Putting Smiles on the Faces of Everyone Nintendo Touches
Governance and Compliance
To maintain the trust of everyone Nintendo touches, we observe the rules, prepare for risk, and implement fair and sound management.
Corporate Governance
We make concerted efforts to build transparent and robust corporate governance systems to enable continuous maximization of corporate value over the long term, while considering how to bring benefits to everyone involved with Nintendo.
Corporate Governance System
Nintendo Co., Ltd. (Japan) aims to strengthen the supervisory functions of the Board of Directors and further promote corporate governance of the company by becoming a company with an Audit and Supervisory Committee. The company has also introduced the Executive Officer System for the purpose of clarifying the responsibility for the execution of operations, and establishing a more flexible management structure which can appropriately and swiftly respond to the rapidly changing business environment. The foregoing will be enabled through separating the management decision-making and supervisory functions from the execution of operations as well as by accelerating the delegation of authority to execute operations.
The Board of Directors consists of thirteen Directors (including five who are Audit and Supervisory Committee Members), including six Outside Directors (including four who are Audit and Supervisory Committee Members). All the Outside Directors satisfy the standards for independent officers stipulated by Tokyo Stock Exchange.
To drive the management activities, in addition to the meetings of the Board of Directors held monthly as a general rule, meetings of the Executive Management Committee, which consists of Representative Directors and Directors who are Executive Officers, are held twice a month generally to make prompt and efficient decisions. Furthermore, Executive Officers appointed by the Board of Directors every year perform their respective duties under the President’s supervision and instructions.
Furthermore, as a non-mandatory advisory body to the Board of Directors, the Nomination Advisory Committee, which consists of the President and Representative Director and all Directors serving on the Audit and Supervisory Committee, deliberates on matters related to the nomination and compensation of Directors and reports to the Board of Directors.
The Audit and Supervisory Committee consists of one full-time Inside Corporate Director and four Outside Directors. The Audit and Supervisory Committee Members attend meetings of the Board of Directors and other important meetings, inspect important documents, have regular meetings with the President and hold monthly meetings of the Audit and Supervisory Committee as a general rule to exchange audit opinions. Furthermore, the full-time Audit and Supervisory Committee Member conducts onsite auditing for each division of the company, etc., based on the annual audit plan.
With respect to internal auditing, the Internal Auditing Department, under the direct supervision of the President, conducts internal auditing from a fair and unbiased perspective independent from business divisions, and works on the promotion and improvement of internal control including that of subsidiaries and affiliates.
The Accounting Auditor cooperates closely with the Audit and Supervisory Committee and the Internal Auditing Department, reports the audit plan and audit results, as well as exchanges information and opinions as necessary throughout the fiscal year, in order to ensure effective and efficient accounting audits.
For more information on our corporate governance system, please see our Corporate Governance Report (II. Business Management Organization and Other Corporate Governance Systems Regarding Decision-making, Execution of Business, and Oversight in Management).
Internal Controls
Nintendo operates and maintains an internal control system according to legal and regulatory circumstances, and the actual state of each organization in the Nintendo group. For more information about our system of internal controls, please see our Corporate Governance Report (IV. Matters Related to the Internal Control System).
Compensation to Directors
The compensation for Directors of Nintendo Co., Ltd. (Japan) who are not Audit and Supervisory Committee Members and Directors who are Audit and Supervisory Committee Members is determined within their respective upper limits which are established by resolution of the General Meeting of Shareholders.
The company uses results of a compensation survey by an external research agency as a reference for setting compensation standards, etc. Also, matters related to the compensation for Directors are deliberated in the non-mandatory Nomination Advisory Committee mainly consisting of Outside Directors, and the deliberation results are reported to the Board of Directors.
Compensation for Directors (excluding Directors who are Audit and Supervisory Committee Members) consists of fixed compensation, performance-based compensation as short-term incentives, and stock compensation as long-term incentives. However, compensation for Outside Directors consists solely of fixed compensation, in view of their position of providing supervision and advice on management, without engaging in business execution.
The company has not determined specific relative proportions of fixed compensation, performance-based compensation, and stock compensation.
The amount of fixed compensation to individual Directors is decided by the President and Representative Director, under authority delegated by the Board of Directors, based on each Director’s position and responsibilities, including whether or not he or she engages in business execution. Fixed compensation is paid in the same amount monthly.
The performance-based compensation is calculated using a formula that uses consolidated operating profit as a benchmark and is determined in advance by the Board of Directors based on points corresponding to each Director’s position within the cap set by a resolution of the Board of Directors. It is paid at a designated time each year. In addition to that, when both the average of consolidated operating profit of the most recent three fiscal years including the subject fiscal year for compensation payment and consolidated operating profit of the subject fiscal year for compensation payment exceed the amount determined in advance by the Board of Directors, additional performance-based compensation is paid. The amount of additional compensation is calculated using the formula set in advance by the Board of Directors.
Stock compensation is paid with restricted stock. The number of shares allocated to each Director is decided according to the Director’s position by the Board of Directors, and the compensation is paid at a designated time each year. Restrictions on the transfer of shares are lifted when the Director leaves both the offices of Director and Executive Officer.
Compensation for Directors (who are Audit and Supervisory Committee Members) consists only of fixed compensation in view of the fact that they are in the position of engaging in audit and supervisory duties independently from Directors who engage in business execution. The amount of individual compensation is determined through deliberation of the Audit and Supervisory Committee Members, and the same amount is paid monthly.
For more information on compensation to Directors, please see our Corporate Governance Report (II. Business Management Organization and Other Corporate Governance Systems Regarding Decision-making, Execution of Business, and Oversight in Management).
Compliance
Nintendo recognizes the crucial importance of adhering to and complying with laws and social standards to ensure long-term, sustainable growth and expansion. To base its business operations on solid compliance, Nintendo has established and implemented region-specific codes of conduct.
Activities of the Compliance Committee
Nintendo Co., Ltd. (Japan) has established the Compliance Committee under the supervision of the Executive Management Committee, which assesses the state of compliance promotion and then develops measures for its facilitation. The Compliance Committee periodically updates the Compliance Manual, which sets out the basic rules that all executive officers and employees should follow.
Compliance Code of Conduct
Abide by all laws and regulations We strictly abide by all laws, Nintendo's internal rules and conventions, and social standards. We participate in fair and open competition. Our business activities are based on high ethical standards.
Strive to create a highly transparent business We promote the appropriate disclosure of information to our shareholders and our communities as we work to create a highly transparent business.
Maintain a resolute stance against anti-social forces Our position on anti-social forces is unwavering.
Strive to be a trusted corporate citizen We fully recognize the social scope of our business. We strive to be a company that everyone in society, including our consumers, can trust as we perform sound business expansion activities.
Excerpt from the Compliance Manual
System for Compliance in the Group
To enhance and promote compliance throughout the Nintendo group, we set up, under the Compliance Committee, the Global Compliance Conference (GCC), comprising executive management and core personnel responsible for compliance from Nintendo Co., Ltd. (Japan) and our major overseas subsidiaries. Specifically, the GCC holds global meetings twice a year for core legal personnel at the major group companies. These meetings also serve as a practical channel for the GCC to establish a common understanding and share information, while exchanging opinions about compliance-related issues and future legal risks that may affect each of our companies.
Compliance Hotline
Nintendo Co., Ltd. (Japan) has established the Compliance Hotline, a system for the internal reporting of compliance-related issues. Using the hotline, internal staff can directly and confidentially report the occurrence or potential occurrence of illicit conduct or business activities of which they have become aware to the President, the Audit and Supervisory Committee, or both. The hotline has also been set up to accept anonymous reports and protect staff from any disadvantage. Information about the hotline system is shared with new employees during orientation training.
Our major subsidiaries also have established internal reporting systems, adapted to the laws and regulations of their respective countries. There is also a system in place that enables employees of our main overseas subsidiaries to report directly to the President of Nintendo Co., Ltd. (Japan) should any misconduct involving the executive of such a subsidiary occur.
Prevention of Corruption
Nintendo Co., Ltd. (Japan) has established rules that prohibit bribery of public officials and affiliated personnel, as well as restrict hospitality and gifts. In addition, we promote an internal understanding of bribery and other forms of corruption, as well as relevant laws, regulations and the aforementioned rules by describing them in detail in relation to our business activities in the Compliance Manual. In addition to designating departments for handling corruption and working to prevent these activities, we also have measures in place to promptly investigate and prevent recurrence should we recognize such an issue. Furthermore, our subsidiaries outside Japan have also incorporated anti-corruption measures into their codes of conduct in accordance with local laws.
For more information on compliance, please also see our Data Sheet.
Nintendo Co., Ltd. (Japan) Code of Conduct (Excerpt)
Position on Hospitality and Gifts
As a general principle, we do not accept hospitality or gifts. However, in such cases where it is unavoidable, we strictly refuse those which exceed the appropriate scope commonly accepted by society.
We do not extort our business partners or otherwise make requests for the purpose of any individual benefit, nor do we take any action that would intimate the same.
Hospitality and gifts for our business partners are conducted in accordance with our internal standards and within the appropriate scope commonly accepted by society.
We build and maintain fair and sound relationships regarding politics (political parties) and administrations (government authorities) inside and outside of Japan. We do not engage in any collusive or misleading activities. When making contributions or donations, we follow internal procedures and do not make any bribes or illegal political contributions or donations.
Prohibition of Acts that Restrict Competition
Nintendo Co., Ltd. (Japan) conducts initiatives to ensure full compliance with laws and regulations related to fair competition, such as antitrust laws. For example, we have implemented an Antitrust Law Manual that incorporates specific explanations of antitrust laws and subcontracting laws, in relation to Nintendo's business activities. The manual is revised every year. In addition to including information on the prohibition of antitrust activities in our training for new employees, we also provide training on competition law that is adapted to the work conducted in each department to further employee understanding.
For more information on compliance, please also see our Data Sheet.
Nintendo Co., Ltd. (Japan) Code of Conduct (Excerpt)
Fair and Impartial Transactions
We do not use an advantageous position to engage in any inappropriate transactions. We conduct fair and impartial transactions with our business partners and establish sound and transparent transactional relationships.
When selecting business partners, we provide broad participation opportunities and make comprehensive and logical decisions based on business benefits, including factors such as necessity, services, quality, pricing and delivery time, regardless of nationality or company size.
Protecting and Managing Information
Nintendo Co., Ltd. (Japan) has established in-house standards, including the Information Management Standards, the Personal Information Management Standards and the Information Security Policy, to ensure that various types of important information are handled appropriately. We have established the Information Security Committee with the Senior General Manager of the Technology Development Division, who also serves as a Director, as the committee chair, and conduct periodic audits in an effort to continually improve our level of information security. We employ physical and technological measures, including access controls, to facilitate proper management of confidential and personal information. In addition, we conduct internal seminars and trainings to supplement and establish employee awareness of the importance of information security. Our Information Security Committee Administration Team also fulfills an internal role similar to that of a CSIRT*1 in handling matters such as information security incidents, proactively collecting information as a member of the Nippon CSIRT Association and collaborating as appropriate with related internal staff and similar teams at our subsidiaries outside Japan.
Our overseas subsidiaries also have established information management policies. Each organization employs physical and technological measures based on its policy and conducts internal training sessions for employees in order to increase awareness of information security. Training sessions on personal information management and seminars on confidential information management are held periodically at various subsidiary offices.
A generic term for organizations that deal with incidents involving computer security.
Raising Employee Awareness of the Code of Conduct
At Nintendo, we have established codes of conduct in each country, and undertake initiatives to deepen our employees’ understanding of the content.
Nintendo Co., Ltd. (Japan) trains new recruits on the Employee Etiquette guide based on our long-cherished Nintendo DNA, and the Code of Conduct that each Nintendo employee must comply with.
Nintendo of America's Code of Business Conduct sets forth clear professional and ethical guidelines for the conduct expected from all employees. In an effort to ensure that employees remain familiar with the Code of Business Conduct, all employees are required annually to complete an online Code of Business Conduct Review. After the deadline for responses has passed, the correct responses and detailed explanations are provided to employees.
In addition to employee Code of Conduct training for new recruits, Nintendo of Europe (Germany) regularly provides e-learning training on the Code of Conduct to employees through the company’s internal network. The training concludes with a final test for which the employee receives a digital certificate of completion.
With each reissue of the employee Code of Conduct at Nintendo Australia, the Human Resources Department sends each employee an email containing a Code of Conduct questionnaire and requires them to sign off to acknowledge their understanding and compliance with the new version. This process was undertaken in February 2023, and all employees consented to the new employee Code of Conduct.
Risk Management
Nintendo recognizes the importance of identifying, understanding and evaluating the various risks affecting the company and then thoroughly reducing and avoiding such risks, as well as the importance of seeking prompt resolution in the event of an incident or accident.
Risk Management System
At Nintendo Co., Ltd. (Japan), as a general rule, each division and department manages risks pertaining to work within its jurisdiction. Furthermore, the Internal Auditing Department monitors the risk management system of each division and department, and proposes and advises on policies for improvement, etc. In addition, under the Compliance Committee, thorough compliance efforts are promoted at each division and department. Nintendo Co., Ltd. (Japan) has also established the Information Security Committee to ensure information security and the Product Safety Committee and other structures to guarantee product safety, prevent the occurrence of product accidents and ensure prompt response in the event of an accident.
Based on a firm stance against anti-social forces that threaten social order and security, Nintendo Co., Ltd. (Japan) has established an internal response department and has a system to address such issues at a company-wide level.
Crisis Management that Assumes Occurrence of Natural Disasters
In preparation for emergencies, including natural disasters, Nintendo Co., Ltd. (Japan) has created the Emergency Action Plan, which outlines the company's initial response to an emergency, and the Business Continuity Plan (BCP), which provides a strategy for business recovery and continuation. In addition, we have created and published the Crisis Management Manual for all employees (available on our internal company network), which defines the fundamental actions employees should take in the event of an emergency. Furthermore, we implement various measures that assume the occurrence of emergencies, including drills to rapidly confirm the safety of employees and evacuation drills to ensure that employees can quickly exit the building.
Our overseas subsidiaries also have created manuals for responding to emergencies in their various regions. For example, Nintendo of America has a BCP that takes into account regional risks and defines corresponding plans for business recovery and continuity. Nintendo of America’s BCP establishes that ongoing training, including quarterly tabletop drills, at the departmental level is managed by Departmental Coordinators who own the plans for their respective departments. These coordinators receive mandatory annual company BCP training. In addition, there is online emergency response training that is assigned to all employees annually.
Information Disclosure
To gain and secure the trust of our shareholders and investors, Nintendo works to ensure the fair, appropriate and timely disclosure of information. We also work to foster an environment conducive to the exercise of voting rights.
Financial Results Briefings and Corporate Management Policy Briefings
At Nintendo, we believe that it is vital to not only provide information about our business performance but also to ensure that our corporate management policy is well understood by our shareholders and investors. After the announcement of our financial results for the second and third quarters and the full-year term, Nintendo Co., Ltd. (Japan) holds Financial Results Briefings (online) to explain the outline of the financial results and the future outlook, and conducts a Q&A session for securities analysts and institutional investors. A Corporate Management Policy Briefing is also held once a year.
Smooth Operation of the General Meeting of Shareholders
As an initiative to foster an environment conducive to the exercise of voting rights by all our shareholders, Nintendo Co., Ltd. (Japan) not only enables voting via the internet but has also adopted a voting platform operated by ICJ, Inc. for institutional investors to exercise their voting rights. In addition, we make the Convocation Notice for the General Meeting of Shareholders available in Japanese and English.
* Information regarding the General Meeting of Shareholders
We strive to provide everyone Nintendo touches with prompt access to content, including presentations and Q&A sessions from Financial Results Briefings and Corporate Management Policy Briefings, by posting these documents on our website in both Japanese and English.
In addition, we post the content of the Q&A sessions from the General Meeting of Shareholders on our website as part of our efforts to provide information disclosure to more people.
