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Basic Policy and Structure

Basic Governance Approach

The Sapporo Group has enacted the Basic Policy on Corporate Governance for the purpose of specifying its thinking and operational policy regarding corporate governance with the goal of attaining sustained growth and enhanced corporate value over the medium to long term, and in light of the purport and spirit of the Corporate Governance Code set forth in the Listing Rules of the Tokyo Stock Exchange.
As part of the policy, the Group's basic philosophy is to regard strengthening and enhancing corporate governance as one of its top management priorities. The Group is working to clarify supervisory, business execution, and auditing functions throughout the Group under the holding company framework. The Group is also working to strengthen management supervisory functions to increase management transparency and achieve management goals.

Corporate Functions and Internal Control Relationships

Corporate Functions and Internal Control Relationships
*1 Group Risk Management Committee: Chaired by President & CEO
*2 Group Sustainability Committee: Chaired by President & CEO

Board of Directors

The Board of Directors performs a supervisory role with regard to Group management.
It makes decisions on statutory matters and important matters related to business execution as stipulated by the Board’s regulations. The Board of Directors also elects and supervises the business execution of the representative director, president, Group operating officers, and other key personnel.

【About Independent Outside Directors】
Five of the ten members of the company’s Board of Directors are independent outside directors. All three have submitted notification to the Tokyo Stock Exchange and the Sapporo Securities Exchange of their independent director status, as stipulated by the exchange regulations. The independent outside directors are expected to objectively advise and supervise the management team from a neutral standpoint. At the 13 Board of Directors meetings held in 2019, the independent outside directors gave advice and suggestions regarding various issues that were discussed from an objective viewpoint which was independent from that of the management.

2016 2017 2018 2019
Number of meetings 12 12 13 13
Attendance rate 100% 97.2% 94.6% 100%

Nominating and Compensation Committees

Although Sapporo Holdings is a Company with an Audit & Supervisory Committee, it has also established a Nominating Committee and a Compensation Committee with the goals of increasing transparency with respect to the nomination and remuneration of directors, and of preserving a sound management structure. Both committees are comprised of a total of four members—all independent outside directors (excluding directors who are Audit & Supervisory Committee members) and the president and representative director—while the chair of each committee is selected from one of the independent outside directors (excluding directors who are Audit & Supervisory Committee members).

Nominating Committee

2016 2017 2018 2019
Number of meetings 1 3 1 1
Attendance rate 100% 100% 100% 100%

Compensation Committee

2016 2017 2018 2019
Number of meetings 1 4 3 2
Attendance rate 100% 100% 100% 100%

Group Operating Officers

The president controls business execution across the entire Group based on the resolutions of the Board of Directors. The Group operating officers, under the direct authority of the president, control business execution in the main business segments.

Audit & Supervisory Committee

Sapporo Holdings uses a Company with an Audit & Supervisory Committee structure, which has the function of auditing and supervising the performance of duties by directors, to increase management transparency and enhance the management oversight function with the aim of achieving management goals.

【About Independent Outside Directors】
Sapporo Holdings’ Audit & Supervisory Committee is comprised of three members, including two independent outside directors who are Audit & Supervisory Committee members. Each of the two independent outside directors who are Audit & Supervisory Committee members is an independent director as stipulated under the regulations of the Tokyo Stock Exchange and the Sapporo Securities Exchange, and is expected to audit the performance of duties by directors from an objective and neutral standpoint. At the 13 Board of Directors meetings held in 2019, during which the Audit & Supervisory Board structure was used, the independent outside Audit & Supervisory Board members made statements intended to ensure the validity and appropriateness of decision making. These members also made statements as needed regarding various issues discussed at the 13 Audit & Supervisory Board meetings held that year.

Standards and Policies Regarding the Independence of Outside Directors and Outside Audit & Supervisory Board Members

Sapporo Holdings’ Nominating Committee requires that candidates for outside director meet the company’s Standards for Independence for Outside Directors. They are also required to have a strong background, track record, and insight into corporate management or certain specialist fields that will enable them to offer accurate proposals and advice on the company’s management issues. Candidates for Outside Audit & Supervisory Board member are required to meet the company’s Standards for Independence for Outside Directors. For the Standards for Independence for Outside Directors, see the Appendix - Basic Policy on Corporate Governance.

Compensation for Directors and Audit & Supervisory Board Members

Compensation for directors (excluding directors who are Audit & Supervisory Committee members) is set within remuneration limits decided at the General Meeting of Shareholders. Compensation for each director consists of a base salary according to the director’s role, which is then adjusted in line with job performance during the previous fiscal year.
Compensation for directors who are Audit & Supervisory Committee members is also set within remuneration limits decided at the General Meeting of Shareholders. Compensation for each member is calculated in accordance with standards decided by the Audit & Supervisory Committee.

The compensation amounts for FY2019, during which the Audit & Supervisory Board structure was used, are outlined below.

Classification Payment recipient Payment amount
(Millions of yen)
Directors (including outside directors) 12 (4) 192 (29)
Audit & Supervisory Board members
(including outside Audit & Supervisory Board members)
5 (2) 53 (19)
Total (including outside officers) 17 (6) 245 (48)

Note:

1. Five of the directors (excluding outside directors) each receive a salary of ¥28 million for the employee part of their employee-directorship position, separately from the basic remuneration for director shown in the table above.

2. The remuneration limit for directors was set to ¥500 million (excluding remuneration from consolidated subsidiaries and their employee salaries) at the 93rd Shareholders’ Meeting held on March 30, 2017. The limit for Audit & Supervisory Board members was set to ¥84 million at the 83rd Annual Shareholders’ Meeting held on March 29, 2007.

3. No share-based compensation linked to business performance was issued in FY2019.

In addition to the abovementioned payment amounts, Sapporo Holdings has introduced a performance-linked, stockbased compensation system (Board Benefit Trust, or BBT) for directors (excluding outside directors), and contributed ¥445 million (over three business years) in accordance with the officer stock benefit rules stipulated by the system. The system is separate from the abovementioned directors compensation, in accordance with a resolution of the 92nd Ordinary General Meeting of Shareholders held on March 30, 2016. The system applies to Group operating officers of the Company, including directors (excluding outside directors), and some of the directors of the Company’s subsidiaries, with the total number as of December 31, 2019 being 27 persons.

Internal Audits

Under instructions from the president and representative director or the Audit & Supervisory Committee, the Group Audit Department, an internal auditing organization independent of the executive chain of command, audits overall operations of the Company and its subsidiaries with regard to the status of compliance with laws and regulations, the articles of incorporation, and internal regulations. In FY2019, during which the Audit & Supervisory Board structure was used, the Group Audit Department and Audit & Supervisory Board members met regularly to exchange views on the results of internal audits, the status of internal control, and other related matters. Internal audit reports issued by the Group Audit Department are read by the Audit & Supervisory Board members and any relevant information contained therein is shared.

Upgrading the Internal Control System

To ensure thorough implementation of the basic policies decided by the Board of Directors and carry out ongoing development and strengthening of systems across the entire Group, the Board of Directors takes responsibility for appointing directors with specific responsibilities and promoting specific measures. Moreover, the Guidelines on the Construction of Internal Control Systems at Sapporo Group have been enacted to set out specific matters in relation to internal control systems at the Group, and these guidelines are used to confirm the level of progress being made in individual measures and to promote collaboration.

For details about the status of our company’s corporate governance, please refer to our annual securities report and the corporate governance report submitted to the Tokyo Stock Exchange and the Sapporo Securities Exchange.

Corporate Governance Report(542KB)
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