Updated on May 22, 2018
Sony believes that it is important to endeavor to improve the effectiveness of the Board and each Committee in order to support Sony's business operations and enhance the corporate value of the Sony Group. To achieve this goal, Sony conducts evaluations of the effectiveness of the Board and of each Committee (the "Evaluation") at least annually.
From February through April 2018, the Board conducted the Evaluation mainly in respect of the Board and Committee activities in the fiscal year ended March 31, 2018 ("FY2017") after confirming that actions proposed in response to the results of the previous Evaluation were taken. The recent Evaluation was conducted with the support of a third-party evaluation by an outside counsel having expertise in Japanese and global corporate governance practices (the "Outside Counsel") in order to ensure transparency and objectivity and to obtain professional advice.
First, the Board discussed and confirmed that the actions proposed to be taken in response to the results of previous Evaluation were taken, and discussed and confirmed the proposed procedures for the Evaluation for FY2017. Thereafter, the third-party evaluation was conducted by the Outside Counsel in accordance with the following steps:
The Board then received, reviewed and discussed the Outside Counsel's report on the results of its evaluation. The Board confirmed the effectiveness of the Board and the Committees.
The Outside Counsel reported that the Board is established and operated in a manner sufficient to be highly appreciated, based on various points, including the self-evaluation results of the Directors and comparison with benchmarked companies in Japan, the United States and Europe. Following discussion and analysis based on the Outside Counsel's report, the Board re-affirmed that the Board and each Committee were functioning effectively as of April 2018.
The Outside Counsel also provided examples of potential options, based on other companies' practices, to help further improve effectiveness of the Board and Committees. The examples include continuously studying the feasibility of having special committees in addition to the Nominating, Compensation and Audit Committees, further enhancing the executive session’s effectiveness and expanding discussions at the Board on ESG (environment, social and governance) topics in which investors are getting more interested.
In order to increase corporate value of Sony Group, Sony will take appropriate actions in response to the results of the Evaluation, as well as various comments and opinions given by the Directors and the Outside Counsel during the Evaluation process, subject to the further discussion and confirmation of the Board.