Sony Group Corporate Governance: Roles & Responsibilities of Directors & Executives, Study notes of Law

Download Sony Group Corporate Governance: Roles & Responsibilities of Directors & Executives and more Study notes Law in PDF only on Docsity! (TRANSLATION) CHARTER OF THE BOARD OF DIRECTORS SONY GROUP CORPORATION 2 (TRANSLATION) CHARTER OF THE BOARD OF DIRECTORS OF SONY GROUP CORPORATION Article 1. Purpose of Charter The purpose of this Charter of the Board of Directors of Sony Group Corporation (hereinafter referred to as the “Corporation”) is to set forth the basic governance principles of the Board of Directors of the Corporation (hereinafter referred to as the “Board of Directors”) and its committees, subject to applicable law, regulation and the Articles of Incorporation. The Board of Directors and such committees shall follow this Charter, as well as applicable law, regulation and the Articles of Incorporation, while adhering to high ethical standards. Article 2. Purpose and Duties of Board of Directors (1) The purpose of the Board of Directors shall be to enhance the corporate value of Sony Group. (2) The Board of Directors shall perform the following duties in furtherance of the purpose set forth in the preceding paragraph: (a) Determine the fundamental management policies of the Sony Group and other matters to be approved by the Board of Directors pursuant to applicable law, regulation, the Articles of Incorporation and this Charter. (b) Oversee the performance of the duties of Directors and Corporate Executive Officers and the performance of Sony Group’s business operations. Article 3. Constitution of Board of Directors The Board of Directors shall consist of not fewer than eight (8) Directors and not more than fourteen (14) Directors. Article 4. Director Qualifications (1) All Directors shall satisfy all of the following qualifications: (a) Shall not be a director, a statutory auditor, a corporate executive officer, a general manager or other employees of any company in competition with 5 to convene a meeting of the Board of Directors, the Chairman of the Committee shall request the Chairman of the Board to convene a meeting of the Board of Directors pursuant to Paragraph 4 of this Article, and the Chairman of the Board shall convene a meeting of the Board of Directors. The Chairman of the Committee may convene a meeting of the Board of Directors in accordance with Paragraph 3 of this Article if the Chairman of the Board does not convene the meeting despite such request; provided, however, that such convocation shall be made with the agenda to be submitted to the meeting of the Board of Directors. (3) To convene a meeting of the Board of Directors, the Chairman of the Board shall send a notice of the meeting setting out the date and location of the meeting (with an agenda and back-up materials, as appropriate, at his/her discretion) to each Director at least five (5) days prior to the date set for the meeting. In the case of urgency, such notice period may be shortened. Meetings may be convened without following these convocation procedures with the consent of all Directors. (4) If a Director (other than the Chairman of the Board) and/or a Corporate Executive Officer wishes to convene a meeting of the Board of Directors, such Director or Corporate Executive Officer must submit an agenda (with back-up materials, as appropriate) to the Chairman of the Board and request the Chairman of the Board to convene a meeting of the Board of Directors. (5) In the event a request for a meeting referred to in the preceding paragraph is made, and if, within five (5) days of such request, a notice of convocation of a meeting within two (2) weeks of the date of the request is not issued, the Director or Corporate Executive Officer who made the request may convene a meeting of the Board of Directors in accordance with Paragraph 3 of this Article. Article 9. Agenda of the Board of Directors (1) Unless otherwise provided by law, regulation or the Articles of Incorporation, the agenda of the Board of Directors shall be determined by the Chairman of the Board, in accordance with proposals made by Directors and Corporate Executive Officers, or upon his/her own decision as the Chairman of the Board. (2) The Director or Corporate Executive Officer who made a proposal under the preceding paragraph to the Chairman of the Board may request the Chairman of the Board to withdraw such submission. 6 Article 10. Quorum and Resolutions of Board of Directors (1) A quorum of a meeting of the Board of Directors shall be a majority of all Directors who may participate in a resolution, and a resolution of the Board of Directors shall be decided by a majority of the Directors present. (2) No Director who has a conflict of interest with respect to an agenda item shall participate in any consideration or decision of such agenda item. (3) Notwithstanding Paragraph 1 of this Article, in the event a Director makes a proposal of a matter to be resolved by the Board of Directors and then all of the Directors who may participate in the decision of such proposal unanimously consent to such proposal in writing or electronically, the Board of Directors shall be deemed to have approved such proposal. Article 11. Matters to be Decided by Board of Directors (1) The matters requiring decision by the Board of Directors are those set forth in Appendix 1 of this Charter and such other matters as provided by law, regulation or the Articles of Incorporation. (2) Determination of matters not included in the preceding paragraph shall be delegated to Corporate Executive Officers, subject to a resolution of the Board of Directors. Article 12. Matters to be reported to Board of Directors (1) Matters to be reported to the Board of Directors are those set forth in Appendix 2 of this Charter and such other matters as provided by law, regulation or the Articles of Incorporation. (2) Notwithstanding Paragraph 1 of this Article, in the event a Corporate Executive Officer or a Director provides to all Directors the required report in writing or electronically, a formal report at the Board of Directors meeting may be omitted, provided, however, that in no event, may a report required under Article 20, Paragraph 5, be omitted in this manner. Article 13. Minutes of Board of Directors (1) With respect to proceedings at meetings of the Board of Directors, minutes shall be prepared in writing or electronically and kept at the head office of the Corporation for at least ten (10) years from the date of the meeting. (2) A summary of all proceedings at meetings of the Board of Directors, the results 7 of such proceedings, and any other matters as provided by law or regulation shall be recorded in the minutes, and the Directors present shall affix their names and seals thereon or put their electronic signatures thereon. Notwithstanding the above, for the minutes that record matters deemed to have been approved by the Board of Directors pursuant to Article 10, Paragraph 3 and the minutes that record matters omitted to be reported to the Board of Directors pursuant to Article 12, Paragraph 2, the minutes shall be prepared in writing or electronically, but no Directors are required to affix their names and seals thereon or put their electronic signatures thereon. (3) Unless otherwise provided by law or regulation, in the event any person wishes to examine or copy the minutes of the Board of Directors, the Chairman of the Board or a Vice Chairman of the Board may decide whether or not to approve such request, except that Directors need no such approval. The Chairman of the Board and the Vice Chairman of the Board may delegate such approval authority to the head of the administrative office of the Board of Directors. Article 14. Committees (1) The Corporation has a Nominating Committee, Audit Committee and Compensation Committee. The matters related to each Committee, unless otherwise provided in this Charter, shall be set forth in the Charter of each Committee as determined by the Board of Directors (hereinafter referred to as the “Charter of the Committee”). (2) The Board of Directors shall appoint and remove members of each Committee and a Chairman of each Committee, pursuant to law, regulation, the Articles of Incorporation and this Charter. (3) Any Director may examine and make copies of minutes of a Committee meeting. (4) Unless otherwise provided by law or regulation, in the event any person wishes to examine or copy the minutes of a Committee, the Chairman of such Committee may decide whether or not to give its approval to such request, except that Directors need no such approval. The Chairman of each Committee may delegate such approval authority to the head of the administrative office of such Committee. Article 15. Constitution of Nominating Committee The Nominating Committee shall consist of at least three (3) Directors, the majority of 10 Board of Directors. Article 21. Administrative Office (1) The Board of Directors shall have an administrative office to administer the business of the Board of Directors. (2) Administrative offices of the Nominating Committee, Compensation Committee and Audit Committee shall be established in the administrative office of the Board of Directors. Article 22. Expenses The Board of Directors shall charge the Corporation for necessary expenses incurred in accordance with the activity plan and budget plan provided in Article 7, Paragraph 2, including fees for outside consultants, outside attorneys and other experts retained by the Board of Directors as it deems necessary to perform its duties. Article 23. Modification or Abolition The modification or abolition of this Charter is subject to a resolution of the Board of Directors. ADDENDUM This Charter shall come into force on June 20, 2003. Amended: June 22, 2004 (*Amendment to Appendix 1 to be effective on July 1, 2004) June 22, 2005 October 26, 2005 June 22, 2006 June 20, 2008 June 18, 2010 June 23, 2015 April 27, 2018 June 19, 2018 July 1, 2020 11 Appendix 1: Matters to be decided by Board of Directors 1. General meetings of shareholders Convocation of a general meeting of shareholders and the contents of the agenda to be submitted to the meeting (excluding the agenda items regarding the appointment and removal of Directors and the appointment, removal and non-reappointment of independent auditors, as such matters are determined by the Nominating Committee and Audit Committee, respectively) 2. Shares and reorganization of the Corporation 2.1 Listing of shares on stock exchanges and delisting of such shares 2.2 Transfer or assignment of all or a substantial part of the business, lease of all the business, and delegation of authority to management, of the Corporation; entering into, terminating, and amending agreements with any other companies regarding the distribution of all profits and losses of the Corporation, or a takeover of all of the business of another company by the Corporation (excluding simplified takeovers as defined under the Companies Act) 2.3 Content of proposals to be presented to a general meetings of shareholders for a share exchange, share transfer, corporate split, merger or any other reorganization of the Corporation (excluding simplified share exchanges, corporate splits and mergers as defined under the Companies Act) 2.4 Issuance of shares or stock acquisition rights or sale of repurchased shares constituting not less than 5% of the total issued shares 2.5 Issuance of shares or stock acquisition rights or sale of repurchased shares at an especially favorable price or condition 2.6 Purchase by the Corporation of its own shares 3. Settlement of accounts, financial statements and dividends 3.1 Approval of non-consolidated financial statements and appended schedules and consolidated financial statements 3.2 Approval of business reports and appended schedules filed under the Companies Act 3.3 Dividends and interim dividends and, if paid, the amount and date of payment 12 4. Board of Directors, Committees and Directors 4.1 Adoption, abolition and modification of the Charters of the Board of Directors, Nominating Committee, Audit Committee, Compensation Committee or any other committee established by the Board 4.2 Chairman of the Board and any Vice Chairmen of the Board; Order of substitution for the Chairman of the Board 4.3 Appointment and removal of members of each Committee 4.4 Appointment of a Chairman of each Committee; Order of substitution for the Chairmen of Committees 4.5 Any reduction in liability of Directors to the Corporation pursuant to the Articles of Incorporation 4.6 Contents of limitation of liability agreements with Directors who do not execute the operation of the Corporation 4.7 Approval of transactions that may result in a Director engaging in competitive transactions or transactions entered into by a Director that may result in a conflict of interests between the Corporation and such Director 4.8 Approval of a Director’s assumption of a role as a director, corporate executive officer, statutory auditor, employee or any position in any entity that may result in the Director engaging in competitive transactions or transactions that may result in a conflict of interests between the Corporation and such Director 4.9 Matters to be reported to the Board of Directors from Committees, Senior Executives and employees 4.10 Judgement whether or not an Audit Committee Member is an “Audit Committee Financial Expert” 4.11 Matters necessary for the Audit Committee to execute its duties including: 4.11.1 Matters regarding Directors and/or employees of the Corporation who support the execution of duties by the Audit Committee (the “Audit Committee Supporting Personnel”) 4.11.2 Matters regarding independence of the Audit Committee Supporting Personnel from Corporate Executive Officers and matters to assure that the Audit Committee’s instructions to the Audit Committee Supporting Personnel are carried out 4.11.3 System of reporting to the Audit Committee of the Corporation by Directors (excluding a Director who is an Audit Committee Member), Corporate Executive Officers and employees of the Corporation, and system of reporting to the Audit Committee of the Corporation by 15 6.1.1.5 Any other matters related to the fundamentals of internal corporate governance 6.2. Approval of mid-term plan (consolidated/segments) 6.2.1 Mid/long-term management policies 6.2.2 Mid/long-term material commitments 6.3 Approval of annual business plan (consolidated/segments) 6.3.1 Annual management policies and prioritized measures (consolidated/segments) 6.3.2 Key performance indicators (KPI) 6.3.2.1 Sales, profits and cash flow 6.3.2.2 Capital expenditures, investments, cost and inventories 6.4 Approval of substantial changes to the annual business plan 6.5 Approval of material matters, including transfers or takeovers of material assets and loans or credit enhancement of large amounts (the materiality threshold for approval shall be separately determined by the Board of Directors) 6.6 Other fundamental management policies of Sony Group (including fundamental management policies of the Corporation) 7. Others 7.1 Person(s) to represent the Corporation in the event of litigation between the Corporation and the Director who is an Audit Committee Member 7.2 Content of remedial measures or any other actions by the Board of Directors regarding matters reported to the Board of Directors by Committees, Senior Executives or any other employees that require such remedial measures or any other actions by the Board of Directors 7.3 Any other matters required to be approved by the Board of Directors by applicable laws, regulations including those of securities exchanges or the Articles of Incorporation 16 Appendix 2: Matters to be Reported to Board of Directors The following matters require prior reporting to the Board of Directors, to the extent possible (not including matters which are required to be reported to Committees under the Charter of each Committee listed in Article 14, Paragraph 1 of this Charter.) 1. Matters regarding the performance of duties of Corporate Executive Officers 1.1 Report of consolidated results 1.1.1 Quarterly results and annual forecasts 1.1.2 Material discrepancies between planned and actual performance 1.2 Matters that materially affect the Sony Group 1.2.1 Matters that may materially injure Sony brand 1.2.2 Matters that may materially affect the interests of shareholders and other stakeholders 1.2.3 Matters related to investigations and litigation regarding material violations of antitrust laws, securities laws and other laws 1.2.4 Establishment and amendment of the material management structure of Sony Group 1.2.5 Material amendments to accounting policies and principles of the Sony Group 1.2.6 Any other matters that may materially affect the Sony Group 1.3 Strategically material individual matters, except for the matters to be decided by the Board of Directors (The materiality threshold for report shall be separately determined by the Board of Directors. This report does not require prior reporting.) 2. IR and Disclosure 2.1 Release of results and forecasts 2.2 Contents of Japanese annual report (Yukashoken Houkokusho) and quarterly report (Shihanki Houkokusho) under the Financial Instruments and Exchange Act of Japan, Form 20-F filing with the U.S. Securities and Exchange Commission, and any other equivalent material disclosure of company information 3. Matters to be reported by the Nominating Committee 3.1 Content of the deliberations of the Nominating Committee and the results 17 thereof 3.2 Draft list of Director candidates to be submitted to the General Meeting of Shareholders (before the Nominating Committee’s determination of the Director candidates) 4. Matters to be reported by the Compensation Committee 4.1 Content of the deliberations of the Compensation Committee and the results thereof 5. Matters to be reported by the Audit Committee and Audit Committee Members 5.1 Content of the deliberations of the Audit Committee and the results thereof 5.2 If defects, as defined in Article 416, Paragraph 1-1 of the Companies Act, arise regarding matters necessary for the Audit Committee to perform its duties, subject to the Companies Act, the content of such defects 5.3 Any violation or suspected violation of any applicable law, regulation or the Articles of Incorporation by a Director or Corporate Executive Officer 6. Matters regarding Senior Executives except for Corporate Executive Officers 6.1 Appointment and removal of Senior Executives except for Corporate Executive Officers 6.2 Matters regarding the relationship among Senior Executives except for Corporate Executive Officers, including but not limited to assignment of their duties and the supervising, and directing relationship among them 7. Other matters required to be reported to the Board of Directors by applicable law or regulation 8. Other matters that Directors or Corporate Executive Officers deem necessary to report to the Board of Directors