Corporate Governance Report PDF 799KB
(Last update: June 25, 2019)
The Company has established a basic viewpoint regarding corporate governance in the Basic Corporate Governance Policy. Please refer to the link below for details.
Basic Corporate Governance PolicyPDF 178KB
The Company's Board of Directors comprises seven Directors (excluding Directors who serve as Audit & Supervisory Committee Members) (of which two are External Directors) and five Directors and Audit & Supervisory Committee Members (of which three are External Directors). The Board of Directors with the executive officers in attendance decides important corporate matters and supervises the execution of business operations by directors and executive officers. The Company has accepted an External Director in order to strengthen the supervisory function of the Board of Directors and realize highly fair and transparent management.
The Company has introduced a system of executive officers with an aim to strengthen Group management, to separate and enhance the business execution function from the decision-making and supervisory functions. Each executive officer appointed by the Board of Directors is delegated management authority based on the Company's internal rules and other stipulations to execute business under the direction of the president & representative director and policies approved by the Board of Directors of the Company.
As a holding company, NREH manages its Group companies under various regulations such as the Partner Company Management Regulations and Group Internal Audit Regulations and strengthens group management. Also, its Directors (excluding those who serve as Audit & Supervisory Committee Members) and Executive Officers act as Directors and others at major Group companies and Directors who serve as Audit & Supervisory Committee Members act as Audit and Supervisory Board Members at major Group companies. Furthermore, NREH and its Group companies have established the systems for risk management, compliance and internal audits and the supervision of the Group management is made effective as the NREH Board of Directors regularly receives reports on each of the systems.
The Company has adopted an Audit & Supervisory Committee governance structure. The majority of Audit & Supervisory Committee membership is comprised of Independent External Directors; and the committee monitors business management and performs audits utilizing the Company's internal control system. We have developed a system through which the Audit & Supervisory Committee receives periodic reports on internal audits and improvements from the Internal Audit Dept., and has the authority to ask Directors, Executive Officers, and Operating Divisions of the Company and the Group Companies to report such matters when necessary. Audit & Supervisory Committee Members can attend the Company’s important meetings, including those of the Management Committee, gather information on the business execution and express their opinions so that an effective system for audits and supervision is secured.
The Audit & Supervisory Committee Members of the Company are as follows.
Chairman: Takao Orihara (Full-time)
Members: Takao Orihara (Full-time), Yasushi Takayama (Full-time), Akira Ono (Independent External Director), Yoshio Mogi (Independent External Director) and Akiko Miyakawa (Independent External Director)
The Company has set up an Advisory Committee Relating to Nominations and Compensation as an advisory organization to strengthen the impartiality, objectivity and accountability of the functions of the board of directors in relation to decisions on management and director nominations and compensation. The majority of committee members are independent external directors and the committee is made up of one internal director other than executive director and three independent external directors. The committee will meet as necessary and discuss matters relating to the nomination of and compensation for directors and executive officers and shall report the outcome of discussions to the Board of Directors.
The Members of the Advisory Committee Relating to Nominations and Compensation of the Company are as follows.
The Company has established a Risk Management Committee whose members include directors and executive officers at the Company and Group companies, for the purpose of promoting risk management activities within the Group. The Committee deliberates matters relating to risk management, compliance, and information security for the entire Group, and also cooperates and provides guidance with regard to countermeasures when risks occur.
The Nomura Real Estate Group regards compliance, including the observance of laws and regulations and corporate ethics, as one of the most important management issues. As a set of relevant guidelines, the Company has formulated the Nomura Real Estate Group Code of Action. We have established the Risk Management Committee and Group Legal & Compliance Dept., in the Company to promote continuous education and enlightening activities for the executives and employees of the entire Group, and to provide advice, guidance and support to Group companies. Furthermore, based on our priority of collecting information regarding risks, the Company has set up the Nomura Real Estate group Helpline as a point of contact for internal reporting by group employees.
The Nomura Real Estate Group has established an internal audit department at each group company, with the exception of some small companies. Each department is supervised under the direct jurisdiction of the Group company president or an officer who does not hold an additional office in a business operations division, which allows the department to maintain organizational independence.
In addition, we have established the Group Internal Audit Dept. in the Company that, in collaboration with the Accounting Auditor, supervises the internal audit functions of the entire Group and performs monitoring, evaluation and auditing in each division within the Company.
The Company has appointed full-time staff in the Audit & Supervisory Committee Dept. to support the execution of duties by the Audit & Supervisory Committee. Each Audit & Supervisory Committee Member attends meetings of the Board of Directors and other important meetings and audits the execution of the duties of directors while cooperating with the Internal Audit Dept. and the Accounting Auditor as needed.
The Company adopts measures to enhance the effectiveness of audits, having established an Audit & Supervisory Committee Dept. to support the execution of duties by the Audit & Supervisory Committee and appointed full-time staff dedicated to the department.
The Audit & Supervisory Committee is composed of 2 full-time Audit & Supervisory Committee Members and 3 Audit & Supervisory Committee Members (independent external director).
Audit & Supervisory Committee Members Takao Orihara and Yoshio Mogi have long-term experience of engaging in finance and accounting affairs and Audit & Supervisory Committee Member Akiko Miyakawa is a certified public accountant. Each of them has considerable insight into finance and accounting affairs.
In the business year ended March 2019, the Audit & Supervisory Committee held 11 meetings, attended by all of the Audit & Supervisory Committee Members.
Main items on the agenda at the meetings of the Audit & Supervisory Committee include drawing-up audit plans, preparing audit reports, evaluating on the reappointment of the Accounting Auditor and giving consent to compensation for the Accounting Auditor.
The full-time Audit & Supervisory Committee Members attend important meetings of the Company and requests for reports from the business execution departments as necessary to gather information on the Company's business execution conditions.
a. Name of auditing firm
Ernst & Young ShinNihon LLC
On July 1, 2018, Ernst & Young ShinNihon LLC changed its Japanese corporate name from ShinNihon Yugen Sekinin Kansa Hojin to EY ShinNihon Yugen Sekinin Kansa Hojin but left its English name unchanged. The Company appointed Ernst & Young ShinNihon LLC as the Accounting Auditor pursuant to the Companies Act.
b. Consecutive period of auditing
Since June 2004
c. Certified Public Accountants involved in auditing
Certified Public Accountant/ Designated and Engagement Partner Shuji Kaneko
Certified Public Accountant/ Designated and Engagement Partner Toru Nakagiri
Certified Public Accountant/ Designated and Engagement Partner Natsuki Saiki
* Ernst & Young ShinNihon LLC takes measures to ensure that individual Engagement Partners do not continue their involvement in NREH accounting audits over an extended period of time.
d. Assistants involved in auditing
Certified Public Accountants: 6/ Part-qualified Accountants, etc.: 5/ Other: 9
e. Policy and reasons for selection of Accounting Auditor
When a need arises to select an Accounting Auditor, the Audit & Supervisory Committee chooses an appropriate audit firm after it obtains necessary information from candidates, hold interviews and make questions focused on the quality assurance systems, independence, audit execution systems and estimates for audit fees.
Furthermore, the committee discusses and determines the appropriateness of reappointment of the Company's Accounting Auditor each year after it obtains necessary information and receives reports from the Accounting Auditor and considers the execution conditions of its duties (including the execution conditions in the previous business years), audit system and independence, based on the separately determined evaluation criteria for the Accounting Auditor.
If the Accounting Auditor is recognized as falling under any of the items listed in Article 340, Paragraph 1 of the Companies Act, the Audit & Supervisory Committee shall dismiss the Accounting Auditor with the unanimous consent of all Audit & Supervisory Committee Members. In addition, notwithstanding the above, if it is recognized that the Accounting Auditor's fulfilment of appropriate auditing would be difficult due to the occurrence of reasons that compromise the eligibility or independence of the Accounting Auditor, the Audit & Supervisory Committee shall propose the dismissal or non-reappointment of the Accounting Auditor at a General Meeting of Shareholders.
f. Evaluation of the Accounting Auditor by the Audit & Supervisory Committee
The Company's Audit & Supervisory Committee evaluates the audit firm each year. The committee judges it proper to reappoint the current audit firm based on the evaluation from the aspects of the audit firm's quality management conditions, independence of the audit team in charge of the Company and expression of its professional skepticism, appropriateness of audit fees, effectiveness of communication between management and the Audit & Supervisory Committee and response to fraud risks.