Japanese

Corporate Governance

Basic Approach to Corporate Governance

Guided by our corporate philosophy of "the creation of a new world of communications culture" and our Medium-Term Strategy 2020 "Declaration beyond," 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.
The basic policy was revised in June 2020 in response to the transition to a company with the Audit & Supervisory Committee, which was approved at the 29th Ordinary General Meeting of Shareholders held on June 16, 2020.

Highlights

Highlights

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.

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 Group and the medium- to long-term improvement of corporate value. Following the transition to a company with the Audit & Supervisory Committee through a resolution at the 29th Ordinary General Meeting of Shareholders held on June 16, 2020, we also resolved to revise the Basic Policy at the meeting of Board of Directors held on the same day.

Overview of the Corporate Governance Structure

In order to establish a system to further enhance business strategy discussions at the Board of Directors and also further improve the mobility of management as an operating company, the Company transitioned to a company with the Audit & Supervisory Committee through a resolution at the 29th Ordinary General Meeting of Shareholders held on June 16, 2020.
The monitoring function of the Board of Directors has been strengthened through a framework in which independent Outside Directors are appointed and encouraged to exercise 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. In order to further strengthen governance and incorporate diverse knowledge to stimulate business strategy discussions, it was resolved at the 29th Ordinary General Meeting of Shareholders to increase the ratio of independent Outside Directors in the Board of Directors to above one third. With respect to the auditing function, all audit & supervisory committee members (including full-time 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 continue to maintain an executive officer system (28 men and 3 women serve as executive officers and 3 executive officers concurrently hold the post of director) to respond quickly to changes in the business environment by clearly delineating the roles of business execution and monitoring, and to better reinforce business execution 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
  • 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.
  • 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

Analysis and Evaluation of the Effectiveness of the 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.

Evaluation Method

  • "Directors’ Self-Assessment Questionnaire" completed by all directors and audit & supervisory board members (conducted from December 2019 to January 2020)
  • 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 2020)

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 status of efforts to realize the medium-term management strategy, allocation of management resources, and response to changes in the business environment, which had been identified as issues requiring improvement during the previous effectiveness evaluation.
In order to establish a system to further enhance business strategy discussions at the Board of Directors and also further improve the mobility of management as an operating company in the future, the Company has transitioned to a company with the Audit & Supervisory Committee, following approval of the relevant item of business at the 29th Ordinary General Meeting of Shareholders held on June 16, 2020. In addition, in order to incorporate a diverse range of knowledge toward further reinforcing governance and energizing business strategy discussions, the Company has a ratio of independent outside directors in the Board of Directors above one third, following approval of the items of business relevant to the election of Directors at the 29th Ordinary General Meeting of Shareholders.
In addition to the transition to a company with the Audit & Supervisory Committee, the Board of Directors will continue to periodically review the status of efforts to realize the medium-term management strategy, allocation of management resources, and response to changes in the business environment, with the aim of further enhancing corporate value.

Discussion by the Board of Directors and Other Structures

The Board of Directors is charged with making decisions on such agenda items as basic management policy and medium-term management plans. The Board of Directors also endeavors to reflect these policies and plans in its decision making when conducting important business execution matters. The transition to a company with the Audit & Supervisory Committee carried out in 2020 was debated in detail by the Board of Directors and in other situations that included input from independent Outside Directors, with decisions made in light of the opinions made.

Main agenda items discussed by the Board of Directors in FY2019

  • Termination of FOMA (3G) and i-mode service
  • Acquisition of Treasury Stock
  • Absorption-type merger of docomo Healthcare, Inc.
  • Transition to a company with the Audit & Supervisory Committee
  • Launch of 5G commercial service

Compensation of Directors and Audit & Supervisory Board Members

The upper limit on total compensation for directors who are not audit & supervisory committee members of the Company (ten (10) directors who are not audit & supervisory committee members that were elected at the Meeting) was set at ¥600 million annually (¥100 million annually for outside directors who are not audit & supervisory committee members) at the 29th Ordinary General Meeting of Shareholders held on June 16, 2020. 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 consolidated operating profit for the current fiscal year. In addition, the Company explains the details of compensation to the parent company, independent outside directors who are not audit & supervisory committee members, and directors who are audit & supervisory committee members to receive appropriate advice prior to the meeting of the Board of Directors.
The determination of the amount of individual compensation for each director is entrusted to the President and Representative Director by the Board of Directors. The President and Representative Director makes determinations in accordance with the following policies, as well as the rules concerning compensation for directors determined by resolution of the Board of Directors.

  1. Compensation for directors who are not audit & supervisory committee members (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. It pays bonuses by taking into account the Company’s achievement based on performance indicators such as consolidated operating profit for the current fiscal year. For functioning the incentives for the medium- term management strategy, operating profit for the primary financial target, ROIC*1, capex to sales*2, capital expenditures, and the number of B2B2X projects for the other financial targets are evaluated. 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 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.
    Percentage of Fixed Compensation and Performance-Based Compensation
  2. In order to ensure a high level of independence, the Company pays only monthly salaries as compensation for independent outside directors who are not audit & supervisory committee members with no links to business results. In order to ensure a high level of independence, the Company pays only monthly salaries as compensation for directors who are audit & supervisory committee members with no links to business results. The upper limit on total compensation for directors who are audit & supervisory committee members of the Company (five (5) directors who are audit & supervisory committee members that were elected at the Meeting) was set at ¥200 million annually at the 29th ordinary general meeting of shareholders held on June 16, 2020.
Total Compensation by Position, Breakdown of Compensation and Number of Recipients(Millions of yen, unless otherwise stated)
Directors/Audit & Supervisory
Board Members
Total compensationTotal compensation by typeNumber of
recipients
(Persons)
Base salaryPerformancebased
compensation
Retirement
benefits
Directors
(excluding outside directors)
439327112014
Audit & supervisory board
members
(excluding outside audit &
supervisory board members)
3030001
Outside directors and outside
audit & supervisory board
members
126126007
Total595483112022
  1. As there is no director with consolidated compensation of ¥100 million or more in total, the information is not provided.
  2. Directors include three directors who retired at the conclusion of the 28th ordinary general meeting of shareholders held on June 18, 2019.
  3. Outside directors and outside audit & supervisory board members include one outside audit & supervisory board member who retired at the conclusion of the 28th ordinary general meeting of shareholders held on June 18, 2019.
  4. The Company transitioned to a company with the Audit & Supervisory Committee, through a resolution at the 29th Ordinary General Meeting of Shareholders held on June 16, 2020. The upper limit on total compensation for directors and the upper limit on total compensation for audit & supervisory board members before the transition to a company with the Audit & Supervisory Committee were set at ¥600 million annually and at ¥150 million annually, respectively, through a resolution at the 15th Ordinary General Meeting of Shareholders held on June 20, 2006.
  5. In terms of performance-based compensation (bonuses), targets for operating profit, which is the main performance indicator for the fiscal year ended March 31, 2020, were set based on the financial result forecast and the actual result for the previous fiscal year. The financial result forecast of ¥830 billion was achieved and the previous year’s result of ¥1,013.6 billion was not achieved.

Initiatives to Strengthen the Governance System

Changes in the Corporate Governance System

Number of Members
(Board of Directors)
Number of Members
(Audit & Supervisory Board)
TotalOf which, outside directorsTotalOf which, outside audit &
supervisory board members
February 1999Establishment of Advisory Board
From experts in various fields, we receive objective opinions and proposals in such areas as management issues and the role of telecommunications technology in society
23040
December 2000Establishment of U.S. Advisory Board
We receive opinions and proposals from a global viewpoint in regard to the role of telecommunications technology in society and information technology trends.
28042
June 2002Appointment of outside director
The Company appointed one outside director from within the NTT Group.
27142
June 2003Outside members account for a 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.
27154
June 2005Introduction of the executive officer system
Reduced the number of members of the Board of Directors in the Articles of Incorporation by more than half in accordance with the introduction of the executive officer system.
13153
June 2013Number of outside directors on Board of Directors increased by one
The Company appointed the first independent outside director from outside the NTT Group.
142 (Of which, 1 is an
independent director)
53 (Of which, 2 are independent audit
& supervisory board members)
June 2016 System with two independent outside directors
The number of independent outside directors increased to two.
152 (Of which, 2 are
independent directors)
54 (Of which, 2 are independent audit
& supervisory board members)
June 2020 Transition to a Company with the Audit & Supervisory Committee
The number of Directors will be 15, including 5 audit & supervisory committee members.
The ratio of independent Outside Directors on the Board of Directors will be one third or more.
The number of independent Outside Directors will be 5, including 2 audit & supervisory committee members.
15 7 (Of which, 5 are
independent Directors)
Number of Members (Audit & Supervisory Committee)
Total Of which, Outside Directors
5 4 (Of which, 2 are independent Directors)

Dialogue with Shareholders and Investors

Policy

DOCOMO is proactively expanding our investor relations (IR) activities by appointing an executive responsible for IR overall and establishing a designated IR department as well as engaging in information disclosure and dialogue with shareholders and investors as part of our efforts to realize sustainable growth and increase our corporate value over the medium and long term. DOCOMO also releases explanatory materials and minutes of financial results presentations and small meetings in English on our website while financial results presentations with simultaneous English interpretation are streamed live on our website to promote fair disclosure that includes expanding and enhancing the information disseminated to overseas investors. In addition, we provide the views expressed by our shareholders and investors as feedback to top management every quarter and share them not only among the management team but across the company, as these views help us to improve our services and business performance.

Status of Activities in FY2019
EventNumber of times
Individual meetings for securities analysts and institutional investors376
Results presentations for securities analysts and institutional investors4
Small meetings following financial results for securities analysts and institutional investors4
Small meetings based on different themes for securities analysts and institutional investors7
Conferences for securities analysts and institutional investors (Japan, overseas)9
Roadshows for securities analysts and institutional investors (Japan, overseas) 10
Presentations for individual investors8
Shareholder events (tours of network operation centers, etc.)13

IR Site Awards History

DOCOMO’s IR site has received high praise from third-party organizations.

  • Grand Prize in the Internet IR Award 2018 presented by Daiwa Investor Relations Co., Ltd.

  • Silver Prize in Gomez IR Site Ranking 2018 for companies with outstanding IR sites

Information Management

Enhancement of Information Management System

DOCOMO recognizes that proper management of information is an important management issue, and to offer secure services to customers we have declared our Information Security Policy as guidelines for the DOCOMO Group’s initiatives on information security, and we are committed to thoroughly complying with the Information Security Policy and Privacy Policy. Our Information Security Policy applies to information assets that consist of any information we obtain or learn in the course of our corporate activities, and all information we possess for the purpose of our operations.
To manage such information, we set up the Information Management Committee chaired by the senior executive vice president who also serves as Chief Information Security Officer (CISO) and Chief Privacy Officer (CPO), and an employee responsible for information management has been assigned to each worksite. By establishing a system for speedily implementing information security measures, we are protecting and appropriately managing all information assets in our possession.

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.

Specific initiatives

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

Information Management System

Internal Control

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.

PDFSystems for Ensuring the Propriety of NTT DOCOMO's Business Activities (Internal Control System)
 (PDF format:61KB) 4 pages

Risk Management

DOCOMO strives to strengthen risk management under the basic policy of identifying and responding to business risk as quickly as possible. We define risks as situations that may adversely affect our credibility or corporate image or lead to a reduction of revenues and/or increase of costs, such as natural and human-caused disasters, including natural calamities and power shortages; inadequate handling of confidential business information, including personal information; changes in the market environment for the telecommunications industry; and intensifying competition from other businesses. We are making our best efforts to prevent and mitigate such risks.
Specifically,In accordance with our Risk Management Principles, business risks are regularly identified, and the Internal Control Committee, headed by the President and CEO, designates risks that require Company-wide management. Management policies for the identified risks are formulated and appropriate efforts are made to prevent such risks from materializing and to prepare to quickly respond 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 management 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 channels 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, DOCOMO uses as our standard for the design, operation and evaluation of our internal control system related to financial reporting 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 Options)" published by the Business Accounting Council. In FY2019, we evaluated the Company and 13 major consolidated subsidiaries and concluded that internal control over financial reporting was effective.

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