The Company analyzed and evaluated the effectiveness of the Board for FY2023 to clarify issues and improvement of the Board and further improve the function of the Board. The Company concluded that overall effectiveness of the Board was ensured based on the results below. The Company also started evaluating the effectiveness of the Audit & Supervisory Committee in FY2022.
The Company conducted self-evaluations of all directors including an Audit & Supervisory Committee members in an anonymous survey related to the following items.
- The size and constitution of the Board
- The operation of the Board
- The supporting system for outside directors
- The decision-making process of the Board
- The communication with shareholders and stakeholders.
The Board discussed the results of evaluations and issues for further improvements.
In terms of size, composition, and operations of the Board, the ratio of outside directors increased in FY2023, and it was confirmed that the structures necessary to enable appropriate performance of the Board's supervisory functions have been established. It was also concluded that the Board operates effectively with an open atmosphere that enables inside and outside directors to engage in candid discussion. In FY2023, based on the FY2022 evaluation results, the Company promoted to develop a sophisticated company-wide risk management framework through newly establishing a Risk Management Committee and conducting risk assessments. The Company also strengthened support for outside directors by conducting hospital tours and product study sessions. At the same time, the Board members shared the following issues: the need for further discussion on initiatives to enhance deliberations at the Board and the Company’s risk management, as well as further reinforcing the support systems for outside directors.
In order to ensure the diversity and internationality of the Board of Directors, two female outside directors and one foreign outside director were appointed at the Ordinary General Meeting of Shareholders in June 2024. As the ratio of outside directors became 50%, the Company will further enhance the supervisory functions of the Board of Directors. In addition to continuing past improvement measures, based on FY2023 evaluation results, the Company will further develop a sophisticated company-wide risk management framework. The Board of Directors will discuss response policies for important risks which were identified by the Risk Management Committee in FY2023. The Company will also strengthen support for outside directors by regularly providing opportunities to acquire knowledge about the Company’s business, such as factory tours and business presentations.
The Company will practice sustainability management, as well as continuing to improve overall effectiveness of the Board aiming at growth of corporate value and for an enhancement of corporate governance.
Nihon Kohden has evaluated and analyzed the effectiveness of the Audit & Supervisory Committee since FY2022, and discussed issues and future improvement measures with the aim of improving the reliability and quality of the committee’s activities and enhancing the effectiveness of audits.
In FY2023, after the items and contents of the evaluation were explained to all directors serving as Audit & Supervisory Committee members, their evaluations and opinions were collected through discussions, and they discussed the evaluation of the Committee’s effectiveness, as well as any other issues and future improvement measures.
As a result of the evaluation, it was confirmed that the Audit & Supervisory Committee operates effectively, in each of the items such as the size, composition, and operations of the Committee, and that the overall effectiveness of the Committee activities is ensured with an open atmosphere that enables inside and outside members to engage in candid discussions.
In FY2023, based on the FY2022 evaluation results, the Committee conducted hearings with the Information Systems Department regarding the current state of information security and future measures, as part of its efforts to strengthen the confirmation of the effectiveness of IT governance and information systems. Thus, we confirmed that specific actions were taken to address the issues identified in the previous fiscal year.
On the other hand, enhanced monitoring of the risk management system was identified as a key issue for us to focus on moving forward. The Audit & Supervisory Committee has traditionally monitored the risk management system. However, given that the Board of Directors and the Risk Management Committee are promoting the enhancement of the company-wide risk management framework, it was mutually confirmed that in FY2024, the Committee has to strengthen the monitoring of the promotion process and various initiatives related to the countermeasures for significant risks identified in FY2023.
The Company will make ongoing efforts to improve the overall effectiveness of the Audit & Supervisory Committee to enhance audit reliability and audit quality with the goal of continuously increasing corporate value and strengthening corporate governance.
