Framework

Corporate Governance Framework (As of June 22, 2016)

The Company is a company with an Audit & Supervisory Board. From the perspective of the "proper and efficient business execution" and "appropriate auditing and supervision functions" expected of corporate governance, the Company has appointed multiple outside directors and has adopted an Audit & Supervisory Board and other systems that include a majority of outside Audit & Supervisory Board members.

Regarding "proper and efficient business execution," the Company believes swift decision-making by the Board of Directors, centered on internal directors, points to a high level of efficiency. With respect to "appropriate auditing and supervision functions," the Company believes that its auditing and supervision functions are functioning appropriately, as outside executives-including independent executives-perform checks of the bodies performing business execution from diverse perspectives. In particular, Audit & Supervisory Board members have no Board of Directors voting rights, enabling them to audit the execution of duties by directors objectively. Furthermore, we believe independent outside auditors are able to conduct audits from a perspective independent from other members of the management team.

Composition of Directors and Advisory Committees

Changes in the Corporate Governance Framework

  • [1]
    Appointed president of DDI in December 1993. Became president of KDDI in October 2000.
  • [2]
    Number of people at the conclusion of each Annual General Meeting of Shareholders
  • [3]
    Number of people at the conclusion of an Extraordinary Meeting of Shareholders convened in October 2000

Reasons for Appointment as Outside Officers and Principal Activities

Name Reason for appointment as an outside director of the Company Principal activities
Tetsuo Kuba Mr. Kuba has abundant experience and superior knowledge stemming from his roles as managers in listed companies. We wish to leverage this experience and knowledge in the supervision of the Company's business activities and in its decision making.
Accordingly he has again been appointed as a director.
Attended 11 of the 12 meetings of the Board of Directors (92%)
Nobuyori Kodaira Mr. Kodaira has abundant experience and superior knowledge stemming from his roles as manager in listed companies. We wish to leverage this experience and knowledge in the supervision of the Company's business activities and in its decision making.
Accordingly he has again been appointed as a director.
Attended 12 of the 12 meetings of the Board of Directors (100%)
Shinji Fukukawa Mr. Fukukawa has abundant experience and superior knowledge he has gained from many years of practical experience in the public sphere and involvement in the execution of business at various organizations. We wish to leverage this experience and knowledge to contribute to the enhancement of the Company's corporate value. Moreover, with this background we judge there to be no risk of a conflict of interest with general shareholders and accordingly he has been appointed as an independent director. Attended 12 of the 12 meetings of the Board of Directors (100%)
Kuniko Tanabe Ms. Tanabe has abundant experience and superior knowledge, cultivated as the partner at a law office. From the perspective of leveraging this knowledge and experience to contribute to the sustainable growth of the Company, she has again been appointed as a director. Moreover, with this background we judge there to be no risk of a conflict of interest with general shareholders and accordingly she has been appointed as an independent director. Attended 10 of the 10 meetings of the Board of Directors (100%)
Yoshiaki Nemoto Mr. Nemoto has a high level of knowledge in information processing, communications and network engineering, which is directly relevant to the business of the Company, as well as a deep understanding of disaster prevention that is valuable for the operation of our business. From the perspective of leveraging this knowledge and experience to enhance the corporate value of the Company, he has been appointed as a director. Moreover, with this background we judge there to be no risk of a conflict of interest with general shareholders and accordingly he has been appointed as an independent director. -
Name Reason for appointment as an outside Audit & Supervisory Board member of the Company Principal activities
Akira Yamashita Mr. Yamashita has cultivated, abundant experience and knowledge gained from many years of practical experience in the public sphere and involvement in the execution of business at various organizations. From the perspective of leveraging this knowledge and experience to monitor general management and to engage in appropriate audit activities, he has been appointed as an Audit & Supervisory Board member. Furthermore, with his background we judge there to be no risk of a conflict of interest with general shareholders and accordingly has been appointed as an independent auditor. -
Kakuji Takano Mr. Takano has abundant experience as a Certified Public Accountant, as the representative of an accountancy firm and as an auditor for other companies, in addition to which he has cultivated extensive experience and knowledge in the execution of business at various organizations. From the perspective of leveraging this primarily accounting-related knowledge and experience to monitor general management and to engage in appropriate audit activities, he has been appointed as an Audit & Supervisory Board member. Furthermore, with his background we judge there to be no risk of a conflict of interest with general shareholders and accordingly he has been appointed as an independent auditor. -
Nobuaki Katoh Mr. Katoh has abundant experience as a director of listed companies, and has extensive experience and knowledge as an auditor and through execution of business at various organizations. From the perspective of leveraging this knowledge and experience to monitor general management and to engage in appropriate audit activities, has been appointed as an Audit & Supervisory Board member. Furthermore, with his background we judge there to be no risk of a conflict of interest with general shareholders and accordingly has been appointed as an independent auditor. -

Advisory Committee

KDDI has formed a Nomination Advisory Committee and a Remuneration Advisory Committee to discuss with and provide advice to the Board of Directors to maintain both transparency and objectivity on the system of nomination of executive candidates and Audit & Supervisory Board member candidates and the level of remuneration for executives.
The Chairman, Vice Chairman and half or more of the members of these committees are outside directors.

Policy and Procedures for Determining Nomination as Directors or Audit & Supervisory Board Members

The nomination of director and Audit & Supervisory Board member candidates involves deliberation by the Nomination Advisory Committee following a selection of candidates based on the below-stated standard. In addition, Audit & Supervisory Board member candidates are approved by the Board of Directors following approval by the Audit & Supervisory Board.

Directors Candidates

People who satisfy any of the following:

  • Specialist knowledge or experience in various fields of business
  • A shareholder's perspective and management knowledge
  • Highly degree of independence and specialist knowledge appropriate for supervising
  • Audit & Supervisory Board Member Candidates

    • People who are able to supervise overall management from a perspective independent from directors and who have the extensive experience and broad-ranging insight to enhance audit appropriateness.

Decision Standards for Independence of Outside Executives

In addition to the outside directors requirements in the Companies Act and the independence standards provided by financial instruments exchanges, the Company has formulated its own standards.
Specifically, these standards state that people hailing from business partners making up 1% or more of the Company's consolidated net sales or orders placed are not independent.

Policy on Transactions Between Related Parties

In accordance with the Companies Act, the Company requires competitive or conflict-of-interest transactions by directors to be approved by and reported to the Board of Directors.

Individual transactions with major shareholders are conducted in accordance with "Appropriate Accounting and Adherence to Agreements," one of the basic principles of the KDDI Code of Business Conduct. In line with this principle, such transactions are decided upon in the same manner as other transactions, through internal requests for decision, rather than by setting special standards. In addition, internal requests for decision are checked by Audit & Supervisory Board members.

The representative director of Kyocera Corporation, which is a major shareholder of the Company, serves as outside director of the Company. Accordingly, we strike a balance between comprehensive approval by the Board of Directors and internal requests for decisions on individual transactions.

Matters for Resolution by the Board of Directors

At KDDI, Board of Directors resolutions determine:

  • Matters prescribed by the Companies Act or other laws and regulations,
  • Matters prescribed by the Articles of Incorporation,
  • Matters delegated for resolution at the general shareholder meeting, and
  • Other important management-related matters.

For other important management-related matters, their importance is determined according to such factors as the scale of money, business, assets, and investment involved.

These decision standards for importance are not permanent. Rather, they are reviewed appropriately in accordance with changes in the legal system and the environment in which the Company operates, with the aim of ensuring management speed and effectiveness.

Analysis and Evaluation of the Effectiveness of the Board of Directors

Purpose of conducting evaluation of Board of Directors

The Company conducts a self-evaluation of the Board of Directors regularly every year in order to correctly understand the situation of the Board of Directors and promote its consecutive improvement.

Outline of evaluation process

The Company confirms the effectiveness of the Board of Directors based on evaluation by the directors and Audit & Supervisory Board members. The evaluation takes the form of a questionnaire and aims to verify the effectiveness of the board's initiatives and discover where improvements can be made from two perspectives, quantitative evaluation and qualitative evaluation, through a combination of four-grade evaluation and free writing.
The evaluation covers the most recent one-year period and is conducted regularly every year. The results of the evaluation are reported to the Board of Directors and future measures are considered.
The main evaluation items are as follows.

  • Operation of the Board of Directors
    (configuration of members, documents and explanations, provision of information, etc.)
  • Supervision of Executives
    (conflict of interest, risk management, management of subsidiaries, etc.)
  • Medium- and long-term discussions
    (participation in medium-term business planning, monitoring of plan enforcement, etc.)

Evaluation results

[Summery]

The Company's Board of Directors is composed of a unique group of members with a diverse set of viewpoints and practical experiences, which brings objective perspectives and provides understanding different business process based on their respective background, experience, and qualifications. In this regard, the Company's Board engages in active discussion and supervision of executives, which enhances the effectiveness of our board.

[Improvements since previous evaluation]

It was confirmed that items raised as issues in the previous evaluation had been improved.

  • Providing opportunities for the outside directors to meet with responsible persons from each business division to familiarize with our business and strategies.
  • All documents for the Board of Directors meeting distributed beforehand. Questions are accepted prior to deliberation, so as to focus on the discussion of essential issues.
  • Medium- and long-term business strategies are debated in depth, and discussions with the participation of outside directors are conducted from the stage of formulation of medium-term management plans.

[Future issues]

We have received opinions that it would be desirable to further expand discussion of strategies aimed at sustainable growth, such as the long-term outlook for the business environment and policies on meeting the changing environment.

Based on these suggestions, we will continue to work for consecutive improvement.

Training Policy for Directors and Audit & Supervisory Board Members

Upon appointment, newly appointed directors and Audit & Supervisory Board members undergo the following types of training to acquire knowledge considered necessary to fulfilling their various responsibilities.

  • Lectures by legal advisors concerning directors' legal responsibilities
  • Certified public accountant lecture on accounting knowledge

In addition, the Company is working to invigorate deliberations in Board of Directors meetings by providing opportunities for outside directors and outside Audit & Supervisory Board members to undergo training by responsible persons in each field concerning industry trends, an overview of the Company's organization and its various businesses and technologies and future strategies, and improve their understanding of the Company.

Besides, individual training may be arranged if executives so request, and other opportunities for training and to augment knowledge are provided as necessary.

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