Nomura Group Governance
Nomura Holdings, Inc.
March 2021
© Nomura
FY2020/21 initiatives to further enhance corporate governance
New Group CEO took over in April last year and new executive team set up. During the current fiscal year we took the following steps to further enhance our governance in line with the global operating environment
FY2020/21 initiatives
Global revenue mix
We have continued to ensure a robust governance system in line with the changing times and business environment (see next page). Recently, the proportion of our international operations as part of our overall business portfolio has continued to increase, and this fiscal year we have considered to further enhance our governance to reflect the global operating environment.
Three segment net revenue
(FY2020/21 1-3Q)
We have researched and verified1 how a board of directors suitable for a global financial institution should be and discussed this several times at Board of Directors' meetings with a view to further enhancing governance. As a result, we decided to look into having a board of directors that emphasizes the monitoring of strategy over the medium to long term.
In order to achieve this, we researched and selected Director nominees that have the required background to ensure oversight of management of a global company
Composition of Board of Directors from June 2021 (overview)
To accurately reflect our global revenue mix, three Director nominees were selected from overseas who have knowledge of the financial industry (As one current Director from overseas is due to retire, Directors from outside Japan will increase by two)
Given our business growth in the US, two nominees have an extensive understanding of the US financial industry, macro economy and regulatory environment
To ensure geographical diversification of Directors, the other nominee is from Asia and has broad experience in finance
In recognition of the importance of having management insights on Japanese companies operating globally, one nominee has been selected from corporate Japan
As a result, the composition of the Board of Directors from June 2021 will have a non-Japanese ratio of 4/12 and a female ratio of 3/12, significantly increasing the diversity of the board
1. The Nomura Holdings Board of Directors conducts a self-assessment each year. In addition to this, in FY20/21 a third party assessed the Board of Directors and a full review of governance was conducted.
Reinforcing governance structure
Shifted to holding company structure and listed on NYSE
2001
Established Advisory Board where outside experts regularly discuss group management
Outside Directors
2003
2021 (plan)
Two Outside Directors
(one female) joined from overseas and Board of Director comprised of a majority of Outside
Directors
2010
2015
Established "Outside Directors Meetings" to discuss matters related to business and corporate governance regularly
Invited Asian experts as members of the
Advisory Board
Non-Japanese and female directors 2021 (plan)
2003
2021 (plan)
Aim to establish more sophisticated governance system as a global financial institution
Increased number of Director nominees to 12, of which 8 are Outside Directors, 4 are non-Japanese and 3 females
Director training program
0%
Introduction for new Outside Directors
In order to deepen understanding of Nomura Group's operations and internal controls, we provide an intensive explanation covering corporate governance, our business execution structure and business model, finance, risk management, compliance, major litigation cases, internal audit, internal investment rules, etc.
Others
Ethics training for Directors and Executive Officers (including Outside Directors) once a year to enhance understanding of ethics
Further enhancing our corporate governance
Of the 12 nominees for Directors at the annual meeting of shareholders to be held in June 2021, 10 have been nominated to serve as Non-Executive Directors.
If all the directors are elected, the Company's Board of Directors will be more diversified with eight Outside Directors, four non-Japanese Directors, and three female Directors.
Name | New Appointment / Reappointment | ||
Koji Nagai | Reappointment | Non-Executive Director | Chairman of the Board of Directors |
Kentaro Okuda | Reappointment | Executive Officer | Representative Executive Officer and President, Group CEO |
Tomoyuki Teraguchi | New Appointment | Executive Officer | Due to be appointed Representative Executive Officer, Deputy President on April 1, 2021 |
Shoji Ogawa | New Appointment | Non-Executive Director | |
Kazuhiko Ishimura | Reappointment | Outside Director | Director of AGC Inc. President of the National Institute of Advanced Industrial Science and Technology |
Noriaki Shimazaki | Reappointment | Outside Director | Advisor, IFRS Foundation Asia-Oceania Office Former Executive Vice President, Sumitomo Corporation |
Takahisa Takahara | New Appointment | Outside Director | Representative Director, President and CEO of Unicharm Corporation |
Mari Sono | Reappointment | Outside Director | Certified Public Accountant Former members of the Securities and Exchange Surveillance Commission |
Laura Simone Unger | Reappointment | Outside Director | Former Commissioner and Acting Chairman of SEC |
Victor Chu | New Appointment | Outside Director | First Eastern Investment Group, Chairman and CEO |
Chris Giancarlo | New Appointment | Outside Director | Former Chairman of the U.S. Commodity Futures Trading Commission Willkie Farr & Gallagher, Senior Counsel |
Patricia Mosser | New Appointment | Outside Director | Former Deputy Director, Office of Financial Research, U.S. Department of Treasury Former Senior Vice President, Federal Reserve Bank of New York Director, Columbia University, School of International and Public Affairs |
Of the four nominees for New Outside Directors at the annual meeting of shareholders to be held in June 2021, three are non-Japanese and one is female.
Takahisa Takahara
Chris Giancarlo
President and CEO of Unicharm Corporation
Chairman of the Committee on Consumer Goods and Services of Keidanren (Japan Business Federation)
Chairman of Japan Hygiene Products Industry Association
Chairman of Nippon Omni-Management Association
Former Chairman of the U.S. Commodity Futures Trading
Commission (CFTC)
Currently serves as Senior Counsel for the international law firm
Willkie Farr & Gallagher as Independent Director and Advisor.
Patricia Mosser
Former Deputy Director, Office of Financial Research, U.S. Department of Treasury
Former Senior Vice President, Federal Reserve Bank of New York
Currently a Director, Columbia University, School of International and Public Affairs
Nomination Committee Calendar for election of directors
Succession plan for Group CEO and others
Discussion for outside director candidates | Determination of candidates to be submitted to Ordinary General Meeting of Shareholders | Determination of grounds of appointments Determination of contents of their disclosure |
Number of outside directors can hold concurrent positions at other listed companies up to 3.
In principle, there is 1 internal director (non-executive).
As a general rule, majority of the board is composed of outside directors
The term of outside directors is expected to be six years
As a general rule, outside directors should meet the company's standards for independence
As a general rule, experts in finance, corporate management, and law should be included
Consideration in election of directors
Candidates from current GCEO are presented to Nomination Committee and elected by Board of Directors.
The Nominating Committee and Board assess appropriateness of candidates at various angles such as audit hearings and board meetings
The succession plan includes the concept of qualities required of Group CEO, business execution system that incorporates management environment and perspective of fostering successors, evaluation of the status of business execution under the business execution system, and specific succession proposals
Corporate Governance Structure (as of March 2021)
In 2001, Nomura formed a holding company structure; Nomura Holdings listed it shares to NYSE, introduced an outside director system for the first time among other Japanese companies
In 2003, transition to Company with Committees (currently referred as a Company with Three Bard Committees)
Separation of management oversight from execution to reinforce supervision. Delegation of decision-making on business execution to executive directors for swift decisions
Execution
Management oversight
1. As of end of February 2021
Name | Year of appoint ment | Background | No. of significant concurrent positions other than Nomura Group | ||||||
Nomin ation | Compe nsation | Audit | Corpor ate manag ement | Interna tional busine ss | Securit ies industr y | Accou nting/F inancia l | Legal/ Regula tions | ||
Koji Nagai | Non-Executive Director (Chairman of the Board of Directors) | Jun. 2013 | 〇 | 〇 | ✔ | ✔ | ✔ | Mr. Nagai served as Nomura Holdings President and Group CEO and Nomura Securities President (relinquished executive duties for Nomura Holdings in April 20202 and for Nomura Securities in April 2017) | - |
Hisato Miyashita | Non-Executive Director | Jun. 2016 | 〇 | ✔ | ✔ | ✔ | Mr. Miyashita has extensive experience with respect to compliance issues having worked for many years at securities companies including Nomura in legal and compliance and served as Nomura Group Chief Compliance Officer | - | |
Hiroshi Kimura | Outside Director | Jun. 2015 | ◎ | ◎ | ✔ | ✔ | Mr. Kimura has extensive experience with respect to corporate management and has held positions such as President, CEO and Representative Director of the Board of JT and Chairman of the Board of JT | 1 | |
Kazuhiko Ishimura | Outside Director | Jun. 2018 | 〇 | 〇 | ✔ | ✔ | Mr. Ishimura has extensive experience with respect to corporate management and has held positions such as Representative Director and President and CEO, and Chairman of the Board of AGC | 4 | |
Noriaki Shimazaki | Outside Director | Jun. 2016 | ◎ | ✔ | ✔ | ✔ | Mr. Shimazaki has extensive experience with respect to corporate management and a high degree of expertise with regard to international accounting systems corresponding to a Sarbanes-Oxley Act of 2002 financial expert. He has held positions such as Representative Director and Executive Vice President of Sumitomo Corporation, Member of the Business Accounting Council of the Financial Services Agency, Trustee of IASC Foundation, Special Advisor of Sumitomo Corporation and Director of the Financial Accounting Standards Foundation | 1 |
Name | Year of appointme nt | Background | No. of significant concurrent positions other than Nomura Group | ||||
Nomin ation | Comp ensati on | Audit | Corpo rate mana geme nt | Intern ationa l busin ess | Securi ties indust ry | Accou nting/ Finan cial | Legal/ Regul ations |
Mari Sono | Outside Director | Jun. 2017 | 〇 | ✔ | ✔ | Ms. Sono has a high degree of expertise with respect to corporate accounting based on many years of experience as a Certified Public Accountant and has held positions such as External Comprehensive Auditor, Tokyo, and Member of "Business Accounting Council," Ministry of Finance. Further, after retiring from the Audit Firm, she served as Commissioner of the Securities and Exchange Surveillance Commission | - |
Michael Lim Choo San | Outside Director | Jun. 2011 | ✔ | ✔ | Mr. Lim is well-versed in international accounting systems and has held positions, including Executive Chairman of PricewaterhouseCoopers (Singapore) and public service roles in Singapore | 1 | |
Laura Simone Unger | Outside Director | Jun. 2018 | ✔ | ✔ | Ms. Unger, by serving as a Commissioner and as Acting Chairman of the SEC, etc., is well-versed in finance-related legal systems | 2 | |
Kentaro Okuda | Executive Officer | Jun. 2020 | ✔ | ✔ | ✔ | Representative Executive Officer, Group CEO of the Company, Representative Director of Nomura Securities Co., Ltd.) | - |
Toshio Morita | Executive Officer | Jun. 2020 | ✔ | ✔ | Representative Executive Officer of the Company, Representative Director and President of Nomura Securities Co., Ltd. | - |
Main items discussed by the Board of Directors in FY2020/21
In FY2020/21 (as of end Feb 2021) Board of Directors meeting held 9 times and discussed main agenda items below Held 3 Outside Directors meetings during same period
FY2020/21 1H
Main agenda | Content of the discussion | |
1Q | FY19/20 results, dividend payouts | Company overview, situation by division and region, situation of competitors, etc. |
Business execution report | Report and discussion on current status and future plans in Wholesale | |
Policy on dealing with acquisition proposal | Determine policy for initial response and maintain Board of Directors and decision making body | |
Report on Investor Day | Report and discussion on priorities, management vision, and business strategy | |
Risk management reports | Report and discussion on framework for top risks and emerging risks | |
Compliance reporting | Report and discussion on initiatives to promote approach to conduct and countermeasures for money laundering and terrorist financing | |
2Q | FY20/21 1Q results | Company overview, situation by division and region, situation of competitors, etc. |
Business execution report | Report and discussion on responses and future issues and strategies amid coronavirus | |
Establishing structure to promote proper conduct | Report and discussion on establishment of conduct program and conduct annual plan | |
Risk management reports | Status of risk appetite management | |
Compliance reporting | Report and discussion on progress of improvement measures related to incident of improper communication of information |
FY2020/21 2H1
3Q
4Q
Main agenda | Content of the discussion |
FY20/21 2Q results, dividend payouts | Company overview, situation by division and region, situation of competitors, etc. |
Business execution report | Report and discussion on current status and future strategies of each division and introduction of monitoring metrics for achieving ROE target |
Information disclosure structure | Report and discussion on internal structure for information disclosure and comparison of disclosure details with competitors |
Strategic Shareholding Review Committee reporting | Current status of strategic shareholdings and future measures |
Audit activity findings report | Report and discussion on reply from execution side in relation to proposals from Board of Directors to execution side |
Compliance reporting | Report and discussion on status of investigation into corporate client information leakage incident and future measures |
FY20/21 3Q results | Company overview, situation by division and region, situation of competitors, etc. |
Business execution report | Report and discussion on current status and future strategies of each division and strengthening of integration of ESG by Nomura Asset Management |
ESG update | Report and discussion on approach and future outlook for ESG |
Risk and responses for operations amid pandemic | Report and discussion on labor management and information management amid pandemic |
Risk management reports | Report and discussion on current status of management of risk appetite, major top risks, and emerging risks |
1. 4Q is as of end of February 2021.
Sustainability initiatives
2020: A year of action on Sustainability at Nomura
December 2019 - Launch of the Nomura Research Center of Sustainability
April - Acquisition of Greentech completed. Ranked #1 M&A Advisor in Clean Energy / Energy Smart Technologies by Bloomberg, 2017-2019
May - Nomura acts as book runner on 5 COVID social bonds, for $15bn
June - Early Investment Bank signing UN Principles for Responsible Banking
July - Publication of Nomura's first TCFD Report
September - The Banker "Investment Bank of the Year for Sustainable Corporate Finance"
September - Nomura publishes Wholesale ESG Sectoral Appetite Statement
October - Virtual ESG Conference, >500 clients registered
October - Nomura is joint lead manager on EU SURE €17bn bond syndication
December - GFMA Climate Finance Market Structure report, with Nomura sponsorship and leadership (Chairmanship of GFMA)
December - Nomura recognised through 3 ESG ratings upgrades
Recognized through NHI ESG rating upgrades
Top 15-20% banks. No banks rated A/B
Transparency Level = "Very High"
Upgrade based on a broad set of initiatives (60 page final submission)
More improvements identified
Two notch upgrade to top 9% of banks
Includes specific reference to Wholesale Sustainability Forum, Sectoral ESG Appetite Statement, acquisition and integration of Greentech
Credit from staff surveys, inclusion and diversity actions
More focussed on NHI own CO2 footprint, and emissions reduction policies
To maintain, we will need to develop CO2 footprint data of financed activity with net zero commitment
ESG Committee
Established ESG Committee to make decisions related to sustainability at senior management level and promote initiatives across the Group
Chaired by Group CEO and comprised of same members as Executive Management Board
Discusses and makes decisions on policies, action plans, and key issues related to sustainability
Appoint an executive officer in chare of sustainability development in April 2021 who will work to raise awareness within the Group including for D&I initiatives, enhance our efforts, and increase information disclosure and external communications
Board of Directors
ESG Committee
Business opportunities and strategies for Sustainable Finance
Transaction frameworks, appetite and policies
Scenario analyses on physical and transition risks
Analyses of climate change risk in the portfolio
Stress testing
Disclosure policy and content
Analysis of impact on our businesses
Study of climate change risks and opportunities
Environmental management system
Efforts to achieve CO2 emissions reduction targets
Initiatives to promote Code of Conduct
Establishment of Code of Conduct and annual revision
Promote Code of Conduct established in December 2019 and further reinforce based on current circumstances
Aim
As we work to realize our mission and vision, everyone at Nomura is expected to uphold the values of entrepreneurial leadership, teamwork and integrity that underpin us as a firm. This Code of Conduct sets out guidelines to help us translate our values into actions Declaration of Nomura's commitment to customers, society and ourselves
Outline
Our conducts
Explanation of the positioning of the Code of Conduct
Responsibility of managers
Basic questions to ask oneself
Each items in detail
Guidelines for
translating the
values of "entrepreneurial leadership", "teamwork" and "integrity" into
concrete actions
(1) Create environment of open discussion, work together as a team and enhance client focus
(2) Further enhance internal discipline and understanding to prevent scandals
(3) Promote proactive activities aimed at strategically advancing sustainability
Initiatives to promote Code of Conduct and reduce conduct risk
Under governance of Conduct Committee, pursue initiatives to promote Code of Conduct and activities to manage conduct risk
First line of defense implements initiatives based on voluntary annual plan and second line supports promotion initiatives
1
1. Diversity & Inclusion will form a part of sustainability activities.
Initiatives to promote Nomura Group Code of Conduct
Group Compliance Dept.
Promote good conduct Consider options for conduct based on examples that bring better results | Learn from mistakes Each year on Nomura Founding Principles and Corporate Ethics Day all employees watch a video, have a discussion, submit an attestation and an affirmation to abide by the Nomura Group Code of Conduct |
Received 15,000 submissions for conduct slogan and upload best ones to intranet daily
Ms. Kawano Aya
Compliance training
Nomura Securities provides officers and employees with training on compliance in a planned manner on such themes as anti-money laundering and terrorist financing, conflict of interest management, prevention of insider trading, compliance with firewall regulations, and thorough management of customer information. The purpose of this training is to raise the level of knowledge of relevant laws and regulations of officers and employees and to raise their awareness of compliance.
Training for sales managers, internal control managers, and employees engaged in internal control activities
Training to improve the quality of sales representatives
Training for branch managers, general affairs managers, new employees, new managers, etc.
Business Manager1 Training
Compliance Hours at Sales Departments and Offices2
Compliance training for all employees
Regular training for head office managers and business managers
Knowledge Improvement Training for General Affairs Division of Branches
Lectures on compliance at various training and meetings
Morning meeting Q&A (Retail)
Compliance training for Investment Banking, Global Markets, Global Research, and Fiduciary Services Research Center
1 The system was established after the second scandal involving an extortionist that was found to have provided profits and compensated for losses. This is a system unique to Nomura, and appointed by appointment.
2 In order to ensure thorough compliance throughout all employees, we hold monthly seminars for Nomura Securities sales departments and branches.
Appendix
Corporate Governance Code established in 2015
Aim to define and contribute to the realization of a framework of effective corporate governance as a structure for transparent/fair and timely/decisive decision-making
Board of Directors
Delegate its authority to execute business to Executive Officers and focus on management oversight
Diversity that enables active discussions from diverse perspectives
Majority of members is Outside Directors
Three board committees established
Analyze and evaluate the effectiveness of the Board and disclose the results
Internal Controls System
Oversee status of maintenance and operation of internal controls through audits by Audit Committee and activities by Internal Audit
Internal Controls Committee chaired by CEO and attended by Audit Committee members established for the purpose of strengthening and enhancing the Internal Controls System.
Involvement of Audit Committee in implementation plans of the Internal Audit as well as in election and dismissal of Head of the Internal Audit
Risk Management
Ensure financial soundness and to maintain and improve corporate value, management shall establish a risk management framework and the Board of Directors shall oversee the effectiveness of the framework
Dialogue with Shareholders
Treat shareholders equally and disclose information appropriately and timely to avoid information disparity
Take necessary measures to ensure that shareholders are not unfairly precluded from exercising their rights
Endeavor to enhance dialogue and provide explanations on general policies for allocation of management resources
Share outcomes of such dialogue with the Board of Directors
Policy for Strategic Shareholdings
Ongoing discussions concerning the purpose of strategic shareholdings
Hold shares only if such shareholdings contribute to maintaining/enhancing the corporate value of Nomura Group
As a result of the discussion, concerning stocks whose sale has been determined to be reasonable, we proceed with sale of such stocks while taking into consideration impact on the market and other circumstances
Fulfill Corporate Responsibilities
Established "Nomura Group Code of Conduct" as guidelines for each director, officer, and employee of Nomura Group to comply with
Enhance corporate value in long-term by respecting diversity and establishing a sound workplace to enable all directors, officers, and employees to perform at their full potential
Actively engage in ESG-related activities for sustainable growth and solving social issues, in addition to contributing to expanding securities markets through daily business
Independence Criteria for Outside Directors, Measures to avoid Conflict of Interests
The nomination committee, comprised its majority of outside directors based on the independence criteria, shall determine proposals concerning election of directors to be submitted to the Board
Respective regulations of the Board and committees articulate measures to avoid conflict of interests in resolutions
Independence Criteria for Outside Directors (excerpt)
(1) Person Related to the CompanyA person satisfying any of the following requirements shall be considered a Person Related to the Company:
• Executive of another company where any Executive of the Company serves as a director or officer of that company;
• Major shareholder of the Company (directly or indirectly holding more than 10% of the voting rights) or Executive of such major shareholder; or
• Partner of the Company's accounting auditor or employee of such firm who works on the Company's audit.
(2) Executive of a Major Lender (*2) of the Company.
(3) Executive of a Major Business Partner (*3) of the Company (including Partners, etc.).
(4) A person receiving compensation from the Nomura Group of more than 10 million yen per year, excluding director/officer compensation.
(5) A person executing the business of an institution receiving more than a Certain Amount of Donation (*4) from the Company.
The person's spouse, relatives within the second degree of kinship or anyone who lives with the person shall not correspond to a person listed right
(excl. persons in unimportant positions)
(1) Executive of the Nomura Group; or
(2) A person identified in any of subsections (1) ~ (5) above
* NYSE criteria for outside director independence about so-called cooling-off; 3 years1
Countermeasures to conflict of interests in resolutions
Regulations of the Board of Directors
Regulations of the Nomination Committee
Regulations of the Audit Committee
Regulations of the Compensation Committee
(Regulations of the Board of Directors)
Article 9. (Resolutions)
1. The resolution of a meeting of the Board of Directors shall be adopted by an affirmative vote of a majority of the Directors present which Directors present shall constitute a majority of all Directors then in office who are entitled to participate in the voting.
2. No director who has a special interest in any matter requiring a resolution shall be entitled to participate in the voting on such matter.
1.New York Stock Exchange Listed Company Manual 303A.02 Independence Tests
Compensation policy
Human resources are Nomura Group's greatest asset in establishing a strong position as a globally competitive financial services group
Established the "compensation policy" for Group officers and employees to secure, maintain, motivate, and develop excellent human resources.
The higher the compensation and bonus, the lower the ratio of cash 例外 bonuses.
This will enable the Group to achieve sustainable growth, achieve long-term growth in shareholder value, provide added value to customers, demonstrate global competitiveness, and enhance Nomura's reputation.
1.
This figure does not indicate the percentage of each remuneration, but shows the breakdown of remuneration. individuals.
Framework for senior management, method of determination for each component
Deferred compensation (deferred for 3 years in principle)
Total compensation1
-
A portion of variable remuneration is paid as deferred remuneration to directors who receive a certain level of remuneration and bonuses.
Main way to provide RSU asNSU3 deferred compensation is to link economic value of compensation to share price and have executive officers share the common target of raising corporate value over the
2.
Restricted Stock Unit, Right to choose either RSU and phantom stock is given to certain
Composition and role of Nomination, Compensation and Audit Committees (as of March 2021)
To ensuring and improving the independence and transparency, Chairman of all three committees are Outside Directors
Composition and role of the three committees
Hiroshi Kimura | Outside Director (Chairman) |
Ishimura Kazuhiko | Outside Director |
Koji Nagai | Inside Directors (Non-executive) |
Noriaki Shimazaki | Outside Director (Chairman) |
Mari Sono | Outside Director |
Hisato Miyashita | Inside Directors (Non-executive) |
Determine the particulars of a proposal concerning the election and dismissal of Directors to be submitted to a general meeting of shareholders
Determine the independence criteria for Outside Directors
Determine the reasons why each person was designated as a Director nominee
Establish the policy with respect to the determination of the compensation and other remuneration of Directors and Executive Managing Directors
Determine the individual compensation and other remuneration of each Director and Executive Officers
Audit the execution by the Directors and Executive Officers of their duties and prepare audit reports
Determine the content of proposals concerning the election and dismissal of the accounting auditors to be submitted to a general meeting of shareholders
Conducting evaluations on the effectiveness of the Board of Directors since FY2015/16
Each Director assesses management of Board, including quantity and quality of information offered and discussions by Board, sharing findings at Board and learn from the results in order to continue strengthening their oversight function.
Constitution and management of the Board of Directors
Information provision to the Board of Directors
The Board of Directors' involvement in management goals and strategy
The Board of Directors' function ability to oversee management
Constitution and management of the Nomination, Audit and Compensation Committees
Monitoring of the state of dialogues with stakeholders
Management of Outside Directors Meetings, etc.
Evaluating effectiveness
Response to results
In fiscal year ended March 2019, Director Kimura who is the lead Outside Director has been assigned to the Chairman of Nomination Committee and Compensation Committee, and aimed for sophistication of Board of Directors
At the Nomination Committee, Succession Plan discussed by concerning the Group CEO qualifications based on factors such as the management environment and candidate proposal. At the Compensation Committee, performance-based compensation was discussed, and the function of each Committee was enhanced
Regarding the incident of improper communication of information, the Board of Directors concerning investigation results by the special investigation team under the Audit Committee, required to establish a remediation action plan to the senior managements. As a result, the Nomura Group Code of Conduct which is an essential part of the remediation plan has been established based on the discussions at the Board of Directors, and the efforts to permeate the code were also discussed at the Board of Directors
Future Challenges
At the regularly held meetings of Outside Directors, enhancement of discussions regarding management's goals and strategies, and effective management of Board of Directors will be discussed with Directors and senior management for ideal way of the Company's Board of Directors
Instill Business Practices, Professionalism;
少し変わったかも。確認
Training programs for Employees
Compliance training
Nomura Securities provides officers and employees with training on compliance in a planned manner on such themes as anti-money laundering and terrorist financing, conflict of interest management, prevention of insider trading, compliance with firewall regulations, and thorough management of customer information. The purpose of this training is to raise the level of knowledge of relevant laws and regulations of officers and employees, to raise their awareness of compliance, and to foster a corporate culture that pursues appropriate business practices
Training for sales managers, internal control managers, and employees engaged in internal control activities
Training to improve the quality of sales representatives
Training for branch managers, general affairs managers, new employees, new managers, etc.
Business Manager *1 Training
Compliance Hours at Sales Departments and Offices*2
"Nomura 'Founding Philosophy and Corporate Ethics' Day" Initiatives
Based on a deep remorse for the misconduct caused in the past, August 3 has been designated "Nomura 'Founding Philosophy and Corporate Ethics' Day" since 2015.
Since then, in August every year, we have reconfirmed our corporate culture and corporate ethics based on spirit of our founding, and reaffirm the lessons learned from past scandals
Implement the following measures to reaffirm our resolutions to prevent the recurrence of misconduct and to earn and maintain trust of society
(1) Viewing of video materials (2) Holding of opinion exchange meetings (3) Submission of a statement of intent on preventing the weathering of scandals
Compliance training for all employees
Compliance training for Investment Banking, Global Markets, Global Research, and Fiduciary Services Research Center
Regular training for head office managers and business managers
Knowledge Improvement Training for General Affairs Division of Branches
Lectures on compliance at various training and meetings
1 The system was established after the second scandal involving an extortionist that was found to have provided profits and compensated for losses. This is a system unique to Nomura, and appointed by appointment.
2 In order to ensure thorough compliance throughout all employees, we hold monthly seminars for Nomura Securities sales departments and branches.
Whistleblowing systems
Purposes
Established for fostering a sound corporate culture and corporate ethics through an early detection and correction of illegal acts and scandals
Increased significantly up to FY2018/19 and continued to increase in FY2019/20
Background of the increase; use of the tools provided by external vendors to enhance anonymity and an implementation of publicity campaigns
Number of reports
126
84
FY17/18
FY18/19
FY19/20
FY20/21 1
31
50
1. as of December 31, 2020
Nomura Group Compliance Hotline
Nominated a total of 4 information counselors: 2 internal directors (Compliance, IA) and 2 external lawyers
Two methods are prepared: one to provide information directly to internal directors, and the other to via a tool provided by an external contractor
Type of information recipient and methods can be freely selected by a reporter
Steps taken to enhance trustworthiness of systems
Registration system
On November 15, 2019, registered as a registered operator of "Internal Reporting System Certification (Self-Declaration of Conformity Registration System; WCMS)2" under the jurisdiction of the Consumer Affairs Agency
Deliver messages to employees
Messages are distributed periodically to all employees on promotion of use of the hotline.
In addition to scope of reportable matters and prohibition of disadvantageous treatment, flow of information from the receipt of reports and points for responding to investigations is also disseminated
2. Certification of the whistleblowing system (Self-Declaration of Conformity to Registration System): A system under which a designated registration organization registers the results of a business operator's verification of its whistleblowing system based on an application from the business operator and permits the use of the designated WCMS mark if the business operator evaluates its internal reporting system and complies with the standards for the whistleblowing system certification based on the "Guidelines for Private Business Operators on the Development and Operation of the Internal Reporting System Based on the Whistleblower Protection Act" (Established on December 9, 2016) established by the Consumer Affairs Agency.
Outline if incidentStrict management of client information and further enhancement of information management
• Improper action by a former Nomura employee working at Nippon Institutional Securities led to leakage of client information of 275 companies, primarily financial institutions, such as ETF transaction details and information related to communication with Nomura via a Nomura employee to Nippon Institutional Securities
• Although we received a report that there was no secondary leakage of the information, this was a serious incident that had a significant impact on many of our clients
(Press release Sept. 10, 2020)
Expanded items within performance management related to ethics, risk management, compliance and conduct within performance management
Conducting training and projects to raise awareness of conduct issues group-wide
- Identified strengths and issues through results of Nomura Group employee survey in 2020; Shared across the group areas to be improved in enforcing Code of Conduct and executive officers take the lead in implementing initiatives
-
Established LCC award: System to award behavior worthy of being a role model by proactively taking action in line with the Code of Conduct
Increase training on information management to enhance information management structure
- Conducted training on opening email attachments and things to look out for when working from home in order to enhance cyber security
Revised rules on information assets, manage information according to confidentiality
- Revised information security categories and ensure proper management for each category
Enhanced controls on printing such as approvals for printing and enhanced reviews of printing records
Strengthening of viewing and managing information when working remotely
- Established guidelines for working remotely. Determined actions that must be followed and where caution is needed when working from home, require employees to regularly submit written pledge
- Also determined actions managers must take (ensure information security in department, oversight structure, reminders to employees, etc.)
Disciplinary action against related persons and internal sharing of cases
Respond to changes in society while playing role in financial and capital markets
Clients
Employees
Continuity of financial services
− Focused on providing liquidity to financial and capital markets amid market turmoil
− Supported fundraising needs of issues by acting as bookrunner on $638.8bn1 (approx. Y69trn) of bond issuances globally in 2020
− Retail closed branch offices temporarily following announcement of state of emergency in March 2020 and continued to operate using phone, email, and online services
Using non-face-to-face channels
− Built out IT infrastructure to provide high quality remote services for online meetings and videoconferencing
− Retail enhanced delivery of information to clients via email
Communities
Diversified work style
− Expanded work from home
− Introduced flextime system
− Considering office designs based on diverse work styles such as satellite offices
Ensured safety of our people
− Following state of emergency announced in January 2021, about 40% of people in Japan and 90% overseas working from home as of end of January
− Implemented wellbeing initiatives such as mental and health counselling predominantly in international offices
− Distributed masks to all employees in Japan and AEJ
Crisis management
Donated a total of Y155.8m to charities globally
Donation of masks and hand sanitizer
−
Collected donations from executive officers and employees globally which | − | Clarified process to enact business continuity plan and operations to |
we matched by the company and a total of Y115.8m was donated to local | prioritize | |
charities supported in each region | ||
− | Confirmed work approach under pandemic and remote access for working | |
from home | ||
− | Set out rules regarding international travel |
− Procured one million masks from Orient International (Holding) and donated to Japanese government and Japan Red Cross for use at medical and welfare institutions
− Donated masks and hand sanitizer to charities in AEJ Charity events
−
Held a global virtual charity event in which over 1,100 people participated, raising a total of $20,465 donated to local charities in each region
Source:Dealogic
Response based on Infectious Disease Action Plan Guidelines
Steps to prevent spread of virus
− Conducted business using a mix of split teams and work from home
− Restricted and advisory messages around internal social gatherings and personal gatherings
− Enforced social distancing in offices and branches
28
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