Corporate Governance

The Group considers continuously improving the transparency and fairness of its corporate governance and fulfilling its corporate social responsibility as essential to maintaining strong relations of trust with stakeholders.
The Group formulated its Corporate Governance Policy to clarify basic policies regarding the formation of the overall vision for the governance structure and the governance framework. We continue to improve our corporate governance and aim to establish optimal systems.
As a Company with an Audit & Supervisory Board, to improve corporate value, we maintain and promote effective oversight and auditing functions using a system of corporate governance comprising the Board of Directors, which makes important management decisions and oversees business execution, and Audit & Supervisory Board members and an Audit & Supervisory Board that are independent of the Board of Directors. In addition, for our business execution structure, under the overall supervision of the Group CEO, we have elected to adopt a Business Owner system, a Group Chief Officer (CxO) system, and an executive officer system to ensure swift and agile decision making as well as to clarify authority and responsibility.
In addition, to ensure transparency in the appointment and treatment of directors, the Nomination and Compensation Committee, which is chaired and membered by a majority of outside directors, has been set up as an advisory body to the Board of Directors.

Corporate Governance Structure

Main Corporate Governance Reforms

Features of Our Corporate Governance

Robust Corporate Governance

We have a hybrid governance model, which heightens the effectiveness of governance, incorporating many of the advantages of adopting “a company with committees” organizational structure.

Multiple outside directors contributing to a diverse Board of Directors

One-third of directors, or four out of 12 directors, are outside directors. The outside directors have diverse backgrounds: two are managers, one is a legal expert, and one is a professor (two are women and one is non-Japanese).

Oversight and auditing functions through Audit & Supervisory Board members and an Audit & Supervisory Board

A majority of Audit & Supervisory Board members, specifically, three out of five members, are outside Audit & Supervisory Board members. They provide oversight and auditing from a position independent of management, participate in various internal committees, and are involved in decisions on the validity of business execution.

Establishment of a Nomination and Compensation Committee

The Nomination and Compensation Committee has been established as an advisory body to the Board of Directors intended to improve transparency and fairness regarding director and executive officer nomination and compensation.
The Nomination and Compensation Committee comprises five members (four outside directors and one internal director [the Group CEO]) and is chaired by an outside director. This committee is responsible for evaluating directors and executive officers and discussing compensation schemes for directors and executive officers as well as individual compensation amounts and reporting to the Board of Directors on these matters. The results of evaluations by the committee are reflected in yearly decisions regarding the reappointment of each officer. When evaluating the Group CEO, discussions are held among only the outside directors on the committee, and the results of these evaluations are reported to the Board of Directors in order to ensure the objectivity, timeliness, and transparency of the process regarding the reappointment of the Group CEO.

System to support proactive engagement of outside directors and outside Audit & Supervisory Board members

Board of Directors meetings and preliminary briefing sessions are conducted in an integrated manner to facilitate extensive and constructive discussions as well as effective proceedings at meetings of the Board of Directors. In addition, meetings between outside directors and the Group CEO are held to allow for free exchanges of opinions among outside directors and between these directors and the highest authority for executive management.

Evaluation of the effectiveness of the Board of Directors

In order to enable the Board of Directors to fully exercise its supervisory function as well as its function for encouraging appropriate risk-taking by executive management, the Company convenes integrated Board of Directors and preliminary briefing session meetings to promote open and unrestricted discussions. In addition, the Company employs means such as discussions on the roles of the holding company in Group management, exchanges of opinions between only the Group CEO and outside directors, self-assessments and overall reviews by Group Chief Officers, exchanges of opinions between representative directors and Audit & Supervisory Board members, and director surveys to provide opportunities to assess and identify issues regarding the effectiveness of the Board of Directors from a wide range of perspectives. By implementing the necessary improvements based on these efforts, the Company builds a governance structure to improve transparent and objective decision-making processes and supervisory functions.
In fiscal 2017, the Board of Directors made timely and appropriate decisions on Group frameworks and growth strategies such as building a robust growth foundation for the overseas insurance business and utilizing digital technologies to realize innovation. In this process, discussions were held at various junctures on the roles that the Company should play to facilitate the Group’s sustained growth and further increase corporate value—such as deciding on the Company’s involvement in the management of operating companies based on the stages and environments of each operating company and allocating the necessary resources and supporting transformation of business models.
The results of such discussions are being reflected in efforts to narrow down the items to be discussed by the Board of Directors, review roles and functions within the Group, and formulate business plans, among other activities.
The Company considers this dynamic plan-do-check-act (PDCA) cycle to be functioning effectively, and going forward, the Company believes that continuing discussions from a broad range of perspectives and points of view and utilizing the results as feedback for the Group as a whole will allow for more advanced governance and enable us to respond to the expectations of all of our stakeholders.

Flexible and Responsive Execution of Operations

To facilitate responses to rapid changes in the environment, we are implementing a Business Owner system and a Group Chief Officer (CxO) system under the overall supervision of the Group CEO.

Matrix-style management system formed by Business Owner and Group CxO Systems

In the current era of volatility, uncertainty, complexity, and ambiguity (VUCA), a flexible and responsive management system is of utmost importance.
To achieve such a management system, the Sompo Holdings Group is developing a matrix-style management system comprising vertical and horizontal axes under the overall supervision of the Group CEO. On the vertical axis, Business Owners, who are heads of business segments, are delegated substantial authority to allow them to perform swift decision making and business execution. On the horizontal axis, Group Chief Officers, who are the highest authority in their respective functional areas, oversee their area of responsibility on a Group-wide basis to ensure decision making that is best for the Group and exercise functions laterally across the Group.

Business Owner System

Business Owners are responsible for advancing plans for the entirety of their respective business segments while also helping build a “theme park for the security, health, and wellbeing of customers” in order to contribute to the realization of the Group Management Philosophy and implement the Group’s management plans. Accordingly, Business Owners are endowed with significant authority, related to areas such as business strategy formulation, investment decision making, and human resource assignment, as required to accomplish those objectives.
Since the introduction of the Business Owner system in April 2016, Business Owners have been leading their business segments in implementing dynamic growth strategies and in taking flexible and responsive action to address issues through swift decision making and business execution.

Group CxO System

Under the Group CxO system, Group Chief Officers act as the highest authority for the Group in their respective functional areas. In this capacity, they exercise their functions in acting in the Group’s best interests laterally across the Group based on the Group’s strategies and on their roles, functions, and responsibilities.
The Group CxO system was introduced in April 2017 to serve as a framework designed to promote strong, mission-driven leadership. The roles and functions as well as the skills and experience required of each Group Chief Officer are defined in the Group’s function portfolio.
The roles and functions of the currently appointed Group Chief Officers are described in the table below. In April 2018, we newly appointed a Group CSO and a Group CBO while also integrating oversight functions through means such as consolidating the position of the Group CACO,* who was responsible for internal control and internal audits at the Group, into the position of Group CRO, who oversees the Group’s risk management.
The roles and functions of Group Chief Officers as well as the number of officers and the fields for which officer positions exist are not set but will rather be flexibly revised as the operating environment of the Group or the management issues it faces change.

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