To achieve our goals, promote sustainable growth, and increase long-term corporate value, Seiko Epson continuously improves corporate governance to ensure transparent, fair, and fast decision-making, including by ensuring that independent outside directors comprise at least one-third of the board, and by establishing committees to nominate officers and determine compensation.
Epson will continue to enhance the effectiveness of its corporate governance by further improving the supervisory function of the Board of Directors and by enhancing discussions at board meetings, as well as by speeding up decision-making in management as a company with an Audit & Supervisory Committee.
Principles of Corporate Governance
The general principles of corporate governance at Epson are as follows:
- Respect the rights of shareholders, and secure equality.
- Keeping the interests of shareholders, customers, communities, business partners, employees and other stakeholders in mind, work in an appropriately cooperative manner with them.
- Disclose company information as appropriate and ensure transparency.
- Directors, Executive Officers, and Special Audit & Supervisory Officers shall be aware of their fiduciary responsibilities and shall fulfill the roles and responsibilities expected of them.
- Epson shall engage in constructive dialogue with shareholders.
Corporate Governance Structure
Seiko Epson ("the Company") has established itself as a company with an Audit & Supervisory Committee with the aim of strengthening the supervision and monitoring of management and of speeding up decision-making by separating the management supervision and execution of operations.
The main corporate management bodies and their aims are described below.
Board of Directors
The Board of Directors, with a mandate from shareholders, is responsible for realizing efficient and effective corporate governance, through which the Company will accomplish its social mission, sustain growth, and maximize corporate value over the medium and long terms. To fulfill its responsibilities, the Board of Directors supervises general operations to ensure that operations are fair and transparent. The Board of Directors also makes decisions on important business affairs of the Company, such as decisions on the formulation of important business matters, such as the establishment of management plans and business plans and decision on investment projects that exceed a certain fixed amount of money.
The Board of Directors is composed of 11 directors*1, including five Outside Directors. Meetings of the Board of Directors are, as a rule, held once per month and as needed. Meetings of the Board of Directors are chaired by the Chairperson of the Board (who is a Non-Executive Director) per the Board of Directors Regulation. The Board of Directors makes decisions on basic business policies, important business affairs, and other matters that the Board of Directors is responsible for deciding as provided for in internal regulations. Business affairs that the Board of Directors is not responsible for deciding are delegated to executive management, and the Board monitors these. Under the company with an Audit & Supervisory Committee structure, the scope of business affairs delegated by the Board of Directors to executive management, such as making decisions on investment projects that are less than a certain fixed amount of money, has been expanded. As such, matters discussed by the Board of Directors are limited to motions of the highest importance (e.g., governance, capital policy, compliance, risk management, deliberations on megatrends and mid- to long-term strategies), thereby speeding up business decision-making and increasing the agility of business. The Company has specified in the Corporate Governance Policy that at least one-third of the members of the Board of Directors shall be Outside Directors.
*1 As of June 30, 2021
Audit & Supervisory Committee
The Audit & Supervisory Committee, with a mandate from shareholders, is responsible for independently and objectively auditing and monitoring the execution of Director duties and for ensuring the sound and sustained growth of the Company. The Audit & Supervisory Committee establishes criteria for properly evaluating potential External Financial Auditors. After selecting External Financial Auditors, the Audit & Supervisory Committee verifies whether External Financial Auditors possess the necessary independence and expertise. In addition, the Audit & Supervisory Committee conducts audits in cooperation with internal audit departments and Financial Auditors.
The Audit & Supervisory Committee is composed of four Audit & Supervisory Committee members*2, three of whom are Outside Directors. It is chaired by a full-time member of the Audit & Supervisory Committee. Meetings are generally held once per month and as needed.
*2 As of June 30, 2021
The Compliance Committee hears and discusses important matters concerning the Company's compliance program in order to supervise whether the compliance program is being properly implemented along the executive line. It reports its findings and offers opinions to the Board of Directors.
As an advisory body to the Board of Directors, the Compliance Committee is composed of all 5 Outside Directors and Directors who are full-time members of the Audit & Supervisory Committee. It is chaired by the full-time member of the Audit & Supervisory Committee, and meetings are held once every six months and as needed.
A Chief Compliance Officer ("CCO") is chosen by the Board of Directors to oversee and monitor the execution of all compliance operations. The CCO periodically reports the state of compliance affairs to the Compliance Committee.
Director Nomination Committee & Director Compensation Committee
A Director Nomination Committee and a Director Compensation Committee have been established as advisory bodies to the Board of Directors, with the aim of ensuring the transparency and objectivity regarding selections for and compensation of Directors, Executive Officers and Special Audit & Supervisory Officers. Outside Directors are the main members and the human resources department is the secretariat.
The outline of each Committee is as follows:
The Director Nomination Committee and the Director Compensation Committee are both comprised of all the Outside Directors, the President/Representative Director, and the Director in charge of Human Resources. Directors who are full-time members of the Audit & Supervisory Committee can attend either meeting as observers.
By a resolution of the Board of Directors in June 2021, the chairperson will be elected by the Board from among the Outside Directors.
Activities of the Director Nomination Committee
The Committee met eight times during the period from April 2020 to the time of the dispatch of this convocation notice. The Committee deliberated on matters including policies for selecting Officers (Directors, Executive Officers and Special Audit & Supervisory Officers) and candidate proposals, changes to the timing of appointment of Executive Officers, and chairpersons of the Director Nomination Committee and the Director Compensation Committee.
Activities of the Director Compensation Committee
The Committee met nine times during the period from April 2020 to the time of the dispatch of this convocation notice. The Committee deliberated on matters including the amount of base compensation and bonuses for each Director, as well as granting of basic points under the performance-linked compensation system.
Corporate Strategy Council
The Corporate Strategy Council is an advisory body to the President. It was created to help ensure that the right decisions are made based on the advice and views of executive management. Meetings of the Corporate Strategy Council are held to discuss important matters that affect the entire Epson Group and matters brought up before the Board of Directors. The Corporate Strategy Council is composed of Directors, Executive Officers, and Special Audit & Supervisory Officers.
Nomination of Officers
With an aim to ensure transparency and objectivity, Director candidates who are submitted for their appointments to the General Meeting of Shareholders are determined by the Board of Directors after going through a fair, transparent, and rigorous screening and reporting by the Director Nomination Committee in which Outside Directors make significant contributions.
- Officers must be impartial and possess high integrity and ethical standards
- Outside Directors must satisfy criteria concerning the independence of Outside Directors in order to guarantee their independence. The Board of Directors established "Criteria for Independence of Outside Directors."
* As a general rule, Outside Directors shall not concurrently serve as either a Director or a Kansayaku of more than three publicly listed companies other than Epson per the bylaws established by resolution of the Board of Directors.
* Per Epson policy, Directors shall attend at least 75% of the meetings of the Board of Directors per year.
- After passing a fair, transparent, and rigorous screening and reporting by the Director Nomination Committee, Executive Director candidates and Executive Officers are selected by the Board of Directors in addition to the foregoing policy and on nomination criteria, such as broadness of insight, extensiveness of experience, sense of mission, sense of responsibility, leadership, and the ability to drive change.
- The Director Nomination Committee screens Non-Executive Director candidates and Special Audit & Supervisory Officers in a fair, transparent, and rigorous screening in line with the foregoing policy and on the basis of nomination criteria, including but not limited to broadness of insight, extensiveness of experience, sense of mission, sense of responsibility, management knowledge and specialized knowledge. The Director Nomination Committee reports its opinions to the Board of Directors, which finalizes the selections. The consent of the Audit & Supervisory Committee is required for nominating Director candidates who are Audit & Supervisory Committee Members and for appointing Special Audit & Supervisory Officers.
Criteria for Independence of Outside Directors
The Company has established the criteria below to objectively determine whether potential Outside Directors are independent.
- A person is not independent if:
- The person considers the Company to be a major business partner1, or has served as an executive2 within the past five years in an entity for which the Company is a major business partner;
- The person is a major business partner3 of the Company or has served as an executive within the past five years in an entity that is a major business partner of the Company.
- The person is a business consultant, certified public accountant, or lawyer who has received a large sum of money or other forms of compensation4 (other than remuneration as an officer) from the Company or has, within the past three years, performed duties equivalent to those of an executive as an employee of a corporation or group, such as a union, that has received a large sum of money or other forms of compensation from the Company;
- The person is a major shareholder5 of the Company or has, within the past five years, been an executive or Audit & Supervisory Board Member of an entity that is a major shareholder of the Company;
- The person is an executive or Audit & Supervisory Board Member of an entity in which the Company is currently a major shareholder;
- The person is a major lender6 to the Company or has been an executive of a major lender to the Company within the past five years;
- The person has been employed by an auditing firm that has conducted a legal accounting audit of the Company within the past five years;
- The person has been employed by a leading managing underwriter of the Company within the past five years;
- The person has received a large donation7 from the Company or, within the past three years, has performed duties equivalent to those of an executive as an employee of a corporation or a group, such as a union, that has received a large donation from the Company;
- The person came from an entity that employs someone from the Company as an Outside Director; or
- A spouse or relative within the second degree of kinship of a person having the interests listed in (1) through (9) above.
- Even if any of the foregoing criteria apply to a potential Outside Director, the Company can elect that person as an Outside Director if that person satisfies the requirements for Outside Directors set forth in the Companies Act, and the Company deems the person suitable as an Outside Director of the Company in light of his or her personality, knowledge, experience, or other qualifications upon explaining and announcing the reasons thereof.
- A person (usually a supplier) considers the Company to be a major business partner if 2% or more of its consolidated net sales (consolidated revenue) has come from the Company in any fiscal year within the past three years.
- "Executive" means an executive officer, executive director or operating officer, or an employee occupying a senior management position of department manager or higher.
- A person (usually a buyer) is a major business partner if 2% or more of the Company's consolidated revenue has come from that partner in any fiscal year within the past three years.
- "A large sum of money or other forms of compensation" means an average annual amount for the past three years that is:
- no less than 10 million yen for an individual; or
- no less than 2% of the annual revenues in any fiscal year for a group.
- "Major shareholder" means a shareholder who directly or indirectly holds 10% or more of the voting rights.
- "A major lender" means a financial institution or other major creditor that is indispensable for the Company's financing and on which the Company depends to the extent that it is irreplaceable in any fiscal year within the past three years.
- "Large donation" means a donation whose annual average amount for the past three years exceeds either:
- 10 million yen or
- 30% of the annual expense of the group, whichever is higher.
Reason for Appointed as Outside Directors, and Attendance at Meetings of the Board of Directors
|Name||Reason for Appointment||Attendance at meetings of the Board of Directors|
|Hideaki Omiya||Mr. Omiya has served as the President and a Chairman of the Board of Mitsubishi Heavy Industries, Ltd. and has considerable experience and insight as a chief executive and engineer.
He has monitored corporate management by expressing opinions actively including findings and proposals regarding overall managerial issues from a perspective of a corporate manager well-versed in the global corporate management in the heavy industry, a different business field.
We have nominated him as a candidate for independent Outside Director with the expectation that he will utilize his wealth of experience and insight to monitor corporate management appropriately in order to achieve sustainable growth and improve the Company's corporate value over the medium and long terms.
|13 / 13 meetings
|Mari Matsunaga||Ms. Matsunaga has created new business models and served as an Outside Officer in multiple companies, has a wealth of experience and considerable insight.
She has effectively monitored corporate management by actively speaking out on and proposing solutions to managerial issues,As an Outside Director of the Company, she has appropriately monitored management, actively pointing out business issues and offering recommendations particularly from the viewpoint of promoting open innovation.
We have nominated her as a candidate for independent Outside Director with the expectation that she will utilize her wealth of experience and insight to monitor corporate management appropriately in order to achieve sustainable growth and improve the Company's corporate value over the medium and long terms.monitor corporate management appropriately aimed at achieving sustainable growth and improving the Company's corporate value over the medium- to long-term.
|13 / 13 meetings
|Yoshio Shirai||Mr. Shirai has served as Directors at Toyota Motor Corporation, Hino Motors, Ltd. and Toyota Tsusho Corporation.
He has considerable insight, a wealth of experience as a corporate manager, and a track record of achievements as an Outside Director and member of the Company's Audit & Supervisory Committee. We have nominated him as a candidate for Outside Director who is an Audit & Supervisory Committee member with the expectation that he will appropriately supervise and contribute to the soundness of the Company's management so as to achieve sustainable growth and improve the Company's corporate value over the medium and long-terms.
|13 / 13 meetings
|Susumu Murakoshi||Mr. Murakoshi possesses a high level of professional knowledge and insight as an attorney. Given his extensive experience in the legal community, which has included stints as the Chairman of the Japan Federation of Bar Associations and the Chairman of the Political Federation of Japan Patent Attorneys, the Company believes that Mr. Murakoshi can be expected to contribute to the effective supervision and soundness of management so as to help ensure sustained growth and enhance long-term corporate value.||10 / 10 meetings
|Michiko Ohtsuka||Ms. Ohtsuka possesses a high level of professional knowledge and insight as a certified public accountant. Given that she has experience and considerable insight as an Outside Officer in a public company, the Company believes that Ms. Ohtsuka can be expected to contribute to the effective supervision and soundness of management so as to help ensure sustained growth and enhance long-term corporate value.||10 / 10 meetings
* Mr. Murakoshi and Ms. Ohtsuka were eligible to attend the 10 meetings held after their appointment at the Ordinary General Meeting of Shareholders on June 25 2020.
The Company's Director Nomination Committee, which is composed primarily of Outside Directors, discusses enhancements to succession plans and the Director appointment process, reviews the roadmap, selects Director candidates, establishes and implements development plans, and reviews the process for evaluating, narrowing down, and replacing candidates.
The Company selects candidates for senior management positions in order to systematically develop these individual as future executives. After their development is assessed, the HR Development Strategy Council, an advisory body to the President, devises and implements a concrete development plan. The state of development and issues are reported to the Director Nomination Committee, and development activities are further enhanced under the supervision and advice of the Outside Directors. Candidates to succeed the President are identified through the aforesaid process and developed by appointing them to key management roles and by providing them with other essential training opportunities.
The Company believes that a diverse Board of Directors is useful for facilitating substantive board discussions that cover all angles. Therefore, the Company has a fundamental policy of assembling a Board of Directors that is well balanced and composed of persons who combine a broad spectrum of knowledge, experience, and skill, without regard to things such as gender, race, ethnicity, nationality, cultural background, or age.
The current Board of Directors reflects this policy and has articulated a management organization for realizing the Management Philosophy and corporate vision so as to enable the Company to achieve sustainable growth and improve corporate value over the medium to long term.
The areas and skills where there are particularly high expectations for Directors are as below.
|Title||Name||Areas of expertise and skills particularly expected by the Company|
|Corporate management||Development Design Technology Production||Sales Marketing||IT Digital||Finance Accounting||Legal affairs Compliance||Global (Internationality)|
|Chairman and Director||Minoru Usui|
|President and Representative Director||Yasunori Ogawa|
|Representative Director Senior Managing Executive Officer||Koichi Kubota|
|Director Managing Executive Officer||Tatsuaki Seki|
|Director Executive Officer||Taro Shigemoto|
|Outside Director||Hideaki Omiya|
|Outside Director||Mari Matsunaga|
|Director Full-Time Audit & Supervisory Committee Member||Masayuki Kawana|
|Outside Director Audit & Supervisory Committee Member||Yoshio Shirai|
|Outside Director Audit & Supervisory Committee Member||Susumu Murakoshi|
|Outside Director Audit & Supervisory Committee Member||Michiko Ohtsuka|
* Up to three areas of expertise particularly expected are stated.
Compensation of Officers
With an aim to ensure transparency and objectivity, compensation of officers is determined by the General Meeting of Shareholders, the Board of Directors or Audit & Supervisory Committee after going through a fair, transparent, and rigorous reporting by the Director Compensation Committee in which Outside Directors make significant contributions.
The Company has established the basic policies regarding the Officer compensation in its internal rules decided by the Board of Directors.
Compensation of Officers Who Have Executive Duties
- Compensation shall provide incentive to improve business performance in order to increase corporate value in the near, medium, and long terms.
- Compensation shall be sufficient to attract qualified persons both from within the Company and from outside.
- Compensation shall be commensurate with period performance so that Directors and Executive Officers can demonstrate their management capabilities to the fullest during their tenure.
Compensation Policies for Officers Who Do Not Have Executive Duties
- The composition of compensation shall guarantee independence so that these Officers can suitably exert their general management supervisory function, etc.
- Compensation shall be sufficient to attract qualified persons both from within the Company and from outside.
The Officer compensation system consists of the following components: base compensation, which is comprised of fixed compensation and a variable portion, bonuses, which are performance-linked compensation, and stock compensation, which is performance-linked, non-monetary compensation. Non-Executive Officers receive base compensation only, a fixed amount, because their role is to supervise general management. They do not receive bonuses and stock compensation, which are forms of compensation that are linked to performance and share price.
Base Compensation (fixed and variable)
Base compensation is a monthly monetary amount that is determined by taking into account factors such as the individual's position and responsibilities. The variable compensation component of base compensation for Officers who have executive duties reflects the results of annual performance evaluations based on criteria set according to the individual's role. (Variable range: 20%)
Monetary compensation is paid as a bonus once per year to Officers who have executive duties in an amount determined in accordance with considerations such as the level of achievement with respect to annual operating performance targets. It is possible that bonuses may not be paid if business profit does not reach a certain amount. Bonuses reflect the results of annual performance evaluations based on criteria set according to the individual's role. (Variable range of bonuses in months' worth of salary: ±1.2 months)
Bonuses are calculated based on a calculation standard that the Board of Directors has determined in advance. However, due to the nature of the short-term incentive bonus, non-recurring losses and other factors are taken into account based on the business profit of a single fiscal year. The amount of bonuses payable are calculated by multiplying the monthly amount of base compensation by a certain number of months determined according to the achievement level of the abovementioned performance indicators, in accordance with the calculation standards predetermined by the Board of Directors. The final payment amount is decided at the Ordinary General Meeting of Shareholders to ensure transparency.
Performance-linked Compensation (variable)
Officers who have executive duties are compensated with Seiko Epson shares under a trust scheme. Under this system, the Company contributes money up to 500 million yen in total for each target period, which covers a period of three consecutive fiscal years, to the trust as compensation for officers eligible for this system. During each target period, the trust uses the entrusted money to acquire up to 300,000 shares (in the event of a share split, share consolidation, etc., the said maximum number of shares will fluctuate in proportionate to the ratio of split or consolidation) of the Company's ordinary shares from the stock market or the Company (disposal of treasury shares). Every July during the trust period, basic points are granted based on positions and other factors. The number of points will fluctuate by multiplying the basic points by a performance-based coefficient determined based on the achievement level of the Company's medium- to long-term performance targets (the maximum number of total points per year is 100,000 points, and one point is equivalent to one share). In principle, after the elapse of three years from the date of grant of basic points, approximately 50% of the Company's ordinary shares equivalent to the number of points after multiplying the performance-based coefficient determined based on the achievement level of the Company's medium-term performance targets, which include business profit, ROS, and ROE, are delivered from the trust, and the remainder is paid as money equivalent to the cash value of the Company's ordinary shares for the purpose of appropriating it as funds to pay withholding taxes and other taxes.
The ratio of stock compensation to base compensation increases or decreases from 10% to 22% depending on position, while the number of shares delivered is linked to the achievement level of the performance indicators during the target period (3 years).
The Company has introduced provisions (malus and clawback provisions) under this stock compensation system that will cause Officers to lose their right to receive stock and require them to pay back an amount equal to the value of the stock already issued if they are found to have violated any laws, ordinances, or company regulations, standards, or other policies.
The Company has selected quantitative evaluations (business profit, ROS, ROE, cash flows from operating activities) as well as qualitative evaluations as indicators, so that the performance-linked compensation based on performance indicators can provide appropriate incentives to Directors and for the purpose of showing its commitment to promoting sustainable growth and increasing its medium to long-term corporate value. The Director Compensation Committee qualitatively evaluates performance based on progress against the previous Mid-Range Business Plan financial targets, the effects of currency volatility, progress in ESG management (environment assessment, CSR survey ranking and evaluation of the effectiveness of the Board of Directors), etc.
Compensation to Directors (Fiscal year ended March 2020)
(Millions of yen)
|Category||Number of individuals (Persons)||Base compensation||Performance-linked compensation||Total|
|Fixed (monetary)||Variable (monetary)||Bonuses (monetary)||Stock compensation (non-monetary)|
|Directors who are not Audit & Supervisory Committee members
(of which, Outside Directors)
|Directors who are Audit & Supervisory Committee members
(of which, Outside Directors)
- The Company has introduced an officers' shareholding association system to link compensation more closely to shareholders' value. A portion of the base compensation is discretionally allotted for the acquisition of the Company's shares. The Company has established the criteria for shareholding by its officers based on internal regulations defined by the Board of Directors to demonstrate its commitment to and responsibilities for the management to all shareholders.
- The amount above includes bonuses to be paid to Directors in the amount of 76 million yen (amount to be paid to five Directors excluding Chairman and Director without the right of representation, Outside Directors, and Directors who are Audit & Supervisory Committee Members), subject to the approval of the proposal concerning the payment of bonus to Directors to be proposed at the Ordinary General Meeting of Shareholders scheduled on June 25, 2021.
- The Company introduced a performance-linked stock compensation plan (stock compensation) by employing a framework referred to as the officer compensation BIP (Board Incentive Plan) trust, for the purpose of showing its commitment to promoting sustainable growth and increasing its medium to long-term corporate value, in addition to strengthening the sense of sharing common interests with its shareholders. The stock compensation stated above represents the amount recorded based on Japanese Generally Accepted Accounting Principles (JGAAP) concerning the stock delivery points granted in the current fiscal year.
- The number of individuals above includes two Directors who are Audit & Supervisory Committee Members who retired at the conclusion of the Ordinary General Meeting of Shareholders held on June 25, 2020.
- Stock options are not granted.
Actions to Ensure Board Effectiveness
1. Overview of Efforts to Evaluate the Effectiveness of the Board of Directors
The Board of Directors of the Company analyzes and evaluates the effectiveness of the entire Board of Directors every year based on Article 28 of the Corporate Governance Policy.
Evaluating the effectiveness of the Board of Directors
When evaluation is performed: February to March
When evaluation results are analyzed and issues are selected: April to May
Disclosure of issues in a Corporate Governance Report: June
Interim report to the Board of Directors (regarding actions taken to resolve issues): October
Final report to the Board of Directors (regarding action take to resolve issues): February of the following year
Disclosure in a Corporate Governance Report of the results of actions taken to resolve issues: June of the following year
2. FY2019 Evaluation Results
The Company analyzed and evaluated the effectiveness of its Board of Directors by asking all Board members to complete a questionnaire that covered the topics listed below.
- Board composition, functioning, and operation
- The function of the Audit & Supervisory Committee
- The function and operation of advisory bodies to the Board
- Management team evaluation, compensation, succession planning, and training
- Dialogue with shareholders
The results showed that the Board of Directors as a whole is functioning effectively.
The Company identified and addressed the issues below to improve Board effectiveness in the future.
- Further improving the organization and disclosure of business strategy risks and opportunities
We have redefined the risks in the Company's management strategy, concretized the risk items, and clarified the relevance to the business strategy. The management process for further enhancing the effectiveness of risk management has been rearranged and applied since 2021.
The Company's website discloses our view on the risks associated with changes in paper demand, while Integrated Report 2020 states the risks and opportunities for the Company vis-á-vis the social transformation brought about by the Covid pandemic.
The Company's view on the risks associated with changes in paper demand: (https://global.epson.com/SR/tcfd/) Risks and opportunities for the Company vis-á-vis the social transformation brought about by the Covid pandemic: (https://global.epson.com/IR/library/integrated_report.html)
We will continue to consider whether to further expand the scope of disclosure of risk management items based on a comprehensive assessment, including of the social and competitive environments.
- Further improving the organization and disclosure of the thinking with regard to business portfolio management.
The businesses in the Company's portfolio have been positioned and broadly divided into three areas according to the product life cycle: a new area, growth area, and mature area.
Funds will be allocated and targets set according to the positioning of the business, the PDCA cycle will be implemented for each, and the direction of the businesses will be determined while taking into consideration synergies among businesses. These strategies were articulated in the Epson 25 Renewed Corporate Vision announced in March 2021.
In April 2021, we transferred the IC test handler business to Kanematsu Corporation as part of our business portfolio management efforts.
The generated cash will be preferentially allocated to growth investments primarily in growth areas, new areas, and the environment. On top of that, the Company will continue to provide stable shareholder returns and build a sound financial structure.
3. FY2020 Evaluation Results
To incorporate a more objective perspective to the Board of Directors effectiveness evaluation for the 2020 fiscal year, we asked an independent firm to evaluate and provide feedback about each step in the process, from creating a questionnaire to analyzing and evaluating the answers.
In addition, the Company dug deeper based on recent corporate governance trends (such as the interests of institutional investors) and identified the following issues in order to improve effectiveness in the future:
- Promote diversity; and
- Promote digital transformation (DX).
In the future, we will work to further improve effectiveness by addressing these issues.
Responding to Large-Scale Acquisitions of Seiko Epson Shares
Epson's Corporate Governance Policy stipulates the following:
- Whether to accept a bid to purchase a number of shares that would give the acquirer control over the Company's financial and business policies ("large-scale acquisition" hereafter) should ultimately be decided by the shareholders.
- Epson shall ask persons who attempt to make large-scale acquisitions of Company shares to provide a sufficient amount of the information needed to determine the desirability of the large-scale acquisition from the perspective of ensuring and enhancing corporate value and the common interests of shareholders, after which Epson shall disclose the opinions of the Company's Board of Directors regarding the proposed large-scale acquisition, thereby doing its due diligence to provide shareholders with the time and information they need to consider the desirability of the large-scale acquisition. The Company shall also take appropriate actions based on the Financial Instruments and Exchange Act, the Companies Act, and other applicable laws and regulations.