Evaluation of the effectiveness of the Board of Directors
In order to verify that the Board of Directors is appropriately fulfilling the duties expected of it, and to strive for improvement, Mercari carries out an evaluation of the effectiveness of the Board of Directors every year.
Initiatives taken in FY2023 to improve effectiveness
Based on the results of the FY2022 evaluation, we carried out the following measures to enrich deliberations and improve the effectiveness of the Board of Directors.
- Create opportunities and forums to spend time on focused discussions about our business strategy and ESG strategy, keeping in mind connections with the roadmap
- Create and make use of mechanisms that enable participants to frequently and proactively propose management agenda items and strategic topics that should be discussed
- Continue to improve administration methods and document formats to facilitate active and smooth discussions
Further enhance onboarding for new directors
Details of the evaluation of effectiveness of the Board of Directors for FY2023
The overview of the Board of Directors effectiveness evaluation for FY2023 is as follows.
The evaluation process used in the FY2023 Board of Directors effectiveness evaluation is as follows.
- Discussion of the course of action for carrying out the effectiveness evaluation (July 2023)
- Objectives of carrying out the evaluation for FY2023
- Evaluation procedures
- Evaluation schedule
- Items to be evaluated
- Survey of directors and members of Audit and Supervisory Board (August 2023)
- Individual interviews with directors and auditors based on the results of the survey (August 2023)
- Discussion of the results of the survey and individual interviews at a Board of Directors meeting (September 2023)
- Report of the improvement plan based on the results of the discussion (September 2023)
In the survey, the items listed below were evaluated both quantitatively and qualitatively, with respondents asked to rate each item as well as fill in a free-response section. In the individual interviews, participants were asked to provide their opinions regarding important items, which were defined based on the results of the survey.
- Composition of the Board of Directors
- Administration of the Board of Directors
- Time deliberating matters to be resolved
- Explanation of matters to be resolved (quality and duration)
- Time spent discussing each topic to be discussed
- Explanation of topics to be discussed (quality and duration)
- Supervision in Board of Directors meetings and response to advice
- Agenda setting of matters to be reported and/or discussed
- Advance provision of information necessary for discussion
- Appropriate questioning and facilitation by the chairperson regarding matters to be reported and/or discussed
- Deliberation process and discussions about basic management policies
- Mid-term management policy/strategy
- Sustainability (ESG/materiality)
- Agenda setting in the future
- Dialogue with shareholders and investors
- Support system for outside directors
- Overall evaluation
Evaluation results and improvement plan
Overall, we were recognized for our initiatives to improve how effectively the Board of Directors fulfills Mercari’s objectives in its role as a monitoring board (striving for strategic agendas and discussions about our business strategy and ESG strategy that are purposefully connected to the roadmap). To further enrich deliberations and improve the effectiveness of the Board of Directors, we have decided to carry out the following measures going forward, while maintaining appropriate separation between supervision and execution given our official transition to a Company with Three Committees.
- Create and make use of mechanisms that enable participants to actively propose significant management agenda items and major strategic topics that should be dealt with by the Board of Directors
- Connect the roadmap with financial/business performance information and promote monitoring based on business execution reports more comprehensively combining qualitative and quantitative information
- Further enrich onboarding for new directors and collaboration between outside directors
Mercari will use the results of the effectiveness evaluation and the various recommendations received from the directors to continue to work toward improving the effectiveness of the Board of Directors.