FUJIFILM Holdings

The Evaluation of the Effectiveness of the Board of Directors

April 1, 2022
FUJIFILM Holdings Corporation

In October 2015, we formulated and published the FUJIFILM Holdings Corporation Corporate Governance Guidelines (“Guidelines”) considering the appropriate implementation of the corporate governance fundamental as the basis upon which FUJIFILM group can achieve the sustainable growth and the increase of the corporate value of FUJIFILM group companies, and the contribution to the sustainable development of society. We revised the Guidelines reflecting the revision of the Corporate Governance Code of Tokyo Stock Exchange and our implementation of measures to enhance corporate governance afterwards.

The Guidelines stipulate the roles and duties of the Board of Directors (“BoD”), as follows: (i) to decide basic management policies, strategies and important matters related to business execution; (ii) to supervise the business execution. In accordance with the Guidelines, the BoD conducts a self-evaluation of the effectiveness of itself on an annual basis, and publishes a summary of its outcome. For the purpose of securing transparency and objectivity, we involved a third party in a part of the questionnaire preparation and the evaluation analysis on a regular basis since the one published in April 2020.

Here is the summary of the outcome of the evaluation which we have recently conducted.

  1. Method of the Evaluation
    Evaluated Board Meetings : The Board Meetings held in the CY 2021 (12 in total)
    Evaluators : All of the Directors and Audit & Supervisory Board Members, who were in office as of the end of December 2021 (14 in total)
    Survey Execution Period : January through March, 2022
    Outline : Evaluation point
    ・The improvement status from last year
    ・The decision of management basic policies, management strategies and the deliberation of propositions about the decision and supervision of the important business execution
    ・The composition, the deliberation and the administration of the BoD
    Outline : Evaluation method
    ・After answering questionnaire, individual interviews are carried out based on the result of the questionnaire and reported to the BoD for discussion.
  2. Results of the Evaluation and Analysis
    We evaluate our company’s BoD to be fully effective.
    - The BoD fully performs its roles and duties; in the making of decisions on basic management policies, management strategies, and in the making of decisions on, and the supervision of, important business execution, there are no major differences in the factors and perspectives that the Directors and Audit & Supervisory Board Members place importance on, and the BoD engages in much discussion.
    - The roles and duties of the BoD are enhanced with the introduction of deliberations on important M&A activities at the initial feasibility review stage, periodic reporting on PMI progress, and deliberations on medium- and long-term issues (decarbonization).
    - In addition to careful advance preparation, such as explanations of proposals to Outside Officers, the new Chairman’s management of the agenda has further promoted free and active discussions, and further improved the quality of deliberations.
  1. Improvements based on the results of the previous evaluation of the effectiveness of the BoD (Evaluation target: Board meetings held in our company from January to December 2020)
Issues based on the previous evaluation Examples of improvements
Further increase opportunities for the BoD to discuss and report on medium- and long-term management issues and SDGs initiatives. Conducted deliberation on new decarbonization targets for FY2040.
Institutionalize reporting to the BoD on PMI of important M&A and the investment effect of capital investment resolved by the BoD. Revised internal rules to institutionalize the following: (1) reporting to and consulting with the BoD at the initial feasibility review stage for M&A; and (2) reporting the progress of the PMI to the BoD at a certain time after the completion of the acquisition. Based on this, conducted deliberations at the initial feasibility review stage for M&A cases in the healthcare field and PMI reporting on a European company manufacturing and distributing endoscopic instruments.
To stimulate discussion and improve the quality of deliberations of the BoD, increase the provision of information on the process of internal discussion. In the case of the proposals to be submitted to the BoD of our company, where these have undergone deliberation of the Management Council, the M&A Investment Committee, or the boards of directors of the business operating subsidiaries, an outline of those deliberations was reported to the BoD of our company.
By utilizing web conferencing, etc., enable Outside Officers to visit workplaces that could not have been carried out due to the COVID-19 pandemic, and deepen their understanding of our company’s management and business by providing them with on-site information. Implemented the following measures to provide information to Outside Officers:
(1) Informal gatherings for discussions between new management and Outside Officers
(2) Meetings to exchange opinions among Outside Officers only
(3) Weekly provision of information relating to our company (analyst reports, press releases, and timely disclosures, etc.)
(4) Briefing sessions on various businesses
(5) Visiting business sites (scheduled for April 2022)
  1. Measures for Enhancement of Effectiveness
    Based on the result of the evaluation, we will continue our efforts to further enhance the deliberation and effectiveness of the BoD by taking the following measures.
    - We will increase opportunities to exchange views and discuss medium- and long-term issues such as sustainability, social value enhancement measures, DX strategies, and human resources strategies.
    - In order to further improve the quality of deliberations by the BoD, we will further enhance the provision of information on the background of proposals and the process of internal discussions.
    - In order for the BoD to fulfill its expected roles and duties, we will provide opportunities for the Directors and Audit & Supervisory Board Members to acquire necessary knowledge and broaden their insights.
    - We will further improve the efficiency and enhancement of the management of the BoD by measures such as holding flexible BoD meetings and pre-briefing sessions and by providing effective explanations of proposals, through the effective use of the online conference platform.

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