth, we will respect the positions of stakeholders, such as our shareholders, and build appropriate governance of offense and defense.
Corporate Governance to Aim for
Approaches Aimed at Establishing Corporate Governance
＜Basic Concept Oriented Towards Evolving Group Governance＞
To ensure that corporate governance functions appropriately, and to realize maximization of value as a corporate group, the group governance structure will continue to be evolved globally.
Group Governance to Aim for
Approaches Aimed at Evolving Group Governance
Our company will implement all the principles of the Corporate Governance Code.
In addition to disclosing each principle of the Corporate Governance Code in accordance with the statutory requirements, our Company's response policies and implementation details for all 83 principles of the Basic Principles, Principles and Supplementary Principles are listed in “NIPPON EXPRESS Policy and Implementations of JPX’s Corporate Governance Code". These are available on our company’s website for “Corporate Governance.”
（Japanese website）
https://www.nipponexpress-holdings.com/ja/ir/governance/
（English website）
https://www.nipponexpress-holdings.com/en/ir/governance/
Our implementations of the fourteen principles of disclosure are as follows:
In principle, our company will reduce cross-shareholdings and will not acquire new shares from other companies. We will not accept any cross-shareholding requests for the sake of retaining loyal shareholders. However, as an exception, we may hold such shares if we decide that the action would improve our mid to long-term corporate value by increasing the number of business transactions, expanding our business scope, strengthening our relationship with business partners and promoting cooperative collaborations.
For cross-shareholdings, our board of directors will annually review the rationality of holding each share name including capital costs and benefits of holding. The benefits will be evaluated not only from quantitative aspects but also from qualitative aspects. Specifically, we will review the benefits using the following criteria:
We conducted the above review at the board meeting held in February 2023 for the listed policy shares held by NX Group the entire company, and the result was as follows:
We conducted the above review at the board meeting held in May this year, and the result was as follows:
(Specific cross-shareholdings)
(A) Number of stocks to which one or more of the criteria listed above applies: 65
(B) Number of stocks which we are planning to sell part or all: 10 including 3 that do not meet the above 4 criteria
(Deemed cross-shareholdings)
(A) Number of stocks to which one or more of the criteria listed above applies: 11
(B) Number of stocks which we are planning to sell part or all: 4
Our company policy for each category:
Regarding (A), our company considers that there is a rationality in holding these shares. However, we will provide opportunities to hold dialogues with the issuing companies as necessary. We will check the positioning of our company’s shareholdings, and if we can confirm that there will be no damage to our relationship with the issuing companies by disposing the shares, we will dispose them by taking into consideration our company’s fund and market conditions.
Regarding (B), these stocks are those which we have decided to dispose part or all of our holdings after discussions with the issuing companies, but have not yet disposed after taking into consideration our company’s fund and market conditions. We will continue to review the time and method for disposition. Note that those shares which are to be disposed partially but still owned by our company will fall into one or more of the above criteria and policy (A) will apply.
Based on this policy, in FY2022, we disposed of the entire shares of 14 stocks and the part of 2 stocks listed in of specific cross-shareholdings held by NX Group. This brought us approximately 2.5 billion yen.
As a result, as of December 31, 2022, the number of listed companies which we still held shares of as cross-shareholdings was 68 and 11 of deemed cross-shareholdings. (6 of above belong to both categories)
Our company opposes the following actions regarding exercising voting rights on cross-shareholdings.
Our company will have regular meetings with the issuing companies of the shares and check our agreed upon standpoint concerning these shares. However, if we see a rapid deterioration in an issuing company’s business performance or a sign of a weakening in our business relationship with a company, we will set up a meeting as soon as possible and utilize the results when deciding whether or not to approve actions.
When a board director engages in competing transactions, transactions between a board director and our company or transactions involving any conflict of interest, the director must seek approval at a meeting of directors including independent outside officers. We conduct an investigation each year to see if any of our board directors, corporate officers or A & S Board Members engage in transactions with our company or a consolidated subsidiary. We disclose the results in our annual securities report in accordance with regulations including the “Accounting Standards for Related Party Disclosures.” Currently, there is no such transaction in existence.
(ⅰ) Ensuring diversity
With respect to ensuring diversity in the workforce, which forms the basis of diversity management, we will work to put them into practice, based on NX Group “Basic Policy on Diversity Promotion”.
【NX Group “Basic Policy on Diversity Promotion”】
By promoting diversity and creating an environment where all employees respect each other's diversity and maximize the power of each employee, we will realize "self-growth and self-fulfillment for employees" and "sustainable growth and improvement of corporate value of NX Group".
“Respect for Diversity”
We will respect each other regardless of age, gender, sexual orientation, gender identity, nationality, disability, etc.
＜Promotion of women’s participation＞
To date, we have been working to increase the number of employees, especially new graduates in career-track positions, create a work environment where everyone can work comfortably, and foster career motivation among female employees. These efforts have produced some results, such as an increase in the proportion of women among employees in their 20s and the ratio of female employees who continue to work for the company.
However, issues remain in raising the overall number of female employees and the proportion of women in management positions. In order to address these issues, we have set targets for expanding the pool and the proportion of women in management positions that play a central role in the company.
Going forward, we will work to achieve these targets by expanding the overall pool through various channels, such as fostering increased awareness among employees (area staff) and hiring experienced personnel, as well as reviewing training and allocation of staff.
In addition, from the perspective of ensuring diversity on the Board of Directors, we will strive to increase the number of female members. (As of March 30, 2023: 2 female directors and 1 female Auditor, Ratio of female directors of the Board of Directors 33.3%, and ratio of A & S Board Members 20%. In addition, one female auditor has been appointed to Nippon Express Co., Ltd., the group's main subsidiary.)
* Both KPI figures are for non-consolidated Nippon Express Co., Ltd.
＜Appointment of foreign nationals to management positions＞
Our group has 739 overseas offices in 49 countries, with more than 20,000 foreign employees. In addition, due to the promotion of local management of overseas operating companies, the percentage of foreign employees in the post of president at overseas operating companies has exceeded 30%. Since foreign employees play an active role as core personnel supporting our overseas operating companies, we have not set or disclosed KPIs for appointing them as core personnel at this time. In the future, we will continue to promote the localization of top management and reinforce the human resource development of top management at overseas operating companies.
＜Appointment of experienced personnel to management positions＞
In order to secure diverse human resources to facilitate diversity management, eliminate biases in the makeup of the workforce, and secure professional human resources with expertise in specialized fields such as industrial logistics and new businesses, in FY2019, we drew up a recruitment plan (260 employees in total over five years) and have been actively recruiting experienced personnel, mainly in the younger and mid-career levels with diverse experience.
However, due to the impact of COVID-19 on our business and changes in the market for hiring experienced personnel, the actual results fell far short of the target and it became difficult to achieve the target. Therefore, for the transitional year, we have revised the target figures in accordance with the actual results.
Going forward, we will set up a full-time recruitment team to achieve these targets, as well as taking a proactive approach to recruiting women, foreign nationals, and managers, for whom particularly intensive hiring efforts are required. This will allow us to achieve our targets and increase diversity in our core personnel by hiring experienced staff.
･Experienced personnel recruitment plan
Hire 190 experienced personnel by FY2023 (5-year cumulative total)
* Both KPI figures are for non-consolidated Nippon Express Co., Ltd.
(ⅱ) Policy for developing human resources and the internal company environment to ensure diversity, and its current status
Nippon Express is committed to promoting diversity management, enhancing employee satisfaction, and improving employee engagement, thereby becoming a company where a diverse range of employees can play an active role while feeling happy and creating new value.
Furthermore, in harmony with society and by practicing our corporate philosophy, we will proactively invest in our employees and enhance our corporate value. The cornerstone of our human resource development will be producing “autonomous personnel” who are not afraid of change, take action proactively, and continue to grow independently.
Specific initiatives are described in the Sustainability Databook.
In order to support our employees’ asset formation and reduce management risk of corporate pension funds, Nippon Express, the group's main subsidiary, adopted a defined contribution pension system in 2007.
In order to teach our employees how to increase their assets, we are working to educate them in how to properly do this. As a part of new employee education, we implement fixed contribution pension seminars and teach basic knowledge on the systems used to start asset management and relevant precautions.
We conduct investment educational seminars once a year for our pension fund beneficiaries and teach employees the importance of long-term investments, continuous investments and diversified investments, depending on their individual future plans. In order to make this more effective and realistic, we review the educational content based on the monitoring results of operation status in cooperation with the operation management institution. In addition, we form a committee with the labor union to reflect the opinions and requests of the members.
In selecting investment products, we consider not only the potential for the highest possible returns and the lowest possible trust fees for our employees, but also the following factors with respect to the investment trusts: (1) a sufficient net asset balance, (2) a stable return over a certain period of time, (3) the degree of linkage to the benchmark for passive products, and (4) the balance of risk and return for active products. After that, we monitor the performance of the products on an annual basis based on the reports from the managing institutions.
In addition, as a company that has introduced a matching contribution plan, we have reminded enrollees of the features of both plans in response to the legal approval of parallel enrollment in iDeCo and matching contribution plans from October 2022.In addition, we verify the evaluation of the management organization, which is required to be conducted once every five years, in a committee meeting with the labor union representing enrollees, and report the results to the relevant government agencies.
(ⅰ) Company objectives (i.e. business principles), business strategies and business plans;
Since the establishment of Nippon Express Co., Ltd, the group has supported the development of society by connecting people, companies, and communities through logistics. In order to fulfill this unchanging mission and create a prosperous future, we will continue to take on the challenge of creating new value from logistics, and to live up to the trust placed in us by our customers and society. These aspirations have been put into words and embodied in the “NX Group Corporate Philosophy.” The “NX Group Corporate Philosophy” describes what we should be doing including goals our corporate group should achieve, what we value, and how we contribute to society. In order to exemplify our corporate philosophy, we established the “NX Group Charter of Conduct” -which defines the direction of day-to-day behaviors of all employees including our determination to uphold “Safety, Compliance and Quality” and the “NX Group Corporate Message” — known as “We Find the Way” — which defines the value and attitude we provide to our customers and society as a company. The charter and the message are the values our corporate group cherishes. These values will be inherited by our company, which was established as a result of the transition to a holding company structure, and we will continue to uphold them as the common values of the group.
All of these are available on our company’s website, Sustainability Databook, and Integrated Report.
＜NX Group Corporate Philosophy＞
（Japanese website）
https://www.nipponexpress-holdings.com/ja/about/philosophy/
（English website）
https://www.nipponexpress-holdings.com/en/about/philosophy/
＜NX Group Charter of Conduct＞
（Japanese website）
https://www.nipponexpress-holdings.com/ja/about/philosophy/charter.html
（English website）
https://www.nipponexpress-holdings.com/en/about/philosophy/charter.html
＜NX Group Corporate Message＞
（Japanese website）
https://www.nipponexpress-holdings.com/ja/about/philosophy/message.html
（English website）
https://www.nipponexpress-holdings.com/en/about/philosophy/message.html
In addition, based on our philosophy and message, we have reflected what our group should achieve and developed a long-term vision. The “NX Group Business Plan 2023” has been set out as a detailed plan for implementing this vision. In order to achieve our long-term vision, we consider preservation of the global environment, the success of all employees and capital efficiency through the establishment of corporate governance to be important issues which must promote for the development of society, and the sustainable growth and improvement of our corporate value. With “Commitment to reducing CO2 emissions as a logistics company” and “Transform the company that makes employees feel satisfied and fulfilled” and "Establishing a mechanism to support sustainable improvement of corporate value" at the forefront, we have established KPIs which relate to the reduction of CO2 emissions indicators, improvement of the workplace environment indicators including paid leave utilization and retention rates and capital efficiency indicators including ROE.
As with the corporate philosophy, we uphold the long-term vision and business plan, and work as a group to realize them.
Our long-term visions and business plans are available on our websites:
（Japanese website）
https://www.nipponexpress-holdings.com/ja/ir/event/policy-meeting/
（English website）
https://www.nipponexpress-holdings.com/en/ir/event/plan/
(ii) Basic views and guidelines on corporate governance based on each of the principles of the code; In accordance with the NX Group’s corporate philosophy, we believe that it is important to establish appropriate corporate governance and a group management system in order to solve social issues through logistics, support the sustainable development of society, and achieve the ideal of the corporate group set out for 2037 in our long-term vision. Based on these ideas, we have established the following basic policy for NX Group governance.
［NX Group Corporate Philosophy］
Our Mission Be a Driving Force for Social Development
Our Challenge Create New Ideas and Value that Expand the Field of Logistics
Our Pride Inspire Trust Every Step of the Way
［2037 Vision］
Business growth: A logistics company with a strong presence in the global market
Customers & Society: A company that contributes to achieve a sustainable society through logistics
Shareholders: A company that achieves sustainable growth by establishing corporate governance
Employees: A company whose employees come from a variety of backgrounds, are proud of their work, support customers and society, and play active roles
＜Basic Concept Oriented Towards Realizing the Long-term Vision＞
＜Basic Concept Oriented Towards Establishing Corporate Governance＞
To realize increased corporate value and sustainable growth, we will respect the positions of stakeholders, such as our shareholders, and build appropriate governance of offense and defense.
Corporate Governance to Aim for
Approaches Aimed at Establishing Corporate Governance
＜Basic Concept Oriented Towards Evolving Group Governance＞
To ensure that corporate governance functions appropriately, and to realize maximization of value as a corporate group, the group governance structure will continue to be evolved globally.
Group Governance to Aim for
Approaches Aimed at Evolving Group Governance
(iii) Board policies and procedures in determining the remuneration of senior management and directors;
Our company has established a basic policy regarding decision-making procedures for officer remuneration and the structure for the remuneration in our internal rules. The procedures and the basic policy are discussed within the discretionary Remuneration and Nomination Advisory Committee. The committee was established as an advisory body of our board with three out of four committee members being independent outside directors and with the chairperson a non-executive director. Our board makes decisions based on the committee’s report.
Our officers’ remuneration policy is as follows:
(Officers’ remuneration policy)
(Determining officers’ remuneration)
Specific amounts will be determined within the scope of the amount stipulated in the articles of incorporation, taking into consideration the company’s performance, the standards of other companies, employee salaries and other factors.
In addition to remuneration and bonuses for directors and corporate officers, the company has introduced a performance-based stock compensation plan using a trust for directors and corporate officers (excluding outside directors and those residing outside Japan). This plan aims to further enhance their awareness of their contribution to enhancing the company's corporate value and shareholder value over the medium to long term. This system is a medium- to long-term incentive system that uses a portion of the existing base compensation as a source of funds and delivers as compensation a variable number of company shares depending on the position of the recipient and the level of achievement of company-wide performance targets, etc. The system is currently being applied with five business years as the period subject to evaluation. This evaluation period is the same length as the mid-term business plan, and the KPIs are business targets set in the business plan. In particular, we evaluate performance based on indicators such as consolidated sales, consolidated operating income and consolidated return on equity (ROE) for each fiscal year and after the end of the evaluation period. The range of increase/decrease corresponding to the achievement of performance targets, etc., is from 0% to 150%, with 100% being the standard corresponding to achieving the performance targets set as the standards for the annual performance evaluation and the mid-term performance evaluation as a whole.
Our company has established internal rules and regulations regarding the decision-making procedures for officers’ remuneration. In particular, based on the officers’ roles and business performance status, directors’ remuneration is decided by our board, and auditors’ remuneration is determined via a discussion amongst the auditors. However, we greatly respect the discussion and the report based on the resolution of the discretionary Remuneration and Nomination Advisory Committee, an advisory body of our board.
(iv) Board policies and procedures in the appointment/dismissal of senior management and the nomination of director and A & S Board Member candidates
When appointing and dismissing director candidates, our board evaluates the candidates from a variety of viewpoints, such as their performance in fulfilling business plans in the businesses and areas for which they have been responsible, the experience and expertise required to play an active role in the post, and their character and insight. Then, using the skill matrix for the Board of Directors established in line with the business strategy such as expanding the ratio of overseas sales and promoting ESG management, candidates are appointed and dismissed in such a way as to maintain a balance of knowledge, experience and ability of the Board of Directors as a whole.
*The board Skill matrix is available in “Other”, “2. Other Corporate Governance Measures” of this report.
When we select candidates for outside directors and outside A & S Board Members, we select individuals with excellent character and insight who meet all criteria for these positions, as stipulated in Items 15 and 16, Article 2 of the Companies Act. These positions will be filled by individuals who have experience in corporate management, high levels of expertise in law and accounting, academic knowledge, and are suitable for monitoring the overall operation of our company from a variety of viewpoints.
For the appointment and dismissal of these officers, we have established a discretionary Remuneration and Nomination Advisory Committee—with three out of four committee members as independent outside directors—as an advisory body of our board. Decisions are made with the greatest regard for the committee’s reports.
(v) Explanations with respect to the individual appointments/dismissals of executive managers and nominations of candidates for directors and A & S Board Members based on (iv).
Personal history and reasons for the selection of each candidate for director or A & S Board Member positions is stated in the “Convening Notice of the Annual Shareholder Meeting” and is posted on our websites:
（Japanese website）
https://www.nipponexpress-holdings.com/ja/ir/event/general-meeting/
（English website）
https://www.nipponexpress-holdings.com/en/ir/event/meetings/
＜Initiatives on Sustainability＞
As a means to address sustainability-related issues, we are working to establish “ESG Management for Sustainable Growth and Enhancement of Corporate Value” in the NX Group Business Plan 2023. As for our sustainability and ESG initiatives, in addition to the establishment of the Sustainability Promotion Division, the company has established the Sustainability Promotion Committee, chaired by the President, to hold cross-divisional discussions on important policies and specific measures relating to sustainability. In the midst of changing international trends and social conditions, such as environmental issues and increasing demands for the realization of a sustainable society, the Sustainability Promotion Committee will continue to identify and periodically review key business issues (materialities) to be addressed. Materiality is examined from two perspectives: the stakeholder perspective and that of the company's business, and those to be addressed as the highest priorities will be selected from both perspectives.
Key policies and other matters discussed by the Sustainability Promotion Committee are submitted to the Board of Directors for their decision, and progress of the initiatives is reported on a regular basis. We will continue to work proactively to resolve these materialities and will disclose the results of our efforts sequentially in our Integrated Report and other documents.
Our Group's sustainability policy and vision are posted on the home page.
(Japanese) https://www.nipponexpress-holdings.com/ja/sustainability/
(English) https://www.nipponexpress-holdings.com/en/sustainability/
＜Initiatives on human capital, etc.＞
With regard to human capital, we are promoting diversity management based on the idea that the growth of the Group will be achieved when employees are able to maximize their abilities. In order to promote diversity management, we took over the efforts of our main subsidiary, Nippon Express Co., Ltd, based on the "NX Group Diversity Promotion Policy".
［NX Group “Basic Policy on Diversity Promotion”］
By promoting diversity and creating an environment where all employees respect each other's diversity and maximize the power of each employee, we will realize "self-growth and self-fulfillment for employees" and "sustainable growth and improvement of corporate value of NX Group".
“Respect for Diversity”
We will respect each other regardless of age, gender, sexual orientation, gender identity, nationality, disability, etc.
Nippon Express Co., Ltd. aims to achieve growth for both its employees and the Company by creating an environment where each of its diverse employees, who have various values and ideas, can maximize their abilities, have job satisfaction and pride, and thrive with a sense of happiness.
To this end, in accordance with the NX Group Diversity Promotion Policy, we are promoting initiatives to realize the management plan while steadily implementing the four reform cycles of "awareness reform," "climate reform," "work style reform," and "behavior reform" based on the pillars of "diversity," "improvement of work styles," and "work style innovation.
In addressing materialities, we recognize the importance of strategically creating value by utilizing non-financial capital such as human capital and intangible assets, and going forward, we will enhance the explanation of investments in non-financial capital to realize our long-term vision.
＜Initiatives of climate change issues ＞
Solving environmental issues is essential for realizing a sustainable society, and we believe it is one of the most important issues for our group. In the “E: Environment” section of our business plan’s “ESG Management for Sustainable Growth and Enhancement of Corporate Value” strategy, we have identified “commitment to reducing CO2 emissions as a logistics company” as an important issue. As such, we have set up “climate change initiatives” in our materiality initiatives, and are working as a group.
In January 2023, we set new medium- and long-term targets for 2030 and 2050 for the Group to contribute to the realization of a carbon-neutral society by 2050, the goal set by the Japanese government.
Going forward, we will continue to work in unison advance our initiatives for 2030 and 2050.
Specifically, we will conduct disclosure through our Integrated Report and other channels, in accordance with the TCFD framework. We endorsed the TCFD in May 2022, conducted scenario analysis and risk/opportunity identification, and evaluated business impact qualitatively and partially quantitatively, which was disclosed in the Integrated Report issued in June of that year.
We publish information regarding each year’s activities in the Integrated Report and Sustainability Databook.
Environmental initiatives, including medium- and long-term targets for reducing CO2 emissions, are posted on our website.
(Japanese website) https://www.nipponexpress-holdings.com/ja/sustainability/environment/
(English website) https://www.nipponexpress-holdings.com/en/sustainability/environment/
Our Integrated Reports are available on our websites:
(Japanese website) https://www.nipponexpress-holdings.com/ja/ir/library/anual/
(English website) https://www.nipponexpress-holdings.com/en/ir/library/annual/
Our Sustainability Databook are available on our websites:
(Japanese website)：https://www.nipponexpress-holdings.com/ja/sustainability/report/
(English website)：https://www.nipponexpress-holdings.com/en/sustainability/report/
Our board determines matters stipulated by the law or the article of incorporation and important business management matters in accordance with the board’s regulations and agenda standards. However, for the purpose of agile decision-making and to improve the supervision capacity of the board, we delegate individual business management matters to the corporate officers who are in charge of implementation as often as possible.
Taking into consideration the requirement for outside directors stipulated in the Companies Act and the criteria set by securities exchanges, our company has established our own standards; and we appoint outside directors and outside A & S Board Members in accordance with these standards.
When the following items do not apply to an outside director or an outside A & S Board Member candidate, we consider that they have the appropriate independence.
* An “executive officer” signifies an executive director, a corporate officer or an employee.
When appointing independent outside directors, we strive to select candidates who can be expected to make effective proposals to the Board of Directors regarding the company’s management policies and management improvements.
We are a company with an A & S Board and three independent outside directors. As for the board’s functions on the matters of nomination and remuneration of our senior management, we seek advice from independent outside directors and A & S Board Members at the board meeting in order to obtain their objective standpoints.
We have established a discretionary Remuneration and Nomination Advisory Committee—with three out of four committee members who are independent outside directors—as an advisory body to the Board of Directors. The board takes final decisions with the greatest regard for the committee’s reports.
It has been determined that the Remuneration and Nomination Advisory Committee shall “consist of three or more members who are directors, the majority of which shall be independent outside directors.” In addition, the committee is composed of lawyers, academics, and corporate executives with diverse perspectives to enhance its independence and objectivity. The committee deliberates on the appointment and dismissal of directors, A & S Board Members, and corporate officers, as well as on establishing a skills matrix for the composition of the Board of Directors, policies and systems for remuneration, and reports to the Board of Directors. The board then takes a final decision with the greatest regard for the committee’s report.
Our board consists of six directors, including three outside directors, and five A & S Board Members, including three outside members. Moreover, in order for us to create new value through innovation and grow into a corporate group with a strong presence in the global logistics market, the Board of Directors has been appointed to maintain an overall balance of knowledge, experience, and abilities by applying the board skill matrix established in line with the business strategy.
*The board Skill matrix is available in “Other”, “2. Other Corporate Governance Measures” of this report.
Currently, 33.3% of directors and 20% of A & S Board Members are women.
When we select director candidates, we select individuals based on certain selection criteria from among those who we believe to have the ability to lead our corporate group to achieve true global business management, regardless of gender, who have the knowledge and experience to execute our company’s business management in an accurate, fair and effective manner, execute each strategy in our management plan swiftly without fail and have sufficient social credibility.
The three independent outside directors we have appointed are a lawyer, an academic and a business executive. We appoint individuals who have excellent character and insight, and who have diverse perspectives such as expertise in law and accounting, academic experience, and management experience as a representative of other companies or organizations. In selecting A & S Board Member candidates, we choose those who have knowledge of finance, accounting and legal affairs. In particular, we appoint at least one individual with expertise in finance and accounting.
When we select director and A & S Board Member candidates, we make decisions based on the report from the discretionary Remuneration and Nomination Advisory Committee—with three out of four committee members who are independent outside directors—as the advisory body of the board of directors.
Our company annually discloses the status of our outside directors and outside A & S Board Members holding additional posts through the Convening Notices of General Shareholder Meetings, annual securities reports and corporate governance reports.
Our board regularly checks whether or not our executive directors are serving as officers at other companies. Currently, there is no interlocking position which may limit the directors from fulfilling their roles and responsibilities. No full-time A & S Board Members are serving as officers at other companies, so they can concentrate solely on their roles within our company.
In analyzing and evaluating the effectiveness of Board of Directors, in addition to reports from each director on the status of the execution of their duties, an external institution is appointed to conduct an annual survey of directors and Audit & Supervisory Board members, including those from outside the company, on the effectiveness of the Board of Directors as a whole, including the Remuneration and Nomination Advisory Committee, and collect their opinions. The results of analysis and evaluation of the survey are discussed and reviewed by the Board of Directors.
A questionnaire survey conducted by an external organization on the effectiveness of the Board of Directors included the following items, and based on the results of the survey, it was determined that the effectiveness of the Board of Directors as a whole has been maintained (the most recent survey was conducted in December 2022).
(Questionnaire items: (1) composition and operation of the board of directors, (2) management and business strategies, (3) corporate ethics and risk management, (4) management evaluation and remuneration, (5) dialogue with shareholders, etc., (6) free responses for each major item)
In particular, the areas that were evaluated as particularly effective in this survey included the following: information necessary for deliberating on strategies, such as explanations of management and business strategies outside of the Board of Directors meetings, is appropriately provided to outside officers; the Board of Directors appropriately monitors and supervises the implementation of management and business strategies; important risks are reported to the Board of Directors as necessary and appropriate monitoring and supervision is carried out.
Key issues were extracted from the recent effective evaluation survey, so we have designated a few steps for improvement including an increase in the frequency of progress reports to the board regarding the business plan and important investment plans, and a change to our policy of the board structure by increasing the proportion of outside directors to at least one third. While working on these matters, our board has strengthened its monitoring function. In addition, improvements have been made in the operation of the Board of Directors, including: periodic reporting on the implementation status and results of important matters on which resolutions have been made; periodic reporting on the progress of business plans, compliance, safety management, system risks, etc.; annual planning with respect to matters to be reported for ensuring implementation of these reports; and increased opportunities for discussion at Board of Directors meetings via reporting on important strategies and policies such as management plans, sustainability and DX during the process of their formulation. Furthermore, efforts have been made to improve the effectiveness of the Board of Directors by providing opportunities for collaboration with and training for outside directors, such as holding liaison meetings for independent outside directors and “Outside Officers’ Seminars.”
We will continue to discuss ways to further improve the Board of Directors to ensure even greater effectiveness.
For an overview of the effectiveness evaluation survey, please also refer to “2. Matters Regarding Functions of Execution of Duties, Auditing and Supervision, Appointment, Decisions on Compensation, etc. (Overview of Current Corporate governance)” of this report.
Our company’s Corporate Governance Report is available on our websites:
（Japanese website）
https://www.nipponexpress-holdings.com/ja/ir/governance/
（English website）
https://www.nipponexpress-holdings.com/en/ir/governance/
Our company provides opportunities for seminars and social gatherings for directors and A & S Board Members to deepen their understanding of our company’s business challenges and acquire the necessary knowledge of corporate governance, financial affairs and laws. We bear the expenses of these.
In addition to internal orientation sessions upon appointment and as necessary, we help newly appointed directors and Audit & Supervisory Board members to acquire the necessary expertise for their roles and responsibilities, providing opportunities them to enhance their expertise in the performance of their duties, particularly with respect to corporate governance, such as external seminars and other training tailored to their needs.
We also provide opportunities for seminars, exchange meetings, and other events where, after their appointment, outside Directors and Audit & Supervisory Board members can acquire essential knowledge on the company’s management issues, finance, legal compliance, etc., as appropriate.
We expect our A & S Board Members to acquire wide knowledge through attending various meetings of the Japan Audit & Supervisory Board Members Association as its members and seminars held by the Japan Industrial Management & Accounting Institute.
For our outside directors and outside A & S Board Members, we provide opportunities to acquire knowledge concerning our company’s business operations through participating in various internal events and site visits.
In addition, in order to seek management judgment from an independent perspective, We also hold monthly “Outside Officers Seminar,” in which corporate officers and executives give presentations on the operational challenges facing the company as well as the management visions, goals, and challenges of the divisions under their jurisdiction, providing an opportunity for outside officers to develop an understanding of these topics.
For our corporate officers and the candidates for our company’s senior managers who are candidates for Representative Director, we provide external training courses, such as a Master of Business Management, so that they can acquire knowledge necessary for executive managers including global business management, financial literacy, business strategies and governance.
We consider the above trainings a good method for training successors of top management.
For dialogues with shareholders and investors, the Investor Relations Promotion Group of the Corporate Planning Division within the Corporate Strategy Unit, which is managed by our top managers, responds to requests. Giving consideration to topics and dates, our top managers, the director in charge and/or senior managers (including corporate officers) attend the meetings.
In terms of how dialogues are conducted, we hold one-on-one base meetings in Japan and overseas as well as telephone conferences during the first and third quarters and financial settlement briefings during the second quarter and at the end of the year. We also hold site visits, business result presentations, an Investor Day (IR Day) where each executive director gives a briefing, and small meetings as necessary. We attend small meetings and Investor Relations Conferences held by securities firms in order to create opportunities for dialogues with shareholders and investors.
Opinions received from shareholders and investors through dialogue are reported regularly at board meetings by the director in charge of investor relations, while the head of the Investor Relations Promotion Group holds individual feedback meetings for directors each quarter, and for outside directors every six months. These feedback meetings provide outside directors with opportunities to gain a deeper understanding of the opinions of shareholders and investors, and to discuss these opinions with the head of the Investor Relations Promotion Group, leading to a greater focus on market participants. To the senior management of the company, the senior management of its major subsidiary Nippon Express (including corporate officers and division managers from the main office), and presidents of regional headquarters of overseas operating companies, we share the opinion of market players via emails as necessary. We also send feedback to relevant internal divisions quarterly and incorporate successful initiatives into our corporate activities.
Inside our company, the Investor Relations Promotion Group serves as the administrative office for information disclosure. The Group establishes, implements and amends the Disclosure Policy with cooperation from other divisions such as the Corporate Communication Division, the Secretarial Division, the Financial Planning Division, the Accounting Division and the Corporate Planning Division. The group also discusses the appropriateness of information disclosure activities with these divisions. The results are then reported to the board for it to make a final decision. In accordance with the Disclosure Policy determined by the board, a senior manager or other officer nominated as the individual responsible discloses the information.
The board obtains the progress of our information disclosure activities through reports by the director in charge of the Corporate Planning Division and also checks the appropriateness of the policy.
Our company’s Disclosure Policy is available on our websites:
（Japanese website）
https://www.nipponexpress-holdings.com/ja/ir/disclosure/
（English website）
https://www.nipponexpress-holdings.com/en/ir/disclosure/
| Ratio of Foreign Shareholders | Between 20% and 30% |
|---|
| Name | Number of shares | Holdings (%) |
|---|---|---|
| The Master Trust Bank of Japan, Ltd. (Account in Trust) | 14,890,200 | 16.7 |
| Custody Bank of Japan, Ltd. (Account in Trust) | 6,652,100 | 7.5 |
| Asahi Mutual Life Insurance Company | 5,601,967 | 6.3 |
| NX Holding Association | 3,950,058 | 4.4 |
| Sompo Japan Insurance Inc. | 3,567,752 | 4.0 |
| Mizuho Trust & Banking Co., Ltd. as trustee for Retirement Benefit Trust of Mizuho Bank, Ltd. (re-entrusted by Custody Bank of Japan, Ltd.) | 2,850,000 | 3.2 |
| State Street Bank West Client – Treaty 505234 | 1,541,570 | 1.7 |
| State Street Bank and Trust Company 505103 | 985,058 | 1.1 |
| JP MORGAN CHASE BANK 385781 | 914,031 | 1.0 |
| Hino Motors, Ltd. | 844,790 | 0.9 |
| Majority Shareholder (excluding the parent company) | None |
|---|
| Parent Company | None |
|---|
The content of the Large Shareholding Report (Change of Status Report) is as follows.
| Name | Address | Number of Shares (Thousand shares) |
Holdings (%) |
|---|---|---|---|
| Nomura Securities Co., Ltd. | 1-13-1, Nihombashi, Chuo-ku, Tokyo, Japan | 211 | 0.2 |
| Nomura Holdings, Inc. | 1-13-1, Nihombashi, Chuo-ku, Tokyo, Japan | 0 | 0.0 |
| Nomura Asset Management Co., Ltd. | 2-2-1, Toyosu, Koto-ku, Tokyo, Japan | 4,440 | 4.9 |
| Total | 4,651 | 5.1 |
| Listed Stock Exchanges and Section | Tokyo / First Section |
|---|---|
| Fiscal Year End | December |
| Industry Type | Land Transportation |
| (Consolidated) Number of Employees as of the Last Fiscal Year-end | Over 1000 |
| (Consolidated) Sales as of the Last Fiscal Year-end | Over 1 trillion yen |
| Number of Consolidated Subsidiaries as of the Last Fiscal Year-end | Between 100 and 300 |
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Nothing of note
