February 1, 2019
The Corporate Governance of the Year is an award program organized by the Japan Association of Corporate Directors (JACD) and supported by the Ministry of Economy, Trade and Industry (METI), the Financial Services Agency, the Ministry of Justice, the Tokyo Metropolitan Government and the Japan Exchange Group, Inc.
At the program in FY2018, the METI Minister’s Award was newly established. METI hereby announces the winner of the METI Minister’s Award for Corporate Governance of the Year 2018.
Aiming to enrich corporate governance reform, a growth strategy of Japan, from a formal one to a substantial one, the Tokyo Stock Exchange (TSE) revised the Corporate Governance Code in June 2018 and METI revised the Practical Guidelines for Corporate Governance Systems (CGS Guidelines) in September 2018.
In light of the purposes of these revisions, it is considered important to: effectively supervise companies’ plans concerning, in particular, selection and succession of presidents and CEOs, the planning of which are fundamental for corporate governance; and broadly convey to the public leading efforts of companies whose achievements should be recognized, thereby promoting corporate governance reform. To this end, in the FY2018 program, JACD newly created the METI Minister’s Award.
In the Corporate Governance of the Year 2018, JACD examined applicants according to the guidelines for offering the METI Minister’s Award (see the Appendix attached to the Japanese language press release) and, as a result, determined OMRON Corporation as the winner of the award in FY2018.
2. Reasons for selecting the company
JACD selected the company since in appraisal the following points, in particular.
- The company established a committee exclusively for appointment of the president called “Advisory Committee for Appointment of the President,” stipulates a rule that no meetings of the committee will prohibit the president from attending, and discloses this rule in its corporate governance report. These efforts enhance the transparency of the processes for appointing the president.
- The company composes the members of the committee with persons other than executing persons alone, in which the majority of the members and the chair of the committee are outside directors. It appointed the current president in 2011 based on the discussion results of the committee, and it has been conducting performance evaluation of the president every fiscal year in determining whether he or she should remain in office. In light of these facts, the company secures the effectiveness of the committee exclusively for appointing the president and has achieved effective utilization of the committee.
- Since the current president took office, the company has been showing a high level of performance as seen in an increasing ROE performance of the company which exceeds the market average.
3. Commendation ceremony
Date and time: February 21 (Thur.), 2019; from 17:00 to 18:20 (tentative)
Venue: The organizer is scheduled to hold the event at a hotel in Tokyo.*
*Note: For more information on the ceremony, contact JACD, the organizer of the event.
Division in Charge
Corporate System Division, Economic and Industrial Policy Bureau