Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information
In accordance with the NX Group’s corporate philosophy, we believe that it is important to establish appropriate corporate governance and a group management system in order to solve social issues through logistics, support the sustainable development of society, and achieve the ideal of the corporate group set out for 2037 in our long-term vision. Based on these ideas, we have established the following basic policy for NX Group governance.
【NX Group Basic Policy on Governance】
［NX Group Corporate Philosophy］
［2037 Vision］
Business growth: A logistics company with a strong presence in the global market Customers & Society: A company that contributes to achieve a sustainable society through logistics
Shareholders: A company that achieves sustainable growth by establishing corporate governance
Employees: A company whose employees come from a variety of backgrounds, are proud to be active in their work, support
customers and society, and feel happy
＜Basic Concept Oriented Towards Realizing the Long-term Vision＞
＜Basic Concept Oriented Towards Establishing Corporate Governance＞
To realize increased corporate value and sustainable growth, we will respect the positions of stakeholders, such as our shareholders, and build appropriate governance of offense and defense.
Corporate Governance to Aim for
Approaches Aimed at Establishing Corporate Governance
＜Basic Concept Oriented Towards Evolving Group Governance＞
To ensure that corporate governance functions appropriately, and to realize maximization of value as a corporate group, the group governance structure will continue to be evolved globally.
Group Governance to Aim for
Approaches Aimed at Evolving Group Governance
Our company will implement all the principles of the Corporate Governance Code.
In addition to disclosing each principle of the Corporate Governance Code in accordance with the statutory requirements, our Company's response policies and implementation details for all 83 principles of the Basic Principles, Principles and Supplementary Principles are listed in “NX Policy and Implementations of JPX’s Corporate Governance Code". These are available at the end of this document and on our company's website for “Corporate Governance.”
（Japanese website）
https://www.nipponexpress-holdings.com/ja/ir/governance/
（English website）
https://www.nipponexpress-holdings.com/en/ir/governance/
The details of our implementations regarding the fourteen principles of disclosure, "Status of Dialogue with Shareholders and investment, etc." and “Action to Implement Management that is Conscious of Cost of Capital and Stock Price” are as follows:
In principle, our company will reduce cross-shareholdings and will not acquire new shares from other companies. We will not accept any cross-shareholding requests for the sake of retaining loyal shareholders. However, as an exception, we may hold such shares if we decide that the action would improve our mid to long-term corporate value by increasing the number of business transactions, expanding our business scope, strengthening our relationship with business partners and promoting cooperative collaborations.
With respect to cross-shareholdings, the rationale for holding each issue is examined quantitatively every year by comparing the benefits of holding the stock with the cost of capital, and by comparing the market value of the issue with sales, etc. Next, a qualitative evaluation is conducted based on the relationship and expectations for current and future improvements in corporate value through enhanced collaboration. Then, after this comprehensive assessment, a review is conducted, and the Board of Directors verifies the details thereof. Specifically, this process involves evaluation of the following aspects:
The above evaluation was conducted at our Board of Directors meeting held in February 2024 for the listed cross-shareholdings held by the entire NX Group, and the results were as follows:
Not covered under the above conditions: 2 issues
Policy for each category
For assessment levels 1 and 2, it is determined, based on the quantitative evaluation, that holding of the shares is reasonable. However, if it is confirmed through ongoing dialogue with the issuers that the disposal of these shares will not affect the benefits and sales that NX Group has been receiving, we will dispose of these shares, taking into account the financial situation and market conditions.
For assessment levels 3 and 4, it is determined, based on the qualitative evaluation, that holding of the shares is reasonable. However, our company will establish opportunities for dialogue with the issuers as appropriate, confirm the position of the shares held by NX Group, and if it can be confirmed that the relationship with an issuer will not be damaged by disposal of its shares, then this will be done, taking into account the financial situation and market conditions.
Issues that are not covered by any of the assessment levels up to 4 are those for which NXHD, after consultation with the issuer, has designated some or all of its held shares for disposal, but has been unable to complete the disposal due to funding and market conditions or other factors. While we will continue to progressively dispose of these shares, methods of disposal will be considered for some specific issues.
Under this policy, in FY2023, the NX Group disposed of all of its holdings of 16 specified issues and some of its holdings of 2 issues, resulting in the raising of approximately 25 billion yen in funds. As a result, as of December 31, 2023, the number of issues of listed cross-shareholdings was 52 in hand and 11 deemed as held (3 issues were duplicates).
Our company opposes the following actions regarding exercising voting rights on cross-shareholdings.
Our company will have regular meetings with the issuing companies of the shares and check our agreed upon standpoint concerning these shares. However, if we see a rapid deterioration in an issuing company’s business performance or a sign of a weakening in our business relationship with a company, we will set up a meeting as soon as possible and utilize the results when deciding whether or not to approve actions.
Competitive transactions by Directors, transactions between Directors and the Company, and transactions involving a conflict of interest shall be approved by the Board of Directors and the Audit and Supervisory Committee, which include Independent Outside Directors. The status of approved transactions shall be reported to the Board of Directors.
We conduct an investigation each year to see if any of our directors or executive officers engage in transactions with our company or a consolidated subsidiary. We disclose the results in our annual securities report in accordance with regulations including the “Accounting Standards for Related Party Disclosures.”
(ⅰ) Ensuring diversity
With respect to ensuring diversity in the workforce, which forms the basis of diversity management, we are working to put them into practice, based on NX GROUP “Basic Policy on Diversity Promotion.”
【NX Group “Basic Policy on Diversity Promotion”】
By promoting diversity and creating an environment where all employees respect each other's diversity and maximize the power of each employee, we will realize "self-growth and self-fulfillment for employees" and "sustainable growth and improvement of corporate value of NX Group".
“Respect for Diversity”
We will respect each other regardless of age, gender, sexual orientation, gender identity, nationality, disability, etc.
＜Promotion of women’s participation＞
From the perspective of ensuring diversity on the Board of Directors, the NX Group will strive to increase the percentage of female members.
*As of March 28, 2024, the rate of director positions held by women was 36.4% (4 female directors).
In addition, two female executive officers have been appointed (One of them also serves as a Director).
＜Appointment of foreign nationals to management positions＞
Our group has 743 overseas offices in 49 countries (As of December 2023), with more than 20,000 foreign employees. In addition, due to the promotion of local management of overseas operating companies, the percentage of foreign employees in the post of president at overseas operating companies has exceeded 30%. Since foreign employees play an active role as core personnel supporting our overseas operating companies, we have not set or disclosed KPIs for appointing them as core personnel at this time. In the future, we will continue to promote the localization of top management and reinforce the human resource development of top management at overseas operating companies.
＜Appointment of experienced personnel to management positions＞
In order to secure diverse human resources to facilitate diversity management, eliminate biases in the makeup of the workforce, and secure professional human resources with expertise in specialized fields such as industrial logistics and new businesses, etc. In cooperation with each business unit, we will actively recruit human resources that contribute to the growth strategy of the business, aiming to secure human resources strategy and human resources that are linked to the human resources strategy of the business plan. The target number of experienced hires for FY2024 is 50.
To achieve our goals, we have set up a dedicated recruiting team, and by taking a proactive approach to women, non-Japanese, and management-level employees, for which there is a particular need to enhance recruitment, we are working to achieve our goals and increase diversity in our core human resources through the hiring of experienced personnel.
(ⅱ) Policy for developing human resources and the internal company environment to ensure diversity, and its current status
[Development of the Human Resources Policy]
The "NX Group Human Resources Policy" was established by resolution of the Board of Directors as a common foundation to address various human resources issues in the Group and globally, and to maintain consistency in the Group’s human resources strategy. In doing so, we aim to clarify “the profile of the human resources we seek” and “the Company’s commitments,” thereby securing human resources and increasing corporate value. The “Company’s commitments” states that the Company is dedicated to diversity, providing a place where diverse human resources can work together to create new value, and where all members of the company can work with a sense of unity.
＜Work Style Reform＞
In the Japan Region, the NX Group has set KPIs as Human Resource Strategy of "NX Group Business Plan 2028" to ensure diversity within the company, such as the proportion of women in management positions, the uptake rate of annual paid leave, the rate of male employees taking childcare leave, and the employment of people with disabilities.
The above four indicators are on an upward trend, and in addition to continuing to work on them, we will also collect qualitative information through questionnaires and similar means.
[KPIs in NX Group Business Plan 2028]
Proportion of women in management positions: FY2028 8%
Annual paid leave uptake: FY2028 80%
Rate of male employees taking childcare leave: FY2028 70%
Rate of people with disabilities among employees: FY2028 2.7%
＜Internal Working Environment Development Policy＞
The NX Group believes that a strong sense of belonging, a strong ability to contribute, and the realization of an environment in which employees can demonstrate their abilities will lead to growth and corporate value through increased productivity. To become a company where a diverse range of employees can play an active role while feeling happy and creating new value, we will strive to promote diversity management and to improve employee engagement to raise levels of employee satisfaction.
＜Human Resource Development Policy＞
The NX Group will enhance its corporate value by proactively investing in its employees through education, based on the following pillars of human resource development: (1) Cultivating self-reliant employees, (2) Passing on logistics-related technologies and generating knowledge and expertise, and (3) Fostering a corporate culture that nurtures people and encourages them to learn on their own.
Specific initiatives are described in the Sustainability Databook.
In order to support our employees’ asset formation and reduce management risk of corporate pension funds, Nippon Express Co., Ltd, the group's main subsidiary, adopted a defined contribution pension system in 2007.
In order to teach our employees how to increase their assets, we are working to educate them in how to properly do this. As a part of new employee education, we implement fixed contribution pension seminars and teach basic knowledge on the systems used to start asset management and relevant precautions.
We conduct investment educational seminars once a year for our pension fund beneficiaries and teach employees the importance of long-term investments, continuous investments and diversified investments, depending on their individual future plans. In order to make this more effective and realistic, we review the educational content based on the monitoring results of operation status in cooperation with the operation management institution. In addition, we form a committee with the labor union to reflect the opinions and requests of the members.
In selecting investment products, we consider not only the potential for the highest possible returns and the lowest possible trust fees for our employees, but also the following factors with respect to the investment trusts: (1) a sufficient net asset balance, (2) a stable return over a certain period of time, (3) the degree of linkage to the benchmark for passive products, and (4) the balance of risk and return for active products. After that, we monitor the performance of the products on an annual basis based on the reports from the managing institutions.
In addition, as a company that has introduced a matching contribution plan, we have reminded enrollees of the features of both plans in response to the legal approval of parallel enrollment in iDeCo and matching contribution plans from October 2022.
In addition, we verify the evaluation of the management organization, which is required to be conducted once every five years, in a committee meeting with the labor union representing enrollees, and report the results to the relevant government agencies.
(ⅰ) Company objectives (i.e. business principles), business strategies and business plans;
Since the establishment of NX GROUP, the group has supported the development of society by connecting people, companies, and communities through logistics. In order to fulfill this unchanging mission and create a prosperous future, we will continue to take on the challenge of creating new value from logistics, and to live up to the trust placed in us by our customers and society. These aspirations have been put into words and embodied in the “NX Group Corporate Philosophy.” The “NX Group Corporate Philosophy” describes what we should be doing including goals our corporate group should achieve, what we value, and how we contribute to society. In order to exemplify our corporate philosophy, we established the “NX Group Charter of Conduct” -which defines the direction of day-to-day behaviors of all employees including our determination to uphold “Safety, Compliance and Quality” and the “NX Group Corporate Message” — known as “We Find the Way” — which defines the value and attitude we provide to our customers and society as a company. The charter and the message are the values our corporate group cherishes. These values will be inherited by our company, which was established as a result of the transition to a holding company structure, and we will continue to uphold them as the common values of the group.
All of these are available on our company’s website, Sustainability Databook, and Integrated Report.
＜NX Group Corporate Philosophy＞
（Japanese website）
https://www.nipponexpress-holdings.com/ja/about/philosophy/
（English website）
https://www.nipponexpress-holdings.com/en/about/philosophy/
＜NX Group Charter of Conduct＞
（Japanese website）
https://www.nipponexpress-holdings.com/ja/about/philosophy/charter.html
（English website）
https://www.nipponexpress-holdings.com/en/about/philosophy/charter.html
＜NX Group Corporate Message＞
（Japanese website）
https://www.nipponexpress-holdings.com/ja/about/philosophy/message.html
（English website）
https://www.nipponexpress-holdings.com/en/about/philosophy/message.html
In addition, based on our Corporate Philosophy, Corporate Message, and Code of Conduct, we have established a long-term vision of what we would like the Group to become. The current long-term vision articulates the “2037 Vision,” which is our vision for the kind of Group we want to be in 2037, the 100th anniversary of our founding. The vision is to grow as a “logistics company with a strong presence in the global market,” and as a precondition for achieving this vision, it also articulates an ideal profile of the Group for our customers, society, shareholders, and employees. We have published the "NX Group Business Plan," a management strategy and specific action plan to achieve this vision.
In order to realize our long-term vision, we consider the preservation of the global environment, the contribution of a diverse range of employees, and improvement of capital efficiency through the establishment of corporate governance to be important issues that will lead to the development of society, the sustainable growth of our group, and the enhancement of our corporate value. The key themes of the business plan include a sustainability management strategy that addresses Key Issues (Materiality) such as climate change and human rights, human capital management that focuses on the success of a diverse range of personnel and employee engagement, and initiatives to improve corporate value that focus on improving profitability and capital efficiency, as well as strengthening dialogue with investors. In undertaking these initiatives, the Group will work together on KPIs such as CO2 emission reductions, employee engagement scores, and capital efficiency indicators (ROE, etc.).
As with the corporate philosophy, we uphold the long-term vision and business plan, and work as a group to realize them.
Our long-term visions and business plans are available on our websites:
＜Website “Business Plan”＞
（Japanese Website）
https://www.nipponexpress-holdings.com/ja/ir/management/plan/
（English website）
https://www.nipponexpress-holdings.com/en/ir/management/plan/
(ii) Basic views and guidelines on corporate governance based on each of the principles of the code; In accordance with the NX Group’s corporate philosophy, we believe that it is important to establish appropriate corporate governance and a group management system in order to solve social issues through logistics, support the sustainable development of society, and achieve the ideal of the corporate group set out for 2037 in our long-term vision. Based on these ideas, we have established the following basic policy for NX Group governance.
［NX Group Corporate Philosophy］
Our Mission Be a Driving Force for Social Development
Our Challenge Create New Ideas and Value that Expand the Field of Logistics
Our Pride Inspire Trust Every Step of the Way
［2037 Vision］
Business growth: A logistics company with a strong presence in the global market
Customers & Society: A company that contributes to achieve a sustainable society through logistics
Shareholders: A company that achieves sustainable growth by establishing corporate governance
Employees: A company whose employees come from a variety of backgrounds, are to be active in their work, support customers and society, and feel happy
＜Basic Concept Oriented Towards Realizing the Long-term Vision＞
＜Basic Concept Oriented Towards Establishing Corporate Governance＞
To realize increased corporate value and sustainable growth, we will respect the positions of stakeholders, such as our shareholders, and build appropriate governance of offense and defense.
Corporate Governance to Aim for
Approaches Aimed at Establishing Corporate Governance
＜Basic Concept Oriented Towards Evolving Group Governance＞
To ensure that corporate governance functions appropriately, and to realize maximization of value as a corporate group, the group governance structure will continue to be evolved globally.
Group Governance to Aim for
Approaches Aimed at Evolving Group Governance
(iii) Board policies and procedures in determining the remuneration of senior management and directors;
Our company has established a basic policy regarding decision-making procedures for officer remuneration and the structure for the remuneration in our internal rules. The procedures and the basic policy are discussed at the discretionary Remuneration and Nomination Advisory Committee. The committee was established as an advisory body of our board where chairperson is an independent external Director, three of the four members of committee member are independent external Director. Our board makes decisions based on the committee’s report.
Our directors’ remuneration policy is as follows:
(Directors’ Remuneration Policy)
(Determining Directors’ Remuneration)
Specific amounts will be determined within the range of the amount resolved at the 2nd Annual general meeting of shareholders held on March 28, 2024, taking into consideration the company’s performance, the standards of other companies, employee salaries and other factors.
In addition to remuneration and bonuses for directors and executive officers (excluding outside Directors, part-time Directors, and Audit & Supervisory Committee members and foreign residents), our company has introduced a performance-based stock compensation plan using a trust for directors and executive officers (excluding outside directors and those residing outside Japan). This plan aims to further enhance their awareness of their contribution to enhancing our company's corporate value and shareholder value over the medium to long term. This system is a medium- to long-term incentive system that uses a portion of the existing base compensation as a source of funds and delivers as compensation a variable number of company shares depending on the position of the recipient and the level of achievement of company-wide performance targets, etc. The system is currently being applied with five business years as the period subject to evaluation. This evaluation period is the same length as the mid-term business plan, and the KPIs are business targets set in the business plan. In particular, we evaluate performance based on indicators such as consolidated revenues, consolidated business income, consolidated return on equity (ROE) and ESG-related non-financial indicators, etc. for each fiscal year and after the end of the evaluation period. The range of increase/decrease corresponding to the achievement of performance targets, etc., is from 0% to 150%, with 100% being the standard corresponding to achieving the performance targets set as the standards for the annual performance evaluation and the mid-term performance evaluation as a whole.
The amount of remuneration of directors (excluding those who are members of the Audit & Supervisory Committee), shall be determined at after deliberation and report on the system and details based on the above-mentioned policy at Remuneration and Nomination Advisory Committee. The amount of remuneration for each individual is based on his/her responsibilities, management execution status, and other factors, and is delegated to the Representative Director by resolution of the Board of Directors. The delegated authority is to determine the amount of each director's base compensation and the allocation of his/her bonus evaluation in accordance with the criteria for setting Director compensation, which have been previously discussed and established by the Remuneration and Nomination Advisory Committee. The amount of remuneration for directors who are members of the Audit & Supervisory Committee shall be determined at the meeting of the Audit & Supervisory Committee through discussions among the Directors who are members of the Audit & Supervisory Committee.
(iv) Board policies and procedures in the appointment/dismissal of senior management and the nomination of director and A & S Board Member candidates
Members of our Board of Directors are appointed and dismissed in such a way as to ensure that the composition of the board as a whole is balanced in terms of knowledge, experience, and ability by utilizing a directors skills matrix established in line with business strategies such as increasing the ratio of overseas sales and promoting ESG management.
Regarding the selection of candidates for directors (excluding those who are members of the Audit & Supervisory Committee), after consulting with the voluntary Remuneration and Nomination Advisory Committee (chaired by an independent outside director, with three of the four members being independent outside directors), and taking into account opinions expressed by the Audit & Supervisory Committee, the Board of Directors adopts a resolution based on a multifaceted perspective,
including the experience and expertise required to serve as a director, an evaluation of the candidate’s past performance in achieving management plans in the businesses and areas for which they have been responsible, and their personality and insight.
Regarding the selection of candidates for directors who are members of the Audit & Supervisory Committee, after consulting the Remuneration and Nomination Advisory Committee and obtaining the consent of the Audit & Supervisory Board, the Board of Directors adopts a resolution based on a multifaceted perspective, including the experience required to serve as a director and the knowledge, character and insight considered necessary to conduct audits of financial, accounting, legal and other matters.
With regard to candidates for outside directors, our company appoints individuals who are outstanding in terms of both character and insight, have experience in corporate management, high levels of expertise and academic knowledge in areas such as finance, accounting, legal affairs, and ESG, and are capable of supervising the overall management of company operations from a multifaceted perspective.
(v) Explanations with respect to the individual appointments/dismissals of executive managers and nominations of candidates for directors and A & S Board Members based on (iv).
Personal history and reasons for the selection of each candidate for director positions is stated in the “Convening Notice of the Annual Shareholder Meeting” including the Skill matrix for our Board of Directors is posted on our websites:
＜Website “Shareholders Meetings”＞
（Japanese Website）
https://www.nipponexpress-holdings.com/ja/ir/event/general-meeting/
（English website）
https://www.nipponexpress-holdings.com/en/ir/event/meetings/
＜Promoting Sustainability Management＞
The “NX Group Business Plan 2028” sets the promotion of sustainability management as one of the company’s important basic strategic policies, and efforts are underway to this end.
As a framework for promoting sustainability management, we have established a Sustainability Promotion Division and a Sustainability Promotion Committee. The Sustainability Promotion Committee, chaired by the President and consisting of the directors in charge of our company and 11 major Group companies, discusses important policies and specific measures relating to sustainability on a cross-divisional basis.
In the midst of changing international trends and social conditions, such as growing demands for a sustainable society, the Sustainability Promotion Committee examined and discussed key issues (materiality) to be addressed from the two perspectives of stakeholders and our business at a meeting held in FY2023, and the Board of Directors meeting held afterward adopted a resolution on five Key Issues (materiality).
By addressing these key issues through our business activities as part of the sustainability management initiatives in the “NX Group Business Plan 2028,” we aim to achieve sustainable social development and enhancement of our corporate value.
Going forward, key policies and other matters discussed by the Sustainability Promotion Committee will be submitted to the Board of Directors for their decision, and progress will be reported on a regular basis. In addition, we will disclose the results of our efforts to resolve these key issues (materiality) in the Integrated Report and other documents.
[Key Issues (Materiality)]
Our Group's sustainability policy and vision are posted on our websites:
＜Website “Sustainability”＞
(Japanese) https://www.nipponexpress-holdings.com/ja/sustainability/
(English) https://www.nipponexpress-holdings.com/en/sustainability/
＜Initiatives Regarding Human Capital, etc.＞
With respect to human capital, in the belief that employees being able to demonstrate their full potential will lead to growth for the Group, we place the highest priority on investing in and focusing on employees, who are the source of value for our business, and by giving due consideration to their wellbeing, we aim to further reinforce the foundation for value creation.
In order that all employees feel motivated and fulfilled in their work, we promote diversity management, and in accordance with the “NX GROUP Basic Policy on Diversity Promotion,” we have continued the initiatives of Nippon Express, our major subsidiary, and have been implementing them throughout our major subsidiaries from FY2024.
[Development of the Human Resources Policy]
The “NX Group Human Resources Policy” was established by resolution of the Board of Directors as a common foundation to address various human resources issues in the Group and globally, and to maintain consistency in the Group’s human resources strategy. In doing so, we aim to clarify “the profile of the human resources we seek” and “the Company’s commitments,” thereby securing human resources and increasing corporate value. The “Company’s commitments” states that the Company is dedicated to diversity, providing a place where diverse human resources can work together to create new value, and where all members of the company can work with a sense of unity.
[Improving Engagement]
The NX Group believes that promoting diversity in order to cultivate a strong sense of belonging, a strong ability to contribute, and an environment in which employees can demonstrate their abilities will lead to sustainable growth and corporate value through increased productivity. In order to measure these factors quantitatively, we have conducted an engagement survey of our major subsidiaries, including those overseas, since FY2023.
This is being implemented throughout the Company with the aim of creating a workplace where all employees, including women, can play an active role. With the results broken down by attributes such as job level, company history, age group, and gender, allowing for quantitative evaluation of diversity status, as well as results for each organizational unit, the survey aims to provide problem-solving that will lead to behavioral changes on the part of every employee, so as to realize the business plan and improve engagement while conducting analysis and providing feedback.
Through these efforts, in addition to social values such as employee happiness and the creation of fair and stable employment and business opportunities, we aim to enhance our corporate value in the following ways:
In addressing materialities of the sustainability management, we recognize the importance of strategically creating value by utilizing non-financial capital such as human capital and intangible assets, and going forward, we will enhance the explanation of investments in non-financial capital to realize our long-term vision with the achievement of the KPIs set as our basic goal.
Reference: [NX GROUP “Basic Policy on Diversity Promotion”]
By promoting diversity and creating an environment where all employees respect each other's diversity and maximize the power of each employee, we will realize "self-growth and self-fulfillment for employees" and "sustainable growth and improvement of corporate value of NX GROUP".
“Respect for Diversity”
We will respect each other regardless of age, gender, sexual orientation, gender identity, nationality, disability, etc.
＜Initiatives of climate change issues ＞
Solving environmental issues is essential for realizing a sustainable society, and we believe it is one of the most important issues for our group. The Sustainability Policy and Vision formulated in January 2023 clearly state that we will contribute to the realization of a carbon-neutral society and the preservation of the global environment by engaging in businesses that help reduce the environmental impact of our company and our customers. In addition, to contribute to the realization of a carbon-neutral society by 2050, as set forth by the Japanese government, we have set new medium- and long-term goals for the Group for 2030 and 2050.
To achieve these medium- and long-term goals, we will expand information disclosure in line with the TCFD framework, which we announced our endorsement of in May 2022, promote efforts toward SBT certification (commitment letter to be submitted in May 2023), and promote measures to reduce CO2 emissions, including the introduction of environmentally friendly vehicles.
We publish information regarding long-term target, each year’s activities in our website, the Integrated Report and Sustainability Databook.
Environmental initiatives, including medium- and long-term targets for reducing CO2 emissions, are posted on our website:
(Japanese website) https://www.nipponexpress-holdings.com/ja/sustainability/value/environment/
(English website) https://www.nipponexpress-holdings.com/en/sustainability/value/environment/
Our Integrated Reports are available on our websites:
(Japanese website) https://www.nipponexpress-holdings.com/ja/ir/library/anual/
(English website) https://www.nipponexpress-holdings.com/en/ir/library/annual/
Our Sustainability Databook are available on our websites:
(Japanese website)：https://www.nipponexpress-holdings.com/ja/sustainability/report/
(English website)：https://www.nipponexpress-holdings.com/en/sustainability/report/
Our board determines matters stipulated by the law or the article of incorporation and matters related to important management policies and strategies in accordance with the "Board’s Regulations" and "Standards for Deliberation at Board of Directors." In addition, with the transition to a company with an Audit & Supervisory Committee, many decisions on important business execution matters will be delegated to Directors to further speed up decision-making and strengthen the supervisory function of the Board of Directors, while we delegate individual business management matters to the executive officers who are in charge of implementation as often as possible.
Taking into consideration the requirement for outside directors stipulated in the Companies Act and the criteria set by securities exchanges, our company has established our own standards; and we appoint outside directors in accordance with these standards.
When the following items do not apply to an outside director candidate, we consider that they have the appropriate independence:
* An “executive officer” signifies an executive director, an executive officer or an employee.
When appointing independent outside directors, we strive to select candidates who can be expected to make effective proposals to the Board of Directors regarding the company’s management policies and management improvements.
We are a company with an Audit and Supervisory Committee and three out of seven Directors (excluding Directors who are Audit Committee members) are appointed as Independent Outside Directors, and three out of four Directors who are Audit Committee members are appointed as Independent Outside. As for the board’s functions on the matters of nomination and remuneration of our senior management, we seek advice from independent outside directors at the board meeting in order to obtain their objective standpoints.
We have established a discretionary Remuneration and Nomination Advisory Committee - chaired by an outside director and with three out of four committee members who are independent outside directors - as an advisory body to the Board of Directors. The board shall adopt resolutions on agenda items related to compensation and nomination of directors and executive officers with the greatest regard for the committee’s reports.
It has been determined that the Remuneration and Nomination Advisory Committee shall “consist of three or more members who are directors, the majority of which shall be independent outside directors.” In addition, the committee is composed of lawyers, corporate executives and etc. with diverse perspectives to enhance its independence and objectivity.
The committee deliberates on the appointment and dismissal of directors, as well as on establishing a skills matrix for the composition of the Board of Directors, the CEO succession plan, and the policies and systems for remuneration, and reports to the Board of Directors. The board then takes a final decision with the greatest regard for the committee’s report.
Our company's Board of Directors is structured to maintain a balance of knowledge, experience, and abilities among the Board of Directors skills matrix established in line with the Board of Director's business strategies, such as increasing the ratio of overseas sales of NX GROUP and promoting ESG management.
When we select director candidates excluding Directors who are Audit and Supervisory Committee Members, we have appointed seven Directors, including three independent outside directors, based on their diverse perspectives, including whether or not they have the necessary experience and specialized knowledge as Directors, evaluation of the status of achievement of the business plan in the businesses and areas for which the candidates have been in charge, and character and insight.
For the appointment of Directors who are Audit and Supervisory Committee Members, we have appointed four members, including three independent external Directors, based on their experience, knowledge, personalities and insights considered necessary to conduct audits of financial, accounting, legal and other matters from a variety of perspectives as Audit and Supervisory Committee Member, and other matters.
When we select independent outside Director candidates, we make decisions based on the report from the discretionary Remuneration and Nomination Advisory Committee - with three out of four committee members who are independent outside directors—as the advisory body of the Board of Directors.
Our company annually discloses the status of our outside directors holding additional posts through the Convening Notices of General Shareholder Meetings, Annual Securities Reports and Corporate Governance Reports.
Our board regularly checks whether or not our executive directors are serving as officers at other companies.Currently, there is no interlocking position which may limit the directors from fulfilling their roles and responsibilities. No full-time Audit & Supervisory Committee Member is serving as officers at other companies, so they can concentrate solely on their roles within our company.
In addition to reports from each director on the status of the execution of their duties, an external institution is appointed to conduct an annual survey of directors, including those from outside our company, on the effectiveness of the Board of Directors as a whole, including the Remuneration and Nomination Advisory Committee, and collect their opinions. The results of analysis and evaluation of the survey are discussed and reviewed by the Board of Directors.
A questionnaire survey conducted by an external organization on the effectiveness of the Board of Directors included the following items, and based on the results of the survey, it was determined that the effectiveness of the Board of Directors as a whole has been maintained (Most recently, in December 2023, the survey was conducted for all Directors and Audit & Supervisory Board Members at a company with an Audit and Supervisory Board prior to the change in the institution).
(Questionnaire items: (1) composition and operation of the board of directors, (2) management and business strategies, (3) corporate ethics and risk management, (4) performance monitoring and management evaluation, (5) dialogue with shareholders, etc., (6) free responses for each major item)
Issues identified through the recent effectiveness evaluation questionnaire leading up to this evaluation, and improvements made in response to these issues, include the establishment of an annual reporting plan to oversee the formulation of business plans and the reliable implementation of important investment projects, compliance, safety management, and system risks, as well as increased opportunities for discussion at board meetings through reporting during the formulation process of important strategies and policies, such as the business plan, sustainability, and DX.
Furthermore, efforts have been made to improve the effectiveness of the Board of Directors by providing opportunities for collaboration with and training for outside directors, such as holding Liaison Meetings for Independent Outside Directors and “Outside Directors’ Seminars.”
The points that were rated as particularly effective through the most recent survey conducted in December 2023 are as follows:
As described above, the Board of Directors was evaluated as effective with respect to “a board composition that ensures diversity” and “the relationship between the management team and outside directors.”
In addition, the issues identified by the questionnaire are as follows:
To address these issues, the following improvements will be made to improve the effectiveness of the Board of Directors and strengthen its supervisory function:
We will continue to discuss ways to further improve the Board of Directors to ensure even greater effectiveness.
For an overview of the effectiveness evaluation survey, please also refer to “2. Matters Regarding Functions of Execution of Duties, Auditing and Supervision, Appointment, Decisions on Compensation, etc. (Overview of Current Corporate governance)” of this report.
Our company’s Corporate Governance Report is available on our websites:
（Japanese website）
https://www.nipponexpress-holdings.com/ja/ir/governance/
（English website）
https://www.nipponexpress-holdings.com/en/ir/governance/
Our company provides opportunities for seminars and social gatherings for directors to deepen their understanding of our company’s business challenges and acquire the necessary knowledge of corporate governance, financial affairs and laws. We bear the expenses of these.
In addition to internal orientation sessions upon appointment and as necessary, we help newly appointed directors to acquire the necessary expertise for their roles and responsibilities, providing opportunities them to enhance their expertise in the performance of their duties, particularly with respect to corporate governance, such as external seminars and other training tailored to their needs.
We also provide opportunities for seminars, exchange meetings, and other events where, after their appointment, outside directors can acquire essential knowledge on the company’s management issues, finance, legal compliance, etc., as appropriate.
We expect our Audit & Supervisory Committee Members to acquire wide knowledge through attending various meetings of the Japan Audit & Supervisory Board Members Association as its members and seminars held by the Japan Industrial Management & Accounting Institute.
For our outside directors, we provide opportunities to acquire knowledge concerning our company’s business operations through participating in various internal events and site visits.
In addition, in order to seek management judgment from an independent perspective, we also hold monthly “Outside Officers Seminar,” in which executive officers and executives give presentations on the operational challenges facing the company as well as the management visions, goals, and challenges of the divisions under their jurisdiction, providing an opportunity for outside officers to develop an understanding of these topics.
For our executive officers and the candidates for our company’s senior managers who are candidates for Representative Director, we provide external training courses, such as a Master of Business Management, so that they can acquire knowledge necessary for executive managers including global business management, financial literacy, business strategies and governance.
We consider the above trainings a good method for training successors of top management.
For dialogues with shareholders and investors, the Investor Relations Promotion Group of the Corporate Planning Division within the Corporate Strategy Headquarters, which is managed by our top managers, responds to requests. Giving consideration to topics and dates, our top managers, the officers in charge and/or senior managers (including executive officers) attend the meetings.
In terms of how dialogues are conducted, we hold one-on-one base meetings in Japan and overseas as well as each quarter's financial results briefings is held via web conference, with the main speaker for the first and third quarters being the director in charge of finance, and the second and fourth quarters being explained by Representative Director President. We also hold site visits, business result presentations, an Investor Day (IR Day) where each executive director gives a briefing, and small meetings as necessary. We attend small meetings and Investor Relations Conferences held by securities firms in order to create opportunities for dialogues with shareholders and investors.
Opinions and requests received from shareholders and investors through dialogue are reported semiannually at board meetings by the officer in charge of investor relations. To outside Directors, we will provide an opportunity to gain a deeper understanding of the opinions of shareholders and investments through Board of Directors and to have a forum for discussion at Board of Directors, which will lead to an opportunity to place greater emphasis on market participants. To the senior management of the company, the senior management of our main subsidiary Nippon Express Co., Ltd. (including executive officers and division managers of the head office, etc.), and presidents of regional headquarters of overseas operating companies, we share the content of questions raised with investors and others at closing results briefings via emails as necessary. We also send feedback to relevant internal divisions quarterly and incorporate successful initiatives into our corporate activities.
Inside our company, the Investor Relations Promotion Group serves as the administrative office for information disclosure. The Group establishes, implements and amends the Disclosure Policy with cooperation from other divisions such as the Corporate Communication Division, the Secretarial Division, the Financial Planning Division, the Accounting Division and the Corporate Planning Division. The group also discusses the appropriateness of information disclosure activities with these divisions. The results are then reported to the board for it to make a final decision. In accordance with the Disclosure Policy determined by the board, a senior manager or other officer nominated as the individual responsible discloses the information.
The board obtains the progress of our information disclosure activities through reports by the director in charge of the Corporate Planning Division and also checks the appropriateness of the policy.
Our company’s Disclosure Policy is available on our websites:
（Japanese website）
https://www.nipponexpress-holdings.com/ja/ir/disclosure/
（English website）
https://www.nipponexpress-holdings.com/en/ir/disclosure/
[Status of Dialogue with Shareholders and Investors, etc.]
As stated in Principle 5-1 (Policy on Dialogue with Shareholders) above, NXHD engages in dialogue with shareholders and investors, and we strive to incorporate the opinions and requests we receive in these dialogues into the management of the Company. These dialogues cover a wide range of topics, including the Company’s financial results, performance, business strategy, market trends and the business environment, and sustainability management, and opportunities are provided for briefings, meetings, etc. to address these topics and requests.
For details on the status of dialogue, please refer to the “Status of IR Activities” in “III. Implementation of Policies Regarding Shareholders and Other Stakeholders” in this report.
This information is also disclosed on “Dialogue with Shareholders and Investors” of our company website.
（Japanese website）
https://www.nipponexpress-holdings.com/ja/ir/dialogue/
（English Website）
https://www.nipponexpress-holdings.com/en/ir/dialogue/
Along with the NX Group Business Plan, we have disclosed our “Action to Implement Management that is Conscious of Cost of Capital and Stock Price” to the Tokyo Stock Exchange in a timely manner, and published it on the Company website.
“Initiatives to Improve Corporate Value” website:
（Japanese website）
https://www.nipponexpress-holdings.com/ja/ir/management/improvement/
（English Website）
https://www.nipponexpress-holdings.com/en/ir/management/improvement/
*“NX Group Business Plan ~2028 Dynamic Growth 2.0 “Accelerating Sustainable Growth” Part 6, ‘Initiatives to Improve Corporate Value’ is applicable.
The following is a summary of the “Initiatives to Improve Corporate Value” that were discussed and resolved on by the Company's Board of Directors:
For details, please refer to our company disclosure materials.
| Ratio of Foreign Shareholders | Between 20% and 30% |
|---|
| Name | Number of shares (Thousand shares) |
Holdings (%) |
|---|---|---|
| The Master Trust Bank of Japan, Ltd. (Account in Trust) | 12,753 | 14.5 |
| Custody Bank of Japan, Ltd. (Account in Trust) | 6,549 | 7.4 |
| Asahi Mutual Life Insurance Company | 5,601 | 6.4 |
| NX Holding Association | 4,073 | 4.6 |
| Sompo Japan Insurance Inc. | 3,567 | 4.1 |
| Mizuho Trust & Banking Co., Ltd. as trustee for Retirement Benefit Trust of Mizuho Bank, Ltd. (re-entrusted by Custody Bank of Japan, Ltd.) | 2,850 | 3.2 |
| State Street Bank West Client – Treaty 505234 | 1,519 | 1.7 |
| JPMorgan Securities Japan Co., Ltd. | 1,433 | 1.6 |
| JP MORGAN CHASE BANK 385781 | 928 | 1.1 |
| Hino Motors, Ltd. | 844 | 1.0 |
| Majority Shareholder (excluding the parent company) | None |
|---|
| Parent Company | None |
|---|
The content of the Large Shareholding Report (Change of Status Report) is as follows:
| Name | Address | Number of Shares (Thousand shares) |
Holdings (%) |
|---|---|---|---|
| Mizuho Bank, Ltd. | 1-5-5, Otemachi, Chiyoda-ku, Tokyo, Japan | 2,850 | 3.2 |
| Asset Management One Co., Ltd. | 1-8-2, Marunouchi, Chiyoda-ku, Tokyo, Japan | 1,918 | 2.1 |
| Total | 4,768 | 5.3 |
In a Large Shareholding Report (Change of Status Report) which was being made available for public inspection as of October 30, 2023, it was described that, MUFG Bank, Ltd. and other three joint holders hold the following shares as of October 23, 2023; however, since our Company could not confirm the actual number of shares owned as of December 31, 2023, such shares are not included in Status of Principal Shareholders described above.
The content of the Large Shareholding Report (Change of Status Report) is as follows:
| Name | Address | Number of Shares (Thousand shares) |
Holdings (%) |
|---|---|---|---|
| MUFG Bank, Ltd. | 2-7-1, Marunouchi, Chiyoda-ku, Tokyo, Japan | 641 | 0.7 |
| Mitsubishi UFJ Trust and Banking Corporation | 1-4-5, Marunouchi, Chiyoda-ku, Tokyo, Japan | 3,066 | 3.4 |
| Mitsubishi UFJ Asset Management Co., Ltd. | 1-9-1, Higashishimbashi, Minato-ku, Tokyo, Japan | 833 | 0.9 |
| Total | 4,541 | 5.0 |
In a Large Shareholding Report (Change of Status Report) which was being made available for public inspection as of December 7, 2023, it was described that, Nomura Securities Co., Ltd. and other three joint holders hold the following shares as of November 30, 2023; however, since our Company could not confirm the actual number of shares owned as of December 31, 2023, such shares are not included in Status of Principal Shareholders described above.
The content of the Large Shareholding Report (Change of Status Report) is as follows:
| Name | Address | Number of Shares (Thousand shares) |
Holdings (%) |
|---|---|---|---|
| Nomura Securities Co., Ltd. | 1-13-1, Nihombashi, Chuo-ku, Tokyo, Japan | 216 | 0.2 |
| Nomura Holdings, Inc. | 1-13-1, Nihombashi, Chuo-ku, Tokyo, Japan | 0 | 0 |
| NOMURA INTERNATIONAL PLC | 1 Angel Lane, London EC4R 3AB, United Kingdom | 204 | 0.2 |
| Nomura Asset Management Co., Ltd. | 2-2-1, Toyosu, Koto-ku, Tokyo, Japan | 4,861 | 5.4 |
| Total | 5,283 | 5.3 |
| Listed Stock Exchanges and Section | Tokyo / First Section |
|---|---|
| Fiscal Year End | March |
| Industry Type | Land Transportation |
| (Consolidated) Number of Employees as of the Last Fiscal Year-end | Over 1000 |
| (Consolidated) Sales as of the Last Fiscal Year-end | Over 1 trillion yen |
| Number of Consolidated Subsidiaries as of the Last Fiscal Year-end | Between 100 and 300 |
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Nothing of note
