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, 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.
Overview of the Corporate Governance Structure
Regarding our core telecommunications businesses, we recognize that as the market expands, mobile phones have come to play a vital role as social infrastructure. To use management resources effectively and to maintain consistent and stable
business operations, we believe it is desirable for directors to participate in important business execution matters. In addition, to ensure sound and effective management, we believe it is desirable to have a governance system in which directors, serving concurrently as executive officers responsible for business execution, supervise each other's actions, while audit & supervisory board members conduct management audits. Accordingly, we have adopted a corporate governance structure that consists of a Board of Directors and an Audit & Supervisory Board. We have also appointed outside directors and outside audit & supervisory board members with the aim of further enhanced monitoring and audit functions.
In addition, we use an executive officer system (27 of them are men, two are women, and eight serve concurrently as directors) to clarify the roles of business execution and monitoring, and to further reinforce our business execution functions. This system enables rapid responses to changes in the operating environment.
Through these initiatives, we have thus established a corporate governance structure capable of both i) realizing consistent and stable business operations while increasing management speed and ii) strengthening auditing and governance functions.
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. · Providing opportunities for independent outside directors, directors, and executive officers, to exchange opinions on the direction of our corporate strategies, etc. · 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 conversations with current and potential institutional investors (when there are requests from investors or directors/audit & supervisory board members) · Holding regular meetings between the outside directors and the audit & supervisory board members
Assessment of Board of Directors
We 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 review conducted in May 2017 by the Corporate Governance Council, which consists of all members of the Board of Directors and the Audit & Supervisory Board.
We also verified that there have been improvements to the vigorousness of the Board of Directors' discussions and the diversity of its membership. For example, in June 2016, the number of outside independent directors was increased to two.
With a view to further strengthening corporate governance, we have decided that members of the Board of Directors should periodically evaluate the efforts being taken to achieve the direction of our corporate strategies, which have been determined through discussions.
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, 2017, NTT owned 66.65% 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 2016
· Increased customer returns · Introduction of "Free Course" and "Zutto DOCOMO Discount Course," further expansion of "Zutto DOCOMO Discount," providing "reward points" · Service creation / evolution · Business evolution with "+d" · Reinforcement / evolution of all foundations
Compensation of Directors and Audit & Supervisory Board Members
In consideration of the Company's business performance over the medium to long term, we have determined the following policy with respect to directors' compensation.
(i) The Company has determined that directors' compensation will consist of monthly compensation and bonuses. Monthly compensation is based on each director's roles and responsibilities, and bonuses reflect factors such as the Company's performance for the current fiscal year.
(ii) To reflect the Company's medium- to long-term business performance, directors with executive authority must contribute any monthly compensation above a certain amount to a director stock purchase plan through the Directors' Shareholders Association. The shares of the Company that are purchased through the plan are held throughout the term of office.
(iii) To maintain a high degree of independence among our independent outside directors, we do not link the compensation of these directors to our performance, and thus they receive only monthly compensation.
In consultation with audit & supervisory board members, it has been decided to pay only monthly compensation, not linked to our performance, to audit & supervisory board members in order to ensure a high degree of independence.
The total of compensation paid to directors and audit & supervisory board members during fiscal 2016 was as follows:
|Directors||18 *1||¥526 million *2|
|Audit & supervisory board members||5||¥131 million|
*1 This figure includes the compensation paid to four directors who retired at the conclusion of the 25th Ordinary General Meeting of Shareholders held on June 16, 2016
*2 The total of compensation paid to directors and audit & supervisory board members includes ¥99 million in bonuses in FY2016.
|Total amount of compensation paid to outside directors||6||¥121 million|
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)|
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 or the senior executive vice presidents, as well as the executive corporate officer in charge of corporate finance, explain recent results, future initiatives, and the return of profits to shareholders, among other topics. In fiscal 2016, we held presentations in Tokyo and Osaka in August 2016 (more than 510 and 370 attendees, respectively); in Fukuoka in November 2016 (more than 130 attendees); in Kanazawa in February 2017 (more than 100 attendees); and in Nagoya in March 2017 (more than 270 attendees). In addition, the person in charge of IR held presentations for individual investors at seminars sponsored by securities companies, and held online presentations.||Yes|
|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, and to explain sales forecasts, among other matters. We held two such presentations in FY2016. Moreover, we brief investors on the status of our businesses at conferences sponsored by securities companies.||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). In addition, 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.|
|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 20, 2017.|
|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).|
|Other||· On the day of the shareholders meeting, we held a smartphone and tablet class in a separate meeting hall.|
· Disclosure of the situation at the General Meeting of Shareholders over the Internet
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 July 1, 2017)
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 Sarbanes-Oxley Act and the Financial Instruments and Exchange Act of Japan, we employ the COSO (the Committee of Sponsoring Organizations of the Treadway Commission) 2013 framework for the design, operation, and evaluation of our internal control system related to financial reporting. In fiscal 2016, we evaluated the Company and 19 major consolidated subsidiaries and concluded that internal control over financial reporting was effective.