Messages from the Chairs of the Statutory Committee

About the Nomination Committee

We intend to create a diverse portfolio of Group officers, and contribute to realizing SOMPO’s Purpose and improving corporate value.

Scott Trevor Davis
Independent Director, Chair of the Nomination Committee

The Nomination Committee aims to improve transparency and fairness in the Group’s governance by introducing a third-party perspective to deliberations concerning the appointment and dismissal of Directors and Executive Officers at all Group companies.
The Group is currently promoting transformation—or qualitative change—with the goal of achieving SOMPO’s Purpose, namely to become “A Theme Park for Security, Health & Wellbeing.”
Improving diversity among Group officers is critical both to realizing SOMPO’s Purpose and to developing our global business—not just in insurance but in wide-ranging sectors, including Nursing Care & Seniors, and Digital. The Nomination Committee works to improve diversity among Group officers both when appointing individual directors and executive officers and when formulating the Succession Plan.
In fiscal 2022, based on the reorganization of the composition of the Board of Directors (reducing the total number of directors by 2 and the number of outside directors by 1), we selected candidates for the Board of Directors and the head of the Sompo International Tokyo Office. In addition, for the purpose of more effectively implementing the business strategy of the entire Group, we set up opportunities for the direct exchange of opinions between the Nomination Committee and each Business CEO in appointing Directors and Executive Officers of the major Group companies.
Through its deliberations, the Nomination Committee intends to establish a diverse portfolio of Group officers, and contribute to realizing SOMPO’s Purpose and to improving corporate value.

Nomination Committee Performance

The Nomination Committee met 10 times in fiscal 2022. Its main agenda items are listed below.

Topic Details
Formulating the Succession Plan
  • Certain key positions are critical for bringing about the further transformation and growth of the Sompo Group; in the Succession Plan, the Committee has established a system that will produce high-quality individuals from diverse backgrounds in a stable and effective way.
  • A total of 86 key positions in the Group, including the position of Group CEO, are governed by the Succession Plan.
  • When selecting succession candidates, the Committee draws up various criteria for consideration, such as the proportion of positions held by women, to ensure a diverse pool of talented personnel.
Appointing Director candidates
  • After considering the criteria for the appointment of Directors and the balance of the Board of Directors as a whole, the Committee resolved an issue related to the appointment of Director candidates to be submitted to the Annual General Meeting of Shareholders.
Appointing Executive Officers
  • The Committee resolved an issue related to the appointment of Executive Officers.
Appointing Directors at Sompo Japan Insurance and Sompo Himawari Life Insurance
  • The Committee resolved an issue related to the appointment of Director candidates at Sompo Japan Insurance and Sompo Himawari Life Insurance.

About the Audit Committee

We contribute to the enhancement of corporate value through appropriate audits of the Group’s wide range of business areas, and thereby meet the expectations of our stakeholders.

Misuzu Shibata
Independent Director, Chair of the Audit Committee

The Audit Committee consists of five directors, four of whom are independent directors. Under our highly independent and objective structure consisting mainly of them, we conduct audit activities with the mission of protecting stakeholders’ interests through information sharing and active exchange of opinions among the Audit Committee and cooperation with the Internal Audit Department.
Audits are conducted mainly through meetings with executive officers and other members of the Board of Directors. In fiscal 2022, we visited several Group companies to gain a deeper understanding of the actual business conditions through direct interviews with on-site staff members, thereby ensuring highly effective audits.
Under the Medium-Term Management Plan launched in fiscal 2021, the Company is aggressively pushing new initiatives—such as solutions that utilize real data—to achieve its goal of becoming “A Theme Park for Security, Health & Wellbeing,” and our audits have therefore become broader in scope. In this fiscal year, the final year of the Medium-Term Management Plan, I believe we can contribute to the enhancement of corporate value by drawing on the knowledge, expertise, and diverse backgrounds of each Member of the Audit Committee to conduct effective and high-level audits in a wide range of business areas in accordance with our auditing objectives in order to ensure the appropriateness of our efforts to achieve SOMPO’s Purpose.
Going forward, the Audit Committee will work to improve appropriate communication with the executive divisions and streamline its auditing methods based on timely and accurate information gathering and active discussions among the committee members, and will continue its efforts to meet stakeholder expectations by conducting audits of the highest quality.

Audit Committee Performance

The Audit Committee met 13 times in fiscal 2022.
The Audit Committee formulates basic policies for audits and auditing plans, carries out audits year-round in accordance with these plans, and provides audit reports and a summary of its auditing activities at the end of each fiscal year. A report is provided to the Audit Committee following the completion of each audit activity, enabling the Committee to regularly verify the progress of the auditing plan. The Committee’s year-round auditing activities include: attending important meetings and verifying important decisions; collecting information through meetings with Representative Executive Officers, through meetings with Business CEOs and Group CxOs, through meetings with general managers of departments and offices, and through site visits to Group companies in Japan and overseas; and providing feedback and suggestions regarding management operations.
Our auditing activities for fiscal 2022 are outlined below.

Topic Details
Audit Committee Responsibility System
  • The Audit Committee Responsibility System, which is continuing from the preceding fiscal year, was introduced with the aim of conducting audits of greater depth. Each Business CEO and Group CxO is assigned a primary auditor from among the members of the Audit Committee. Audit Committee members other than the primary auditor also actively participate, and after the audit, the committee has a lively exchange of opinions.
Collaborating with the Internal Audit Department
  • In order to strengthen collaboration with the Internal Audit Department, as in the preceding fiscal year, the General Manager of the Internal Audit Department attends meetings between Audit Committee members and officers, and is present at site visits to Group companies both in Japan and overseas. The Internal Audit Department also discusses the results of internal audits with Audit Committee members and participates in the lively exchange of opinions as described above.
Collaborating with Independent Accounting Auditors
  • We established a plan for year-round meetings with Ernst & Young ShinNihon LLC on the Overseas Insurance and Reinsurance Business and other businesses, and we work to mutually improve audit quality by ensuring frequent communications and engaging in lively exchanges of opinion, including requesting the provision of information from the viewpoint of an independent accounting auditor.
Measures to improve audit activities
  • The Audit Committee and other meetings were held both face-to-face and using video conferencing as appropriate to increase efficiency and ensure sufficient time for discussion.
  • We visited several Group companies to gain a deep understanding of the actual business conditions through direct interviews with on-site staff members.

About the Compensation Committee

The Compensation Committee will increase the incentivizing effects of the Sompo Group’s executive compensation structure to contribute to the enhancement of corporate value.

Kazuhiro Higashi
Independent Director, Chair of the Compensation Committee

The Compensation Committee aims to improve transparency and fairness in the Group’s governance by introducing a third-party perspective to deliberations about compensation for Directors and Executive Officers at all Group companies.
It is imperative that the executive compensation structure not only imparts positive effects on governance, but also provides real incentives for Group officers to contribute to the enhancement of corporate value. From this perspective, we discussed revisions to Sompo Holdings’ executive compensation system, and the following specific measures were taken effective April 2023: 1. Revision of the compensation levels; 2. A decrease in the fixed compensation ratio (increase in the variable compensation ratio); 3. Use of metrics for brand value and engagement as evaluation metrics in the strategic targets for performance-linked compensation; 4. Revision of long-term incentive program (changed from stock trust method to phantom stock method). These revisions will be implemented in the executive compensation plans of the major Group companies in fiscal 2024.
Two of the key questions concerning our Group’s executive compensation structure are: “what compensation package should we award to the Group CEO?” and “how can we properly evaluate this?” In fiscal 2022, the Compensation Committee carefully deliberated the Group CEO’s strategic goals and initiatives, and assessed the Group CEO’s overall compensation, fixed compensation, and performance-linked compensation.
The Committee will continue to discuss the Sompo Group’s executive compensation structure, with a view to increasing its incentivizing effects to contribute to the enhancement of corporate value.

Compensation Committee Performance

The Compensation Committee met 11 times in fiscal 2022. The main agenda items of the Compensation Committee in fiscal 2022 are outlined below.

Topic Details
Revising executive compensation structures at Sompo Holdings
  • Discussions were held to increase the incentivizing effects of the executive compensation structure of Sompo Holdings, and the following revisions were implemented as of April 2023:
    1. Revision of the compensation levels
    2. A decrease in the fixed compensation ratio (increase in the variable compensation ratio)
    3. Use of metrics for brand value and engagement as evaluation metrics in the strategic targets for performance-linked compensation
    4. Revision of long-term incentive program (changed from stock trust method to phantom stock method)
Policy for handling differences in executive compensation between Japan and overseas
  • Regarding differences in executive compensation between Japan and overseas, we conducted a study of our attractiveness to Directors and Executive Officers using assessments from an outside consulting firm and other sources.
  • We confirmed that going forward, we will make efforts to raise our attractiveness to Directors and Executive Officers outside of the Group to form a more competitive Director and Executive Officer portfolio.
Performance-linked compensation of the Group CEO
  • The Committee assessed the Group CEO’s initiatives in fiscal 2022, and determined the payment rates and payment amounts for performance-linked compensation.
Strategic goals and base amount of compensation of the Group CEO
  • The Committee approved the Group CEO’s fiscal 2023 strategic goals of 1. Business portfolio transformation; 2. Engagement, and inclusion & diversity; and 3. Improving corporate value.
    1. Promote the transformation of the Sompo Group’s business portfolio with the aim of realizing SOMPO’s Purpose.
    2. Engagement, and inclusion and diversity: Accelerate inclusion and diversity efforts with the aim of “creating innovation” and “improving employee happiness and job satisfaction,” and realize an organizational and corporate culture in which diverse employees accept each other, respect each others’ “My Purpose,” and are able to fully demonstrate their individual strengths.
    3. Improving corporate value: Enhance brand value by globally disseminating SOMPO’s Purpose, RDP, and promotion of sustainability management, and enhance corporate value by increasing recognition amongst stakeholders.
  • The base amount of compensation for fiscal 2023 was determined based on the above strategic goals.
Performance-linked compensation of Executive Officers
  • The Committee assessed the fiscal 2022 initiatives of Executive Officers.
  • It determined the performance-linked compensation payment rates and payment amounts.
Strategic goals and base amount of compensation of Executive Officers
  • The Committee approved the fiscal 2023 strategic goals of all Executive Officers at Sompo Holdings and, based on these strategic goals, determined the base amount of compensation for fiscal 2023.
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