Corporate Governance

Nomination of Candidates for Directors and Audit & Supervisory Board Members / Training

Nomination of Candidates for Directors

Our company has adopted human resource standards for Directors that take into account the composition of the Board of Directors.
Our company believes that it is important for the Board of Directors to have a certain number of people who are familiar with our company's business and its issues as a member of the Board of Directors, to ensure the independence and objectivity of the Board of Directors, and to ensure diversity in the knowledge, experience, and capabilities of the Directors, in order for the Board to fulfill its roles and responsibilities and to strategically direct our group, and has prepared a Skill Matrix as one of the criteria for selection.
Based on this, the Board of Directors receives recommendations from the Nominating Advisory Committee and appoints a certain number of candidates who are familiar with our company's business and its issues, and who are capable of carrying out our company's management appropriately, fairly and efficiently.
In the election of Director candidates, after discussions among representative directors, the CEO shall submit a draft to the Nomination Advisory Committee on full assessment of the abilities, knowledge and performance of individual candidates, regardless of whether they are from inside or outside of the Company. The Board of Directors shall make a decision based on a report submitted by the Nomination Advisory Committee.
The Nomination Advisory Committee, when it deems it necessary, deliberates on the dismissal of directors and
reports the results to the Board of Directors.
出光昭和シェル, DFF Inc.

Nomination of Candidates for Audit & Supervisory Board Members

Our company determines the standards for the personnel of Audit & Supervisory Board Members based on the structure of the Audit & Supervisory Board, after obtaining the prior consent of the Audit & Supervisory Board.
Candidates for Audit & Supervisory Board Members are selected based on the prior consent of the Audit & Supervisory Board, provided that they have appropriate experience and abilities as well as the necessary knowledge of finance, accounting or legal affairs. Candidates for internal Audit & Supervisory Board Members are selected based on their full knowledge of our company's business and its issues, and are able to conduct audits and supervision of our company appropriately, fairly and efficiently.
In the selection of candidates for Audit & Supervisory Board Members, the President and Representative Director discusses this with all representative directors and, based on the recommendations of the Nominating Advisory Committee, submits to the Board of Directors a draft which sufficiently evaluates the abilities, knowledge and performance of each candidate, as for both inside and outside the company, with the consent of the Audit & Supervisory Board.
出光昭和シェル, DFF Inc.

Independence Requirements for Outside Officers

In order for the Board of Directors to fulfill its supervisory functions, our company's basic policy is to appoint more than 1/3 of its Directors and half of its Audit & Supervisory Board Members as Independent Outside Directors and auditors, respectively, who have the knowledge and experience to provide useful advice for the management of our company, from among persons who satisfy the "Independence Requirements for Outside Officers " by taking into consideration a variety of knowledge and backgrounds.

  1. A person who has become an executive officer of the Company or its subsidiaries in the present or in the past.
  2. A person who is a major shareholder or currently affiliated with an organization that is a major shareholder with a 10% or higher share ratio in the Company’s latest shareholder list.
  3. A person who is currently affiliated with the Company’s business partners or their consolidated subsidiaries with a total annual transaction amount of 2% or more of consolidated net sales in the three most recent business years.
  4. A person who is a consultant, accounting professional, legal expert, accounting auditor, or contractor (if they are
    corporations, associations, or other organizations, those who actually belong to those organizations) who receives money or other properties of ¥10 million or more per annum from the Company other than remuneration for a Director or 4 Audit & Supervisory Board Member in the three most recent fiscal years.
  5. A person who is currently affiliated with non-profit organizations that have received 2% or more of their gross or ordinary income from the Company in the three most recent fiscal years.
  6. In the case where a person has belonged to any of the organizations or business partners described in "2." to "5." above, five years have not elapsed since (s)he left the organization or business partner.
  7. A person who is the spouse or relative within the third degree of kinship of an officer (excluding those that are not important) of the Company or a specified associated company of the Company.
出光昭和シェル, DFF Inc.

Training

Our company provides training to its Directors and Audit & Supervisory Board Members on the roles, responsibilities, and compliance that are expected of them when they become Directors or Audit & Supervisory Board Members of listed companies.
In addition, we explain our company's business, finance, and organization to newly appointed Independent Outside Directors and auditors of our company, so that they can fulfill their roles and responsibilities.
In addition, our company encourages Directors and Audit & Supervisory Board Members to improve their skills and provides them with training opportunities tailored to their needs, while at the same time providing a broad range of support for necessary expenses.
出光昭和シェル, DFF Inc.