Corporate Governance

The Basic Management Policy of the Company is that we shall continuously strive to enhance both our economic value and our value to society while making ongoing, active contributions to the development of a sustainable society, with Our Philosophy serving as the basis for our every decision and as the impetus for our every action. In keeping with this policy, the Company considers the enhancement of overall corporate governance to be a key management objective.

(as of March 29, 2023)

In analyzing and assessing the effectiveness of the Board of Directors, said Board prepared a survey questionnaire for all Members of the Board of Directors and Members of the Audit & Supervisory Board with regard to the composition of the Board of Directors and its management situation, among other matters. Having conducted this survey between September and October of 2020, the Board of Directors in January 2021 held discussions in order to deliberate on the results obtained therefrom.
As a result of these deliberations, the Board of Directors was able to verify that said Board has, by and large, attained effectiveness in terms of its number of members and member composition, frequency of meetings, time spent deliberating and other management matters, as well as its deliberations, oversight of the business and affairs of the Company and all other aspects of its conduct.
The Company also confirmed that the provision of fuller information to outside officers contributed to more lively discussions at meetings of the Board of Directors.
The Company will work on maintaining its environment and, as necessary, execute measures to enhance its effectiveness.

Sumitomo Rubber Industries’ remuneration for Directors and Executive Officers consists of basic remuneration and bonuses. The basic remuneration is determined based comprehensively on each individual’s position, duties and responsibilities as well as the Company’s business results. Directors’remuneration is paid within the framework approved at the Company’s general meeting of shareholders. The amount of each bonus is determined in accordance with an evaluation of the Company’s business results as well as each Director’s business execution. The amount of remuneration for Audit & Supervisory Board Members is determined in discussions among Audit & Supervisory Board Members and paid within the framework approved at the Company’s general meeting of shareholders. Although stock-based incentives are not paid, the Company encourages the purchase of its stock through a stockholding association scheme for Directors and Executive Officers. When determining the amount of bonuses, the Company also takes into account the contributions made by each individual to the progress of medium- and long-term business plans. In these ways, the Company is providing Directors and Executive Officers with incentives to achieve sustainable business growth.
As for performance-based remuneration and stock options linked to medium- and long-term business results, the Company will engage in ongoing in-house discussions as well as dialogue with its shareholders to assess the optimal timing for the introduction and determine the form of remuneration. The Company determines the amount of remuneration for Directors and Executive Officers based on a resolution of the Board of Directors after examining proposals submitted by the “Nomination and Remuneration Committee,” which discusses the matter from objective and unbiased viewpoints, with independent Outside Directors comprising the majority of members.

The Group is focusing on training next-generation managers and overseas base managers.
A Management School was established so that candidates can acquire skills related to perspective (viewing things as a manager), knowledge (basic knowledge required of management), and thinking (critical thinking). Starting in 2003, approximately 20 people have been selected each year, and classes are offered throughout the year. Management attends the last meeting, and reports on issues such as future business expansion are provided. This is the training of next-generation managers.

Based on “compliance with social norms,” which is stipulated in the Company’s “Corporate Code of Conduct,” Sumitomo Rubber Industries maintains the guideline that “corporate activities must adhere to laws and ordinances, social norms and standards of public decency.” Moreover, the Company has established “systems to ensure that in the execution of their duties, Directors comply with laws and the Company’s Articles of Incorporation and that Group operations undertaken by the Company and its subsidiaries are always appropriate,” thereby securing strict legal compliance. In addition to complying with laws and its Articles of Incorporation, Sumitomo Rubber Industries aims to fulfill its corporate social responsibilities and, to this end, has established a strict code of corporate ethics while pursuing sound business operations. To that end, the Company formulated “Regulations on Corporate Ethics Activities” in February 2003. Simultaneously and in line with these regulations, the Company established the “Corporate Ethics Committee,” which meets on a quarterly basis and is chaired by the President, with the aim of strengthening its Group-wide compliance system.
Furthermore, Sumitomo Rubber Industries set up a “Corporate Ethics Helpline (Compliance Consultation office)” directly controlled by the President as a corporate ethics helpline for employees. This enables the Corporate Ethics Committee to investigate any problems that arise within the Group and give sufficient attention to ensuring that those employees who come forward are not penalized. With a close eye on legal issues, the Company also takes such measures as seeking advice from corporate attorneys as circumstances demand.