Basic Approach to Corporate Governance
Guided by our corporate philosophy of "creating a new world of communications culture," we are striving to develop our telecommunications business while also supporting our customers so that they may have a safe and secure, comfortable, and convenient life. In our endeavors to build a rich and vigorous society, the foundation of our management policy is the attainment of a high degree of trust and recognition from shareholders and customers through the improvement of corporate value. Maintaining effective corporate governance is crucial to the continuous improvement of corporate value, and we continue to take steps in strengthening corporate governance.
- Corporate Governance System
- Initiatives to Strengthen the Governance System
- Dialogue with Shareholders and Investors
- Information Management
- Internal Control
Initiatives during the Fiscal Year
- Verified the effectiveness of the Company's Board of Directors through a Directors' Self-Assessment Questionnaire completed by all directors and audit & supervisory board members and a meeting by the Corporate Governance Council, which consists of all members of the Board of Directors and the Audit & Supervisory Board.
Corporate Governance System
NTT DOCOMO's Corporate Governance System
Basic Approach to Corporate Governance
Guided by our corporate philosophy of "creating a new world of communications culture" and our Medium-Term Strategy 2020 "Declaration beyond," we are aiming to contribute to the realization of a rich and vigorous society and to improve our corporate value in order to win greater trust and recognition from our shareholders and customers.
Under this management policy, we recognize that to maximize corporate value while meeting the expectations of our various stakeholders including our shareholders, customers, employees, partners and local communities. It is essential that we ensure the effective function of corporate governance through the reinforcement of the governance structure in line with the objectives of each principle of the "Corporate Governance Code." Based on this approach, we have established the "NTT DOCOMO Basic Policy on Corporate Governance" for the purpose of attaining the sustained growth of our corporate group and the medium- to long-term improvement of corporate value. The basic policy was revised in December 2018 in response to the revision of the "Corporate Governance Code" in June 2018.
Overview of the Corporate Governance Structure
We have adopted a corporate governance structure consisting of the Board of Directors, audit & supervisory board members and the Audit & Supervisory Board, aiming both to realize consistent and stable business operations and to bolster monitoring and auditing functions, while striving to boost management speed. The reason why we adopt this structure, and we consider this structure reflects a desire for directors to play a key role in important business execution matters from the standpoint of realizing consistent and stable business operations through the effective utilization of management resources. From the perspective of ensuring sound and efficient management, this configuration also reflects a desire for a structure in which Directors who concurrently serve as executive officers supervise each other for their respective actions, while audit & supervisory board members perform audits of overall management.
The monitoring function of the Board of Directors is strengthened through the framework in which independent outside directors are appointed and encouraged to fulfill their ability and insight, under the supportive arrangements such as in-depth prior briefing on the proposals to be discussed at the Board of Directors meetings and holding of periodical meetings with representative directors and internal officers. With respect to the auditing function, all audit & supervisory board members (including independent outside audit & supervisory board members) attend important meetings such as the Board of Directors meetings, while conducting effective audits over directors' execution of duties in coordination with the independent auditor and internal audit staff, to ensure management soundness. In addition, we have introduced the executive officer system (27 men and 3 women serve as executive officers and 8 executive officers concurrently hold the post of director) to clearly delineate the roles of business execution and monitoring, and to better reinforce business execution functions. This system enables us to speedily respond to changes in the operating environment.
Support System That Ensures the Effectiveness of Outside Officers
The Company has established the following framework so that outside directors and outside audit & supervisory board members can perform their duties, drawing on their management skills and insight as they participate in constructive discussions.
· Providing explanations and materials prior to meetings by the Board of Directors
· Building a system of support in which independent outside directors advise directors and other members of the management team with the opinions of general shareholders and other stakeholders in mind
· Allowing independent outside directors to participate in management training and various company activities
· Inspecting various sites (research centers, branches, docomo Shops, wireless base stations, etc.)
· Providing opportunities for independent outside directors, directors and executive officers to exchange opinions on the direction of our corporate strategies, etc.
· Creating opportunities to exchange opinions with mid-career and young employees
· Establishing the Audit & Supervisory Board Members' Office as a dedicated organizational unit to assist in audits by audit & supervisory board members, and assigning full-time personnel to that office
· Having dialogue with current and potential institutional investors (when there are requests from investors or directors/audit & supervisory board members)
· Holding regular meetings between the independent outside directors and audit & supervisory board members
Assessment of Board of Directors
With the aim of achieving sustainable enhancement of its corporate value, the Company conducts an analysis and evaluation of the effectiveness of the Board of Directors in an ongoing effort to make improvements by identifying issues or points to be improved with respect to the responsibilities, operation, composition, etc., of the Board of Directors.
- "Directors' Self-Assessment Questionnaire" completed by all directors and audit & supervisory board members (conducted from December 2018 to January 2019)
- Discussions based on the results of Directors' Self-Assessment Questionnaire during a meeting by the "Corporate Governance Council," which consists of all members of the Board of Directors and the Audit & Supervisory Board (held in March 2019)
<Evaluation results and future operation policy>
We verified the effectiveness of the Board of Directors and the appropriateness of its responsibilities, operation, composition, etc.
Furthermore, it was confirmed that the effectiveness of the Board of Directors was improved as a result of regular verification of the state of measures used to implement the Medium-Term Strategy 2020 "Declaration beyond" and "business foundation centered on our membership base," which had been identified as issues requiring improvement during the previous effectiveness evaluation, as well as the enhancement of governance functions, reflecting the revisions to the Corporate Governance Code.
In order to further increase our corporate value, we will continue to implement the Medium-Term Strategy 2020 "Declaration beyond" and "business foundation centered on our membership base," and will also promote the medium-term management strategy we announced in October 2018. To this end, the Board of Directors will regularly verify the state of measures used to achieve these aims, the allocation of management resources, and our responses to changes in the management environment, and will also create governance functions appropriate for the Company.
Relationship with Parent Company
The corporate group led by our parent company, NIPPON TELEGRAPH AND TELEPHONE CORPORATION (NTT), operates the following main businesses: regional communications, long-distance and international communications, mobile communications, and data communications. As of March 31, 2019, NTT owned 64.10% of the voting rights of the DOCOMO Group and was in a position to influence the Company's management decision making through the exercise of majority shareholder rights. However, the Company retains its own management responsibility and conducts operations in accordance with its own decision-making authority.
Major Subjects Discussed by the Board of Directors in Fiscal Year 2018
· Medium-Term Management Strategy
· Implementation of Medium-Term Strategy 2020 "Declaration beyond"
· Business innovation centered on our membership base
· NTT Plala Integration
· Capital & business collaboration agreement with M3, Inc.
· Share Repurchase
Compensation of Directors and Audit & Supervisory Board Members
The upper limit on total compensation for directors of the Company was set at 600 million yen annually at the 15th Ordinary General Meeting of Shareholders held on June 20, 2006. The Board of Directors determines compensation for directors for each fiscal year by comprehensively taking into account factors such as the scope of roles and responsibilities of each director, and the Company's achievement based on performance indicators such as operating profit for the current fiscal year. In addition, the Company explains the details of compensation to the parent company and independent outside directors to receive appropriate advice prior to the meeting of the Board of Directors.
The determination of individual compensation for each director is entrusted to Representative Director, President and Chief Executive Officer by the Board of Directors. Representative Director, President and Chief Executive Officer determines the amount in accordance with the following policies and regulations on compensation for directors specified by a resolution of the Board of Directors.
i. Compensation for directors (excluding independent outside directors) consists of a monthly salary and bonuses. The Company pays monthly salaries based on the scope of roles and responsibilities of each director, and bonuses by taking into account the Company's achievement based on performance indicators such as operating profit for the current fiscal year. In addition, from the perspective of reflecting medium- to long-term business results, directors with executive authority over operations make monthly contributions of at least a certain amount, out of their monthly salaries and bonuses, for the purchase of the Company's shares through the Director Shareholding Association, and all purchased shares are held by the directors during their terms in office. In the case of standard business performance, compensation is composed of "approximately 70% fixed compensation and 30% performance-based compensation."
The Company will also consider expanding the percentage of performance-based compensation, including stock-based compensation, in total compensation for the purpose of fostering stronger awareness with regard to achieving the medium-term management strategy and sustained growth, as well as enhancing medium- to long-term corporate value.
ii. In order to ensure a high level of independence, the Company pays only monthly salaries as compensation for independent outside directors with no links to business results.
Compensation for audit & supervisory board members is determined through consultation with the members, and in order to ensure a high level of independence, only monthly salaries are paid with no links to business results. Total amount of compensation for audit &supervisory board members of the company was set an upper limit at 150 million yen annually at the 15th ordinary general meeting of shareholders held on June 20, 2006.
The total of compensation paid to directors and audit & supervisory board members during fiscal 2018 was as follows:
|Directors / Audit & Supervisory Board Members||Number of recipients
|Directors (excluding outside directors)||16||481|
|Audit & supervisory board members
(excluding outside audit & supervisory board members)
|Outside directors and outside audit & supervisory board members||7||126|
- As there is no director or audit & supervisory board member with consolidated compensation of 100 million yen or more in total, the information is not provided.
- Directors include five directors who retired at the conclusion of the 27th ordinary general meeting of shareholders held on June 19, 2018.
- Outside directors and outside audit & supervisory board members include one outside audit & supervisory board member who retired at the conclusion of the 27th ordinary general meeting of shareholders held on June 19, 2018.
Initiatives to Strengthen the Governance System
Changes in the Corporate Governance System
|Number of Members|
(Board of Directors)
|Number of Members|
(Audit & Supervisory Board)
|Total||Of which, outside audit &|
supervisory board members
|February 1999||Establishment of Advisory Board|
From experts in various fields, we receive objective opinions and proposals in such areas as management issues and the role of communications technology in society.
|December 2000||Establishment of U.S. Advisory Board|
We receive opinions and proposals from a global viewpoint in regard to the role of communications technology in society and information technology trends.
|June 2002||Appointment of outside director|
The Company appointed one outside director from within the NTT Group.
|June 2003||Outside members account for majority of audit & supervisory board members.|
The Company exceeded the stipulations of the Companies Act, which calls for outside members to account for half or more of audit & supervisory board members, when outside members became a majority of audit & supervisory board members.
|June 2005||Introduction of the executive officer system|
In conjunction with the introduction of this system, the number of members of the board of directors was reduced from 27 to 13.
|June 2013||Number of outside directors on Board of Directors increased by one|
Designated as an independent director The Company appointed the first outside director from outside the NTT Group.
|14||2(Of which, 1 is an independent director)||5||3(Of which, 2 are independent audit & supervisory board members)|
|June 2015||Reelection of outside audit & supervisory board members|
One independent outside audit & supervisory board member retired, and one independent outside audit & supervisory board member was newly appointed.
|14||2(Of which, 1 is an independent director)||5||4(Of which, 2 are independent audit & supervisory board members)|
|June 2016||System with two independent outside directors|
One outside director retired, and one independent outside director was newly appointed. The number of independent outside directors increased to two.
|15||2(Of which, 2 are independent directors)||5||4(Of which, 2 are independent audit & supervisory board members)|
|June 2018||Reelection of directors and outside audit & supervisory board members|
Five directors retired, and four directors was newly appointed. One independent outside audit & supervisory board member retired, and one independent outside audit & supervisory board member was newly appointed.
|14||2(Of which, 2 are independent directors)||5||4(Of which, 2 are independent audit & supervisory board members)|
Dialogue with Shareholders and Investors
We proactively engage in information disclosure and dialogue with shareholders and investors as part of our efforts to maintain our growth and increase our corporate value over the long term. We are actively expanding our IR activities by appointing an executive responsible for IR overall and establishing a designated IR department. In addition, we share the views expressed by our shareholders and investors not only among the management team but across the Company, as these views help us to improve our services and business performance.
|Supplementary explanation||Briefing by representative in person|
|Regular presentations held for individual investors||We hold presentations for individual investors, in which the president, senior executive vice presidents, the executive|
corporate officer in charge of corporate finance and the executive corporate officer in charge of corporate strategy & planning explain recent results, future initiatives and shareholder returns, among other matters. In FY2018, we held 11 presentations in 7 cities throughout Japan and online with around 3,000 people in attendance.
|Regular presentations held for securities analysts and institutional investors||We hold presentations of quarterly results. The results are explained by either the president or one of the senior executive vice presidents, as well as by the corporate officers in charge of corporate finance, corporate planning, sales and other areas. We also hold presentations about new products and services to provide detailed product or service explanations. Moreover, we brief investors on the status of our businesses at conferences sponsored by securities companies. In FY2018, we held 14 presentations. (5 conferences in Japan, 7 overseas conferences, 2 new service and product presentations)||Yes|
|Live streaming of financial results presentations for overseas investors made available and individual presentations held||We provide a live streaming broadcast of the aforementioned presentations for securities analysts and institutional investors that take place in Japan with simultaneous interpretation in English on our website. We also hold individual meetings as necessary, mainly in Western countries and Asia, to explain recent results, future initiatives, and the return of profits to shareholders, among other matters.||Yes|
|IR materials posted on the Company’s website||We post a variety of information on our website, including quarterly operational and financial data, video (for PCs and smartphones), and presentation documents for results presentations, and we have a special website for individual investors. We also post earnings information, securities reports, and briefing documents. In addition, the president’s comments on the 2Q and fiscal year results are provided through video streaming. Furthermore, we post videos about the medium-term strategy together with the president’s comments.||None|
|IR-related department assigned (person in charge)||The department involved with IR is the Investor Relations Department. The corporate officer responsible for IR is an executive vice president. The liaison officer is the head of investor relations.||None|
|Early mailing of convocation notices for the general meeting of shareholders||We mailed convocation notices six days before the statutory cut-off date (22 days before the general meeting date).|
|Scheduled the general meeting of shareholders so as to avoid days on which shareholder meetings are concentrated||We held the Ordinary General Meeting of Shareholders on June 18, 2018.|
|Electronic voting||We enabled voting from Internet enabled mobile phones, smartphones and PCs.|
|Initiatives to facilitate a better voting environment for institutional investors, including participation in the electronic proxy voting platform||We enabled voting via the electronic proxy voting platform for institutional investors operated by Investor Communications Japan (ICJ).|
|Providing an English translation of the Notices of Convocation for the General Meeting of Shareholders||We made the convocation notice available in both Japanese and English on our website.|
|Other||We disclosed the convocation notice (Japanese and English versions) to the Tokyo Stock Exchange four days prior to mailing it, and made it available on our website.|
Enhancement of Information Management System
The DOCOMO Group has been entrusted with the personal information (customer information) of approximately 75 million people, and accordingly, ensuring information security is an important management issue.
As a telecommunications company with public-oriented operations, the rigorous management and protection of customer information and administrative information is our most important duty. In recognition of this, we have assigned the position of Chief Privacy Officer (CPO) and Chief Information Security Officer (CISO) to the senior executive vice president level. The CPO heads the Information Management Committee, which meets on a regular basis. The committee considers and promotes information security measures. To advance integrated information management, we have established the Information Security Department and each work site has an employee who is responsible for information management. Outside contractors who perform work for the Company are required to designate a person responsible for the handling of that work for each organization and policy. We have established and are advancing a system that assigns responsibility for information management.
Formulation of Management and Administration Rules
To fulfill our obligations above, in regard to the handling of information of customers, shareholders, employees, etc., we have systematically formulated internal regulations in accordance with the Personal Information Protection Act and the guidelines of related government ministries and agencies, clarified internal rules regarding information management, and formulated and announced a policy for data privacy that clarifies detailed handling policies in accordance with basic principles regarding customer information protection.
In working to strengthen information management, we are advancing and developing the following safety management measures:
(1) Organizational Security
1. Establishment of the Information Security Policy
2. Enhancement of a system for information security
3. Formulation of basic guidelines for information security and establishment and application of regulations and manuals
4. Tracking and management of information assets
5. Implementation and application of audits and security checks
6. Implementation of measures to deal with accidents and violations
(2) Human Security
1. Mandatory written pledges regarding confidentiality
2. Mandatory information management compliance for outside contractors
3. Implementation of training and education for employees, contractors and sales agents
4. Formulation and distribution of training tools, such as handbooks and DVDs
(3) Physical Security
1. Restrictions on the number of information management terminals and continuous optimization of installed locations and authorized people
2. Rigorous control of the lending and checking-out of portable equipment
3. Consolidation and special monitoring of terminals used to extract large amounts of customer information
4. Transition to paperless handling of documents, such as customer applications
5. Entrance and exit control in locations handling information
(4) Technical Security
1. Access control, access-log retention and periodic checks
2. Introduction of biometric identity confirmation for use of systems
3. Stricter customer information search parameters
4. Introduction of encryption software for information system terminals and communication channels
5. Strict monitoring to prevent unauthorized removal of information from the office
6. Cyber attack countermeasures and system surveillance
Information Management System (As of September 28, 2018)
Basic Policy for Internal Control
In accordance with the Basic Policy on Fortifying Internal Control Systems, as approved by the Board of Directors, we maintain a system for the purpose of securing rigorous compliance with laws and regulations, business effectiveness and efficiency, and financial reporting reliability. These initiatives are carried out primarily by the Internal Control Committee. Furthermore, the Company’s Internal Audit Department implements audits with the objective of contributing to the minimization of risks and the maximization of corporate value for the entire DOCOMO Group (Head Office, branches, and Group companies worldwide). The department’s work includes evaluating the effectiveness of the internal control system.
Systems for Ensuring the Propriety of NTT DOCOMO's Business Activities (Internal Control System)
(PDF format:61KB) 4 pages
We strive to strengthen risk management with the basic policy of identifying and responding to business risk as early as possible.
Specifically, in accordance with our Risk Management Principles, business risks are regularly identified, and the Internal Control Committee designates risks that require Company-wide management. Management policies for those identified risks are formulated, and appropriate efforts are made to prevent such risks from materializing and to prepare for a quick response should they occur.
Compliance (Ethics and Legal Compliance)
The foundation of our compliance management is to promote strict observance of the NTT DOCOMO Group Code of Ethics among all employees while continuing to meet the steadily increasing demands and expectations of society based on high ethical standards, including respect for human rights. Accordingly, we have built a compliance promotion system, which is centered on the Compliance Committee. Specifically, we have implemented rules that require employees to make a report if they notice any illegal or fraudulent incidents, and we have established avenues within and outside the Company for consulting on related issues. In addition, all divisions have employees with responsibility for compliance promotion, and we implement education and training in ethics and legal compliance for all employees. In these ways, we are implementing a range of compliance-related initiatives. Moreover, we have conducted a compliance and human rights awareness survey of every employee, the results of which have been reflected in our various measures to ensure compliance. Through such efforts, we are working to further advance ethical views.
Ensuring Reliability of Financial Reporting
To meet the requirements of the Financial Instruments and Exchange Act of Japan, we designs, operates and assesses internal control of the Company in accordance with the basic framework set forth in "On the Setting of the Standards and Practice Standards for Management Assessment and Audit concerning Internal Control Over Financial Reporting (Council Opinions)" published by the Business Accounting Council.
In fiscal 2018, we evaluated NTT DOCOMO, Inc. and 13 major consolidated subsidiaries and concluded that internal control over financial reporting was effective.