At Unitika, we carry out business activities as we strive to be a company that is continuously chosen by customers, under our philosophy of contributing to society by connecting people’s lives and technology. We have worked to achieve stakeholder-focused management by pursuing stakeholder strategies that include the enhancement of legal compliance and risk management, the timely and appropriate disclosure of information, and the implementatoin of rapid decision making. We believe this will enable Unitika to maximize corporate value in an increasingly global environment, and continue to grow.
Under the Companies Act, Unitika has adopted the system of a company with a Board of Auditors, and put in place auditors. We have also introduced a voluntary executive officer system. We divide the decision making and management supervisory (governance) functions of the Board of Directors and the business execution functions of the executive officers. In order to enhance the mobility and effectiveness of the management, we promote cooperation between the directors and the executive officers, while most of the directors also serve as the executive officers with some exceptions.
We believe that our governance system is functioning as expected by means of the establishment of a voluntary committee, an executive officer system, outside directors, and an auditor system.
Evaluating the Effectiveness of the Board of Directors
In March 2021, Unitika conducted a survey with the recommendations of external institutions on all directors and auditors comprising the Board of Directors. We then analyzed and evaluated the Board of Directors, taking into consideration the tallied results from the external institutions. The results were generally a positive evaluation of the composition, operation, management, supervision and other functions of the Board of Directors. Subsequently, we have evaluated the Board of Directors to be effective overall. There has also been a notable improvement in the items identified in the previous survey as having scope for further review and improvement, including having more diversity among the Board of Directors’ members, enhancing the documents and materials for agenda items, and creating opportunities to further strengthen communication between members. This year’s survey also indicated the need for discussion on topics such as further strengthening the functions of the Unitika Group’s overall internal control systems, training successors, and management strategies based on ESG and SDGs, etc. We will review these views, and continue working on improving the effectiveness of the Board of Directors.
Remuneration of Executive Officers
All Unitika executive officers are remunerated in cash payments. Excluding outside directors and auditors, these payments to executive officers are comprised of position-specific fixed remuneration and performance-linked remuneration as an incentive. Outside directors and auditors only receive fixed remuneration.
The remuneration of Unitika executive officers is determined via consultation with the voluntary Remuneration Committee, which has an independent outside director as the Committee Chairman and is set upasanadvisory institution of the Board of Directors. The remuneration of directors is determined by the Board of Directors, and the remuneration of auditors is determined by the Board of Auditors. When determining the level of remuneration for executive officers, we also refer to surveys and other data from external third-party institutions, and take into consideration the views, etc. of out side officers in the Remuneration Committee. There munerationis appropriately determined within the maximum limit of executive officer remuneration (within 40 million yen per month for directors and within 6 million yen per month for auditors), as stipulated at the Annual General Meeting of Shareholders (June 28, 1990).
Unitika’s performance-linked remuneration system targets achieving the medium-term management plan as a strong motivator. It was introduced for executive officers excluding outside directors and auditors, and calculates remuneration based on an evaluation of the achievement rate according to the current fiscal year’s results for the medium-term management plan’s revenue target values. The ratio of performance-linked remuneration has been roughly set at around 10% of the position-specific fixed remuneration as a standard level. The evaluation of the achievement rate related to the revenue that is the base for calculating the remuneration is set using a certain weight assigned to consolidated net sales, operating profit, and net profit. Also, the evaluation for calculating the performance-linked remuneration is determined via consultation with the Remuneration Committee.
|Category of executive officers||Total
|Class-specific total (million yen)|
|Directors: 5 (excluding outside directors)||138||128||9|
|Auditors: 2 (excluding outside auditors)||36||36||－|
|Outside officers: 4||30||30||－|