Corporate Governance

Fundamental Approach

Nomura Holdings recognizes that the enhancement of corporate governance is one of the most important issues in terms of achieving management's goal of enhancing corporate value by deepening society's trust in the firm and increasing the satisfaction of stakeholders beginning with clients.

As a company with Three Board Committees structure, we have separated management oversight from business execution. This separation of duties strengthens the oversight functions and transfers authority regarding business execution from the Board of Directors to the Executive Officers in a bid to accelerate the Group's decision-making process.

Nomura's Corporate Governance

Addressing Japan's Corporate Governance Code

With the application of Japan's Corporate Governance Code to publicly listed companies beginning in June 2015, Nomura Holdings has been undertaking various initiatives to reinforce corporate governance. As a result, we have at this point adopted all of the principles of the Code.

Establishing Corporate Governance Guidelines

Nomura Holdings, recognizing the perspectives of various stakeholders beginning with shareholders and clients, established the “Nomura Holdings Corporate Governance Guidelines”, for the purpose of setting forth an effective corporate governance framework as a structure for transparent/fair and timely/decisive decision-making, and contributing to the realization of that.

An outline of the “Nomura Holdings Corporate Governance Guidelines” is provided below.

Outline of the Nomura Holdings Corporate Governance Guidelines

Board of Directors

  • The Board of Directors shall, as a general rule, delegate its authority to execute business to the Executive Officers. The main role of the Board of Directors shall be management oversight.
  • The composition of the Board of Directors shall have a diversity that enables active discussions from diverse perspectives.
  • As a general rule, the majority of the Board of Directors shall be Outside Directors, and Directors shall include experts in accounting, corporate management, and law, etc.
  • Nomination, Audit, Compensation, and Board Risk Committees shall be established, each comprised of a majority of Outside Directors.
  • The Board of Directors shall, based on the evaluation by each Director, analyze and evaluate the effectiveness of the Board of Directors as a whole and disclose a summary of the results.
    Nomination Committee
    • The Nomination Committee shall decide director nominees based on certain appointment standards, including personality, insight, ethics, in-depth knowledge and experience in his/her field of expertise.
    • The Nomination Committee shall establish Independence Criteria for Outside Directors and shall, as a general rule, nominate Outside Director nominees who satisfy such criteria.
    • In order to strengthen the independence of the Committee from execution functions and to enhance the transparency of activities, the Board of Directors shall appoint the Chairman.
    Audit Committee
    • All members of the Audit Committee must satisfy the criteria for independence in accordance with the Sarbanes-Oxley Act of 2002.
    • As a general rule, at least one member shall be a financial expert.
    • As a general rule, the Chairman of the Audit Committee shall be an Outside Director in order to strengthen the independence of the Audit Committee from execution functions and to enhance the transparency of audit activities.

    In order to enhance the effectiveness of audits, the Board of Directors shall appoint an internal Director who does not concurrently serve as an Executive Officer and who is well-versed in the Nomura Group's business as a fulltime member of the Audit Committee or an Audit Mission Director.

    Compensation Committee
    • On the basis of the general rule of paying compensation commensurate with business performance, the Compensation Committee shall decide the compensation of Directors and Executive Officers while seeking to enhance objectivity and transparency based on analysis performed by external evaluation institutions, etc.
    • The Compensation Committee shall utilize deferred compensation, to seek alignment with the interests of shareholders and increase long-term incentives.
    • In order to strengthen the independence of the Committee from execution functions and to enhance the transparency of activities, the Board of Directors shall appoint the Chairman.
    Board Risk Committee
    • The Board Risk Committee shall assist the Board of Directors in supervising Nomura Group’s risk management to contribute to sophistication of the risk management.
    • The Board Risk Committee shall deliberate on important matters concerning risk management such as the revision and abolishment of the Risk Appetite Statement and the key design of risk management framework.
    • As a general rule, the Chairperson of the Board Risk Committee shall be an Outside Director in order to strengthen the independence of the Board Risk Committee from execution functions and to enhance the transparency of its activities.

Internal Controls System

  • The Board of Directors shall oversee the status of the maintenance and operation of internal controls through audits by the Audit Committee and activities by the Internal Audit division, which is independent from the business execution functions.
  • An Internal Controls Committee chaired by the Group CEO and attended by members of the Audit Committee shall be established for the purpose of further strengthening and enhancing the Internal Controls System.
  • The involvement of the Audit Committee in the implementation plans of the Internal Audit Division as well as in the election and dismissal of the Head of the Internal Audit Division shall be assured.

Risk Management

  • To ensure financial soundness and to maintain and improve corporate value, management shall establish a risk management framework and the Board of Directors shall oversee the effectiveness of the framework.

Dialogue with Shareholders

  • The Company shall treat shareholders equally based on their shareholdings, and shall disclose information appropriately and timely to avoid information disparity.
  • The Company, based on the importance of shareholder rights, shall take necessary measures to ensure that shareholders are not unfairly precluded from exercising their rights.
  • The Company shall engage in a constructive dialogue with major shareholders for the purpose of sustainable growth of the Company and the mid- to long-term enhancement of corporate value.
  • Regarding dialogue with stakeholders, the Company shall endeavor to enhance methods of dialogue and also provide explanations on general policies for the allocation of management resources.
  • An officer in charge of IR shall endeavor to share the outcomes of such dialogue with the Board of Directors.

Basic Policy for Strategic Shareholdings

  • Nomura Group has ongoing discussions concerning the purpose of strategic shareholdings.
  • Regarding strategic shareholdings, we consider the risks and costs involved in holding such shares and perspectives of business strategy, such as opportunities to increase the revenues of our businesses through the expansion of transactions or business alliances with us whose shares are held, and shall hold such shares only if such shareholdings will contribute to maintaining/enhancing the corporate value of the Nomura Group.
  • As a result of the discussion, concerning stocks whose sale has been determined to be reasonable, we proceed with the sale of such stocks while taking into consideration the impact on the market and other circumstances.

Basic policy for Strategic Shareholdings

Fulfillment of Corporate Responsibilities

  • The Company established the "Nomura Group Code of Conduct" as guidelines for each director, officer, and employee of the Nomura Group to comply with.
  • The Company shall enhance corporate value in the long-term by respecting the diversity and different values among the directors, officers and employees of the Nomura Group, and establishing a sound workplace to enable all directors, officers, and employees to perform at their full potential.
  • The Company, together with contributing to the development of capital markets through various business activities, shall actively engage in activities aimed at the Company's sustainable growth, solving social issues, and the realization of a sustainable society.
  • The Company shall establish a “Sustainability Committee” for the purpose of appropriately promoting and managing such activity throughout the Nomura Group.
  • The Company shall have the Sustainability Committee establish the “Sustainability Statement” as something that indicates the aims of the activities regarding sustainability and the policy/response with regard to environmental/societal risks,
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