Basic Approach to Corporate Governance
Nippon Life has been formed as a mutual company. In line with the Fundamental Management Principles of Nippon Life that we have stipulated, Nippon Life has established a corporate governance system that ensures the appropriateness and improves the transparency of management to fulfill its longterm responsibilities to policyholders as a life insurance company.
Operating through a mutual company framework that reflects the views of all "Company Members"
As a step to prioritize and maximize profits for "Company Members" (participating insurance policyholders) as a mutual company, Nippon Life incorporates the "Management Based on the Voice of Company Members" through the Meeting of Representatives, the Conference of Representatives (Kondankai), the Nissay Konwakai Meetings and other initiatives.
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Rationale and Others for the Governance Structure We Have Selected
We selected a governance model that adopts an Audit and Supervisory Committee for we believe the following two features of this model are important: One is the collaboration between the executive function of executive officers working directly with customers and the supervisory function of directors appointed by the Representatives. The other feature is that the committee responsible for audits and supervision is independent from the Board of Directors. In addition, we established the Nomination and Remuneration Advisory Committee and the Outside Directors Meeting. The former was built to ensure transparency in the appointment, dismissal and remuneration of directors and executive officers, as well as to institute checks with objectivity. The latter was set up to discuss important management issues and other matters while benefitting from the broad range of experiences and insights of our outside directors.
For enabling prompt and decisive exectuion, we have also adopted an executive officer system in which executive officers are responsible for business operations.
Directors and the Board of Directors
The Board of Directors is mainly responsible for the following matters in accordance with legal and regulatory requirements as well as our Articles of Incorporation and other internal rules.
1.Decisions on basic management policy
2.Decisions on the Internal Control System Basic Policy and supervision of its construction and operation
3.Supervision of the execution of duties of directors and executive officers
4.Development of the corporate governance system
5.Appointment and dismissal of representative directors
Directors engage in discharging the duties of the Board of Directors by sufficiently reviewing matters brought forth by the Board of Directors and actively participating in discussions, including requesting explanations and stating their opinions as necessary. Outside directors undertake their duties from an objective position and provide advice on business execution based on their experience and insights.
The Board of Directors has a scale appropriate for discussions to fulfill the aforementioned duties, and ensures diversity in its overall experience, insights, perspectives and so forth. At least one-third of directors are outside directors, and directors that concurrently serve as executive officers are appointed.
Based on the selection criteria, candidates for appointment as director are decided by the Board of Directors after deliberation by the Nomination and Remuneration Advisory Committee, with all appointments requiring approval by a resolution of the Meeting of Representatives.
Representative directors and executive directors are decided by the Board of Directors from among the directors (excluding Audit and Supervisory Committee members) after deliberation by the Nomination and Remuneration Advisory Committee, in consideration of the totality of their experience, performance, insights, character and other factors.
Nomination and Remuneration Advisory Committee
The Nomination and Remuneration Advisory Committee is a consultative body to the Board of Directors that deliberates on matters relating to the appointment and dismissal of directors, executive officers and others, the remuneration of directors (excluding Audit and Supervisory Committee members) and executive officers and other important business matters. It then reports its conclusions to the Board of Directors.It also makes necessary reports related to the appointment, dismissal, and remuneration of directors the Audit and Supervisory Committee in order for the Audit and Supervisory Committee to carry out their supervisory duties appropriately.
The committee is made up of outside directors (excluding Audit and Supervisory Committee members), the chairman and the president, and a majority of its members and its chair must be independent outside directors.
Outside Directors Meeting
The Outside Directors Meeting deliberates on basic management policy and other important management matters.
The meeting is made up of all outside directors, the chairman and the president, with executives and employees as well as outside experts participating as needed.
Audit and Supervisory Committee/Audit and Supervisory Committee Members
The Audit and Supervisory Committee audits and supervises the execution of duties of directors as an independent function from the Board of Directors, through exercising its authority to conduct active investigations, using the internal control system and exercising its authority to give opinions on the appointment, dismissal and remuneration of directors (excluding Audit and Supervisory Committee members).
The Audit and Supervisory Committee has the necessary scale for conducting effective and efficient audit and supervision, and ensures that as a whole it possesses the necessary knowledge of our business processes, the ability to gather information, and the objectivity and expertise required for conducting auditing activities. A majority of the Audit and Supervisory Committee members must be outside directors.
Based on the selection criteria, Audit and Supervisory Committee candidates are decided by the Board of Directors following deliberation by the Nomination and Remuneration Advisory Committee and approval by the Audit and Supervisory Committee. All appointments must be approved by a resolution of the Meeting of Representatives.