About Nidec Corporation

Corporate Governance

Revised in July 2010

Nidec and its subsidiaries (the "Group") pursue continuous enhancement of corporate management in the manner consistent with our business creed, three management principles, and our qualitative objectives of achieving "high business growth," "high profits," and "high shareholder value."


In this context, we codified our corporate governance policies in May 2006 to reinforce the Group's overall corporate governance activities and communicate our commitment and responsibilities to stakeholders.


Nidec Group Corporate Governance Policy

Nidec and its subsidiaries (the "Group") pursue continuous enhancement of corporate management in the manner consistent with our business creed, three management principles, and our qualitative objectives of achieving "high business growth," "high profits," and "high shareholder value."

In this context, we codified our corporate governance policies in May 2006 to reinforce the Group's overall corporate governance activities and communicate our commitment and responsibilities to stakeholders.

Principle

The Nidec Group Corporate Governance Policy aims for sustainable enhancement of corporate value based on ethical integrity and social trust. To this end, we pursue sound, efficient and transparent business management through ceaseless improvement in internal controls and information disclosure.

Stakeholder Engagement

Sustainable enhancement of corporate value builds upon harmonious relations with stakeholders. Our definition of stakeholders extends broadly and includes not only our shareholders, customers, suppliers, individual employees, but even the communities and the environment that can be directly or indirectly affected by the Group's objectives and actions. As a business seeking growth through fulfillment of social responsibility and sustainable corporate value development for our stakeholders, we will continue to increase our focus on products and activities that are green and socially desirable. This concept constitutes a common thread running through our entire business activities, most notably reflected in our engagement in the brushless DC motor technology, which provides excellence in energy efficiency, operating life and noiselessness for IT and audiovisual devices, automobiles, home appliances and industrial machinery. Nidec Group contributes to the progress of society and reduction of load on the earth's environment by developing and supplying products that are environmentally friendly and required by society, and through a range of business activities related to the above. We believe that all this helps ensure sustainable growth in our company value.

Business Execution and Management Oversight

The Board of Directors makes material management decisions and oversees the Group's business operations as a whole. The Board of Directors includes highly independent outside directors (non-executive directors), who are dedicated to monitoring managerial decisions from an objective perspective and further improving management transparency for all stakeholders.

The Board of Corporate Auditors audits directors' execution of business and performs financial audits, assuming responsibilities similar to those of a U.S. Audit Committee.

The Management Meeting and the Managing Directors' Meeting compose the Group's business execution mechanism and discuss specific operational issues. The Management Meeting and the Managing Directors' Meeting compose the Group's business execution mechanism and discuss specific operational issues. The Management Meeting convenes once a month to assess the present state of business and determine the next course of action, based on the monthly performance data and outcome of discussions at respective business unit-level meetings. At the plenary meeting, the directors and officers from respective departments/business units get together to share the final conclusions. The Managing Directors' Meeting, the consultative body to the CEO, is held and chaired by the COO on a weekly basis to discuss operational directions, plans, and other important considerations in the execution of business.

With a view to improving management efficiency, the Group has adopted an executive officer system and a site oriented business management system. The executive officer system delegates part of the Board responsibilities to executive officers, thereby allowing the Board of Directors to focus on more proactive, in-depth discussions on the Group's strategic directions and enables executive officers to accelerate the execution of business. In the meantime, the site oriented business management system makes clear the locus of respective managerial responsibilities and contributes to the maintenance and improvement of a viable internal control system.

Internal Control

The Group commits itself to the enhancement of its management soundness and transparency by specifying risk management responsibilities and maintaining compliance capabilities generally required as listed companies in Japan and the United States. The Group conforms to its internal control policies compiled as "Nidec Policy Manual," based on which the Internal Audit & Management Advisory Division, a specialized oversight division, regulates the Group's internal controls over financial reporting and evaluates their effectiveness in the manner consistent with the Sarbanes-Oxley Act in the United States and relevant internal control regulations in Japan. In addition, the Compliance Committee and the Risk Management Committee, both operating under the direct supervision of the Board of Directors, are dedicated to the creation of a strong internal control environment for the Group. Each Committee has its subordinate body, named the Compliance Office and the Risk Management Office, respectively.

Information Disclosure

The Group ensures strict adherence to its Disclosure Policy and conducts fair, timely and proper disclosure of information in order to offer appropriate accountability and transparency to shareholders and relevant stakeholders. Each disclosure item is carefully reviewed by the Disclosure Committee with respect to materiality, legality and adequacy of disclosure. In the meantime, shareholder opinions and viewpoints are constantly fed back to management through day-to-day investor relations activities.

Subsidiary Governance

Unified under the same management principles, each company of the Group operates in compliance with Nidec's internal control system. The members of the management team at each Nidec subsidiary, including those sent from Nidec, undertake substantial discussions in managerial decision-making with a significant involvement of outside corporate auditors and experts to ensure that specific circumstances in each company are rationally considered and that each company's independency is appropriately assured.

Nidec Group "The Compliance Code of Conduct"

Nidec Corporation has a written Code of Conduct for our chief executive officer, chief financial officer, chief accounting officer and other senior officers. The Code of Conduct is also applicable to our directors, corporate auditors, other officers and all employees.


Nidec Corporation Code of Conduct was first adopted on May 1, 2003 and most recently updated on January 11, 2011.


The Compliance Code of Conduct(49KB)

Significant differences from NYSE Corporate Governance Standards

Companies listed on the New York Stock Exchange, or the "NYSE" must comply with certain listing standards regarding corporate governance under the NYSE's Listed Company Manual, or the "NYSE Corporate Governance Standards". Listed companies that are foreign private issuers, such as us, however, are permitted, with certain exceptions, to follow home country practices in lieu of the NYSE Corporate Governance Standards. Our corporate governance practices, which comply with Japanese laws, regulations and stock exchange rules, and the NYSE Corporate Governance Standards followed by U.S. listed companies have the following significant differences:

Director Independence

A company listed on the NYSE must have a majority of directors that meet the independent requirements under Section 303A of the NYSE's Listed Company Manual. The Company Law (Law No.86, 2005) of Japan, or the "Company Law," does not require Japanese companies with boards of corporate auditors, such as us, to have a director who is independent as defined in the NYSE Corporate Governance Standards, on their boards of directors.

Audit Committee

A company listed on the NYSE must have an audit committee composed entirely of independent directors. We are generally exempted, with some exceptions, from this requirement by virtue of paragraph (c)(3) of Rule 10A-3 of the U.S. Securities Exchange Act of 1934 as amended.

Consistent with the requirements of the Company Law, our corporate auditors are elected by a resolution at a general meeting of shareholders. We currently have five corporate auditors, which exceeds the minimum of three corporate auditors required by the Company Law, who comprise our board of corporate auditors. Our board of corporate auditors has a statutory duty to monitor, review and report on the administration of our affairs and accounts for the benefit of our shareholders.

The Company Law requires that at least half of a company's corporate auditors be "outside auditors," which is defined as a corporate auditor who has not been a director, executive officer, manager or employee of the company or any of its subsidiaries at any time prior to his or her election. Four of our five current corporate auditors are outside corporate auditors.

Compensation, Nominating and Corporate Governance Committees

A company listed on the NYSE must have a compensation committee comprised entirely of independent directors. Under the Company Law, we and other Japanese companies with boards of corporate auditors, are not required to establish a compensation committee. The Company Law requires that the total amount of remuneration to be paid to all directors and the total amount of remuneration to be paid to all corporate auditors must be approved by a resolution of the general meeting of shareholders, unless their remuneration is provided for in the articles of incorporation. The distribution of remuneration among directors is broadly delegated to the board of directors, and distribution of remuneration among corporate auditors is determined by consultation among the corporate auditors.

A company listed on the NYSE must also have a nominating or corporate governance committee comprised entirely of independent directors. Under the Company Law, we and other Japanese companies with boards of corporate auditors are not required to establish a nominating or corporate governance committee.Pursuant to the Company Law, our board of directors nominates and submits a proposal for election of directors for shareholder approval. Our shareholders elect or dismiss directors by a simple majority of votes at a general meeting of shareholders. Our corporate auditors are also elected or dismissed at a general meeting of shareholders. A proposal by our board of directors to elect a corporate auditor needs the consent of our board of corporate auditors.

Corporate Governance Guidelines

A company listed on the NYSE must adopt and disclose corporate governance guidelines. Under the Financial Instruments and Exchange Law of Japan and applicable stock exchange rules, we are not required to adopt or disclose corporate governance guidelines. However, we are required to disclose policies and the present status of our corporate governance under the Financial Instruments and Exchange Law of Japan in respect of timely disclosure.

Shareholder Approval of Equity-Compensation Plans

A company listed on the NYSE must obtain shareholder approval for an equity compensation plan. Under the Company Law, a public company seeking to issue rights to acquire from the company shares of its stock at a prescribed price, or "stock acquisition rights," must obtain the approval of its board of directors.

Under the Company Law, if a company desires to adopt an equity-compensation plan in which stock acquisition rights are granted on specially favorable terms to the plan's recipients, then the company must obtain shareholder approval by a "special resolution" of a general meeting of shareholders, where the quorum is one-third of the total number of voting rights and the approval of at least two-thirds of the voting rights represented at the meeting is required.

Executive Sessions

A company listed on the NYSE must hold regularly scheduled executive sessions where participants are limited to non-management directors. Under the Company Law, Japanese corporations are not required to hold such executive sessions.

Organizational Chart

Organizational Chart for Corporate Governance

Board Members

Board of Directors

Updated on June 25, 2013

Shigenobu Nagamori Chairman of the board, President & CEO
Hiroshi Kobe Representative Director, Executive Vice President & COO
Kenji Sawamura Executive Vice President
Bunsei Kure  Executive Vice President
Akira Sato Executive Vice President
Tadaaki Hamada First Senior Vice President
Toshihiro Kimura  First Senior Vice President
Masuo Yoshimatsu First Senior Vice President & CFO
Kazuya Hayafune First Senior Vice President
Shozo Wakabayashi Outside Board Member
Noriko Ishida Outside Board Member

Board of Corporate Auditors

Ryuichi Tanabe Full-time Outside Audit & Supervisory Board Member
Osamu Narumiya Full-time Audit & Supervisory Board Member
Tetsuo Inoue Full-time Audit & Supervisory Board Member
Chihiro Suematsu Outside Audit & Supervisory Board Member
Kiichiro Kobayashi Outside Audit & Supervisory Board Member

*Information regarding the External Corporate Auditors' attendance at the Company's meetings of Board of Directors/Auditors is available in Proposals of Annual General Meeting of Shareholders.
*External Corporate Auditors mean persons who have not been directors, executive officers, managers or employees of the company or any of its subsidiaries at any time prior to such corporate auditors' election ("External Auditors").