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
Outside 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.” In order to further accelerate the realization of our Purpose, in fiscal 2021, we implemented the Succession Plan and selected and appointed new candidates for the following key positions: Group Chief Operating Officer & President, CEO of the Domestic P&C Insurance Business, CEO of the Overseas Insurance and Reinsurance Business, and CEO of the Nursing Care & Seniors Business. Under this new management, the Group has made a healthy start to fiscal 2022.
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, 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.
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 11 times in fiscal 2021. Its main agenda items are listed below.
|Implementing the Succession Plan for key Sompo Group positions
- In line with the Succession Plan, the Committee selected and publicly announced new candidates for the following key Sompo Group positions: Group Chief Operating Officer & President, CEO of Domestic P&C Insurance Business, CEO of Overseas Insurance and Reinsurance Business, and CEO of Nursing Care & Seniors Business.
|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 88 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 Executive Officer 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 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 carry out highly effective audits that cater both to the growth of our business and rapid environmental changes, and thereby meet the expectations of our stakeholders
Outside Director, Chair of the Audit Committee
The Audit Committee is primarily comprised of Outside Auditors, ensuring high transparency and fairness. Roles are divided according to the diverse skillsets and backgrounds of its composite members, and the Committee carries out highly effective audits.
We seek to contribute to work style reforms through our auditing methods. For example, since fiscal 2020 we have proactively used video conferencing systems in response to the spread of COVID-19. By promoting auditing methods that are efficient both for those carrying out and those receiving the audits, we ensure our audits are of the highest quality. Going forward, we will continue to explore new methods for carrying out even more effective audits.
Fiscal 2021 marked the beginning of a new Mid-term Management Plan. The Company is aggressively pushing a wide range of new initiatives—such as solutions that utilize real data—to achieve its goal of becoming “A Theme Park for Security, Health and Wellbeing.” Future audits will therefore have to be broader in scope and more specialized. Accordingly, in order to carry out audits of greater quality, in June 2022 the Audit Committee welcomed two new committee members with wide-ranging knowledge and expertise. The Audit Committee now comprises seven members. The Audit Committee will continue its efforts to meet stakeholder expectations by conducting audits of the highest quality.
Audit Committee Performance
The Audit Committee met 12 times in fiscal 2021.
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 2021 are outlined below.
|Audit Committee Responsibility System
- The Audit Committee Responsibility System 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, and audits are carried out mainly through this primary auditor.
|Collaborating with the Internal Audit Department
- In order to strengthen collaboration with the Internal Audit Department, various opportunities are created for exchanging opinions. For example, 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.
|Collaborating with Independent Accounting Auditors
- In order to strengthen collaboration with Independent Accounting Auditors, we established a plan for year-round meetings with Ernst & Young ShinNihon LLC. We work to mutually improve audit quality by ensuring frequent communications and engaging in lively exchanges of opinion.
|Measures to improve audit activities
- To combat COVID-19 and to promote new work styles, we have improved the efficiency of various auditing activities—including Audit Committee and other meetings, and site visits to Group companies in Japan and overseas—through the widespread use of video conferencing and other remote methods. We have also implemented measures to ensure there is sufficient time for discussions.
About the Compensation Committee
The Compensation Committee will continue to discuss the Sompo Group’s executive compensation structure, with a view to increasing its incentivizing effects
Outside 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. In fiscal 2021, the Compensation Committee recommended revisions to the executive compensation structures at both Sompo Japan and Sompo Himawari Life Insurance. This formed part of our efforts to develop a more mission-driven executive compensation structure not only at Sompo Holdings, the holding company, but across the entire Group—and particularly at its core business companies.
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 2021, 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.
Compensation Committee Performance
The Compensation Committee met 10 times in fiscal 2021. The main agenda items of the Compensation Committee in fiscal 2021 are outlined below.
|Revising executive compensation structures at Sompo Japan and Sompo Himawari Life Insurance
- In light of the Group’s Policies on Decisions Pertaining to Executive Compensation, the Committee discussed whether any aspects of the executive compensation structure at the Group’s core businesses— Sompo Japan, Sompo International, Sompo Himawari Life Insurance, and Sompo Care—needed revising.
- Following these discussions, the Committee made recommendations regarding the executive compensation structures at Sompo Japan and Sompo Himawari Life Insurance to the Boards of Directors at both companies, in order to align them more closely to the Group’s Policies on Decisions Pertaining to Executive Compensation. As of April 2022, revisions were executed in line with these recommendations.
|Performance-linked compensation of the Group CEO
- The Committee assessed the Group CEO’s initiatives in fiscal 2021, 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 discussed the Group CEO’s fiscal 2022 strategic goals of 1. Establishing RDP; 2. Engagement, and inclusion & diversity; and 3. Improving corporate value. Based on these strategic goals, it determined the base amount of compensation for fiscal 2022.
The base amount of compensation for fiscal 2022 was determined based on the above strategic goals.
- Establishing RDP: Realize the creation of a real data platform (RDP) as a useful and socially-common framework that creates new customer value and contributes to the solving of social issues.
- 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.
- 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.
|Performance-linked compensation of Executive Officers at Sompo Holdings
- The Committee assessed the fiscal 2021 initiatives of Sompo Holdings Executive Officers, and determined the performance-linked compensation payment rates and payment amounts.
|Strategic goals and base amount of compensation of Executive Officers at Sompo Holdings
- The Committee discussed the fiscal 2022 strategic goals of all Executive Officers at Sompo Holdings and, based on these strategic goals, determined the base amount of compensation for fiscal 2022.