Sony 2015 Annual Report Download - page 130

NYSE Standards Sony’s Corporate Governance Practices
Executive Sessions. Non-management directors must
meet in regularly scheduled executive sessions without
management. Independent directors should meet alone
in an executive session at least once a year.
An “outside” director, as defined under the
Companies Act, is equivalent to a “non-management
director” under the NYSE rules because an “outside”
director does not engage in the execution of business
operations of the company.
The outside/non-management directors generally
meet several times a year without management,
though neither the Companies Act nor Sony’s
Charter of the Board of Directors requires non-
management directors to meet regularly without
management and there is no requirement for the
outside directors to meet alone in an executive
session at least once a year.
Nominating/Corporate Governance Committee. A
nominating/corporate governance committee of
independent directors is required. The committee must
have a charter that addresses the purpose,
responsibilities (including development of corporate
governance guidelines) and annual performance
evaluation of the committee.
Sony’s Nominating Committee consists of at least
three directors. Under the Companies Act, the
Committee is responsible for determining the
contents of proposals regarding the appointment and
dismissal of directors to be submitted for approval to
the shareholders’ meeting. Unlike listed
U.S. companies under NYSE rules, it is not
responsible for developing governance guidelines or
overseeing the evaluation of the board and
management. Under the Companies Act, a majority
of its members must be “outside” directors, as
defined under the Companies Act. Sony’s Charter of
the Board of Directors requires at least one of the
directors on the Committee to be a corporate
executive officer.
Compensation Committee. A compensation committee
of independent directors is required. The committee
must have a charter that addresses the purpose,
responsibilities and annual performance evaluation of
the committee. In addition, in accordance with the SEC
rules adopted pursuant to Section 952 of the Dodd-
Frank Act, NYSE listing standards expanded the factors
relevant in determining whether a committee member
has a relationship to the company that will materially
affect that member’s duties to the compensation
committee and provided compensation committees the
authority to engage compensation advisers.
Additionally, the committee may obtain or retain the
advice of a compensation adviser only after taking into
consideration all factors relevant to determining that
adviser’s independence from management, unless the
adviser’s role is (i) limited to consulting on a generally
applicable broad-based plan or (ii) is providing
Sony’s Compensation Committee consists of at least
three directors. Under the Companies Act, a majority of
its members must be “outside” directors, as defined
under the Companies Act. Sony’s Charter of the Board
of Directors recommends that at least one of the
directors on the Committee be a corporate executive
officer. The Charter prohibits the CEO and/or the COO
(or a person at any equivalent position) from serving on
the Compensation Committee. Under the Companies
Act, the Committee is responsible for, among others,
determining the compensation of each director and
corporate executive officer.
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