Japanese law offers listed companies three board structures. Most use either a statutory auditor board or, since 2015, an audit and supervisory committee. The third, introduced in 2003 and modelled on US practice, is the company with nomination and other committees. It must have three board committees, for nomination, audit and remuneration, each with at least three directors and an outside majority. The nomination committee decides who goes to shareholders for election as director, and the remuneration committee sets individual pay for directors and officers.
In this structure the board supervises and the shikkoyaku execute. The board appoints them, their term ends one year after appointment, and it chooses one or more representative executive officers with authority to bind the company. A shikkoyaku can also be a director. Unlike the far more common shikko yakuin, the shikkoyaku is a statutory office: the officer owes duties to the company, is liable for losses caused by neglect of duty, and is registered in the commercial register.
Uptake is small. In July 2025, 96 of 3,801 Tokyo-listed companies used the committee structure, against 1,705 with an audit and supervisory committee and 2,000 with a statutory auditor board. Its users include large global groups such as Hitachi and Sony.
What it means for a foreign employer
- Do not confuse the two titles. In English both shikkoyaku and shikko yakuin are rendered "executive officer". Check which one a candidate held; the statutory version carries legal liability and its pay was set by a committee.
- Committee companies hire differently. Senior appointments go through a nomination committee with an outside majority, so succession planning is more formal and external hires at the top are more common than at a traditional board.
- Expect governance fluency. Executives from these companies are used to reporting to outside directors and to written, structured pay decisions. They often adapt well to a foreign parent's reporting culture.
Sources
- Companies Act, Articles 400, 402, 404, 418, 420 and 423.
- Japan Association of Corporate Directors and Tokyo Stock Exchange, counts of listed companies by board structure, 2024 and July 2025.