Sustainability

Creation of a Corporate Governance System

Basic approach

Through the realization of effective corporate governance, FUJI OIL HOLDINGS INC. aims to prevent situations that would harm corporate value, such as violation of laws and regulations, fraud or misconduct, and to strive for sustainable growth and improvement of corporate value over the medium to long term. We positioned corporate governance as an important mechanism for decision-making that is transparent, fair, prompt and resolute, in order to meet the expectations of stakeholders such as shareholders, customers, other business partners, our officers and employees, and society.
To ensure the confidence of shareholders, we consider it important to conduct flexible and rational decision-making and business execution and to enhance the functions for monitoring and supervising management.
With this in mind, we appoint multiple outside directors and outside Audit & Supervisory Board members, take care of the independence of the Audit & Supervisory Board and the effectiveness of audits by the members.
To expedite decision-making, the Fuji Oil Group shifted its management structure to a pure holding company structure through an incorporation-type company split, separating management from execution, thereby promoting delegation of authority to its regional headquarters, which are operating companies. Meanwhile, as the global headquarters, FUJI OIL HOLDINGS INC. is engaged in formulating strategies for group management and for managing group subsidiaries.

Fuji Oil Holdings Corporate Governance Guidelines PDF (76KB)

Objectives

By 2020, internal control processes should be established in each group company and frameworks for increasing business process efficiency and reducing the occurrence of losses should be created and upgraded.

Progress

We promoted improvement activities at Group companies in and outside Japan, by distributing a check sheet created by Fuji Oil Holdings to them. Also, after identifying areas needing improvement at each Group company through internal audits, the manager in charge of each identified area at Fuji Oil Holdings provided guidance for improvement to each Group company. These activities led to improved operational efficiency and progress in efforts toward common Group targets.

Specific initiatives

Holding Company Structure and the Fuji Oil

Group Management Philosophy

On October 1, 2015, the Fuji Oil Group shifted its management structure to a holding structure under a pure holding company. Under this new structure, we aim to enhance our strategic functionality, achieve sustainable growth, and increase our earning capacity.

Fuji Oil Group Management Structure (as of March 2019)

Fuji Oil Group Management Structure

Purposes of the holding company structure

1. Strengthening governance

As centralized oversight becomes more important due to the increasing diversity in employee nationalities and other factors, we will strengthen governance functions, primarily in FUJI OIL HOLDINGS INC.

2. Enhancing the Group's strategic functionality

We will implement, especially global strategies that enable the entire Group to achieve sustainable growth, with FUJI OIL HOLDINGS INC. as the core.

3. Hitozukuri (fostering people)

People devise strategies and implement governance. We will change the way we evaluate people and the way we work because we believe that it is to recruit people on a global basis and develop them optimally based on Group-wide allocation.

4. Creating new businesses

To realize our desired vision for "How we want to be in 2030", we will implement a business expansion strategy, including M&A, and a growth strategy to create new businesses by making technological innovations.

Establishment of the Fuji Oil Group Management Philosophy

The Fuji Oil Group Management Philosophy states action principles that should be observed worldwide by all group managers and employees in order for our group to achieve sustainable growth, inheriting our foundation's DNA and fulfilling our social responsibilities. Established together with the shift to a holding company structure on October 1, 2015, the Management Philosophy is a unifying force for Group management.

See the following web page for more details on the Fuji Oil Group Management Philosophy.
https://www.fujioilholdings.com/en/about/constitution/

Corporate Governance

Corporate Governance Structure

Corporate Governance Functions

Corporate Governance Functions

Board of Directors

Based on the rules of the Board of Directors, meetings of the Board of Directors are held once a month. Extraordinary meetings are held from time to time as necessary. Matters stipulated by laws and regulations and other important matters are deliberated and resolved, and the status of the directors' execution of duties is reported.

Results of the Analysis and Evaluation of the Effectiveness of the Board of Directors

In FY 2018, we mainly checked the progress of the measures taken to address the issues identified in the FY 2017 effectiveness evaluation of the Board of Directors.

1.Overview of evaluation (targets, evaluation process, question items)

Targets: Five directors and two auditors
Progress check of the identified issues: President and CEO, outside directors, two standing Audit & Supervisory Board members
Overall questions for new directors: three newly appointed directors (including one outside director)
Evaluation process: Interviews by a third-party organization and result analysis that guarantees anonymity

2.Question items:

I.
Composition and structure of the Board of Directors
II.
Management and duties of the Board of Directors
III.
Items for deliberation by the Board of Directors
IV.
Supervisory function of the Board of Directors
V.
Supervision function of the Board of Directors by Audit & Supervisory Board members
VI.
Participation at Board of Directors Meetings
VII.
Respecting the opinions of shareholders

3.Results of evaluation

Through the Board of Directors effectiveness evaluation which involved a third-party institution, it was confirmed that improvements were made since the previous fiscal year. Specifically, due to an increase of one outside director and organizational revision (review of CxOs), the diversity of the Board of Directors was strengthened, and the role of the Board of Directors was further clarified.
Regarding future tasks that need to be carried out by the Board of Directors, the strengthening of the Group's governance was identified as a priority, as a large-scale acquisition is scheduled this year. Also, the following items were identified as needing improvement: discussions regarding medium- to long-term strategies, appropriate supervision of the execution of those strategies, and the clarification of the role and function of the Nomination and Compensation Advisory Committee.
The Board of Directors discussed future policies based on the report from the third-party institution on the Board effectiveness evaluation. As a result, it was decided to begin formulating an action plan for the issues listed in the evaluation results.
Based on the evaluation results and activities stated above, the Board of Directors plans to continue to evaluate its effectiveness in order to further upgrade its functions, and strengthen corporate governance, thereby promoting the continuous improvement of corporate value.

Audit & Supervisory Board

The Audit & Supervisory Board discusses and decides on audit policies and audit plans, and reports, resolves and decides on other important matters related to auditing. A total of 13 meetings were held during the 91st term (April 1, 2018 to March 31, 2019).

Nomination and Compensation Advisory Committee

In October 2015, we established the Nomination and Compensation Advisory Committee as an advisory body to the Board of Directors for transparency in the processes of officer appointments and executive compensation decisions. A total of 11 Meetings were held during the 91st term (April 1, 2018 to March 31, 2019).

ESG Committee

The ESG Committee was established in October 2015 as an advisory body to the Board of Directors to accelerate and promote activities related to ESG (Environment, Social, and Governance). It contains the following subcomitees: Safety, Quality and Environment, Human Resources Development, Sustainable Procurement, Governance and Solutions through Creation of Foods. The ESG committee discuss and make reports to the Board of Directors regarding these areas.

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