Nomura Holdings, Inc. Nomura Report 2015 Nomura at 90 Years. The Road Ahead N o m u r a R e p o r t 2 0 1 5 N o m u r a H o l d i n g s , I n c . Editorial Policy In FY2012/13, we began publishing the Nomura Report, an integrated version of our annual report and our citizenship report, which detailed our CSR initiatives. We hope that this integrated report helps readers gain a broader understanding of our activities to support sustainable development and aim to grow and develop together with our stakeholders, including our shareholders and customers, as Asia’s global investment bank. Contents Nomura at 90 Years. The Road Ahead The 90-Year History of Nomura Group ..................... 2 Nomura Group’s Business Model ............................ 4 Nomura Today in Figures.......................................... 5 Financial and Non-Financial Highlights (US GAAP) .............................................................. 6 Report Period April 1, 2014 to March 31, 2015 (Some content may be outside this time frame.) Nomura’s Ideas: Looking to the Coming 100th Anniversary Previous Report August 2014 Next Report July 2016 Entities Covered Nomura Holdings, Inc. and its major subsidiaries and affiliates http://www.nomuraholdings.com/company/group Numerical data are presented alongside information on the scope of companies covered. Reference Guidelines • Sustainability Reporting Guidelines of the Global Reporting Initiative (GRI) This report contains information regarding the standard disclosure items contained in the fourth edition of the GRI Sustainability Reporting Guidelines. Please access the following Message from the CEO ............................................ 8 Special Feature COO and Regional CEO Roundtable .......................................... 13 Message from the CFO ............................................ 18 Nomura’s Ability to Get Things Done Review of Operations ............................................... 20 Company Segments .............................................. 20 Retail ..................................................................... 22 Asset Management ............................................... 26 Wholesale .............................................................. 30 Special Feature Global Research ............................... 34 URL on our corporate website for our GRI Guidelines Index. System for Supporting Corporate Value http://www.nomuraholdings.com/csr/gri/ • Environmental Reporting Guidelines (2012 Version) of Japan’s Ministry of the Environment • Charter of Corporate Behavior of Keidanren External Recognition Nomura’s CSR initiatives and its ESG (Environment, Social, and Governance) information disclosure practices have been widely recognized outside the Company. Nomura Holdings has been selected for inclusion in the Dow Jones Sustainability Indices, the FTSE4Good Index, and, as of January 2015, the Morningstar Socially Responsible Investment Index (MS-SRI), all of which are socially responsible investment (SRI) indexes. Involvement in External ESG Initiatives • The United Nations Global Compact • Principles for Responsible Investment (UN PRI) • CDP Corporate Governance ............................................. 36 Outside Director’s Interview ................................... 40 Directors ................................................................ 42 Executive Officers and Senior Managing Directors ................................... 44 Compliance .............................................................. 45 Risk Management .................................................... 48 CSR Management .................................................... 52 Contributing to Sound and Sustainable Capital Markets .................................. 54 Nurturing Human Resources with a Respect for Diversity.................................... 56 Special Feature Nurturing Human Resources .............. Taking on Global Challenges ............... 59 Our Community : Dialogue with Stakeholders .......... 60 Our Environment ...................................................... 62 Data Section Seven-Year Financial Summary (US GAAP) ............. 64 CSR Key Facts ......................................................... 66 Independent Assurance ........................................... 71 • Principles for Financial Action towards a Sustainable Society Global Network ......................................................... 72 (Principles for Financial Action for the 21st Century) • Climate Bonds Initiative • Green Bond Principles • CSR Asia Nomura Securities Domestic Network ..................... 73 Corporate Data ......................................................... 74 Website Information ................................................. 75 Nomura at 90 Years. The Road Ahead The Founder’s Principle: “Putting the Customer First” This year, Nomura Group will mark the 90th year since its establishment. Starting business in 1925 with less than 90 employees, Nomura Group today has grown to become the largest securities company in Japan with a total of about 29,000 executives and employees in Japan and the rest of the world and about ¥109 trillion in client assets. Over the years, Nomura has remained faithful to the principle of its founder. One of the tenets of this philosophy “Putting the Customer First” evolved to become “Prospering Together with Our Clients” and finally to today’s “Placing Our Clients at the Heart of Everything We Do.” With this principle, Nomura will continue to respond to changes in the operating environment and take up the challenge of reforming itself. Founder’s Tokushichi Nomura Our research-oriented culture— “Osaka Nomura Business News” 1 Nomura Report 2015Nomura at 90 Years. The Road Ahead The 90-Year History of Nomura Group The driving force for Nomura Group’s growth has been our continued devotion to responding to society’s needs, which, in At present, Nomura is taking initiatives to create new value and services to share with its stakeholders, drawing on turn, is founded on a basic belief we have held since our establishment, “Placing Our Clients at the Heart of Everything We core skills in finance and its network covering more than 30 countries. Nomura is also continuing to innovate and Do.” take up new challenges to consolidate its position as Asia’s global investment bank. 1925– 1960– 1980– 2000– Supported Japan’s securities market at the dawn of its development Provided fund-raising support for the era of high economic growth in Japan Offering products and services in response to Japan’s “financial Big Bang” Promoting the transition from deposits to investments From Asia to the world: Moving together with our customers and the market 1925 The head office of Nomura Securities at about the time of its founding 1980 Pamphlets advertising “Medium-Term Japanese Government Bond Fund” 2001 Nomura Holdings listed its shares on the New York Stock Exchange 1969 U.S. subsidiary Nomura Securities International (NSI) 1927 Staff of the new representative office in New York 1972 Nomura Europe N.V. in the Netherlands 1925 The Securities Department of Osaka Nomura Bank split off into a separate company: Nomura Securities Co., Ltd. 1927 Representative office in New York 1949 Became a full member of the Tokyo Stock Exchange 1953 Head office moved to the Nihonbashi Nomura Building 1959 Founded the Nomura Securities Investment Trust Co., Ltd. 1961 Nomura Securities listed its shares on the Tokyo Stock Exchange, Osaka Securities Exchange, and Nagoya Stock Exchange 1967 Established Nomura International (Hong Kong) Limited 1969 Established U.S. subsidiary Nomura Securities International, Inc. (NSI) 1972 Established its first subsidiary in Europe, Nomura Europe N.V., in the Netherlands Major Issue of New Companies’ Stocks Marks the First Step toward Recovery Nomura Securities was established in 1925, and, following World War II, developed as the leading presence in Japan’s securities transactions. The opportunity for this development came from 1947 to 1948 when Japan’s electric power distribution companies (today’s electric power generation companies), banks, and textile companies made stock issues to raise funds. At that time, Nomura exerted its efforts in underwriting and selling these issues. This provided a foothold for Nomura to build its present position as it contributed to the first steps toward Japan’s postwar recovery. Nomura Expands Globally, Opening a Series of Overseas Subsidiaries Nomura’s overseas business activities date back to the opening of a representative office in New York in 1927, only two years after its founding. In the postwar period, Nomura’s international business activities recommenced in 1953, and it was active as a partner to Japanese companies that were raising funds overseas. In 1969, Nomura Securities International, Inc. (NSI) was established in the United States. Subsequently, Nomura has grown to become one of the world’s leading securities companies. 1985 Tokyo Stock Exchange 2012 Nomura Securities trading floor 1980 Began sales of the “Medium-Term Japanese Government Bond Fund” 1981 Established Nomura Investment Management Co., Ltd. Established U.K. subsidiary Nomura International Limited (NIL) 1993 Established The Nomura Trust and Banking Co., Ltd. 1997 The Nomura Securities Investment Trust and Nomura Investment Management merged to form Nomura Asset Management Co., Ltd. 2001 Separation of roles of Nomura Holdings and Nomura Securities with the transition to a holding company structure Nomura Holdings listed its shares on the New York Stock Exchange 2008 Absorbed the personnel of Lehman Brothers Asia Pacific and Lehman’s European and Middle Eastern divisions 2009 Two public offerings by Nomura Holdings 2014 Client assets reached ¥100 trillion Moving toward Comprehensive Financial Business Operations Nomura has expanded its portfolio of activities to become a comprehensive financial services company. This has included the establishment of Nomura Investment Management Co., Ltd., The Nomura Trust and Banking Co., Ltd., and other companies. Nomura has also expanded its offerings of products and services in response to Japan’s financial Big Bang. Also, to contribute to the globalization of its corporate customers, Nomura has established overseas subsidiaries. In all of these activities, Nomura Group has always been quick to respond to the increasingly diverse financial needs of its customers. Transitioning to a Holding Company Structure and Strengthening Corporate Governance Nomura Holdings, Inc., the holding company for Nomura Group of companies, was formed in 2001, and on this occasion, Nomura introduced a system of appointing Outside Directors. Beginning in 2003, Nomura adopted a corporate governance system separating the oversight of management from the conduct of business operations and became a “Company with Three Committees.” Under this system, Nomura has substantially strengthened the function of supervising management and increasing management transparency. Principal Economic and Social Developments P 1920 Early development of Japan’s securities transactions P 1960 Period of rapid economic growth P 1970 Period of stable economic growth P 1980 Bubble era P 1990 Post-bubble era P 2000 Era of structural reforms 1920 Japanese Government Bond (JGB) market began operations separately from the Tokyo Stock Exchange 1944 Operation of the fixed exchange rate system began 1952 Japan joins the IMF 1964 Tokyo Olympics 1965 First issues of deficit finance bonds by the Japanese government in the postwar period 1970 Osaka Expo ’70 1973 Tr a n s i t i o n t o f l o a t i n g exchange rates First oil crisis 1979 Second oil crisis 1985 Plaza Accord 1989 Berlin Wall torn down Nikkei stock price average peaking at ¥38,915.87 1995 G r e a t H a n s h i n - A w a j i Earthquake 1997 Asian currency crisis Hong Kong returned to China 1999 Bank of Japan’s zero interest rate policy 2001 September 11 attacks 2002 Euro notes and coins began to circulate 2007 World financial crisis P 2010 Era of revitalization in Japan 2011 Great East Japan Earthquake 2013 M o n e t a r y e a s i n g p o l i c y adopted under “Abenomics” 2 3 Nomura Report 2015Nomura at 90 Years. The Road Ahead Nomura Group’s Business Model Nomura Today in Figures The mother market of Nomura Group is in Asia, including Japan, and it offers financial services through its global network. With three main segments—Retail, Asset Management, and Wholesale—Nomura Group offers high-value-added services to its clients in Japan and the rest of the world through an international network that covers more than 30 countries. Wholesale Asset Management Global Markets Global development of sales and trading in bonds, stocks, foreign exchange, and derivatives businesses for institutional investors in Japan and overseas• Strong client base • Product syndication capabilities drawing on sophisticated financial technology Investment Banking Development of services that include underwriting of bonds and stocks, M&A advisory, and offering solutions tailored to client needs • Top-level syndication and execution capabilities • Strong network The Community Nomura’s asset management business, centered around Nomura Asset Management Co., Ltd., is global in scope. Individual investors and institutional investors in Japan and overseas entrust the management of their assets to Nomura, and Nomura responds through investment advisory, investment trust, and other related services globally. • Japan’s largest asset management company • Offering creative products • High-quality portfolio management capabilities • Supported by Nomura Group systems Nomura Personnel Wholesale Clients Asset Management Stockholders and Investors Retail Nomura offers a broad range of financial services to its individual and corporate customers through its 159 branches and other offices in Japan, its call centers, and its Internet services. Also holds Wealth Management business in Japan and Asia. • Sophisticated consulting capabilities • Abundant lineup of products Retail Environment Contributing to Sound and Sustainable Capital Markets Nomura Group’s Material CSR Issues Risk Management Nurturing Human Resources with a Respect for Diversity Dialogue with Stakeholders Corporate Governance Compliance Economic development in Asia and emerging countries Social Issues Influencing Nomura Group Declining birthrate in Japan and demographic aging of the population Climate change and other environment problems Development of regional societies and the community Global financial regulatory environment Total Client Assets: ¥109 trillion One of Nomura’s missions is to promote the proper flow of funds and contribute to economic growth. As of March 31, 2015, Nomura’s total client assets amounted to ¥109.5 trillion. This was twice the size of the balance of client assets of ¥54.6 trillion of the next largest company. Nomura Group Executives and Employees Are Citizens of More than 70 Countries Nomura Securities opened its first overseas office in New York in March 1927. Today, executives and employees working in Nomura Group are citizens of more than 70 countries. The goal of the Group is to create a corporate culture where staff with diversified backgrounds can mutually respect each other’s values and work together. 680,000 Persons Nomura Group has worked to spread knowledge and understanding of finance and economics since the 1990s. The number of persons who have attended educational programs, including sponsored lectures at universities, off-site lectures by Nomura staff for primary, junior, and high school students, and seminars for instructors and adult members, numbered 680,000 as of March 31, 2015. Thus far, about 23,000 Nomura management and staff served as guest lecturers. From 84 Employees to 28,672 Nomura Securities spun off from the Osaka Nomura Bank in 1925 with 84 employees. Now approaching the 90th anniversary of its founding, Nomura Group in Japan and the rest of the world has 28,672 (as of March 31, 2015) personnel. Number of Nomura Securities Branches in Japan: 159 Nomura Securities has 159 branches nationwide in Japan. In FY2014/15, Nomura held 3,233 seminars on Nippon Individual Savings Accounts (NISA), which provide tax exemption on investments by individuals. As of April 30, 2015, Nomura held 1,595 thousand NISA accounts. 44% of Nomura Executives and Employees Work outside Japan In recent years, the number of Nomura personnel working outside Japan has increased sharply, and, as of March 31, 2015, of 28,672 executives and employees at that time, 44% were in positions overseas (9% in the Americas, 12% in Europe, and 23% in Asia-Pacific). Nomura is molding this organization to be a company where a diversity of values is respected, and staff can collaborate across divisions and geographical regions. 23% 12% 9% 56% Japan EMEA Americas Asia-Pacific 4 5 Nomura Report 2015Nomura at 90 Years. The Road Ahead Financial and Non-Financial Highlights (US GAAP) For the fiscal years beginning April 1 and ending March 31 of the following year FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15 Billions of yen Major management indicators Major financial data Net revenue Income before income taxes Net income*1 Total assets Shareholders’ equity*2 Short-term unsecured debt Long-term unsecured debt Total risk-weighted assets*3 1,130.7 1,535.9 1,813.6 1,557.1 1,604.2 93.3 28.7 85.0 11.6 237.7 107.2 361.6 213.6 346.8 224.8 36,693.0 2,082.8 35,697.3 2,107.2 37,942.4 2,294.4 43,520.3 2,513.7 41,783.2 2,707.8 2,634.3 6,466.9 3,009.1 6,373.0 2,293.3 6,457.3 2,969.3 6,218.6 2,557.0 6,509.4 11,629.5 14,681.0 17,546.7 17,425.9 18,926.0 *1 Net income attributable to Nomura Holdings, Inc. shareholders *2 Total Nomura Holdings, Inc. shareholders’ equity *3 Figures for FY2010/11 were based on Basel II capital adequacy standards. Figures for FY2011/12 were prepared under Basel 2.5, and figures for FY2012/13 through FY2014/15 were prepared under Basel III standards. Per share data Net income—diluted Shareholders’ equity Cash dividends Income (loss) before income taxes by region Japan Americas Europe Asia-Pacific Sub-total Consolidated 7.86 578.40 8.0 148.8 4.4 (43.6) (16.3) (55.5) 93.3 3.14 575.20 6.0 214.1 (24.6) (91.5) (12.9) (129.1) 85.0 28.37 618.27 8.0 55.81 676.15 17.0 317.2 25.7 (93.1) (12.1) (79.4) 237.7 386.3 29.5 (48.9) (5.2) (24.7) 361.6 Yen 60.03 752.40 19.0 Billions of yen 363.2 (27.6) (23.5) 34.6 (16.4) 346.8 * Region information is based on US GAAP. Revenues and expenses are allocated based on the country of domicile of the legal entity providing the service. This information is not used for business management purposes. ROE Gross leverage (times) Leverage after adjustments (times)*1 Consolidated capital adequacy ratio*2 Tier 1 ratio*2 1.4 17.6 10.3 22.2 16.4 0.6 16.9 10.4 16.5 14.2 4.9 16.5 10.4 13.9 11.9 8.9 17.3 10.4 15.6 13.2 % 8.6 15.4 9.3 14.9 12.9 *1 Total assets minus securities purchased under agreements to resell and securities borrowed, divided by Nomura Holdings shareholders’ equity. *2 Figures for FY2010/11 were based on Basel II capital adequacy standards. Figures for FY2011/12 were prepared under Basel 2.5, and figures for FY2012/13 through FY2014/15 were prepared under Basel III standards. Number of employees Total Japan Americas Europe Asia-Pacific Members of the Board Board of Directors Outside Directors Non-Japanese Directors Female Directors Number of women in managerial positions Total Japan Americas Europe Asia-Pacific FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15 26,871 14,918 2,348 4,353 5,252 34,395 21,609 2,420 4,014 6,352 27,956 16,030 2,271 3,618 6,037 27,670 16,037 2,281 3,461 5,891 People 28,672 15,973 2,449 3,485 6,765 Unit June 30, 2011 June 30, 2012 June 30, 2013 June 30, 2014 June 30, 2015 People People % People % People % 14 8 57 4 29 1 7 11 7 64 3 27 1 9 11 6 54 3 27 1 9 11 6 54 3 27 1 9 12 7 58 3 25 1 8 FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15 898 173 159 317 249 1,064 1,055 1,031 205 243 325 291 219 234 315 287 218 234 290 289 People 1,234 236 250 311 437 Number of employees Number of women in managerial positions worldwide (People) 40,000 30,000 20,000 10,000 0 (People) 1,500 1,000 500 0 Net revenue (Billions of yen) 2,000 1,500 1,000 500 0 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) Segment income (loss) before income taxes (Billions of yen) Total assets (Trillions of yen) Income (loss) before income taxes by region (Billions of yen) 400 300 200 100 0 -100 50 40 30 20 10 0 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) 500 400 300 200 100 0 -100 -200 L Retail L Asset Management L Wholesale L Other L Retail L Asset Management L Wholesale L Other 6 L Japan L Americas L Europe L Asia-Pacific L Japan L Americas L Europe L Asia-Pacific L Japan L Americas L Europe L Asia-Pacific 7 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) Nomura Report 2015Nomura at 90 Years. The Road Ahead Message from the CEO Review of FY2014/15 Long-Term Management Vision Each of our businesses had a solid year in FY2014/15. In August last year, we announced a long-term Retail made progress in transforming its business management vision for 2020 in order to respond to the model. Retail client assets, one of our key performance evolving market conditions and changing client needs indicators, grew to ¥109.5 trillion, beating our target of while aiming for further sustained growth. We raised our ¥100 trillion one year ahead of schedule. EPS target from ¥50 to ¥100 and aim to achieve that Asset Management enhanced its investment level consistently. The initiatives underpinning this vision management expertise and reported ongoing inflows will pave the way to establishing a solid position as Asia’s both in Japan and overseas with assets under global investment bank. management reaching a record high. As part of our long-term management vision, we Amid challenging market conditions, our Wholesale announced a new slogan Vision C&C to express how we business saw improved profitability and franchise growth. see the current changing environment as a chance to High-profile mandates in Investment Banking and robust change ourselves and continue to grow. performance in Global Markets in AEJ drove overall performance. As a result of this momentum, we reported stronger revenues and income year on year, with net income of ¥224.8 billion at the highest level in nine years. Earnings per share (EPS)* was ¥60, above our FY2015/16 target of ¥50 set in 2012 for the second straight year. * Net income per share We continue to transform as we aim for sustainable growth based on our philosophy of “placing our clients at the heart of everything we do.” 8 9 Nomura’s Ideas: Looking to the Coming 100th AnniversaryNomura Report 2015 Message from the CEO To meet the needs of these investors, we are stepping up our consulting services tailored to the specific Diverse Talent In 1941, we became the first Japanese securities firm to start offering investment trusts. And in 1961, we requirements of each client. In April this year, The Our people are the key to realizing our long-term arranged the first ADR issuance by a Japanese company. Nomura Trust and Banking started offering inheritance- management vision. Over the years, we have achieved many firsts in terms of related services, and we established Nomura Institute of We are a diverse firm with about 29,000 people from products, services, and transactions. The environment Estate Planning. These are just some of the steps we are over 70 nationalities working in more than 30 countries. we operate in has changed constantly, and we have taking to build up our platform for the estate planning To meet the increasingly diverse needs of our clients, our continued to survive for 90 years thanks to our business. We aim to expand this business by fully diverse workforce by age, gender, and nationality must determination to take on new challenges and the intent leveraging our new platform and taking a consulting- make full use of their various backgrounds to continue to focus of Nomura people to “place our clients at the heart based sales approach to meet our clients’ needs. create new added value. of everything we do.” Addressing Challenges The second challenge we face is further improving the At Nomura, all employees have the opportunity to take The needs of society and our clients are transforming profitability of our international business. on new challenges to realize their full potential. We faster than we think. If we don’t move swiftly and We face two main challenges on the road to achieving International clients are increasingly looking to Nomura believe people become responsive to change by gaining respond accordingly, we won’t be valued by society or our long-term management vision. as some of our peers are reviewing their business models experience and overcoming individual challenges. our clients. As such, in our 90th year, we are transforming The first challenge is to transform our business model in light of new financial regulations around the world. in Japan. Economic conditions aimed at overcoming In response, we will focus on boosting the profitability deflation are currently taking hold in Japan thanks to of our international franchise. To do so, we will leverage Abenomics. We expect this positive momentum to our global network and invest resources in products continue at least until 2020 when the Tokyo Olympic and where we have a competitive advantage to deliver high- Paralympic Games are held. Historically, when value-added services to our clients while also managing economies shift from deflation to inflation, there is often costs stringently. an associated shift by investors away from savings and In EMEA, we are continuing to deepen our client into investments. Japan has over ¥1,700 trillion in franchise while controlling costs. In the Americas, the personal financial assets, the majority of which are held world’s largest fee pool, we will look at how to expand by senior citizens over 65. We expect these assets to our current footprint. AEJ offers medium- to long-term start being transferred to the next generation in various economic growth. We are laying the foundation to tap Nomura at 90 Years. The Road Ahead investment bank. ourselves and taking on new challenges. As we head towards our centenary, we remain focused on establishing a solid presence as Asia’s global This year we are celebrating our 90th anniversary. In 1925, Nomura Securities was spun off from Osaka Nomura Bank. We were a latecomer to the Tokyo market, and our most-important mission at the time was to gain client recognition by responding accurately to their needs. Each Nomura employee committed to give their all for our clients and remain positive no matter how difficult the environment became. That is the Nomura Group CEO Koji Nagai forms, including as real assets such as real estate. into this growth by planting the seeds for our Retail and DNA. This trend from savings to investment combined with Wholesale integrated business model through alliances the significant needs around inheritance, and retail and other measures with local financial institutions. investors in Japan are becoming increasingly interested in managing their assets. 10 11 Nomura’s Ideas: Looking to the Coming 100th AnniversaryNomura Report 2015 Introducing New Members of the Advisory Board Nomura Holdings formed its Advisory Board in 2001 to act as a consulting body to its Executive Management Board, which is the decision-making body for the conduct of business activities. Nomura’s Outside Directors draw on their professional knowledge and oversee the conduct of business activities from an external perspective. On the other hand, the members of the Advisory Board, who have been selected from among persons outside Nomura Group with outstanding insight into business management, provide advice and suggestions for the development of Nomura’s business activities from an overall perspective. In FY2015/16, Nomura welcomed four new members, with outstanding qualifications, to its Advisory Board from other parts of Asia. These new members are not only familiar with conditions in their respective countries, but also have depth of insight from a global perspective. They will provide both detailed advice on business development appropriate to the conditions in various countries and offer advice related to establishing Nomura’s solid position as Asia’s global investment bank. Mr. Goh Chok Tong (Singapore) Mr. Sofjan Wanandi (Indonesia) Mr. Deepak Parekh (India) Mr. Kan Trakulhoon (Thailand) Emeritus Senior Minister of Singapore Prime Minister of Singapore from 1990 to 2004 and Senior Minister from 2004 to 2011. He has been Emeritus Senior Minister of Singapore and Senior Advisor to the Monetary Authority of Singapore since 2011. Senior Advisor to the Vice President of Indonesia Former Chairman of APINDO (Indonesian Employers Association) and founder of the Santini Group. He has been Senior Advisor to the Vice President of Indonesia since November 2014. Chairman of HDFC Group Chairman of HDFC since 1993. He has successively filled roles on various high-powered economic groups, government-appointed advisory committees, and task forces. President and CEO of SCG President and CEO of SCG since 2006. Established in 1913, SCG is one of Thailand’s most- reputable industrial conglomerates. He was recently awarded the 2014 Deming Distinguished Service Award for Dissemination and Promotion (Overseas). From left: Mr. Deepak Parekh, Mr. Goh Chok Tong, Group CEO Koji Nagai, Group COO Atsushi Yoshikawa, Mr. Sofjan Wanandi, Mr. Kan Trakulhoon 12 Special Feature COO and Regional CEO Roundtable Establishing dominant position as Asia’s global investment bank through closer cross-divisional and cross-regional collaboration. Front row: Group COO Atsushi Yoshikawa, Back row from left: Regional CEO, Asia ex-Japan, Minoru Shinohara (at the time of the roundtable, currently, Executive Chairman, EMEA), Regional CEO, EMEA, Jonathan Lewis, Regional CEO, Americas, David Findlay Improving profitability Atsushi Yoshikawa, COO: our Wholesale business. Third, reallocating management resources. In Wholesale, we focused on improving profitability by implementing an additional $1 billion of When I took over as President and Group COO and cost cuts to lower our break-even point while deploying Wholesale CEO in August 2012, we faced a challenging resources to areas where we have a competitive market environment. We had already taken out $1.2 billion advantage. These initiatives, coupled with contributions in costs to combat the decline in global fee pools, but our from Retail and Asset Management and spurred on by a cost base still remained high. Our earnings per share global stock market rally and yen depreciation, helped us (EPS) was languishing in single digits. We had to take beat our FY2015/16 EPS target two years in a row. swift action. We set a management target of achieving We still need to work on improving the profitability of EPS of ¥50 by the year ending March 2016, our 90th our international franchise. That said, our client base in anniversary. We had to be responsive to the changing Global Markets and Investment Banking has grown environment and the evolving needs of our clients. We significantly, and we have diversified our revenue streams had to become flexible enough to continue transforming and spread risk. Today, I’d like to take a look back at ourselves under our Fit for the Future program. what each region has focused on and the results they We focused on three initiatives. First, enhancing our have achieved. domestic business. Second, improving the profitability of N o m u r a ’ s I d e a s : L o o k n g i t o t h e C o m n g i 1 0 0 t h A n n v e r s a r y i 13 Nomura Report 2015 Special Feature COO and Regional CEO Roundtable Our philosophy of “Placing Our Clients at the Heart of Everything We Do,” which is born out of our founder’s principles, is alive and well around the world, underpinning our interactions with clients. and Nomura Corporate Research and Asset Management Markets divisions ever closer. Second, we have (NCRAM) successfully grew assets under management reorganized the Financial Institutions Group, assigning from institutional investors. dedicated account champions who collaborate across Minoru Shinohara, AEJ: products, divisions, and regions to best serve our clients. Finally, we continue to build upon our strengths, One unique feature of our Asia business is that besides connecting markets east and west and delivering the institutional clients we have a significant Wealth firm’s global products and services to our European Management business. Wealth Management is clients. continuing to grow as we offer high-net-worth clients in Asia global products from our Wholesale business, such Atsushi Yoshikawa, COO: as FX, fixed income, and equities products. When working with clients, we keep a close eye on The Taiwanese asset management firm we acquired changing market structures and client needs in order to from ING Group in April 2014 and Capital Nomura deliver high-quality services backed by controlled risk Securities, the listed securities firm in Thailand that taking to also ensure we deliver added value for our became a subsidiary in June 2014, both delivered solid stakeholders. performances and supported the overall performance of AEJ. We now aim to step up collaboration between these businesses and our Wholesale business. Achieving our long-term vision target Atsushi Yoshikawa, COO: Group COO, Atsushi Yoshikawa Minoru Shinohara, AEJ: designed to mitigate the impact of market volatility. Jonathan Lewis, EMEA: We achieved our FY2015/16 target of EPS of ¥50 for two In Asia ex-Japan (AEJ), last year we had our most- Significant revenue initiatives, such as strategically Delivering value to our stakeholders by addressing consecutive years. So, we decided to set out our profitable year since the global financial crisis. This was building upon our Moody’s upgrade, have enabled us to revenues and costs, positioning the European business direction for the longer term. With that in mind, in August due to three key drivers. First, we played to our strengths strengthen our client-driven franchise model and onboard on a sustainably profitable footing, continues to be our last year, we announced our long-term vision, which sets focusing on Fixed Income products, such as FX, Rates, new accounts in areas that require creditworthiness, priority. a new target of EPS of ¥100 by 2020. and Credit, while also ensuring close collaboration such as the derivatives business, deepening our Examples of initiatives being taken include our To reach that target, it is critical that we improve the among our Research, Trading, Sales, and Structuring relationships with real money accounts across EMEA. origination-led growth strategy, which brings the best-in- profitability of our international business. I’d like to ask teams. Second, we saw results from cross-border Closely managing the rate of our expense growth while class abilities of our Investment Banking and Global each of you to briefly discuss your regional strategy. collaboration. We acted as financial advisor on some ¥1 looking for new sources of revenues has been imperative, trillion-plus M&A transactions that were the result of close and we remain dedicated to controlling costs, which cross-border collaboration. In January, ITOCHU continue to decline. Action is being taken in areas without Corporation and Charoen Pokphand Group, Thailand’s a competitive advantage, insufficient scale or with poor largest conglomerate, announced an investment in CITIC returns against financial resources. Underperforming Limited, China’s largest state-owned conglomerate. businesses continue to be scrutinized. Third, we stepped up cross-divisional collaboration to deliver high-value-added services to our clients. David Findlay, Americas: In the Americas, we didn’t acquire the Lehman Jonathan Lewis, EMEA: businesses so we have been building our platform In EMEA, we also made progress in improving organically since 2009. We have significantly increased profitability. We were quick to perceive changes in the our client business and expanded our range of products. market and successfully diversified away from our This has helped us increase revenues each year. The dependence on the Credit business by further developing build-out of our Fixed Income and Equities franchises is our Foreign Exchange and Emerging Markets’ franchise, largely complete, and last year we made selective hires in to build out a more-balanced core operating model, Investment Banking. Instinet’s revenues have increased, We will emphasize our agency businesses relying on our client advisory skills to assist them to prosper in difficult markets. Regional CEO, Americas, David Findlay 14 15 Nomura’s Ideas: Looking to the Coming 100th AnniversaryNomura Report 2015 Special Feature COO and Regional CEO Roundtable Minoru Shinohara, AEJ: a granular level are analyzed in terms of both absolute Countries in Asia are at different stages of development profitability and returns on resources. and market structures differ greatly. So, we have to correctly understand the difference of our clients and David Findlay, Americas: their individual needs. Fixed Income, Equities, Investment In the past, the Americas business relied heavily on Banking, and Wealth Management have to work together Securitized Products, but we are now consistently to deliver high-value-added solutions to our clients. coordinating the growth of our revenue streams and As Asia’s global investment bank, we aim to provide diversifying where necessary. We are doing so because Asian products to our global client base and global we believe that sufficient diversification will address risks products to our clients in Asia. Roughly half of our arising from rapidly changing market segment conditions. business is cross-border, and we want to increase that As we head towards 2020, we aim to further develop further. At the same time, we recognize the importance of each of our revenue drivers to ensure consistency in upholding the highest ethical standards and stringent risk earnings. That requires us to further enhance our client management. franchise and grow our client businesses. Moody’s credit rating upgrade improved the position of our credit ratings We are building long-term relationships of trust with clients based on a philosophy of “Asian spirit, global skills.” The road to our 100th anniversary in 2025 Jonathan Lewis, EMEA: in relation to our competitors and some of our European Minoru Shinohara, AEJ: Regional CEO, Asia ex-Japan, Minoru Shinohara (at the time of the roundtable, currently, Executive Chairman, EMEA) to maintain balance with diversified business models, different revenue and profit streams, tailored risk management, and a thoughtful and responsive approach A sustainably profitable foundation in EMEA is crucial to and U.S. peers have been scaling back or exiting certain We consider Asia including Japan as our home market. to different regulatory environments. achieving our ¥100 EPS target. In a challenging market businesses due to regulatory requirements. That means We have a geographic advantage in the region and build To better serve our clients, we will emphasize our environment, we are looking to continue to grow our we are well positioned to win business from clients who long-term relationships of trust with clients based on a agency businesses, relying less on our balance sheets business in areas of competitive strength, such as are looking to diversify the counterparties they transact philosophy of “Asian spirit, global skills.” We leverage our and more on our client advisory skills to assist them to financing by European financial institutions aimed at with. global platform to high-value-added solutions and prosper in difficult markets. While it is impossible to do enhancing capital levels, multi-product M&A transactions, In Investment Banking, we have selectively increased services to our Asian clients. everything at once, we are focused on planning for the and underwriting bond issuances by government entities. the number of bankers and increased per capita We will witness the internationalization of Japanese future, and our long-term goals are crystal clear. We We also endeavor to optimize our cost base in line with productivity. These actions have more than tripled institutional and retail investors. Investing abroad, believe we are on the right path to achieve them. the revenue opportunity and reduce volatility to protect us revenues over the past four years, while headcount has whether in Asia, Europe, or the United States, will be the from down-side risk. Over the past three years, we have increased by about 1.7 times. Looking ahead, we aim to order of the day. I am confident we will be a strong driver Atsushi Yoshikawa, COO: taken significant costs out of the region, and we remain continue to build on this momentum and deliver further and supporter of these trends and am solidly optimistic Thank you all for your time today. It was evident from committed to further efficiencies. Individual businesses at value to the Group. about the coming decade. your responses that our philosophy of “Placing Our Nomura’s European franchise is critical to our east-west strategy. Regional CEO, EMEA, Jonathan Lewis 16 Clients at the Heart of Everything We Do,” which is born Jonathan Lewis, EMEA: out of our founder’s principles, is alive and well around Last year, Nomura celebrated its 50th anniversary of the world, underpinning our interactions with clients. being in Europe. Despite the Eurozone’s political To further improve the profitability of our international challenges, Nomura’s European franchise is critical to our business, the regional management team must work east-west strategy. Our mission is to position the even closer with the business line heads to take our European business on a profitable stand-alone basis and matrix management approach to the next level. By to increase cross-border flows further. We must develop ensuring closer cross-divisional and cross-regional a culture which ensures top-quality service for our clients, collaboration, we will be able to better understand the attracts talented employees, and delivers the best of increasingly complex and sophisticated needs of our Nomura to all our internal and external stakeholders. clients and provide them with the value-added products and services they are looking for. David Findlay, Americas: We have embarked on an integrated expansion program requiring skillful execution. We understand that we need 17 Nomura’s Ideas: Looking to the Coming 100th AnniversaryNomura Report 2015 Message from the CFO Building on our strengths as a global financial services group by allocating resources efficiently in line with changes in the operating environment and further developing our dialogue with stakeholders. Unsecured debt (Billions of yen) 10,000 8,000 6,000 4,000 2,000 0 Shigesuke Kashiwagi Chief Financial Officer Gross leverage (%) 20 (Times) 20 16 16 12 12 8 4 0 8 4 0 Total risk-weighted assets and Tier 1 ratio* (Billions of yen) 20,000 16,000 12,000 8,000 4,000 0 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) L Long-term unsecured debt L Short-term unsecured debt L L L Total risk-weighted assets (left scale) L P R Tier 1 ratio (right scale) 18 * Figures for FY2010/11 were based on Basel II capital adequacy standards. Figures for FY2011/12 were prepared under Basel 2.5, and figures for FY2012/13, FY2013/14, and FY2014/15 were prepared under Basel III standards. Robust Financial Position, Revenue Growth As of March 31, 2015, we had total assets of ¥41.8 trillion and shareholders’ equity of ¥2.7 trillion. Our gross leverage was 15.4 times. Our Tier 1 ratio under Basel III was 12.9%, or 12.4% on a fully loaded 2019 basis, which places us among the industry leaders. The liability side of our balance sheet is dominated by long-term debt, and we have diversified our sources of funding, in terms of products, markets, and currencies. With a high-quality liquidity portfolio of ¥6.1 trillion as of the end of March 2015, we are positioned to continue operations for one year without the need for additional unsecured funding or selling assets, even under stressed market conditions. This robust financial position is a major competitive strength that benefits our clients by allowing us to deliver the best products and services tailored to their diverse requirements. In FY2014/15, Moody’s Investors Service upgraded Nomura Securities’ long-term credit rating to A3. This has enabled us to expand our client business and the scope of our transactions. Our decisions to conduct reviews of business performance and link compensation to performance have had a clearly positive impact in increasing the profitability of our overseas operations. Shareholder Returns To date, one of our indicators for shareholder returns has been a full-year consolidated payout ratio of 30%. To increase transparency of dividend payments, we will apply this indicator on a semi-annual basis from this fiscal year. We will determine dividends taking into account regulatory trends in Japan and overseas, our consolidated performance, and other factors. For the fiscal year ended March 2015, we declared a dividend of ¥19 per share, ¥2 per share higher than in the previous fiscal year. In addition, we conducted a share buyback program as part of our efforts to raise capital efficiency and ensure a flexible capital management policy. Looking ahead, to move toward our EPS target for 2020 of ¥100 in net income per share, we will continue to invest in businesses with strong earnings and growth potential and deliver appropriate returns for our shareholders, taking into account our share price and regulatory capital requirements. Dialogue with Stakeholders An increasing number of investors have indicated their intention to accept the “Principles for Responsible Institutional Investors” contained in Japan’s Stewardship Code. Progress is being made toward creating an environment where investors can contribute to fostering investee companies’ corporate value in the medium-to- long term based on in-depth knowledge and high-quality dialogue. To formulate and implement our financial strategies from a broader perspective, we will work to enhance communication with a range of stakeholders, including shareholders, business partners, rating agencies, financial regulatory authorities around the world, ESG research organizations*, and others. * Organizations that conduct research and provide information to investors and others on the performance of corporations in the areas of ESG (Environment, Social, and Governance). 19 Nomura’s Ideas: Looking to the Coming 100th AnniversaryNomura Report 2015 Company Segments L Retail Nomura offers high-quality investment information and a diverse range of financial products and consulting services through its head office and its nationwide branch network, “Nomura Net & Call” call centers, Internet websites, and other media to meet the increasingly diverse and sophisticated needs of its individual and corporate customers. Nomura also develops Wealth Management Business in Japan and Asia. L Asset Management With Nomura Asset Management as its core, Nomura’s asset management business operations are global in scope and they provide both products and services. • Assets under management: ¥39.3 trillion (as of March 31, 2015) • Investment trusts business: Offers a wide lineup of products to meet diverse clients’ needs through a broad range of channels, L Wholesale Wholesale comprises Global Markets and Investment Banking, which provide a wide spectrum of services to such customers as domestic and overseas industrial corporations, government organizations, and financial institutions. • Global Markets: Provides research; syndication, sales, and trading in various financial products; and other services on a global scale mainly to domestic and overseas institutional investors. • Number of offices: 159 (including head office and branches) • Retail client assets: ¥109.5 trillion (As of March 31, 2015) such as securities companies (including Nomura Securities), commercial banks, post offices, and insurance companies. • Investment advisory and overseas business: Provides high- quality products and asset management services to a broad spectrum of institutional investors, including pension funds in Japan and overseas, government organizations, central banks, commercial banks, and insurance companies. • Investment Banking: Provides various investment banking services, including underwriting services for bonds, equities, and other securities; proposals for risk solutions; and M&A advisory services to a wide range of clients in Japan and overseas. Value Creation Flow: Placing Our Clients at the Heart of Everything We Do External Environment L Retail L Asset Management L Wholesale Income before income taxes ¥161.8 billion 16% decrease year on year Income before income taxes ¥32.1 billion 18% increase year on year Income before income taxes ¥82.2 billion 26% decrease year on year (Billions of yen) (Billions of yen) (Billions of yen) (Billions of yen) (Billions of yen) (Billions of yen) 600 400 200 0 240 100 40 800 160 80 75 50 25 30 600 20 400 10 200 0 0 0 0 150 100 50 0 -50 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) L L Net revenue (after interest expense) (left scale) L L Non-interest expenses (left scale) L Income before income taxes (right scale) Nomura Group Competitiveness Ending deflation Aging society Economic growth in Asia Regulatory trends Financial Capital Intellectual Capital Human Capital Social-Related Capital Toward realizing our long-term management vision 1 2 Reforming our business model in Retail Division More stable earnings base overseas Measures to implement • Further development of consulting sales • Expansion of services to meet clients’ needs (Inheritance matters, real estate, business succession) • Strengthening of asset management capabilities, expansion of sales channels • Optimization of the business portfolio • Collaboration among divisions and regions • Thorough penetration of risk culture CHANCE CHANGE “We turn changes in the operating environment into business chances by boldly changing ourselves.” Achievement of EPS of ¥100 by 2020 Contribution toward affluent society and sustainable economic development 20 21 Review of Operationsp. 22p. 26p. 30Nomura’s Ability to Get Things DoneNomura Report 2015 Retail Highlights Retail Business Model Income before income taxes ¥161.8 billion Retail client assets ¥109.5 trillion Number of offices 159 (including head office and branches) All accounts held at securities companies in Japan (As of March 31, 2015) Source: Japan Securities Dealers Association website Nomura Securities 23% 5,294 thousand accounts 22,807 thousand accounts Clients Channels Individual investors Government agencies Regional financial institutions Legal entities Educational institutions 159 branches and offices located nationwide Call centers Internet websites Our Products and Services Our Strengths Our Focus Equities Bonds Investment trusts Insurance Real estate (agency services) M&A advisory Inheritance and business succession related services Sophisticated consulting services Enhancing in-depth identification closely tailored to client needs of customer needs Strong product and service delivery capabilities in collaboration with our Expanding recurring revenue from increasing client assets Wholesale Division Market Environment and Results in FY2014/15 During FY2014/15, the domestic economy got off to a slow start along with concerns about the slowing U.S. and Chinese economies and the slump due to the increase in Japan’s consumption tax rate to 8%. Thereafter, positive expectations rose from a number of factors, including the prospects for an early increase in interest rates in the United States and expectations of monetary easing in Europe. These developments brought a rising trend in Japanese stock markets, which was reinforced by additional monetary easing by the Bank of Japan in October 2014 and reports that the Government Pension Investment Fund would expand its investments in domestic equities. As a result, markets became increasingly active. Amid this operating environment, Retail reported ¥476.5 billion in net revenue and income before income taxes of ¥161.8 billion, the third-highest level since Nomura began to disclose financial data by operating segment in FY2001/02. As to Nomura’s client base, the number of accounts with balances increased about 110,000 over the previous fiscal year, thus bringing the total as of March 31, 2015, to 5.29 million. Client assets rose ¥17.8 trillion, to ¥109.5 trillion over the previous fiscal year. Retail client assets (Trillions of yen) 109.5 91.7 83.8 70.6 72.0 Other*2 Overseas mutual funds Bond investment trusts Stock investment trusts Domestic bonds*1 Foreign currency bonds Equities 120 90 60 30 0 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) *1 Includes CBs and warrants *2 Includes variable annuity insurance Accounts with balances (Thousands) 5,500 5,294 5,182 5,000 4,936 5,063 4,985 4,500 4,000 0 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) Toshio Morita Retail CEO The Retail Division conducts transactions in a diverse range of financial products and offers other services through its network of 159 locations and Nomura Net & Call (Internet-based platform and call centers) in Japan. As of March 31, 2015, Nomura held 5.29 million client accounts with balances, which represented 23% of securities accounts in Japan, and had client assets of ¥109.5 trillion. Along with the time changing, the environment around our clients is undergoing major change. As clients’ needs become increasingly complex and urgent, Nomura gives responsive attention to the views and requirements of clients with its enhanced lineup of services and products. We will expand our business by meeting the needs of clients made apparent through our sincere interviews. 22 23 Review of OperationsNomura’s Ability to Get Things DoneNomura Report 2015 Retail To give in-depth responses to clients’ concerns and needs, Nomura is working to “win greater trust among clients” and “expand business activities.” As a result of the aging of the population and changes in the tax system in Japan, clients’ ideas about their assets have become more diverse. It is, therefore, becoming increasingly necessary to ask individual clients about the composition of their families, their personal plans going forward, and other matters to provide them with detailed consulting services. To offer appropriate advice, we make use of our Asset Design Services, which provide simulations of individual clients’ life plans. In addition, we make use of our Asset Portfolio Reports, which grip and analyze all the assets of our clients, including those held by other institutions, to provide periodic follow-up advice on asset management. Next, we interview our clients to determine their financial needs and risk tolerance, and, through the use of a wrap account (Nomura Separately Management Accounts (SMAs) and the Nomura Fund Wrap) that can handle various types of assets, we offer suggestions for medium- to long-term diversified asset portfolios. Also, drawing on Nomura research, we may suggest expansion of the portfolio to include foreign assets to meet global investment needs. Approach to Nippon Individual Savings Accounts (NISA) Japan’s NISA system (tax-exempt accounts for investment by individuals), which was introduced in January 2014, encourages the proper flow of funds and contributes to the realization of an affluent society. Nomura has maintained its position as the leading provider of these accounts with 1.52 million applications Consultation at sales branch Interview response form for developing customer investment strategies 24 from the start of the NISA system. For customers with scarce experience in investing, Nomura suggests its “Fund Ruito,” which enables customers to make regular purchases through these accounts in predetermined amounts. Through these and other services, Nomura will continue to contribute to asset formation through NISA. Making More Fundamental Business Model Reforms Beginning in August 2012, the Retail Division took initiatives to reform its business model to respond to changing customer needs more accurately. Under these reforms, Nomura has established two basic objectives. The first is to “winning greater trust among clients,” and the second is “expanding business activities.” Numerical targets include increasing client assets to ¥150 trillion by FY2019/20 and boosting recurring revenues (revenues linked to assets, such as fees from investment trusts) to cover 50% of operating costs. At present, Nomura is launching a range of new products and services and working to structure the necessary platforms with the aim of making more fundamental reforms in its business model. Expansion in Inheritance-Related Services Beginning in April 2014, Nomura began to offer an “Asset Succession Anshin (Reassurance) Pack,” a service to provide comprehensive support to customers for considering and taking action regarding inheritance matters. This service comprises an “Asset Succession Anshin (Reassurance) Report,” which is prepared under the supervision of a tax accounting company, and a “Last Will and Testament Kit,” which provides assistance in preparing wills. For customers desiring more-detailed advice, Nomura also provides introductions to tax accountants and others. On April 1, 2015, Nomura Holdings established Nomura Institute of Estate Planning, as a wholly owned subsidiary. This new company conducts surveys and research on asset and business succession and seeks to disseminate information through reports and publications as well as provide consulting services to customers. Accompanying the establishment of Nomura Institute of Estate Planning, on the same day, under the Nomura brand, we began to offer services related to inheritance matters, including inheritance trusts, estate settlement services, and support for asset succession planning through the Nomura Trust and Banking Co., Ltd. Seminars Offering Advisory Services Nomura has been holding seminars on such themes as inheritance, donations, and wrap accounts that are of strong interest to its customers since February 2014. These Advisory Service Seminars are also combined with individual consulting sessions. Thus far, these seminars have been held about 12,000 times nationwide and have been attended by about 100,000 customers. Initiatives Aiming at an Increase in Customer Satisfaction Beginning with the fiscal year ended March 31, 2011, the Retail Division has convened its once-a-month Customer Satisfaction Improvement Liaison Committee with members including the CEO of the Retail Division and other directors of the division. In meetings of this committee, issues communicated via Nomura’s customer advisory office, the call centers, and websites, including complaints, opinions, and requests, are given consideration, and initiatives are taken to make improvements in products, services, systems, and other aspects of Nomura’s activities. In addition, customer satisfaction surveys about each salesperson responsible for Retail activities were conducted for the third time in February 2015. Assessments and opinions received from customers are shared internally, and we work to increase customer satisfaction. In addition, the Branch Customer Satisfaction Survey, conducted by branches among their customers, was implemented during the fiscal year under review with 38,492 persons as respondents (Details on results of the survey may be found on page 66.). Management, the head office, and branches share information on issues raised by the survey and consider ways of making improvements and offering higher-quality services. Response to a Broad Range of Needs To respond to the increasingly broad range of customer needs, Nomura has begun to expand its business activities into new fields. In November 2014, to make introductions of customers to real estate companies, Nomura established the Real Estate Operations Department. In addition, to respond to rising needs for services related to business succession, the number of personnel in M&A-related departments has been increased, and the number of M&A intermediary cases has steadily increased. Asset Design Tool installed on salespersons’ tablet PCs N o m u r a a t 9 0 Y e a r s . T h e R o a d A h e a d Further Development of High-Net-Worth Business in Asia As Nomura has worked toward its objective of being “Asia’s global investment bank,” within the Retail Division, Asia Wealth Management exists to provide services to high-net-worth customers in Asia. The Wealth Management business has provided Japanese top-level fund management and administration services comprehensively in major Asian countries beginning in the 1960s when Nomura began to establish overseas entities. Nomura Group will focus sharply on identifying the needs of its clients based on its principle of “Placing Our Clients at the Heart of Everything We Do,” and develop and offer solutions needed by each of the clients. Looking to the years ahead, we will work to build a strong brand not only in Japan but also in all regions of Asia. Nomura Wealth Management Office in the Marina Bay Financial Centre in Singapore 25 Review of OperationsNomura’s Ability to Get Things DoneNomura Report 2015 Asset Management Highlights Asset Management Business Model Income before income taxes ¥32.1 billion Assets under management ¥39.3 trillion Share of ETFs in Japan Source: The Investment Trusts Association, Japan 47.9% Share of public investment trust market in Japan (As of March 31, 2015) Source: The Investment Trusts Association, Japan Nomura Asset Management 24.0% * Japan’s Stewardship Code specifies the responsibilities of institutional investors to enhance the medium- to long-term investment return for their clients and beneficiaries by improving and fostering the investee companies’ corporate value and sustainable growth through constructive engagement, or purposeful dialogue, based on in-depth knowledge of the companies and their business environment. Clients Channels Individual investors Domestic and overseas pension funds, Governments and central banks, and Institutional investors, etc. Domestic investment trusts: Securities companies, banks, Japan Post Bank, insurance companies, and other intermediary sales companies Domestic investment advisory: Direct sale of services to pension funds, institutional investors, etc. Overseas business: Intermediary sales companies and direct sales of services to pension funds, institutional investors, etc. Our Products Our Strengths Our Focus Domestic equities and bonds Asian equities and bonds Global equities and bonds Balanced funds Absolute profit type investments Sophisticated in-house asset management and research, multi- manager fund management systems Capabilities for global product development and supply Capabilities for providing passive/ ETF investments Further improving fund performance Strengthening capabilities for providing product matching customer needs Establishing a highly transparent corporate governance structure Assets under management* (Trillions of yen) 39.3 30.8 27.9 24.7 24.6 40 30 20 10 0 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) * Net after deduction duplications from total assets under management of companies that belong to the Asset Management Division Market Environment and Results in FY2014/15 The investment environment continued to improve as the Bank of Japan’s bold quantitative easing policy continued and expectations of economic recovery ran high in Japan and overseas. As of March 31, 2015, the overall balance of funds in publicly offered investment trusts was about ¥97 trillion, an increase of about 21% over the previous fiscal year-end. In the Asset Management Division, net revenue after the deduction of interest expense in FY2014/15 was ¥92.4 billion, representing a gain of 15% over a year earlier, and income before income taxes was ¥32.1 billion, 18% above the prior year. Total assets under management at fiscal year-end were the highest in Nomura’s history, ¥39.3 trillion, an increase of ¥8.5 trillion over the previous fiscal year-end. In the investment trust business, we offered new funds to meet customer needs and worked to expand the balance invested in existing funds. Investor funds flowed into investment trusts placing their resources in infrastructure-related equities, global high dividend yield stocks, and funds aiming for overall return by capital gain, income gain, and foreign exchange gains in FY2014/15. Among ETFs (Exchange-Traded Funds), in addition to conventional index-linked investments, differentiated funds, such as ETFs linked to the JPX-Nikkei Index 400 and the Nikkei Average Leveraged Index, also drew attention. As a result, the balance of assets under management in ETFs as of March 31, 2015 amounted to ¥6.2 trillion. Kunio Watanabe Asset Management CEO Nomura’s Asset Management Division aims to provide optimal performance for its clients to help them reach their investment objectives. To this end, we provide a wide range of differentiated investment products, and work to improve our capabilities for proposing products and services that respond to changing asset management needs of individual customers. While the asset management industry is expected to expand in the medium term, many asset management methods are being developed, and competition is becoming more intense. Our objective is to win the trust of the world’s investors by enhancing our management and proposal development capabilities as a differentiated asset management company in Asia. In addition, by following Japan’s Stewardship Code*, which provides rules for investors, we encourage proper corporate governance functions at investee companies and expand investment returns for beneficiaries through increasing the corporate value of investee companies. In parallel with this, we want to contribute to the proper formation and development of securities markets. 26 27 Review of OperationsNomura’s Ability to Get Things DoneNomura Report 2015 Asset Management To respond to the increasingly diverse needs of our clients, we have assembled a lineup of differentiated products and proactively offer investment recommendations. In addition, as an asset management company, we are strengthening our corporate governance structure to better fulfill our fiduciary responsibilities. In the investment advisory business, assets held in management trusts investing in Japanese equities, high- yield bonds, and other instruments increased mainly by institutional investors in Europe, the Americas, and Asia except Japan. In addition, we began to accept funds in management trusts from Central America and South America. Also, the balance of funds investing in Japanese stocks and U.S. high-yield bonds that have received UCITS certification (For further information, please refer to the column article “UCITS Driving Overseas Business” of this report on page 29.) increased not only from investors in Europe but also from elsewhere in Asia, including Singapore, South Korea, and Taiwan, as we expanded our channels for attracting investments from these areas. As a consequence, the overall balance of assets in the investment advisory business expanded. We also took initiatives to expand into new business domains. In April 2014, we acquired the asset management business of the ING Group in Taiwan (currently, Nomura Asset Management Taiwan Ltd.) and began a full-scale entry into the asset management business in Taiwan. In addition, in June 2014, we established an office in Dubai with the objective of strengthening our presence in the Middle East. Also, in August, we concluded an alliance with Bridge Capital, which provides hedge fund incubation services, and in September, we formed a joint venture to manage private equity funds in China (Nomura China Asset Management Co., Ltd.). Meeting Customer Needs To deepen the understanding of features of investment trusts, their inherent risk, and other related matters, as well as to gain a better understanding of customer needs, Nomura holds annually about 8,000 seminars and study group meetings for individual investors and partner companies acting as intermediaries in the sale of investment trusts. These are held in Nomura branches nationwide in Japan and in other sales channels for securities, such as other securities companies, banks, and Japan Post Bank. In addition, to respond to inquiries from individual investors and intermediary partners regarding investment trusts, we provide a dedicated telephone support service free of charge. The opinions and requests obtained through this channel are shared with related departments and used in developing products as well in further raising service quality. To meet the various needs of regional financial institutions increasing from the recent monetary easing, we are not only developing products that respond to risk and return requirements of individual clients but also actively proposing high-value-added solution services. Responsible Investing Initiatives Nomura Asset Management is a signatory institution to the United Nations Principles for Responsible Investment, and, when conducting its activities, takes account of social responsibility. We are also taking initiatives to address issues relating to the environment, social, and governance (ESG), and our internal Responsible Investment Committee meets twice a year in principle for discussing these issues. In May 2014, we gave notice of its acceptance of Japan’s Stewardship Code, which was prepared by Japan’s Financial Services Agency. As a responsible institutional investor, we aim to encourage investee companies to strengthen their governance structures to achieve sustainable growth and increase investment returns to beneficiaries in the medium term. Moreover, to maintain its own corporate governance structure, Nomura Asset Management appointed two outside directors in June 2015 who are independent of Nomura management and principal shareholders. 28 Future Activities Offering Differentiated Products with High Performance Nomura’s Asset Management Division offers products that are differentiated while also delivering highly competitive investment performance and aims to propose investments that meet customer needs. In addition to assisting clients in investing in Japanese and other Asian equities, where we have extensive experience and a proven track record, we offer investments in high- yield bonds that require a high level of professional skills and absolute profit type investments. We also offer fundamentals-based index investing (also known as “smart beta indexed” investments) and investments in ETFs that offer low cost and high liquidity. We are continuing to work to expand our lineup of differentiated investment products. Favorable Support from the Regulatory Side In Japan, the asset management business is also benefiting from support from the regulatory environment. The Nippon Individual Savings Account (NISA) program, which was introduced in January 2014, provides tax exemption on investments by individuals. Plans now call for raising the upper limit on these accounts and establishing a “Junior NISA” program for much younger generations. In addition, as a result of revisions in defined contribution pension plans, government workers and housewives will be allowed to place funds in these pension accounts. These regulatory developments, reflecting governmental support, are expected to boost the growth of the asset management business. To respond to these expectations, Nomura is working to further improve its asset management and proposal delivery capabilities, respond to the full range of customers’ asset management needs, and, thereby, fully meet its fiduciary responsibilities. Investment stock selection committee meeting Morningstar “Fund of the Year 2014” award ceremony N o m u r a a t 9 0 Y e a r s . T h e R o a d A h e a d UCITS Driving Overseas Business UCITS stands for “Undertakings for Collective Investment in Transferable Securities” and is a general term referring to funds that meet the criteria established in European Union Directives that aim to allow collective investment schemes that have been approved and authorized in one EU country to operate freely throughout the EU. UCITS is part of a “basic investment trust framework” focused on the EU, but has also been adopted in countries in Asia and Latin America. This is a very convenient arrangement for marketing and developing global investment funds. As of March 31, 2015, Nomura Asset Management had a total of 22 funds, including 17 funds based in Ireland and 5 in Germany, and these are registered and sold in 19 countries around the world. The balance of assets in these funds as of March-end 2015 was about ¥860 billion. In particular, the balance of assets invested in Japan equity, high-yield bond, and certain other funds that are highly competitive is expanding and is expected to drive the growth of Nomura’s overseas business activities. Prospectus for UCITS-certified fund 29 Review of OperationsNomura’s Ability to Get Things DoneNomura Report 2015 Wholesale Highlights Wholesale Business Model Income before income taxes ¥82.2 billion Share of global fee pool Source: Nomura 3.2% Standing in the Japan ECM League Table (April 1, 2014 to March 31, 2015) Source: Thomson Reuters 1st (Share: 38.2%) Japan-Asia Related M&A Deals Advisory (January 1 to December 31, 2014) Source: Thomson Reuters Share: 30.8% Tetsu Ozaki Wholesale CEO To reach Nomura Group’s target of ¥100 in earnings per share ahead of plan, Wholesale is working to expand its market share and increase productivity as quickly as possible. In capital markets, interest rates in the industrialized world are at lower levels than at any time in the past, and liquidity has markedly declined. The needs of capital market clients are expanding and becoming more diverse. Accordingly, Nomura Group is responding by devoting its fullest energies to benefit its clients by drawing on its management resources nimbly and managing risk appropriately. Under our policy of “DELIVERING TOGETHER,” we provide the most-appropriate solutions to clients by working across our divisions and from country to country to ensure that the quality and flexibility of the services we offer to clients are best in class. We are also putting even greater emphasis on our principle, “Placing Our Clients at the Heart of Everything We Do.” 30 League Table Standing 1st FY2014/15 Wholesale net revenues by region (Billions of yen) 250 231.5 AEJ** EMEA* Americas Japan 200 188.9 190.6 178.9 150 100 50 0 1Q 2Q 3Q 4Q * EMEA=Europe, Middle East, and Africa ** AEJ=Asia except Japan Clients Channel Financial institutions Institutional investors Industrial corporations Governments and Government agencies Network covering more than 30 countries Our Services Our Strengths Our Focus Underwriting of bonds and stocks Dominant presence in Japan M&A advisory Global client base Syndication of financial products, provision of liquidity Proposals for investment, high-level execution Asia’s global investment bank Offering solutions that match customer needs and regional characteristics Strengthening cross-divisional and cross-regional collaboration Connecting Markets East & West Wholesale Market Environment and Results in FY2014/15 In Wholesale, while market conditions were tough, net revenues were strong at ¥789.9 billion, 3% higher than in the previous fiscal year. By geographical area, performance in Japan and Asia except Japan was favorable, and we are consolidating a strong position as a global financial services group based in Asia. In the Americas and Europe, results were influenced by the especially unstable market conditions in October 2014, and results in the third quarter left much to be desired. In addition to reviewing our business portfolio with the aim of better matching client needs and Nomura Group’s strengths, net revenues recovered in the fourth quarter, aided by improvement in the operating environment. Notwithstanding, costs rose because of the weaker yen, and income before income taxes amounted to ¥82.2 billion, 26% lower than in the previous fiscal year. Looking Forward In Wholesale, to diversify and expand sources of revenues, we are reallocating our management resources optimally toward our areas of competitive strength, while watching changes in the macro and regulatory environment. In fiscal 2015/16 and beyond, we intend to respond to the anticipated needs by offering even higher-value-added products and services, as we build on our greatly improved credit rating. Head of Global Markets Steven Ashley (right) Kentaro Okuda (center) Head of Investment Banking James DeNaut (right) Joint International Head of Investment Banking Head of Investment Banking, Americas Charles Pitts-Tucker (left) Joint International Head of Investment Banking Head of Investment Banking, EMEA 31 Review of OperationsNomura’s Ability to Get Things DoneNomura Report 2015 Wholesale “DELIVERING TOGETHER” Working together across divisions and regions, we are committed to being highly proactive and offering optimal solutions. Global Markets Looking Forward Market Environment and Results in FY2014/15 FY2014/15 started on a relatively favorable note with signs of recovery in the U.S. and turnaround in the Eurozone economies, but the momentum waned from heightened geopolitical risks, divergence in monetary policies of central banks, and concerns about persistent low inflation. In global financial markets, liquidity declined markedly due to sudden changes in the market environment and the effects of regulatory tightening. This resulted in periods of market dislocations, such as the sharp fluctuations in both equity and bond markets in October 2014. In this environment, investors took shelter in safe-haven assets, as evidenced by negative yields on government bonds of certain developed countries. Amidst this macroeconomic and market backdrop, Nomura’s Fixed Income business remained relatively steady. This performance was supported by growth in Japan and Asia, continued expansion of our client franchise, tight risk controls, and Nomura’s diversified business model, offset by market-driven declines in EMEA and the United States. As a result, revenues amounted to ¥407.2 billion, an ¥8.9 billion increase from the previous fiscal year. Despite the macroeconomic challenges, the Equities markets globally continued to rally driven by abundant liquidity supplied by central banks and a persistently low rates environment. In our Equities business, client volumes were robust as trading and Prime Services held strong. As a result, revenues amounted to ¥276.2 billion, a ¥24.8 billion increase from the previous fiscal year. Even as the downward pressure on commissions continues and regulatory changes lead to increased uncertainty, our Japan Equities business remains the cornerstone and driver of our franchise. With the global economy heading toward recovery led by the United States, and changes in the regulatory environment and market structure now priced in, we expect a gradual turnaround in the global markets over the coming years. However, increased geopolitical risk, a trend toward competitive currency devaluation against a background of diverging central bank monetary policies, and other factors are likely to continue to weigh on market sentiment in the foreseeable future. Global Markets remains committed to providing market insights, investment ideas, market access, and liquidity to clients throughout market cycles. In our endeavor to be an industry innovator and thought leader, we will offer cutting-edge products and services, including our integrated Global Markets offerings, our leading agency execution platform Instinet, and our global research. In all regions and businesses, we will implement strict capital management measures and shift to business models that are not so much dependent on leveraging our balance sheet. We will also draw on our recent credit rating upgrade to further deepen relationships with clients and generate higher returns on our resources for our shareholders. Investment Banking Market Environment and Results in FY2014/15 Gross revenues in Investment Banking in FY2014/15 amounted to ¥193.8 billion. As the financial needs of our clients became increasingly diversified and globalized, we encouraged cross-divisional and cross-regional collaboration and were successful in providing global fund-raising, M&A advisory, related acquisition finance, and a wide range of other financial services, including foreign exchange and interest rate related solutions. 32 In Japan, Nomura acted as bookrunner for Softbank’s retail bond issue, which was the largest bond underwriting deal in Japan during FY2014/15, and on all the major equity issues amounting to ¥100 billion or more during the fiscal year. Highlights included the global public offering of Mitsui Fudosan and the global IPO of Recruit Holdings. We also advised ITOCHU on its acquisition of shares of CITIC of China jointly with Charoen Pokphand Group of Thailand, which was the largest deal spanning Japan and other countries in Asia. Our market share in the ECM, DCM, and M&A league tables increased from the previous fiscal year. Overseas, Nomura played major roles in many deals and continued to add to its record of major accomplishments especially in the Americas where we have expanded our business base. These included large deals worth over ¥1 trillion such as advising Talisman Energy of Canada on its acquisition by Spanish company Repsol, which was a cross-border deal spanning Europe and the Americas, and the acquisition of U.S. company PetSmart by the consortium led by U.K. company BC Partners. We also played major roles in many fund-raising deals. In Europe, we effectively identified the needs of financial institutions to help them navigate regulatory changes, and underwrote a number of deals including the Samurai bond issue of Rabobank of the Netherlands and the rights offering of Banco Popolare Societa Cooperativa Scarl of Italy. We also underwrote the IPO of Dalian Wanda Commercial Properties of China, which was the largest deal in the Hong Kong market in 2014, and the IPO of the NN Group, which was the second- largest Continental European IPO in 2014. We continue to build on our strengths in Financial Sponsors, with a number of multi-product deals, including acting as advisor to GIC on the acquisition of a stake in RAC and providing related financing. Looking Forward We are strengthening our global investment banking capabilities by promoting cross-divisional and cross- regional collaboration. We are working to enhance profitability by offering clients value-added solutions. M&A Advisory In addition to Japanese cross-border M&A deals, we are focusing on securing global mandates following our continued platform build-out in the Americas. Progress continues to be made in providing M&A financing, along with foreign exchange and interest rate solutions, as we meet the increasingly diverse needs of our clients. Global Fund-Raising We will continue to identify the increasingly diverse funding requirements of our client base, expanding our fund-raising business through the use of our global platform. This will include equity and bond underwriting as well as other services in an expanding range of currencies and markets. N o m u r a a t 9 0 Y e a r s . T h e R o a d A h e a d Social Contribution Bonds In September 2014, and January and March 2015, Nomura underwrote and sold World Bank Bond to the individual investor market. We also underwrote Global U.S. dollar denominated World Bank Bond in April 2015 and supported the fund-raising activity to terminate world poverty. The raised fund will be employed for supporting education, providing for disaster measures, promoting gender equality, and other uses that will facilitate sustainable development. The syndication and sale of World Bank Bond were made possible through the collaboration of Nomura’s Wholesale and Retail divisions, including overseas offices. These divisions worked together to design these foreign currency denominated bonds to attract the interest of a range of investors preparing marketing materials to communicate the value the World Bank offers not only in economic but also in social terms. Looking ahead, Nomura divisions will continue to collaborate to offer investment products that meet the asset management needs of customers and contribute to the solution of social issues such as Food Security Bond and Education Support Bond from AfDB, and Water Bond and Clean Energy Bond from ADB. World Bank logo 33 Review of OperationsNomura’s Ability to Get Things DoneNomura Report 2015 Special Feature Global Research The history of Nomura’s research activities dates back to 1906, when it became the first company in Japan to establish a research department. At that time, Nomura published its Osaka Nomura Business News for its customers, and this became the first example of an information service of its kind in Japan. In subsequent years, Nomura further developed and substantially expanded its research activities, and consolidated the base for its strong reputation in research. Today, Nomura has about 400 research personnel stationed in 15 countries and regions around the world, and they collaborate in covering politics, economics, foreign exchange, interest rates, equities, credit, quantitative strategies, and other areas. As the foundation for its securities business, the strength of Nomura’s global research lies in its detailed, in-depth analyses and forward-looking insights. Nomura provides timely information based on this research to assist its clients in making investment judgments. Leading Global Money Flows The scope of Nomura’s research is exceptionally broad, covering the GDP of 40 countries and regions, 31 currencies, and stocks of companies included in the world’s major stock price indexes in Japan, the Americas, Europe, and Asia except Japan. The breadth of this research allows us to cover 90% of global economic and financial indicators. Our research on currency markets enables us to give advice on timely investment strategies and play a role in leading money flows from Japan to the world, and flows from the world into Japan and Asia except Japan. In our equity research, our research professionals now cover 290 stocks in the United States, focusing on such major sectors as Finance, Technology, Consumer Goods and Services, and the Internet. We also cover just under 1,200 stocks in Asia including Japan as well as over 400 stocks in Europe. The findings of our macroeconomic and individual stock research are also used to inform Japanese individual investors who are diversifying their portfolios globally. In-Depth Equity and Macroeconomic Research The strengths of Nomura’s equity research are its ability to make investment judgments and recommendations on core themes based on exchanges of opinions among sector specialists in the Nomura global network. For example, our research on automated automobile driving systems based on autonomously controlled robotic systems requires fusion of in-depth understanding of the automobile and technology sectors. Our research in this area is the product of collaboration among our specialists in the automobile and electronic components sectors as well as analysts with insight into technology in peripheral industries, and has won a high appraisal from our customers. Our macroeconomic analyses enable us to provide timely forecasts of upcoming changes and future directions based on economic data and market trends. At the same time, we deepen our analyses by taking a long-term perspective. For example, last year, as a new government administration emerged in India with Narendra Modi as prime minister, economists, strategists, and equity analysts in charge of Japan and India collaborated to issue Asia Special Report: Abenomics x Modinomics = Greater opportunities for Japan and India. This report forecast bold reforms, including market- opening measures and has won a high appraisal. In addition, in the latter half of last year, when prices of crude oil and other commodities declined sharply, there were concerns about the slowing of growth in the emerging economies, mainly in Asia. Nomura analyzed investment opportunities by character of each region and issued a timely report, which was read widely by our clients: Special Report on Emerging Countries: The impact of commodity prices on EM. Covering 90% of global economic and financial indicators No.1 in the Nikkei Veritas ranking of analysts and economists following Japanese bonds and currency Ranked No. 2 in Japanese equity research by Institutional Investor Offering a Broad Range of Investment Strategies and Indexes Offering High-Quality Research in Line with Global Trends (ESG) Principally in Europe and the United States, investment styles that take account of environment, social, and corporate governance (ESG) issues are taking hold. In Japan also, under Prime Minister Shinzo Abe’s growth strategy, which includes moving forward with corporate governance reforms, non-financial information, including ESG disclosure, is drawing the attention of companies and investors. This is because of the impact these ESG issues may have on attaining sustainable growth and increasing corporate value in the medium-to-long term. In this area also, Nomura plans to continue to offer value- added information to investors by issuing reports on ESG themes and the development of related equity indexes. In our quantitative strategy research, based on quantitative analyses, we respond to the needs of our clients for investment strategy proposals and prepare benchmark indexes for pension fund managers. “Nomura-BPI” and “Russell/Nomura Japan Equity Indexes,” in particular, are widely used by institutional investors, including public pension funds, as benchmark indexes for domestic bonds and stocks. In April 2014, the “Russell/Nomura Prime Index” was newly adopted by Japan’s Government Pension Investment Fund (GPIF) for passive management. Other indexes Nomura provides include the “Russell/Nomura Fundamental Prime Index” and the “Nomura Japan Equity High Dividend 70,” which are smart beta indexes that use a non-market cap weighted method. In addition, Nomura offers many other indexes that include the “Nomura Agri Business Index,” which comprises equities related to the agriculture, forestry, and fisheries industries; and the “NOMURA Crude Oil Long Index,” which follows trends in the crude oil futures market. Nomura is continuing to develop new indexes to respond in a timely fashion to investor needs in constantly changing markets. Research reports 34 35 Nomura’s Ability to Get Things DoneNomura Report 2015 Corporate Governance Fundamental Approach Nomura Holdings recognizes that the enhancement of corporate governance is one of the most-important issues in terms of achieving management’s goal of enhancing corporate value by deepening society’s trust in the firm and increasing the satisfaction, beginning with clients, of stakeholders. The basic thinking concerning the governance of Nomura Holdings is as set forth below. Board of Directors In order to achieve effective oversight of business execution functions from multiple perspectives, we place importance on diversity within the Board of Directors. Each Director has a diverse background in terms of nationality, gender, professional experience, etc., and by utilizing their extensive experience in their respective fields, such as business manager, legal/accounting professional, and public servant, the Directors assist with the determination of important managerial matters and oversee business execution. • Nomura Holdings has strengthened the supervisory function by separating management’s supervisory and executive functions and has adopted the “Company with Three Committees” structure, a highly transparent governance structure, which has the following three committees: the Nomination, Compensation, and Audit committees, each made up of a majority of Outside Directors. • The Board of Directors will have a sufficient number of members/ composition that enables active discussion from diverse perspectives and will supervise effectively. A Director who does not concurrently serve as an Executive Officer will serve as the chairman and, as a general rule, the majority of the Board of Directors will be Outside Directors meeting the “Independence Criteria for Outside Directors” established by the Company. Business execution decisions will be made flexibly and efficiently by Executive Officers to whom authority has been delegated by the Board of Directors. • The Nomination Committee will, referencing the opinions of external evaluation institutions and others, strive to assess talented individuals and will decide on candidates for the office of Director based on certain election standards. For the election of candidates for the office of Outside Director, in addition to corporate management experience and expertise in law and accounting, diversity, including nationality and gender, will be considered. • The Compensation Committee, in deciding the compensation of Directors and Executive Officers, will, on the basis of the general rule of paying compensation commensurate with business performance, seek to enhance objectivity and transparency based on analysis performed by external evaluation institutions and others. Moreover, by utilizing deferred compensation, such as equity-related compensation with a certain exercise limitation period, the interests of the Directors and Executive Officers will be matched with the interests of shareholders, and long-term incentives will be increased. However, business performance- based bonuses and equity-based compensation will not be provided to Outside Directors. • The Audit Committee will include at least one member who is a financial expert, and transparency will be increased by having an Outside Director serve as chairman. To raise the effectiveness of legality/adequacy audits performed by the Audit Committee, a full-time Director who does not concurrently serve as an Executive Officer from within the Company, who is well-versed in the affairs of the Company, will be a member of the Audit Committee or an Audit Mission Director, and a full-time support organization will be put in place. • Regarding the internal controls system, it will be developed based on resolutions adopted by the Board of Directors, and the effectiveness/adequacy of the system will be secured through activities such as audits by the Audit Committee and activities of the Internal Audit Department that is independent from business execution. With a focus on the Internal Controls Committee in which both Audit Committee members and business execution managers participate, Nomura Holdings will strive to strengthen/ enhance the internal controls system. • Regarding risk management, high standards are constantly pursued, and the Group Integrated Risk Management Committee has been put in place to heighten management effectiveness and will appropriately submit reports/recommendations to the Board of Directors. • Regarding matters concerning a company’s social responsibility beginning with compliance, the Code of Ethics of Nomura Group has been established as the rules of conduct that all Directors, officers, and employees of Nomura Group must comply with, and Nomura Group will strive to carry out its responsibilities to all stakeholders. Measures for Reinforcing Governance Although Japan’s Corporate Governance Code went into effect in June 2015, we had already been moving forward with a number of initiatives to reinforce our corporate governance prior to this. In 2001, when we adopted a holding company structure and listed on the New York Stock Exchange (NYSE), we installed Outside Directors and established an Internal Controls Committee, a Compensation Committee (the majority of the members are Outside Directors), and an Advisory Board of distinguished persons from outside the Company, and further improved our information disclosure system. Beginning in 2003, we further strengthened and increased the transparency of our oversight functions and expedited Nomura Group’s decision-making process by adopting the governance structure under which management oversight and business execution functions a re c l e a r l y s e p a r a t e d ( “ C o m p a n y w i t h T h re e Committees”). In addition, in 2004, we established the “Code of Ethics of Nomura Group,” which specifies matters to be observed by each Director, officer, and employee of Nomura Group with respect to corporate governance and corporate social responsibility, and are making a thoroughgoing effort in this regard. Moreover, our Code of Ethics is in line with the Universal Declaration of Human Rights and the OECD Guidelines for Multinational Enterprises. Please see our website for further information on the Code of Ethics of Nomura Group. Code of Ethics of Nomura Group. http://www.nomuraholdings.com/company/basic/ ethics.html Management Structure Shareholders’ Meeting Board of Directors Nomination Committee Audit Committee Compensation Committee • Three Directors, including two Outside Directors • Determines the details of proposals on the election and dismissal of Directors for submission to a meeting of shareholders in accordance with a set criteria for character, insight, experience, and independence • Directors concurrently serving as Executive Officers are not members. • Four Directors, including three Outside Directors • Audits the execution of duties by the Directors and Executive Officers, prepares audit reports, and determines details of proposals regarding the election, dismissal, and non-reelection of the Independent Auditor for submission to a meeting of shareholders • All committee members satisfy requirements for independent Directors as defined in the Sarbanes- Oxley Act of 2002. • Three Directors, including two Outside Directors • Determines policy with respect to the particulars of compensation for each Director and Executive Officer, as well as the individual compensation • Directors concurrently serving as Executive Officers are not members. Group CEO Executive Management Board Advisory Board Deliberates on and determines important management formation of our management strategy matters, such as the management strategy for Nomura Group, business plans, budgets, and allocation of management resources Established as a consulting body to the Executive Management Board, with the aim to bring an external perspective to the formation of our management strategy Group Integrated Risk Management Committee Deliberates on and determines important matters concerning the integrated risk management of Nomura Group Internal Controls Committee Deliberates on and determines matters concerning the establishment and assessment of internal control of Nomura Group and promoting proper corporate behavior A p p o i n t m e n t o f I n d e p e n d e n t O u t s i d e D i r e c t o r s Nomura Group is continuing to take initiatives to reinforce its corporate governance. As part of this, by adopting the “Company with Three Committees” structure, a structure which has the following three committees: the Nomination, Compensation, and Audit committees, not only at Nomura Holdings but also at other major subsidiaries in Japan and by appointing independent Outside Directors, Nomura Group has strengthened management oversight functions and enhanced management transparency while expediting the decision-making processes. This year, Nomura Holdings welcomed Mr. Hiroshi Kimura, former President and CEO and Representative Director of Japan Tobacco Inc., as Outside Director, thus bringing the number of Outside Directors to 7 out of a total of 12 Directors. At Nomura Securities, a major securities subsidiary of Nomura Holdings, in addition to Messrs. Masahiro Sakane, Takao Kusakari, Tsuguoki Fujinuma, and Toshinori Kanemoto, each an Outside Director of Nomura Holdings, Mr. Toshiaki Hiwatari, former Attorney General, and Mr. Motoki Ozaki, former Chairman of Kao Corporation, joined the Board as Outside Directors in 2012 and in 2015, respectively. At Nomura Asset Management, which is an asset management subsidiary, Mr. Rikio Nagahama, former President & CEO of DIAM Co., Ltd., and Ms. Akiko Kimura, Attorney at Law, Of Counsel, Anderson Mori & Tomotsune, both joined as Outside Directors this year. Nomura Group will continue to work to further strengthen management oversight functions and enhance management transparency with an emphasis on external perspectives. 36 37 WEBSystem for Supporting Corporate ValueNomura Report 2015 Corporate Governance Additionally, 7 of the 12 Directors making up our Board of Directors are Outside Directors, and based on supervision with an emphasis on the exter nal perspective, we are aspiring to put in practice management with a high level of transparency. We emphasize the independence of Outside Directors from Nomura Group, and in order to maintain such independence, we have established the “Independence Criteria for Outside Directors.” As none of the Outside Directors fall under the categories for which independence is considered suspect, and since none of the Outside Directors have any conflicts of interests with the shareholders, we have reported that each of the seven Outside Directors are independent Directors in our submission to the Tokyo Stock Exchange. Please see our website for more information on the Independence Criteria for Outside Directors. Independence Criteria for Outside Directors. http://www.nomuraholdings.com/investor/cg/data/ criteria.pdf Board of Directors (As of June 24, 2015) Outside Directors Non-Japanese Directors Female Directors 58% (7 of 12) 25% (3 of 12) 8% (1 of 12) Nomura Group’s Internal Controls Business Execution The Board of Directors has broadly delegated decision- making authority for business execution functions to the Executive Officers to ensure that they can execute business with speed and efficiency. Among the matters delegated to the Executive Officers by resolutions adopted by the Board of Directors, the most-important matters of business must be deliberated and decided by specific management bodies within the Company, including the Executive Management Board, the Group Integrated Risk Management Committee, and the Internal Controls Committee. These management bodies are required to report to the Board of Directors on the status of their deliberations at least once every three months. In order to further bolster our business execution framework for financial operations that are becoming increasingly sophisticated and specialized, we utilize a system whereby the Executive Officers delegate a part of their authority for business execution decisions to Senior Managing Directors, who focus on individual business and operations. Internal Controls We are committed to strengthening and improving our internal controls system to promote proper corporate behavior throughout Nomura Group, from the viewpoints of ensuring management transparency and efficiency, complying with laws and regulations, controlling risks, ensuring the reliability of business and financial reports, Internal Controls Committee Agrees on IA’s audit plan, human resources, and budget Audit Committee • Deliberates on and determines matters concerning the maintenance and assessment of internal controls and promoting proper corporate behavior • Made up of the Group CEO, the Group COO, two Audit Committee members, and persons appointed by the Group CEO Report concurrently serving as an Executive Officer • Consists of three Outside Directors and one Director not • Internal audit plan and Report budget approval • Appointment and dismissal of IA head Report Internal audit Assists the Audit Committee with its report duties Office of Audit Committee Internal Audit (IA) Management Business Risk Management Compliance and fostering the timely and appropriate disclosure of information. Furthermore, in order to ensure effective and adequate internal controls, the Group Internal Audit Department, which is independent from the business execution functions, and other similar audit sections placed in major subsidiaries conduct internal audits of the Company and its subsidiaries. The implementation status of internal audits is also reported to the Board of Directors and the Audit Committee. In addition, to strengthen the independence of the internal audit sections from the business execution functions, implementation plans and the formulation of the budget of the Internal Audit Divisions, as well as the election and dismissal of the Head of the Internal Audit Division require the consent of the Audit Committee. Audit Committee members may recommend changes to the implementation plan, etc., to Executive Officers. Compensation for Directors and Executive Officers As Nomura has adopted the “Company with Three Committees” structure, the Compensation Committee has prepared and approved the Compensation Policy of Nomura Group and Compensation Policy for Directors and Executive Officers of Nomura Holdings, Inc. Compensation Policy of Nomura Group To enable us to achieve sustainable growth, realize a long-term increase in shareholder value, deliver added value to our clients, compete in the global market, and enhance our reputation, Nomura has developed the Compensation Policy of Nomura Group applicable to regular employees, including senior management. The policy is broadly divided into six key themes. 1. Align with Nomura values and strategies 2. Reflect firm, division, and individual performance 3. Establish appropriate performance measurement with a focus on risk 4. Align employee and shareholder interests 5. Establish appropriate compensation structures 6. Ensure robust governance and control processes Please refer to our corporate website. http://www.nomuraholdings.com/investor/cg/ compensation.html Compensation Policy for Directors and Executive Officers of Nomura Holdings, Inc. The compensation of Directors and Executive Officers comprises base salary, an annual bonus, and a long-term incentive plan. The Compensation Committee has approved the following matters related to compensation of Directors and Executive Officers: 1. Base Salary Base salary is determined based on factors such as professional background, career history, responsibilities, and compensation standards of related business fields. A portion of base salary may be paid in the form of equity- based compensation with a certain non-exercise period to ensure that the interests of Directors and Executive Officers are closely aligned with those of shareholders. 2. Annual Bonus Annual bonuses of Directors and Executive Officers are determined by taking into account both quantitative and qualitative factors. Quantitative factors include performance of the Group and the division results, while qualitative factors include achievement of individual goals and subjective assessment of individual contributions. Depending on the level of bonus payment, a portion of payment in cash may be deferred. In addition, a portion of deferred bonus may be paid in equity-based compensation with a certain non-exercise period in lieu of cash. Such deferred bonus may be unpaid or forfeited under specific circumstances. 3. Long-Term Incentive Plans Long-term incentive plans may be awarded to Directors and Executive Officers, depending on their individual responsibilities and performance. Payments under long- term incentive plans are made when a certain degree of achievements is accomplished. Payments are made in equity-linked awards with appropriate vesting periods to ensure that medium- to long-term interests of Directors and Executive Officers are closely aligned with those of shareholders. Please refer to Form 20-F. http://www.nomuraholdings.com/investor/library/ sec/ 38 39 WEBWEBWEBSystem for Supporting Corporate ValueNomura Report 2015 Corporate Governance Outside Director’s Interview The reality is that you express your views, opinions, and queries on all matters you deemed fit to raise. Outside Director Michael Lim Choo San Mr. Lim is Chairman of Nomura Singapore Limited, the Audit Committee of Nomura Asia ex-Japan, and Outside Director of Nomura Holdings, Inc. A Chartered Accountant by profession, Mr. Lim was the Executive Chairman of PricewaterhouseCoopers Singapore, a position he held since 1999 until his retirement at the end of 2003. Prior to that, he was the Managing Partner of Price Waterhouse Singapore since 1992. Mr. Lim is currently also the Chairman of the Land Transport Authority of Singapore, the Singapore Accountancy Commission, and the Singapore Accounting Standards Council. Q1 What are your main areas of expertise, and how do you see your mission as an Outside Director? First, I trust that I have been invited to the Nomura Board based on my background and experience, which are largely in the areas of finance, accounting, auditing, corporate governance, and regulatory work. As an Outside Director, I believe my focus is to fulfill my fiduciary responsibilities as set out by legislation. There is an expectation that, with my background, my likely focus will be on matters I am experienced in. While this is likely the case, the reality is that you express your views, opinions, and queries on all matters you deemed fit to raise. The combination of Outside Directors with differing backgrounds and skill sets, therefore, allows a variety of focus areas to be addressed at Board meetings, and I believe this to be so at Nomura. Q2 Japan is taking steps to strengthen corporate governance, such as introducing the Stewardship Code last year. How would you rate corporate governance at Nomura? Could you also comment, in general, on the appropriate number of governance committees? I see no reason why corporate governance in Japan cannot be benchmarked against practices elsewhere in the world, and be further progressed from what are prescribed by codes. As an example, many boards evaluate their performance yearly, including an evaluation of members’ performance. The recommendations and comments received, while confidential, are discussed and acted upon based on consensus. I have seen some fairly common comments relating to the desire for more discussion on strategy and succession planning. Indeed, many board members welcome such evaluations as they provide formal avenues for feedback and discussion, all done to improve corporate governance. As to the number of board committees, this would vary among boards depending on their needs. I believe many countries prescribe a minimum of three (audit, nomination, and remuneration) but allowing other committees such as risk, CSR, and capital investment. Q3 Nomura is celebrating its 90th anniversary in 2015. Heading toward our 100th anniversary, what do you think will be important for Nomura to increase its corporate value? My view is that Japan is moving in the right direction as regards its new Stewardship Code, which was released in February 2014. The more communication you have with your shareholders and other stakeholders, the better it is for the company and society overall. I also look forward to the finalization of Japan’s proposed Corporate Governance Code, which is the internal control guidance for listed companies. I come from a small country, Singapore, where long-term planning has become second nature to most institutions, especially government-related entities. Long-term planning entails vision, mission, strategy, and corporate values, which are set and reviewed at regular intervals. I am impressed that the principles established by Nomura’s founder of placing the customer first, thinking globally, emphasizing research, and promoting teamwork have been so well thought out that today they have withstood the test of time. The emphasis on commitment to clients, society, and ethics is critical in this day and age and should continue to guide Nomura’s culture of ethical responsibility. Nomura has made progress internationally and has the opportunity to do more. I am convinced that we can do more cross-border and cross-functional transactions. As a small illustration of a recent successful cross-functional activity, the Wealth Management business in Singapore has become a growing contributor to the Fixed Income business through active forex transactions executed for Wealth Management clients. Coming from the ASEAN region, I feel that we have yet to capture enough of the opportunities regarding cross-border transactions between ASEAN countries and between these countries and Japan and other Asian countries. Q4 Asia is expected to grow faster than Europe and the United States, but it is a highly competitive region. What are your thoughts on Nomura’s strategy of establishing a dominant position as Asia’s global investment bank? I am pleased that you used the term “Asia’s global investment bank.” Being the largest investment bank headquartered in Asia, it has and will continue to be more focused on Asia. This becomes more compelling as you look forward in the coming years to Asia’s expected growth in GDP. As a global investment bank, you have the capacity to tap into this growth especially on deal flows within Asia as well as flows between Asian and American and European corporations. And by deal flows, I am referring not only to M&A activities but also debt and equity instruments. Given this outlook, Nomura welcomed Asian leaders from India, Indonesia, Singapore, and Thailand to its Advisory Board, including Mr. Goh Chok Tong, former Prime Minister of Singapore. Q5 Nomura integrated its annual report and CSR report in 2012, issuing the Nomura Report to introduce the Company’s economic and social value. The Singapore Exchange also has requested the disclosure of non-financial information. What are your thoughts on corporate disclosure in integrated reports? I am encouraged that Nomura has adopted integrated reporting as I feel that this is the way forward in annual reports. The Singapore Accountancy Commission, which I chair, has been working with the International Integrated Reporting Council (IIRC) to pave the way for more Singapore listed entities to adopt integrated reporting. While integrated reporting may have started with the desire to integrate corporate sustainability reporting (CSR) with financial reporting, the direction it is now taking is towards a report by a corporation of how it creates values, its strategy, opportunities and risks, its business model, and governance and performance - giving stakeholders a holistic view. Given that integrated reporting is principle based with no defined format, I believe that Nomura’s integrated report represents a move in the right direction. 40 41 System for Supporting Corporate ValueNomura Report 2015 Corporate Governance Directors (As of June 25, 2015) Nobuyuki Koga Chairman of the Board of Directors, Chairman of the Nomination Committee, Chairman of the Compensation Committee Apr. 1974 Jun. 1995 Apr. 1999 Jun. 2000 Oct. 2001 Apr. 2003 Joined the Company Director of the Company Managing Director of the Company Director and Deputy President of the Company Director and Deputy President of the Company (concurrently Director and Deputy President of Nomura Securities Co., Ltd.) Director and President of the Company (concurrently Director and President of Nomura Securities Co., Ltd.) Jun. 2003 Apr. 2008 Jun. 2008 Jun. 2011 Director, President & CEO of the Company (concurrently Director and Executive Officer and President of Nomura Securities Co., Ltd.) Director and Representative Executive Officer of the Company (concurrently Director and Chairman of Nomura Securities Co., Ltd.) Director and Chairman of Nomura Securities Co., Ltd. Director and Chairman of the Company (concurrently Director and Chairman of Nomura Securities Co., Ltd.) (Current) Mr. Koga, who has held a number of significant positions, including Director and President of Nomura Holdings and Director and President of Nomura Securities, and currently holds the positions of Vice Chairman of Nippon Keidanren (Japan Business Federation) and Vice Chairman of the Japan Securities Dealers Association, is well-versed not only in the business of Nomura Group but also in the customs of the securities industry, and contributes to the smooth operation of the meeting of the Board of Directors, acting as a chairman. Masahiro Sakane Outside Director, Member of the Nomination Committee, Member of the Compensation Committee, Former Representative Director and President of Komatsu Ltd. Apr. 1963 Jun. 2001 Jun. 2003 Jun. 2007 Joined Komatsu Ltd. Representative Director and President of Komatsu Ltd. Representative Director and President & CEO of Komatsu Ltd. Representative Director and Chairman of Komatsu Ltd. Jun. 2008 Jun. 2010 Apr. 2013 Jun. 2013 Outside Director of the Company (Current) Director and Chairman of Komatsu Ltd. Director and Councilor of Komatsu Ltd. Councilor of Komatsu Ltd. (Current) Mr. Sakane has held a number of significant positions, including Representative Director and President of Komatsu Ltd. and Vice Chairman of Nippon Keidanren (Japan Business Federation), and his achievements and insights have been evaluated highly both within and outside of the Company. Applying his extensive experience with respect to management, Mr. Sakane contributes to the Company as an Outside Director. Takao Kusakari Outside Director, Member of the Nomination Committee, Member of the Compensation Committee, Former President of NYK Line Joined Nippon Yusen Kabushiki Kaisha (NYK Line) Apr. 1964 Aug. 1999 President of NYK Line Apr. 2002 Apr. 2004 Apr. 2006 President, Corporate Officer of NYK Line Chairman, Corporate Officer of NYK Line Chairman, Chairman Corporate Officer of NYK Line Director and Corporate Advisor of NYK Line Apr. 2009 Jun. 2010 Corporate Advisor of NYK Line Jun. 2011 Apr. 2015 Senior Advisor (Current) Outside Director of the Company (Current) Mr. Kusakari has held a number of significant positions, including President of NYK Line and Vice Chairman of Nippon Keidanren (Japan Business Federation), and his achievements and insights have been evaluated highly both within and outside of the Company. Applying his extensive experience with respect to management, Mr. Kusakari contributes to the Company as an Outside Director. Tsuguoki Fujinuma Outside Director, Chairman of the Audit Committee, Certified Public Accountant, Former Chairman and President of the Japanese Institute of Certified Public Accountants Joined Horie Morita Accounting Firm Joined Arthur & Young Accounting Firm Apr. 1969 Jun. 1970 Nov. 1974 Registered as a Certified Public Accountant May 1991 Jun. 1993 Managing Partner of Asahi Shinwa Accounting Firm Managing Partner of Ota Showa & Co. (Ernst & Young ShinNihon (currently, Ernst & Young ShinNihon LLC)) May 2000 Jul. 2004 Jun. 2007 Jul. 2007 Jun. 2008 President of the International Federation of Accountants Chairman and President of the Japanese Institute of Certified Public Accountants Retired from Ernst & Young ShinNihon Advisor of the Japanese Institute of Certified Public Accountants (Current) Outside Director of the Company (Current) Mr. Fujinuma has held a number of significant positions, including President of the International Federation of Accountants, and his achievements and insights have been evaluated highly both within and outside of the Company. He is well-versed in international accounting systems and applying his high degree of expertise corresponding to a Sarbanes-Oxley Act of 2002 financial expert and extensive experience, Mr. Fujinuma contributes to the Company as an Outside Director. Toshinori Kanemoto Outside Director, Member of the Audit Committee, Attorney-at-Law, Of-Counsel, City-Yuwa Partners, Former President of ICPO-INTERPOL Apr. 1968 Apr. 1992 Joined National Police Agency Kumamoto Prefecture Police Headquarters, Director General Aug. 1995 Director General of the International Affairs Department, Apr. 2001 Jan. 2007 Director of Cabinet Intelligence, Cabinet Secretariat, Government of Japan Registered as Attorney-at-Law (Dai-ichi Tokyo Bar Association) National Police Agency President of ICPO-INTERPOL Oct. 1996 Aug. 2000 President, National Police Academy Feb. 2007 Of-Counsel, City-Yuwa Partners (Current) Outside Director of the Company (Current) Jun. 2011 Mr. Kanemoto has held a number of significant positions, including President of ICPO-INTERPOL, and his achievements and insights have been evaluated highly both within and outside of the Company. Applying his sophisticated expertise and extensive experience as a currently active attorney, Mr. Kanemoto contributes to the Company as an Outside Director. Hiroshi Kimura Outside Director, Member of the Audit Committee, Former President and CEO and Representative Director of Japan Tobacco Inc. Apr. 1976 Jun. 1999 Jun. 2001 Jun. 2005 Joined Japan Tobacco and Salt Public Corporation (currently, Japan Tobacco Inc.) Director of Japan Tobacco Inc. Resigned as Director of Japan Tobacco Inc. Director of Japan Tobacco Inc. Jun. 2006 Jun. 2012 Jun. 2014 Jun. 2015 President and CEO and Representative Director of Japan Tobacco Inc. Chairman of the Board of Japan Tobacco Inc. Special Advisor of Japan Tobacco Inc. (Current) Outside Director of Nomura Holdings, Inc. (Current) Mr. Kimura has held a number of significant positions, including President, CEO and Representative Director of Japan Tobacco Inc., and his achievements and insights have been evaluated highly both within and outside the Company. Applying his extensive experience with respect to management, Mr. Kimura contributes to the Company as an Outside Director. Hiroyuki Suzuki Member of the Audit Committee Joined the Company Apr. 1982 Senior Managing Director of Nomura Securities Co., Ltd. Apr. 2005 Oct. 2008 Senior Managing Director of the Company Dec. 2008 Senior Managing Director of Nomura Securities Co., Ltd. Apr. 2009 Senior Corporate Managing Director of Nomura Securities Co., Ltd. Jun. 2010 Apr. 2011 Apr. 2013 Jun. 2013 Senior Corporate Managing Director of the Company (concurrently Executive Managing Director and Senior Corporate Managing Director of Nomura Securities Co., Ltd.) Senior Corporate Managing Director of the Company (concurrently Executive Vice President of Nomura Securities Co., Ltd.) Advisor of the Company Director of the Company (Current) Mr. Suzuki has held a number of significant positions, including Senior Corporate Managing Director of the Company and Executive Vice President of Nomura Securities Co., Ltd. He is well-versed in the business of Nomura Group, and as a full-time member of the Audit Committee, Mr. Suzuki contributes to more-effective audits by the Audit Committee. Dame Clara Furse Outside Director, Former Chief Executive of the London Stock Exchange Group Feb. 1983 Joined Phillips & Drew (currently UBS) Jun. 1990 Non-Executive Director of the London International Financial Futures Exchange (“LIFFE”) Deputy Chairman of LIFFE Group Chief Executive of Credit Lyonnais Rouse Jun. 1997 May 1998 Jan. 2001 Jun. 2010 Apr. 2013 Chief Executive of the London Stock Exchange Group Outside Director of the Company (Current) External Member of the Bank of England’s Financial Policy Committee (Current) Dame Clara Furse has held a number of significant positions, including Chief Executive of the London Stock Exchange Group, and she was also made Dame Commander of the Order of the British Empire. Her achievements and insights have been evaluated highly both within and outside of the Company. Applying her global and extensive experience with respect to financial businesses, Dame Clara Furse contributes to the Company as an Outside Director. Michael Lim Choo San Outside Director, Former Executive Chairman of PricewaterhouseCoopers, Singapore Aug. 1972 Joined Price Waterhouse, Singapore Jan. 1992 Oct. 1998 Managing Partner of Price Waterhouse, Singapore Member of the Singapore Public Service Commission (Current) Executive Chairman of PricewaterhouseCoopers, Singapore Jul. 1999 Sept. 2002 Chairman of the Land Transport Authority of Singapore (Current) Sept. 2004 Independent Director of Olan International Limited (Current) Outside Director of the Company (Current) Jun. 2011 Nov. 2011 Chairman of the Accounting Standards Council, Apr. 2013 Singapore (Current) Chairman of the Singapore Accountancy Commission (Current) Mr. Lim has held a number of significant positions, including Executive Chairman of PricewaterhouseCoopers (Singapore) and was also awarded with national honors by the Government of Singapore three times. His achievements and insights have been evaluated highly both within and outside of the Company. Applying his global and extensive experience and his high degree of expertise with respect to international accounting systems, Mr. Lim contributes to the Company as an Outside Director. David Benson Feb. 1997 Joined Nomura International plc Jul. 1999 Mar. 2005 Aug. 2007 Resigned from Nomura International plc Nov. 2008 Chief Risk Officer (“CRO”), Senior Managing Director of Head of Risk Management, Nomura International plc Chief Operating Officer (“COO”) of Nomura International plc Jan. 2011 Apr. 2011 Jun. 2011 Senior Managing Director of the Company, Vice Chairman, Risk and Regulatory Affairs Vice Chairman of the Company (Senior Managing Director) Director of the Company (Current) the Company Mr. Benson has held a number of significant positions, including Vice Chairman (Senior Managing Director) and Chief Risk Officer (CRO) of the Company. Applying his experience and expertise, Mr. Benson contributes to strengthen the oversight functions of the Board of Directors in relation to risk management. Koji Nagai Representative Executive Officer, Group CEO Apr. 1981 Apr. 2003 Jun. 2003 Apr. 2007 Oct. 2008 Apr. 2009 Apr. 2011 Joined the Company Director of Nomura Securities Co., Ltd. Senior Managing Director of Nomura Securities Co., Ltd. Executive Managing Director of Nomura Securities Co., Ltd. Senior Corporate Managing Director of Nomura Securities Co., Ltd. Executive Managing Director and Executive Vice President of Nomura Securities Co., Ltd. Co-COO and Deputy President of Nomura Securities Co., Ltd. Apr. 2012 Senior Managing Director of the Company (concurrently Director and President of Nomura Securities Co., Ltd.) Aug. 2012 Representative Executive Officer & Group CEO of the Jun. 2013 Company (concurrently Director and President of Nomura Securities Co., Ltd.) Director, Representative Executive Officer & Group CEO of the Company (concurrently Director and President of Nomura Securities Co., Ltd.) (Current) Mr. Nagai has held a number of significant positions, including Director and President of Nomura Securities Co., Ltd. By having Mr. Nagai, who serves as Representative Executive Officer & Group CEO of the Company, the Board of Directors will be able to easily understand the business execution status and internal affairs of the Company, and he contributes to more-effective oversight functions of the Board. Atsushi Yoshikawa Representative Executive Officer, Group COO Apr. 1978 Jun. 2000 Oct. 2001 Jun. 2003 Apr. 2004 Apr. 2005 Apr. 2006 Apr. 2008 Joined the Company Director of the Company Director of Nomura Securities Co., Ltd. Senior Managing Director of Nomura Securities Co., Ltd. Senior Managing Director of the Company (concurrently Executive Managing Director of Nomura Asset Management Co., Ltd.) Senior Managing Director of the Company (concurrently Executive Vice President of Nomura Asset Management Co., Ltd.) Executive Vice President of Nomura Asset Management Co., Ltd. Director and President of Nomura Asset Management Co., Ltd. Oct. 2008 Jun. 2011 Executive Managing Director of the Company (concurrently Director, President & CEO of Nomura Asset Management Co., Ltd.) Executive Vice President of the Company (concurrently CEO and President of Nomura Holding America Inc.) Jun. 2013 Aug. 2012 Representative Executive Officer & Group COO of the Company (concurrently Chairman of Nomura Holding America Inc.) Director, Representative Executive Officer & Group COO of the Company (concurrently Chairman of Nomura Holding America Inc.) Director, Representative Executive Officer & Group COO of the Company (concurrently Director and Representative Executive Officer of Nomura Securities Co., Ltd., Chairman of Nomura Holding America Inc.) (Current) Apr. 2014 42 Mr. Yoshikawa has held a number of significant positions, including CEO of the holding company in the Americas region and a securities subsidiary. By having Mr. Yoshikawa, who serves as Representative Executive Officer and Group COO of the Company, the Board of Directors will be able to easily understand the business execution status and internal affairs of the Company, and he contributes to more-effective oversight functions of the Board. 43 System for Supporting Corporate ValueNomura Report 2015 Corporate Governance Executive Officers and Senior Managing Directors (As of June 1, 2015) Compliance Group CEO President and Group COO Retail Retail CEO Asset Management Asset Management CEO Wholesale Wholesale CEO Global Markets Co-Head of Global Markets Head of Global Markets Investment Banking Head of Investment Banking Head of Global Markets, EMEA Americas EMEA AEJ Banking Regional CEO, Americas Regional Co-CEO, Americas Executive Chairman, EMEA Regional CEO, EMEA Regional CEO, Asia ex-Japan Banking Chief of Staff Chief Financial Officer (CFO) Koji Nagai Atsushi Yoshikawa Toshio Morita Kunio Watanabe Tetsu Ozaki Steven Ashley Yasuo Kashiwagi Yutaka Nakajima Kentaro Okuda David Findlay Toshiya Hasegawa Minoru Shinohara Jonathan Lewis Toshiyasu Iiyama Chie Toriumi Shoichi Nagamatsu Shigesuke Kashiwagi Deputy Chief of Staff, Head of Group Compliance Hisato Miyashita Chief Risk Officer (CRO) Deputy CRO Group CAO (Wholesale IT, Global Operations, Facility Management) Corporate CIO Co-CIO Chief Legal Officer (CLO) Group Strategy & Executive Office Group Corporate Communications Global Head of Human Resources Lewis O’Donald Yuji Nakata Paul Spanswick Masahide Nakamura Naohiro Sako Yasushi Takayama Yo Akatsuka Hajime Ikeda Kenji Kimura Chairman, AEJ and Wealth Management, Asia Hiromasa Yamazaki Internal Audit Asia Strategy (China) Asia Strategy (China) Group Internal Audit Toshihiro Iwasaki Noriaki Miyano Junko Nakagawa Nomura Group companies a Group Compliance Department that provides support. A Wholesale Compliance Head has also been designated to strengthen our internal controls in response to global business expansion. Compliance Officers who report on compliance-related issues under the direction of the Group Compliance Head are also assigned to each Group company, including overseas offices, to develop and maintain their respective compliance structures. Nomura Securities’ Compliance Structure In addition to Group-wide initiatives, Nomura Securities has established a Compliance Program as a detailed action plan, and put into place a compliance framework based on this program. A Compliance Committee chaired by the President oversees Company-wide initiatives and is in charge of establishing and deliberating on important issues related to internal controls. In addition, the Company has established the post of Internal Administration Supervisor to monitor compliance issues and set up the Compliance Division. Fundamental Approach Compliance is a top management priority for Nomura Group, and the Code of Ethics of Nomura Group represents our fundamental policy on compliance. Once each year, the management and employees of the Group pledge to abide by the rules stated in this code. Also, Nomura Securities conducts an ethics training course once a year for management and employees. This course is intended to give all employees a substantially heightened understanding of workplace ethics through the exchange of views by employees and other means. Our management and employees always set their challenges related to professional ethics and compliance as part of the issues they plan to address determined at the outset of each fiscal year. If problems are found, the assessor provides proper guidance and reflects evaluation results in their pay scale. Compliance Framework We have appointed a Group Compliance Head to oversee compliance for the Group as a whole along with Compliance Framework Nomura Holdings Board of Directors Audit Committee Executive Management Board Group Compliance Head Direction Report Wholesale Compliance Head Direction Report Group Compliance Department Direction Report Compliance Officers Direction Report Departments 44 45 System for Supporting Corporate ValueNomura Report 2015 Compliance The Compliance Division strengthens and improves legal and regulatory compliance as well as the internal controls system by formulating internal rules and disseminating them throughout the Company. It also monitors the status of compliance with respect to these rules in each department and branch office. Should any problems arise, the division takes remedial action, such as increasing awareness of the rules or revising them as needed. Legal Compliance and Reporting of Violations In all Group companies and departments, Nomura Group insists on compliance with laws and regulations and endeavors to prevent the occurrence of activities that may be construed as illegal by structuring the necessary administrative systems. In the event that such issues arise, they are reported in full to management-level officers without delay, and organizations and systems are structured to respond appropriately. When actions that may impair trust in the capital markets and major violations of legal regulations occur that may have a major impact on the Company’s reputation and financial position, after due investigation and confirmation, related information is made available on the Company website. Compliance Hotline Employees in Japan who have become aware of potential legal or regulatory violations are able to report their concerns to persons designated by Nomura Holdings, including Outside Directors and outside legal counsel, through the Compliance Hotline (persons reporting have the option of remaining anonymous). In FY2014/15, there were 18 calls received via the Compliance Hotline, and the status of related matters was confirmed, and appropriate measures were processed. Compliance Training We conduct comprehensive compliance training for all Executive Officers and employees on topics such as the prevention of money laundering and insider trading, firewall regulations, and guidelines for managing customer information. Nomura Securities’ Primary Initiatives • Training for sales officers, internal controls officers, and employees of internal controls departments, as well as quality improvement training for securities sales representatives • Training for branch managers, general administration managers, new employees, newly appointed personnel, and others, aimed at increasing knowledge and deepening the understanding of compliance • Supplementary compliance education and drills during various training sessions and meetings • Training for Compliance Officers • Monthly Compliance Hour* at branch offices and departments * To ensure that each and every employee throughout the Company understands the need for full compliance, training sessions are held once a month in the branches and offices of Nomura Securities. Offering High-Quality Financial Services Nomura Securities seeks to enhance the quality of financial products and services offered to customers under the Guidelines for Financial Instruments Business Supervision. Some of its initiatives include rigorous screening of account openings and securities underwriting practices as well as the provision of accurate and easy-to-understand information. Nomura Securities’ Primary Initiatives • Appointing officers to oversee internal controls, compliance, etc., and developing systems to ensure compliance and the appropriateness of operations • Thoroughly screening account openings and conducting proper examinations when underwriting securities • Carefully reviewing product details and taking action to provide accurate and comprehensive information • Conducting sales and solicitation activities in compliance with the Financial Instruments and Exchange Act and laws and regulations governing each operation with an overall understanding of the customer’s knowledge of financial instruments and financial status • Structuring systems that establish guidelines for sales to senior customers and requiring compliance with these guidelines • Ensuring thorough compliance with laws, regulations, and internal rules through compliance training Fair Financial Business Practices Nomura Group works to ensure fair business practices that are fully complied with by all management and employees as regards the prohibition of transactions with anti-social forces and also in reference to guidelines related to gifts to and entertainment of public officials and private-sector groups. These guidelines reply both to instances of responses where Nomura personnel are the recipients and to cases where they are the providers of such benefits and also prevents acceptance or giving of bribes. Nomura Securities’ Primary Initiatives • Protocols for preventing money laundering, including the identification and reporting of suspicious transactions • Protocols for eliminating all transactions associated with anti-social forces or activities in violation of applicable laws, such as not allowing anti-social forces to participate in trading with Nomura Securities • Managing conflicts of interest and insider information from a global perspective by concentrating information in the Group Compliance Department of Nomura Holdings Protection of Customer Assets In accord with various legal regulations, Nomura Securities has structured arrangements that allow for the separate administration of assets. Accordingly, the assets of customers and those of Nomura Securities itself, including deposits and securities, are properly administered separately. Note that Nomura Securities requests Ernst & Young ShinNihon LLC to examine the status of its separate administration of customer assets in accord with criteria in effect under relevant laws in the United States. As of March 31, 2015, Nomura Securities was in compliance with all material aspects of these criteria as regards the separate administration of customer assets and received a report certifying its compliance. Information Security Nomura Group Information Security Policy is the basic document governing the effective protection of clients’ personal information and other information assets of the Group. Customer-related personal information is handled under stringent standards set out in Nomura Group Privacy Policy and other information security related rules, and in full compliance with personal information- related laws and regulations. Customer Protection and Information Security Please refer to Nomura Group Privacy Policy. http://www.nomuraholdings.com/policy/privacy.html Under various legal regulations, including the Financial Instruments and Exchange Act and Personal Information Protection Act, Nomura Securities works to properly protect customers’ assets and information. R e c o v e r i n g T r u s t Following the series of insider trading incidents related to public offerings in 2012, Nomura Securities announced business improvement measures on June 29 in 2012, and these have been fully implemented. Going forward, to ensure that our efforts are maintained and sustained, Nomura Securities will take the necessary measures to prevent this incident from having an effect on its reputation and, by implementing fully adequate improvement measures with the cooperation of all management and staff, will work to prevent a recurrence and recover public trust. Nomura is also working to substantially reinforce and improve its internal controls systems. 46 47 WEBSystem for Supporting Corporate ValueNomura Report 2015 Risk Management Fundamental Approach The business activities of Nomura Group are exposed to various risks such as market risk* 1, credit risk* 2, operational risk*3, model risk*4, and other risks caused by external factors. We are working to further upgrade and strengthen our risk management systems, and we position the appropriate management of these risks as a management issue with the highest priority. Risk Management Systems Nomura Group has prepared its Risk Appetite Statement. This statement sets forth the content of risks that the Group can undertake, and it takes account of the Group’s business strategy and business targets, including the amount of capital and liquidity required under regulations, and the business environment. The Risk Appetite Statement is proposed by the Chief Risk Officer (CRO) and the Chief Financial Officer (CFO), and submitted for final approval to the Executive Management Board. The statement covers all types of risk that the Group is exposed to, including capital adequacy and balance sheet measures, liquidity risk, market and credit risk, operational risk, and model risk. With a basic policy of controlling risks that arise in the course of operations within the limits of the Group’s risk appetite, the Executive Management Board or the Group Integrated Risk Management Committee,*5 which has been delegated responsibility by the Executive Management Board, is responsible for deliberating and determining important matters pertaining to risk management. *1 Market risk: Risk of losses arising from fluctuations in values of financial assets and debt due to fluctuations in interest rates, foreign exchange rates, and securities prices *2 Credit risk: Risk of losses arising from the decrease of asset values (including off- balance sheet items) due to deterioration in creditworthiness or default of an obligor or counterparty *3 Operational risk: Risk of losses arising from inadequate or failed internal processes, people, and systems or from external events *4 Model risk: Risk of losses arising from errors in the model or from illicit or inappropriate use of the model *5 The Group Integrated Risk Management Committee is chaired by the Group CEO and comprised of the Group COO, business division CEOs, the Chief Risk Officer, the Chief Financial Officer, the Chief Legal Officer, the Deputy CRO, and other members appointed by the chairman. Risk Management Structure Board of Directors Internal Controls Committee Executive Management Board Report Group Integrated Risk Management Committee Group Internal Audit Department CFO CRO • Market risk management • Credit risk management • Operational risk management • Other Audit Risk Management Departments Report Check Individual Business Units Stress Tests Nomura Group periodically conducts stress tests to calculate the size of losses and the volume of risk that may emerge for the Group as a whole under assumptions of extremely difficult economic conditions. The results of these stress tests are reported to the Group Integrated Risk Management Committee. In these tests covering the Group as a whole, risks that cannot be fully calculated by the most-sophisticated and precise risk models are taken into account, and the results are a substantially better measure of the sufficiency of the Group’s capital for maintaining financial soundness. In addition, among inherent risks of businesses and transactions at the detailed business and trading desk level, there may be risks that are difficult to ascertain with existing risk models. Therefore, stress scenarios are developed to focus on and capture these risks and determine the size of potential losses under these various scenarios. As a result of conducting these tests based on stress scenarios, Nomura is able to supplement information developed by risk models and obtain valuable information on the impact on its income of specific stress scenarios. Risk Management in New Businesses Transactions Nomura Group has established a strict approval process for new products and new individual transactions. Decisions on whether to provide these new products and individual transactions are made after a review that covers all perspectives, including reputational risk, legal risk, accounting risk, and financial risk. Internal Controls Moreover, to increase the effectiveness of internal controls, including the risk management systems, the Internal Audit Department, which is independent from business lines, conducts audits and makes assessments and then makes recommendations and proposals. Please refer to Form 20-F. http://www.nomuraholdings.com/investor/library/ar/ Ensuring Financial Soundness and Transparency Responding to Increasingly Sophisticated Financial Regulation To respond to higher-level financial regulations under Basel III, Nomura Group has applied its own internal models for measuring general market risk, specific risk, incremental risk, and comprehensive risk with the aim of more accurately calculating increasingly complex and diverse risks. To measure the amounts corresponding to counterparty transactions, the Group applies the expected exposure method. These sophisticated risk measurement methods apply cutting-edge risk management methodologies and are supported by large- scale computer systems that process the vast volumes of data related to risk management on a daily basis. In addition, in order for Nomura to be in compliance with the strict regulatory gover nance requirements, independently from the Risk Methodology Group, which is responsible for risk model development, Nomura’s Model Verification Group conducts periodic verifications to ensure that the models are functioning properly. Risk measurement data, which has been quantified in the exacting processes previously described, is used in computing the Group’s capital adequacy ratio, thus ensuring a high degree of reliability and transparency regarding the soundness of Nomura Group’s financial position. Enhancing and Strengthening Risk Management Systems Nomura Group is always working to further enhance and strengthen risk management systems from a full range of perspectives. To give a specific example, in addition to the credit risk management methods applied thus far to counterparties in derivative transactions, Nomura has introduced a “single name limit” approach that sets an overall limit on risks arising from issuers of bonds, equities, and other securities as well as on counterparties, while also identifying groups of bond issuers from a comprehensive perspective. In addition, Nomura is also structuring a system to identify and manage so-called “wrong course risk” which arises when there is a strong correlation between deterioration in the performance of a customer and the size of credit extended to that party. 48 49 WEBSystem for Supporting Corporate ValueNomura Report 2015 Risk Management Business Resilience* From the perspective of providing benefits to customers and ensuring the stability of business processes, Nomura takes a wide range of measures. Nomura is working to maintain and strengthen its systems for dealing with emergencies, such as natural disasters, system outages, and attacks. * Ability of an organization to anticipate, prepare for, and respond and adopt to incremental change and sudden disruptions in order to survive and prosper. Crisis Management Nomura Group has established the Crisis Management Committee, comprised of crisis management officers of each Group company worldwide, to address any crisis that may occur. Chaired by an Executive Officer nominated by the Group CEO, this committee has established a system for managing crises and ensuring business continuity in the event of an emergency. Under the crisis management system, the Crisis Management Committee reports to the Board of Directors regarding matters related to crisis management. In addition, this committee’s secretariat regularly conducts employee safety verification drills, disaster prevention drills, and business continuity drills, in order to be fully prepared to check the status of all Nomura employees during an emergency. As part of these efforts, the secretariat is also tasked with fostering greater awareness of crisis management as well as maintaining and strengthening our ability to respond to emergencies. This system and these measures are stipulated in Nomura Group Crisis Management Policy. This policy covers a wide range of risks facing the Company, including natural disasters, fires, serious crimes committed against the Company or its Executive Officers and employees, system interruptions, transmittable diseases, and the leakage of information assets. We have delegated significant authority to crisis management officers to ensure they can promptly make decisions on-site should a crisis occur. The above policy dictates that crisis management officers be able to take the most- appropriate actions necessary to ensure people’s safety and minimize the spread of damage. Strengthening Systems for Dealing with Major Earthquake Disasters Nomura Group is using the lessons learned at the time of the Great East Japan Earthquake to develop systems toward natural and other disasters. Moreover, in view of the release of studies by Japan’s Central Disaster Prevention Council in 2013, regarding the impact of earthquakes that might occur directly beneath the Tokyo metropolitan area and along the Nankai Trough off the coast of Nagoya, we reviewed our disaster risk scenarios to take account of the impact of such major earthquakes. Key issues identified were how to deal with these disasters and how to secure business continuity, and, as part of addressing these issues, we are working to strengthen and upgrade our collaboration with Nomura Group companies in Japan and overseas. In FY2014/15, we focused efforts on the following initiatives. 1. Strengthening systems for business continuity • Upgraded and strengthened capabilities of backup offices • Appointed persons to be in charge of evacuation and taking shelter in times of emergencies • Improved emergency telecommunication systems 2. Continued to implement practice drills and training sessions • Drills to establish an emergency headquarters function • Performed drills to verify the safety of employees • Performed drills in accordance with the business continuity plan (BCP) • Provided training for initial response in the event of a major earthquake such as a direct quake beneath the Tokyo metropolitan area • Implemented training sessions for countermeasures for the possible Nankai Trough Earthquake at branch offices 3. Strengthened collaboration between Group companies in Japan and overseas • Expanded collaboration among Group companies in Japan • Enhanced information sharing with overseas Group companies 4. Business continuity plan • Revised the BCP as the capabilities of backup offices were strengthened • Prepared a BCP focusing on a possible earthquake directly beneath the Tokyo metropolitan area 5. Other initiatives • Maintenance of supplies of water, food, and other items at the head office and branch offices • Allocated additional supplies to backup offices • Provided additional supplies to branch offices located in areas likely to be damaged by a tsunami following the Nankai Trough Earthquake that experts think may occur Cyber security To accommodate the diverse needs of its clients, Nomura Group provides a wide range of its services over the Internet. These services use the latest, most- advanced encryption technologies to ensure that important client information is always safeguarded. In recent years, cyber attacks have been on the increase, and their methods are more sophisticated and artful to disrupt systems and steal customer data by gaining improper access through the Internet. To deal with cyber attacks, Nomura is taking further measures to enhance system security, and, by forming a specialized unit, is working to strengthen its organizational response. Nomura is also endeavoring to further improve the capabilities of its management and employees to handle cyber attacks through training and practice drills. System Security Measures In addition to previously existing measures, including putting firewalls in place and installing antivirus software, Nomura is strengthening its system surveillance capabilities and introducing security systems to improve detecting and handling capabilities for these incidents. Formation of the CSIRTs Nomura Group and its major companies have formed the Computer Security Incident Response Teams (CSIRTs). Nomura shares information through CSIRTs within the Group as well as with external organizations such as the Financial Information Sharing and Analysis Center (ISAC*) to prevent computer-security related damage before it occurs, and, when threats to security arise, to respond quickly. * Financial ISAC: An organization set up by Japanese financial institutions to share information with regard to cyber security. Management and Employee Training In many cases, the entrances of cyber attacks are “targeted attacks” against management and employees. Nomura provides training and practice drills toward these attacks. Going forward, Nomura will work to raise the capabilities of management and employees through offering these kinds of training and opportunities for practice drills. Social and Environmental Risk Management We believe that considering the social and environmental risks that may arise from various transactions is key to managing our reputational risk. As such, in executing our business operations, we focus on these risks in the same way we are careful about legal compliance. For example, for equity underwriting businesses, we review and confirm the issuer’s awareness of any associated potential risks to society and the environment and that the issuer has taken appropriate steps to address such risks, including the disclosure of information about those risks. Impact on the environment and society as well as financial condition, operating results, and other aspects are included in the overall guidelines applied by relevant departments during the assessment process as vital items that must be confirmed when taking on underwriting deals. Assessment process Assessment of transaction • Regulations • Environmental and social issues Decision 50 51 System for Supporting Corporate ValueNomura Report 2015 CSR Management Fundamental Approach Nomura Group actively engages in initiatives to address social issues to fulfill its social responsibilities as a corporate citizen. The Group believes that promoting and managing corporate social responsibility (CSR) activities properly is an important factor to maintain and to increase its corporate value. The basic policy concerning CSR is set forth in the Code of Ethics of Nomura Group and its Basic Management Policy, and the CSR Committee is responsible for the appropriate management of these activities. In March 2010, the Group formulated “For Future Generations” as a fundamental guideline to be shared among all of our Executive Officers and employees globally for its approach to CSR. Please refer to the Code of Ethics of Nomura Group. http://www.nomuraholdings.com/company/basic/ ethics.html Please refer to “For Future Generations,” our corporate citizenship. http://www.nomuraholdings.com/csr/group/ Framework for Promoting CSR Activities The CSR Committee has been formed as the management-level decision-making entity for promoting Groupwide CSR programs. Chaired by the chairperson appointed by the Group CEO, the committee comprises seven Executive Officers, including the chairperson. The responsibilities of the committee include formulating policies for CSR initiatives as well as approving and monitoring progress of these activities. The activities of the committee are reported to the Board of Directors and the Executive Management Board accordingly. During FY2014/15, the CSR Committee held two meetings. In Nomura Group, CSR activities are conducted comprehensively in collaboration with Group offices and companies in Japan, AEJ, EMEA, and the Americas. In addition, the various CSR activities that are conducted by the Group are accurately communicated and disclosed through the Nomura Report and its website with the aim of raising the corporate value of Nomura Group. Identification of Material CSR Issues In 2014, Nomura Group reassessed its material CSR issues using the method outlined below. In analyzing and assessing issues, we took account of the opinions of third parties, conducted hearings across internal departments, and, based on the confirmations by the CSR Committee, specified the Group’s material issues. We sorted out the Group’s issues based on analyses for external elements, including the GRI Guidelines (Version 4), criteria for information disclosure on sustainability such as those of the Sustainability A c c o u n t i n g S t a n d a rd B o a rd ( S A S B ) , J a p a n ’s Stewardship Code, and also based on analysis for internal elements such as the Code of Ethics of Nomura Group, and our fundamental approach to CSR. Then, we assessed materiality of the selected issues with two criteria: “stakeholders’ materiality” and “the Group’s materiality.” We comparatively scored each issue based on evaluation of SRI (socially responsible investing) institutions in Japan and overseas to figure out stakeholders’ materiality. To figure out the Group’s materiality, we prioritized issues based on the Group’s Basic Management Policy and the Code of Ethics of Nomura Group as well as based on hearings conducted across internal departments. We formed a “materiality matrix” regarding issues figured out and identified issues that were of high importance to both stakeholders and the Group as the material CSR issues. CSR Framework Board of Directors Executive Management Board Report Approvals CSR Committee Report Approvals Japan EMEA Americas Secretariat: Corporate Citizenship Department Cooperation AEJ Identification of Material CSR Issues in Nomura Group Customers Shareholders Investors Employees Impact on stakeholders Communities Government organizations NGOs and NPOs Economic and business groups • Key non-financial indicators, such as GRI and SASB • Dialogue with socially responsible investing (SRI) organizations • Trends among financial institutions Contributing to sound and sustainable capital markets Nurturing human resources with respect for diversity Place Clients at the Heart of Everything We Do Dialogue with stakeholders Corporate governance Compliance Risk management • Contribute to economic growth and social development • Drawing on the capabilities of personnel and respect for diversity • Maintaining the spirit of putting the customer first, etc. Bases of Nomura Group Founder’s spirit Code of Ethics Basic management policy Material CSR Issues Categories Issues Pages Categories Issues Pages Strengthening corporate governance Offering high-quality financial services Corporate governance CSR management Legal compliance and reporting of violations Fair financial business practices Compliance Preventing bribery Risk management Preventing money laundering Enhancing and strengthening risk management systems Ensuring financial soundness and transparency Business resilience Social and environmental risk management Contributing to sound and sustainable capital markets Products and services responding to environmental and social issues Customer protection and information security Improving financial literacy Nurturing human resources Diversity and inclusion Employee-friendly work environment Respecting human rights Global CSR initiatives Communication with stakeholders Nurturing human resources with a respect for diversity Our community: Dialogue with stakeholders 52 53 WEBWEBP36P52P46P47P47P47P49P49P50P51P54P54P54P54P56P56P57P58P60P60System for Supporting Corporate ValueNomura Report 2015 Contributing to Sound and Sustainable Capital Markets Fundamental Approach One of the highest-priority issues for Nomura Group is contributing to sound and sustainable capital markets. The Group is listening intently to the opinions of its customers and the market, offering high-value-added solutions to its customers through financial and capital markets, and providing high-quality financial services. Moreover, Nomura is taking active initiatives to contribute to society, principally through providing opportunities for financial and economic education. Offering High-Quality Financial Services Nomura Group is working to offer high-quality and appropriate financial services to contribute to economic growth and social development as Asia’s global investment bank. For further details, please refer to the following sections of this report. • Retail Division: Pages 22 to 25 • Asset Management Division: Pages 26 to 29 • Wholesale Division: Pages 30 to 33 • Compliance: Page 45 to 47 Products and Services Responding to Environmental and Social Issues Nomura Group, through its products and services based on customer needs, facilitates appropriate flows of funds, and believes its role in society as a financial services company is to contribute to economic growth and sustainable development of society. Through dialogue with its stakeholders, Nomura endeavors to develop and offer financial services that contribute to the solution of social issues around the world. The world today faces many social issues that demand solutions, such as global warming and obtaining sufficient water resources and food. To help provide these solutions, Nomura Group acts as a conduit for financial resources by meeting the funding needs of projects that promote solutions to these issues by acting as a channel for funds from investors who want to contribute to society. From 2010 information on Nomura’s record of accomplishments related to social contribution bonds in FY2014/15 may be found on page 33 in the column article “Social Contribution Bonds” in the Wholesale section and on page 66 of the CSR data section. Customer Protection and Information Security In accord with various legal regulations, Nomura Securities has structured arrangements that allow for the separate administration of assets. Accordingly, the assets of customers and those of Nomura Securities itself, including deposits and securities, are properly administered separately. Customer-related personal information is handled under stringent standards set out in Nomura Group Privacy Policy and other information security related rules, and is in full compliance with personal information- related laws and regulations. For further information, please refer to the Compliance section of this report on page 47. Improving Financial Literacy Knowledge and understanding of finance and economics are important for leading self-reliant, secured, and prosperous lives. We trust that having each and every citizen improve their financial literacy leads to promoting the development of sound capital markets and appropriate flows of funds. Our principal activities in this area have included the distribution of textbooks, offering courses for university students in Japan and overseas, off-site lectures by Nomura employees for elementary, junior high school, and high school students, special support for the Nikkei Stock League, which has the participation of students from the junior high to university level, and in the Nikkei Future Investment Program with the participation of adults. All told, more than 680,000 students have taken part in these programs since 2000. Our sponsored financial education lectures at universities, which began in 2001, have been conducted annually, mainly by financial professionals from branches of Nomura Securities. Over this period, about 400 Group employees have participated as lecturers, and during the 14 years of this program, more than 200,000 university students have attended the lectures. During FY2014/15, Nomura prepared a publication entitled The Framework of Society Milestones in Nomura’s Activities 1990’s~ 91,479 participants Stock education contest “Nikkei Stock League” Held 15 times Junior high schools High schools Universities Finance courses for universities Donated course: “The Roles of Capital Markets and Securities Investments” Let’s Learn about “Living Economic Activities” from a Practical Perspective! Held 1,548 schools Universities Lectures on securities for adult members of society Provided textbooks to junior high schools nationwide Provided textbooks to primary schools nationwide 6,898 participants Lectures for primary school students “Let’s Learn Classes” about foreign exchange and stocks “Let’s Become Familiar with ‘Money’” Held 100 times Primary schools Financial education seminars for instructors Seminars for school principals and teachers Practical Financial and Economic Education Held 65 times Instructors Actual working experience/special lectures Cumulative participants = 2,000 persons = 100 persons 206,000 participants 3,675 participants Universities 2,646 participants Held 143 times Lectures for junior high school students Experiencing the role of investors: “What is investing?” Let’s Learn about the Meaning of “Investment” Held 78 times Junior high schools 3,014 participants Lectures for high school students Let’s Learn about Life Planning: “A Talk on Your Future and Money” Let’s Learn about “the Future” and “Money” Held 57 times High schools 2,078 participants Publication of a textbook for primary school students The Framework of Society and the Role of Money Let’s Learn about connections between “the Framework of Society” and “Money” 2000 2001 2004 2006 2008 2010 2011 2014 and the Role of Money for use as a textbook of finance and economics for students in the fourth, fifth, and sixth grades. This publication was donated to primary schools nationwide, and, in addition, Nomura edited two publications: An Illustrated Book on Securities Companies and The Great Adventures of Nyanta and Money. Through these activities, Nomura is working to make it possible for everyone, even people in remote areas and economically disadvantaged persons, to have equal access to opportunities for financial and economic education. Similarly, for adult members of society, Nomura offers its “Lifelong Learning Venues” program in regional communities and workplaces. The aim of this program is to provide participants with knowledge of finance and securities that will enable them to live affluent “second lives.” 54 55 System for Supporting Corporate ValueNomura Report 2015 Nurturing Human Resources with a Respect for Diversity Fundamental Approach Today persons of more than 70 nationalities work in Nomura Group. Human resources development respecting diversity is one of the most-important issues. This diverse workforce is the Group’s greatest asset. Nomura believes that through letting employees respect various backgrounds and many sets of values of the others and all the employees work harmoniously, Nomura will be able to better satisfy a wide variety of needs of its customers and offer more value-added services. For each and every one of the employees to be active and successful utilizing her/his capabilities and personal strengths, Nomura Group provides equal opportunities. In addition, the Code of Ethics of Nomura Group forbids discrimination in any way at all on the basis of nationality, ethnic origin, race, gender, age, religion, beliefs, social standing, gender preference, gender identity, physical impairments, or other criteria in case of hiring, evaluation, and determining remuneration. From FY2015/16, to enhance the development of human resources, Nomura Group appointed a new Senior Managing Director dedicated to HR development. Personnel Development The Retail Division encourages the personal growth of its employees through various educational programs that create a basis of necessary abilities and action requirements to develop capabilities for independent thinking, acting, and delivering results. The Group provides training for the first three years of employment and training at given career milestones (new hires, appointment, and promotion). Training for managerial- level personnel, in addition to instruction in developing leadership skills, also provides the specific knowledge and skills required while also reinforcing personal qualities and strengthening compliance awareness. The Wholesale Division offers training to personnel to meet the standards needed to enable them to become leaders in the Group’s global operations and to satisfy the needs of the division. Training aims to develop especially personnel who have capabilities for taking action and developing creative solutions. Specifically, training programs offer a selection of courses aimed at developing individual abilities and identifying personnel with leadership potential as well as mentoring programs that are offered selectively to develop the next generation of leaders. Furthermore, we have Company-wide training programs aimed at raising the awareness of workplace ethics, programs to support employees in obtaining licenses or other certifications, and similar support for training that will 56 assist personnel in attaining their career objectives. We are also helping to build internal networks by enabling employees from different divisions and geographic regions to take part in the same training programs. Diversity and Inclusion at Nomura Our aim for Diversity and Inclusion at Nomura is simple— it is essential that we encourage various points of view and ways of thinking among our people to win the trust of increasingly diverse and complex needs of clients and to offer highly value-added services to them. Nomura’s three autonomously operated employee networks provide a range of information that supports the work-life management of female employees and promotes understanding of diverse cultures as well as LGBT* issues. In addition, through the planning and holding of related events, the networks provide opportunities for interchange internal and external to the Company. Also, by including training on diversity management in all managerial-level courses, Nomura is promoting the reform of the awareness of middle managers, and is placing emphasis on developing corporate cultures where a diversity of human resources can contribute actively. * LGBT: Lesbian, gay, bisexual, transgender, and other gender minorities n In No m ur a ” n x their care e r s WIN e m o W “ e m o W = M ultic Health, c Lif e hild & r e L F & a a m i l y r i F n g , s e n i o r c a r e Diversity & Inclusion Using a diversity of ideas and points of view to increase competitiveness ultural, cross-gen e r a t i o MCV ulticultur a l M n al, L G BTA e V a l u Supporting Women through Their Career Nomura offers opportunities for a wide range of activities to support female employees. In addition to introducing systems that go beyond minimum legal requirements, Nomura has adopted an employment system that allows general career type B Employees (who are not subject to relocation to other regions) to relocate (For further details, refer to page 58) and to switch to category A (employees who can be relocated) and vice versa. To support women’s career development, Nomura provides a variety of training and mentoring programs along with their career stages, namely, for “Continuous Employment,” for “Stepping Up,” and for “Rising Higher.” These initiatives are designed to create an environment where female employees feel motivated to work to the best of their abilities. Nomura has set a quantitative target to have 550 female managers in Nomura Securities by 2020. Nomura Group will further enhance its approaches for women’s career growth and development. The Keidanren (Japan Business Federation) established the Planning Sub-Committee of the Committee on Gender Diversity, where Junko Nakagawa, an Executive Officer of Nomura Holdings, chairs the sub- committee. In line with Keidanren’s “Action Plan for W o m e n ’s A c t i v i t i e s : E n h a n c i n g C o r p o r a t e Competitiveness and Achieving Sustainable Economic Growth,*1” which was prepared in July 2014, Nomura posted a voluntary action plan on the Keidanren website* 2 regarding the appointment of women as Directors and to other managerial positions. *1 https://www.keidanren.or.jp/en/policy/2014/029.html *2 https://www.keidanren.or.jp/policy/woman/ap12461.html Staff members of the “Women In Nomura (WIN)” Employment of Handicapped Persons Nomura Group offers a wide range of employment opportunities for the handicapped. To motivate handicapped personnel, their assignments are decided flexibly through ongoing discussions with the workplaces where they will be assigned, and, by placing them in positions suited to their capabilities, Nomura encourages them to be autonomous in their work and aims to provide them with a stable work life. At Nomura Securities, each year, employment opportunities offered to handicapped persons exceed the legal requirements, and handicapped persons are contributing actively in a wide range of departments. N o m u r a a t 9 0 . T h e R o a d A h e a d Promotion of Diversity and Inclusion Employee-Friendly Work Environments We support working conditions that allow each employee to fully concentrate on his or her work in a healthy condition, with both good physical and mental health. We have shifted our emphasis to early discovery and intervention. Our occupational health physicians periodically visit our worksites for health monitoring and conduct face-to-face interviews with supervising managers. Improvement measures are being introduced to departments where many employees work long hours, and employees who work such extended hours are recommended to consult with and receive the guidance of physicians. Based on the Industrial Safety and Health Act, Nomura Group has formed a Health Committee, which meets once a month. This committee discusses issues related to the status of the workplace environment and health and gives its attention to preventing all employees, including temporary and contract workers, from injuring their health. Mental Healthcare To safeguard the mental health of employees, we provide access to psychiatrists and an employee counseling room staffed by a dedicated professional. We also offer consultation services provided by medical staff at our Health Management Center. Furthermore, we are committed to helping employees who have overcome mental illnesses return to the workplace. Initiatives in FY2014/15 1. For employees who have been ill and are returning to work, Nomura Securities prepared a return-to-work program to assist them in continuing their jobs. This initiative aims to create a workplace environment where employees are able to work without anxiety by clearly showing the process for returning to work and setting up an internal advisory service. 2. At the employees cafeteria in the head office in the Nihonbashi district of Tokyo, Nomura Securities provides a “Helsapo*” lunch to assist employees in keeping themselves in good health. Nomura’s proactive firm-wide efforts to promote employee health were highly appreciated and last year Nomura won the “2014 Ministry of Health, Labour and Welfare Award Given for Excellent Meal Facilities.” * Helsapo is an abbreviation of “health support.” The Helsapo lunch is a healthy menu designed to promote employee health. Under the “TABLE FOR TWO” program, a portion of the price of the meal is donated to provide school meals to children in developing countries. There are three diversity and inclusion networks within Nomura. These are WIN, or Women In Nomura, which engages, supports, and retains women through their career development at Nomura; L&F, or Life & Family, which promotes a culture of good health, well-being, and work-life balance; and MCV, or the multicultural value network. MCV is a network that promotes values of diversity through cross-cultural understanding, inter-generational communication, and support for gender minorities such as lesbian, gay, bisexual, and transgender (LGBT) individuals and the straight “Allies” who support the LGBT community. These networks are operated on a global collaboration basis by Group offices and offer an environment in the workplace for promoting the activities of a diversity of employees. 57 System for Supporting Corporate ValueNomura Report 2015 Nurturing Human Resources with a Respect for Diversity Special Feature Nurturing Human Resources Taking on Global Challenges Relationships with Labor Unions More than half of the employees of Nomura Securities are members of the Nomura Securities Employees Union, and Nomura Securities has standing labor agreements with the union. To maintain sound and healthy relationships between labor and management, discussions are conducted with the union on a wide range of topics, not only when changes are to be made in various systems, such as employee welfare benefits and personnel management, but also on day-to-day issues, including respect for employee rights and management issues. Through these discussions, management and labor share views, and employees in the workplace have the opportunity to make their views known. Realizing Work Practices that Allow for Flexibility and Diversity Reducing Long Working Hours and Providing for Flexibility in Work Styles Management and labor are monitoring hours that employees work to reduce excessively long hours and, thereby, maintain the physical and mental health of employees and enable them to conduct work efficiently. Specific initiatives include not only abiding by the provisions of the Japanese Labor Standards Act but also setting the joint management and labor objectives of having employees leave work at the set time on Wednesday and no later than 8 pm on other weekdays. Also, in some departments, since the nature of the work may require working into the night hours and on holidays, Nomura is working to optimize total hours worked by giving consideration to the actual conditions in each department and having managerial staff exercise flexibility regarding hours worked, including such measures as adopting a work shift system and encouraging employees to use their allotted vacation days. Moreover, Nomura provides for flexibility in work styles to provide employees with work security for the long term. In specific terms, Nomura has endeavored to provide improved arrangements that allow employees to take half day paid vacation time, take leaves for childbirth and rearing children, and time off for providing nursing care for seniors and others. In fact, all of the benefits provided by Nomura are above the legally requirement minimum. These include leave for giving birth to children and aftercare, leave time for rearing children, time off when a dependent gives birth to children, time off for childrearing, time for nursing sick children, supplements for child day care center expenses, and time off as well as leaves for nursing family members back to health. Introduction of a New Job Category and System for Changing Work Location To provide employee-friendly workplace environments where employees can continue to work for a longer number of years, Nomura extended the retirement age for the existing financial advisors in the Retail Division (“FA Shain”) until the age of 65 and introduced a new employee category called “FA Shoku” with the same retirement age. Nomura made a further amendment which allows employees, subject to permission, to work until the age of 70. Nomura Securities expects that these arrangements will enable employees to make better contributions based on their sophisticated skills and abundant experience. Also, Nomura introduced the “Work Location Change” regime whereby general career type B Employees may, upon request and subject to approval, change their place of work within the branch network and continue to work for Nomura. General career type B Employees, who were not supposed to transfer among different regions under their employment contracts previously, were obliged to leave their jobs against their wishes if, due to personal reasons, such as marriage, transfer of their spouses, or need to care for family members, they were required to move out of the area where they were able to commute to their offices. The new regime makes it possible for such employees to continue their careers without conflict with their personal life events. In addition, Nomura has made more flexible the reemployment process of ex-employees who hope to come back to Nomura. Respecting Human Rights We have established various mechanisms to prevent discrimination and harassment, in accordance with the Code of Ethics of Nomura Group. Specifically, we set up the Nomura Group Human Rights Committee to debate and determine human rights initiatives as well as to share information across the Group from its secretariat. In addition, we continue to hold human rights training for all Nomura people, including members of the Board of Directors, to create greater awareness about human rights issues and make everyone aware of our consultation contacts for these matters. All types of consultation contacts are available both within and outside the Company through our Sexual Harassment/Power Harassment Hotline to help prevent all types of harassment in the workplace. In addition, the Human Rights Awareness Office provides similar advisory functions for other human rights issues. Nomura Group instituted its overseas training program in FY2013/14 to train the personnel aiming for further sustained growth as Asia’s global investment bank. Thus far, 33 employees have been sent to 14 countries. We believe this training program will enable each employee to come into contact with diversified values, encourage them to confront the challenges, and will enable them to respond to changing client needs and offer high-value-added services. Contributing to the Development of Agribusiness in Japan and Vietnam Kota Imai, dispatched to Hanoi, Vietnam To overcome the difficulties of language barriers and the lack of personal connections, I dived proactively into new experiences such as living on a farm, developing new sales channels for agricultural products, and other challenges. The results I had were to discover a company aiming for listing its shares, to arrange for the business matching of Vietnamese and Japanese companies, and to give a presentation at a government sponsored agricultural conference attended by government ministers. I believe that I could contribute to agribusiness development by these experiences. I felt strongly that the main sources of successful business are “trust” and “human relationships.” I also think that I want to be a person who can earn high trust regardless of different nationalities and ethnic origins. Shinji Momonoe Department Head, Human Resources Development Department Nomura Securities This program is a human resource development system for employees who are in their fourth year with Nomura Securities. Participants in the program select the countries where they stay as well as their research themes, and they decide self-direction in foreign countries around the world. By giving them the opportunity to think on their own and take action in foreign countries whose cultures and values differ, they will improve their language skills and get used to global thinking. Looking to the future, we hope they can contribute to economic growth not only in Japan but also in the world with our commitment to placing our c l i e n t s a t t h e h e a r t o f everything we do. Supporting the Development of an Indian Fair Trade Company Aiming to Create a New Korea-Japan Relationship Ken Matsumoto, dispatched to Mumbai, India I encountered a fair trade company that tried to sell T-shirts in Japan while I was doing research on poverty in India. Although I had no particular knowledge of the apparel industry or special connections, I continued to contact Japanese corporations and was successful in establishing a business relationship with one c o m p a n y. B y c a r r y i n g o n m y activities in Mumbai where the culture and business environment are completely different from Japan, I w a s a b l e t o g e t a d e e p understanding about economic conditions in Mumbai. Kota Yamanaka, dispatched to Seoul, Korea Since I hope to contribute to the development of both Japan and Korea, I organized job seminars for Korean students who are seeking jobs in Japanese companies while aiming to solve Korea’s job shortage problem. I also arranged networking events jointly sponsored with the KOREA-JAPAN New Future Project (officially recognized by Japan’s Ministry of Foreign Affairs) in order to establish a new era of Japan-Korea relations beginning with young generations by exceeding the framework of finding a job. I would like to continue activities for improving relationships between the two countries which are quite close in business, culture, and education. 58 59 System for Supporting Corporate ValueNomura Report 2015 Our Community : Dialogue with Stakeholders Fundamental Approach Global CSR Initiatives To understand the expectations and requests of society and reflect these in business activities and CSR activities, we believe that dialogue with stakeholders inside and outside the Group is important. Through continuing communication with a broad range of stakeholders, from customers to shareholders, the community, and employees, we are working to contribute to finding solutions to social and environmental issues. Breakdown of community contribution expenditure Other 7.7% Disaster relief 4.7% Human rights and labor 1.3% Environment 2.3% Welfare and health 5.8% Total Education 36.4% Community contribution 11.1% ¥1.46 billion Science and academic achievement 7.8% Arts, culture, and sports 22.8% Note: The total includes approximately ¥0.22 billion from Nomura Foundation. In the regions around the world where Nomura Group conducts its business activities, the basic CSR theme is “For Future Generations.” Nomura staff work with stakeholders in these regions and conduct activities that aim to nurture the next generation and promote regional revitalization in line with the needs of these regions. Communication with Stakeholders One of the ways Nomura Group interacts with stakeholders is through participation in activities with various initiatives in Japan and overseas that have the objective of contributing to society and the environment. Through dialogue and collaboration with stakeholders, we carefully examine and review the activities and information disclosure we undertake that are related to the economy, society (human rights and labor), and environmental issues. We also report to the CSR Committee when needed. G l o b a l C S R I n i t i a t i v e s U.K. In London, Nomura engages in activities which help make a positive impact in the local community. These include fund-raising for our London Charity Partner and supporting disadvantaged young people to raise aspirations, employability potential, and educational attainment. Through a developed and focused platform, we support charitable organizations by providing financial contributions, resources, and our time to have a significant impact on those most in need of our support. Hong Kong In Asia ex-Japan, employees focus on initiatives that benefit disadvantaged children and the environment. In 2015, Nomura enhanced its contribution to the community through partnerships with Changing Young Lives and Hong Kong Beach CleanUp (Hong Kong), MINDS (Singapore), and the Adream Charitable Foundation (China), driven by hundreds of hours of employee volunteer time and significant financial support, in addition to disaster relief fund-raising appeals. Newly launched this year, Nomura offered employees the chance to expand their skills to contribute to a not-for-profit board with a formal training program. Powai, India Nomura Powai’s focus is towards delivering quality education and healthcare to lesser-privileged communities across India, as well as promoting environment conservation. Over the past year, 4,344 volunteering hours were put in by a total of 2,212 volunteers through 190 unique volunteering initiatives, fund-raisers, and drives conducted collaboratively with our NGO Partners. Additionally, Nomura Powai is funding many NGO programs, directly benefiting the lives of 5,425 children and youth across India. 60 Please refer to Stakeholder Dialogue. http://www.nomuraholdings.com/csr/dialogue/ Nomura Foundation (Public Interest Foundation) Dialogue with Stakeholders (Selected Examples) Themes External Organization Outline Human rights, labor, environment, anti-corruption United Nations (UN) Global Compact Participation in the Japan network ESG ESG ESG ESG UN Principles for Responsible Investment Participation in the Japan network Principles for Financial Action for the 21st Century Participation in a working group on asset management, securities, and investment banking businesses Climate Bonds Initiative Participation as a partner in activities to promote green bonds CSR Asia Exchanges of opinions on ESG issues in Asia Environment CDP Promotion, as a signatory, of the climate change and water programs Nomura Foundation was established by Nomura Group as a public interest foundation. Its activities include providing assistance for research and educational activities in the social sciences, scholarships for foreign students majoring in the social sciences and humanities, conducting and publishing of research on the world economy, including macroeconomics and capital markets, as well as supporting the nurturing of young artists and international exchange in art and cultural fields. In fiscal 2014, the Foundation provided various forms of support totaling approximately ¥218 million. In addition, the Foundation began its “Research Support for Opening New Frontiers in Finance and Securities” program, which has the aim of supporting research in the fields of finance and securities. Through its activities, the Foundation will contribute to advancing academic studies and the world economy, cultivating the arts and culture, fostering international talent, encouraging mutual international understanding, and, ultimately, supporting the progress of human society. For further information, please access the Foundation’s webpage: http://www.nomurafoundation.or.jp/ Japan To provide support for recovery following the Great East Japan Earthquake, Nomura began to offer assistance for the “Sakura Project 3.11,” which aims to create a cherry tree park in one of the devastated areas since 2012. Donations from Nomura employees are used to procure cherry tree seedlings, and, thus far, a cumulative total of 750 employees have provided their time on a voluntary basis on seven occasions to plant the seedlings and assist in cleanup activities in the area. Other forms of assistance have included the sponsoring of sports days and other events as well as support for career education. Americas Nomura works to help children study in an effort to positively impact their lifestyles. Nomura partners with Read Ahead (formerly Everybody Wins!) in New York, to provide mentorship and literacy support for local school-aged children. The CSR program in the Americas focuses on benefiting the younger generation and local community. Nomura has held book drives and backpack drives to support local students participating in the Read Ahead program. Instinet* Instinet CSR activities aim to reduce income disparities among young people by motivating them to study as well as providing support for life planning. Instinet employees work in partnership with Elevate New York to mentor New York high school students. Additionally, Instinet partners with Operation Backpack, which provides essential school supplies to disadvantaged students for a successful school year. * Instinet, a Nomura subsidiary, is headquartered in New York. 61 WEBWEBSystem for Supporting Corporate ValueNomura Report 2015 Our Environment Fundamental Approach Environmental Management The Code of Ethics of Nomura Group states, “Nomura Group is committed to acting in an environmentally responsible manner and should, therefore, approach environmental issues positively.” Based on this commitment, in 2009, we created both our Environmental Statement and Environmental Policy and, with the Environmental Activities Working Group as the core, we are proactively working to reduce the environmental impact of our business activities. In Japan, we have established an environmental management system (EMS) and are implementing comprehensive environmental preservation activities to deal with environmental risks and issues. Our Environmental Activities Working Group, which is a Group-wide organization, meets once a month to monitor the progress of environmental preservation activities. Also, to make sure the plan, do, check, action (PDCA) management approach is functioning, internal Nomura Group Environmental Management Framework Board of Directors Executive Management Board Report Approvals CSR Committee The Head of Environmental Affairs Report Approvals Environmental Activities Working Group Promotion Nomura Group companies Nomura Securities head office/ branch offices Cooperation Asia Europe Americas Nomura Group Environmental Objectives and Progress (Japan) FY2014/15 targets Assessments FY2015/16 targets Reduce domestic Nomura Group CO2 emissions per square meter of floor space by 20% or more from FY2009/10 levels q Reduction: 28.6% Reduce CO2 emissions per square meter of floor space of Nomura Group in Japan by 20% or more from FY2009/10 Reduction of greenhouse gas emissions Increase ratio of fuel-efficient, low pollution vehicles to 95% of the fleet q Switchover ratio: 98% Shift and maintain the percentage of fuel- efficient, low pollution vehicles of Nomura Securities at 95% Raise wastepaper recycling rate at principal offices to 90% q Recycling ratio: 99.2% Raise wastepaper recycling rate at principal offices to 95% Effective use of resources Among general office supplies, have green products account for 85% of supplies request system items q Purchase ratio: 87.3% Have green products account for 85% of supplies request system items Reduction of paper usage Reduce use of copy paper bought through supplies request system by 2% from the previous year T 5.2% increase year on year Reduce use of copy paper (as measured by the annual volume purchased) from the previous year Encourage electronic document delivery service q Accounts accepting electronic document delivery: 1.31 million Encourage electronic document delivery service Contribution to environment through Nomura’s main businesses Increase the number of financial products and services that help resolve social issues q Pursued underwriting and sales of green bonds to promote “social contribution-type investments” Increase the number of financial products and services that help resolve social issues Note: For further information on environmental objectives, please access: http://www.nomuraholdings.com/jp/csr/environment/management.html environmental audits are conducted periodically. We carry out “checks of environmental initiatives” on a nationwide basis in Japan and work to increase the effectiveness of our EMS. In addition, the Head of Environmental Affairs conducts reviews of these activities, confirms and assesses progress toward reaching objectives, and aims for continuing improvements. Reports are made to the CSR Committee regarding risks and opportunities related to environmental issues. Our offices around the world are implementing environmental initiatives, which include our London headquarters building, which obtained ISO 14001 certification in 2007 following an audit performed by a local accreditation body and has maintained its certification to the present. Environmental Targets We set environmental goals for each year and closely manage the progress of our environmental preservation activities. Environmental goals are set for each region, and the Environmental Activities Working Group checks to see if these targets are met. In addition, in line with the target to cut electricity consumption per square meter in FY2030/31 by 20% or more from 2009, the Group is working to conserve resources and energy. To deepen the understanding of environmental issues and conduct related educational programs, we have held an annual environmental training program for all Nomura Group employees since 2009. In FY2014/15, 92% of employees in Japan participated in this program. Moreover, we stream information over the Group intranet and host events to raise the awareness of environmental matters. Efforts to Address Climate Change The proper management of climate change risk and the promotion of measures to deal with global warming will lead to solutions to social problems and will contribute to maintaining and increasing corporate value. Nomura Group, as a multinational corporation with offices around the world, is making every effort to help resolve climate change issues through its business activities and to reduce the impact of its business activities on the natural environment. We collect and disclose environmental information, and, since FY2009/10, we have introduced third-party assurance verifications to ensure the reliability of this information (refer to page 71 for the third-party verification). Moreover, Nomura participates in the “Committee for Considering and Assessing Information Disclosure for Encouraging Green Investments” and the “Project for Improving the Basis for Disclosure of Environmental Information.” Nomura also engages in initiatives aimed at appropriate environmental information disclosure. In each region, based on the regulations established by local governments, we prepare plans for dealing with global warming and submit these to the government authorities. Please refer to climate change. http://www.nomuraholdings.com/csr/citizenship/ environment/climate.html Nomura Group is working to lighten the impact of its activities on the environment through the purchase of green power. Our purchases of green power began domestically in 2006, and these reached a cumulative total of 53.76 million kWh. Beginning in 2014, we have set a goal of continuing these purchases of green power (from biomass power generation and other green sources) for three years, and it will be allocated to our principal domestic offices (located in Nihonbashi in Tokyo, Osaka, and Nagoya). In addition, at our offices in London and elsewhere, we make use of electric power generated by renewable energy sources, including hydroelectric power. Going Paperless and Promoting Recycling We are making efforts to more effectively use limited natural resources and reduce the environmental impact of our activities and assist in the creation of a recycling- oriented society. As part of our commitment to reducing paper usage, we continue to digitize prospectuses, reports, forms, and other documents. Beginning in 2012, our initiatives have included providing all of our sales staff with tablet devices featuring digitized sales and marketing tools to enhance the quality of our services and further reduce paper usage. We also use these devices for training and internal meetings. We are also continuing to expand the range of documents that are distributed electronically for our Nomura Home Trade service. During FY2014/15, 10.39 million documents were delivered electronically. In our offices, we are working to raise employee awareness of the amount of paper they use as part of our campaign to reduce paper consumption. Going forward, we will continue to promote reductions in paper usage and strive to raise awareness about paper usage across the entire Group. 62 63 WEBSystem for Supporting Corporate ValueNomura Report 2015 Seven-Year Financial Summary (US GAAP) For the fiscal years beginning April 1 and ending March 31 of the following year Note: This financial summary is prepared solely for convenience. Readers are recommended to refer to the Form 20-F. FY2008/09 FY2009/10 FY2010/11 FY2011/12 FY2012/13 FY2013/14 Operating Results: Revenue: Commission Fees from investment banking Asset management and portfolio service fees Net gain (loss) on trading Gain (loss) on private equity investments Interest and dividends Gain (loss) on investments in equity securities Other Total revenue Interest expense Net revenue Non-interest expenses: Compensation and benefits Commissions and floor brokerage Information processing and communications Occupancy and related depreciation Business development expenses Other Total non-interest expenses Income (loss) before income taxes Income tax expense (benefit) Net income (loss) Less: Net income (loss) attributable to noncontrolling interests Net income (loss) attributable to NHI shareholders Balance Sheets (Period End): Cash and cash deposits Loans and receivables Collateralized agreements Trading assets and private equity investments Other assets Total assets Short-term borrowings Payables and deposits Collateralized financing Trading liabilities Other liabilities Long-term borrowings Total liabilities Total NHI shareholders’ equity Noncontrolling interests Total equity Total liabilities and equity Cash Flows: Net cash provided by (used in) operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents ¥ 306,803 54,953 140,166 (128,339) (54,791) 331,356 (25,500) 39,863 664,511 351,884 312,627 491,555 73,681 154,980 78,480 31,638 262,558 1,092,892 (780,265) (70,854) (709,411) (1,219) ¥ (708,192) ¥ 1,422,709 1,643,007 8,412,618 11,672,612 1,686,902 ¥24,837,848 ¥ 1,183,374 1,242,318 10,157,954 4,752,054 467,574 5,483,028 23,286,302 1,539,396 12,150 1,551,546 ¥24,837,848 ¥ (712,629) (98,905) 999,760 (81,896) ¥ 106,330 ¥ 395,083 121,254 132,249 417,424 11,906 235,310 6,042 37,483 1,356,751 205,929 1,150,822 526,238 86,129 175,575 87,806 27,333 142,494 1,045,575 105,247 37,161 68,086 288 ¥ 67,798 ¥ 1,352,244 2,071,714 12,467,213 14,700,282 1,638,975 ¥32,230,428 ¥ 1,301,664 1,528,419 11,216,481 8,356,806 494,983 7,199,061 30,097,414 2,126,929 6,085 2,133,014 ¥32,230,428 ¥ (1,500,770) (269,643) 2,176,530 964 ¥ 407,081 ¥ 405,463 107,005 143,939 336,503 19,292 346,103 (16,677) 43,864 1,385,492 254,794 1,130,698 518,993 92,088 182,918 87,843 30,153 125,448 1,037,443 93,255 61,330 31,925 3,264 ¥ 28,661 ¥ 2,150,453 2,227,822 15,156,318 15,241,931 1,916,466 ¥36,692,990 ¥ 1,167,077 2,103,608 13,686,438 8,688,998 552,316 8,402,917 34,601,354 2,082,754 8,882 2,091,636 ¥36,692,990 ¥ (235,090) (423,214) 1,284,243 (26,246) ¥ 599,693 ¥ 347,135 59,638 144,251 272,557 25,098 435,890 4,005 563,186 1,851,760 315,901 1,535,859 534,648 93,500 177,148 100,891 48,488 496,227 1,450,902 84,957 58,903 26,054 14,471 ¥ 11,583 ¥ 1,953,677 2,211,423 13,742,646 14,123,594 3,665,972 ¥35,697,312 ¥ 1,185,613 2,437,370 12,519,274 7,495,177 1,165,901 8,504,840 33,308,175 2,107,241 281,896 2,389,137 ¥35,697,312 ¥ 290,863 9,942 (844,311) (6,314) ¥ (549,820) ¥ 359,069 62,353 141,029 367,979 8,053 394,007 38,686 708,767 2,079,943 266,312 1,813,631 547,591 91,388 179,904 91,545 49,010 616,463 1,575,901 237,730 132,039 105,691 (1,543) ¥ 107,234 ¥ 1,652,752 2,629,875 14,115,257 17,124,349 2,420,206 ¥37,942,439 ¥ 738,445 2,413,801 15,409,383 8,491,296 978,163 7,592,368 35,623,456 2,294,371 24,612 2,318,983 ¥37,942,439 ¥ 549,501 (160,486) (701,623) 47,175 ¥ (265,433) ¥ 473,121 91,301 168,683 476,356 11,392 416,350 15,156 179,485 1,831,844 274,774 1,557,070 570,058 111,849 192,168 80,142 38,485 202,754 1,195,456 361,614 145,165 216,449 2,858 ¥ 213,591 ¥ 2,189,310 2,570,678 17,347,001 18,714,314 2,699,011 ¥43,520,314 ¥ 602,131 2,836,873 17,111,999 11,047,285 1,141,750 8,227,063 40,967,101 2,513,680 39,533 2,553,213 ¥43,520,314 ¥ 457,426 (103,195) 289,385 41,089 ¥ 684,705 Millions of yen FY2014/15 ¥ 453,401 95,083 203,387 531,337 5,502 436,766 29,410 175,702 1,930,588 326,412 1,604,176 596,593 129,977 192,300 76,112 35,230 227,205 1,257,417 346,759 120,780 225,979 1,194 ¥ 224,785 ¥ 2,096,596 2,948,424 16,719,520 17,308,848 2,709,848 ¥41,783,236 ¥ 662,256 3,398,600 15,379,803 10,044,236 1,217,099 8,336,296 39,038,290 2,707,774 37,172 2,744,946 ¥41,783,236 ¥ (77,028) 12,337 (178,206) 68,513 ¥ (174,384) 64 65 Data SectionNomura Report 2015 Unit FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15 No. of groups assisted No. of groups 200 243 274 257 264 Unit June 30, 2011 June 30, 2012 June 30, 2013 June 30, 2014 June 30, 2015 Unit FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15 Dialogue with Stakeholders CSR Key Facts Corporate Governance Members of the board Board of Directors Outside Directors Non-Japanese Directors Female Directors Officers (Executive Officers and Senior Managing Directors) Men Women Ratio of women Board of Directors meetings No. of times held Average attendance rate Client Focused Caseload at Customer Help Desk Department (Nomura Securities) Total Complaints Inquiries Opinions and requests Other No. of people No. of people Ratio (%) No. of people Ratio (%) No. of people Ratio (%) 14 8 57 4 29 1 7 11 7 64 3 27 1 9 11 6 54 3 27 1 9 11 6 54 3 27 1 9 12 7 58 3 25 1 8 Unit April 1, 2011 April 1, 2012 April 1, 2013 April 1, 2014 April 1, 2015 No. of people No. of people % Unit No. of times % 30 1 3 41 2 4 23 2 8 27 2 6 26 2 7 FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15 10 96 10 95 11 97 10 98 10 99 * The number of meetings of the Board of Directors and the average number of board members attending from April 2014 to March 2015 No. of cases No. of cases No. of cases No. of cases No. of cases 5,189 2,359 2,408 256 166 5,005 3,012 1,836 13 144 5,693 3,409 2,119 23 142 7,010*1 4,023*2 2,730 55 202 5,540 2,537 2,766 81 156 *1 The increase in the caseload in FY2013/14 was due to a rise in the number of incoming calls and heavy demand on telephone circuits. *2 Of the total, 69 calls were related to the handling of customer information. Branches that are barrier-free and have AEDs (Nomura Securities) Certified universally accessible Toilets accessible in wheelchairs Elevators accessible in wheelchairs With steps removed from entrances and exits (with ramps, elevators, or no steps) With installations to mitigate entrance and exit steps (railings or step heights reduced) Percentage of branches equipped with AEDs (automated external defibrillators) Percentage of branches with personnel designated to provide assistance to seniors No. of branch offices No. of branch offices No. of branch offices No. of branch offices No. of branch offices % % 30 78 53 136 15 — — 30 80 54 140 14 — — 30 81 57 139 13 — — 30 78 66 129 13 100 80 30 78 66 130 14 100 80 Unit December 2013 August 2014 January 2015 Results for survey of customer satisfaction at branch offices (Nomura Securities) Extremely satisfied/satisfied Neither satisfied nor dissatisfied Extremely dissatisfied/dissatisfied % % % * The response rate for the survey conducted in January 2015 was 23.5%. 81.6 15.7 2.7 81.4 16.3 2.2 80.9 16.3 2.8 Social Contribution Type Bonds (Nomura Securities) Name of bonds issued Number of issues Issue proceeds 66 Unit FY2012/13 FY2013/14 FY2014/15 ADB Clean Energy Bonds (AUD/TRY/BRL)/ Green IFC Bonds (AUD/TRY/BRL)/ ADB Clean Energy Bonds (NZD/TRY/ZAR) 9 47,966 Number Millions of yen ADB Clean Energy Bonds (MXN/BRL)/ AfDB Education Support Bonds (BRL)/ ADB Water Bonds (TRY/BRL) 5 53,574 World Bank Green Bonds (TRY/BRL)/AfDB Food Safety and Security Bond (BRL)/Green IFC Bonds (BRL)/ADB Water Bonds (BRL) 5 53,916 Community contribution expenditures*1 Total Education Arts, culture, and sports Science and academic achievement Community contribution Welfare and health Environment Human rights and labor Disaster relief Other Amount (Millions of yen) 1,400 1,235 1,348 1,323 1,457 Amount (Millions of yen) Amount (Millions of yen) Amount (Millions of yen) Amount (Millions of yen) Amount (Millions of yen) Amount (Millions of yen) Amount (Millions of yen) Amount (Millions of yen) Amount (Millions of yen) 623 71 162 138 55 25 27 121 182 582 106 83 200 49 43 3 71 103 556 81 129 199 79 47 4 88 171 604 66 117 190 39 84 20 78 129 530 333 114 161 85 34 19 68 113 Number of community development projects implemented*1 Projects No. of projects 173 370 423 299 405 Assistance provided to groups that contribute to society*1 *1 These figures cover Nomura Holdings and 10 of its major subsidiaries in Japan and overseas. Unit FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15 Cumulative total Participants and materials in financial and economics education*2 Visiting classes (elementary, junior, senior high schools, universities, teachers)*3 Financial courses for universities Since 2001 No. of schools Since 2008 No. of participants No. of schools 10 734 108 22 31 56 265 427 1,087 115 1,865 114 2,825 112 9,836 18,833 108 1,548 No. of participants 10,000 12,000 11,000 11,000 11,000 206,000 Financial courses for the general public Since 2003 No. of courses 630 536 444 531 566 7,134 No. of participants 28,659 27,839 21,696 23,897 24,712 365,766 Nikkei Stock League Since 2000 Teaching material for elementary schools (The Economics Classroom, “The Framework of Society and the Role of Money”*4) Since 2008 No. of teams No. of members No. of schools 1,565 6,331 200 1,420 5,741 120 1,287 5,120 396 1,484 5,699 227 1,361 5,167 366 23,071 91,479 3,309 No. of copies 30,000 5,000 17,422 14,639 24,170 261,231 Teaching material for junior high schools (The t-shirt shop) Since 2006 No. of schools 400 180 387 215 161 4,643 No. of copies 50,000 17,200 17,326 12,162 15,380 442,068 *2 These figures cover Nomura Holdings and four of its major subsidiaries in Japan. *3 Beginning in FY2014/15, these figures include special lectures for universities and workplace visits. *4 In FY2014/15, a textbook for primary school students entitled “The Framework of Society and the Role of Money” was prepared and distributed. Developing Human Resources Who Respect Diversity FY2010/11 Unit FY2011/12 FY2012/13 FY2013/14 FY2014/15 Education and training expenses Total Japan Europe Americas Asia-Pacific Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen 2,455 1,573 489 257 136 2,033 1,468 133 280 153 2,441 1,907 108 233 193 2,515 1,978 81 262 194 2,972 2,076 115 573 208 67 Data SectionNomura Report 2015 CSR Key Facts Data for FY2014/15 items marked with have undergone assurance verification by a third party. Unit FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15 Participation in education and training*1 Total Japan (Nomura Holdings, Nomura Securities) Europe Americas Asia-Pacific Composition of employees*2 Total Japan Europe Americas Asia-Pacific Aggregate no. of hours Aggregate no. of participants Aggregate no. of hours Aggregate no. of participants Aggregate no. of hours Aggregate no. of participants Aggregate no. of hours Aggregate no. of participants Aggregate no. of hours Aggregate no. of participants No. of employees Ratio of male employees (%) Ratio of female employees (%) No. of employees Ratio of male employees (%) Ratio of female employees (%) No. of employees Ratio of male employees (%) Ratio of female employees (%) No. of employees Ratio of male employees (%) Ratio of female employees (%) No. of employees Ratio of male employees (%) Ratio of female employees (%) Ratio of employees by region Total Japan Europe Americas Asia-Pacific % % % % % 272,528 13,146 207,458 8,255 3,790 407 — — 61,280 4,484 26,871 62 38 14,918 56 44 4,353 70 30 2,348 74 26 5,252 68 32 100 55 16 9 20 225,184 21,928 169,385 11,965 2,766 977 7,390 1,182 45,643 7,804 27,168 62 38 15,145 56 44 4,014 70 30 2,420 74 26 5,589 66 34 100 56 15 9 20 254,117 22,048 208,087 12,081 1,732 647 7,204 1,794 37,094 7,526 26,242 62 38 15,004 57 43 3,618 70 30 2,271 74 26 5,349 65 35 100 57 14 9 20 406,602 89,657 284,920 12,325 26,117 21,822 7,811 5,598 87,754 49,912 26,019 62 38 15,062 56 44 3,461 71 29 2,281 74 26 5,215 64 36 100 58 13 9 20 507,639 132,672 333,305 14,398 48,434 41,654 15,439 12,255 110,461 64,365 28,672 62 38 15,973 58 42 3,485 71 29 2,449 74 26 6,765*2 61 39 100 56 12 9 23 Composition by employment contract (Japan) Full-time regular employment Part-time regular employment Number of new hires*3 Total Japan (Nomura Holdings, Nomura Securities) Europe Americas Asia-Pacific No. of employees No. of employees 14,918 788 15,145 766 15,004 606 15,062 586 15,973 740 No. of employees Men (No. of employees) Women (No. of employees) Men (No. of employees) Women (No. of employees) Men (No. of employees) Women (No. of employees) Men (No. of employees) Women (No. of employees) 3,631 548 439 754 638 3,359 573 495 663 478 1,252 1,150 2,554 446 581 307 361 859 2,920 507 522 503 418 970 2,934 482 363 389 121 382 128 718 351 *1 Participation in education and training: For Europe, Americas, and Asia-Pacific, in the Wholesale Division, the figures include the number of persons registered through the in-house training system. *2 Composition of employees: The figures cover Nomura Group on a consolidated basis. In FY2013/14 and prior years, some subsidiaries were not included in the scope of the calculations. *3 Number of new hires: In Asia-Pacific, certain subsidiaries were not covered in the data for FY2014/15. Those not covered included Capital Nomura Securities Public Company Limited (CNS) and Nomura Asset Management Taiwan Ltd. Please refer to standards for calculation (http://www.nomuraholdings.com/csr/data/). 68 Composition of managers Total Japan (Nomura Holdings, Nomura Securities) Europe Americas Asia-Pacific Use of childcare and family nursing care support plans*1 Pre- and post-natal leave Childcare leave Leave to care for sick or injured children Childcare time Assistance with daycare expenses Family nursing care leave Reduced working hour plan for family nursing care Paid leave for family nursing care Unit Men Women Ratio of women (%) Men Women Ratio of women (%) Men Women Ratio of women (%) Men Women Ratio of women (%) Men Women Ratio of women (%) No. of employees No. of employees No. of employees No. of employees No. of employees No. of employees No. of employees No. of employees Post-childcare leave reinstatement and retention rates*1 Men (%) Women (%) Men (%) Women (%) Reinstatement rate Retention rate Human rights training*1 Sessions Lecture hours Participants FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15 6,643 898 12 3,474 173 5 1,553 317 17 786 159 17 830 249 23 233 338 435 104 332 13 0 30 100 96 100 95 7,299 1,064 13 3,623 205 5 1,693 325 16 1,060 243 19 923 291 24 237 367 478 148 365 6 0 33 100 99 100 98 7,024 1,055 13 3,549 219 6 1,557 315 17 1,016 234 19 902 287 24 249 392 529 175 390 11 2 43 100 98 50 98 6,913 1,031 13 3,480 218 6 1,507 290 16 1,028 234 19 898 289 24 273 414 571 223 408 10 3 48 100 93 100 98 7,095 1,234 15 3,437 236 6 1,479 311 17 1,093 250 19 1,086 437 29 266 459 606 253 405 7 1 55 100 95 100 95 No. of sessions Hours No. of participants 32 14,520 13,827 20 10,509 9,823 16 14,777 14,129 28 15,648 15,220 24 15,059 14,643 Status of other personnel and labor-related issues*1 Employee turnover rate Number of seniors (aged 60 years and over) rehired Percentage of employees with disabilities Average number of annual paid leave days used Percentage of employees with labor union memberships Average annual salary*2 % No. of employees % Days % Thousands of yen *1 Data cover Nomura Securities. *2 In Nomura Securities, there is no difference in job types by gender or region. 5 713 1.86 9.7 6 763 2.00 9.9 7 727 2.02 10.0 6 719 2.09 9.2 6 714 2.07 9.7 53.8 10,869 52.8 10,660 53.0 9,990 53.5 11,187 52.5 11,932 69 Data SectionNomura Report 2015 CSR Key Facts Data for FY2014/15 items marked with have undergone assurance verification by a third party. Independent Assurance Our Environment GHG Emissions Scope 1: Direct emissions*1 Scope 2: Indirect emissions*1 Scope 1, 2 Emissions per employee Scope 3 Emissions from employee travel*2 (Air, rail, and automobile travel) Energy Consumption Direct energy consumption (Natural gas, etc.)*4 Indirect energy consumption (Purchased electric power)*4 Including, Green electric purchase power*5 (Purchased cooling and heating power) Environmental Resource Efficiency Water consumption*6 Copy paper consumption*7 Amount of waste generated*8 Japan Europe Americas Asia-Pacific Japan Europe Americas Asia-Pacific Japan Europe Americas Asia-Pacific Japan Europe Americas Asia-Pacific*3 Japan Europe Americas Asia-Pacific Japan Europe Americas Asia-Pacific Japan Europe Americas Asia-Pacific Japan Europe Americas Asia-Pacific Unit t-CO2 t-CO2 t-CO2 t-CO2 t-CO2 t-CO2 t-CO2 t-CO2 t-CO2 t-CO2 t-CO2 t-CO2 t-CO2 t-CO2 t-CO2 t-CO2 MWh MWh MWh MWh MWh MWh MWh MWh MWh MWh MWh MWh MWh Thousand m3 Thousand m3 Thousand m3 Thousand m3 Tons Tons FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15 2,673 1,256 — 101 41,953 22,408 — 16,816 3.0 6.4 — 5.7 12,407 — — 2,595 14,275 6,783 — 406 89,674 47,830 — 17,813 5,900 26,740 0 — 0 204 101 — 36 746 1,450 2,373 1,299 0 76 34,214 21,629 12,208 24,357 2.4 6.9 5.0 5.0 18,505 9,446 6,060 11,883 12,664 6,981 0 272 74,648 50,091 16,194 27,474 7,424 20,550 0 10,047 2,352 188 136 4 33 820 1,223 2,247 1,318 0 76 38,988 16,842 11,672 24,323 2.8 6.2 5.1 5.4 17,919 9,728 5,124 11,057 11,948 7,025 0 800 74,293 38,679 16,104 28,012 6,329 17,523 0 7,924 1,907 178 124 4 45 759 1,904 2,207 1,131 46 143 42,300 17,334 10,143 21,601 3.0 6.0 4.5 4.9 18,729 9,253 5,561 9,552 11,729 6,210 225 608 74,117 41,164 15,896 26,942 6,317 15,258 0 2,220 1,731 177 124 13 45 746 2,659 2,107 797 69 143 40,965 14,164 13,486 22,007 2.9 4.6 5.5 4.3 20,823 8,127 4,349 10,575 11,107 4,438 340 611 72,780 30,836 22,148 27,862 32,626 12,400 0 238 1,694 171 97 26 48 1,041 2,281 The scope 1, 2, and 3 classifications follow The Greenhouse Gas Protocol (GHG Protocol): http://www.ghgprotocol.org/ Please refer to standards for calculation (http://www.nomuraholdings.com/csr/data/). The coverage by region is as follows: Japan: The Group companies located in Japan (http://www.nomuraholdings.com/company/group/) Europe: Offices in London, Paris, Frankfurt, Zurich, Madrid, Milan, and Luxembourg Americas: Offices in New York and Instinet offices Asia-Pacific: Offices in Hong Kong, Singapore, India, Dalian, and Bangkok *1 In Asia-Pacific, totals include only the India office in FY2010/11. Beginning in FY2014/15, data for Bangkok has been included. As a result of improvements in data collection precision, figures within Scope 1, for Japan and Europe, for FY2013/14 were revised, and within Scope 2, figures for the Americas for FY2013/14 were revised. *2 Data for airline and long-distance railway travel in Japan and overseas include the portion purchased through specified travel agencies. Data for Asia-Pacific in FY2010/11 include only offices in India. Among Japan, Europe, and India, Hong Kong, and Bangkok offices in Asia-Pacific, data covers the actual usage of regular automobiles. *3 In Asia-Pacific offices, assurance-verified data compiled in FY2014/15 came to a total of 9,373 t-CO2. *4 In Asia-Pacific offices, data included only the India office in FY2010/11. As a result of improvements in data collection precision, figures for FY2013/14 for direct energy consumption in Japan and Europe have been revised. Also, in the Americas, data for indirect energy purchases (amount of electric power purchased) from FY2011/12 to FY2013/14 have been revised. *5 In FY2010/11, data applied only to Nomura Group companies in Japan. However, in addition to Nomura Group companies in Japan, in Europe, the Frankfurt and Zurich offices were included from FY2011/12 onward. From FY2013/14, the Milan office was included, and the London office was included beginning with FY2014/15. *6 Totals for Europe only included the London office in FY2010/11. Totals for Asia-Pacific only applied to the India office in FY2010/11 and FY2011/12. As a result of improvements in data collection precision, figures for the Americas in FY2013/14 were revised. *7 In Nomura Securities, goods and services purchased through designated firms by the London, India, Hong Kong, and Bangkok offices were compiled. Data for the Bangkok office were included beginning in FY2014/15. Nomura Securities increased the scope of its data compilation. *8 Totals include the Tokyo main offices (Nihonbashi Head Office building and the Dai-ni Edobashi Building); the Osaka Branch; the Nagoya Branch; the London, Paris, Frankfurt, and Zurich offices; and the India office. From FY2013/14, the following were added: the Tokyo main office (Urbannet Otemachi Building), the Kyoto Branch, the Okayama Branch, and the Hong Kong office. 70 71 Data SectionNomura Report 2015 Global Network Nomura Securities Domestic Network (As of June 30, 2015) Okinawa Naha Branch Hokuriku Fukui Branch Kanazawa Branch Niigata Branch Toyama Branch Kinki Akashi Branch Daito Branch Gakuenmae Branch Higashiosaka Branch Himeji Branch Hirakata Branch Ibaraki Branch Kawanishi Branch Kishiwada Branch Kobe Branch Kyoto Branch Nanba Branch Nara Branch Nishinomiya Branch Okamoto Branch Osaka Branch Otsu Branch Sakai Branch Senri Branch Takarazuka Branch Takatsuki Branch Tennoji Branch Toyonaka Branch Tsukaguchi Branch Uehonmachi Branch Umeda Branch Wakayama Branch Chugoku Fukuyama Branch Hiroshima Branch Kurashiki Branch Shikoku Matsue Branch Okayama Branch Shimonoseki Branch Tokuyama Branch Tottori Office Yonago Branch Kochi Branch Matsuyama Branch Takamatsu Branch Tokushima Branch Kyushu Fukuoka Branch Fukuoka Branch, Amu Plaza Hakata Office Kagoshima Branch Kitakyushu Branch Kumamoto Branch Kurume Branch Miyazaki Branch Nagasaki Branch Oita Branch Saga Branch Sasebo Branch Hokkaido Asahikawa Branch Hakodate Branch Kushiro Branch Tohoku Akita Branch Aomori Branch Fukushima Branch Hachinohe Branch Iwaki Office Sapporo Branch Tokachi Obihiro Office Koriyama Branch Morioka Branch Sendai Branch Yamagata Branch Tokyo metropolitan area Chofu Branch Denenchofu Branch Fuchu Branch Gotanda Branch Hachioji Branch Head Office Ikebukuro Branch Ikebukuro Metropolitan Plaza Branch Jiyugaoka Branch Kamata Branch Keio Shinjuku Branch Kanto Aeon Mall Funabashi Office Aobadai Branch Atsugi Branch Chiba Branch Fujisawa Branch Funabashi Branch Hiratsuka Branch Ichikawa Branch Kamakura Branch Kashiwa Branch Kawagoe Branch Kawaguchi Branch Kawasaki Branch Kofu Branch Chubu Gifu Branch Hamamatsu Branch Kanayama Branch Kariya Branch Kasugai Branch Matsumoto Branch Kichijoji Branch Koiwa Branch Kokubunji Branch Machida Branch Mita Branch Nakameguro Branch Nakano Branch Nerima Branch Ogikubo Branch Omori Branch Seijo Branch Senju Branch Shibuya Branch Shinbashi Branch Shinjuku Branch Shinjuku Nomura Building Branch Shinjuku-eki Nishiguchi Branch Tachikawa Branch Tamagawa Branch Tanashi Branch Tokyo Branch Toranomon Branch Ueno Branch Koshigaya Branch Kumagaya Branch Matsudo Branch Mito Branch Musashikosugi Branch Odawara Branch Omiya Nishiguchi Branch Ota Branch Sagamihara Branch Saitama Branch Saitama Branch, Omiya Higashiguchi Office Shinyurigaoka Branch Takasaki Branch Tama Plaza Branch Tokorozawa Branch Totsuka Branch Tsukuba Branch Tsurumi Branch Urawa Branch Utsunomiya Branch Yokohama Bashamichi Branch Yokohama Branch Yokosuka Branch Nagano Branch Nagoya Branch Nagoya-ekimae Branch Numazu Branch Okazaki Branch Shizuoka Branch Toyohashi Branch Toyota Branch Tsu Branch Yokkaichi Branch Europe Nomura Group has locations in 13 countries in Americas In addition to nine offices in this region that this region, with the London Office, which provide wholesale services, Nomura has an asset marked the 50th anniversary of its establishment management company with the advantage in in FY2014/15, as the core of operations. Drawing high-yield bond investment and other companies. on the strengths of its global network, Nomura Nomura is concentrating its corporate resources provides services that include underwriting and in business fields where it can attain competitive trading in bonds and equities as well as financial superiority. Also, by tapping into its global solutions, with the aim of further expanding client network to respond to a diverse range of client revenue and enhancing the profitability of needs, Nomura Group is working to expand its Nomura Group. Number of personnel: 3,485 market share in the Americas which is home to the largest fee pool in the world. Number of personnel: 2,449 Asia–Pacific This is the only major region where Nomura offers Japan The headquarters functions of Nomura Group, services to retail customers in addition to its which is expanding its business activities on a wholesale and asset management services. global scale, are located in Japan. Nomura’s Tailoring its approach to specific market strengths include the largest share of client conditions, Nomura Group offers integrated retail assets and sales of investment trusts. Nomura is and wholesale services and is structuring an also differentiated by its position as an original business model for the region, where independent securities company with a broad rapid economic growth is expected. Number of personnel: 6,765* * Includes personnel in offshore offices in India customer base as well as capabilities for providing services through its global business platform in wholesale business. Number of personnel: 15,973 72 73 Data SectionNomura Report 2015 Corporate Data Website Information E Corporate Data Company name Nomura Holdings, Inc. President & CEO Koji Nagai Date of incorporation December 25, 1925 Business description Investment and financial services Paid-in capital ¥594.5 billion (As of March 31, 2015) Head office 1-9-1, Nihonbashi, Chuo-ku, Tokyo 103-8645, Japan Group employees 28,672 (As of March 31, 2015) E Share Data Common stock issued 3,822,562,601 shares (As of March 31, 2015) Listing The common shares of Nomura Holdings, Inc. are listed on the Tokyo, Nagoya, and Singapore stock exchanges. The shares are also listed on the NYSE in the form of American Depositary Shares (ADSs) evidenced by American Depositary Receipts (ADRs). Each ADS represents one share of common stock. (As of March 31, 2015) Securities code 8604 (Tokyo Stock Exchange) NMR (New York Stock Exchange) Number of shareholders 440,233 (Unit shareholders: 417,955) (As of March 31, 2015) Transfer agent and registrar Mitsubishi UFJ Trust and Banking Corporation Corporate Agency Department: +81 (3) 5391-1900 Depositary for American Depositary Receipts (ADRs) The Bank of New York Mellon Depositary Receipts Division: +1 (866) 680-6825 http://www.adrbnymellon.com Ratio: 1 ADR = 1 ordinary share Major shareholders (Top 10)* Component ratio of shareholders Names of shareholders Japan Trustee Services Bank, Ltd. (Trust Account) The Master Trust Bank of Japan, Ltd. (Trust Account) The Bank of New York Mellon SA/NV 10 State Street Bank West Client-Treaty 505234 Japan Trustee Services Bank, Ltd. (Trust Account 5) Japan Trustee Services Bank, Ltd. (Trust Account 1) Japan Trustee Services Bank, Ltd. (Trust Account 7) Japan Trustee Services Bank, Ltd. (Trust Account 6) Japan Trustee Services Bank, Ltd. (Trust Account 3) Japan Trustee Services Bank, Ltd. (Trust Account 2) Number of shares (thousands) 148,073 145,364 49,865 46,849 41,992 41,966 41,815 41,747 41,340 41,210 Percentage (%) 4.1 4.0 1.4 1.3 1.2 1.2 1.2 1.2 1.1 1.1 * The Company has 222,555 thousand shares of treasury stock as of March 31, 2015, which is not included in the major shareholders list above. * Numbers of shares less than 1,000 have been truncated. Treasury stock has been excluded in calculating ownership percentages. Date of record for dividend payments Second quarter-end September 30 March 31 Year-end (%) 100 80 60 40 20 0 2010/11 2011/12 2012/13 2013/14 2014/15 (Fiscal year) L Financial Institutions L Other Legal Entities L Foreign Legal Entities L Individuals and Others Nomura Holdings Nomura Securities Long-term Short-term Long-term Short-term BBB+ Baa1 A- A+ AA- A-2 — F1 a-1 — A- A3 A- A+ AA- A-2 P-2 F1 a-1 — E Other Credit rating* Standard & Poor’s Moody’s Investors Service Fitch Ratings R&I JCR * As of June 30, 2015 74 B Nomura Holdings Website http://www.nomura.com/ At Nomura Group, we are continuing to strive to make our corporate website broadly accessible by eliminating difficulties people may have in accessing information and services due to visual, hearing, speech, or other physical impairments. C Corporate Citizenship Site http://www.nomuraholdings.com/csr/ C Investor Relations Site http://www.nomuraholdings.com/investor/ Nomura Group makes available detailed information on this site regarding its CSR activities. This site also contains application forms for requesting guest lectures by Nomura staff on financial and economic topics, a GRI Guidelines Index, and other CSR- related data as well as other materials. Provides various investor relations information for Nomura Group, including earnings presentations, financial data, the Nomura Report, notices for shareholders, and information pertaining to corporate governance. About the Company Logo The logo of Nomura Group is based on our Company badge. This badge design is an arrangement of an ivy leaf, which appears on the crest of the Nomura family, and the original Nomura trade name in Japanese, yamato. The yama portion of the trade name, which means “mountain,” was restyled in the shape of a mountain, and this combination of symbols is immediately recognizable today as synonymous with “NOMURA.” The cover design of this report is based on the “M” motif. Inquiries Nomura Holdings, Inc. Investor Relations Urbannet Otemachi Building, 2-2-2, Otemachi, Chiyoda-ku, Tokyo 100-8130, Japan Tel. +81 (3) 5255-1000 (Main switchboard) Corporate Citizenship Otemachi Nomura Building, 2-1-1, Otemachi, Chiyoda-ku, Tokyo 100-8170, Japan Department Tel. +81 (3) 5255-1000 (Main switchboard) e-mail: csr@jp.nomura.com 75 Nomura Report 2015 N o m u r a R e p o r t 2 0 1 5 N o m u r a H o l d i n g s , I n c . This report was produced using non VOC inks. All electricity to print this booklet was generated by green energy. (800 kWh) About the photo on the front cover The Tokyo Nihonbashi head office building under construction around 1955-1960 The photo was taken before the 1964 Tokyo Olympics and before the expressway over the bridge at Nihonbashi was built. Electric- powered trolleys were still running in the streets, and the milestone marking the beginning of all roads to the rest of Japan is visible in the center of the photograph. Printed in Japan