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Shiseido Company, Limited Selected as Winner of the METI Minister’s Award for the Corporate Governance of the Year 2019

January 30, 2020

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. METI hereby announces that in the Corporate Governance of the Year 2019, JACD determined Shiseido Company, Limited as the winner of the METI Minister’s Award for the Corporate Governance of the Year 2019.

1. Outline

Aiming to enrich corporate governance reform, a growth strategy of Japan, from a formal one to a substantial one, the 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 company plans, mainly led by an independent committee for appointment of the president, concerning, in particular, a succession plan for appointment and succession of presidents and CEOs, the planning of which is 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 2019 program, examination committee examined listed companies in the TSE first section according to the guidelines for selecting the METI Minister’s Award (see the Appendix), and, as a result, determined Shiseido Company, Limited (listed in the TSE first section; securities code: 4911), as the winner of the award in FY2019.

2. Reasons for selecting the company

Examination committee selected the company since it appraised the following points, in particular.

  1. The company established a council in which only outside directors assess the president since it places weight on the independence of its business execution system, and the council, together with the advisory committee for appointment of directors, has been committed to preparing its succession plan for appointment and succession of the president. The company has appropriately established a governance system for such succession as seen in the disclosure of the process for such appointment and succession in its corporate governance report, integrated report and other documents and has enhanced the transparency and objectiveness of the processes for appointing the president.

  2. In having appointed the current president in 2014, independent outside directors of the company led the objective examination of candidates for presidents in light of the competitive environment faced by the company and decided to appoint an outside candidate as the president. Following on from 2014, these outside directors have 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 has been effectively operating the system for the succession plan of the president.

  3. Since the current president took office, the president has been exercising his leadership as he fully shares corporate information with independent outside directors and gained their trust. As a result, the company has been showing a high level of performance as seen in an increasing total shareholder return (TSR) which far exceeds the average of the sector as well as an increasing ROE, ROA and other financial performance of the company.

3. Commendation ceremony (tentative)

Date and time: February 25 (Tue.), 2020; from 17:00 to 18:20
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.

4. Links to related information

Division in Charge

Corporate System Division, Economic and Industrial Policy Bureau

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