Corporate Governance

NTN Group considers the strengthening and enhancement of corporate governance to be one of our top management priorities. While further improving the efficiency and soundness of our management, we are also striving to increase management transparency by rapidly disclosing accurate information to our shareholders and investors.
With the aim of creating a structure for rapid decision-making and execution, enhancing our business supervisory functions and improving the transparency and impartiality of our management, NTN Group transitioned from Company with Board of Company Auditors to Company with Nominating Committee, etc. in June 2019. Under this structure, we will work on further enhancement of corporate value over the medium- and long-term.

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Board of Directors

The Board of Directors decides on the basic management policies and supervises the execution of duties of Directors and Executive Officers. Apart from matters stipulated by laws and regulations or the Articles of Incorporation to be resolved by the Board of Directors, the Board delegates substantial authority to Executive Officers with the aim of strengthening the supervision of management and speeding up decision-making.
The Articles of Incorporation stipulate that the term of office of a Director shall be one year, and the number of Directors shall be 15 or fewer. The Board of Directors convenes once a month in principle, but also meets flexibly as needed.
As of June 25, 2025, there are 12 Directors, of which six are Outside Directors. The Board is chaired by an Outside Director.

Nominating Committee

The Nominating Committee decides on the content of the proposal regarding appointment or removal of Directors, which is submitted to the General Meeting of Shareholders. Five members sit on the committee as of June 25, 2025, three of whom are Outside Directors. The committee is chaired by an Outside Director.

Compensation Committee

The Compensation Committee decides on the policy for determining the compensation of Directors and Executive Officers, and determines compensation for individuals. Six members sit on the committee as of June 25, 2025, four of whom are Outside Directors. The committee is chaired by an Outside Director.

Audit Committee

The Audit Committee audits the execution of duties of Directors and Executive Officers, and decides on the content of a proposal regarding appointment/removal of the accounting auditor, which is submitted to the General Meeting of Shareholders. The duties of the Audit Committee are supported by the Internal Audit Department, and its concurrently assigned staff members serve as the Audit Committee secretariat and other functions. These staff members, who have the requisite skills and experience to support the Audit Committee, are appointed by the manager of the Internal Audit Department with the approval of the Audit Committee. Decisions on matters related to transfer, disciplinary action or evaluation of these staff members require the approval of the Audit Committee.
The committee has five members as of June 25, 2025, three of whom are Outside Directors. The committee is chaired by an Outside Director.

Management Meeting

The Management Meeting discusses important matters relating to operational execution, as the supporting body for decision-making by the President, Executive Officer. The meeting is composed of the President, Executive Officer and other Executive Officers as designated by him and held twice a month in principle.

Executive Officers Meeting

The Executive Officers Meeting is convened by the President, Executive Officer and attended by all Executive Officers. Resolutions passed by the Board of Directors are communicated and each Executive Officer reports about the status of operational execution. This meeting is held once a month in principle, sharing information among Executive Officers to make operational execution more efficient and effective.

General Meeting of Shareholders(as of June 25, 2025)

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Executive Officers (as of April 1, 2025)

Appointment of Executive Officers

The appointment of Executive Officers shall be determined after careful deliberation by the Board of Directors, taking into overall account whether they possess the appropriate character, insight, capabilities, experience and track record to fulfil their duties. In addition, if it becomes clear that an Executive Officer lacks the required qualifications, they shall be promptly dismissed by the Board of Directors.

Flattening of the hierarchy and compensation structure

On June 25, 2021, NTN Group removed the Managing Executive Officers and eliminated hierarchical relationships among Executive Officers to create one team. This was also done in order to re-activate discussions among Executive Officers, respond to issues quickly and to further enhance corporate value.
In line with the flattening of the structure, the existing system of position-specific Directors’ remuneration was abolished in April 2022 and transitioned to a compensation system adapted to the responsibilities held by each Director in their field.

Adoption of ESG evaluation

Since April 2022, ESG factors have been set as key individual target measures for Executive Officers involved in the calculation of annual incentives (bonuses). The degree of achievement of these ESG factors is one of the evaluation indicators. Incorporating ESG factors into the evaluation system promotes active engagement by Executive Officers on ESG.

The Board of Directors decides on the basic management policies and supervises the execution of duties of Directors and Executive Officers. Apart from matters stipulated by laws and regulations or the Articles of Incorporation to be resolved by the Board of Directors, the Board delegates substantial authority to Executive Officers with the aim of strengthening the supervision of management and speeding up decision-making.
The Articles of Incorporation stipulate that the term of office of a Director shall be one year, and the number of Directors shall be 15 or fewer. The Board of Directors convenes once a month in principle, but also meets flexibly as needed.
As of June 25, 2025, there are 12 Directors, of which six are Outside Directors. The Board is chaired by an Outside Director.

Activities of the Board

In FY2024, NTN‘s Board of Directors met 15 times and deliberated primarily on the business plan for the current year and the progress of the Medium-term Management Plan, current conditions and issues faced by business and region, occupational health and safety , quality control, compliance, risk management and sustainability.
The Board, which consists of both Inside and Outside Directors, is selected from a wide range of fields with consideration for diversity and balance.
As of June 25, 2025, there were two female Directors (Outside Directors) on the Board, and one of whom serves as Chairperson. Through the oversight of management by the Directors, diverse values are integrated in our efforts to achieve sustained enhancement of corporate value.

Assessing the effectiveness of the Board

The effectiveness of the Board of Directors is evaluated annually to ensure it is fit for purpose. In FY2024, self-evaluation was conducted by each Director using a questionnaire asking about aspects such as the role, composition and operation of the Board and the operation of committees. The anonymized questionnaire has a four-point grading system, with a blank section provided for each question to elicit individual opinions from the respondent. In FY2024, the third-party evaluation, which is implemented once every three years, took place. An external organization lent its support in designing the questionnaire and reviewed the results. Overall, the opinion was generally positive, indicating that initiatives to ensure the effectiveness of the Board are being implemented. However, there was a view that it may be necessary to further enhance the methods for information-sharing from the Nominating Committee to the Board of Directors regarding CEO succession planning and other matters, and we decided that the Nominating Committee would consider this going forward. NTN will continue to regularly analyze and evaluate the effectiveness of the Board of Directors and strive for improvement and enhancement.

Members, attendance rate, and number of meetings attended

(from April 1, 2024 to March 31, 2025)

Deliberations of the Compensation Committee

The Compensation Committee held six meetings from April 2024 to March 2025.
The committee resolved matters related to executive compensation, including individual compensation, with the aim of enhancing corporate governance and improving the fairness, transparency, and objectivity of the procedures for determining the compensation of Directors and Executive Officers.

■Compensation Committee meetings (from April 1, 2024 to March 31, 2025)

Basic policy for determining compensation

The Compensation Committee, chaired by an Outside Director, shall determine the system and level of compensation for Officers and individual compensation with reference to objective data on compensation levels and trends at other companies.
Executive Officers’ and Directors’ compensation shall be determined separately, and if a Director also serves as an Executive Officer, those compensations shall be combined.

Compensation for Executive Officers

The compensation for Executive Officers consists of fixed compensation and performance-linked compensation, which varies based on performance. The standard ratio of fixed to performance-linked compensation is approximately 5:5.

Fixed compensation consists of basic compensation, compensation by responsibility and compensation by representative authority.

■Annual incentives

For Executive Officers, the Group determines whether to provide monetary compensation reflecting performance over a single fiscal year, and, if so, the total amount to be paid. This decision is based on the business plan at the beginning of the relevant fiscal year and the consolidated performance indicators from the previous fiscal year. Whether or not to pay an annual incentive to an Executive Officer, and in the case of payment, the amount, is determined (within the total amount of provision) with reference to the Executive Officer’s progress on priority target measures. The indicator related to the calculation of bonuses is based on the consolidated Return on Invested Capital (ROIC), from the perspective of focus on the achievement of growth that takes capital efficiency into account. The provision is made once a year in June as determined by the Compensation Committee.

■Medium to long-term incentives

NTN Group shares shall be issued based on the achievement of key targets in the Medium-term Management Plan (money equivalent to the converted amount of shares shall be paid for a certain portion) as an incentive to achieve those targets and to contribute to raising shareholder value, as well as to promote the holding of NTN Group shares. With respect to the grant of such shares, claw-back and malus provisions have been incorporated into the rules governing the incentive plan. Medium- to long-term performance targets include key performance indicators (consolidated operating margin, consolidated sales, etc.), taking into account the Company’s management policies.

Compensation for Directors

Compensation for a Director consists only of fixed compensation.
Fixed compensation shall be calculated by adding a supplement to basic compensation (which is determined based on any concurrent duties as an Executive Officer and whether the work is full-time or part-time), taking into account the committee(s) to which a Director belongs and their role on the committee(s).

Members, attendance rate, and number of meetings attended

(from April 1, 2024 to March 31, 2025)

Deliberations of the Audit Committee

Major agenda items of the Audit Committee include the formulation of audit policies and plans, evaluation of the audit plans of accounting auditors, and assessment of the appointment of accounting auditors, and the assessment of the status of development and operation of the Internal Control System.

Audit status

The Audit Committee members attend meetings of the Board of Directors and other major meetings in accordance with auditing standards, policies, and plans determined by the Audit Committee. The Audit Committee receives reports or hears from Directors, Executive Officers, employees, etc. on the status of the execution of their duties, and audits the execution of duties by Directors and Executive Officers. In addition to the Board of Directors and Executive Officers Meetings, members of the Audit Committee attend and monitor other committees which operate the internal control system – the Sustainability Committee, the Risk Management Committee, the Compliance Committee and the Fair Trade Monitoring Committee.

Sustainability Committee

The NTN Group has established the Sustainability Committee chaired by the Executive Officer in charge of the ESG Promotion Department (Chief Management Officer of Sustainability Activities). The committee serves as a body that deliberates on the sustainability activities required for identifying and resolving issues with a view to realizing a ”NAMERAKA Society.” In principle, the committee meets twice a year. Members of the committee, comprising mainly of the heads of departments related to ESG, deliberate on the details of risks and opportunities related to sustainability as well as the initiatives to be implemented. The status of initiatives is reviewed regularly as a response measure for materiality linked to risks and opportunities. In addition, the Risk Management Committee has established a framework for reporting and deliberating on more specific countermeasures for sustainability-related risks. The details of deliberations by the Sustainability Committee are reported to the Board of Directors.

Carbon Neutrality Promotion Committee

Amid the growing importance of climate change countermeasures worldwide, NTN established the Carbon Neutrality Promotion Committee in FY2023 to promote, globally and more strongly, the realization of carbon neutrality, which the Sustainability Committee has long been working on as one of our ESG issues.
The Carbon Neutrality Promotion Committee is chaired by the President, Executive Officer, with the Executive Officer in charge of the Carbon Neutrality Strategy Promotion Department serving as the Vice Chairperson. Its members include Executive Officers and general managers responsible for each region (Japan, Europe and Africa, the Americas, China, ASEAN/Oceania/West Asia, and India). The Committee meets twice a year in principle to deliberate on action plans toward achieving the carbon neutrality target and the status of efforts.
In addition, the regional subcommittee of each region, chaired by an Executive Officer in charge, functions as the subordinate organization of the Carbon Neutrality Promotion Committee. These subcommittees meet four times a year in principle to review measures and efforts corresponding to the actual conditions in each region, and report the results of their discussions to the Carbon Neutrality Promotion Committee.
Matters deliberated on by the Carbon Neutrality Promotion Committee are reported independently or jointly with the Sustainability Committee, to the Board of Directors as appropriate.

Risk Management Committee

NTN has established the Risk Management Committee, chaired by the Executive Officer in charge of the ESG Promotion Department (Chief Management Officer of Risk Management), for the purpose of preventing risks and minimizing damage in the event of a crisis. In principle, the committee meets twice a year.
The committee regularly checks activities including identification, analysis, evaluation, and treatment with regard to various risks surrounding the business of the NTN Group, and reports the details of deliberations to the Board of Directors.
Risks that are discovered through internal audits conducted by the Internal Audit Department are shared with the Internal Control Department. This allows the Group to take preventive actions and make improvements to prevent risks in a timely and appropriate manner.

Compliance Committee

NTN has established the Compliance Committee, chaired by the Executive Officer in charge of the Legal Department (Chief Management Officer of Compliance Promotion Activities). It serves as an advisory body for compliance promotion activities, and meets twice a year in principle. Members of the Committee are comprised primarily of the heads of the related risk management departments. They discuss issues related to global compliance risks (excluding the risk of violating antimonopoly and subcontract laws), as well as action plans and results, and report to the Board of Directors. Based on the action plans discussed by the Committee, the relevant risk management promotion departments implement measures to mitigate risks in collaboration and partnership with the Compliance Promotion Activity Supervisors appointed at each domestic business site and subsidiary as well as the Administration & Internal Control Department established at each Office of the General Manager in each overseas region.

Fair Trade Monitoring Committee

NTN has established the Fair Trade Monitoring Committee, chaired by the President, Executive Officer, to engage in activities for promoting compliance with antimonopoly and subcontract laws. The Committee meets twice a year in principle. The primary members include the Executive Officers in charge of sales and procurement departments, Outside Directors, and external lawyers. The Committee discusses the implementation plans and performance reports for compliance with antimonopoly and subcontract laws, and provides supervision and guidance on effective control for fair trade practices along with education and awareness-raising activities. The discussed matters are reported to the Board of Directors. Under the direction of the Fair Trade Monitoring Committee, the Legal Department, which oversees activities related to compliance with antimonopoly laws, conducts activities including education, guidance, and supervision of the relevant domestic departments, and also works together with the Administration & Internal Control Department of each overseas region to manage the implementation status of activities related to compliance with antimonopoly laws.

Based on the Affiliate Company Management Regulations, we have established a subsidiary management system by concluding Written Confirmation of Management Control letters with subsidiaries, which have the subsidiaries (1) report on the state of execution by Directors, etc. and (2) apply for approval from NTN for certain matters.
Based on these letters, we are also establishing internal control systems, CSR activity promotion systems, risk management systems, compliance promotion activity systems, security export trade control systems, and systems for compliance with competition laws for our subsidiaries.
In addition, we are also operating a helpline as a consultation hotline for our subsidiaries.

Clarifying management systems via Written Confirmation of Management Control letters

・Reporting on the state of execution by Directors, etc. of subsidiaries
・Applications for approval from subsidiaries based on the Regulations of the approval authority
・Establishment of internal control system
・Establishment of CSR activity promotion system
・Compliance with the Risk Management Policy
・Establishment of a system to promote compliance activities
・Establishment of a security export trade control system
・Guidance for and audits of compliance with competition laws

In line with the intent of the Corporate Governance Code, we are actively working to strengthen our corporate governance, including by transitioning to a company with a Nominating Committee, etc. effective as of June 2019. We are also implementing all of the principles of the Corporate Governance Code, and, furthermore, we will continue working to strengthen our corporate governance in light of the changes in the environment surrounding us.

• Corporate Governance Report (PDF)