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MarketScreener Homepage  >  Equities  >  Tokyo  >  Nomura Holdings, Inc.    8604   JP3762600009

NOMURA HOLDINGS, INC.

(8604)
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Nomura : ESG (Environment, Social and Governance) initiatives

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12/09/2019 | 09:36am EST

Connecting Markets East & West

ESG (Environment, Social and Governance) initiatives

Nomura Holdings, Inc.

December 2019

© Nomura

Agenda

1

2

3

4

Introduction

Nomura's ESG (Environment, Society and Governance)

Strengthening the Corporate Governance System

Activities of the Board of Directors

1

Nomura's mission

Social contribution through risk capital cycle

OUTCOME

Preparing for

Investment

the future

(reinvestment)

Resolve social

issues

Prosperous

Individuals' asset

Capital

lives

formation

markets

資本市場

Asset building

Succession to

the next

Improving

Capital gains,

generation

living

dividends and

standards

interest income

ReturnsProfits

Finance by

corporates and public

bodies

Financing Investment

OUTCOME

Resolve social

issues

Promote

innovations

Provide

infrastructure

Stimulate

regional

economies

Increase

employment

Challenges in Japan

  • More than 50% of individual financial assets sits in cash and bank deposits
  • Shift from saving to asset building still halfway

3.0%

Japan1

Cash and deposits

Bonds

28.6%

Investment trusts

Equities, etc.

53.3%

Insurance &

10.0%

annuities

Other

3.9%

1.3%

Investment securities: 15.2%

2.7%

US1

12.9%

Cash and deposits

31.7%

6.5%

Bonds

Investment trusts

12.0%

Equities, etc.

Insurance &

annuities

Nomura connects both investors and companies to the capital markets, thereby supporting the

productive use of risk capital, paving the way to a better future.

1. As of March 31, 2019. Source: Bank of Japan

34.3%

Other

Investment securities: 52.8%

2

Nomura Group Corporate Philosophy

Mission

Vision

Values

Contributing to Society

We help to enrich society through our expertise in capital markets

Trusted Partner

As a leading financial institution, we aim to be the most trusted partner for our clients

Entrepreneurial LeadershipWith passion and courage, we continually innovate to meet the needs of our stakeholders

TeamworkTo build our values and 'Deliver Together', we promote diversity and collaboration across divisions and regions

IntegrityPersonal integrity is paramount to us. We act honestly, fairly and openly

3

Agenda

1

2

3

4

Introduction

Nomura's ESG (Environment, Society and Governance)

Strengthening the Corporate Governance System

Activities of the Board of Directors

4

ESG initiatives

  • The Nomura Group reorganized the CSR Committee chaired by an executive officer into the ESG Committee chaired by the Group CEO in FY2018/19, in an attempt to deal with issues related to ESG in ways that are more strategic than before

Framework

Board of Directors

Japan

Report

EMEA

Executive

Management Board

Cooperation

Approvals

Report

Americas

ESG Committee

Report

Secretariat

Approvals

AEJ

ESG Committee members, and discussions in FY2018/19

Initiatives in FY2018/19 and onwards

Jul 2018

Nomura Holdings pledged support for TCFD

Conducted group work on the subject of the

Sep 2018

SDGs in Nomura

Group Executive Meeting (incl. Outside Directors)

  • Relationship betweenlong-term management vision (Vision C&C) and SDGs
  • Changes in the relationship between Nomura and stakeholders
  • Deepening Nomura's sustainable growth model

Dec 2018

Established mid- and long-term CO2emission reduction targets

Area

Global

Target type

Absolute

Base year

FY2012/13

Chairman

Members

  • of meetings
    Agenda

Outline of

discussions

Group CEO

Nomura Group executives in charge of businesses and corporates

2 (from April 1, 2018 to March 31, 2019)

  • Matters concerning ESG initiatives and information disclosure
  • Matters concerning fundamental ESG policy
  • ESG risks and opportunities
  • Reports related to climate change
  • Formulation of the Nomura Group ESG Statement
  • Review of material ESG issues (materiality)
  • Response to TCFD
  • Matters concerningMedium/Long-term CO2Emission Reduction Target
  • Matters concerning sustainable development goals (SDGs), etc.

Target years

Mid-term

Long-term

FY2030/31

FY2050/51

Level

32% reduction

65% reduction

Jan 2019

Established Nomura Group ESG Statement

To further promote the realization of a sustainable

environment and society by informing stakeholders of our

approach to ESG-related activities and our envisaged

response to environmental and social risks.

Mar 2019

Nomura Asset Management pledged support for TCFD

Identified "Nomura Group Materiality" by comprehensively

Jul 2019

reviewing management issues and key traditional ESG issues

5

Nomura Group Materiality

Identified "Nomura Group Materiality" by comprehensively reviewing management issues and key traditional ESG issues

growth sustainable toward Initiatives growth sustainable toward Platform

Nomura Group Materiality

Categories

Material issues

Metrics

• Diversity of the Board of Directors

Corporate governance

Strengthen corporate governance

Reflecting qualitative factors such as compliance in

executive compensation

Instilling the Code of Conduct and ensuring an operational framework

• Number of calls to compliance hotline

Compliance training

Legal compliance and reporting of violations

Status of compliance with Code of Ethics

Compliance

Fair financial business practices

Understanding of policies for providing gifts and

Prevent bribery

entertainment

Prevent financial crime

• Progress in building the operational framework

Establish and strengthen risk management systems

Risk management

Ensure financial soundness and transparency

Risk Appetite Monitoring

Business resilience

Address social and environmental risks

Nurture human resources

Employee satisfaction survey

Human resources

Education/training expenses

Diversity and inclusion

valuing diversity

Number of female managers

Create employee-friendly work environment

• Use of childcare and family nursing care support plans

• Offer high-quality financial services to diverse clients

Customer satisfaction level

Contribute to sound

Number of complaints

Products and services that address environmental and social issues

and sustainable

Sustainable finance issuance amount

Customer protection and information security

capital markets

• Financial and economic education activities

Improve financial literacy

Sustainable investment ratio

Business selection

• Optimal allocation of resources

Flexible review of business portfolio

Enhancing profitability

and focus

EPS

Contribute to a

Promote environmental conservation initiatives

sustainable

Combat climate change and protect natural capital through our

CO2emissions

Environment

business activities

Contribute to a

Global initiatives

Community contribution expenditures

Dialogue with stakeholders

sustainable society

Dialogue with stakeholders

Respect human rights

Realization of corporate philosophy

SDGs

6

ESG: Sustainable finance

  • With the UN's sustainable development goals gaining recognition, we are seeing growing demand for SDG bonds
    (green bonds, social bonds, sustainability bonds, etc.)

Volume and number of sustainable finance issuances Nomura involved in

Examples and success of initiatives aimed at developing sustainable finance

(billions of yen)

(#)

2,500

50

Sustainability Bond

Social Bond

2,000

Green Bond

40

International Capital Market Association

  • Only Japanese firm to join The Green Bond Principles and The Social Bond Principles advisory council*
    • New advisory body set up to support the executive committee that sets the rules for the Green Bond Principles, The Social Bond Principles, sustainability bond guidelines, etc. and develop systems better aligned to market circumstances

1,500

# of sustainable

30

finance issuances

1,000

20

500

10

0

0

FY12/13

FY13/14

FY14/15

FY15/16

FY16/17

FY17/18

FY18/19

Published first index for Japan SDG bonds, NOMURA-BPI SDGs (November 2019)

Research group on

sustainable

development of ESG

bond market

Global Capital

Green / SRI Awards

2019

  • Result of joint research with Nomura Research Institute
  • Investment performance calculated using SDG bonds chosen fromNOMURA-BPI component universe based on certain criteria
  • Set up by Nomura Institute of Capital Markets Research consisting mainly of external experts
  • Issued research report in June 2019: The Era of Sustainable Finance - ESG/SDGs and the bond market
  • Ranked second in Most Impressive Investment Bank for Asia Pacific Green/SRI Capital Markets

7

Agenda

1

2

3

4

Introduction

Nomura's ESG (Environment, Society and Governance)

Strengthening the Corporate Governance System

Activities of the Board of Directors

8

Outline of Nomura Holdings Corporate Governance

Guidelines

  • Corporate Governance Code established in 2015
  • Aim to define and contribute to the realization of a framework of effective corporate governance as a structure for transparent/fair and timely/decisivedecision-making

Board of Directors

  • Delegate its authority to execute business to Executive Officers and focus on management oversight
  • Diversity that enables active discussions from diverse perspectives
  • Majority of members is Outside Directors
  • Three board committees established
  • Analyze and evaluate the effectiveness of the Board and disclose the results

Internal Controls System

  • Oversee status of maintenance and operation of internal controls through audits by Audit Committee and activities by Internal Audit
  • Internal Controls Committee chaired by CEO and attended by Audit Committee members established for the purpose of strengthening and enhancing the Internal Controls System.
  • Involvement of Audit Committee in implementation plans of the Internal Audit as well as in election and dismissal of Head of the Internal Audit

Risk Management

  • Ensure financial soundness and to maintain and improve corporate value, management shall establish a risk management framework and the Board of Directors shall oversee the effectiveness of the framework

Dialogue with Shareholders

  • Treat shareholders equally and disclose information appropriately and timely to avoid information disparity
  • Take necessary measures to ensure that shareholders are not unfairly precluded from exercising their rights
  • Endeavor to enhance dialogue and provide explanations on general policies for allocation of management resources
  • Share outcomes of such dialogue with the Board of Directors

Policy for Strategic Shareholdings

  • Ongoing discussions concerning the purpose of strategic shareholdings
  • Hold shares only if such shareholdings contribute to maintaining/enhancing the corporate value of Nomura Group
  • As a result of the discussion, concerning stocks whose sale has been determined to be reasonable, we proceed with sale of such stocks while taking into consideration impact on the market and other circumstances

Fulfill Corporate Responsibilities

  • Established "Nomura Group Code of Conduct" as guidelines for each director, officer, and employee of Nomura Group to comply with
  • Enhance corporate value inlong-term by respecting diversity and establishing a sound workplace to enable all directors, officers, and employees to perform at their full potential
  • Actively engage inESG-related activities for sustainable growth and solving social issues, in addition to contributing to expanding securities markets through daily business

9

Corporate Governance Structure

  • In 2001, Nomura formed a holding company structure; Nomura Holdings listed it shares to NYSE, introduced an outside director system for the first time among other Japanese companies
  • In 2003, transition to Company with Committees (currently referred as a Company with Three Bard Committees)
  • Separation of management oversight from execution to reinforce supervision. Delegation ofdecision-making on business execution to executive directors for swift decisions

General Meeting of Shareholders

10

Board of Directors

meetings/year

(FY18/19)

GCEO

Formulation of proposals

Determination of

Audit

for election and dismissal

compensation

Nomination

Audit

Compensation

Committee

Committee

Committee

(Chair

(Chair)

(Chari)

(Full-time member)

6meetings/

17meetings/

4meetings/

year(FY18/19)

year(FY18/19)

year(FY18/19)

Management oversight

  • Oversight
  • Delegation ofdecision-making authority on business execution

Determination of compensation for Executive Officers

Audit

Outside Directors / External Experts (Advisory Board)

Inside Directors (Non-

Inside Directors

executive)

(Executive)

Executive

Group CEO

Management

Board

Group

Integrated

RiskAdvisory Board

Management

Committee

Four Business

Divisions

Corporate

Function

Execution

10

Independence Criteria for Outside Directors, Measures to avoid Conflict of Interests

  • The nomination committee, comprised its majority of outside directors based on the independence criteria, shall determine proposals concerning election of directors to be submitted to the Board
  • Respective regulations of the Board and committees articulate measures to avoid conflict of interests in resolutions

Independence Criteria for Outside Directors (excerpt)

(1) Person Related to the Company

The person, currently, or within the last three

years*, shall not correspond to a person

listed right

A person satisfying any of the following requirements shall be considered a Person Related to the Company:

  • Executive of another company where any Executive of the Company serves as a director or officer of that company;
  • Major shareholder of the Company (directly or indirectly holding more than 10% of the voting rights) or Executive of such major shareholder; or
  • Partner of the Company's accounting auditor or employee of such firm who works on the Company's audit.
  1. Executive of a Major Lender (*2) of the Company.
  2. Executive of a Major Business Partner (*3) of the Company (including Partners, etc.).
  3. A person receiving compensation from the Nomura Group of more than 10 million yen per year, excluding director/officer compensation.
  4. A person executing the business of an institution receiving more than a Certain Amount of Donation (*4) from the Company.

The person's spouse, relatives within the second

degree of kinship or anyone who lives with the

(1)

Executive of the Nomura Group; or

person shall not correspond to a person listed right

(2)

A person identified in any of subsections (1) ~ (5) above

(excl. persons in unimportant positions)

NYSE criteria for outside director independence about so-calledcooling-off; 3 years1

Countermeasures to conflict of interests in resolutions

Regulations of the Board of

Directors

Regulations of the

Nomination Committee

Regulations of the

Compensation Committee

Article 9. (Resolutions)

  1. The resolution of a meeting of the Board of Directors shall be adopted by an affirmative vote of a majority of the Directors present which Directors present shall constitute a majority of all Directors then in office who are entitled to participate in the voting.
  2. No director who has a special interest in any matter requiring a resolution shall be entitled to participate in the voting on such matter.

1. New York Stock Exchange Listed Company Manual 303A.02 Independence Tests

11

Board diversity

Highly-independent Board of Directors

Leveraging diversity of expertise and experience

Independent outside

directors: 6

(Non-Japanese director: 2,

female director: 2)

Executive Officers

20%

Company

Management

20%

  • of outside directors 6 out of 10 people

Board Training Program

  • Training for new outside directors
    • In order to deepen the understanding of Nomura Group and its internal controls, approximately three days of training were provided on Nomura Group overview, business model, general shareholders meetings and committees, finance, risk management, compliance, litigation and notification, internal audit, and internal investment rules.
  • Others
    • Ethics training is conducted once a year for executives (Including outside directors) in order to further raise their awareness of professional ethics.

1. # of directors is as of December 2019

Diverse

Securities

backgrounds

Accountants

industry experts

20%

20%

Company

Experts in finance-

related legal

management,

systems

corporate accounting

10%

experts

10%

12

Each director's profile and role (1)

Involved

Experience

No. of

Commitee1

Year

significant

of

Corp

Inter

Secu

Acco

Legal

concurrent

Name

appoi

Background

positions

Nomi

Com

orate

natio

untin

ntme

natio

pens

Audit

man

nal

rities

g/Fin

/Reg

other than

indus

ulatio

nt

Nomura

n

ation

age

busin

try

ancia

ns

Group

ment

ess

l

Non-Executive

Nobuyuki

Director

Jun.

Mr. Koga has been a non-executive director of the company since June

(Chairman of

2008. He also has not been involved in an execution of the company's

1

Koga

1995

the Board of

subsidiary, Nomura Securities Co., Ltd. since June 2011

Directors)

Hisato

Non-Executive

Jun.

-

Miyashita

Director

2016

Mr. Kimura has extensive experience with respect to corporate

Hiroshi

Outside

Jun.

management and has held positions such as President, CEO and

2

Kimura

Director

2015

Representative Director of the Board of JT and Chairman of the Board of

JT

Kazuhiko

Outside

Jun.

Mr. Ishimura has extensive experience with respect to corporate

management and has held positions such as Representative Director and

3

Ishimura

Director

2018

President and CEO, and Chairman of the Board of AGC

Mr. Shimazaki has extensive experience with respect to corporate

management and a high degree of expertise with regard to international

accounting systems corresponding to a Sarbanes-Oxley Act of 2002

Noriaki

Outside

Jun.

financial expert. He has held positions such as Representative Director and

1

Shimazaki

Director

2016

Executive Vice President of Sumitomo Corporation, Member of the

Business Accounting Council of the Financial Services Agency, Trustee of

IASC Foundation, Special Advisor of Sumitomo Corporation and Director of

the Financial Accounting Standards Foundation

1. : Chairman of the Committee,: Member of the Committee

13

Each director's profile and role (2)

Involved

Experience

No. of

Commitee1

Year

significant

of

Corp

Inter

Secu

Acco

Legal

concurrent

Name

appoi

Background

positions

Nomi

Com

orate

natio

untin

ntme

natio

pens

Audit

man

nal

rities

g/Fin

/Reg

other than

indus

ulatio

nt

Nomura

n

ation

age

busin

try

ancia

ns

Group

ment

ess

l

Ms. Sono has a high degree of expertise with respect to corporate

accounting based on many years of experience as a Certified Public

Mari Sono

Outside

Jun.

Accountant and has held positions such as External Comprehensive

-

Director

2017

Auditor, Tokyo, and Member of "Business Accounting Council," Ministry of

Finance. Further, after retiring from the Audit Firm, she served as

Commissioner of the Securities and Exchange Surveillance Commission

Michael

Outside

Jun.

Mr. Lim is well-versed in international accounting systems and has held

Lim Choo

positions, including Executive Chairman of PricewaterhouseCoopers

1

Director

2011

San

(Singapore) and public service roles in Singapore

Laura

Outside

Jun.

Ms. Unger, by serving as a Commissioner and as Acting Chairman of the

Simone

2

Director

2018

SEC, etc., is well-versed in finance-related legal systems

Unger

Koji Nagai

Executive

Jun.

-

Officer

2013

Shoichi

Executive

Jun.

-

Nagamatsu

Officer

2018

1. : Chairman of the Committee,: Member of the Committee

14

Evaluation of effectiveness of Board

  • Conducting evaluations on the effectiveness of the Board of Directors since FY2015/16
  • Each Director assesses management of Board, including quantity and quality of information offered and discussions by Board, sharing findings at Board and learn from the results in order to continue strengthening their oversight function.

PDCA cycle to ensure effectiveness of Board

1

Each Director evaluates own

execution of duties and

2

effectiveness of the entire

Board

Board analyzes and

evaluates effectiveness of

the entire Board based on

evaluations of each Director

4

Discuss results of evaluation including proposal to address issues

Evaluation Items

  • Constitution and management of the Board of Directors
  • Information provision to the Board of Directors
  • The Board of Directors' involvement in management goals and strategy
  • The Board of Directors' function ability to oversee management
  • Constitution and management of the Nomination, Audit and Compensation Committees
  • Monitoring of the state of dialogues with stakeholders
  • Management of Outside Directors Meetings, etc.

Response to results

  • In response to the growing global interest in preventing money laundering, Nomura Group substantially increased its compliance reporting, including these initiatives at the Board of Directors.
  • At the Executive Officers' and Executive Officers' Meeting, where outside directors also attend, the SDGs were taken up as a theme, and discussions were held on the relationship with Vision C&C, the sustainable growth model that Nomura should aim for, priority issues, and measures to solve them.

3

Discuss issues that can be

addressed on executive

side and propose to Board

Next schedule

  • Evaluation for the current fiscal year will start around December 2019, and will be disclosed in the Corporate Governance Report in early April 2020

15

Clarification of responsibilities
action plans,
Efforts for the
completion of remedial
taken be to Actions
Reorganize the Wholesale Equities business to ensure that our people are incentivized to contribute to the development of the capital markets
Embed the mindset of a
Code of Conduct that fulfills the role the public expects financial institutions to play, and create an environment to maintain and improveself-discipline
Progress of 11 action plans (as of November 2019)

Remedial action plan on improper communication of information, and its progress

1.

Embed mindset of "Conduct"

Reflect the concept of conduct risk in 2019 "Nomura 'Founding Philosophy and Corporate Ethics Day'"

"Code of Conduct (Nomura Group Code of Conduct)" enacted and announced in Dec. 3

2.

Review of performance evaluation system

Implemented incentives to facilitate good conduct adhered to "Code of Conduct" into performance

evaluation systems

Registered Obtained its whistleblowing system under Japan's Consumer Affairs Agency's

3.

Enhance recognition / credibility of

"Whistleblowing Compliance Management System

Compliance Hotline

Disseminate and disseminate information on the operation of the whistle-blowing system to the entire

company

4.

Review of organization structure and

Reorganized Wholesale Equities business and Research

establishment of new evaluation regime

5.

Establishment of systems for information

Established basic rules around exchange of information between GM and Research

protection and proper management

Checking broad disseminations of emails and determining necessity

6.

Stricter management of important non-

Establish a framework to

public information obtained from public

tightly control not only

Introduction and implementation of new rules and implementation of training

organizations, etc., and re-enforcement of

corporate confidential

existing rules

information, but also non-

public information that could 7.

Handling of information dissemination by

Establishment of the "Guidelines on the Handling of Information Related to Members of Public External

materially affect investment

other internal and external experts

Organizations"

decisions

8.

Review of outsourcing agreements

Review of contracts with third party, including confidentiality clauses

9.

Verification by third-parties

Develop plans to conduct governance and framework audits for conduct risk management and conduct

follow-up reviews of other key remedial actions

10. Management efforts to complete

Continue efforts to instill "Code of Conduct"

improvement measures

Top management visits departments and branches to continue dialogue with employees

11. Clarity of responsibilities

Announced punitive actions to individuals on 24 May press release

16

Corporate Culture and Ethics

  • Shared values to realize our social mission andlong-term strategic goals
  • Creating optimal value for customers and society by making the most of individual capabilities and their diversity, while all officers and employees are conscious of their thoughts and actions based on common sense and Code of Conduct

Missions

Long-term Goals

Corporate

Culture

Value

Entrepreneurial LeadershipWith passion and courage, we continually innovate to meet the needs of our stakeholders TeamworkTo build our values and 'Deliver Together', we promote diversity and collaboration across divisions and regions IntegrityPersonal integrity is paramount to us. We act honestly, fairly and openly

Capable individual

  • Since its foundation, Nomura believes the most valuable assets are our "people"
  • We are striving to hire capable individuals globally

Co-existence of "capable

individuals" and

"diversity"

To our customers and

society,

deliver optimal value

Ethics, principles

Diversity

  • People from approx. 90 courtiers working at Nomura
  • Diversity is source of Nomura'slong-term competitiveness as it accurately responds to clients' needs and changes in society and contributes to improving quality of decision-making and productivity of services
  • Implementing flexible human resource management that emphasizes diversity so that various human resources can fully demonstrate their abilities and individuality and play active roles

Announce "Code of Conduct",standards for all employees to make appropriate decisions and actions based on ethics

17

Announcement of "Code of Conduct"

Aim

  • As we work to realize our mission and vision, everyone at Nomura is expected to uphold the values of entrepreneurial leadership, teamwork and integrity that underpin us as a firm. This Code of Conduct sets out guidelines to help us translate our values into actions.
  • Declaration of Nomura's commitment to customers, society and ourselves

Outline

What does the Code mean?

How do we implement the Code?

Five questions to ask when in

Our conducts

doubt

Explanation of the positioning

Responsibility of managers

Basic questions to ask oneself

Each items in detail

of the Code of Conduct

Guidelines for

translating the

values of

"entrepreneurial

leadership",

"teamwork" and

"integrity" into

concrete actions

18

Instill Business Practices, Professionalism;

Training programs for Employees

Compliance training

Nomura Securities provides officers and employees with training on compliance in a planned manner on such themes as anti-money laundering and terrorist financing, conflict of interest management, prevention of insider trading, compliance with firewall regulations, and thorough management of customer information. The purpose of this training is to raise the level of knowledge of relevant laws and regulations of officers and employees, to raise their awareness of compliance, and to foster a corporate culture that pursues appropriate business practices

Training required by the regulations

of the Japan Securities Dealers

Association

Training mandated by the compliance

program

Training to create a corporate culture that pursues appropriate conduits

Other Training

Training for sales managers, internal control managers, and employees engaged in internal control activities Training to improve the quality of sales representatives

Training for branch managers, general affairs managers, new employees, new managers, etc.

Business Manager*1Training

Compliance Hours at Sales Departments and Offices*2

  • Professional ethics training
    • Conduct ethics training to help employees better understand social responsibilities in order to further raise awareness of professional ethics
    • Implementation in FY 2019, conducted training in conjunction with "Nomura 'Founding Philosophy and Corporate Ethics' Day"
  • "Nomura 'Founding Philosophy and Corporate Ethics' Day" Initiatives
    • Based on a deep remorse for the misconduct caused in the past, August 3 has been designated "Nomura 'Founding Philosophy and Corporate Ethics' Day" since 2015.
    • Since then, in August every year, we have reconfirmed our corporate culture and corporate ethics based on spirit of our founding, and reaffirm the lessons learned from past scandals
    • Implement the following measures to reaffirm our resolutions to prevent the recurrence of misconduct and to earn and maintain trust of society
      1. Viewing of video materials (2) Holding of opinion exchange meetings (3) Submission of a statement of intent on preventing the weathering of scandals
  • Compliance training for all employees
  • Compliance training for Investment Banking, Global Markets, Global Research, and Fiduciary Services Research Center
  • Regular training for head office managers and business managers
  • Knowledge Improvement Training for General Affairs Division of Branches
  • Lectures on compliance at various training and meetings

1.

The system was established after the second scandal involving an extortionist that was found to have provided profits and compensated for losses. This is a system unique to Nomura, and appointed by appointment.

19

2.

In order to ensure thorough compliance throughout all employees, we hold monthly seminars for Nomura Securities sales departments and branches.

Whistleblowing systems:

Nomura Group Compliance Hotline

Whistleblowing systems ~ Nomura Group Compliance Hotline

Purposes

Established for fostering a sound corporate culture and corporate ethics through an early detection and correction of illegal acts and scandals

Structure

  • Nominated a total of 4 information counselors: 2 internal directors (Compliance, IA) and 2 external lawyers
  • Two methods are prepared: one to provide information directly to internal directors, and the other to via a tool provided by an external contractor
  • Type of information recipient and methods can be freely selected by a reporter.

Trend in number of users

Substantial increase in fiscal 2019

Number of reports

Background of the increase; use of the tools

provided by external vendors to enhance

84

anonymity and an implementation of publicity

31

campaigns

FY17/18

FY18/19

Initiatives to enhance credibility of system

  • Registration system
    • On November 15, 2019, registered as a registered operator of "Internal Reporting System Certification (Self- Declaration of Conformity Registration System; WCMS)1" under the jurisdiction of the Consumer Affairs Agency.
  • Deliver messages to employees
    • Messages are distributed periodically to all employees on promotion of use of the hotline.
    • In addition to scope of reportable matters and prohibition of disadvantageous treatment, flow of information from the receipt of reports and points for responding to investigations is also disseminated

1. Certification of the whistleblowing system (Self-Declaration of Conformity to Registration System): A system under which a designated registration organization registers the results of a business operator's verification of its

whistleblowing system based on an application from the business operator and permits the use of the designated WCMS mark if the business operator evaluates its internal reporting system and complies with the standards for

20

the whistleblowing system certification based on the "Guidelines for Private Business Operators on the Development and Operation of the Internal Reporting System Based on the Whistleblower Protection Act" (Established on

December 9, 2016) established by the Consumer Affairs Agency.

Agenda

1

2

3

4

Introduction

Nomura's ESG (Environment, Society and Governance)

Strengthening the Corporate Governance System

Activities of the Board of Directors

21

Main items discussed by the Board of Directors

  • The Board of Directors discussed the following matters in FY2018/19.
  • In addition, Outside Directors Meetings were held four times this year.

FY2018/19 1H

Main agenda

Content of the discussion

FY17/18 results,

Company overview, performance and market

environment by division and region, situation of

dividend payouts

competitors, etc.

Changes to the basic

Specifying total return ratio of 50% or more in the basic

polity on dividends, etc.

policy

Business execution

Current status of the Wholesale Division and future

report

measures

1QKey Performance

Indicators (KPIs) for

KPIs for realizing client-oriented business operations in

client-oriented business

Nomura Securities and Nomura Asset Management

operations

Risk management

Operational status of risk appetite and unauthorized

reports

access to the systems of overseas subsidiaries

Compliance reporting

Recent issues, money laundering and counter-terrorism

financing measures

FY18/19 1Q results

Company overview, situation by division and region,

situation of competitors, etc.

Business execution

Establishment of a securities company in China and the

report

outlook for business performance in the second quarter

2Q

Report on audit activity

Responses from the executive side to recommendations

findings

from the audit committee

Risk management

Status of risk appetite management

reports

Compliance reporting

Recent issues, money laundering and counter-terrorist

financing measures

FY2018/19 2H

Main agenda

Content of the discussion

FY18/19 2Q results,

Company overview, situation by division and region,

dividend payouts

situation of competitors, etc.

Business execution

Strategies in Wholesale Division and Retail Division to

report

address megatrends

Revision of Corporate

Company's response to the revision of the Corporate

3Q

Governance Guidelines

Governance Code

Verification of the

Review of the results of discussions by the Policy

appropriateness of

Shareholding Review Committee

strategic shareholdings

Risk management reports

Status of Brexit compliance and risk appetite

Compliance reporting

Recent issues, money laundering and counter-terrorist

financing measures

FY18/19 3Q results

Company overview, situation by division and region,

situation of competitors, etc.

Business execution

Current status of each division and future measures

report

Strategy for non-face-to-

Collecting new clients using digital technology

face sales

4Q

HR related report

Introduction of new personnel system

Business platform

Review of matrix management structure and corporate

restructuring

restructuring

Selection of conduct risks, system risks, geopolitical

Risk management reports

events, and risks related to climate change as themes

to be addressed in the Risk Appetite Statement for

FY19/20

22

Composition and role of Nomination / Compensation /

Audit Committee

  • To ensuring and improving the independence and transparency, Chairman of all three committees are Outside Directors

Composition and role of the three committees

Composition

Role

Nomination Committee

Compensation

Committee

Audit

Committee

Hiroshi

Outside Director

Kimura

(Chairman)

Ishimura

Outside Director

Kazuhiko

Nobuyuki

Inside Directors

Koga

(Non-executive)

Noriaki

Outside Director

Shimazaki

(Chairman)

Mari Sono

Outside Director

Hisato

Inside Directors

Miyashita

(Non-executive)

  • Determine the particulars of a proposal concerning the election and dismissal of Directors to be submitted to a general meeting of shareholders
  • Determine the independence criteria for Outside Directors
  • Determine the reasons why each person was designated as a Director nominee
  • Establish the policy with respect to the determination of the compensation and other remuneration of Directors and Executive Managing Directors
  • Determine the individual compensation and other remuneration of each Director and Executive Officers
  • Audit the execution by the Directors and Executive Officers of their duties and prepare audit reports
  • Determine the content of proposals concerning the election and dismissal of the accounting auditors to be submitted to a general meeting of shareholders

23

Election of Directors and Management

Nomination Committee Calendar for election of directors

Ad-hock

March

April

June

Election of Directors

Determination of

Determination of

Discussion for

candidates to be

grounds of

at Shareholders

submitted to

appointments

Meetings

outside director

Appointment of

Ordinary General

Determination of

candidates

Nominating

Meeting of

contents of their

Committee Members

Shareholders

disclosure

by Board of Directors

Consideration in election of directors

Succession plan for Group CEO and others

Determination of

Determination

candidates for

of GCEO

directors

Succession plan

(GCEO to draft proposal)

Establish concept

Review of

execution

Discussion

Nomin

Report

of quality

Decision on

Board of

systems

ation

Directors

a

Commi

proposed

Fostering through

ttee

successor

business execution

Selection criteria based on personality, insight, ethics,

deep knowledge and experience in

ones area of expertise

As a general rule, majority of the board is composed of outside directors

Outside directors are required to comply with independence criteria

Including experts in finance,

corporate management, law, etc.

Number of outside directors can hold concurrent positions at other listed companies up to 3.

In principle, there is 1 internal

director (non-executive).

The term of outside directors is

expected to be six years

As a general rule, the Group CEO and COO serve concurrently as directors

  • Candidates from current GCEO are presented to Nomination Committee and elected by Board of Directors.
  • The Nominating Committee and Board assess appropriateness of candidates at various angles such as audit hearings and board meetings
  • The succession plan includes the concept of qualities required of Group CEO, business execution system that incorporates management environment and perspective of fostering successors, evaluation of the status of business execution under the business execution system, and specific succession proposals

24

Compensation policy, framework for senior management

Compensation policy

Framework for senior management, method of determination for each component

  • Human resources are Nomura Group's greatest asset in establishing a strong position as a globally competitive financial services group
  • Established the "compensation policy" for Group officers and employees to secure, maintain, motivate, and develop excellent human resources.
  • This will enable the Group to achieve sustainable growth, achievelong-term growth in shareholder value, provide added value to customers, demonstrate global competitiveness, and enhance Nomura's reputation.

1. Align with Nomura's values and strategies

Total compensation1

Variable

compensation

Deferred

compensation

A portion of variable

remuneration is paid as

(Exception)

NSU3

deferred remuneration

to directors who receive

a certain level of

remuneration and

RSU2

bonuses. The higher

the compensation and

bonus, the lower the

ratio of cash bonuses.

Cash(Part of) variable compensation paid in bonuscash after the financial year end

6. Ensure robust

2. Reflect group, divisional

governance and control

and individual performance

processes

5. Appropriate

3. Establish appropriate

performance measurement

compensation structures

with a focus on risk

4. Align employee and shareholder interests

Stock-basedPaid for executive officers, determined by compensationindividual responsibilities

Fixed

compensation

Base

Determined by reflecting

individual role, responsibilities,

salary

etc.

1.

This figure does not indicate the percentage of each remuneration, but shows the breakdown of remuneration.

2. Restricted Stock Unit

25

3.

Right to choose either RSU and phantom stock is given to certain individuals.

Disclaimer

  • This document is produced by Nomura Holdings, Inc. ("Nomura").
  • Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or other instrument, including securities issued by Nomura or any affiliate thereof. Offers to sell, sales, solicitations to buy, or purchases of any securities issued by Nomura or any affiliate thereof may only be made or entered into pursuant to appropriate offering materials or a prospectus prepared and distributed according to the laws, regulations, rules and market practices of the jurisdictions in which such offers or sales may be made.
  • The information and opinions contained in this document have been obtained from sources believed to be reliable, but no representations or warranty, express or implied, are made that such information is accurate or complete and no responsibility or liability can be accepted by Nomura for errors or omissions or for any losses arising from the use of this information.
  • All rights regarding this document are reserved by Nomura unless otherwise indicated. No part of this document shall be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Nomura.
  • This document contains statements that may constitute, and from time to time our management may make"forward-looking statements" within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. Any such statements must be read in the context of the offering materials pursuant to which any securities may be offered or sold in the United States. These forward- looking statements are not historical facts but instead represent only our belief regarding future events, many of which, by their nature, are inherently uncertain and outside our control. Actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements. You should not place undue reliance on any forward-looking statement and should consider all of the following uncertainties and risk factors, as well as those more fully discussed under Nomura's most recent Annual Report on Form 20-F and other reports filed with the U.S. Securities and Exchange Commission ("SEC") that are available on Nomura's website (https://www.nomura.com) and on the SEC's website (http://www.sec.gov); Important risk factors that could cause actual results to differ from those in specific forward-looking statements include, without limitation, economic and market conditions, political events and investor sentiments, liquidity of secondary markets, level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions and size, and the number and timing of transactions.
  • Forward-lookingstatements speak only as of the date they are made, and Nomura undertakes no obligation to update any forward- looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.
  • The consolidated financial information in this document is unaudited.

Nomura Holdings, Inc.

www.nomura.com/

Disclaimer

Nomura Holdings Inc. published this content on 09 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 December 2019 14:35:03 UTC

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