Pan Pacific International Holdings Corporation

Pan Pacific International Holdings Corporation

Ensuring management transparency

Purpose of the establishment of the Nomination and Compensation Committee

The Company has established the Nomination and Compensation Committee as a voluntary advisory body to the Board of Directors in order to strengthen fairness, objectivity, and transparency in the evaluation and decision-making process regarding nomination and compensation of directors, etc. and to further enhance the corporate governance system.
The Nomination and Compensation Committee shall, in response to the Board of Directors' inquiries, deliberate and report on matters related to the election and dismissal of directors, the selection and dismissal of representative directors, etc., matters related to the compensation of directors, etc., and other matters for which the Board of Directors has provided advice.
The Nomination and Compensation Committee consists of at least three members, a majority of whom are independent outside directors. The chairperson of the committee shall be elected by a resolution of the Board of Directors from among the independent outside directors.
The matters that the Nomination and Compensation Committee discusses and reports to the Board of Directors in consultation with the Board of Directors are as follows:

  • - Deliberations on the Election and Dismissal of Directors
  • - Policy for determining the compensation of individual Directors of the Company
  • - Review and deliberation of the Company's executive compensation system
  • - Organization of the latest situation surrounding management remuneration
  • - Review of the Company's management remuneration system

In the selection and dismissal of senior management and nomination of candidates for directors (excluding those who are members of the Audit and Supervisory Committee), the Nomination and Compensation Committee deliberates and reports to the Board of Directors, which then decides on the nominees from the viewpoint of the right person for the job, taking into consideration the ability, experience, and personality of the candidate, in light of their ability to make decisions quickly in response to rapidly changing business environments and to supervise appropriate risk management operations. In nominating candidates for Directors as members of the Audit Committee, the Board of Directors determines the nominees after a comprehensive review in consultation with the Audit Committee, taking into consideration the supervisory function of business execution, while ensuring a balance of knowledge of finance and accounting, diverse perspectives on corporate management, and other factors.

Evaluation of the effectiveness of the Board of Directors

A third-party institution is commissioned to evaluate the effectiveness of the Board of Directors at least once a year. In fiscal year 2022, the Board of Directors' members made appropriate and timely decisions based on vibrant discussions that sufficiently considered management ideals. Furthermore, the evaluation was able to confirm the effective role played by the Board of Directors in boosting longer-term corporate value through the Group's strict supervisory function, such as monitoring of internal management operations, and recognized the efficacy of the Board of Directors.
We have also confirmed that sustainability-related issues, which were identified as challenges in last year's analysis and evaluation, are being appropriately reported and discussed at the Board of Directors meetings. On the other hand, the results of the survey also indicated a need for further strengthening of the nomination and compensation functions, and further reinforcement of the system for sustainable growth and medium- to long-term enhancement of corporate value. In preparing and collecting the survey questionnaire and conducting some of the analysis, an external organization will be utilized to increase the transparency of the evaluation and ensure its effectiveness.

Process of Evaluation Process of Evaluation

FY2022 Overview of the evaluation of effectiveness of the Board of Directors

-Strengths of the Company's Board of Directors

  • - Board of Directors' management based fully on "The Source" and other management principles, etc.
  • Provide training and training opportunities for Directors and their ability to respond to and implement new themes, such as ESG's and sustainability.

-Pressing issues for the Company's Board of Directors

  • - Reexamine the allocation of time between discussions on recent business performance and medium- to long-term management strategies, etc.
  • - Further improve transparency of processes related to succession planning, nomination, and compensation.

Training Policy for Directors

The Company appoints directors who are knowledgeable and experienced in various fields, including laws and regulations, finance, and accounting, which are required of Directors, and who are capable of fulfilling their roles and responsibilities. We have established a system to appropriately report and provide various types of information to Directors even after their appointment, and provide them with opportunities to receive explanations directly from lawyers, accountants, and other experts, as well as consultants on ESG issues, and hold training sessions as necessary.