In May 2018, at a presentation held at our head office in Otemachi, Chiyoda-ku, Tokyo for analysts and institutional investors,Mr. Noriaki Shimazaki, Outside Director and Chairman of the Audit Committee, made his first appearance explaining the effectiveness of our corporate governance and current status of the Audit Committee’s activities. This was followed by a question and answer session.

Sell-side analyst「What is your evaluation of Nomura Group’s arrangements and the provisions concerning lawsuits and cases of legal disputes with authorities?」

The Audit Committee receives regular reports on the status of the lawsuits from the executive officer in charge of legal affairs. The Committee also receives reports from the CFO on the amount of estimated maximum loss for each lawsuit and each case of legal dispute at the time of each quarterly financial results and confirms that an appropriate allowance is reflected in the financial statements. The Committee fully confirms the appropriateness of the accounting of the provision for allowance concerning lawsuits, etc. and descriptions in the notes to financial statements.

Overseas institutional investor「There is a trend in the U.S. toward imposing board term limits. As an Independent Director, what do you think about the idea of term limits for board members?」

In Japan, the term of office for directors and a mandatory retirement age system for executive officers are generally established by companies,often varying by the individual company. The term of office for Outside Directors is also determined at Nomura. The renewal of these terms or retirement from office for board members is proposed at a general meeting of shareholders every year. I believe that these standards and measures are appropriate.

Sell-side analyst「Monitoring the effectiveness of strategies is indicated as the objective of the Audit Committee.
If, for example, there is a situation in which key performance indicators (KPIs) set by management cannot be achieved, would the Audit Committee present some proposals to the Directors?」

We have various KPIs and goals to achieve by 2020.The Audit Committee tracks progress at least every quarter and monitors not only the figures indicated in the financial results but the degree to which our goals have been achieved, including the enhancement of the earnings structure. In addition, we take care not to show individual numbers out of context. Looking back at Nomura’s scandals in the past, the people working on site focused too heavily on numbers above all else,which led to improper transactions in some cases. It is important to achieve numerical goals but that should not be the only goal. The primary objective of our management vision for 2020 (Vision C&C) is to create a robust operating platform capable of delivering consistent growth for the Nomura Group. To achieve our vision, we are working to address two overarching issues: transforming our business model in Japan and improving the profitability of our international operations. When our vision is achieved, we will attain an EPS of ¥100. At the recent meeting of the Board of Directors, I strongly reiterated this message to the execution side as the chairman of the Audit Committee.