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Corporate Governance Structure

In order to speed up its response to management conditions and achieve enhanced transparency in its management, Kubota has been committed to enhancing its corporate governance structure. Moreover, by building an internal control system and implementing steady improvements continuously during its business activities, Kubota not only enforces the observance of laws and regulations, but also reduces risk.

Ensuring quick response to management conditions and improving management transparency

In order to speed up its response to management conditions and achieve enhanced transparency in its management, Kubota has adopted the following corporate governance structure.

Corporate Governance Structure

Board of Directors

The Board of Directors makes company-wide strategic decisions and oversees the execution of duties by the Executive Officers. It consists of 10 Directors (3 of whom are the Outside Directors). In addition to its regular monthly board meetings, it also meets as and when required to discuss and make decisions relating to management planning, financial planning, investment, business restructuring and other important management issues.
The Board of Directors holds a meeting once a year to report the results of risk management activities. This is done in order to verify that there are no inadequacies in the internal control system that could have a serious impact on corporate management with regards to the organization and operation of the management system for key risks identified by the Company.


Audit & Supervisory Board

Kubota is a company with an Audit & Supervisory Board, which oversees and audits the execution of duties by the Directors. It consists of 5 Audit & Supervisory Board Members (3 of whom are the Outside Audit & Supervisory Board Members).
In addition to its regular monthly Audit & Supervisory Board Meetings, it also meets as and when required to discuss and make decisions with regard to auditing policy, audit reports, and other matters.


Executive Officers’ Meeting

Kubota has adopted the Executive Officer System in order to strengthen business execution by each department and make prompt and appropriate business decisions. The Executive Officers' Meeting consists of the President and Representative Director (the "President") and 32 Executive Officers. In addition to its regular monthly meetings, it also meets as and when required. The President instructs the Executive Officers on policies and decisions made by the Board of Directors. The Executive Officers report to the President regarding the status of their execution of duties.


Management Committee and Investment Council

Kubota has a Management Committee and Investment Council in place in order to discuss and make decisions in regard to specific and important issues. The Management Committee meets to deliberate on important management matters such as investments, loans, and mid-term management plans before they are discussed by the Board of Directors. The Investment Council gives the President advice on matters to be decided by the President, except those deliberated by the Management Committee, as well as special matters.


Nomination Advisory Committee and Compensation Advisory Committee

Kubota has a Nomination Advisory Committee and a Compensation Advisory Committee in place, in which more than half of the members are the Outside Directors, to give advice to the Board of Directors. The Nomination Advisory Committee and Compensation Advisory Committee meet to deliberate on nomination of candidates for the Directors, and compensation system and compensation level of the Directors over appropriate involvement and advice from the Outside Directors.
The Nomination Advisory Committee met once during the fiscal year for the purpose of discussing the nomination of new candidates for Directors and the reappointment of existing Directors. Meanwhile, the Compensation Advisory Committee met twice during the fiscal year for the purpose of discussing both the consistency of levels of compensation paid to the Directors and Executive Officers and the adequacy of the stock compensation plan adopted the previous year. (Including one resolution in writing.)


Policy for Appointing Outside Directors and Outside Audit & Supervisory Board Members

In selecting candidates for the positions of the Outside Directors and the Outside Audit & Supervisory Board Members, Kubota Corporation considers their experience outside Kubota Corporation, professional insights, and other qualifications, and recommends them to the General Meeting of Shareholders after approval by the Board of Directors.
Kubota elects those who have no possibility of a conflict of interest with ordinary shareholders by reference to the rules for Independent Executives defined by the Tokyo Stock Exchange (TSE).


Reasons for Appointing Outside Directors (Independent Executives)

Kubota elected Mr. Yuzuru Matsuda as an Outside Director since Kubota wishes to receive his advice about general management based on his adequate experience and considerable insight in management which he acquired through his duties as a president of a listed company for a long time. Kubota has no business relationship with Kyowa Hakko Kirin Co., Ltd., for which Mr. Matsuda used to serve for, and Kato Memorial Bioscience Foundation, BANDAI Namco Holdings, Inc., and JSR Corporation for which Mr. Matsuda concurrently serves for. Kubota places him as an Independent Executive since there is no particular vested interest between Kubota and him, and there is no possibility for a conflict of interest with ordinary shareholders.
Kubota elected Mr. Koichi Ina as an Outside Director since Kubota wishes to receive his advice about general management based on his adequate and considerable insight into management which he acquired through his experience as a president, chairman, and plant and manufacturing manager in a vehicle manufacturer. Kubota has no business relationship with Toyota Motor Corporation, for which Mr. Ina used to serve as a director and adviser. Kubota has a business relationship with Daihatsu Motor Co., Ltd., for which Mr. Ina concurrently serves for adviser, but the amount arising from the above transactions for the year ended December 31, 2017 was less than 1% of total consolidated revenues of the Company. Kubota places him as an Independent Executive since there is no particular vested interest between Kubota and him, and there appears to be no conflict of interest with ordinary shareholders.
Kubota elected Mr. Yutaro Shintaku as an Outside Director since Kubota wishes to receive his advice about general management based on his experience and achievements in actively promoting global strategies as the top management of a medical device manufacturer. Kubota has no business relationship with Terumo Corporation, Santen Pharmaceutical Co., Ltd., J-Oil Mills, Inc., and Tonen International Scholarship Foundation, which he used to serve for. Kubota places him as an Independent Executive since there is no particular vested interest between Kubota and him and there is no possibility for a conflict of interest with ordinary shareholders.


Reasons for Appointing Outside Audit & Supervisory Board Members (Independent Executives)

Kubota elected Mr. Akira Morita as an Outside Audit & Supervisory Board member since Kubota wishes him to conduct audits from a broad-ranging and high-level perspective based on his adequate experience and considerable insight as a jurist. Kubota Corporation has no business relationship with Doshisha University and Miyake & Partners Law Firm, which Mr. Morita concurrently serves for. Kubota Corporation places him as an Independent Executive since there is no particular vested interest between Kubota Corporation and him and there is no possibility for a conflict of interest with ordinary shareholders.
Kubota elected Mr. Teruo Suzuki as an Outside Audit & Supervisory Board Member since Kubota wishes him to conduct audits from a broad-ranging and high-level perspective based on his adequate experience and considerable insight as a Certified Public Accountant (CPA) in corporate accounting and finance. Kubota has no business relationship with KPMG AZSA LLC, for which Mr. Suzuki initially started his career as a CPA, and Seven-Eleven Japan Co., Ltd., for which Mr. Suzuki concurrently serves as an adviser. Kubota places him as an Independent Executive since there is no particular vested interest between Kubota and him, and there seem to be no conflict of interest with ordinary shareholders.
Kubota elected Mr. Masaki Fujiwara as an Outside Audit & Supervisory Board Member because of his adequate knowledge concerning management and accounting, which he has acquired through serving as a manager in charge of management and accounting at Panasonic Corporation and its affiliated companies, as well as his global perspective fostered through his long experience of working overseas. Thus Kubota expects that he will help Kubota further enhance and globalize its auditing. Kubota has a business relationship with Panasonic Corporation, which he used to serve for, but the amount arising from the above transactions for the year ended December 31, 2017 was less than 1% of the total consolidated revenues of the Company. Kubota has no business relationship with Sansha Electric Manufacturing Co., Ltd. Kubota places him as an Independent Executive since there is no particular vested interest between Kubota and him and there is no possibility for a conflict of interest with ordinary shareholders.


Attendance rate of Outside Executives (Jan.–Dec. 2017)

Attendance rate of Outside Directors at Board of Directors’ meetings Yuzuru Matsuda 100% Koichi Ina 100%
Attendance rate of Outside Audit & Supervisory Board
Members at Audit & Supervisory Board meetings
Akira Morita 100% Teruo Suzuki 100%

System supporting Audit & Supervisory Board Members

Office of Audit & Supervisory Board Members is staffed with 5 employees to support auditing by the Audit & Supervisory Board Members. Relocation, evaluation, etc. of these staff members requires consultation with the Audit & Supervisory Board Members and acquisition of their agreement, thereby independence is ensured.
Moreover, Kubota assigns full-time Audit & Supervisory Board Members (4, as of April 2018) who are exclusively engaged in auditing of subsidiaries, thereby enhancing the system supporting the Audit & Supervisory Board Members and reinforcing the Group’s internal control. Kubota has also established a system to facilitate the payment of expenses that arise in relation to the Audit & Supervisory Board Members’ execution of their duties. Those employees’ independence is ensured as the employees’ appointment and evaluation require a discussion with and consent from the Audit & Supervisory Board Members.
Kubota Corporation has placed 4 members in the Office of Audit & Supervisory Board Members; the new members engage in audits exclusively for subsidiaries in order to provide support for the Kubota Corporation’s Audit & Supervisory Board Members and improve internal control over the Kubota Group. Also, Kubota Corporation put in place a system where any expenses incurred related to execution of duties by the Audit & Supervisory Board Members are to be disbursed with no delay.
Internal audit departments and Independent Auditors of Kubota report audit plans and the results of audits to the Audit & Supervisory Board periodically, and as needed collaborate with each other.


Compensation of Director and Audit & Supervisory Board Members

At the Meetings of the Board of Directors, the basic remuneration for the Directors is determined within the range of the maximum aggregate amount of remuneration approved at the General Meeting of Shareholders after it has been deliberated on in the Compensation Advisory Committee, in consideration of the Company’s operating results, compensation levels of other companies, and other factors.
In addition, the total amount of bonuses for the Directors is decided by the General Meeting of Shareholders. The amount of stock compensation is determined at the Meetings of the Board of Directors after being deliberated on in the Compensation Advisory Committee, within the limits established by the total amount of the monetary compensation claims and the total number of common shares to be issued or disposed of as approved at the General Meeting of Shareholders.
Furthermore, if the Director covered by the restricted stock compensation plan is a domestic non-resident because of the reasons such as playing the role of an overseas representative, the monetary compensation claims are temporarily suspended during the above period, in consideration of local laws and regulations. However once his/her role is over and he/she becomes a domestic resident, the suspended monetary compensation claims are granted to him/her.
The compensation for the Audit & Supervisory Board Members consists of basic remuneration only because of the roles they play and the need to preserve their independence and is determined upon consultation among the Audit & Supervisory Board Members within the range of the maximum aggregate amounts of compensation approved at the General Meeting of Shareholders in consideration of the roles of the respective Audit & Supervisory Board Members.


Director and Auditor Remuneration (Jan.–Dec. 2017)
Position Number of
persons
Total amount of
compensation
(million yen)
Total amount by type (million yen)
Basic remuneration Bonuses Restricted stock
compensation
Directors (excluding Outside Directors) 7 627 364 218 45
Audit & Supervisory Board Members (excluding
Outside Audit & Supervisory Board Members)
2 71 71
Outside Executives (Outside Directors and
Outside Audit & Supervisory Board Members)
4 54 54

Training for Executives

Kubota holds annual executive forums related to CSR, human rights, health, and safety, the environment, quality, public relations and other topics, for all of its Directors, Audit & Supervisory Board Members and Executive Officers. In the fiscal year ended December 31, 2017, such forums were held on five occasions.
Visiting lectures were brought in, and those in attendance were provided with opportunities to acquire and update knowledge necessary for supervising operations.
During the period from January to December 2017, a total of 155 executives participated in the forums.
Kubota also conducts training hosted by external organizations for all newly appointed Executive Officers, featuring content pertaining to lows and regulations, and corporate governance.
Moreover, Kubota conducts inspections and engages in companies, with on-site executives at its overseas subsidiaries and affiliated companies, and at the regional offices in Japan, so that those in attendance can gain a deeper understanding of the Group’s businesses activities and make appropriate management decisions.


Themes of the forums for FY2017 and the attendance of executives
Date Title of forum Theme No. of attending
executives
Feb. 17, 2017 Human Rights Training To create LGBT-friendly workplaces 30
July 18, 2017 Safety and Health
Convention
Roles that each individual should play in fostering a
safety-conscious corporate culture
28
Sep. 27, 2017 CSR Forum The roles of management executives in preventing/
responding to corporate scandals
33
Nov. 27, 2017 Environment and
Quality Forum
Konica Minolta’s environmental management
and quality management
31
Dec. 25, 2017 Public Relations Forum Importance of public relations and risk communication 33

Policy for Constructive Dialogue with Shareholders

The Company,recognizing that constructive dialogue with shareholders and investors contributes to the improvement of the Company's sustainable growth and medium- to long-term corporate value,regularly stays abreast of the shareholder composition,makes timely and appropriate disclosure of a wide range of information ranging from financial information to non-financial information and promotes constructive dialogue with shareholders and investors.
The policies for development of systems and operations for this activity are as follows.


  1. Basic policy
    • The Company holds briefings where the President and General Manager of Planning & Control Headquarters present the basic management policy, priority measures, and results of operation, with the aim of promoting constructive dialogue with domestic and foreign institutional investors. Furthermore, the Company promotes two-way communication, such as timely disclosure to all stakeholders including individual investors through active use of the Company website and executing questionnaire surveys.
  2. IR organizational structure
    • General Manager of Planning & Control Headquarters is in overall charge of directing and promoting IR. The department in charge of IR plays a central role in developing its IR activities through organic coordination with each related department, such as Corporate Planning & Control Dept., Accounting Dept., Corporate Communication Dept., CSR Planning Dept., General Affairs Dept. and Legal Dept.
  3. Feedback to management
    • Subjects of dialogue with investors are reported back to the Board of Directors, the Executive Officers’ Meeting, and relevant departments by the President and General Manager of Planning & Control Headquarters as necessary.
  4. Dialogue with institutional investors and analysts
    • The Company holds individual and group meetings, product exhibitions and briefings on business operations, and results briefings with institutional investors and analysts. In addition, the Company discloses the results materials and the results briefings materials in both English and Japanese at the same time, and regularly holds tours and briefings on business operations in Japan and overseas.
  5. Dialogue with individual shareholders and investors
    • The Company aims to promote lively communication through such means as holding on-site factory tours for individual shareholders and inviting them to product exhibitions.
      Also, in addition to holding company information sessions for individual investors to provide an opportunity for the President and individual investors to directly engage in dialog, the Company also works on public relations to improve understanding of the Company’s business activities through such activities as exhibiting in investor forums.
  6. Policy for insider information management when engaging in dialogue
    • Insider information, such as any undisclosed material facts, is not conveyed at the meetings with investors. The following section describes the structure and procedures regarding the timely disclosure of the Company information.
    1. Financial Information Disclosure Committee
      The Company has established the Financial Information Disclosure Committee so as to monitor and control financial information disclosure and, thereby, ensure its fairness, correctness, timeliness, and comprehensiveness. The committee consists of a committee chairperson, who is General Manager of Planning & Control Headquarters; committee members, who are Deputy General Manager of CSR Planning & Coordination Headquarters, General Manager of Corporate Planning & Control Dept., General Manager of General Affairs Dept., General Manager of Corporate Communication Dept., General Manager of Accounting Dept., General Manager of Global Management Promotion Dept., and General Manager of Corporate Auditing Dept.; and observers, who are full-time Audit & Supervisory Board Members. The committee meets periodically in order to draft and assess the Annual Securities Reports and the Quarterly Reports ("Shihanki Hokokusho") pursuant to the Financial Instruments and Exchange Act. And the committee also meets in response to extraordinary events such as important decisions and material facts that must be disclosed immediately.
      In accordance with the intent and meaning of fair disclosure rules set out in the Financial Instruments and Exchange Act, the Company takes all reasonable care to avoid selective disclosure of information, such as by simultaneously releasing Japanese and English versions of results briefing materials with attached explanations and the minutes of question and answer sessions via the corporate website, and by working to enhance the timely and fair disclosure of information in order to promote proactive dialogue with investors.
    2. Company regulations for information disclosure
      The Group has declared that “The Kubota Group makes appropriate and timely disclosure of corporate information and fulfills its responsibilities for transparency and accountability in corporate activities” in the “Kubota Group Charter for Action” and has stipulated “Appropriate and Timely Disclosure of Corporate Information” and “Prohibition of Insider Trading” in the “Kubota Group Code of Conduct.” The Company strives to promote awareness and ensure through efforts in regard to the “Kubota Group Code of Conduct” and prevention of insider trading before it occurs through conducting education tailored to each management level within the Company.

Directors, Audit & Supervisory Board Members and Executive Officers(as of March 28, 2018)

Directors

President and
Representative Director
Masatoshi Kimata
Representative Director
and Executive Vice President
Toshihiro Kubo
Director and Senior
Managing Executive Officer
Shigeru Kimura
Kenshiro Ogawa
Yuichi Kitao
Masato Yoshikawa
Shinji Sasaki
Outside Director Yuzuru Matsuda
Koichi Ina
Yutaro Shintaku

Audit & Supervisory Board Members

Audit & Supervisory Board Members Toshikazu Fukuyama
Yasuhiko Hiyama
Akira Morita
(Outside Audit & Supervisory Board Member)
Teruo Suzuki
(Outside Audit & Supervisory Board Member)
Masaki Fujiwara
(Outside Audit & Supervisory Board Member)

Executive Officers

Managing Executive
Officers
Kunio Suwa Executive Officers Kazuhiro Shinabe
Toshihiko Kurosawa Ryuichi Minami
Yoshiyuki Fujita Yoshimitsu Ishibashi
Kaoru Hamada Ryoji Kuroda
Yasuo Nakata Eiji Yoshioka
Kazuhiro Kimura Yasukazu Kamada
Dai Watanabe Muneji Okamoto
Haruyuki Yoshida Hiroto Kimura
Takao Shomura Katsuhiko Yukawa
Yuji Tomiyama Koichiro Kan
Kazunari Shimokawa Hirohiko Arai
Mutsuo Uchida Tomohiro Iitsuka
Nobuyuki Ishii Kazushi Ito

Directors

Directors

Related Information

Kubota's research and development values thorough hands-on approach. As an agricultural and water expert, we challenge and attain the future of food, water, and the environment, realizing our customer’s needs.

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