Updated on July 22, 2019

Evaluation of the Board and the Committees' Effectiveness

Policy for Evaluation

Sony Corporation believes that it is important to endeavor to improve the effectiveness of the Board and each Committee in order to support Sony's business operations and enhance the corporate value of Sony. To achieve this goal, Sony Corporation conducts evaluations of the effectiveness of the Board and of each Committee (the "Evaluation") at least annually.

Recent Evaluation

From February through April 2018, the Board conducted the Evaluation mainly in respect of the Board and Committee activities in the fiscal year ended March 31, 2019 ("FY2018") after confirming that actions proposed in response to the results of the previous Evaluation were taken. The recent Evaluation was conducted, as the company did with the previous Evaluation, with the support of a third-party evaluation by an outside counsel having expertise in Japanese and global corporate governance practices (the "Outside Counsel") in order to ensure transparency and objectivity and to obtain professional advice.

Procedures for Recent Evaluation

First, the Board discussed and confirmed that the actions proposed to be taken in response to the results of previous Evaluation were taken, and discussed and confirmed the proposed procedures for the Evaluation for FY2018. Thereafter, the third-party evaluation was conducted by the Outside Counsel in accordance with the following steps:

  • Reviewed relevant material, such as the minutes of Board meetings, and attended a Board meeting;
  • Confirmed with the Board Secretariat office and each Committee’s secretariat office how meetings of the Board and Committees were conducted;
  • Gathered responses to a questionnaire from each Director about the current status and practices of the Board and each Committee, such as the composition of the Board, operation of the Board, commitments of each Director, activities of each Committee and procedures of the previous Evaluation;
  • Interviewed the Chairman of the Board, newly-appointed Directors, a Director who is concurrently in the position of the CEO, and certain additional Directors about the Board and Committee status and practices; and
  • Researched other global companies' practices in Japan, the United States and Europe, and compared them with the company’s practices.

The Board then received, reviewed and discussed the Outside Counsel's report on the results of its evaluation. The Board confirmed the effectiveness of the Board and the Committees.

Summary of the Results of Recent Evaluation

The Outside Counsel reported that the Board is established and operated in a manner sufficient to be highly appreciated, based on various points, including the self-evaluation results of the Directors and comparison with benchmarked companies in Japan, the United States and Europe. Following discussion and analysis based on the Outside Counsel's report, the Board re-affirmed that the Board and each Committee were functioning effectively as of April 2019.

The Outside Counsel also provided examples of potential options, based on other companies' practices, to help further improve effectiveness of the Board and Committees. The examples include studying the feasibility of having special committees, further enhancing the executive session’s effectiveness, further enhancing disclosure about the compensation system, and further securing diversity of the outside Directors and enhancing disclosure about the same.

Actions in response to the Results of Evaluation

In order to further increase corporate value of Sony, Sony Corporation will take appropriate actions to further enhance functions of the Board and the Committees in response to the results of the Evaluation, as well as various comments and opinions given by Directors and the Outside Counsel during the Evaluation process.
For reference, after the previous Evaluation conducted from February through April 2018, Sony Corporation took the following actions, among others, to help improve the effectiveness of the Board:

  • Enhanced diversity in the boardroom (by newly appointing one non-Japanese and two female Directors as outside Directors);
  • Made periodic reports to the Board on ESG (Environment, Social and Governance) related matters;
  • Focused on information security continuously through the Director in charge of Information Security;
  • Held additional executive sessions; and
  • Expanded disclosure on Sony’s appointment/dismissal policy on Senior Executives, including the CEO, and Sony’s policy on succession planning.
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