JAPAN Law and Practice Contributed by: Hiroshi Mitoma, Tomohiko Iwasaki and Kosuke Hamaguchi, Nagashima Ohno & Tsunematsu
directors are independent outside direc - tors; and (b) other listed companies appoint at least two independent outside directors. • Third, the TSE Regulations require listed companies to make efforts to secure at least one independent outside director as a board member. In addition, the Corporate Governance Code recommends that a board of directors of a listed company be composed in a manner to achieve diversity, including in terms of gender, interna - tional experience, work experience and age. 4.4 Appointment and Removal of Directors are appointed by a resolution of a shareholder meeting. Unless otherwise provid - ed in the articles of incorporation, this resolution must be made by a majority of the votes of the shareholders present at the meeting if a quorum is satisfied (ie, by the presence of shareholders representing a majority of those who are enti - tled to exercise their voting rights). The company may lower the quorum for the appointment of directors down to a third pursuant to the articles of incorporation. A cumulative voting system is also available although this is not common in Japan. In the case of a company with an audit and supervisory committee, directors who are audit and super - visory members must be appointed separately from the other directors of the company. Other management members, including an execu - tive officer in a company with nominating and other committees, are appointed by the board of directors. Directors/Officers Appointing Directors
In addition, the Corporate Governance Code recommends that a listed company, unless it has nominating and other committees or its inde - pendent outside directors constitute a majority of its board of directors, seek the involvement of, and advice from, an independent nominat - ing committee regarding the appointment of its directors or other management members. In par - ticular, a listed company on the Prime Market is encouraged to ensure that a majority of such nominating committee’s members are independ - ent outside directors and disclose, among other things, the view on the independence regarding the composition of the nominating committee Although the Companies Act provides the restrictions on qualification of directors that a corporation cannot be a director or an individ - ual who was sentenced for breaching laws and regulations may not become a director during a certain period, there are no nationality or resi - dence restrictions. Dismissing Directors and Other Members of Management Directors may be dismissed at any time by a majority of the vote at a shareholder meeting, except audit and supervisory members, whose dismissal requires two thirds of the votes at a shareholder meeting. However, a dismissed director is entitled to seek damages arising out of the dismissal except in cases where justifiable grounds exist. Typically, a dismissed director may claim the compensation they would have received during their remaining term. and its authority and roles. Qualifications of Directors In addition, if a director engages in any miscon - duct or commits a material violation of law or the articles of incorporation in connection with the execution of their duties as a director, and a
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