Corporate Governance Corporate Governance Structure
Corporate Governance Corporate Governance Structure
Overview of structure
The Company has transformed into an Operating Company Structure (Holding Company Structure) in April 2022. The Operating Companies are “(1)Panasonic Corporation” (it is composed of multiple business areas and unites the following five divisional companies: China & Northeast Asia Company, Living Appliances and Solutions Company, Heating & Ventilation A/C Company, Cold Chain Solutions Company, and Electric Works Company), “ Panasonic Entertainment & Communication Co., Ltd.”, “ Panasonic Housing Solutions Co., Ltd.”, “ Panasonic Connect Co., Ltd.”, “ Panasonic Industry Co., Ltd.”, and “ Panasonic Energy Co., Ltd.”,. They facilitate the evolution and change of business in each area and carry out autonomous management on development, manufacturing, and sales as well as management of profits and fund for the realization of growth strategies.
The Company has responsibility for the management and engineering strategies across the Group. Specifically, the Company formulates the mid/long-term group strategies for the enhancement of corporate value, contributes to the businesses with innovative technology and production technology, and supports for engineering development and manufacturing. In addition, “ Panasonic Operational Excellence Co., Ltd. ” has been established to play a role as a platform for improving the efficiency and sophistication of operations across the Group. Panasonic Operational Excellence Co., Ltd. assumes as a function of the group-wide management control in terms of developing the Company-wide rules, infrastructure and systems, implementing internal audit, internal control and compliance activities required to the listed company and the legal entity, and responding to the stakeholders closely working with the Company.
Background of corporate governance structure
Under the Operating Company structure, a full-fledged autonomous management is implemented by the Operating Companies that have gained substantial delegation of authority for investments, etc. As a holding company, the Company's role is to determine the Group’s mid-to long-term strategies and important Group matters, and, concentrates on Group direction through Group governance and risk management, in order to make important decisions for the Group and conduct sound and suitable monitoring. The Company has determined that it has been able to ensure the effectiveness of corporate governance by having an independent A&SB establish and operate the Group internal audit system in cooperation with the Internal Audit Division, and by having a voluntary Nomination Advisory Committee and Compensation Advisory Committee chaired by an independent outside director, with a majority of independent outside directors, deliberate on executive personnel matter and remuneration. The Company has determined that the corporate governance that it aims to achieve under the Operating Company structure can be achieved without changing the conventional corporate governance structure and maintaining the system of a company with A&SB Members. For that reason, the Company has established the corporate governance structure, based on the A&SB System composed of the Board of Directors and A&SB Member / A&SB, holding the following elements.
Corporate Governance Structure
The Board of Directors and Executive Officer System
The Board of Directors entrusts authority to the Operating Companies, and achieves a fast-moving decisionmaking process centered on the Operating Companies. It also decides the Group’s mid- to long-term strategies and important Group matters, and concentrates on Group direction through Group governance and risk management, in order to make important decisions for the Group and conduct sound and suitable monitoring. The term of each Director is limited to one (1) year and all Directors are reelected at an annual general meeting of shareholders. The structure of the Board of Directors makes it possible to appropriately apply decisions of shareholders to management. The Board of Directors is composed of thirteen (13) Directors (of which four (4) are women). With consideration for the skills required by the Panasonic Board of Directors, it seeks to ensure diversity of the knowledge, experience, and qualifications of the Board of Directors as a whole. Based on a policy of ensuring that a majority of Board of Directors Members are Outside Directors who can be expected to provide valuable opinions for decisions related to operations and supervision of Director duties based on their extensive careers outside the Company and high levels of knowledge, seven (7) Outside Directors have been appointed. An outside director takes on the position of a chairman of the Board.
In the Company, authorities are significantly delegated to the Operating Companies for the complete autonomous management. Also, in order to maximize the Group value, the Company has adopted the Executive Officer system, which allows group management from the standpoint of total optimization.
The number of Executive Officers (including those who concurrently serve as Directors) is thirteen (13), consisting of President, Executive Vice President, a position in which the executive officer acts as President in specific areas, and Executive Officer, a position responsible for the business execution of specific functions.
Audit & Supervisory Board Members (A&SB Members) and Audit & Supervisory Board (A&SB)
In order to contribute to “the sound and sustainable growth” and “improvement in mid- to long-term corporate value of the Group”, the A&SB is responsible for a part of corporate governance as an independent agency contracted by the shareholders in order to “establish a high-quality corporate governance system” and ensure sound management and trust from society. The A&SB is composed of five (5) members (of which one (1) is a woman). Two (2) of these members are Senior A&SB Members (full-time) who were selected from executive directors or equivalent positions and who are highly familiar with company operations, and are capable of visiting actual worksites and exercising investigative authority to understand the actual conditions of operations. Of these, one (1) has considerable knowledge related to financial and accounting matters. Three (3) Outside A&SB Members have been appointed, consisting of a business manager, lawyer, and certified public accountant who are capable of effectively supervising the execution of Director duties based on their advanced expertise, extensive careers, and high levels of knowledge.
Voluntary Advisory Committee
The Company has established two (2) voluntary advisory committees separately to the Board of Directors : Nomination Advisory Committee and Compensation Advisory Committee.
Each committee will have an Outside Director serve as its chairperson, and the majority of the members will be composed of Outside Directors Members to ensure independence, objectivity, and transparency. By incorporating the opinions of Outside Directors who possess extensive knowledge and diverse perspectives, each Committee aims to conduct more effective discussions.
1. Nomination Advisory Committee
This committee will receive inquiries from the Board of Directors and will make recommendations regarding the appointment, dismissal, and reappointment of the Company’s Members of the Board of Directors, A&SB Members, executive officers, and Presidents of operating companies, as well as the succession plan for the Group CEO and discussions on the members of Outside Directors. The members of this committee are Outside Director Shinobu Matsui (chairperson), Outside Director Michitaka Sawada, Outside Director Keita Nishiyama, and Representative Director, President Yuki Kusumi.
2. Compensation Advisory Committee
This committee will receive inquiries from the Board of Directors and will make recommendations regarding the compensation system for the Company’s Members of the Board of Directors, A&SB Members, executive officers, and Presidents of operating companies. The members of this committee are Outside Director Shinobu Matsui (chairperson), Outside Director Michitaka Sawada, Outside Director Ryusuke Shigetomi, and Representative Director, President Yuki Kusumi.
Group Management Meeting/PHD Strategy Meeting
The Group Management Meeting and the PHD Strategy Meeting are held to discuss, set the direction, and report on the Group’s mid-to long-term strategies, important Group-wide projects and committees, and important Group-wide initiatives implemented by the Company and the Operating Companies.
The Group Management Meeting is held basically once a month, chaired by the Group CEO. It consists of approximately twenty (20) senior managements including the presidents of the Operating Companies and functional directors.
The PHD Strategy Meeting is held basically at least two times a month chaired by the Group CEO. It consists of approximately ten (10) senior managements including functional directors of Human Resources, Accounting, and Legal Affairs.