Denso Corporation | 2016

For the second year in a row, Etica Sgr voted at Denso Corporation’s annual shareholders’ meeting, held on June 21st, 2016. Denso is a Japanese company that produces advanced automotive technology, systems and components for major automakers around the world.

The meeting was convened in order to elect the Board of Directors. The company asked shareholders to approve the re-election of 12 members who were already on the board in 2015, as well as the election of one new director.

Etica Sgr abstained from voting on the proposal to re-elect 6 candidates as “Representative Directors” (that is, executive directors), including the Chairman of the Board of Directors and the Chief Executive Officer.

The reasons for this decision stem from paragraphs 1.1, 1.2, 1.3 and 1.4 of the Guidelines on Active Shareholder Engagement: namely, there should be at least one woman among the Representative Directors as per good corporate governance practice, and the proposed composition of the new Board of Directors is entirely made up of men, just as the year before.

Etica Sgr voted in favor of the election of 5 outside directors, while it abstained from voting on two candidates presented as “independent outsiders” because, even though Denso had presented them as such, they hold or have recently held important positions at universities or consultancy companies that are directly connected to Denso, such that their actual, effective independence would be compromised.

Etica Sgr was pleased that Denso had chosen to submit Board Member bonuses for shareholder approval even though Japanese law does not require it to do so; nevertheless, it decided to vote against this resolution, in keeping with paragraph 1.6 of its Guidelines on Active Shareholder Engagement. The reasons for this decision can be found in the fact that there was a lack of clear information on the performance indicators that led to the payment of these bonuses, as well as the impossibility to determine whether there was any coherence between the bonuses paid out and the results achieved.

Lastly, in keeping with its voting rationale, Etica Sgr has made an effort to start a dialogue with Denso on the issues of independence and the presence of women on the Board of Directors. Additional engagement issues that will be brought up with Denso Corp. include product innovation (car batteries, Internet of Things), carbon dioxide emissions, supply chain management (especially as concerns conflict minerals), product safety, and issues related to fiscal transparency.

Engagement Azionariato Attivo Foreign companies
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