N o m u r a R e p o r t 2 0 1 7 N o m u r a H o l d i n g s , I n c . Nomura Report 2017 Nomura Holdings, Inc. Introduction Nomura Group contributes to the economic development and realization of a prosperous society through its involvement in the securities industry. 2 Nomura Report 2017 Nomura Report 2017 Nomura Report 2017 1 1 Introduction “Place our clients at the heart of everything we do” A commitment that remains unchanged since our founding 2 Nomura Report 2017 Nomura Report 2017 3 Introduction Aiming for a better future Individuals’ asset formation is closely connected to the financing and growth of individual companies and the broader economy. To prepare for the future, individuals can invest to receive capital gains, dividends, interest and other benefits commensurate with their risk taking. In addition, corporations and public bodies can create value, revitalize communities, and sometimes even resolve social issues through the capital markets. We connect both investors and companies to these capital markets, thereby supporting the productive use of risk capital, paving the way to a better future. Social contribution through risk capital cycle (Nomura’s Retail-Wholesale two-pronged business model) OUTCOME Resolve social issues Promote innovations Provide infrastructure Stimulate regional economies Increase employment Profits Returns Investment (reinvestment) Preparing for the future OUTCOME Finance by corporates and public bodies Capital Capital markets markets Equities and bonds Individuals’ asset formation Prosperous lives Investment Financing Capital gains, Dividends and interest income Improving living standards Supporting financing by companies and public bodies 1961 First American Depositary Receipts issued by Japanese company (Sony Corporation) 1987 Nippon Telegraph and Telephone Corporation (NTT) listed on stock market 2015 Three Japan Post Group companies listed on stock market Supporting individuals’ asset formation 1953 Distributed “Million Ryo Savings Chest” piggy banks to promote securities investment as a form of savings 2012 Start using mobile tablets for client consultations (Photo taken in 2017) 2016 Providing investment information through robo advisory service Please see “Special Feature 1: Transforming business model in Japan” on P28 for more details. Please see “Special Feature 2: Leveraging new technologies” on P30 for more details. Financial and economic education 4 Nomura Report 2017 Nomura Report 2017 5 2000 Start of financial education courses for universities (Photo taken in 2015) 2008 Start of “Manabou Classroom” school-visit classes for elementary schools (Photo taken in 2017) Please see “Special Feature 3: Promoting financial and economic education in Japan” on P32 for more details 2016 The 17th Nikkei Stock League contest award ceremony INDEX About Nomura Strengths Supporting Value Creation P 8 Business Model P46 Corporate Governance P10 History of the Nomura Group P54 Interview with Outside Director —Contributing to the Development of Capital Markets for 91 Years P12 Nomura by the Numbers P13 Key Events during the Year P14 Financial and Non-Financial Highlights P56 Interview with Advisory Board Member P58 Message from the Chief of Staff P60 Directors of Nomura Holdings / Outside Directors of Major Subsidiaries in Japan / Executive Officers and Senior Managing Directors of Nomura Holdings Strategies for Value Creation P16 Message from Group CEO P22 Message from Group COO P26 Message from CFO P28 Special Feature 1: Transforming business model in Japan P30 Special Feature 2: Leveraging new technologies P32 Special Feature 3: Promoting financial and economics education in Japan P34 Special Feature 4: Supporting the growth of private and public sectors through our business P36 Special Feature 5: Strengthening international businesses P38 At a Glance P40 Business Divisions: Retail Division P42 Business Divisions: Asset Management Division P44 Business Divisions: Wholesale Division P64 Risk Management P70 Compliance P72 Investing in Our Employees P76 Corporate Social Responsibility P78 Advancing Sustainable Finance P80 Supporting Our Communities P84 Our Environment Corporate Information / Data P86 Key Financial Data P88 Eleven-Year Consolidated Financial Summary P90 CSR Key Facts P94 Independent Assurance P96 Global Network P97 Services for Retail Clients / Nomura Securities Branches in Japan P98 Corporate Data / Share Information / Credit Rating Forward-Looking Statements This Nomura Report contains forward-looking statements about the future plans, strategies, beliefs, and performance of Nomura Group. These forward-looking statements are not historical facts. They are expectations, estimates, forecasts, and projections based on information currently available to the Company and are subject to a number of risks, uncertainties, and assumptions, which, without limitation, include market trends, economic trends, competition in the financial industry, laws and regulations, and tax systems. As such, actual results may differ materially from those projected. 6 Nomura Report 2017 Nomura Report 2017 Nomura Report 2017 7 7 About Nomura Business Model Nomura Group value creation model The Nomura Group’s business is executed according to our philosophy of always “placing our clients at the heart of everything we do.” We contribute to the economic growth and creation of a prosperous society by providing financial products, services, and solutions that are innovative and competitive, while also utilizing our high-quality management resources. We strive to raise our economic value by building a sustainable business foundation to support growth in any environment. Social issues Management resources Our businesses Our strengths Our strategy Our products and services OUTCOME: Value creation Raising social value Contribute to the resolution of social issues INPUT Japan Human capital Retail • Aging population with a low birthrate, limits to social security system • Necessity of shift from savings to investment • Evolution of corporate governance Intellectual capital Social capital Asset Management Global Physical capital • Prepare for potential geopolitical risks • Supply risk assets to growth industries and countries • Pursue opportunities for corporate growth • Promote innovation Financial capital Wholesale Reinvestment Help tackle social issues Provide financial products and services to individual and corporate clients through our 158 branches throughout Japan See P40 for Business Division details Operate globally, providing asset management services to a wide range of clients See P42 for Business Division details Global Markets Provide a variety of financial services, including trading, sales and structuring to our institutional investors and corporate clients Investment Banking Support our clients by underwriting bonds and stocks and providing M&A and other advisory services See P44 for Business Division details OUTPUT Realize the founder’s mission to “enrich the nation through the securities business” Unparalleled track record in Japan Diverse employee base, representing more than 70 nationalities Continuous accumulation of experience and knowledge Global franchise Close relationships with a wide range of stakeholders Robust financial position Competitive financial products, services, and solutions Establish a solid position as Asia’s global investment bank Enhance human capital, intellectual capital and social capital by improving financial literacy and supporting innovation Raising economic value Build a sustainable business foundation to support growth in any environment FY2019/20 management target: EPS of ¥100 (FY2016/17: ¥65.65) Invest in areas of growth Provide appropriate shareholder returns 8 Nomura Report 2017 Nomura Report 2017 9 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data History of the Nomura Group — Contributing to the Development of Capital Markets for 91 Years Pursue long-term growth by responding to clients’ needs and providing a wide range of financial services Since its inception in 1925, the Nomura Group has continually expanded its product and service offerings, developed its global operations and reinforced its corporate governance systems. Our Founder set forth ten principles that, even today, lie at the heart of Nomura’s operations. Among these founding principles is a description of Nomura’s raison d’être or mission to “enrich the nation through the securities business.” We will continue to contribute to economic growth and a more fulfilling society by delivering superior services and solutions to meet all of our clients’ investment needs. Unchanged from time of founding Changes from time of founding Founder’s Principles “Nomura’s mission is to enrich the nation through the securities business.” 1926 2000 2017 — 1,062.7 — 62.4 84 14,823 5 — — 126 19 0.3* 1,403.2 107.7 28,186 158 42 77 Net revenue (billions of yen) Retail client assets (trillions of yen) Employees Branches in Japan Personnel working outside of Japan (%) Aggregate number of participants in financial education programs (tens of thousands of people) * Figures as of March 31, 2001 91 Years of contributing to the development of capital markets -1927 Operations centered on underwriting and sale of public and corporate bonds 1941 Sale of Japan’s first investment trust products 1947 Public offering of 8 power stocks (currently electricity stocks) 1961 First American Depositary Receipts issued by Japanese company (Sony Corporation) 1949 Issuance of Japan’s first convertible bonds (I unit Takashimaya convertible bonds) 1962 First overseas issuance of convertible bonds by a Japanese company (Shin Mitsubishi Heavy Industries [currently Mitsubishi Heavy Industries]) 1968 Nippon Gakki (currently Yamaha) conducted public stock offering by issuing Japan’s first shares at market value 1970 First issuance of samurai bonds by overseas entity (Asian Development Bank) 1972 Deregulation of foreign investment trust sales in Japan History of the Nomura Group 1925 The Securities Department of Osaka Nomura Bank split off into a separate company, Nomura Securities 10 Nomura Report 2017 1927 Opened representative office in New York 1959 Founded Nomura Securities Investment Trust 1967 Established Nomura International (Hong Kong) 1961 Nomura Securities listed its shares on the Tokyo Stock Exchange, Osaka Securities Exchange, and Nagoya Stock Exchange 1969 Established Nomura Securities International, a U.S. subsidiary 1980 Development and commencement of sales of the Medium-Term Japanese Government Bond Fund 1987 Nippon Telegraph and Telephone (NTT) listed on stock market Early 1990s Adoption of Open Architecture: offering products managed by a wide range of asset managers 1994 Global offering conducted by Japan Telecom, when listing on stock market 2003 Commence of government bond issuance targeting individual investors by Ministry of Finance 1994 Japan Tobacco listed on stock market 2015 Three Japan Post Group listed on stock market 1981 Established Nomura Investment Management 1981 Established Nomura International, a U.K. subsidiary 1993 Established The Nomura Trust and Banking 2001 Formed 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 its European and Middle Eastern divisions 2016 Entered into a strategic alliance with American Century Investments Nomura Report 2017 11 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data19251930193519401950194519551960197019751990199520002005201020152017196540,00020,00060012019801985Nikkei Stock Average(lhs, yen)Retail Client Assets(rhs, trillions of yen)Global financial crisisiDeCo-Expansion of eligibilityStart of Nippon Individual Savings Account programCollapse of bubble economyGames of the XVIII Olympiad in TokyoJapan’s “financial Big Bang”Introduction of the electronic share certificate systemEnd of WWII107.7 Nomura by the Numbers Key Events during the Year Nomura Securities branches Client Assets of Retail Division Accounts with balances 158 branches (As of March 31, 2017) ¥107.7 trillion (As of March 31, 2017) 5.36million (As of March 31, 2017) ¥148 branches (As of March 31, 2007) ¥85.2 trillion (As of March 31, 2007) 3.95 million (As of March 31, 2007) In the spring of 2016, against a backdrop of a changing In July 2016, we adopted the Nomura Health & business environment, which began in the second half of Productivity Declaration Statement and the Nomura 2015, and a tighter regulatory environment, we made Group Declaration on Diversity & Inclusion. These strategic changes to the Wholesale businesses in EMEA initiatives are intended to ensure a working environment and the Americas. Although FY2016/17 was subsequently that values diversity, supports the health and well-being marked by major events that affected the macro of our employees and encourages them to demonstrate environment, we were able to return to profitability in their individuality. our international businesses. Assets under Management of Asset Management Division ¥44.4 trillion (As of March 31, 2017) ¥27.0 trillion (As of March 31, 2007) Central bank seminar Held for 36 (As of March 31, 2017) consecutive years Percentage of Japanese listed companies that name Nomura as lead / deputy underwriter 62.6% Support for financing in overseas markets Nomura was involved in 70% of deals Number of Japan-related stock global offerings and euro-yen convertible bonds (April 2016–March 2017) Ratio of non-Japanese Advisory Board members Ratio of overseas employees (EMEA, Americas, AEJ) 100% (As of March 31, 2017) 42% (As of March 31, 2017) An annual event in which central banks, financial institutions, and issuers from countries and regions around the world gather and to which top-level speakers are invited 0% (As of March 31, 2007) Advisory Board formed in 2001 to advise the Executive Management Board 24 % (As of March 31, 2007) Nomura Group’s female manager ratio Participants in economics and financial education courses Economics and finance learning materials distributed Donations of learning materials for junior high school students to schools 15% (As of March 31, 2017) Cumulative total: Cumulative total: 767,000 453,000 (As of March 31, 2017) (As of March 31, 2017) Cumulative total: 211,000 (As of March 31, 2007) 110,000 (As of April 30, 2007) 2016 April May June July August September December 2017 January February March April May November Standard & Poor’s raised long-term ratings on Nomura Holdings and core subsidiaries Announced strategic changes in EMEA and the Americas Wholesale businesses Completed equity investment in American Century Investments (ACI) Completed share buyback program (35 million shares; about ¥16.3 billion) Adopted Nomura Health & Productivity Declaration Statement Appointed Chief Health Officer Adopted Nomura Group Declaration on Diversity & Inclusion Completion of equity investment in ACI Established Asia Infrastructure Project Office in Singapore Selected as an index component of two Dow Jones Sustainability Indices for global socially responsible investing: the DJSI World Index, and the DJSI Asia Pacific Index Launched Nomura’s first robo advisory service, a “Nomura Goal-Based” online platform providing retail investors with automated, asset management advisory services Launched accelerator program, VOYAGER, to promote open innovation Announced consideration of establishing a new company to promote new business development and provide financial support to start-ups Completed share buyback program (85.99 million shares; about ¥45.0 billion) Launched new plan for individual-type defined contribution pension plan (iDeCo) Initiated the “Nomura Work Style Innovation” program, which is comprised of Work Style Reform and Health & Productivity Management Certified as one of the White 500 Health and Productivity Enterprises, a designation given to companies that carry out superior health management activities Announced partial amendment of organization and management (including strengthening structure of Nomura Securities) Established Policy on Customer-Oriented Business Conduct Launched Nomura Fintech Partnership accelerator program, VOYAGER Certified as one of the White 500 Health and Productivity Enterprises, a designation given to companies that carry out superior health management activities Reported diluted EPS of ¥65.65 in FY2016/17. International income before income taxes of ¥88.1 billion, a record high since regional reporting began in 2002 Selected as Competitive IT Strategy Company 2017 by Ministry of Economy, Trade and Industry, and Tokyo Stock Exchange Selected as Competitive IT Strategy Company 2017 12 Nomura Report 2017 Nomura Report 2017 13 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Financial and Non-Financial Highlights Net revenue, non-interest expenses (billions of yen) 2,000 1,500 1,000 500 0 1,091 773 852 787 1,093 1,151 1,046 1,131 1,037 313 Net revenue Non-interest expenses Members of the Board of Directors (End of June, 2017) 1,814 1,536 1,451 1,576 1,557 1,604 1,396 1,403 1,195 1,257 1,231 1,080 Percentage of Outside Directors 60 % Number of Outside Directors 6 of 10 Percentage of non-Japanese Directors 10 % Number of non-Japanese Directors 1 of 10 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (Fiscal years ended March 31) In FY2016/17, we performed a strategic review of the Wholesale business in EMEA and the Americas, and reallocated management resources to the areas where Nomura has competitive strength. The strategic review was the culmination of an ongoing, multi-year review of our costs, especially across Wholesale. And as a result, we could significantly lower our expenses, while growing revenues in FY2016/17. The Board of Directors comprises a majority of Outside Directors, which enables it to conduct highly transparent management while enabling oversight based on outside perspectives. The Nomination Committee has established the Independence Criteria for Outside Directors to ensure that Outside Directors are sufficiently independent from the Group. The Company places importance on the diversity of the Board of Directors in order to allow for business execution to be supervised from various perspectives and to improve effectiveness. Directors with various nationalities, genders, and backgrounds utilize their extensive experience in a broad range of fields to make decisions on important management matters, and to provide management oversight. Income (loss) before income taxes, net income (loss) attributable to Nomura Holdings shareholders, effective tax rate Income (loss) before income taxes Net income (loss) attributable to Nomura Holdings shareholders Effective tax rate (rhs) Women in managerial positions Number of women in managerial positions (lhs) Percentage of women in managerial positions (rhs) Ratio of employees by region Japan Americas Europe Asia and Oceania (billions of yen) 400 319 45.8 176 200 0 -200 -800 -65 -68 -780 -708 65.8 69.3 93 29 85 12 35.3 105 68 362 347 214 40.1 225 34.8 55.5 238 107 323 240 24.9 165 132 13.7 (%) 70 35 0 (Employees) 1,500 1,000 13 13 13 15 16 15 500 0 20 9 15 56 20 9 14 57 20 9 13 58 23 9 12 56 24 8 12 56 23 8 11 58 (%) 20 (%) 100 15 10 5 0 75 50 25 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 (Fiscal years ended March 31) (End of March) (End of March) We booked income before income taxes of ¥322.8bn in FY2016/17, of which ¥88.1bn, or close to 30%, was derived from the international businesses. Income generated overseas effectively lowered the firm-wide effective tax rate to 25% and, as a result, net income attributable to Nomura Holdings shareholders improved to ¥239.6bn, the second highest level since we started reporting under US GAAP in 2001. Initiatives to support women in improving their careers include training and mentoring programs for management candidates and sponsorship programs supported by senior management, along with various other measures. Nomura Group boasts a network consisting of business sites in more than 30 countries and regions staffed by employees of more than 70 different nationalities. These diverse human resources are our greatest asset for the ongoing creation of new value. ROE (%) 10 8.3 5 0 8.9 8.6 8.7 4.9 4.9 3.7 1.4 0.6 E PS (yen) 100 50 0 -50 -400 (Diluted net income (loss) attributable to Nomura Holdings shareholders per share) 92.00 55.81 60.03 65.65 28.37 35.52 21.59 7.86 3.14 -35.57 -366.16 (millions of yen) 3,000 2,033 2,000 2,441 2,515 1,000 0 Education and training expenses Social contribution-type bonds 2,972 2,880 2,767 (billions of yen) 200 Proceeds (cid:9)lhs(cid:10) Bonds issued (cid:9)rhs(cid:10) (Bonds) 30 24 19 18 150 100 50 0 14 11 15 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 (Fiscal years ended March 31) (Fiscal years ended March 31) (Fiscal years ended March 31) (Fiscal years ended March 31) Our 2020 management vision is to create an organization capable of consistently delivering EPS of ¥100, which equates to approximately 10% of ROE. In addition to working to improve profitability, we also continued to buy back shares and, as a result, EPS improved to ¥65.65 in FY2016/17. We are establishing and enhancing human-resource development systems to enable employees with diverse backgrounds and values to better display their talents. In addition to offering equal employment, we provide appropriate, performance-based evaluations and feedback. Nomura offers products that contribute to sustainable development of society in order to bridge the gap between investors that seek to aid society through investment and projects, and funding drives that help resolve social and environmental issues. 14 Nomura Report 2017 Nomura Report 2017 15 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Strategies for Value Creation Message from Group CEO Towards 2020 and beyond Aiming for consistent growth In August 2014 we announced Vision C&C, our long- To achieve our vision, we are working to address term management vision for 2020. This calls for us, two overriding issues: transforming our business as we head towards 2020 and beyond, to transform model in Japan and improving the profitability of our ourselves and create a robust operating platform international operations. Our Retail business is capable of delivering consistent growth in any shifting to a consulting-based approach to meet market environment. individual needs and diversifying its offerings by The key driver behind this is the changes we working closely with our clients as a trusted partner. envisage over the coming years. In Japan, the In Wholesale, we are focusing on our areas of strength declining birthrate and aging population will continue where there is client demand and recalibrating our Our operating environment is expected to to hinder growth, while the global geopolitical business portfolio to take services to the next level. change dramatically over the coming years, but our overriding philosophy of placing clients at the heart of everything we do will remain unchanged. As we head towards 2020 and beyond, we will continue to transform ourselves and take on new challenges with the aim of creating a solid operating platform that can deliver consistent growth in any market environment. Koji Nagai Group CEO landscape shifts significantly as economic growth We are already starting to see results, but when powers ahead in the rest of Asia. With innovation, we look ahead to 2020 and beyond, we still have a lot conventional wisdom and the way business is of work to do. By leveraging our strengths and conducted could undergo fundamental changes. transforming ourselves from within, we will continue Naturally, we cannot accurately predict what the world to take on new challenges to seek growth. Some will be like in ten or twenty years’ time. That is why we initiatives may not lead to concrete results in the are looking to lay the foundation for a solid operating short term, but I am personally committed to ensuring platform that can help us sustain growth even under their contribution to our success over the longer term. uncertain conditions. Creating synergies between Retail and Wholesale We have a long-standing presence in the Retail business. listed in Japan. We also have broad coverage of To add to that strength, we built an independent financial institutions and other institutional investors Wholesale franchise to create a two-pronged business across Japan which allows us to provide liquidity to model. In the financial services industry, underwriting a wide range of clients, giving us a competitive edge and other Wholesale businesses can generally be in our Global Markets business. That is why our considered upstream while sales and distribution is Wholesale and Retail businesses have never been downstream. Having worked in both Retail and separated and operate in unison, deriving synergies Wholesale at Nomura, I can say confidently that we from each other. have a holistic approach, adding to our strength. Corporate clients highly rate our ability to make Issuers are well aware of our distribution compelling proposals as well as our extensive capabilities and, by delivering on the trust they place distribution capabilities. Retail clients recognize our in us, we have been able to forge close business consulting expertise and diverse product offering. partnerships with over 60 percent of companies These are the reasons they choose Nomura. 16 16 Nomura Rep ort 2017 Nomura Report 2017 Nomura Report 2017 17 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Message from Group CEO Growing with Asia as Asia’s global investment bank fierce competition. So by establishing a robust Retail Japan to Europe and the US will be our true business and setting up a strong distribution network competitive advantage which peers may find hard to We believe that our successful Retail-Wholesale two- when, where and how to lay the foundations for this across the region, we believe we can avoid replicate. That is the essence of Connecting Markets pronged business model in Japan can be exported business in Asia. unnecessary competition. Having a two-pronged East & West. to some other regions internationally. We recognize With Capital Nomura Securities (CNS) in Thailand business model in Asia that connects Asia including that it will be challenging to build a Retail brand from and BDO Nomura Securities in the Philippines, we scratch in Europe or the US where there are multiple already have a Retail presence in some Asian markets. high-profile brands with long histories. But in Asia We now have to make a concerted effort to increase including Japan, the region we consider our home, client accounts and position ourselves to respond to we have an advantage and we believe we can build the middle class that emerges with economic growth. a credible business. Thailand is about to enter that phase and CNS has That said, Asia is a diverse region where each 500 financial advisors who have started proving Generational asset shift and technological innovation: Working with the next generation In Japan, our strongest market, people’s lifestyles and behavior are expected to change significantly as the population declines and ages and as a result of country is at a different stage of population growth consulting services to their clients. ( For details, please refer to technological innovation. and economic development. To establish a viable “Special Feature 5: Strengthening international businesses” on pages 36-37.) Retail business in any country, there needs to be In China, we have set up a joint venture with a a middle class and per-capita GDP of around local financial firm in the Shanghai Free Trade Zone US$15,000 to US$20,000. Asian countries are as part of our efforts to steadily build out our expected to start entering this zone and we believe business platform there. there are ample business opportunities over the long The Wholesale business in Asia, and investment With people now living into their nineties, it is essential that personal financial assets are managed from a long-term perspective so that they live a fulfilling life in old age. The Japanese government has introduced a number of schemes, such as the accumulation-type NISA that starts in 2018 and is term. However, we will have to carefully assess banking in particular, is known for its low fees and tax-free for twenty years. There is also the iDeCo, demand for advice around estate planning and GDP per capita*1, Nomura’s Retail and Asset Management businesses in Asia ex-Japan (US dollar) 60,000 2005 2015 52,239 42,431 Nomura China Asset Management Capital Nomura Securities*2 (since 1970) 27,397 22,358 Shanghai Nomura Lujiazui Investment Management (Wealth Management) Nomura Asset Management Taiwan BDO Nomura Securities (since 2016) Asset Management Wealth Management 9,768 8,109 5,815 3,346 2,904 2,068 1,614 1,161 50,000 40,000 30,000 20,000 10,000 0 Singapore Hong Kong Republic of Taiwan Malaysia China Thailand Indonesia Philippines Vietnam India Myanmar Korea *1 Source:United Nations, IMF data used for Taiwan *2 Engages in Wholesale business otherwise known as J401K, which is a defined business succession. We have set up a team to contribution pension plan that offers tax breaks for respond to these needs and provide the required individuals. At Nomura, we are developing systems solutions. We also have dedicated lawyers, to help investors tap into these plans through simple, accountants, and tax attorneys who help support our low-fee products that they can use to invest over the clients’ needs. long term. By meeting the needs of asset builders One of the key challenges for Japan is to protect today, we aim to pave the way for their success in and grow the 1,800 trillion yen of personal financial twenty years. assets. And Nomura has a major role to play in this. For asset builders, it is critical to proactively use The field of gerontology, or the study of old age, has latest technologies such as artificial intelligence and big received significant attention recently. In October data. To this end, Nomura offers goal-based robo 2016, we launched a joint research project with Keio advisory services and the moneby app on smartphones. University on financial gerontology that looks into the We have set up a dedicated department in the firm to implications of old age on financial behavior. This is a guide our use of the latest technologies and to drive part of our efforts to conduct research and provide open innovation by teaming up with start-ups. advice on how to solve the problems that older people ( For details, please refer to “Special Feature 2: Leveraging new face in managing their assets. We will continue to stay technologies” on pages 30-31.) close to our clients to ascertain their needs and In Japan, which has an annual inheritance related leverage the full expertise of Nomura to be chosen as market of over 50 trillion yen, there is increasing the best partner by clients across generations. 18 Nomura Report 2017 Nomura Report 2017 19 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Message from Group CEO Our people continue to challenge the status quo Staying relevant by helping solve social and environmental issues We cannot achieve our goals or meet the needs of and always being forward looking in trying to make Our Founder’s Principles have acted as a compass to on to future generations from what needs to change. our clients without excellent people in the firm. our tomorrow better than today, we have never guide our work and contribute to economic and With this in mind, we have drawn up a corporate When we started out in Osaka in 1925, we were been afraid of change or taking on new challenges. social development. As our operating environment philosophy and are internally discussing how to share already a latecomer to the Tokyo market. But by As Japan was recovering from World War II, we changes, we need to distil what needs to be passed this with our stakeholders. placing our clients at the heart of everything we do promoted the democratization of securities and negotiated hard with the authorities to allow the recommencement of investment trust sales as we believed it would help steer the country towards economic recovery. To this end, we set up investment consultation booths in department stores and offered courses for women to learn about savings and investment. Our employees thought of new ideas that led to concrete results. As such, adapting to change and taking on new challenges is a part of our DNA. In our business we don’t deal with tangible products. Our clients buy financial products based on the values and individual qualities of each of our people. Our people therefore constantly work to improve themselves, enhancing trust among clients and growing with them. We currently have employees from over 70 nationalities, each of whom strives to take on new challenges and grow as a professional, while providing the best solutions to our clients by collaborating across divisions and regions. Nomura Group Corporate Philosophy Mission Contributing to Society We help to enrich society through our expertise in capital markets Vision Trusted Partner As a leading financial institution, we aim to be the most trusted partner for our clients Values Entrepreneurial Leadership With passion and courage, we continually innovate to meet the needs of our stakeholders Teamwork To build our values and ‘Deliver Together’, we promote diversity and collaboration across divisions and regions Integrity Personal integrity is paramount to us. We act honestly, fairly and openly To remain relevant to society and ensure importance of the ESG framework to the way we do consistent growth, we must listen to our diverse business. group of stakeholders and increasingly contribute to Looking ahead, we are entering an era in which resolving issues that society faces. It is also essential conventional wisdom will be increasingly challenged that we recognize the importance of environmental, and the financial services industry will change social and governance (ESG) aspects to ensure considerably. No matter what the future holds, we sustainable growth of the corporate sector. In my must expand our focus with an eye on helping solve efforts to raise the satisfaction levels of clients, social and environmental issues to continue to be shareholders and employees since I took over as relevant to society. Nomura aims to help create a CEO five years ago, I have always emphasized the better future for everyone. 20 Nomura Report 2017 Nomura Report 2017 21 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Message from Group COO Management target (EPS*) and its progress “Vision C&C” The business environment surrounding Nomura is expected to change even more dramatically than in the past. We see this as the perfect chance to take decisive action and change the way we operate. We have expressed this as “Vision C&C,” where “C&C” represents a chance to change. The letter “C” also demonstrates our willingness to always take on new challenges and put our clients first. Under this overriding vision, we will focus on achieving our 2020 management targets. Long-term management vision for 2020 “Vision C&C” Two Challenges •Transforming business model in Japan •Improving profitability of international business 100 FY2015/16 management target EPS ¥50 Achieved target 2 years ahead of schedule 55.81 60.03 65.65 35.52 28.37 3.14 Tetsu Ozaki Group COO * Net income attributable to Nomura Holdings shareholders per share FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 FY2019/20 (target) Working toward 2020 Management Vision fiscal year on the back of a market recovery. In addition, also expanding market share. In addition, as a result of while negative interest rate policy in Japan made investing mandates won from institutional investors both in Japan unprecedentedly challenging, we still managed to grow our and abroad, funds flowed into high-performing high-yield investment solutions business for financial institution clients products. And finally, markets appreciated globally and the Division successfully grew its business succession during the year, positively impacting AuM. Even amid a and asset management platform for the owners of small to declining return environment, the Division was able to medium-sized enterprises. prudently manage the costs associated with each asset With three years remaining to realize management’s The environment in the previous fiscal year was We remain focused on achieving ¥150 trillion of class to achieve the highest income before income taxes Vision C&C for the fiscal year ending March 2020, characterized by an undercurrent of historic changes clients assets by 2020, one of our key performance since the fiscal year ended March 2002. Nomura is fulfilling various initiatives and programs that marked by the referendum in the U.K. over Brexit and indicators (KPIs). To facilitate this asset growth, the As we head toward March 2020, we aim to maintain are aligned with the vision and the Road to 2020. the U.S. presidential election – two events made us structure of the Retail Division has been changed to allow and expand our market share, while also contributing to As technology continues to evolve and the political remember that we live in an age of uncertainty. more frequent and more effective touch points with the development and growth of Japan’s asset and economic landscape around the globe reaches a Notwithstanding, Nomura achieved EPS of ¥65.65, the clients. Also, as part of the structural change, heads of management industry. As part of our efforts to achieve historic turning point, we anticipate the business record-high level since the financial crisis in 2008. retail branches across Japan have been given the ¥55 trillion of AuM by 2020, one of our KPIs, we will also models of financial institutions will change more rapidly than ever before. Under these circumstances, we continue to challenge ourselves and pursue our Performance and initiatives in each business flexible and stay closer to clients. overseas by deepening our collaboration with American At the same time, within Retail, efforts to promote Century Investments. discretion to make more business decisions to remain further expand our investment advisory business philosophy of “placing clients at the heart of everything Below is an explanation of each division’s performance financial innovation through the introduction of FinTech, The most important theme for the Retail Division and we do.” Over the last five years, we have dedicated in FY2016/17 and new initiatives planned for the next etc., will be accelerated. For details, please refer to “Special Feature the Asset Management Division is to help address ourselves to accomplishing the two main strategic three years to help us progress toward our March 2020 2: Leveraging of New Technologies” on page 30. Japan’s national challenge of expanding risk assets and goals of “business model transformation in Japan” and goals. The Asset Management Division successfully brought increasing the flow of money from cash to securities and “improvement of profitability of our international The Retail Division struggled in a difficult market assets under management (AuM) to a record high as of other investments. With regard to the recently businesses.” With these goals at our core, we believe environment and grappled with attracting new assets for March 2017. The increase in AuM can be attributed to an reconfirmed “Customer-Oriented Business Conduct,” we are poised to steadily progress toward our the purpose of long-term investment. In the first quarter, expansion of our ETF business, as we were able to offer both divisions are aiming to resolve any issues and management goal for 2020 of EPS of ¥100. revenue hit a low but began rising toward the end of the a wide range of products to meet investors’ needs, while improve performance by retaining the de facto standards 22 Nomura Report 2017 Nomura Report 2017 23 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Message from Group COO of a leading company. such as Rates and Emerging Markets, including declining birthrate, Japan is confronting the challenge of of Nomura’s strengths while, at the same time, working on As a result of the strategic review of businesses in currencies. In Investment Banking, in addition to winning improving productivity and resolving a generational divide. measures to improve productivity, including Company-wide EMEA and the Americas conducted in April 2016, the cross-border M&A mandates and ancillary transactions, As Japanese society undergoes rapid changes, it is also cost controls. We expect Nomura’s business efforts will Wholesale Division succeeded in increasing revenues we deepened collaboration with Global Markets to pursuing a new growth model. Through the implementation complement broader initiatives across Japan that are and greatly lowering the breakeven point overseas. strengthen our origination and distribution structure, of Nomura Work Style Innovation, Nomura will endeavor to intended to promote financial innovation, attract a greater Although revenue was slow in Japan due to rigid interest which resulted in a significant improvement of provide more effective services in a more efficient manner. number of participants, and ultimately revitalize the rates and a lack of momentum in the equity market, our productivity, especially in the Americas. In other words, we will enable our clients to make the most country’s financial markets. enhanced risk culture ( for details, please refer to “Risk Management” As we move toward March 2020, we will continue to on page 64) helped us successfully navigate major events expand our Origination and Emerging Market businesses overseas, such as the decision of Brexit and the start of to meet clients’ needs by deepening the collaboration the Trump Administration. Through the year, we were between Global Markets and Investment Banking. Also, able to improve productivity both in Global Markets and we will continue to focus on cross-border businesses by Investment Banking and we have come to the point promoting and developing relationships across regions. where we can acknowledge our success in “improving Lastly, we will continue to balance prudent risk profitability of our international business.” management and efficient resource allocation to In Global Markets, we successfully broadened our establish a more stable business model that is not easily client base and diversified revenue streams as we influenced by market fluctuations. continued to win clients’ trust, especially in businesses Matrix management structure Retail Eiichiro Yamaguchi Head of Retail Asset Management Kunio Watanabe Head of Asset Management Wholesale Steven Ashley Head of Wholesale Koji Nagai Group CEO Tetsu Ozaki Group COO Toshio Morita President, Nomura Securities Yuji Nakata Deputy President, Nomura Securities Co-CRO Vikas Sharma Head of Asia ex-Japan Jonathan Lewis Head of EMEA Kentaro Okuda Head of Americas JAPAN Asia ex-Japan EMEA Americas Key performance indicators (KPIs) to achieve 2020 management target* Shoichi Nagamatsu Chief of Staff Takumi Kitamura CFO Lewis O’Donald CRO 2020 management target EPS ¥100 (EPS ¥65.65) Three segment income before income taxes ¥450-470 billion (¥278.6 billion) ( ) is for FY2016/17, or as of March 2017 Retail ¥195-205 billion (¥74.8 billion) Asset Management ¥50-55 billion (¥42.3 billion) Wholesale ¥200-220 billion (¥161.4 billion) Retail client assets ¥150 trillion (¥107.7 trillion) Recurring revenue cost coverage ratio around 50% (25%) AuM ¥55 trillion (¥44.4 trillion) Fee pool market share 3.4 % (3.2 %) * FY2019/20 market assumptions: Nikkei 225 at ¥25,000; USD/JPY rate ¥115; Effective tax rate for Japanese corporates below 30%; Global fee pool annual growth rate of 1% Our matrix management structure by clients. The Americas region has entered a critical stage that will determine whether we can establish a In the fiscal year ended March 2017, Nomura’s matrix- structure that allows us to address growing needs for based management structure was strengthened to cross-border businesses, while also retaining enhanced enable each region to resolve challenges and achieve productivity. And across Asia, we will accelerate our its previously defined goals. With Brexit in the offering of cross-divisional services to build Nomura’s background, the EMEA region is now at a turning point franchise in emerging countries, including China. that will determine whether we are going to be chosen Against the backdrop of an aging population and a From the left: Vikas Sharma, Head of Asia ex-Japan; Kunio Watanabe, Head of Asset Management; Steven Ashley, Head of Wholesale; Tetsu Ozaki, Group COO; Koji Nagai, Group CEO; Shoichi Nagamatsu, Chief of Staff; Toshio Morita, President, Nomura Securities; Eiichiro Yamaguchi, Head of Retail (front row); Jonathan Lewis, Head of EMEA; Kentaro Okuda, Head of Americas 24 Nomura Report 2017 Nomura Report 2017 25 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Message from CFO Takumi Kitamura Chief Financial Officer Controlling costs to achieve the long-term management vision for 2020 highest level since we introduced US GAAP in 2001. Our expanded client base and thorough risk management culture have contributed to a more stable In FY2016/17, we succeeded in nearly doubling income revenue stream. We are, however, not insulated from before income taxes, on revenues that were roughly the impact of uncertain financial markets and, in order unchanged from the prior year. to continue to improve profitability, we must maintain The international regions have been a long-lasting stringent cost controls. For example, personnel challenge for Nomura. In the spring of 2016, we performed expenses represent close to 50% of our total cost base a strategic review of the Wholesale business in EMEA and and, to closely manage these costs, we will continue to the Americas, exited some businesses, and scaled back emphasize the concept of “Pay for Performance.” In others in order to reallocate resources in the areas where addition, we are able to control our IT and occupancy Nomura has competitive advantages. In FY2016/17, all costs through the use of Cloud technology and a international regions returned to profitability and generated thorough review of office space usage. At the same close to 30% of the Company’s total income before time, we will be conducting an overhaul of all costs, income taxes, primarily due to the difficult decisions made including our centralized, firm-wide purchasing system, overseas. The international business contributed to our and introducing new technologies that will improve success in maintaining stable firm-wide revenues and business process efficiency. These initiatives will allow dramatically lowering costs, which resulted in a significant the Finance to support the Company’s initiative to improvement in profitability. In fact, net income attributable “grow in a sustainable manner, no matter what the to our shareholders came to ¥239.6 billion, the second external environment.” Execute a flexible capital policy while con- sidering the needs of various stakeholders and maintained an open dialogue with other stakeholders to share information about Nomura and obtain feedback about our business and capital As a global financial institution, various capital planning policies. While the opinions of different adequacy regulations, including those laid out by the stakeholders vary and sometimes conflict with one Basel Committee on Banking Supervision, impact the another, my mission as CFO is to balance the desires of way we conduct business. As of March 2017, our each stakeholder to identify the best course of action Common Equity Tier 1 (CET 1) ratio was 18.2%, up for Nomura. significantly from 11.9% four years ago, as a result of In our shareholder return policy, we have adopted a our efforts to accumulate Tier 1 capital and reduce dividend payout ratio of 30%, based on half-year risk-weighted assets, while actively conducting performance. Therefore, after we pay 30% of profits to shareholder returns. shareholders in the form of a dividend, we theoretically While we intend to retain a CET 1 ratio of 11% or add the remaining 70% to our capital base. Looking more in the medium term, we are currently retaining an ahead, we will pay close attention to the market excess in anticipation of potentially tighter regulations environment and the impact of regulatory changes to and their uncertain impact on Nomura. appropriately allocate our capital surplus to business Nomura has a broad range of stakeholders including investment, share buyback, etc. In addition, we will clients, shareholders, creditors and regulators. In regularly review the capital allocated to each business FY2016/17, we held more than 300 one-on-one to continue to improve capital efficiency. meetings with equity investors and sell-side analysts, Consolidated capital adequacy ratio RWA CET1 capital ratio*(rhs) Dialogue with stakeholders in FY2016/17 (trillions of yen) 20 15 10 5 0 18.2 14.0 (%) 20.0 15.0 10.0 5.0 0 2 013 2 014 2 015 2 016 2 017 Conference Conference call following results announcements Presentations on strategies One-on-one meetings (incl. small meetings) With analysts and institutional investors With debt investors With credit rating agencies Individual investors No. 4 2 No. 302 67 42 No. * CET 1 capital ratio is defined as Tier 1 capital minus Additional Tier 1 capital divided by risk-weighted assets. No. of attendees at 113th General Shareholders Meeting 545 (end of March) No. of individual shareholders (March 2017) 374,769 26 Nomura Report 2017 Nomura Report 2017 27 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Special Feature 01 Special Features: Transforming business model in Japan Initiatives to enhance consulting service Business model transformation to better respond to each client’s needs The Retail Division has been transforming its and passing them on to the next generation. In business model to grow its business by addition, the owners of small- to medium-sized enhancing client trust and satisfaction and enterprises must plan and execute strategies becoming a financial institution many people for business succession, and regional financial turn to. The transformation will enable Nomura institutions are faced with selecting investment to address clients’ more diversified needs and strategies appropriate in a low interest rate the challenges they face against a backdrop of environment. In order to effectively respond to an aging population, a low birthrate and these challenges, we are shifting our business consistently low interest rates. For example, model to one focused on individual consulting Japan’s senior generation is currently services and need-based solutions from one confronted with protecting their own assets centered on product offerings. Changing the performance management and HR system Our first priority has been to educate our client, we have started offering a wider variety people about the benefits of the business of products such as discretionary investment model transformation. We have also revised products, insurance and real estate offerings our performance management and HR that complement more traditional financial systems to better reflect our long-term goals products. In addition, in April 2015, we also for the business. enhanced the inheritance related services that To tailor investment solutions for each the business is able to offer to our clients. FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 Toward 2020 Business model transformation: Aim to grow our business by enhancing client trust and satisfaction to become a financial institution many people turn to Change employee mindset Organization and HR changes April 2013 Changes to performance management system • Emphasize client asset growth and client relations • Reward on results for full term of appointment September 2014 Revision of HR system • Lengthened appointments for General Career Type A Employees (from average of 3 to 5 years) • Introduced new employment category (no rotations, retirement up to 70, recurring revenue based compensation) April 2017 Established Policy on Customer-Oriented Business Conduct April 2017 • Organizational change: Abolished regional head • Place stronger emphasis on improvements in client satisfaction as part of employee performance management Service and product enhancement July 2012 Sales staff started using mobile tablets for client consultations Steady growth in product and business offering • Discretionary investments • Insurance • Real estate • SME M&A April 2015 • Nomura Trust & Banking enters estate planning business • Established Nomura Institute of Estate Planning January 2018 Integrate and increase online services (Nomura online services) October 2016 Launched a joint research project with Keio University on financial gerontology Retail Division’s consulting services: On the front lines By putting Nomura’s all-around capabilities to use, we are able to address each client’s unique concerns, ensuring we become their go-to partner for all aspects of their financial plans. Q. What kind of things do you consider when you talk with clients? I look to grasp precisely, quickly, and thoroughly what the client is really concerned about and I try to picture his or her concerns in the form of a pie chart. For example, if you are a company owner your main business may take up about 70%–80% of your attention, leaving a small amount of time to focus on business succession and inheritance issues. In these instances, financial planning or asset management, which is the main focus of securities companies’ activities, are often surprisingly low on the list. Q. What can you do for a client who is tack- ling issues with their principal business? A client’s business concerns may vary from time to time; e.g. its principal business, potential expansion of overseas business, employee training, succession plan issues, etc. If it comes to principal business, I can provide information tailored to the client’s needs by liaising with and leveraging resources across Nomura’s core business divisions. If a client is interested in growing their business overseas, we can provide introductions to local partners through Shosaku Tobioka Financial Consulting Section Niigata Branch Nomura Securities Co., Ltd. Nomura’s global network and office locations overseas. In a restructuring of his asset management company and addition, if a client is interested in improving employee various inheritance-related measures. Since all of them training, I can at least speak about Nomura’s approach to were very important for the entire family, I also met with his human resources. By listening and responding carefully to children to explain the details of the plan and their parents’ each concern, I believe Nomura can become a go-to overall intentions. After much discussion, and only after the partner for all aspects of a client’s wealth, including entire family was comfortable with Nomura’s proposal, we financial matters. implemented the restructuring and estate plan. Q. Can you give a specific example? Q. What are your ambitions now? There was one company owner who had been managing his Nomura has a wide range of networks, specialized financial assets through Nomura. As I got to know the knowledge, product lineups and infrastructure, including client better, it became clear to me that he was having a tablet terminal that provides access to the company’s trouble finding someone to rely on for assistance managing internal knowledge, even on the go. We, however, are his family’s total assets and aiding gifting and inheritance not making full use of our potential. When I joined planning. Before we began working together, he had Nomura, my boss told me that client satisfaction was of engaged with several financial institutions to address utmost importance. I truly believe the effectiveness of certain portions of his financial plan, but altogether, the my work can be measured by the gratitude and thanks works were incomplete. I, together with a tax accountant that I receive from my clients. It is my personal and who was familiar with inheritance tax matters, visited him, professional goal to enhance my skill set so that I can and reviewed his complete estate plan and discussed his continue to act as a partner and ultimately please each inheritance goals. We drafted a total solution that included of my clients. 28 Nomura Report 2017 Nomura Report 2017 29 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Special Feature 02 Special Features: Leveraging new technologies Enhanced services through online services and contact centers in Japan Appealing to a broad client base The Retail Division offers products and services transactions like order entry, deposits and tailored to client needs, either by working withdrawals, and also provide direction for new together at Nomura branches or through our clients. Looking ahead, we are keen on adding online services and contact centers. As Japan’s advisory functions and improving client access, conventional social security system has been eliminating the need to visit a branch office. reaching its limits in tandem with its aging Our online services currently include Nomura population and declining birthrate, the need to Home Trade, which is available to clients who prepare for old age has been growing. Nomura have an account at our headquarters or one of has been supporting the shift from savings to our branches, and Nomura Net & Call, which asset formation through interactive seminars specializes in online-based and telephone-based and virtual communications. services. Beginning in January 2018, we plan to We would also reinforce our business purpose combine those two services to optimize their other than face-to-face services. Our contact complementary strengths, and ultimately enhance centers currently focus mainly on recurring to the status of “digital advisers.” Image through to 2020 Headquarters and branches Contact Centers Online Services Channel Number of clients (image) Reinforcing client-approach effectiveness •Strengthening consulting •Assistant system •Enhanced remote consulting services •Advisory functions •Introduction of new technologies, other companies’ technologies Strengthening services Nomura Securities Nomura Asset Management In November 2016, we launched our first robo- In April 2016, we launched our asset management advisor, “Nomura Goal-Based,” to provide robo advisor “Funds Robo,” and in March clients with online financial advice. In addition to 2017 we released our “moneby” smartphone proposing optimal investment solutions, it offers app. This “moneby” is equipped with a game “Investor Style Diagnostics” and “Investment function that predicts the movement of the Goal Setting,” which allow clients to set Nikkei Average and Dow Jones, and a function investment goals while considering their risk called “school” which helps people learn tolerance and overall financial objectives. about investing. Promote FinTech initiatives by collaborating globally, and utilizing third-party expertise and technology Promotion of accelerator programs and new business development in Japan and India Nomura Accelerator Program VOYAGER Together with Nomura Research Institute and Nomura Real Estate Holdings, we identified five themes that address important social issues. We then invited and selected qualified start-ups to work together with us to commercialize various new businesses initiatives. New business development Establishment of N-Village, a subsidiary In April 2017, we established N-Village as a subsidiary focused on new business development and open innovation. N-Village aims to transform the way Nomura works with its clients by creating new services and promoting existing businesses. In addition, N-Village will engage and partner with start-ups to support their business expansion. Expand accelerator program to India We started a similar accelerator program in India in order to expand into Asia. Five recruitment themes Establishment of Nomura Innovation Center Creating services to enrich the lives of seniors in India Improving the reliability of financial information using technology Proposing new approaches to owning, giving, and bestowing assets in step with changing lifestyles Creating strong ties with consumer companies Creating living environments that meet diversified lifestyles We established the Nomura Innovation Center (NICe) in India as an “innovation laboratory” that evaluates and applies new ideas and technologies to Nomura’s core businesses. NICe is a component of our effort to promote innovation globally. Example of use of artificial intelligence in public-private partnerships In 2015, Nomura Securities created the Nomura AI of Economy, Trade and Industry’s Industrial Production Business Confidence Index, which was developed Index in order to promptly disclose its results. Through through the AI-based analysis of economic and direct collaboration with Ministry of Economy, Trade and financial data provided by the government and Bank of Industry, this initiative has enhanced the efficiency and Japan. We are now working to reproduce the Ministry accuracy of such indices. Other initiatives Blockchains RPA We are participating in the R3 consortium, a research and Robotic Process Automation (RPA) is used to automate development initiative for blockchain and decentralized work processes that until now have been handled only account technologies that support financial institutions. by humans. Nomura is currently using RPA to improve In addition, we are also participating in the Japan Exchange overall work efficiency and productivity, a project we Group’s blockchain verification project to support the practical expect will reduce costs and improve processes across 30 Nomura Report 2017 “Nomura Goal-Based” “Funds Robo” Smartphone application “moneby” use of blockchains across the financial services industry. our businesses. Nomura Report 2017 31 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Special Feature 03 Special Features: Promoting financial and economics education in Japan Supporting the shift in asset-building from savings to investment Asset-building taking new shape to meet rapid changes in the structure of society Japan is at a point where approaches to asset- and economics education initiatives for young people in building are changing dramatically against a backdrop Japan. We initiated educational and awareness of an aging population, declining birthrate, and people activities for university students in 2001, and today we living longer lives. People need to make their own are focusing on providing educational programs for all efforts to build assets, and financial and economics generations, ranging from elementary and junior high education, particularly for young people, has school students, to university students and adults. We become a vital issue. Financial and economics are continuing to contribute to the creation of a truly knowledge is important not only for appropriate thriving society by offering a diverse range of asset-building but also for developing sound capital economics and securities education opportunities markets from a long-term perspective. for children, who hold the future in their hands— Nomura Group has long been engaged in financial and for all who wish to gain financial knowledge. Comprehension of financial terms financial literacy: International comparison Interest Suppose you put ¥1 million into a savings account with an annual interest rate of 2%. How much would be in the account at the end of the first year? Risk/Return Investments providing above-average returns entail above-average risk 61% 64% 48% 77% 79% 47% Compound interest With the same condition as on the left, how much would be in the account at the end of five years? Choose one of the following responses: (1) more than ¥1.1 million, (2) exactly ¥1.1 million, (3) less than ¥1.1 million, (4) it is impossible to tell from the information given, (5) don’t know. Diversification It is usually possible to reduce the risk of investing in the stock market by buying one company’s stocks and shares 47% 37% 31% 60% 55% 30% UK Germany Japan Inflation When inflation is high, prices of goods and services increase rapidly overall. 94% 87% Five question average 65% 67% 40% 39% Source: UK and Germany: from OECD International Network on Financial Education pilot study undertaken in 14 countries in 2010-11, Measuring Financial Literacy. (Questionnaire used in face-to-face and telephone interviews) Japan: Nomura Research Institute (NRI), door-to-door survey of 10,000 consumers “Third Questionnaire Survey of 10,000 Japanese Consumers – Financial Edition” (number of respondents: 10,070) aged 18-79 across Japan in August – September 2016 Providing a wide range of tools for different purposes and audiences We have been providing financial and economics education across different generations since the 1990s. Our programs and educational materials are designed to meet the needs in all areas set forth in “financial literacy as a life skill” within the broader “Financial Literacy Map” in a report by the Study Group on Financial Education established by the Financial Services Agency in April 2013. Financial and economics education programs offered by Nomura Group Aim Course Elementary school students Junior high school students High school students Become familiar with “Money” Let’s Learn about the Meaning of Investment” Let’s Learn about “The Future” and “Money” University students Let’s Learn about “Living Economics Activities” from a Practical Perspective! Instructors Practical Financial and Economics Education Manabou Classroom for elementary schools (for learning about foreign exchange and stocks) Investor Experience: “What Is Investing?” Let’s Learn about Life Planning: “A Talk on Your Future and Money” NOMURA Business Challenge: Teaching junior high and high school students about entrepreneurship Sponsored Lecture: “The Role of Capital Markets and Securities Investments” Seminars for instructors Learning about stocks through games Courses for children and parents to learn about investment based on animated cartoons Study materials (free distribution) “The Economics Classroom” “Social System and the Role of Money” textbook An introduction to the economy: “The T-Shirt Shop” “STOCK FANTASY” Sponsored Lecture: (reference library) “Investment Basics” “Japan’s Capital Markets” Textbook: “Social System and the Role of Money” (Instructors Manual) Publications Co-sponsored programs Online “Nyanta and the Great Adventure of Money” Team challenge! Learning from Stock Investment: Nikkei Stock League “The Compendium of Securities Companies” The Nikkei Stock League stock education contest Sponsorship of “Nikkei Investing in the Future” contest man@bow economics learning website Expanding efforts in education to improve financial literacy Nomura Group’s financial and economics education programs offices in 47 prefectures nationwide, our branches have been have been approved as official programs of the Olympic and working hand-in-hand with people in local communities to send Paralympic Games Tokyo 2020 in the field of economics and Nomura Group employees to serve as visiting lecturers to technology. In FY2016/17, we held financial courses at 104 schools throughout Japan. Through contact with employees universities throughout Japan. We also offered programs in who are professionals in finance, we hope children will deepen which parents and children could participate together, and on their understanding of finance and the economy. We also hope the theme of entrepreneurship, which drew high demand from that they will make use of this knowledge as they build their high schools. Tapping the experience of staff in our network of future careers. Implementation status of programs (as of March 31, 2017) Year first offered No. of schools/participants, etc. Total number of participants Nikkei Stock League Financial courses for universities Financial courses for the general public Visiting classes (elementary, junior, senior high schools, universities, teachers) 2000 2001 2003 2008 No. of teams: 26,118 103,528 No. of schools: 1,758 228,200 No. of times: 7,850 391,650 No. of classes: 1,066 43,787 Donations of teaching materials (as of March 31, 2017) Year first offered FY2016/17 Cumulative total Teaching materials for elementary schools (“The Economics Classroom,” “Social System and the Role of Money”) 2008 Teaching materials for junior high schools (“The T-shirt Shop”) 2006 No. of schools: 378 4,048 No. of copies: 25,503 308,111 No. of schools: 56 4,778 No. of copies: 4,664 452,660 Total number of participants 767,165 Total: 761,000 copies Courses for children together with their parents In FY2016/17, we developed a program for parents and children together featuring an animated movie, and held the program at 15 branches. To ensure the effective implementation of programs, we have been offering visiting classes in cooperation with local education coordinators. We have also been providing support by sending employees as lecturers to study groups organized by student bodies. As part of our post-disaster reconstruction support, we have been sending employees as visiting teachers for middle school students in disaster-affected areas. In Kumamoto Prefecture, employees visiting middle schools had students speak about their future dreams. Special partnership program The Nikkei Stock League is a competition-based stock education program for junior high school, high school and university students. Nomura Group has served as a special sponsor since the contest began in 2000. Each year, almost 100 of our employees participate as members of the report review panel. 32 Nomura Report 2017 Nomura Report 2017 33 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Special Feature 04 Special Features: Supporting the growth of private and public sectors through our business Connecting “issuers needing funds” and “investors providing funds” Today’s economic climate is changing at a startling but other times it is necessary to utilize capital speed, as evidenced by the evolution of technology markets to undertake business reorganizations, and change of consumer behavior. All corporations, mergers, investments or financing to remain including financial institutions, are faced with the competitive. In this situation, Nomura acts in its challenge of responding to these changes and capacity as Asia’s global investment bank and adapting to the new environment. Often times, aims to provide various solutions that respond to corporations are able to forge ahead on their own, each company’s individual needs. Nomura’s strength is providing comprehensive solutions matched to client needs. Corporates, government institutions, etc. M&A advisory Financing Solutions business Nomura Group • Issuing stocks, convertible and other bonds • Share buyback • Acquisition financing, etc. • Foreign exchange and interest rate hedges • Real estate purchase, sale, securitization, etc. Sales Investors Trading desk Business foundation and track record necessary to provide optimal solutions. Investment Banking Thomson Reuters Deal Watch Awards 2016 - Overall “House of the Year - Nomura Securities” Deal Watch Awards 2016 - Equity “Equity House of the Year - Nomura Securities” Asiamoney Best Domestic Bank Awards 2016 “Best Domestic Equity House in Japan” Trading Sales Euromoney FX Survey 2016 No. 18 in overall ranking (No. 1 among Japanese financial institutions for 7 consecutive years) Coalition 2016 APAC Investment Banking League Table Tied for No. 3 (Up from No. 8 in 2015) Institutional Investor All-Japan Sales Team Ranking No. 2 overall Japan’s Top Corporate Access Provider Ranking No. 1 overall J.D. Power 2012–2016 Japan Investor Satisfaction Study Full-Service Securities Segment “No. 1 in investor satisfaction for 5 consecutive years” Support for new market entrants The Nomura Group provides support for its clients by for future business growth, Nomura aspires to support connecting investors with new issuers with high growth the health of the Japanese economy and invigorate potential. By helping private companies list on public capital markets while also, in some cases, aiding the exchanges, and by providing them with ongoing support resolution of various social issues. Number of new listings in Japan and the percentage of these for which Nomura was the lead underwriter 1 No.1 share in underwriting Number of new listings in Japan (lhs) Percentage for which Nomura was the lead underwriter (based on number of deals) (rhs) (Companies) 200 1 1 1 1 1 1 1 1 1 1 1 1 150 100 50 0 73 50 27 23 23 22 23 29 19 29 35 37 33 36 31 26 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (%) 100 75 50 25 0 Newly listed company stories HEALIOS K.K. (Listed on the TSE Mothers market on June 16, 2015) Kanamic Network Co., Ltd. (Listed on the TSE Mothers market on September 14, 2016) The mission of HEALIOS K.K. is “to be the change in an ever Kanamic Network provides information solutions across the evolving world through enrichment of living.” Guided by this mission, medical care, long-term care, and child-rearing industries. Healios develops its business by utilizing its iPS cell and other stem Ultimately, their goal is to support comprehensive regional care cell technologies to deliver treatments and hope to patients suffering through cloud-based services. The company’s main business from intractable diseases. Healios was established in February 2011 focus is currently its information sharing platform Kanamic Cloud with the aim of realizing practical application of treatments for Services. For example, Kanamic’s cloud services can play an age-related macular degeneration that entail transplanting retinal important role by sharing information about a medical patient with pigment epithelium cells derived from allogeneic iPSC. In addition to all interested parties, including doctors, care managers, etc. In alliances with leading Japanese companies, Healios has procured addition, parents can use the cloud-based platform to receive approximately ¥7.7 billion in capital by its listing on the Tokyo Stock regular updates about their child from the child-rearing facility or Exchange Mothers in June 2015. The company is moving forward the individual caregiver. with development projects in Japan and overseas with the aim of Through the listing, the company hopes to fund its ambition of establishing treatment methods that work to fully cure illnesses with becoming the top cloud service provider in the medical care, a focus on diseases that are rising with the aging of the population long-term care and child-rearing sectors and to ultimately help to and other diseases that are currently without a viable treatment. build a safe and thriving society. Contents distribution from corporates Parties relevant to medical care, long-term care Kanamic Cloud Services Parties relevant to child-rearing support •Information sharing platform •Care operations management system •Child-rearing support system •Contents service Comprehensive multi-generational care At the Cell Processing Center 34 Nomura Report 2017 Nomura Report 2017 35 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Special Feature 05 Special Features: Strengthening international businesses Initiatives towards improving international profitability Paving the way for future growth in Asia Achieving sustainable profitability in our operations returned to profitability and the international platform has been a key priority business portfolio is well positioned for growth for Nomura. A number of strategic initiatives opportunities going forward. In order to ensure have been implemented in the Wholesale the sustainability of our performance, we will Division over the years to structurally lower pursue revenue growth while continuing to shift our cost base and realign our overseas towards a flexible cost structure leveraging platform around the areas of our strength. industry best practices and synergies within the As a result, our firm-wide international Nomura Group. Cost rationalization Strategic repositioning Growth focus Thailand Initiatives of Capital Nomura Securities Major review of cost structure Integrated Global Markets Rationalization of underperforming businesses Focused investments Improving returns CNS booth at an event for individual investors sponsored by the Stock Exchange of Thailand Front to back streamlining Focus on areas of strength Firm-wide international profitability improved Firm-wide international profitability improved following to a series of initiatives following to a series of initiatives (billions of yen) Firm-wide international income (loss) before income taxes 100 50 0 -50 -100 -150 88.1 -24.7 -16.4 -79.4 -79.6 -129.1 FY 2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 Philippines Initiatives of BDO Nomura Securities Party commemorating start of general operations on October 24, 2016 Capital Nomura Securities Public Company Ltd. (CNS) is a securities company based in Bangkok, Thailand, that engages in both Retail and Wholesale businesses. It was established in May 1970, became a founding member of the Stock Exchange of Thailand in 1975, and was then listed on the exchange in 1988. As of December 31, 2016, CNS had 17 offices across Thailand and employed approximately 580 people. CNS has grown into one of Thailand’s leading securities companies by increasing trading volumes by private and institutional investors, underwriting volumes of initial public offerings and investment trust sales. Nomura Holdings held a minority stake in CNS until 2014 when it increased its stake to 85.78% through a tender offer bid and subsequently converted CNS to a consolidated subsidiary. CNS continues to focus on both its Retail and Wholesale businesses to capitalize on the rising number of listed companies and the growing population of investors across Thailand. In addition, as Thailand faces an aging population, CNS will also expand operations by moving away from the conventional, brokerage-centric business model to a consulting-based business model. In 2016, Nomura and Banco de Oro Unibank, Inc. (BDO Unibank), the Philippines, largest commercial bank, established BDO Nomura Securities, Inc. (BDO Nomura), an online securities company and a means for Nomura to develop a Retail business in the Philippines. In October 2016, BDO Nomura commenced operations targeting major domestic clients of BDO Unibank. It also began transacting with local Philippine stock exchanges to fill orders received from Nomura’s global clientele. The economic growth rate in the Philippines was 6.8% in 2016, one of the highest among principal Asian countries, second only to India. High economic growth, coupled with the exceptionally low average age of 23, leaves the country ripe for future business growth. Despite the country’s socio-economic landscape, average daily trading volumes across all stock exchanges were only ¥17 billion (US$153 million) in 2016, and roughly half of the transactions were placed by overseas investors, which is most likely a function of the nation’s low financial literacy rate. The population of the Philippines is expected to exceed that of Japan within the next decade. BDO Nomura intends to grow with the population as it leverages the experience and insight it has gained in Japan, Asia’s largest retail market. Ultimately, BDO Nomura’s goal is to increase the risk capital and stimulate the growth and development of capital markets across the Philippines. 36 Nomura Report 2017 Nomura Report 2017 37 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data At a Glance Business segments Retail Retail Division provides a broad range of financial products and services through its head office and its nation- wide network of 158 branches, as well as Nomura Net & Call (online-based platform and call centers), to individual and corporate clients. Nomura also develops its Wealth Management Business in Japan and Asia ex-Japan. Asset Management Asset Management Division operates globally, with Nomura Asset Management playing a central role. Investment trusts business offers a wide lineup of products through a broad range of channels. Investment advisory business provides high-quality products and asset management services to a broad spectrum of institutional investors. Income before income taxes: ¥74.8 billion Retail client assets: ¥107.7 trillion Number of branches: 158 Income before income taxes: ¥42.3 billion Assets under management: ¥44.4 trillion Share of ETFs in Japan: 45 % Source: The Investment Trusts Association, Japan • Individual investors • Regional government Clients agencies • Regional financial institutions • Corporates • Educational institutions • Other legal entities Our Services • Sales of financial products • M&A advisory • Real estate (agency services) • Inheritance and business succession services • Individual investors • Domestic and overseas Clients pension funds • Governments and central banks • Institutional investors, etc. Our Services • Development of financial products and asset management • Direct sales of services to some investors Wholesale Wholesale Division consists of two businesses: Global Markets providing financial products and solutions and secondary market liquidity, and Investment Banking offering capital- raising transactions and advisory services. It provides diverse services to a broad range of clients including corporates, government entities and financial institutions in Japan and overseas. Income before income taxes: ¥161.4 billion Countries possessing the Primary Dealer qualification World’s major markets 15 countries Japan ECM League Table 1st / Share 22.0 % (April 2016 to March 2017) Source: Thomson Reuters Clients • Financial institutions • Institutional investors • Corporates • Governments and government entities Our Services • Underwriting of bonds and stocks • M&A advisory • Syndication of financial products, proposal for investment • Provision of liquidity, high-level execution Overview of regions One of the Nomura’s strengths is its global business platform. By collaborating closely across businesses and regions, we are able to provide optimal solutions to meet the needs of our clients. Asia ex- Japan*2 6,619 people We define Asia, including Japan, as our home market. It is in Asia ex-Japan however, where high economic growth is expected. We are well poised to capitalize on this growth as our business, led by our Wholesale and Asset Management Divisions, operates in 12 countries across the region. In addition, we also have an overseas Retail business in Asia ex-Japan. Japan 16,227 people Japan has been the home base of the Nomura Group for 91 years since it was established in 1925. The Group provides a full range of financial services to a broad range of clients through its Retail, Asset Management and Wholesale Divisions. Asia and Oceania ¥23.7billion Japan ¥234.7 billion Income before income taxes ¥322.8 billion Europe ¥14.4 billion Europe 3,026 people Europe is the world’s second-largest financial market, after the Americas. In this region, the Wholesale Division is focusing on businesses of strength, including Macro (Rates, Foreign Exchange), M&A advisory and solutions, while also controlling costs to improve profitability. The Americas ¥50.0 billion The Americas 2,314 people The Americas is the largest financial market in the world and a key strategic region for Nomura. The Wholesale Division is looking to grow its market share by allocating management resources to areas where we have a competitive edge. In addition, the Asset Management Division has been diversifying its investor base while increasing assets under management, mainly in high-yield bond products, through new investor mandates and assets appreciation. A b o u t N o m u r a S t r a t e g e s i l f o r V a u e C r e a t i o n S t r e n g t h s S u p p o r t i n g V a l u e C r e a t i o n C o r p o r a t e I n f o r m a t i o n / D a t a *1 Income before income taxes is for FY2016/17, and the remaining figures are as of March 31, 2017, unless otherwise defined. 38 Nomura Report 2017 *1 Income before income taxes is for FY2016/17, and the remaining figures are as of March 31, 2017 *2 Includes Powai office in India Nomura Report 2017 39 Business Divisions Retail Division Strengths, Challenges, Actions Strategy (Actions to create value) • Largest branch network and client base across Japan’s securities sector • Ability to prepare and deliver best-in-class investment advice Strengths • Sophisticated consulting services The Retail Division has been working to transform its expanded its eligibility to a wider range of nations in business model as it aims to grow the business by January 2017, and monthly investment-type NISA • Leverage capabilities across the Nomura Group to offer clients enhancing client trust and satisfaction and becoming a plan will start from January 2018. Through diverse differentiated services • Approaching clients’ core assets, in addition to investment assets Challenges • Earnings structure exposed to market environment • Building relationships with family members of elderly clients • Increasing new, younger clients • Training consultants whom clients could completely trust • Building stable earnings structure by increasing recurring revenues • Enhancing products and services aimed at elderly clients and their younger family members Actions financial institution people turn to. The key performance channels, we are explaining the benefits of the indicators (KPIs) we are targeting as we head towards expanded systems to clients, when appropriate. FY2019/20 are income before income taxes of ¥195-205 We are also pursuing initiatives designed to billion, client assets of ¥150 trillion, and a recurring enhance client convenience. In February 2017, we revenue cost coverage ratio of 50%*1. In the last fiscal launched our new money transfer service. This year, we made major organization changes across Retail enables the immediate transfer of funds from clients’ to enhance our efforts to raise client trust and satisfaction bank accounts to their securities accounts with and to ultimately achieve our KPIs. Nomura after making a request via telephone or • Enhancing content targeted at younger people (websites, seminars, We continue to promote various initiatives that will through Nomura Home Trade. robo advisor services, etc.) Review of FY2016/17 During the first half of the fiscal year, client activity declined amid an uncertain market environment. Following the US presidential election in November 2016 however, trading of equities and bonds recovered as the yen depreciated and stock prices rose. Notwithstanding the improvement in the second half, full- year net revenue was ¥374.4 billion and income before income taxes was ¥74.8 billion, both marking year-on-year declines. Against this backdrop, the Retail Division continued to expand its consulting services and pursue its ambition to counsel each client about their individual concerns and requirements, with a goal of providing optimal investment solutions. Supported by this effort, discretionary investment client assets expanded, helping stabilize earnings. Assets under custody also increased over the year, approaching a record high. Trend of business results (billions of yen) Net revenue Income before income taxes 435.6 374.4 127.6 74.8 600 450 300 150 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (Fiscal years ended March 31) offer higher-value consulting services to clients. For In January 2018, we intend to rebrand our online example, we have been reinforcing our inheritance and services as Nomura Online Service, which will integrate business succession planning capabilities. Specifically, Nomura Home Trade and Nomura Net & Call and will The Nomura Trust and Banking Co., Ltd. launched aim to further improve customer satisfaction of our testamentary trust and estate management and Nomura online services. Institute of Estate Planning*2 established an estate In addition to the programs mentioned, we continue planning research center. The research center is staffed to emphasize the importance of customer satisfaction with certified tax accountants that strengthen the and are maintaining ongoing annual customer network for research and information exchange relating satisfaction surveys of sales representatives. to estate planning and business succession. We are targeting a wide range of investors focused on accumulating assets. In addition to the Nippon Individual Savings Account (NISA) program, individual- type defined contribution pension plans (iDeCo) *1 Recurring revenue divided by total Retail expenses. Recurring revenue refers to revenue received from ongoing services related to client assets such as investment trust administration fees. *2 A wholly owned subsidiary of Nomura Holdings established in April 2015 to undertake research and disseminate information on estate planning and business succession issues. Morning Pitch is an event aimed at creating business Topics tie-ups between venture companies and large enterprises held every Thursday from 7am at the Shinjuku Nomura Building Branch of Nomura Securities. The program began in 2013 on a proposal put forward by Tohmatsu Venture Support and Nomura Securities employees as a way of accelerating the emergence of new companies that will drive the Japanese economy. To date, more than 900 venture companies have made presentations and participated in always lively question and answer sessions. 40 Nomura Report 2017 Nomura Report 2017 41 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Business Divisions Asset Management Division Strengths, Challenges, Actions Strategy (Actions to create value) • Sophisticated in-house research and investment expertise, combined with a multi-manager fund management system, enables us to offer a wider range of investment products and solutions than we can handle Strengths through in-house management alone • The ability to offer persuasive solutions to meet diverse customer needs by combining a wide range of investment products and services • Dynamic product development and a sales structure able to offer products globally • Intensifying competition and structural changes in the asset Challenges management industry in Japan and overseas • Growing social demands with respect to fiduciary duty • Attracting individual investors as they reach the asset accumulation threshold • Expand our investment capabilities to access more business opportunities globally • Further strengthen business collaboration with American Century Investments (ACI) to leverage mutually complementary sales regions and products • Deepen commitment to client-first business operations through efforts Actions such as establishing the conflict of interest management policy • Hold seminars to improve financial literacy and support wealth and asset building, information campaigns related to provision of smartphone apps, etc. • Expand lineup of products in which individual investors reaching the asset accumulation threshold find it easy to invest Review of FY2016/17 In the Asset Management Division, net fund inflows during the year amounted to ¥2.2 trillion supported by efforts to offer clients a broad range of products to address diverse investment needs. Assets under management at the year-end amounted to a record-high ¥44.4 trillion. For the year, net revenue was ¥99.4 billion and income before income taxes was ¥42.3 billion, both up sharply from the year before. As part of the strategic partnership with ACI, Nomura completed the purchase of a 41% economic interest in ACI in May 2016. The alliance gained traction with such developments as the November 2016 launch of the U.S. Value Strategy Fund, man- aged by ACI, for retail investors in Japan. Trend of business results (billions of yen) Net revenue Income before income taxes 99.4 95.4 42.3 36.7 100 75 50 25 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (Fiscal years ended March 31) We are working to ensure the highest level of client investment advisory businesses in Japan and overseas. satisfaction and earn the implicit trust of our clients based While looking to further improve the performance of on the three pillars of “maximizing value,” “advanced existing investment strategies, we are actively working expertise,” and “confidence and responsibility.” on stewardship activities and developing investment The global asset management industry is expected strategies that make effective use of pilot funds to to see sustained expansion. At the same time, the enhance value-creation effectiveness. To respond industry structure is changing and becoming more promptly and more effectively to client needs, we are dynamic amid moves by major Japanese financial also broadening our solutions lineup and strengthening institutions to reinforce their asset management cooperation between sales and investment management businesses, and due to ongoing mergers between departments. Furthermore, we are working to boost global asset management companies. In addition, competitiveness by securing and nurturing talented staff competitors have been developing various investment with high-level expertise across different business fields. techniques and the use of ETFs and other passive We are focusing on improving work efficiency from a investment approaches has been gaining momentum. global and company-wide standpoint. Nomura Asset Management ETFs assets under management (trillions of yen) 12 10.5 Share in Japan with our strategic partner ACI. Leveraging ACI’s strong We are steadily making headway in our collaboration 45% presence in the US mutual fund market and Nomura’s strengths in Japan and Asia, we are beginning to reap 6 0 7.5 6.2 4.0 2.6 2013 2014 2015 2017 2016 (End of March) (Source: The Investment Trusts Association, Japan) (As of March 31, 2017) good results through the mutual supply of products to clients as we continue to expand our business. The Asset Management Division will always operate with professionalism as an investment manager entrusted with clients’ assets. We intend to contribute In this environment, the Asset Management Division to our clients’ wealth and asset building through the aims by FY2019/20 to raise income before income taxes sustainable value creation of investee companies, which to ¥50-55 billion and increase assets under management we hope can be part of future growth cycles. to ¥55 trillion through expanding investment trust and What can we do, as an asset management company, to realize a virtuous cycle through investment? The role of investment in society is to create future growth cycles by circulating Topics money. To align this cycle in a positive direction, we are engaged in stewardship activities. As an asset management company, we seek to encourage sound corporate management through constructive dialogue with the companies in which we invest while exercising voting rights to maximize investment returns. We also conduct wide-ranging activities to explain the role and appeal of investment to individual investors through seminars and press advertisements. 42 Nomura Report 2017 Nomura Report 2017 43 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Business Divisions Wholesale Division Strengths, Challenges, Actions Strategy (Actions to create value) • Top-in-class industry presence in Asia-Pacific region, particularly in Strengths Japan, and strengthening international platform • Global client base across more than 30 countries • Leading facilitator of cross-border transactions worldwide • Generating higher return under tighter regulatory environment Challenges • Relatively high sensitivity to market fluctuation • Changes in market structure and competitor dynamics • Continue to align our portfolio to evolving market conditions and client needs Actions • Reinforce risk culture and discipline • Deliver growth through value-added service to clients and selective investment in growth areas Review of FY2016/17 Since the second half of 2015, global markets have experienced extreme volatility and a significant decline in liquidity, triggered by heightened uncertainty in the global economy. With the assumption that this market environment would continue, and under tighter regulatory environment, Wholesale took decisive action to make strategic changes in EMEA and the Americas and lowered its breakeven point. As a result, full year net revenue was ¥739.3 billion and income before income taxes jumped to ¥161.4 billion. We succeeded in increasing our net revenue within this difficult market environment, while also significantly lowering our cost base. In particular, Fixed Income revenue jumped on strong client flows. Trend of business results (billions of yen) Net revenue Income (loss) before income taxes 800 600 400 200 0 -200 -800 720.3 739.3 161.4 15.4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 At Nomura Wholesale Division, our focus has been to Wholesale business made a remarkable recovery during position the business to deliver sustainable performance FY2016/17. Going forward, the key priorities are to build across market cycles, and contribute ¥200 – ¥220 billion on this robust foundation through the following items. to the firm’s income before income taxes by FY2019/20. To that end, we undertook strategic repositioning of the • Reinforce our client franchise, particularly in international business portfolio in April 2016, to shift away international regions, to ensure long-term sustainable from structurally disadvantaged businesses, and to focus performance our management resources to areas of strength including • Invest in medium-term growth drivers, including Global Macro, Emerging Markets, M&A and Solutions, etc. Advisory and Origination, Emerging Markets, and At the same time, the breakeven point for our business Structured Products & Solutions has been lowered through structural cost reductions • Increase optimal utilization of financial resources to serve through initiatives such as the streamlining of our ”front to client needs seamlessly across the Wholesale portfolio back” infrastructure, and synergies from stronger collaboration between Global Markets and Investment In responding to the various needs of our clients, we Banking under an integrated Wholesale structure. will continue to maintain a resilient risk culture as well as As a result of these initiatives, and continued flexible resource allocation, collaborating effectively resilience in our home market in Asia-Pacific, the between Global Markets and Investment Banking. Global business expansion of Wholesale Division Leverage strengths in APAC to deliver competitive services to clients in Europe/US and Asia: “Connecting Markets East & West” Clients EMEA Focus on areas of strength Institutional investors Financial institutions Corporates Retail investors Government entities Financial sponsors Americas Strengthen franchise, maintain full service platform APAC Expand franchise to tap into growth Provide liquidity to market Nomura Wholesale aims to make markets across asset classes and market cycles for clients. We are active participants across primary and secondary markets, as reflected in ~6% market share in U.S. Treasuries and ~13% in JGBs. We also actively help corporates raise funding and were ranked No. 1 in the Japan ECM underwriting league table in FY2016/17 with a 22.0% market share as well as a No. 1 ranking in the Japan IPO league table in FY2016/17 with 27.3% market share. Wholesale exercises robust risk discipline while providing liquidity and deploying our financial resources to meet client needs. There has been relentless and ongoing focus on strengthening our risk framework, and Topics 44 Nomura Report 2017 Nomura Report 2017 45 (Fiscal years ended March 31) improving return on financial resources by seamless allocation across all areas of the Wholesale business portfolio. About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Strengths Supporting Value Creation Corporate Governance http://www.nomuraholdings.com/company/cg/index.html 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 goals of bolstering corporate value by deepening society’s trust in the firm and increasing the satisfaction of clients and other stakeholders. We are working to make the Group’s decision-making process speedy and efficient, while also striving to ensure effective oversight of management and management transparency through the enhancement of corporate governance. Corporate governance system and features • Strengthening oversight through the separation of management oversight and business execution • Rapid decision-making through the delegation of business execution authority Nomura Holdings has adopted a “Company with Three execution to a large extent to Executive Officers. Board Committees” structure. Though this structure, we In addition, we have put in place three board aim to strengthen the oversight function by separating committees (the Nomination Committee, the Audit management oversight and business execution. We also Committee, and the Compensation Committee), all aim to ensure prompt decision-making by having the comprising a majority of Outside Directors, in order to Board of Directors delegate authority for business further improve transparency. Audit Execution General Meeting of Shareholders Board of Directors (Page 50) 10 Directors, of which six are Outside Directors • In its composition, the Board of Directors emphasizes diversity. Board members conduct oversight from diverse perspectives, applying their experience and knowledge in various specialized fields in order to realize highly transparent management Nomination Committee Three Directors, of whom two are Outside Directors • Comprises Directors who are not concurrently serving as Executive Officers • Determines the details of proposals on the election and dismissal of Directors for submission to the General Meeting of Shareholders, in accordance with set criteria for character, insight, corporate management experience and expertise, as well as independence Audit Committee Four directors, comprising three Outside Directors and one full-time member of the Audit Committee • Audits the execution of duties by Directors and Executive Officers, prepares audit reports, and determines details of proposals regarding the election, dismissal, and non-reelection of the Independent Auditor Compensation Committee Three Directors, including two Outside Directors • Comprises Directors who are not concurrently serving as Executive Officers • Determines policies with respect to the compensation of Directors and Executive Officers, and determines compensation for each individual Outside Director Meetings (Page 51) Outside Directors meet periodically to hold discussions on such topics as Nomura Group’s strategies and the management of the Board of Directors Group CEO Executive Management Board Deliberates on and determines important Nomura Group matters, such as the management strategy for Nomura Group, business plans, budgets, and allocation of management resources Delegates authority to make decisions on business execution Advisory Board Established as a consulting body to the Executive Management Board, with the aim of bringing an external perspective to the formation of our management strategy Group Integrated Risk Management Committee (Page 52) Deliberates on and determines important matters concerning Nomura Group’s integrated risk management Internal Controls Committee (Page 52) Deliberates on and determines matters concerning the establishment and assessment of Nomura Group’s internal controls and the promotion of appropriate corporate behavior Matrix Management Across Three Divisions and Regions (Page 25) Nomura Group employs a matrix management system across divisions. Under this system, the organization implements strategies and attains management goals through close collaboration between Nomura Holdings, division heads, business infrastructure division heads, and regional heads A b o u t N o m u r a S t r a t e g e s i l f o r V a u e C r e a t i o n S t r e n g t h s S u p p o r t i n g V a l u e C r e a t i o n C o r p o r a t e I n f o r m a t i o n / D a t a 46 46 Nomura Report 2017 Nomura Report 2017 Nomura Report 2017 Nomura Report 2017 47 47 Corporate Governance Measures to reinforce governance Nomura’s initiatives to bolster corporate governance • Adoption of the “Company with Three Board Committees” structure • Establishment of the Advisory Board In 2001, when we adopted a holding company structure transparency of our oversight function and expedited and listed on the New York Stock Exchange (NYSE), we Nomura Group’s management process by adopting the introduced Outside Directors and established an Internal “Company with Committees, etc.” structure (now the Controls Committee, a Compensation Committee (the “Company with Three Board Committees” structure), majority of the members of which are Outside Directors), a governance structure under which management and an Advisory Board of distinguished persons from oversight and business execution functions are clearly outside the Company. separated. We have also diversified the Board of Directors in The Company’s corporate governance system is terms of the backgrounds of members and made efforts very similar to the corporate governance standard to improve management transparency by such means stipulated in the NYSE’s Corporate Governance Guide as further improving our information disclosure system. for listed companies and we judge that it is the optimal In 2003, we further strengthened and increased the institutional design for us at this point in time. Addressing Japan’s Corporate Governance Code • Implementation of all principles of Japan’s Corporate Governance Code With the application of Japan’s Corporate Governance initiatives to reinforce corporate governance. As a Code to publicly listed companies beginning in June result, we have at this point adopted all of the 2015, Nomura Holdings has been undertaking various principles of the Code. Establishing Corporate Governance Guidelines • Structure for transparent/fair and timely/decisive decision-making In November 2015, the Board of Directors of Nomura “Company with Three Board Committees” structure, Holdings, recognizing the perspectives of various with a Nomination Committee, a Compensation stakeholders beginning with shareholders and clients, Committee, and an Audit Committee, promoting established Nomura Holdings Corporate Governance dialogue with shareholders, and fulfilling our social Guidelines, with the aim of defining and contributing to responsibility. the realization of a framework of effective corporate Please visit our website to view the full text of the governance as a structure for transparent/fair and Corporate Governance Guidelines and the Corporate timely/decisive decision-making. The Corporate Governance Report, which discloses the status of our Governance Guidelines stipulates the frameworks for measures to address Japan’s Corporate Governance Code. strengthening corporate governance, including the composition of the Board of Directors, the outline for the Nomura Holdings Corporate Governance Guidelines http://www.nomuraholdings.com/company/cg/data/cg_guideline.pdf Company with Board of Auditors Appointed one Outside Statutory Auditor 1994 1998 2001 Established the Compensation Committee (voluntary) Established the whistle-blowing system “Compliance Hotline” Appointed two Outside Directors Adopted a holding company structure and changed the Company’s name to Nomura Holdings, Inc. (1) Strengthen corporate governance and ensure transparency (2) Election of two Outside Directors and two Outside Statutory Auditors (3) Established the Internal Controls Committee (4) Established the Executive Compensation Committee (one Representative Director and two Outside Directors) Listed on the New York Stock Exchange (NYSE) 2003 2004 Company with Committees, etc Established the Nomination, Audit and Compensation Committees Adopted a “Company with Committees, etc.” structure Passed resolution on the Internal Controls System Formulated the Code of Ethics of Nomura Group 2006 Company with Committees Passed resolution on amending the Internal Controls System Began making pledges to abide by the Code of Ethics of Nomura Group 2010 2012 2013 2015 Company with Three Board Committees 2016 Diversification of the composition of Directors (appointed two non-Japanese Directors and one female Director) Outside Directors became the majority of Directors Appointed an Outside Director who does not serve concurrently at Nomura Holdings to Nomura Securities Co., Ltd. Passed a resolution on amending the Internal Controls System Published the Independence Criteria for Outside Directors of Nomura Holdings, Inc. Passed a resolution on amending the Internal Controls System Appointed an Outside Director from outside the Nomura Group to Nomura Asset Management Co., Ltd. Established the Nomura Holdings Corporate Governance Guidelines Established August 3 as Nomura Founding Principles and Corporate Ethics Day Started evaluation of the Board of Directors meetings Established “office of Non-Executive Directors and Audit Committee” as an organization to support Directors’ execution of duties by ensuring full provision of information to Outside Directors and so forth. Passed a resolution on amending the Internal Controls System 48 Nomura Report 2017 Nomura Report 2017 49 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Corporate Governance Board of Directors Management status of the Board of Directors • Outside Directors comprise a majority of the Board of Directors including independent Outside Directors • Emphasis on diversity within the Board of Directors to conduct oversight from diverse perspectives Separate from Board of Directors meetings, meetings the management of the Board of Directors are comprising only Outside Directors are held, where discussed to help strengthen the oversight function. Nomura Holdings has made management oversight the ensure the independence of Outside Directors from main role of the Board of Directors. Based on oversight Nomura Group. As none of the six Outside Directors of with an emphasis on an external perspectives, we aspire to Nomura Holdings fall under the categories for which have highly transparent management, through such means independence is considered suspect, we have reported as structuring the Board of Directors with a majority of that each of the Outside Directors is an independent Outside Directors. Currently, six of the 10 members of the Director in our submission to the Tokyo Stock Exchange. Board are Outside Directors. Our Board of Directors consists of members with diverse backgrounds in terms of nationality, gender, professional experience, and other attributes. By utilizing their extensive experience in their respective fields, such as finance, corporate management, and law, the Directors assist with the determination of important management matters and oversee business execution. We have established Independence Criteria for Outside Directors within the Nomination Committee to Independence Criteria for Outside Directors http://www.nomuraholdings.com/company/cg/data/criteria.pdf Composition of the Board of Directors (as of July 1, 2017) Concurrently serving as Executive Officers 2 Familiar with securities business 2 Attorney-at-law 1 Corporate managers 2 Accountants 2 Business accounting expert 1 Support system for Directors • Establishment of system to support directors in their duties The Company has established an Office of Non- to Meetings of the Board of Directors, continuously Executive Directors and Audit Committee to support provides updates to Outside Directors regarding the work of the Audit Committee and the Board of important matters of the Company, including business Directors. The office acts as the secretariat of the content, business plans, financial status, and governance Audit Committee and supports Directors in the structures such as the internal controls system. performance of their duties by such means as In addition, an Outside Director may request an regularly providing information on management to explanation or report and/or request materials from Outside Directors. Executive Officers and employees as necessary. An In connection with meetings of the Board of Directors, Outside Director may consult legal, accounting, or other the Company, by using occasions such as briefings prior outside experts at the Company’s expense, as necessary. matters such as the strategy of Nomura Group and Number of meetings of Board of Directors 11 (from April 1, 2016 to March 31, 2017) Outline of discussions • Items relating to quarterly earnings results • Decisions on interim and full-year dividends • Statutory matters such as the appointment of Executive Officers • Reports on business conditions in each division and region and on business execution • Analysis and discussion related to management strategy based on the PDCA cycle • Reports related to such matters as risks and compliance Officers Regularly held meetings attended only by Outside Directors Evaluation of the effectiveness of Board of Directors meetings Since FY2015/16, the Company has conducted evaluations of the effectiveness of the Board of Directors. We assess the effectiveness of the Board of Directors in terms of such matters as its management, the quality and quantity of information provided, and the content of discussions. We are working to further strengthen the oversight function, including through discussions at the Board of Directors meetings based on the results of assessments. Each individual Director evaluates the status of his/her execution of duties and the effectiveness of the entire Board of Directors The Board of Directors analyzes and evaluates the effectiveness of the entire Board of Directors based on the evaluation of each individual Director 1 4 2 3 The results of the evaluation including the report on response measures are discussed at meetings of the Board of Directors Discussion of issues that can be handled by Executive Officers, proposals submitted to the Board of Directors Evaluation method Matters evaluated Questionnaires are submitted to the Directors, and discussions are held by the Board of Directors based on questionnaire results • Composition and management of the Board of Directors • Provision of information to the Board of Directors • The involvement of the Board of Directors in management targets and management strategy • The Board of Directors’ management oversight function • The three Board committees (Nomination, Audit, and Compensation) • Monitoring of the status of dialogue with stakeholders • Meetings of Outside Directors, etc. Addressing the results We have established the Office of Non-Executive Directors and Audit Committee to support the duties of the Audit Committee and Directors, and have otherwise enhanced the organizational platform for providing information to Directors, along with further improving the management of the Board of Directors. 50 Nomura Report 2017 Nomura Report 2017 51 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Corporate Governance Business execution by Executive Officers Compensation for Directors and Executive Officers • Agile business execution through the broad delegation of decision-making authority to Executive Officers The Board of Directors has broadly delegated decision- Internal Controls Committee. These management making authority for business execution to Executive bodies report to the Board of Directors on the status of Officers to ensure that they can execute business with their deliberations at least once every three months. speed and efficiency. Furthermore, among the matters In order to further bolster our business execution of business delegated to the Executive Officers by framework for financial business that is becoming resolutions adopted by the Board of Directors, certain increasingly sophisticated and specialized, we utilize a important matters must be deliberated and decided by system whereby the Executive Officers delegate a part specific management bodies within the Company, of their authority for business execution decisions to including the Executive Management Board, the Group Senior Managing Directors, whose role is to focus on Integrated Risk Management Committee, and the individual businesses and operations. Internal Controls • Established internal audit departments, independent from business execution, in the Company and in key subsidiaries As Nomura has adopted the “Company with Three Board Compensation Policy for Directors and Executive Committees” structure, the Compensation Committee Officers of Nomura Holdings, Inc. has established the Compensation Policy of Nomura The compensation of Directors and Executive Officers Group and the Compensation Policy for Directors and comprises base salary, yearly cash bonuses and Executive Officers of Nomura Holdings, Inc. long-term incentive plans, and is determined by the Compensation Committee based on this policy. A Compensation Policy of Nomura Group portion of compensation may be deferred or paid in To enable us to achieve sustainable growth, realize a the form of equity-linked awards. Equity-linked long-term increase in shareholder value, deliver added awards have vesting periods to ensure that the value to our clients, compete in the global market, and medium- to long-term interests of Directors and enhance our reputation, our compensation policy is Executive Officers are closely aligned with those of based on the following aims. shareholders. 1. Align compensation with Nomura’s values and strategies 2. Reflect company, division, and individual performance 3. Establish appropriate performance measurement with We are committed to strengthening and improving our audits of the Company and its subsidiaries, in addition to a focus on risk internal controls system to promote proper corporate the audits carried out by the Audit Committee. ( Please see 4. Align compensation with company earnings and behavior throughout Nomura Group, with the aim of page 65 regarding risk management through the so-called “Three Lines of shareholder interests ensuring management transparency and efficiency, Defense” approach.) The implementation status of internal complying with laws and regulations, controlling risks, audits is also reported to the Board of Directors and the ensuring the reliability of business and financial reports, Audit Committee. and promoting the timely and appropriate disclosure of In addition, to strengthen the independence of the 5. Establish appropriate compensation systems 6. Ensure robust governance and control processes information. Furthermore, in order to manage business internal audit sections from the business execution function, Compensation paid to Directors and Executive Officers risk, to implement risk management through the risk implementation plans and the formulation of the budget of management and compliance functions, and to ensure the Internal Audit Division, as well as the election and effective and adequate internal controls, the Group dismissal of the Head of the Internal Audit Division require Internal Audit Department, which is independent from the the consent of the Audit Committee. Audit Committee business execution function, and other similar audit members may recommend changes to the implementation sections established in key subsidiaries, conduct internal plan and other matters to Executive Officers. Internal Controls System Internal Controls Committee • Deliberates on and determines matters concerning the establishment and assessment of internal control, along with promoting proper corporate behavior • Made up of the Group CEO, the Group COO, two Audit Committee members, and persons appointed by the Group CEO Agrees on IA’s audit plan, human resources, and budget Report Audit Committee • Four Directors, comprising three Outside Directors and one full-time member of the Audit Committee • Internal audit plan and budget approval • Appointment and dismissal of IA head Report Assists the Audit Committee with its duties Office of Non-Executive Directors and Audit Committee 52 Nomura Report 2017 Business Risk Management Compliance Internal Audit (IA) Internal Audit Management Position Number of People*1 Basic Compensation*2,3 (millions of yen) Bonus (millions of yen) Deferred Compensation*4 (millions of yen) Total Amount Paid (millions of yen) Directors (Outside directors) Executive Officers Total 9 (6) 6 15 315 (146) 430 745 94 (-) 379 473 88 (-) 288 376 497 (146) 1,098 1,595 *1 There were 9 Directors and 6 Executive Officers as of March 31, 2017. The number of people and compensation to Directors who were concurrently serving as Executive Officers is included in the section for Executive Officers. *2 Basic compensation of 745 million yen includes other compensation (commuter pass allowance) of 690 thousand yen. *3 In addition to basic compensation, 24 million yen of corporate housing costs, such as corporate housing tax and related tax adjustments, were provided. *4 For deferred compensation (such as stock options) granted during and prior to the fiscal year ended March 31, 2017, the amount recognized as expense in the fiscal year ended March 31, 2017, are shown here. *5 Subsidiaries of the Company paid 47 million yen to Outside Directors as compensation etc. for their directorship at those subsidiaries for the year ended March 31, 2017. *6 The Company abolished retirement bonuses to Directors in 2001. Compensation for Directors and Executive Officers http://www.nomuraholdings.com/company/cg/compensation.html Nomura Report 2017 53 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Interview with Outside Director I will continue to strive to contribute to the enhancement of Nomura’s competitiveness and the creation of value by offering advice as well as acting as a check Noriaki Shimazaki Outside Director, Chairman of the Audit Committee; Advisor of the IFRS Foundation Asia-Oceania Office; Former Executive Vice President of Sumitomo Corporation Please discuss the merits and challenges with respect to Nomura’s corporate governance. Please discuss the specific roles and activities of the Audit Committee. In 2003, Nomura became one of the first companies in In terms of how we operate, the Audit Committee has Japan to adopt the “Company with Three Board adopted a new approach since 2016, under which Outside Committees” structure. Today, a majority of the Board of Directors who are not Audit Committee members are Directors is comprised of independent Outside Directors, invited to attend monthly meetings. At Audit Committee and the Company has a clear separation of supervisory and meetings, we invite leaders such as the Group CEO, Group business execution functions. COO, division heads, and heads of subsidiaries to join us, In one year since I was appointed Outside Director, and we spend about an hour talking with them. This gives I have come to clearly understand that Nomura’s corporate us access to the thinking of the executive side. The aim governance structure is in no way superficial, and that the here is to eliminate disparities in the amount of information nomination, audit, and remuneration committees, all of available to each Director, to the maximum extent possible. What is needed to raise Nomura’s presence overseas? What needs to be done in order to enhance Nomura’s corporate value? which comprise a majority of Outside Directors, function In FY2016/17, the Audit Committee debated four main Nomura Group has declared its aim to be “Asia’s global I see two main themes crucial to achieving Nomura Group’s extremely well. I think this stems from a strong awareness topics and reported back to the Board of Directors. The first investment bank,” but I think it is one of the few companies long-term management vision targeting the fiscal year on the part of senior management. Every year, August 3 is matter was about creating something that would make it taking up the challenge of globalization. Above all, the key ending March 2020: reforming the business model in Japan designated as Nomura Founding Principles and Corporate easier for employees to understand top management’s to success is people. The quality of Nomura’s people and further improving profitability overseas. We must work Ethics Day, and this day is used to renew awareness of the thinking, in order to ensure an even healthier corporate abroad, both in terms of abilities and awareness, is higher to build a foundation for sustainable growth regardless of lessons learned from past mistakes. I, too, watched the culture. Secondly, we discussed enhancing Nomura’s than I had imagined. This is true not only for people in the business environment. Progress here requires top video prepared by the Company and took an oath. I sense corporate value by ensuring a balance between earnings in management positions, but it applies to people throughout management to clearly delineate strategies and give a clear a strong determination to achieve sustained growth based Nomura’s core businesses, while at the same time adhering the organization, including sales staff and the people sense of direction. At the same time, it is important to make on the principle of putting the customer first as found in the to the customer-first principle. Thirdly, we talked about working in such areas as IT, human resources, general sure that people throughout the group gain a firm ten principles set out by our founder Tokushichi Nomura, monitoring the specific strategies of different departments services, and business support centers. The staff in Tokyo understanding of these strategies and the overall direction while making sure to prevent a “business above all else” to ensure that efforts are aligned towards realizing Nomura who work in cooperation with these people overseas are that Nomura Group is heading in. culture from taking hold. Group’s overall management strategies. Finally, with also outstanding. Nomura’s head office is becoming an In addition, I think it is vital to listen to the opinions of After assuming my post, I visited the Kyoto and Osaka respect to internal control, we looked to build a strong increasingly international place. Surely we can raise our our people on the ground regarding these strategies in branches, along with offices in New York, London, Hong platform to bolster management control, and both expand presence overseas by further strengthening systems to order to factor their views into new strategies and tactical Kong, Singapore, and Powai. I interviewed executives and the earnings base and generate higher earnings than before better enable our diverse human resources to demonstrate approaches. Moreover, we also need to aim higher on the held group discussions with mid-level employees, and through appropriate risk-taking. In our dealings with the their individuality and abilities to the fullest extent. back of repeated PDCA (plan, do, check, action) cycles. what struck me was how much traction top management’s authorities and our independent auditors, we focused on Nomura Group has adopted a matrix system of It is also important to learn from best practices. While philosophy has gained among the staff in all of the establishing relationships of trust with an element of management across divisions and regions, under which studying U.S. and European investment banks, Japanese different regions. “tension” that prizes extensive communications but also appropriate authority is delegated to division and regional megabanks, and others that have succeeded in steadily One of the roles of an Outside Director is to give welcomes healthy pressure. heads in order to enhance expertise in each area. I think we expanding earnings in Japan and overseas, thereby counsel on whether any particular business is consistent In such ways, the Audit Committee has been going a need to look to more precisely define assignments and increasing corporate value, Nomura needs to create its with Nomura’s excellent principles. I am happy to report little beyond simple oversight, as we have been monitoring further clarify responsibilities so that this management own, unique value. Outside Directors have a role to play in that Nomura’s senior executives take such external business activities and giving advice targeting additional approach does not become overly complicated, and I overseeing executive officers and providing advice that opinions very seriously, and the effectiveness of growth for Nomura. believe that close cooperation centered on each division supports corporate strategies and growth. As an Outside governance has steadily improved. We also hold meetings limited to Outside Directors four and regional head will enhance competitiveness overseas. Director and Chairman of the Audit Committee, I will times in FY2016/17. At about two of these meetings, we invite the Group CEO, Group COO, or other executives, and spend considerable time discussing detailed strategies, the medium-term management plan, and other matters. It is also important to integrate operations in Japan and continue to strive to contribute to the enhancement of Asia, and to bring the know-how and expertise that Japan Nomura’s competiveness and the creation of value by possesses to the rest of Asia. offering advice as well as acting as a check. 54 Nomura Report 2017 Nomura Report 2017 55 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Interview with Advisory Board Member Kan Trakulhoon Advisory Board Member Director and Chairman of the Management Advisory Committee of the Siam Cement Group (SCG) Former President and CEO of SCG, one of Thailand’s most reputable industrial conglomerates established in 1913. Chairman of the Management Advisory Committee from 2016. He was recently awarded the 2014 Deming Distinguished Service Award for Dissemination and Promotion (Overseas). I believe that with corporate values that reflect innovation and sustainability, Nomura can become not only Asia’s global investment bank but also a global leader by its 100th anniversary What is your philosophy for steering organizations as a member of top management? to top management. Employee surveys are helpful for acquiring insights on Adaptability and responsiveness are among the most trends, such as why young people tend to leave their important qualities and, as such, they must be ingrained in companies. We found that the largest proportion of young the organizational culture in order to compete globally. people—40%—does so to further their education. We Employees need to be highly flexible and always welcome established networks and programs to support and change. People are the most crucial resource, and maintain contact with employees who leave to study management must commit to protecting and providing for abroad and encourage them to return after graduation. We the true betterment of its employees in order to inspire also learned that the younger generation has a strong loyalty, integrity, and sustainable development. volunteer spirit, and with this in mind, we introduced many A number of companies laid off staff during the Asian CSR programs, even during orientation training, that bring currency crisis of 1997. The Siam Cement Group (SCG), for real benefits to communities and the environment. Taking example, incurred large losses and reduced its equity part in activities that give back to society gives employees holdings. During this challenging time, however, we did not a sense of pride, both personal and with regard to their benefit from the employment of women in more challenging sustainable organization. I agree with Nomura’s vision to be roles. Nomura could brand itself as “the leading workplace Asia’s global investment bank, but I would also like for for women.” Nomura to include innovation and sustainability as elements of its overall vision. As such, Nomura’s branding Nomura aims to contribute to the development of Asian capital markets. How do you view Nomura’s potential to support growth in Asia? must reflect its personality from the perspectives of innovation and sustainability. I believe that Nomura can consistently provide creative and novel product offerings I think Nomura has tremendous potential to support growth that please customers while being a good global corporate in Asia and establish a dominant position as Asia’s global citizen. In addition, I recommend developing the right CSR investment bank. Currently, even within Asia, regions vary in programs to engage Nomura’s employees and local terms of the degree of development and customer needs, communities, which in turn will strengthen Nomura’s brand. and Nomura can leverage its diverse experience in In order to survive future competition, a company must developed markets such as Japan, North America, and draw on its internal strengths, which derive from its Europe to capitalize on trends in various Asian markets. corporate culture. After spending two years on the Nomura We have discussed at length our strategies for Advisory Board, it is evident that Nomura has a well-rounded investment in China. Certainly, investment in China is a perspective, a dynamic culture, and a management team must that cannot be avoided. Finding a partner is extremely with a forward-looking approach, exemplified by a diverse important, however, and finding a good partner will require board comprising 50% foreign and outside directors. a lot of effort. The internationalization strategy for the Nomura is quite advanced compared to its Japanese Chinese yuan also presents Nomura with business competitors, but there is still room for improvement. I believe opportunities. Hong Kong is already a financial hub. that with corporate values that reflect innovation and lay off any personnel, and instead continued to hire 200 company. Since people are Nomura’s most important asset, Singapore is becoming very strong and indeed may have sustainability, Nomura can become not only Asia’s global young recruits each year. We believed that to contribute to Nomura should implement such CSR programs for its society, young people needed employment in order to avert employees, especially for the younger generation. already surpassed Hong Kong. Also, Taiwan is striving to investment bank but also a global leader by its 100th become a financial hub, and I see a lot of potential in anniversary. structural problems with the “population pyramid.” Finally, I believe in the power and value of diversity. For investing more in Taiwan. A company must also provide suitable engagement example, SCG has more than 17,000 employees working programs for its employees, including training and outside Thailand, with diversity in religion, culture, and development, a good succession plan process, regular gender, who now represent about 32% of our total review of employee talent, employee surveys, and CSR workforce and collaborate together as one. I believe that activities, among other things. Leaders at every level must Nomura can gain immensely from such diversity in the be good role models in terms of fairness, ethics, and workforce. I have been to Japan more than 170 times and commitment to sustainable development, demonstrating have noticed that Japanese women in the workforce are their abilities through their roles and responsibilities. very intelligent, but they remain underutilized. With Japan’s Furthermore, leaders must also provide their subordinates aging population and shrinking workforce, Nomura has an with challenging jobs and thoughtful mentoring so that they opportunity to leverage the country’s talented female can develop and achieve their fullest potential. For instance, workforce by developing policies that promote career every year I committed several hundred hours to teaching a advancement for women. I see great potential, especially number of classes to employees of all levels—from new hires for companies in the financial sector, like Nomura, to I think the key for Nomura to achieve its goals in Asia will lie in the research capabilities of the aforementioned How should the Nomura management team make the best use of the Advisory Board? countries and may thus require selective synergistic After two years of working together with Nomura’s collaboration with local banks. Finding a partner for such management, I feel that we are much more open toward collaboration, however, remains a crucial part of the process. each other and I find that our discussions are very smooth To meet the aforementioned expectations as we head toward our 100th anniversary in 2025 and beyond, what do you think will be important in order for Nomura to increase its corporate value and grow sustainably? and fluid in every session. It is important as well to have free and open discussion, as I believe this makes the best use of the Advisory Board. Occasionally, the Advisory Board may base its comments on previous experiences that may no longer be applicable in certain situations. Thus, I urge the management team to have frank, open discussion with the Nomura is approaching its 100th anniversary, and I would Advisory Board without worrying about differences of like to see the Company branded as an innovative and opinion or anyone losing face over a particular matter. 56 Nomura Report 2017 Nomura Report 2017 57 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Message from the Chief of Staff Shoichi Nagamatsu Chief of Staff Enhancing Nomura’s Value I believe it is vital for Nomura Group to create a higher level requires us to build upon the strengths of individuals. It is of value if we are to achieve our long-term management important that each individual determine what they personally vision targeting FY2019/20, and continue to grow both should do to contribute to organization-wide optimization. For towards and beyond our 100th anniversary in 2025. We are this reason, every employee must see themself as a key player thus undertaking a significant shift in management with the in pursuing the targets set forth by senior management, caring deeply about their work and become accustomed to Today, Nomura Holdings’ Nomination Committee, losing. Conversely, a commitment to victory requires Compensation Committee and the Board of Directors are maximum effort. This is rightfully based on the premise that comprised of a majority of Outside Directors. Accordingly, individuals are compliant with laws and having a clear authority regarding senior management personnel matters notion of right and wrong based on their ethics. It is vital rests with the Board of Directors, which represents a truly that everyone feel a strong passion to contribute to the advanced system among Japanese companies. In 2015, a team effort of raising the brand value of Nomura Group so Outside Directors Meeting was established, and at these that we can be victorious in all areas, including staying at meetings, attended solely by Outside Directors, deliberations the top of the league tables. on specific strategies, medium-term management plans, and Moreover, we must never stray from our established other matters are held, with the Group CEO and Group COO principles and mindset regarding customers and how to invited to join meetings as necessary. This is one example of work with them. There are, however, areas in which we how our Board of Directors does more than just carry out should actively pursue change, such as in our processes management oversight. In 2016, we began looking for ways for doing business with customers. The ideal approach, to reduce disparities in the information held by different the one that is best for customers, changes with the Directors. One measure to this end was having Outside times. A customer-oriented business is one that stays in Directors who are not members of the Audit Committee tune with the times by transforming all of its systems as attend meetings between the Audit Committee and Company necessary to maximize the benefits for customers. I am officers. In this manner, we are constantly tweaking our confident that Nomura Group will create even more value corporate governance system to make it even more effective. if we all remain highly receptive to changing social issues Moreover, the Chairman of the Audit Committee adds his and client needs, always seeking solutions. own prominent finance and accounting experience and Corporate governance supporting our missions insights to form his views on the global situation and issues faced in Japan and overseas, and we receive the frank and advanced opinions of the Chairman. The Chairman has also adopted other unprecedented approaches to enhancing Enhancing corporate governance is one of the most corporate governance, including actively engaging with important matters when it comes to helping employees accounting audit firms to ensure that highly competent fulfill their missions to achieve goals. individuals are assigned to the Company’s account so they Nomura committed two scandals in the late 1990s, and can provide the Company with incredibly viable advice. these regrettable experiences made us realize that we Furthermore, Outside Directors inspect overseas sites and must never again lose the trust of society. Based on this visit domestic branches to obtain input from frontline recognition, we established the Advisory Board in 2001 to employees that can be incorporated into management. This incorporate input from people outside Nomura Group. This active involvement by Outside Directors is another distinctive move represented a large step forward in the enhancement characteristic of Nomura’s corporate governance. aim of realizing our vision for the future. recognizing and faithfully carrying out their mission toward of our corporate governance system. Amassing of individual strengths to achieve sustainable growth accomplishing these targets. It is also critical that supervisors provide appropriate guidance to employees in their reporting line, helping them to identify their particular objectives. Everyone should be constantly asking themselves what they Later, in 2003, we transitioned to the Company with Increasing Nomura’s Value Committees, etc., system described in the Companies Act of Japan (currently the Company with Three Board Committees) Having a diverse group of personnel is important in order for in order to further clarify the separation of the management Nomura to provide financial solutions to customers all over The Financial Services Agency of Japan published the want Nomura Group to become and what they can do to raise oversight function from the business execution function and the world. Currently, more than 70 nationalities are “Principles for Customer-Oriented Business Conduct” in the Group’s value. Without such individual reflection, March 2017. This document contains principles for seven sustainable growth will remain beyond our reach. Bringing increase transparency. This change made it possible for represented within Nomura Group, and diversity has become Outside Directors to engage in discussions from the deeply rooted in the organization. Looking ahead, we should areas, including pursuing the best interests of customers together the thoughts of each and every employee is a source standpoint of management oversight. We have achieved a step up efforts to increase diversity at the management level and appropriately managing conflicts of interest. These of strength for Nomura Group. principles are congruent with Nomura Group’s approach, as striving to be an organization that customers choose has always been our top priority based on the principle of putting Pursuing change while maintaining important values the customer first–one of the ten principles set out by our more stable corporate governance system which by promoting female employees to management positions incorporates active discussions and the various perspectives and creating frameworks for utilizing, in management, the of both domestic and overseas Outside Directors. The skills and experience of employees that have worked Advisory Board, which had comprised business managers of overseas. Finally, to raise Nomura’s value going forward, we Japanese companies, was transformed in 2015, when we will communicate even more closely with people from both founder. As we work to make Nomura Group more competitive, it is appointed four renowned experts from Asia and reinforced inside and outside Nomura Group and in Japan and overseas, Increasing Nomura Group’s value based on our philosophy crucial that we maintain our desire to never lose. If people our governance system toward our aim to establish and actively implement changes where they are needed. of “placing our clients at the heart of everything we do” do not hold onto a strong aversion to losing, they will stop ourselves as “Asia’s global investment bank.” 58 Nomura Report 2017 Nomura Report 2017 59 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Directors of Nomura Holdings (As of July 1, 2017) Nomura Holdings has adopted a company with three board committees structure, under which the management oversight and business execution functions are separate from one another. This system allows the Board of Directors to delegate considerable authority for the execution of business to Executive Officers, thereby enabling expedited decision-making. Directors are experts in fields such as finance, corporate management and law, and draw upon their extensive experience and insights to oversee management from many different perspectives. Also, the establishment of three (Nomination, Audit, and Compensation) committees, each comprised of a majority of Outside Directors, allows for enhanced management supervision and increased transparency. * In 2001, the Company changed its name to Nomura Holdings, Inc. Mari Sono Outside Director, Member of the Audit Committee Oct. 1976 Joined NISSHIN Audit Corporation (currently Ernst & Young ShinNihon LLC) Mar. 1979 Registered as Certified Public Accountant Nov. 1988 Partner of CENTURY Audit Corporation (currently Ernst & Young ShinNihon LLC) Nov. 1990 Member of “Certified Public Accountant Examination System Subcommittee,” Certified Public Accountant Examination and Investigation Board, Ministry of Finance Apr. 1992 Member of “Business Accounting Council,” Ministry of Finance Dec. 1994 Senior Partner of CENTURY Audit Corporation (currently Ernst & Young ShinNihon LLC) Oct. 2002 Member of Secretariat of the Information Disclosure, Cabinet Office (currently Secretariat of the Information Disclosure and Personal Information Protection Review Board, Cabinet Office) Apr. 2005 External Comprehensive Auditor, Tokyo Jul. 2008 Senior Partner of Ernst & Young ShinNihon LLC Aug. 2012 Retired Ernst & Young ShinNihon LLC Dec. 2013 Commissioner of the Securities and Exchange Surveillance Commission Jun. 2017 Outside Director of the Company (Current) Ms. Sono has many years of experience as a Certified Public Accountant and has served as a member of the Securities and Exchange Surveillance Commission. Her experience and insight are highly regarded both inside and outside the Company. She has been applying her extensive experience and high degree of expertise and independence to contribute as an Outside Director to determining important managerial matters and overseeing the business execution of the Company. Nobuyuki Koga Chairman of the Board of Directors, Chairman of the Nomination Committee, Chairman of the Compensation Committee Hisato Miyashita Director, Member of the Audit Committee (Full-time member) Apr. 1974 Joined the Company Jun. 1995 Director of the Company Apr. 1999 Managing Director of the Company Jun. 2000 Director and Deputy President of the Company Oct. 2001 Director and Deputy President of the Company (concurrently Director and Deputy President of Nomura Securities Co., Ltd.) Apr. 2003 Director and President of the Company (concurrently Director and President of Nomura Securities Co., Ltd.) Jun. 2003 Director, President & CEO of the Company (concurrently Director and Executive Officer and President of Nomura Securities Co., Ltd.) Apr. 2008 Director and Representative Executive Officer of the Company (concurrently Director and Chairman of Nomura Securities Co., Ltd.) Jun. 2008 Director and Chairman of Nomura Securities Co., Ltd. Jun. 2011 Director and Chairman of the Company (concurrently Director and Chairman of Nomura Securities Co., Ltd) Apr. 2017 Director and Chairman of the Company (concurrently Director 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 practices in the securities industry and, as Chairman, contributes to the smooth operation of the Board of Directors. Takao Kusakari Outside Director, Member of the Nomination Committee, Member of the Compensation Committee, Special Advisor of NYK Line Apr. 1964 Joined Nippon Yusen Kabushiki Kaisha (NYK Line) Aug.1999 President of NYK Line Apr. 2002 President, Corporate Officer of NYK Line Apr. 2004 Chairman, Corporate Officer of NYK Line Apr. 2006 Chairman, Chairman Corporate Officer of NYK Line Apr. 2009 Director and Corporate Advisor of NYK Line Jun. 2010 Corporate Advisor of NYK Line Jun. 2011 Outside Director of the Company Apr. 2015 Special Advisor of NYK Line (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. Hiroshi Kimura Outside Director, Member of the Nomination Committee, Member of the Compensation Committee, Advisor of Japan Tobacco Inc. Apr. 1976 Joined Japan Tobacco and Salt Public Corporation Jun. 2006 President and CEO and Representative Director of (currently, Japan Tobacco Inc.) Jun. 1999 Director of Japan Tobacco Inc. Jun. 2001 Resigned as Director of Japan Tobacco Inc. Jun. 2005 Director of Japan Tobacco Inc. Japan Tobacco Inc. Jun. 2012 Chairman of the Board of Japan Tobacco Inc. Jun. 2014 Special Advisor of Japan Tobacco Inc. Jun. 2015 Outside Director of the Company (Current) Jul. 2016 Advisor of Japan Tobacco 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 of the Company. Applying his extensive experience with respect to management, Mr. Kimura contributes to the Company as an Outside Director. Noriaki Shimazaki Outside Director, Chairman of the Audit Committee, Advisor of the IFRS Foundation Asia-Oceania Office, Former Executive Vice President of Sumitomo Corporation Apr. 1969 Joined Sumitomo Corporation Jun. 1998 Director of Sumitomo Corporation Apr. 2002 Representative Director and Managing Director of Sumitomo Corporation Jan. 2003 Member of the Business Accounting Council of the Financial Services Agency Apr. 2004 Representative Director and Senior Managing Executive Officer of Sumitomo Corporation Apr. 2005 Representative Director and Executive Vice President of Sumitomo Corporation Jan. 2009 Trustee of the IASCF Foundation (currently, IFRS Foundation) Jul. 2009 Special Advisor of Sumitomo Corporation Jun. 2011 Director of the Financial Accounting Standards Foundation; Chairman of Self-regulation Board; Public Governor of the Japan Securities Dealers Association Sep. 2013 Advisor of the IFRS Foundation Asia-Oceania Office (Current); Advisor of the Japanese Institute of Certified Public Accountants (Current) Jun. 2016 Outside Director of the Company (Concurrently Director of Nomura Securities Co., Ltd.) (Current) Mr. Shimazaki has held a number of significant positions, including Representative Director and Executive Vice President of Sumitomo Corporation, and his achievements and insights have been evaluated highly both within and outside of the Company. Applying his abundant experience in corporate management and high degree of expertise with regard to international accounting systems making him the equivalent of a Sarbanes-Oxley Act of 2002 financial expert, he contributes to the Company as an Outside Director. Toshinori Kanemoto Outside Director, Member of the Audit Committee, Of-Counsel, City-Yuwa Partners Apr. 1968 Joined National Police Agency Apr. 1992 Kumamoto Prefecture Police Headquarters, Aug. 2000 President, National Police Academy Apr. 2001 Director of Cabinet Intelligence, Cabinet Secretariat, Director-General Aug. 1995 Director General of the International Affairs Department, National Police Agency Oct. 1996 President of ICPO-INTERPOL Government of Japan Jan. 2007 Registered as Attorney-at-Law (Dai-ichi Tokyo Bar Association) Feb. 2007 Of-Counsel, City-Yuwa Partners (Current) Jun. 2011 Outside Director of the Company (Current) Mr. Kanemoto has held a number of significant positions, including President of ICPO-INTERPOL, and his achievements and insights have been evalu- ated highly both within and outside of the Company. Applying his high level of expertise and extensive experience as a currently active attorney, Mr. Kanemoto contributes to the Company as an Outside Director. Jul. 1987 Joined the Company Jun. 1993 Joined Union Bank of Switzerland (currently, UBS) Aug.1996 Joined Bankers Trust Asia Securities Ltd. Apr. 1998 Joined Credit Suisse First Boston Securities (Japan) Limited Dec.1999 Joined Nikko Citigroup Limited Compliance Head (concurrently Senior Managing Director of Nomura Securities Co., Ltd.) Apr. 2013 Senior Managing Director of the Company, Group Compliance Head (concurrently Representative Executive Officer of Nomura Securities Co., Ltd., Internal Control Supervisory Manager) (currently Citigroup Global Markets Japan Inc.) Apr. 2015 Senior Managing Director of the Company, Deputy Mar. 2005 Executive Officer of Nikko Citigroup Limited, Internal Control Supervisory Manager Jul. 2009 Management Director of Group Compliance Department of the Company Apr. 2012 Senior Managing Director of the Company, Head of Wholesale Compliance Jun. 2012 Senior Managing Director of the Company, Group Chief of Staff and Group Compliance Head (concurently Representative Executive Officer and Senior Corporate Managing Director of Nomura Securities Co., Ltd., Internal Control Supervisory Manager) Apr. 2016 Advisor of the Company Jun. 2016 Director of the Company (Current) Mr. Miyashita has engaged in legal and compliance work for many years at a number of securities companies, including the Company, and by working in positions such as the Group Compliance Head of the Nomura Group, he has extensive experience and knowledge in the compliance field. As a full-time member of the Audit Committee, he contributes to enhancing the effectiveness of audits by the Audit Committee. Michael Lim Choo San Outside Director, Former Executive Chairman of PricewaterhouseCoopers, Singapore Aug. 1972 Joined Price Waterhouse, Singapore Jan. 1992 Managing Partner of Price Waterhouse, Singapore Oct. 1998 Member of the Singapore Public Service Commission (Current) Jul. 1999 Executive Chairman of PricewaterhouseCoopers, Singapore Sep. 2002 Chairman of the Land Transport Authority of Singapore Sep. 2004 Independent Director of Olam International Limited Jun. 2011 Outside Director of the Company (Current) Nov. 2011 Chairman of the Accounting Standards Council, Singapore Apr. 2013 Chairman of the Singapore Accountancy Commission Sep. 2016 Non-Executive Chairman of Fullerton Healthcare Corporation Limited (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 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. Directors who are concurrently serving as Executive Officers Koji Nagai Director, Representative Executive Officer, President and Group CEO Apr. 1981 Joined the Company Apr. 2003 Director of Nomura Securities Co., Ltd. Jun. 2003 Senior Managing Director of Nomura Securities Co., Ltd. Apr. 2007 Executive Managing Director of Nomura Securities Co., Ltd. Oct. 2008 Senior Corporate Managing Director of Nomura Director and President of Nomura Securities Co., Ltd.) Aug. 2012 Representative Executive Officer and Group CEO of the Company (concurrently Director and President of Nomura Securities Co., Ltd.) Jun. 2013 Director, Representative Executive Officer and Group Securities Co., Ltd. Apr. 2009 Executive Managing Director and Executive Vice CEO of the Company (concurrently Director and President of Nomura Securities Co., Ltd.) President of Nomura Securities Co., Ltd. Apr. 2017 Director, Representative Executive Officer, President and Group Apr. 2011 Co-COO and Deputy President of Nomura Securities Co., Ltd. Apr. 2012 Senior Managing Director of the Company (concurrently CEO of the Company (concurrently Director and Chairman 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 and Group CEO of the Company, serve as Director, the Board of Directors is able to easily understand the business execution status and general status of the Company, and he contributes to the effectiveness of the oversight function of the Board. Tetsu Ozaki Director, Representative Executive Officer, Deputy President and Group COO Apr. 1982 Joined the Company Apr. 2004 Senior Managing Director of the Company (concurrently Senior Managing Director of Nomura Securities Co., Ltd.) Apr. 2008 Executive Managing Director of Nomura Securities Co., Ltd. Oct. 2008 Senior Corporate Managing Director of Nomura Securities Co., Ltd. Aug. 2012 Deputy President of Nomura Securities Co., Ltd. Apr. 2013 Director and Deputy President of Nomura Securities Co., Ltd. Apr. 2014 Executive Managing Director of the Company (concurrently Deputy President of Nomura Securities Co., Ltd.) Apr. 2016 Representative Executive Officer and Group COO of the Company (concurrently Director and Deputy President of Nomura Securities Co., Ltd.) Jun. 2016 Director, Representative Executive Officer and Group COO of the Company (concurrently Director and Deputy President of Nomura Securities Co., Ltd.) Apr. 2017 Director, Representative Executive Officer, Deputy President and Group COO of the Company (concurrently Director of Nomura Securities Co., Ltd.) (Current) Mr. Ozaki has held a number of significant positions including CEO of the Wholesale Division (Executive Managing Director) of the Company and Deputy President of Nomura Securities Co., Ltd. By having Mr. Ozaki, who serves as Representative Executive Officer and Group COO, serve concurrently as a Director, the Board of Directors is able to easily understand the business execution status and general status of the Company, and he contributes to more effective oversight by the Board. 60 Nomura Report 2017 Nomura Report 2017 61 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Outside Directors of major subsidiaries in Japan (Nomura Securities Co., Ltd. / Nomura Asset Management Co., Ltd.) Nomura Securities Co., Ltd. Toshiaki Hiwatari Outside Director, Advisor Attorney of TMI Associates, Former Superintending Prosecutor Apr. 1970 Public Prosecutor Jun. 1997 Public Prosecutor, the Supreme Public Prosecutor’s Office Aug. 2002 Detective Superintendent, Ministry of Justice Jun. 2004 Administrative Vice-Minister of the Ministry of Justice Dec. 2006 Superintending Prosecutor, Tokyo High Public Prosecutor’s Office Jul. 2008 Prosecutor General Sep. 2010 Registered as Attorney-at-Law (Dai-ichi Tokyo Bar Association); Advisor Attorney of TMI Associates (Current) Oct. 2012 Outside Director of Nomura Securities Co., Ltd. (Current) Mr. Hiwatari has held a number of significant positions, including Vice-Minister of Justice at the Ministry of Justice and Prosecutor General, and his achievements and insights are highly regarded both within and outside the Company. Applying his advanced expertise and extensive experience as a currently active attorney, Mr. Hiwatari contributes to Nomura Securities as an Outside Director. Motoki Ozaki Outside Director, Former Chairman of the Board of Directors of Kao Corporation Apr. 1972 Joined Kao Corporation (formerly Kao Soap Co., Ltd.) Apr. 2000 President, Prestige Cosmetics of Kao Corporation Apr. 2002 President, Global Fabric and Home Care of Kao Corporation Jun. 2002 Board of Director, Executive Officer of Kao Corporation Jun. 2004 Representative Director, President and Chief Executive Officer of Kao Corporation Jun. 2012 President and Representative Director of Kao Foundation for Arts and Sciences (Current) Jun. 2015 Outside Director of Nomura Securities Co., Ltd. (Current) Mr. Ozaki has held a number of significant positions, including Representative Director, President and Chief Executive Officer of Kao Corporation, and his achievements and insights are highly regarded both within and outside the Company. Applying his extensive management experience, Mr. Ozaki contributes to Nomura Securities as an Outside Director. Executive Officers and Senior Managing Directors of Nomura Holdings (As of July 1, 2017) Executive Officers Representative Executive Officer, President and Group CEO Representative Executive Officer, Deputy President and Group COO Koji Nagai Tetsu Ozaki Representative Executive Officer, Deputy President and Chief of Staff Shoichi Nagamatsu Executive Managing Director Executive Managing Director, Head of Asset Management Executive Managing Director, Chief Financial Officer Toshio Morita Kunio Watanabe Takumi Kitamura Executive Managing Director, Head of Group Entity Structure and Co-CRO Yuji Nakata Senior Managing Directors Retail Wholesale Head of Retail Head of Wholesale and Global Markets (based in London) Co-Head of Wholesale and Head of Investment Banking Eiichiro Yamaguchi Steven Ashley Minoru Shinohara Co-Head of Global Markets and Head of Global Markets, EMEA (based in Tokyo) Yutaka Nakajima Nomura Asset Management Co., Ltd. Global Markets, Global Head of Equities Co-Head of Global Markets, EMEA (based in London) Head of Global Markets, Asia ex-Japan (based in Singapore) Rikio Nagahama Outside Director, Board Chairperson of NPO Triton Arts Network Corporate Chief Risk Officer (CRO) (based in London) Apr. 1967 Joined Dai-ichi Life Insurance Company Apr. 2003 Representative Director and Executive Vice President, Dai-ichi Life Jan. 2008 Representative Director and President, DIAM Co., Ltd. (currently, Asset Management One Co., Ltd.) Insurance Company Jun. 2004 Representative Director and President, DLIBJ Asset Management Co., Ltd. Jun. 2009 Councilor of DIAM Co., Ltd. Jun. 2010 Board Chairperson of NPO Triton Arts Network (Current) Jun. 2015 Outside Director of Nomura Asset Management Co., Ltd. (Current) Mr. Nagahama has held a number of significant positions, including Representative Director and President of DIAM Co., Ltd., and his achievements and insights are highly regarded both within and outside the Company. Applying his extensive experience managing asset management companies, Mr. Nagahama contributes to Nomura Asset Management Co., Ltd. as an Outside Director. Akiko Kimura Outside Director, Of-Counsel, Attorney-at-Law, Anderson Môri & Tomotsune Apr. 1973 Registered as Attorney-at-Law (Dai-ichi Tokyo Bar Association) and joined Nishimura Komatsu & Tomotsune (currently Anderson Môri & Tomotsune) Jun. 2012 Outside Corporate Auditor of Fuji Electric Co., Ltd. (Current) Apr. 2013 Member of the Certified Public Accountants and Auditing Oversight Board (Current) Jan. 1977 Partner, Nishimura Komatsu & Tomotsune Jan. 2011 Of-Counsel, Anderson Môri & Tomotsune (Current) Jun. 2014 Outside Corporate Auditor, Daiichi Sankyo Co, Ltd. (Current) Jun. 2015 Outside Director, Nomura Asset Management Co., Ltd. (Current) Ms. Kimura has held a number of significant positions, including a long career as an attorney at Anderson Môri & Tomotsune working in the field of finance and other areas, and her achievements and insights are highly regarded both within and outside the Company. Applying her high level of expertise and extensive experience in law, Ms. Kimura contributes to Nomura Asset Management Co., Ltd. as an Outside Director. Norikazu Akedo Hideo Kitano Rig Karkhanis Lewis O’Donald Kaoru Numata Paul Spanswick Tomoyuki Teraguchi Yasushi Takayama Satoshi Arai Yo Akatsuka Chief Information Officer (CIO) Deputy Chief of Staff and Group Chief Administrative Officer (CAO) Head of Group Compliance and Operations Chief Legal Officer (CLO) Deputy Chief of Staff and Group Strategy Innovations Group Corporate Communications, Corporate Citizenship and Tokyo 2020 Olympic and Paralympic Hajime Ikeda Banking Americas Global Head of Human Resources Human Resources Head of General Services Banking Executive Chairman, Americas (based in New York) Head of Americas (based in New York) Co-Head of Americas (based in New York) EMEA Executive Chairman, EMEA (based in London) Head of EMEA (based in London) Asia ex-Japan Executive Chairman, Asia ex-Japan; Head of China Committee; Asia Strategy (based in Hong Kong/Singapore) Head of Asia ex-Japan (based in Singapore/Hong Kong) Internal Audit Group Internal Audit Kenji Kimura Yuji Hibino Rikiya Nonomura Chie Toriumi David Findlay Kentaro Okuda Tsutomu Takemura Yasuo Kashiwagi Jonathan Lewis Toshiyasu Iiyama Vikas Sharma Shoji Ogawa 62 Nomura Report 2017 Nomura Report 2017 63 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Risk Management http://www.nomuraholdings.com/company/risk/index.html Risk Management Fundamental Approach The three lines of defense in risk management Nomura Group has established processes to accurately identify risks arising from all types of operations and trading, and is working to bolster risk evaluation and the risk management framework. Nomura Group has adopted the following layered structure on the grounds that all employees are accountable for proactively managing risk. Risk management policy Our business activities are exposed to various risks including market risk, credit risk, operational risk, and liquidity risk. Properly managing these risks is one of management’s top priorities. In order to maintain capital adequacy and achieve its business plans under any type of economic environment, Nomura Group has defined the types and maximum levels of risk that the firm is willing to take, as documented in the Risk Appetite Statement. Risk culture Fostering a sound risk culture is essential for Nomura Group to maintain its social credibility and sustain its business activities. At Nomura Group, all employees, irrespective of their function or geographic location, must understand their specific responsibilities related to risk management, and actively work to manage risks. We aim to embed this risk culture throughout the firm through various training courses, a as well as company rules and regulations. First line of defense Departments engaged in trading and sales Establish and promote the risk management framework; monitor and challenge the first line of defense Second line of defense Departments engaged in risk management Third line of defense Review from an independent position Internal Audit First line of defense Second line of defense Departments engaged in trading and sales Departments engaged in risk management Third line of defense Internal Audit As the first line of defense, Departments engaged in risk Internal Audit reviews and departments engaged in sales management establish frameworks provides consulting from an and trading manage the risks to manage each type of risk, independent, objective position, associated with their own business and support risk management with the aim of adding value activities. measures taken by sales and by improving the organization’s For example, trading trading departments, which are the operations and frameworks, departments do business within First Line of Defense. including risk management. predetermined risk limits, and Risk management departments proactively identify and address independently monitor risks, any issues they find. and keep trading and sales departments in check as needed. 64 64 Nomura Report 2017 Nomura Report 2017 Nomura Report 2017 65 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Risk Management Risk management framework Stress testing Nomura Group has established a risk management committees comprising members of senior Nomura Group conducts stress testing to address risks Stress testing uses stress scenarios to assess the framework based on risk profiles, as shown in the management. The Group Integrated Risk that may spread globally, and to identify risks that are impact on our business and financial soundness should table below. We have also adopted a multi-faceted Management Committee (GIRMC) and Global Risk difficult to recognize with statistical methods alone, as those adverse events occur. These scenarios may risk evaluation process to avoid risks that may be Management Committee (GRMC), for example, well as to prepare for unprecedented risk events. include severe deterioration in the economic damaging to our reputation. deliberate and decide on risk management issues environment, geopolitical conflicts, and natural disasters. Risk management oversight is carried out by the material to the firm. Related Divisions Retail Asset Management Wholesale Examples of stress scenarios Key Risk Types Description Market risk Risk of losses arising from fluctuations in values of financial assets and debt (including off balance sheet items) due to fluctuations in market risk factors (including interest rates, foreign exchange rates, and securities prices) Credit risk Risk of losses arising from the inability of an obligor or counterparty to fulfil their obligations under the terms of a previously agreed contract as the result of default, bankruptcy, or legal proceedings Operational risk Risk of losses arising from inadequate or failed internal processes, people, and systems or from external events Liquidity risk Risk of losses arising from a potential lack of access to funds or higher cost of funding than normal levels due to a deterioration in Nomura’s creditworthiness or deterioration in market conditions Adapting to the globalization of risk We have observed the impact of the financial crisis in Nomura Group has Risk Management Departments Europe and the US on the world economy. We have in five regions and seven countries. In addition to also witnessed economic developments in Asia managing risks particular to their individual region, influencing global energy prices. In terms of risk these Risk Management Departments work in close management, we must increasingly address risk on a cooperation across the globe to ascertain and lessen global level. the impact that risks may have on other regions. Assessment of capital adequacy under the scenario that a serious economic situation that occurred in the past happens again (Example: Financial crisis) Assessment of the impact on Nomura’s earnings of extreme economic conditions that could occur in the future (Example: Economic collapse in a particular country or region) Assessment of the impact on Nomura’s portfolio of political events in Japan or overseas (Example: UK referendum on leaving EU) Assessment of the impact on Nomura’s earnings of a large-scale natural disaster (Example: earthquake directly under the Tokyo metropolitan area) 66 Nomura Report 2017 Nomura Report 2017 67 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Risk Management Cyber security measures Missions of business continuity Nomura Group has for some time been undertaking Organizational Structure The impacts of earthquakes, typhoons, and other and applications will be protected in a backup various security measures to protect systems against Nomura Group, along with Nomura Securities and natural disasters as well as the threats of terrorism and datacenter located in a different location. Additionally, cyber-attacks. However, in light of the growing cyber other Group companies, has established an other malicious acts are increasing in Japan and we have reinforced our infrastructures, for example, security threat worldwide, we recognize that our organizational structure, centered on the Nomura around the world. In light of this situation, Nomura such as installing the power generators. Accordingly, current countermeasures may be insufficient. Group Computer Security Incident Response Team Group has established a global business continuity these infrastructures can be used in the event of a Faced with this growing cyber security threat, (CSIRT), to work together to deal with events management structure and is continuously enhancing single building failure or a wide area disaster, such as a Nomura Group is working continuously to strengthen stemming from cyber-attacks and to minimize the its program through implementations of numerous Tokyo Inland Earthquake, to avoid systemic risks and its cyber security platform to ensure that clients’ damage they may cause. measures and awareness programs. continue or quickly recover high-priority operations information and assets are secure, and to enable clients to conduct transactions with peace of mind. Information-sharing organizations, etc. Cooperation Organizations specializing in security Nomura Group CSIRT Nomura Group company cyber security organizations (Group company CSIRTs, etc.) Nomura Securities cyber security organization (Nomura Securities CSIRT) Client information Client assets Monitoring/ response Client transactions Multi-layered defense system (inbound perimeter control, intranet security control, outbound perimeter control) Growing cyber security threats Countermeasures In terms of system security measures, we have put in Recognizing the importance of cyber security amid place a multi-layered defense system, which includes increasingly sophisticated and cunning cyber-attacks, multiple detection and defense mechanisms against we established CSIRTs with the aim of further unauthorized access and malicious programs such as improving our response capability. We are promoting computer viruses. We review these countermeasures as measures to enhance cyber security centering on the appropriate to deal with new threats. way the organization operates, system security As a human-level response, the Group has measures, executive and employee training, and prepared the Nomura Group Information Security cooperation with external organizations. Policy and regularly conducts relevant training for all With respect to the organization, we participate in executives and employees in order to raise awareness drills to protect against cyber-attacks, and have outside among executives and employees. cyber security experts evaluate the effectiveness of our Nomura Group has established information cyber security measures. In addition, when we obtain collecting and sharing systems relating to cyber information on dangerous vulnerabilities or detect cyber attacks and attack methods through information- that are crucial to the lives of our clients. Similar Business continuity structure measures and infrastructure have also been placed at Nomura Group has established the Crisis Management our major overseas offices. Committee, which is comprised of officers responsible The Office of Crisis Management Committee for crisis management from Group companies regularly conducts employee safety confirmation drills, worldwide, to prepare for major natural and manmade disaster prevention drills, and business continuity drills disasters. With this committee in place, we have in Japan to ensure that we are able to respond developed a business continuity and crisis immediately during the crisis situation. For overseas management structure to cover aforementioned offices, these activities are carried out by the Business disasters globally. Continuity Management Team. Through these efforts, Should a major office be rendered unable to we are working to foster greater awareness of crisis continue its operations due to disasters, we have set management and strengthen our ability to respond to up backup offices allowing us to continue our emergencies. These structures and measures are operations from these alternate locations. Similarly, stipulated in Nomura Group Crisis Management we have built redundancy into our datacenters so Regulations. that, in the event of a datacenter outage, critical data Activities of crisis and business continuity management 1 Strengthening structure for business continuity • Establishment and reinforcement of backup offices • Establishment of datacenter redundancy • Identification of critical resources • Enhancement of emergency communication equipment 2 Drills and training • Emergency Command Center activation drills • Employee safety confirmation drills • Drills based on business continuity plan • Initial response drills simulating Tokyo Inland Earthquake • Nankai Trough earthquake response training at branch offices 3 Strengthening collaboration between Group companies in Japan and overseas • Enhancing information sharing between domestic Group companies • Enhancing information sharing among overseas Group companies 4 Enhancing business continuity plan • Review and revision of business continuity plan • Review and revision of business continuity plan for datacenter outage scenario • Review and revision of business continuity plan for Tokyo Inland Earthquake scenario 5 Others security events, the CSIRT leads the response effort to sharing organizations such as Financial ISAC Japan • Stockpiling of water, food, and other emergency supplies at headquarters, branch offices, and backup offices analyze the cause, minimize damage, and quickly and Nippon CSIRT Association. restore systems. 68 Nomura Report 2017 Risk Management http://www.nomuraholdings.com/company/risk/index.html Nomura Report 2017 69 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Compliance http://www.nomuraholdings.com/company/compliance/index.html Compliance Fundamental Approach Compliance is a top management priority for Nomura Group, and the Code of Ethics of Nomura Group defines our funda- mental policy on compliance. The management and employees of the Group pledge to abide by the rules stated in this code once each year. Also, we have established Nomura Founding Principles and Corporate Ethics Day as a day for management and employees annually to reaffirm our corporate culture and corporate ethics, underpinned by Our Founder’s Principles. occurrence of activities that may be construed as Compliance Hotline (informants have the option of illegal by establishing effective control measures. In remaining anonymous). In FY2017, there were 42 calls the event that such issues arise, they are reported in received via the Compliance Hotline, and in all cases the full to management-level officers without delay, and status of related matters was confirmed and appropriate organizations and systems are structured to respond measures were taken. appropriately. Nomura Securities conducts comprehensive Nomura employees who have become aware of compliance training for all Executive Officers and potential legal or regulatory violations are able to report employees on topics such as the prevention of money their concerns to persons designated by Nomura laundering and insider trading, firewall regulations, Holdings, including Outside Directors, through the and guidelines for managing customer information. Compliance framework Offering high-quality financial services We have appointed a Group Compliance Head to oversee compliance for the Group as a whole along with a Group Compliance Department that provides support. In addition, Compliance Officers have been assigned to each Group company to strengthen our internal controls in response to global business development, and to develop and maintain the respective compliance structures of each Group company, including overseas offices. 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. Board of Directors Audit Committee Nomura Holdings Executive Management Board Group Compliance Head Direction Report Group Compliance Department Direction Report Compliance Officers Direction Report Departments Nomura Securities seeks to enhance the quality of financial compliance, etc., and developing systems to ensure products and services offered to customers through the compliance and the appropriateness of operations following initiatives under the Guidelines for Supervision of • Thoroughly screening account openings and conducting Financial Instruments Business Operators, etc. proper examinations when underwriting securities. For Nomura Securities’ Primary Initiative • Appointing officers to oversee internal controls, further information, please refer to our website. Nomura Securities' Primary Initiatives http://www.nomuraholdings.com/company/compliance/ Ensuring fair financial business practices • Prohibition of transactions with anti-social forces sector groups and disseminates the guidelines • Prevention of bribery • Management of conflicts of interest and prevention of insider trading throughout the Company and works to ensure fair business practices to prevent bribery. We manage conflicts of interest and insider information on a global Nomura Group works to prohibit transactions with basis by concentrating the information in the Group anti-social forces and to prevent money laundering. Compliance Department. Nomura Group has established guidelines related to gifts and entertainment of public officials and private- Fair Financial Business Practices http://www.nomuraholdings.com/company/compliance/ • Appropriate segregation of customer assets • Effective protection of clients’ personal information and other information assets of the Group Nomura Group Information Security Policy is the basic document governing the effective protection of clients’ personal information and other information assets. Under applicable laws and regulations, including the Customer-related personal information is handled under Financial Instruments and Exchange Act and the Personal stringent standards set out in Nomura Group Privacy Information Protection Act, Nomura Group works to Policy and other information security related rules, and in properly protect customers’ assets and information. full compliance with personal information-related laws In accord with applicable laws and regulations, and regulations. For further information, please refer to including the Financial Instruments and Exchange Act, our website. Nomura Securities properly segregates the assets of its customers from the assets of Nomura Securities itself. Privacy Policy http://www.nomuraholdings.com/policy/privacy.html Nomura Report 2017 71 Nomura Group companies Customer protection and information security Legal compliance measures • Maintenance of compliance framework and enhancement of management systems • Compliance Hotline • Carrying out compliance training In all Group companies and departments, Nomura Group complies with applicable laws and regulations and endeavors to prevent the 70 70 Nomura Report 2017 Nomura Report 2017 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Our People http://www.nomuraholdings.com/csr/employee/index.html Investing in Our Employees Human Resources Strategy Fundamental Approach Individuals from over 70 nationalities are currently employed in Nomura Group. This diverse group of people represents our greatest asset. Nomura Group provides equal opportunities and, under the Code of Ethics of Nomura Group, forbids discrimination based on nationality, ethnic origin, race, gender, age, religion, beliefs, social standing, gender preference, gender identity, disability or any other attribution, so that each and every employee can be active and successful in utilizing her or his capabilities and personal strengths. A Company in which diverse people can play a full role Since its establishment, Nomura has prioritized the development of human resources, emphasis on teamwork, staying one step ahead, and global ambition. Since the time of our founder, Tokushichi Nomura, we have continued our efforts to secure and nurture human resources, recruiting personnel who are adept in foreign languages and actively employing new graduates of colleges and vocational schools to promote the modernization of the organization. Upon taking on employees from Lehman Brothers in 2008, we adopted a globally integrated approach to human resource management. In April 2013, in order to further promote personnel exchanges between divisions, we introduced a system of job classifications based on core work responsibilities, consisting of General Career Type A employees, Type B, and Type C. General Career Type A employees and Type B differ only in that the latter are not subject to relocation. The aim with both is for employees to develop careers as generalists based on a broad range of experience. General Career Type C employees are specialists who pursue advanced expertise as required in their particular business area, and work under a merit-based system. To the extent possible, we have standardized recruitment and training, particularly for younger employees. We look to develop their core skills and judge their individual aptitudes from an organization-wide perspective, and create a wide range of opportunities for them to develop their careers through transfers and other means, which allows the organization to better ensure that we have the right people in the right positions. Overview of employment categories (Nomura Securities) General Career Type A and Type B Pursue career development through broad experience without prerequisite of specific expertise. Type B is not subject to transfer with relocation Type C Specialists located in specified regions required to demonstrate a high level of expertise in their business areas. They are evaluated in a “pay for performance” environment. Specified Career Financial advisors, Specialist employees and others Work on specific area of business/operation Not subject to transfers as a general rule Financial advisors are sales professionals attached to specific regions Global human resources framework Nomura Group employs a pool of professional Global human resources framework personnel around the world who are capable of providing financial services that meet the diverse needs of clients, and whose career paths within the Group and values are unique. We strive to manage our personnel in a flexible and suitable manner so that each and every one of our employees can thrive as they contribute their skills to the workplace. In addition to providing well-developed education and training programs to support our employees’ self-led skill-building endeavors, we also evaluate the achievements and skills of each employee and deploy our personnel with an eye on the future career path of each individual. In this manner, Nomura Group is able to maximize the skills of each employee and further enhance client services through personnel management that emphasizes diversity. Recruitment and hiring Talent acquisition Improve Work environment Assessment & development Organization effectiveness Recognizing that people are our greatest asset, since people are placed in positions they are best suited for our founding we have placed particular emphasis on and that each employee can display their capabilities recruitment. In our constant effort to secure the most to the fullest. An example of this is our system under talented people, we continue to follow a policy of which employees can transfer from General Career recruiting people regardless of nationality, gender, and Type A to Type B employees, Type A employees can other attributes. In FY2015/16 we introduced a “career switch to Type C employees, and Type C employees support system” for new graduate hires and we have can apply for other positions using an internal job broadened contact points with students by expanding posting program. our internship program and other measures. Since 2008, we have also been actively recruiting new graduates overseas. In recent years, we have also been actively hiring mid-career professionals capable of contributing immediately, and about 1,000 people each year have been joining Nomura in Japan through this route. In addition, we have been rehiring employees who previously left Nomura, with the expectation they will hit the ground running. We have also adopted a Number of new hires Mid-career hires 31% Financial advisors 1% General Career Type C employees (new graduates) 5 % General Career Type A employees (new graduates) 38% General Career Type B employees (new graduates) 25% personnel management approach that ensures that (Japan: Nomura Holdings, Nomura Securities FY2016/17) 72 72 Nomura Report 2017 Nomura Report 2017 Nomura Report 2017 73 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Investing in Our Employees Employee development Creating work environments that allow diverse personnel to thrive In developing and growing our business globally, we believe programs include group training programs based on years of Promoting Work Style Reform and Health & events related to diversity in the workplace. These that improving our personnel system is important in order to service and job position, elective group training programs Productivity Management networks also provide opportunities for interaction ensure that personnel with diverse career backgrounds and tailored to staff in the Wholesale and Corporate divisions, In July 2016, Nomura Group adopted the NOMURA both internally and externally. values can demonstrate their talents. Accordingly, we and on-the-job training. To support self-driven skills provide diverse education and training programs to help development, we have also established a self-study support employees at all levels develop their careers. system that includes a wide range of external training and Health & Productivity Declaration Statement as part of the Group’s efforts led by the Group COO, acting as Chief Health Officer, to maintain and improve the health * “Women in Nomura (WIN)” which focuses on women’s career advancement “Life & Family Network” (L&F)”, which is concerned with work-life management “LGBTA”, which promotes understanding of diverse value systems and multicultural values In Nomura Securities, each division appoints instructors to correspondence courses helpful in enhancing business and of employees. Supporting women’s careers serve for one year to guide and train new hires and help them management skills, including language courses. In addition, Nomura has launched the “Nomura In May 2015, Nomura Securities set a quantitative target develop into talented and independent-minded employees. In Furthermore, in order to develop personnel capable Work Style Innovation” initiative, which comprises of 550 female managers by 2020. In March 2016, an the Retail Division, a (management-level) employee is appointed of playing an active role globally, we have established “Work Style Reform” and “Health & Productivity action plan was announced to help women thrive in the as a mentor to work with the instructor in nurturing sales staff. study-abroad programs and overseas training programs Management.” Under this policy, we have company. The action plan outlines initiatives to achieve In order to make personnel development more visible, Nomura where employees themselves determine where they go introduced a work-at-home system, established quantitative targets, including support for female has established a competency framework, which sets out the and what topics they study. behavioral requirements and skills needed, and announces Amount invested in employees them to individual employees. In the case of the Retail Education and training expenses In-house training (FY2016/17) Division, this covers competency conditions and behavioral requirements, while in the Wholesale Division and the Corporate Division the aim is to raise performance levels. At the same time, discussions are held between employees 2,094 Japan and their supervisors with the aim of identifying areas needing development. With regard to Type C employees, who are highly skilled in a specific area, we have put in place a system that allows employees hired in Japan and those hired overseas to take courses with identical content. In addition to training programs for new hires, our core Proper evaluation and compensation EMEA Americas AEJ 161 299 213 2,767million yen (FY2016/17) 2,033 (FY2012/13) million yen Cumulative total(cid:1)of participants: 195,819 employees Cumulative total of hours: 562,289 hours To properly evaluate performance and further the employees, and persons under their supervision. development of personnel, the Group adopts an integrated Every employee is provided, in principle once a personnel evaluation process and all employees in principle year, with an opportunity to be interviewed by the participate in this process. Employees set their goals at the Human Resources Department and directly beginning of each year, and these goals are aligned with communicate their thoughts about their career. the Group’s strategy as well as competency and behavioral The Group has established its Compensation Policy for requirements. Employees then meet with their supervisors Group management and employees. This policy aims to in the middle and at the end of the year to have frank promote the sustainable growth of the Group and continue discussions regarding goal attainment. This approach increasing its global competitiveness and shareholder value enables the Group to evaluate its personnel fairly and over the long term. It also has the objective of contributing identify development opportunities suited to their to the value-added the Group can offer its customers and capabilities and competencies. For personnel chosen from realizing continued improvement in the Group’s evaluation among those in managerial-level positions, depending on among its clients through securing, retaining, motivating, days off for employees to receive comprehensive employees’ career-building and support for balancing medical checkups, and embraced the “Premium their careers with life events, among other measures to Friday” campaign. establish an employment environment in which female employees can thrive. Diversity and Inclusion Initiatives to support women in improving their Nomura Group believes that by having employees with careers include a mentoring program for managers, a diverse backgrounds and values respect one another sponsorship program in which executive officers support and work together, the organization is better able to management candidates, and training programs for provide high value-added services and satisfy a wide management candidates, among other efforts. variety of customer needs. We have established the Nomura Group Diversity LGBT and Inclusion Committee, which is chaired by the At Nomura Securities, we have implemented measures Group COO. The committee is made up of division to support lesbian, gay, bisexual and transgender representatives who regularly discuss the promotion of (LGBT) and other sexual-minority employees through diversity and inclusion. In March 2017, the committee training for all staff, activities to increase the number of conducted a diversity and inclusion survey targeting all support allies, and by introducing a partnership system. Nomura Securities employees in order to ascertain their In recognition of these efforts, in October 2016 we were views on the subject as part of the committee’s efforts given the highest Gold grade in the Pride Index, Japan’s to promote diversity and inclusion. first evaluation of the LGBT-friendliness of work Nomura has three autonomously run employee environments run by Work with Pride, a private group. networks* that provide a range of information and hold External evaluations • From Jun. 2007 Kurumin (Nomura Securities) • From Oct. 2016 Tomonin (Nomura Securities) • Jun. 2016 • Oct. 2016 • Feb. 2017 ERUBOSHI (Nomura Trust and Banking) Pride Index, Gold grade (Nomura Securities) White 500 Health and Productivity Enterprises (Nomura Holdings) Nadeshiko Brand (Nomura Holdings) the business unit the Group also provides 360-degree and nurturing outstanding employees. • Mar. 2017 evaluation based on feedback from their supervisors, fellow Nomura Group’s Basic Compensation Policy http://www.nomuraholdings.com/csr/employee/capability.html 74 Nomura Report 2017 Certifications on promoting women participation in workplace http://www.nomuraholdings.com/csr/employee/di.html Nomura Report 2017 75 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data CSR http://www.nomuraholdings.com/csr/index.html Corporate Social Responsibility CSR Initiatives Fundamental Approach Code of Ethics of Nomura Group http://www.nomuraholdings.com/company/basic/ethics.html Nomura Group actively engages in initiatives to address social issues in order 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 in maintaining and increasing its corporate value. The basic policy concerning CSR is set out in the Code of Ethics of Nomura Group and its Basic Management Policy. Moreover, the Nomura Holdings Corporate Governance Guidelines formulated in November 2015 state that Nomura shall actively engage in CSR activities, including educational activities in economics and finance, in addition to contributing to expanding securities markets through daily business. Our Founder’s Principles Since its founding, Nomura Group has been committed to contributing to the development of society at all times. We believe CSR is an essential part of Nomura Group’s commitment to implementing our Founder’s Principles— principles that have been passed down since Tokushichi Nomura founded the company. Our founder’s principles are the cornerstone of our business activities Ten principles set out by our founder We remain committed to enriching society by delivering superior services and solutions to our clients that meet all their investment needs. This has been our unwavering spirit since our founding. It is our social mission and our raison d’être. Our History & Founder’s Principles http://www.nomuraholdings.com/ company/basic/ 1. Nomura’s raison d’être “Nomura’s mission is to enrich the nation through the securities business. This is something we must absolutely see though.” 2. Principle of putting the customer first “We must place our customers’ interests before our own.” 3. Global ambition “Nomura is destined to become an active player on the international stage.” 4. Emphasis on rigorous research and analysis “We have a duty to research scientifically the intrinsic nature of all securities.” 5. Staying one step ahead “Always strive to stay one step ahead. Standing still is retrogressive.” 6. Entrepreneurial spirit “If, as an entrepreneur, you can determine something to a 70% certitude, you must have the courage to take up the challenge even though some uncertainty remains.” 7. Human resources “Nomura underscores the fact that the development of human resources, acquisition of talented personnel and ability to match the right talent with the most appropriate position are more formidable assets than sheer capital strength.” 8. Emphasis on team work “It is the management’s task to see that Nomura employees take responsibility and pride in their work and to form a unified team under the control of branch office managers.” 9. Business development frame of mind “We must have the courage to boldly follow the path of our convictions.” 10. Customer service mindset “If you conduct your work in a mechanical manner, believing simply that your role is over once the deal is done, there is no use in drawing on the strengths of those around you.” Founder Tokushichi Nomura CSR implementation process Identification of Material CSR Issues http://www.nomuraholdings.com/csr/group/index.html Framework for promoting CSR activities the committee include formulating policies for CSR The CSR Committee functions as the management- initiatives as well as approving and monitoring the level decision-making entity for promoting Group-wide progress of these activities. The activities of the CSR programs. The committee comprises seven committee are reported to the Board of Directors and executive officers, including the chairperson the Executive Management Board accordingly. During appointed by the Group CEO. The responsibilities of FY2016/17, the CSR Committee held one meeting. CSR framework Board of Directors Executive Management Board Report Approve CSR Committee Japan EMEA Americas Report Approve Secretariat: Corporate Citizenship Department Cooperation AEJ Nomura Group, our fundamental approach to CSR, and other matters. Based on such analysis, we identified the issues for the Group. Next, we assessed the “materiality to stakeholders” of the identified issues based on the evaluations of prominent SRI (socially responsible investment) bodies in Japan and overseas. We then assessed and prioritized the issues with regard to the “materiality to the Group” based on internal hearings and looking at the Group’s Basic Management Policy. We formed a materiality matrix of the issues based on Identification of material CSR issues and PDCA these two assessments to identify CSR issues of high In 2014, Nomura Group reassessed its material CSR importance to both stakeholders and the Group. issues through reflecting the opinions of third parties, In FY2016/17, we also examined the relationship hearings conducted across internal departments, and between our material CSR issues and SDGs*. Going confirmation by the CSR Committee members. forward, through CSR activities incorporating In the reassessment process, we first looked at external stakeholders' perspectives, including SDGs, we will elements. We analyzed the GRI Guidelines (G4), the promote initiatives aimed at sustainable development criteria for information disclosure on sustainability, such and resolving social issues, as well as work to increase as those of the Sustainability Accounting Standard our corporate value over the long term. Board (SASB), and Japan’s Stewardship Code. Turning to internal elements, we analyzed the Code of Ethics of * SDGs: "Sustainable Development Goals" adopted at the United Nations Sustainable Development Summit in September 2015. Material CSR issues for the Nomura Group Corporate governance Measures to reinforce governance CSR management Risk management Compliance Enhancing and strengthening risk management systems Ensuring financial soundness and transparency Business resilience Social and environmental risk management Legal compliance and reporting of violations Ensuring fair financial business practices Preventing bribery Preventing money laundering Contributing to sound and sustainable capital markets Offering high-quality financial services Products and services that address environmental and social issues Customer protection and information security Improving financial literacy Contributing to sustainable communities Global CSR initiatives Communication with stakeholders Fostering human resources with a respect for diversity Fostering human resources Diversity and inclusion Employee-friendly work environments Respecting human rights P.48 P.76 P.64 P.66 P.69 P.66 P.71 P.71 P.71 P.71 P.71 P.78 P.71 P.32 P.80 P.80 P.74 P.75 P.75 P.75 76 Nomura Report 2017 Nomura Report 2017 77 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Advancing Sustainable Finance Fundamental Approach Contributing to Sound and Sustainable Capital Markets Nomura Group believes that the social mission of the financial services sector is to contribute to economic growth and sustainable social development by promoting the appropriate flow of funds in the capital markets through providing products and services that meet customers’ needs. In addition, through dialogue with stakeholders, we offer financial services that help address various social and environmental issues around the world. Working to address social issues through financial services In FY2016/17, Nomura Securities provided support for the first “Social Bond” issued by a domestic issuer, the Japan International Cooperation Agency (JICA), and the first “Green Bond” issued by a non-financial company in Japan, Nomura Research Institute (NRI), in the Japanese bond market as lead manager. We will continue to serve as a bridge between the needs of investors who want to contribute to society and the funding demands of projects aimed at solving social issues. In doing so, we aim to contribute towards the development of Japan’s Green Bond and Social Bond markets. Social Bonds: JICA Bonds In September 2016, Nomura Securities was lead manager for a ¥35 billion bond issuance by the Japan International Cooperation Agency (JICA). The proceeds are being used for such purposes as infrastructure projects in emerging and developing countries and measures to tackle climate change. JICA received a second opinion from the Japan Research Institute, Limited (“JRI”) that the framework of JICA bonds is aligned with the features of Social Bonds as defined in the updated Green Bond Principles, 2016, where the proceeds will be exclusively used for social projects to address social issues. In 2015, the United Nations set out its Sustainable Development Goals (SDGs). Within the Japanese government’s SDGs Implementation Guiding Principles, “issuance of JICA bonds” is given as a specific example for the 17th of the SDG goals, “partnerships for the goals.” Green Bond Issue: NRI Green Bond has been certified as an environmentally friendly Against the backdrop of expanding ESG (Environment, property, and occupancy work related to the building. Social, Governance) investment, Green Bonds have A Second Party Opinion certifying conformity with been attracting international attention as one way of the Green Bond Principles has been obtained from addressing environmental issues. In September 2016, Vigeo Eiris which provides ESG evaluation. In addition, Nomura Securities structured, underwrote, and sold the the NRI Green Bond has received an R&I Green Bond first yen-denominated Green Bond issue in Japan, by Assessment of the highest grade, “GA1”, from Rating Nomura Research Institute (NRI). The bond proceeds and Investment Information, Inc. were used to finance the acquisition of trust beneficiary rights for part of the Yokohama Nomura Building, which Social Finance Products http://www.nomuraholdings.com/csr/sustainable/products.html Realizing a virtuous cycle through investment as a Responsible Institutional Investor Financial Services Agency of Japan published the management and seeks to maximize returns on investment. “Principles for Responsible Institutional Investors” Nomura Asset Management agrees with the purport (“Japan’s Stewardship Code”) in 2014. By actively of the Code and also undertakes investments taking undertaking stewardship activities through constructive ESG into consideration. We are supporting future dialogue with investee companies and proxy voting, growth cycles by boosting companies’ ability to grow Nomura Asset Management encourages sound corporate sustainability and by helping people build their assets. Realizing the Investment Chain targeted by Nomura Asset Management Responsible Investment System Sustainable economic growth / Thriving society Investee companies Investment and returns Shareholders Customers Employees High-quality products / increased purchases Increase in employment / higher pay Growth in orders placed / received Stakeholders Business partners Individual investors Pension funds, etc. I n v e s t m e n t a n d r Constructive dialogue Investment Chain e t u r n s s n r u t e r d n Investment a Nomura Asset Management established the Responsible Investment Department In April 2016. Through it, we aim to strengthen dialogue with investee companies relating to ESG, make investment decision-making more precise, and support sustainable corporate growth. Responsible Investment Committee Responsible Investment Council Reporting Bring up issues, etc. Responsible Investment Department •Proxy voting •Engagement •ESG research and analysis Reporting Integration Nomura Asset Management Investment and Research Division Responsible Investment http://global.nomura-am.co.jp/responsibility-investment/ Holding ESG seminars 78 78 Nomura Report 2017 Nomura Report 2017 s r o t s e v n I Investment in JICA bonds Interest payments, bond redemptions e c n a t s i s s a n a o L Investments and loans Repayment ODA yen loans and overseas investment in developing countries . c t e , s e i r t n u o c g n p o e v e D l i Infrastructure, medical treatment, health, measures to combat climate change Development of Thilawa Special Economic Zone (Myanmar) Olkaria Geothermal Power Development Project (Kenya) Polio eradication program (Pakistan) In response to growing interest in ESG investment based of ESG seminars for institutional investor clients on such on an evaluation of a company’s efforts with respect to themes as the environment, ESG developments in the environment, society, and governance at the time of Europe, and the evaluation of Boards of Directors. More investment, Nomura Securities has been holding a series than 300 people attended these seminars in FY2016/17. Nomura Report 2017 79 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Community Support Activities http://www.nomuraholdings.com/csr/society/contribution/index.html Supporting Our Communities Fundamental Approach Contributing to Sustainable Communities Community contribution expenditure We are working to contribute to finding solutions to social and environmental issues by communicating with a wide range of stakeholders, from customers to shareholders, local communities, and employees on a continual basis. Nomura Holdings Corporate Governance Guidelines, formulated in November 2015, set out the principle that the Company shall endeavor to contribute to the development of society at all times and shall fulfill Nomura Group’s social responsibilities as a corporate citizen by putting into practice Our Founder’s Principles that have been inherited since the foundation of the Company. (FY2016/17) Others 11% Emergency relief 4% People and human rights 1% Environment 4% Healthcare and welfare 3% Community contribution Total Approx. ¥1.7 billion Education & young people 26% Art and culture, sport 33% 11% * The total includes approximately ¥160 million from Nomura Foundation and ¥40 million from The Nomura Charitable Trust. Science and academia 7% Global CSR initiatives In the regions around the world where Nomura Group conducts its business activities, we share the basic CSR theme of “For Future Generations” and carry out activities in line with regional needs while forming partnerships with NGOs and other entities. These activities are focused on nurturing future generations, including activities aimed at eradicating disparities for future generations. Communication with stakeholders Nomura Group participates in initiatives in Japan and overseas that aim to contribute to society and the environment to fulfill its corporate social responsibility as a corporate citizen. Through dialogue and collaboration with stakeholders, we carefully examine the activities and information disclosure we undertake that are related to the economy, society, and environmental issues. We also review these activities and information disclosure, and report to the CSR Committee when needed. Dialogue with stakeholders (selected examples) Themes External Organization Outline Human rights, labor, environment, anti-corruption United Nations (UN) Global Compact Participation in Global Compact Network Japan ESG ESG ESG ESG UN Principles for Responsible Investment Participation in the Japan network Principles for Financial Action for the 21st Century Climate Bonds Initiative Participation in working group on asset management, securities, and investment banking businesses Participation as a partner in activities to promote green bonds CSR Asia Exchange of opinions on ESG issues in Asia Environment CDP Promotion, as a signatory, of the climate change and water programs Communication with Stakeholders http://www.nomuraholdings.com/csr/stakeholder/communication.html Participation in Initiatives for Sustainability http://www.nomuraholdings.com/csr/stakeholder/initiatives.html Inclusion in SRI indices Nomura’s CSR initiatives and ESG information and, as of January 2017, the Morningstar Socially disclosure practices have been widely recognized Responsible Investment Index (MS-SRI). In October outside the Company. Nomura Holdings has been 2016, Nomura Holdings was selected as a component selected for inclusion in a number of SRI indexes, of the STOXX Global ESG Leaders Index for the including the Dow Jones Sustainability Indices (DJSI second consecutive year. World and DJSI Asia Pacific), the FTSE4Good Index, External Assessment http://www.nomuraholdings.com/csr/evaluations/ Dow Jones Sustainability Indices The world’s first sustainability equity indices, Dow Jones & Company and RobecoSAM, jointly choose the companies to be included in these benchmarks FTSE4Good Index FTSE Russel, a subsidiary of the London Stock exchange, has created a socially responsible investment index by selecting excellent companies from around the world STOXX Global ESG Leaders Index STOXX Limited, a wholly owned subsidiary of Deutsche Borse Group, has established the global index for SRI represents companies that meet strict environmental, ESG criteria MS-SRI Morningstar, Inc. selected 150 companies that were assessed as having a high level of social awareness from among companies listed in Japan, and created Japan’s first socially responsible investment index by indexing their stock prices 80 80 Nomura Report 2017 Nomura Report 2017 Nomura Report 2017 Nomura Report 2017 81 81 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Supporting Our Communities Contributing to sustainable communities 2020 and beyond Global initiatives Proudly supporting Japan every step of the way. Support for the Olympic and Paralympic Games Tokyo 2020 The Road to 2020 http://www.nomuraholdings.com/tokyo2020/ Nomura Holdings is sponsoring the Olympic and Paralympic Games Tokyo 2020 (the Tokyo 2020 Games) as the exclusive Gold Partner in the Securities category. We see this as a perfect opportunity for Japan to showcase on the world stage its efforts to stimulate the Japanese economy and achieve sustainable growth by overcoming challenges such as low economic growth and an aging population with a low birth rate. Nomura Holdings is working not only to ensure the success of the Tokyo 2020 Games but also to stimulate the entire Japanese economy by applying its strengths and extensive experience in providing support to a wide range of companies through the capital markets. At the same time, in order to foster opportunities throughout society, Nomura Holdings is undertaking activities in support of the Tokyo 2020 Nationwide Participation Programme. Under this program, we are making a concerted effort to support post-disaster restoration work and promote educational programs to enhance financial and economic literacy. All Nomura employees are coming together to support sustainability in Japan in 2020 and beyond. Participating in BE FREE Tokyo Bicycle Sharing Project Support for Para-Sports Nomura Group is committed to supporting para-sports as an official As a leading partner in this project, we are promoting partner of the Japanese Para-Sports Association. Nomura Group also bicycle sharing with the aims of contributing to the supports the Japan Para-Volleyball Association as a special top partner. health of users, revitalizing the area, and enhancing the This association is working to increase the popularity of sitting volleyball, central Tokyo environment. We continue to tackle an official event of the Tokyo 2020 Paralympic Games. In FY2016/2017, various economic, social, and environmental issues as Nomura Group supported para-sports by holding events for staff to part of our effort to support sustainable communities. experience sitting volleyball for themselves, holding national athletic meeting supporter group meetings, and preparing DVDs and pamphlets introducing the different events. We intend to continue to broaden the appeal of these sports, support training athletes, and encourage general awareness of para-sports. Post-earthquake restoration support: The Sakura Project Since 2012, Nomura has been working hand in hand with local groups to make Tohanayama Hill in Yamamoto Town, Watari District, Miyagi Prefecture, a notable cherry blossom (“sakura”) viewing spot. The Watari District suffered severe tsunami damage in the Great East Japan Earthquake. With the eleventh semi- annual event held in April 2017, we commemorated the steady growth of the newly planted trees by inviting local people and children to enjoy the blossoms and join with us in planting more saplings. Approximately 800 employees have participated in these activities to date. EMEA Americas The focus of the EMEA Community Affairs program is to support Nomura Americas’ CSR program aims to support future the success of future generations, and is divided into three main generations in our New York City community through mentorship, areas: Two-Year Charity Partnership, The Nomura Charitable fundraising efforts, and awareness campaigns. Nomura works Trust, and Employee Engagement. FY2016/17 saw the second to improve the literacy of local students through the Read year of the partnership with Rays of Sunshine, a charity that Ahead program. The firm also supports several New York City grants wishes for seriously ill children. Over US$815,000 was organizations that benefit communities in need, including the Anti- raised for the charity, which included a range of fundraising Violence Project to empower LGBTA and HIV-affected individuals activities—from challenges and quizzes to sports and cooking through education, counseling and advocacy, and Toys for Tots competitions. Employee volunteering is a key part of EMEA’s for less fortunate children. Fundraising campaigns are also held Community Affairs program, with employees volunteering for through the year to increase local awareness and contribute to initiatives such as school mentoring, work skills support, and medical research these non-profits, include the Memorial Sloan schemes designed to raise the aspirations of future generations. Kettering Cancer Center, Autism Speaks, and the National MS Society. Instinet continues to support local youth through its partnerships with Elevate and Operation Backpack. EMEA AEJ Powai, India Americas AEJ Powai, India The Nomura CARES network was established by employee Nomura Powai’s CSR initiatives focus on the key areas of education volunteers as the focal point for CSR initiatives in Asia ex-Japan. and healthcare. These include programs in remedial education, We have charity partnerships with local NGOs in Hong Kong, skills development, primary healthcare, and cancer treatment. Singapore, and China that our employees support via various Current efforts are directed toward creating collective impact by fundraising and volunteering events. In India, we comply with engaging with NGOs who have complementary capabilities to Section 135 of the Companies Act to allocate at least two improve the overall welfare of a community. Powai CSR consistently percent of average net profit for CSR activities. We also support adds value by building a robust employee engagement program local CSR projects in Australia and Korea. Nomura CARES focuses and integrating it with its ongoing projects. The volunteering on four main streams: local charity partnerships, environmental programs leverage core competencies and domain knowledge of initiatives including annual beach cleanup events, donations to our employees in building capacities of partner NGOs and their NGOs that our employees are actively involved with, and the Hong stakeholders. In FY2016/17, 2,802 employees put in 6,641 hours Kong Community Connections Program that Nomura helps to participating in 212 volunteering initiatives. organize along with five other industry peers. 82 Nomura Report 2017 Nomura Report 2017 83 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Our Environment Fundamental Approach Environmental Initiatives http://www.nomuraholdings.com/csr/environment/index.html Environmental Initiatives Nomura Group, recognizing its responsibilities as a corporate group that operates globally, is committed to helping address climate change issues through its business activities. At the same time, we are working to reduce the environmental impact of our own business activities themselves. The Code of Ethics of Nomura Group states, “Nomura Group is commit- ted to acting in an environmentally responsible manner and should, therefore, approach environmental issues positively.” In addition, we are working on a global basis to tackle climate change issues based on recognized international criteria such as sustainable development goals (SDGs) and the Paris Agreement on Climate Change. Environmental management In 2009, Nomura Group created both its Environmental Statement and Environmental Policy based on the Code of Ethics of Nomura Group. Centered on the Environmental Activities Working Group, the Group is proactively working to reduce the environmental impact of its 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 offices around the world are also implementing environmental initiatives. For example, our London headquarters building obtained ISO 14001 certification in 2007 following an audit performed by a local accreditation body and has maintained its certification to the present. In addition, its energy management system received ISO 50001 certification in 2015. Nomura Group environmental management framework Board of Directors Executive Management Board Report Approve CSR Committee The Head of Environmental Affairs Report Approve Asia Environmental Activities Working Group Cooperation Europe Nomura Group companies Nomura Securities head office/branch offices Americas Nomura Group environmental targets (Japan) In Japan, the Group is working to conserve resources and energy as it seeks to attain its target to reduce CO2 emissions per square meter in FY2030/31 by 20% or more from FY2009/10. Nomura Group environmental objectives and progress (Japan) FY2016/17 targets Assessments FY2017/18 targets Reduction of greenhouse gas emissions Reduce domestic Nomura Group CO2 emissions per square meter of floor space by 20% or more from FY2009/10 Reduce the CO2 emissions per mileage driven of leased vehicles of Nomura Securities from the previous year Reduce the waste emissions volume at principal offices from FY2013/14 Effective use of resources Have green products account for 85% of supplies request system items Reduction of paper usage Reduce use of copy paper (as measured by the annual volume purchased) from the previous year Reduction: 32.4% Reduction: 2.4% Reduction: 6.0% Purchase ratio: 92.09% Reduction: 5.0% Reduce domestic Nomura Group CO2 emissions per square meter of floor space by 20% or more from FY2009/10 Reduce the CO2 emissions per mileage driven of leased vehicles of Nomura Securities from the previous year Reduce the waste emissions volume at principal offices from FY2013/14 Have green products account for 85% of supplies request system items Reduce use of copy paper (as measured by the annual volume purchased) from the previous year Encourage electronic document delivery service Accounts accepting electronic document delivery: 1.38 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 Pursued underwriting and sales of JICA Bonds and NRI Green Bond 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 visit: http://www.nomuraholdings.com/csr/environment/management FY2017/18 targets CO2 emissions CO2 -20% CO2 emissions per mileage driven Year-on-year reduction Waste emissions volume Reduction Compared with FY2013/14 Green office supplies purchase ratio Volume of copy paper usage Electronic document exchange 85% Year-on-year reduction Promotion Number of financial products and services that help resolve social issues Expansion Efforts to address climate change Nomura Group is making efforts to improve disclosure of environmental information globally. In addition, we are working to lighten the impact of our activities on the environment through the purchase of green power. Per-employee greenhouse gas emissions (scope 1, 2) (t-CO2) Japan EMEA Americas Green power purchasing volume Greenhouse gas emissions (scope 1, 2) (t-CO2) AEJ 100,000 Americas Japan EMEA 80,000 60,000 40,000 20,000 0 2014 2015 2016 2017 (Fiscal years ended March 31) 7 6 5 4 3 2 1 0 2014 2015 2016 (Fiscal years ended March 31) 2017 AEJ (MWh) 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Japan and main EMEA offices 2014 2015 2016 2017 (Fiscal years ended March 31) Nomura Report 2017 85 84 84 Nomura Report 2017 Nomura Report 2017 * For detailed environmental information please refer to Our Environment on page 93. About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Corporate Information / Data Key Financial Data P/L Net revenue Income before income taxes Net income* * Net income attributable to Nomura Holdings shareholders FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 1,535.9 1,813.6 1,557.1 1,604.2 1,395.7 1,403.2 85.0 11.6 237.7 107.2 361.6 213.6 346.8 224.8 165.2 131.6 322.8 239.6 (billions of yen) Segment information Net revenue Retail Asset Management Wholesale Subtotal Other Unrealized gain (loss) on investments in equity securities held for operating purposes Income (loss) before income taxes Net revenue Retail Asset Management Wholesale Subtotal Other Unrealized gain (loss) on investments in equity securities held for operating purposes Income before income taxes FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 397.9 68.9 644.9 511.9 80.5 765.1 476.5 92.4 789.9 435.6 95.4 720.3 (billions of yen) FY2016/17 374.4 99.4 739.3 1,111.7 1,357.5 1,358.7 1,251.3 1,213.1 664.2 188.8 220.8 165.1 183.5 350.3 65.8 555.0 971.1 560.9 3.8 37.7 10.7 24.7 (20.7) 6.6 1,535.9 1,813.6 1,557.1 1,604.2 1,395.7 1,403.2 63.1 20.5 (37.7) 46.0 35.2 3.8 85.0 100.6 21.2 71.7 193.5 6.6 37.7 237.7 192.0 27.1 111.8 330.9 20.0 10.7 361.6 161.8 32.1 82.2 276.1 46.0 24.7 346.8 127.6 36.7 15.4 179.7 6.1 (20.7) 165.2 74.8 42.3 161.4 278.6 37.6 6.6 322.8 (billions of yen) Geographic information* FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 Income (loss) before income taxes by region Japan Americas Europe Asia and Oceania Subtotal Consolidated 214.1 (24.6) (91.5) (12.9) (129.1) 85.0 317.2 386.3 363.2 244.8 234.7 25.7 (93.1) (12.1) (79.4) 29.5 (48.9) (5.2) (24.7) (27.6) (23.5) 34.6 (16.4) (32.0) (67.4) 19.8 (79.6) 50.0 14.4 23.7 88.1 237.7 361.6 346.8 165.2 322.8 * 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 ROE B/S Total assets FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 0.6% 4.9% 8.9% 8.6% 4.9% 8.7% FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 35,697.3 37,942.4 43,520.3 41,783.2 41,090.2 42,852.1 (billions of yen) Total Nomura Holdings shareholders’ equity 2,107.2 2,294.4 2,513.7 2,707.8 2,700.2 2,789.9 Gross leverage (times) Net leverage* (times) 16.9 10.4 16.5 10.4 17.3 10.4 15.4 9.3 15.2 9.6 15.4 8.6 * Total assets minus securities purchased under agreements to resell and securities borrowed, divided by Nomura Holdings shareholders’ equity. Funding and liquidity Liquidity portfolio* Short-term unsecured debt Long-term unsecured debt March 31, 2012 March 31, 2013 March 31, 2014 March 31, 2015 March 31, 2016 March 31, 2017 5,427.7 3,009.1 6,373.0 5,883.5 2,293.3 6,457.3 6,127.2 2,969.3 6,218.6 6,064.0 2,557.0 6,509.4 5,947.1 3,303.8 6,593.6 4,970.3 1,883.0 5,918.9 (billions of yen) * Definition differs from financial disclosures reflecting Liquidity Management’s view. Cash and cash deposits portion of liquidity portfolio excludes funds on deposit at exchanges and segregated client funds. Per share data Basic-net income attributable to Nomura Holdings shareholders per share (EPS) Diluted-net income attributable to Nomura Holdings shareholders per share (EPS) Nomura Holdings shareholders’ equity per share (BPS) FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 3.18 29.04 57.57 61.66 36.53 67.29 (yen) 3.14 28.37 55.81 60.03 35.52 65.65 575.20 618.27 676.15 752.40 748.32 790.70 Dividends per share (DPS) Dividend payout ratio 6.0 8.0 17.0 19.0 13.0 188.7% 27.5% 29.5% 30.8% 35.6% 20.0 29.7% Consolidated capital adequacy, etc.*1 March 31, 2012 March 31, 2013 March 31, 2014 March 31, 2015 March 31, 2016 March 31, 2017 Tier 1 capital Tier 2 capital Total capital RWA Tier 1 capital ratio CET 1 capital ratio*2 Consolidated capital adequacy ratio Consolidated leverage ratio*3 HQLA*4 LCR*4 (billions of yen) 2,090.2 2,092.9 2,314.2 2,459.2 2,577.5 2,689.8 319.6 359.2 401.5 361.2 323.1 109.6 2,427.0 2,452.1 2,715.7 2,820.4 2,900.6 2,799.4 14,681.0 17,546.7 17,425.9 18,929.2 15,970.5 13,977.9 14.2% 14.2% 16.5% 11.9% 11.9% 13.9% 13.2% 13.2% 15.5% — — — — — — — — — 12.9% 12.9% 14.8% 3.82% 16.1% 15.4% 18.1% 4.28% 19.2% 18.2% 20.0% 4.63% (trillions of yen) — — 6.2 4.5 175.8% 180.0% *1 Figures for March 2012 were prepared under Basel 2.5 standards. Figures for March 2013 to March 2017 were prepared under Basel 3 standards. *2 CET 1 capital ratio is defined as Tier 1 capital minus minority interests divided by risk-weighted assets. *3 Tier 1 capital divided by exposure (sum of on-balance sheet exposures and off-balance sheet items). *4 Monthly average of 4Q. Number of shares outstanding, share price, etc. March 31, 2012 March 31, 2013 March 31, 2014 March 31, 2015 March 31, 2016 March 31, 2017 Number of shares outstanding (thousands) 3,822,563 3,822,563 3,822,563 3,822,563 3,822,563 3,822,563 Share price (fiscal year-end) (yen) Market capitalization (trillions of yen)* PBR (times)* PER (times)* * Figures based on the fiscal year-end share price. 366 1.4 0.64 577 2.2 0.93 662 2.5 0.98 706.2 502.9 2.7 0.94 1.9 0.67 115.09 19.87 11.50 11.45 13.77 691.9 2.6 0.88 10.28 86 Nomura Report 2017 Nomura Report 2017 87 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Eleven-Year Consolidated 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 Form 20-F. FY2006/07 FY2007/08 FY2008/09 FY2009/10 FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 (Millions of yen) 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 Private equity entities product sales 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 Private equity entities cost of goods sold 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 ¥ 337,458 ¥ 404,659 ¥ 306,803 ¥ 347,135 ¥ 359,069 ¥ 473,121 ¥ 453,401 ¥ 99,276 145,977 290,008 47,590 981,344 (20,103) 100,126 67,425 2,049,101 958,000 1,091,101 345,936 50,812 109,987 61,279 38,106 57,184 109,295 772,599 318,502 145,930 172,572 (3,256) 85,096 189,712 61,720 76,505 796,540 (48,695) — 28,185 1,593,722 806,465 787,257 366,805 90,192 135,004 64,841 38,135 — 157,190 852,167 (64,910) 3,259 (68,169) (322) (67,847) ¥ 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) ¥ 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 ¥ 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 ¥ 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 ¥ 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) 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 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 1,194 431,959 ¥ 118,333 229,006 354,031 13,761 440,050 (20,504) — 156,460 1,723,096 327,415 1,395,681 327,129 92,580 216,479 475,587 1,371 441,036 7,708 — 153,626 1,715,516 312,319 1,403,197 574,191 123,881 189,910 78,411 35,892 — 228,238 1,230,523 165,158 22,596 142,562 11,012 496,385 94,495 175,280 69,836 35,111 — 209,295 1,080,402 322,795 80,229 242,566 2,949 239,617 Net income (loss) attributable to NHI shareholders ¥ 175,828 ¥ 107,234 ¥ 213,591 ¥ 224,785 ¥ 131,550 ¥ 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 1,643,007 8,412,618 11,672,612 1,686,902 1,406,216 17,838,227 13,094,552 2,184,504 1,187,600 10,391,367 10,278,188 1,944,832 ¥ 1,054,012 ¥ 1,434,067 ¥ 1,422,709 ¥ 1,352,244 2,071,714 12,467,213 14,700,282 1,638,975 ¥ 35,577,511 ¥ 25,236,054 ¥ 24,837,848 ¥ 32,230,428 ¥ 1,093,529 ¥ 1,426,266 ¥ 1,183,374 ¥ 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 ¥ 35,577,511 ¥ 25,236,054 ¥ 24,837,848 ¥ 32,230,428 1,242,318 10,157,954 4,752,054 467,574 5,483,028 23,286,302 1,539,396 12,150 1,551,546 950,381 10,540,731 4,469,942 623,206 5,224,426 23,234,952 1,988,124 12,978 2,001,102 1,262,187 20,599,256 4,588,208 808,482 5,002,890 33,354,552 2,185,919 37,040 2,222,959 2,969,578 15,077,660 16,410,002 2,734,084 2,629,875 14,115,257 17,124,349 2,420,206 2,948,424 16,719,520 17,308,848 2,709,848 2,570,678 17,347,001 18,714,314 2,699,011 2,211,423 13,742,646 14,123,594 3,665,972 2,227,822 15,156,318 15,241,931 1,916,466 ¥ 2,150,453 ¥ 1,953,677 ¥ 1,652,752 ¥ 2,189,310 ¥ 2,096,596 ¥ 3,898,843 ¥ 2,972,088 3,097,428 18,729,825 15,192,364 2,860,373 ¥ 36,692,990 ¥ 35,697,312 ¥ 37,942,439 ¥ 43,520,314 ¥ 41,783,236 ¥ 41,090,167 ¥ 42,852,078 ¥ 1,167,077 ¥ 1,185,613 ¥ 543,049 3,708,435 19,061,091 8,191,794 1,308,510 7,195,408 40,008,287 2,789,916 53,875 2,843,791 ¥ 36,692,990 ¥ 35,697,312 ¥ 37,942,439 ¥ 43,520,314 ¥ 41,783,236 ¥ 41,090,167 ¥ 42,852,078 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 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 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 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 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 4,249,118 16,605,591 7,499,335 1,200,647 8,129,559 38,347,152 2,700,239 42,776 2,743,015 738,445 ¥ 602,131 ¥ 662,256 ¥ 662,902 ¥ Net cash provided by (used in) operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities ¥ (1,627,156) ¥ (533,813) 1,568,703 (647,906) ¥ (102,019) 942,879 (712,629) ¥ (1,500,770) (269,643) 2,176,530 (98,905) 999,760 ¥ (235,090) ¥ (423,214) 1,284,243 290,863 ¥ 9,942 (844,311) 549,501 ¥ (160,486) (701,623) 457,426 ¥ (103,195) 289,385 (77,028) ¥ 1,238,372 ¥ 1,305,025 (23,711) 12,337 (118,051) 986,387 (178,206) (2,130,644) Effect of initial adoption of investment company accounting on cash and cash equivalents — (38,427) — — — — — — — — — Effect of exchange rate changes on cash and cash equivalents 10,333 Net increase (decrease) in cash and cash equivalents ¥ (581,933) ¥ (57,319) 97,208 ¥ (81,896) 106,330 ¥ 964 407,081 (26,246) 599,693 ¥ ¥ (6,314) 47,175 41,089 68,513 (40,195) (549,820) ¥ (265,433) ¥ 684,705 ¥ (174,384) ¥ 2,160,853 ¥ 4,249 (939,421) 88 Nomura Report 2017 Nomura Report 2017 89 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Unit June 30, 2012 June 30, 2013 June 30, 2014 June 30, 2015 June 30, 2016 June 30, 2017 Unit FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 Dialogue with stakeholders Data for FY2016/17 items marked with have undergone assurance verification by a third party. CSR Key Facts Corporate governance Members of the Board Board of Directors Outside Directors Non-Japanese Directors Female Directors No. of people No. of people Ratio (%) No. of people Ratio (%) No. of people Ratio (%) 11 7 64 3 27 1 9 11 6 55 3 27 1 9 11 6 55 3 27 1 9 12 7 58 3 25 1 8 11 6 55 3 27 1 9 10 6 60 1 10 1 10 Unit FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 Officers (Executive Officers and Senior Managing Directors) Men Women Ratio of women No. of people No. of people % 41 2 4 23 2 8 27 2 6 26 2 7 27 2 7 33 1 3 Unit FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 Board of Directors meetings No. of times held Average attendance rate No. of times % 10 95 11 97 10 98 10 99 10 100 11 99 Client Focused Unit FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 Caseload at Customer Help Desk Department (Nomura Securities) Total Complaints Inquiries Opinions and requests Other No. of cases No. of cases No. of cases No. of cases No. of cases 5,005 3,012 1,836 13 144 5,693 3,409 2,119 23 142 *1 *2 7,010 4,023 2,730 55 202 5,540 2,537 2,766 81 156 5,767 2,771 2,749 128 119 6,003 2,531 3,267 98 107 *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. Community contribution expenditures Total Millions of yen Millions of yen Education Arts, culture, and sports Millions of yen Science and academic achievement Millions of yen Community contribution Millions of yen Welfare and health Environment Human rights and labor Disaster relief Other Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen 1,235 582 106 83 200 49 43 3 71 103 1,348 556 81 129 199 79 47 4 88 171 1,323 604 66 117 190 39 84 20 78 129 1,457 530 333 114 161 85 34 19 68 113 1,325 562 102 120 162 79 29 39 56 176 Unit FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 1,704 451 567 116 189 53 71 12 61 184 Cumulative total Participants and materials in financial and economics education Visiting classes (elementary, junior, senior high schools, universities, teachers) Since 2008 Financial courses for universities Since 2001 No. of participants No. of schools No. of schools No. of participants 22 31 56 265 304 346 1,077 1,087 115 12,000 536 27,839 1,420 5,741 120 1,865 114 11,000 444 21,696 1,287 5,120 396 2,825 112 11,000 531 23,897 1,484 5,699 227 9,836 108 11,000 566 24,712 1,361 5,167 366 9,637 106 11,000 412 14,958 1,429 5,587 361 304 15,317 104 43,787 1,758 11,200 228,200 7,850 10,926 391,650 1,618 26,118 6,462 103,528 4,048 378 Financial courses for the general public Since 2003 No. of courses No. of participants No. of teams No. of members No. of schools Nikkei Stock League Since 2000 Teaching material for elementary schools (The Economics classroom,“The Framework of Society and the Role of Money”)* Since 2008 Teaching material for junior high schools (The t-shirt shop)* Since 2006 No. of copies 5,000 17,422 14,639 24,170 21,377 25,503 308,111 No. of schools 180 387 215 161 79 56 4,778 No. of copies 17,200 17,326 12,162 15,380 5,928 4,664 452,660 Unit FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 * The total volume of learning materials donated to elementary and junior high schools by Nomura Holdings Branches that are barrier-free and have AEDs (Nomura Securities) Certified universally accessible Wheelchair-accessible toilets No. of branch offices Wheelchair-accessible elevators No. of branch offices No. of branch offices With steps removed from entrances and exits (with ramps, elevators, or no steps) No. of branch offices With installations to mitigate entrance and exit steps (railings or reduced step heights) No. of branch offices Percentage of branches equipped with AEDs (automated external defibrillators) Percentage of branches with personnel designated to provide assistance to seniors % % 30 80 54 140 14 — — 30 81 57 139 13 — — 30 78 66 129 13 100 80 30 78 66 130 14 100 80 33 83 68 128 14 100 80 32 83 66 132 12 100 86.7 Unit January 2012 December 2013 August 2014 January 2015 February 2016 February 2017 Results of customer satisfaction surveys at branch offices (Nomura Securities) Extremely satisfied/satisfied % Neither satisfied nor dissatisfied % Extremely dissatisfied/dissatisfied % — — — 81.6 15.7 2.7 81.4 16.3 2.2 80.9 16.3 2.8 82.1 15.1 2.8 83.7 14.3 2.0 Unit FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 Social contribution-type bonds (Nomura Securities) Name of bonds issued ADB Clean Energy Bonds/ IFC Bonds ADB Clean Energy Bonds/ ADB Water Bonds/AfDB Education Support Bond/IFC Bonds/IFC Green Bonds/EIB Bonds ADB Bonds/ADB Water Bond/ AfDB Food Safety and Security Bond/IADB Bonds/ IBRD Bonds/IBRD Green Bonds/IFC Bond/IFC Green Bond ADB Bonds/IADB EYE Bonds/ IBRD Bonds/IFC Bonds/NIB Bonds ADB Bonds/IADB Bonds/ IBRD Bonds/IFC Bonds/NIB Bonds Bonds issued Proceeds Number Millions of yen 14 76,883 11 95,960 19 159,145 24 72,310 18 78,118 Developing human resources who respect diversity Unit FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 Education and training expenses Total Millions of yen Japan Europe Americas Asia-Pacific Millions of yen Millions of yen Millions of yen Millions of yen Participation in education and training* 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 2,033 1,468 133 280 153 225,184 21,928 169,385 11,965 2,766 977 7,390 1,182 45,643 7,804 2,441 1,907 108 233 193 254,117 22,048 208,087 12,081 1,732 647 7,204 1,794 37,094 7,526 2,515 1,978 81 262 194 406,602 89,657 284,920 12,325 26,117 21,822 7,811 5,598 87,754 49,912 2,972 2,076 115 573 208 507,639 132,672 333,305 14,398 48,434 41,654 15,439 12,255 110,461 64,365 2,880 2,020 225 426 209 589,242 211,014 307,295 16,294 137,565 62,077 17,589 25,122 126,793 107,521 2,767 2,094 161 299 213 562,289 195,819 303,854 15,581 94,550 44,325 15,848 19,816 148,037 116,097 * Certain subsidiaries and affiliates were excluded from the number of participants in internal education and training in Europe, the Americas and Asia as the data was compiled based on persons registered through the Wholesale Division’s internal training system. 90 Nomura Report 2017 Nomura Report 2017 91 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data CSR Key Facts Data for FY2016/17 items marked with undergone assurance verification by a third party. Developing human resources who respect diversity Unit FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 Composition of employees*1 Total Japan Europe Americas Asia-Pacific 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 % % % % % Number of new hires*2 Total Japan (Nomura Holdings, Nomura Securities) Europe Americas Asia-Pacific 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) Composition of managers*3 Total Japan Europe Americas Asia-Pacific 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 (%) 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 3,359 573 495 663 478 1,150 7,299 1,064 13 3,623 205 5 1,693 325 16 1,060 243 19 923 291 24 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 2,554 446 581 307 361 859 7,024 1,055 13 3,549 219 6 1,557 315 17 1,016 234 19 902 287 24 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 2,920 507 522 503 418 970 6,913 1,031 13 3,480 218 6 1,507 290 16 1,028 234 19 898 289 24 28,672 62 38 15,973 58 42 3,485 71 29 2,449 74 26 6,765 61 39 100 56 12 9 23 2,934 482 363 389 121 382 128 718 351 7,095 1,234 15 3,437 236 6 1,479 311 17 1,093 250 19 1,086 437 29 28,865 62 38 16,083 58 42 3,424 71 29 2,503 74 26 6,855 61 39 100 56 12 8 24 2,868 537 395 286 119 313 111 714 393 7,165 1,370 16 3,345 270 7 1,503 335 18 1,123 276 20 1,194 489 29 28,186 61 39 16,227 58 42 3,026 70 30 2,314 74 26 6,619 59 41 100 58 11 8 23 2,266 526 430 189 94 227 91 425 284 7,705 1,405 15 4,289 383 8.2 1,270 289 19 1,029 250 20 1,117 483 30 *1 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. *2 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. *3 Composition of managers: The figures cover Nomura Group on a consolidated basis. In FY2015/16 and prior years, some domestic subsidiaries were not included in the scope of the calculations. Please refer to standards for calculation (http://www.nomuraholdings.com/csr/data/). 92 Nomura Report 2017 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.) Indirect energy consumption (Purchased electric power) Including, Green electric purchase power*4 (Purchased cooling and heating power) Unit FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16 FY2016/17 t-CO2 Japan Europe t-CO2 Americas t-CO2 Asia-Pacific t-CO2 t-CO2 Japan Europe t-CO2 Americas t-CO2 Asia-Pacific t-CO2 t-CO2 Japan Europe t-CO2 Americas t-CO2 Asia-Pacific t-CO2 t-CO2 Japan Europe t-CO2 Americas t-CO2 Asia-Pacific*3 t-CO2 MWh Japan Europe MWh Americas MWh Asia-Pacific MWh MWh Japan Europe MWh Americas MWh Asia-Pacific MWh 2,373 1,299 0 76 34,214 21,629 6,784 24,357 2.4 6.9 2.8 5.0 18,505 9,446 6,060 11,883 12,664 6,981 0 272 74,648 50,091 16,194 27,474 2,247 1,318 0 76 38,988 16,842 6,278 24,323 2.8 6.2 2.8 5.4 17,919 9,728 5,124 11,057 11,948 7,025 0 800 74,293 38,679 16,104 28,012 2,207 1,131 46 143 42,300 17,334 5,015 21,601 3.0 6.0 2.2 4.9 18,729 9,253 5,561 9,552 11,729 6,210 225 608 74,117 41,164 15,896 26,942 2,107 797 69 143 40,965 14,164 6,406 22,007 2.9 4.6 2.6 4.3 20,823 8,127 4,349 10,575 11,229 4,438 340 611 72,780 30,836 22,148 27,862 1,986 752 72 169 39,065 12,822 6,966 21,892 2.7 4.3 2.8 4.2 22,013 7,651 4,966 11,587 10,573 4,201 355 732 70,520 30,133 21,882 26,720 2,005 772 72 173 36,783 11,786 6,168 20,942 2.5 4.2 2.7 4.2 22,936 7,023 4,343 11,041 10,654 4,329 359 743 68,372 30,713 20,236 25,577 MWh 7,424 6,329 6,317 32,626 34,652 35,033 Japan MWh Europe MWh Americas MWh Asia-Pacific MWh Environmental resource efficiency Water consumption*5 Thousand m3 Japan Thousand m3 Europe Americas Thousand m3 Asia-Pacific Thousand m3 Copy paper consumption*6 Amount of waste generated*7 ton ton 20,550 0 10,047 2,352 188 136 4 33 820 1,223 17,523 0 7,924 1,907 178 124 4 45 759 1,904 15,258 0 2,220 1,731 177 124 13 45 746 2,659 12,400 0 238 1,694 171 97 26 48 1,041 2,281 11,971 0 140 1,617 170 115 30 36 1,083 2,540 12,320 0 198 1,723 168 107 29 35 1,018 2,658 The scope 1, 2, and 3 classifications follow The Greenhouse Gas Protocol (GHG Protocol): http://www.ghgprotocol.org/ The coverage by region is as follows. However, data on air transportation in scope 3 are compiled based on corporate data. Japan: 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 The Bangkok office was included in the scope for Asia from FY2014/2015 Indirect emissions at offices located in New York were previously calculated using emission factors from the Emissions & Generation Resource Integrated Database of the United States Environmental Protection Agency for the NYLI, a decision made based on a conservative assessment. However, the Company has since chosen to utilize emission factors for the NYCW based on an on-site survey aimed at improving the precision of data collection. Information on the impact of this change can be found on the Company’s corporate website (http://www.nomuraholdings.com/csr/data/). *2 Data based on airline and long-distance railway travel in Japan and overseas purchased from specified travel agencies. Data for Japan, Europe, and the India, Hong Kong and Bangkok offices of Asia include emissions from regularly used automobiles. *3 Assurance-verified data for Asia totaled 9,723 t-CO2 in FY2016/17. (Offices in Hong Kong, Singapore, India and Bangkok.) *4 Data for FY2011/12 and FY2012/13 were comprised of Japan and the Frankfurt and Zurich offices for Europe. Additions to the scope for Europe were the Milan office from FY2013/14, the London office from FY2014/15, and the Luxembourg and Paris offices from FY2015/16. *5 Only the India office was included in the scope for Asia in FY2011/12. *6 Data for FY2011/12 and FY2013/14 were compiled based on paper purchased from specified suppliers by Nomura Securities for Japan, paper consumed by the London office for Europe, and paper consumed by the India and Hong Kong offices for Asia. From FY2014/15, the scope was expanded to include the Bangkok office for Asia, and from A4 paper to all copy paper purchased by Nomura Securities for Japan. *7 Data for FY2011/12 and FY2012/13 were compiled based on the Nihonbashi Head Office building and Dai-ni Edobashi Building in Tokyo, the Osaka Branch, and the Nagoya Branch for Japan, the London, Paris, Frankfurt, and Zurich offices for Europe, and the India office for Asia. Additions to the scope were the Urbannet Otemachi Building in Tokyo, the Kyoto Branch, and the Okayama Branch for Japan, and the Hong Kong office for Asia from FY2013/14, the Luxembourg office for Europe from FY2014/15, and the Nomura Asset Management Head Office building in Tokyo for Japan from FY2015/16. Nomura Report 2017 93 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Independent Assurance Website Information 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 access- ing information and services due to visual, hearing, speech, or other physical impairments. Investor Relations Site Corporate Citizenship Site http://www.nomuraholdings.com/investor/ http://www.nomuraholdings.com/csr/ Provides various investor relations information for Nomura Group makes available detailed information Nomura Group, including earnings presentations, on this site regarding its CSR activities. This site financial data, the Nomura Report, notices for also contains application forms for requesting guest shareholders, and information pertaining to lectures by Nomura staff on financial and economic corporate governance. topics, a GRI Guidelines Index, and other CSR- related data as well as other materials. 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. 94 Nomura Report 2017 Nomura Report 2017 95 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data Global Network (As of March 31, 2017) Services for Retail Clients / Nomura Securities Branches in Japan The Nomura Group, as Asia’s global investment bank, has a global network spanning more than 30 countries and regions. Europe, the Middle East and Africa Americas London Amsterdam Vienna Subsidiary* Subsidiary Representative office Stockholm Branch Zurich Paris Frankfurt Helsinki Madrid Milan Subsidiary Branch* Subsidiary Branch* Subsidiary Branch* Branch Branch Branch Luxembourg Subsidiary Istanbul Qatar Dubai Bahrain Riyadh Representative office Branch Branch Subsidiary Subsidiary New York Subsidiary* Branch* Washington, D.C. Branch Boston Chicago Branch* Branch* Manhattan Beach Branch San Francisco Los Angeles St. Louis Branch* Branch* Branch* New Jersey Subsidiary Branch Subsidiary* Representative office Representative office Subsidiary Toronto Colombia São Paulo Bermuda Japan South Africa Branch Japan Head office, branches and offices 158 Stockholm Helsinki Luxembourg London Paris Zurich Madrid Amsterdam Frankfurt Vienna Milan Istanbul Bahrain Riyadh Europe, the Middle East and Africa Dubai Qatar Hanoi Mumbai Seoul Beijing Shanghai Hong Kong Taipei Japan St. Louis Chicago Toronto San Francisco Los Angeles Manhattan Beach Boston New York New Jersey Bermuda Washington, D.C. Philippines Bangkok Kuala Lumpur Singapore Asia ex-Japan Americas Colombia Jakarta South Africa Sydney Melbourne São Paulo Asia ex-Japan Hong Kong Subsidiary* Branch Beijing Shanghai Taipei Seoul Mumbai Representative office Representative office Branch Subsidiary Representative office Subsidiary Hanoi Jakarta Kuala Lumpur Philippines Bangkok Singapore Sydney Representative office Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary* Subsidiary* *Includes subsidiaries and branches of Instinet Melbourne Representative office 96 96 Nomura Report 2017 Nomura Report 2017 Consulting Services Provide tailored consulting services to each client through Nomura’s head office and nationwide network of 158 branch offices Client Real estate Asset Management Insurance Loan Business succession Estate planning, Bestowing gifts Testamentary trust Call Center Provide a wide range of services to clients who have existing accounts at Nomura, as well as new potential clients • Transaction orders • Market outlook and investment consulting (reservation required) • Individual-type defined contribution pension plan (iDeCo) information and services • Administrative functions, including new account opening services Online Services Provide access to information and convenient tools through a broad range of devices. Clients with accounts in Nomura can execute various transactions through their individual web interface • Nomura Home Trade*: Services for clients who have accounts at our head office or a branch • Nomura Net & Call* • Website exclusive for each subscriber of individual-type defined contribution pension plan (iDeCo) • Website exclusive for each subscriber of employee stock ownership plan * Beginning January 2018, Nomura Home Trade and Nomura Net & Call will be integrated and re-launched as Nomura Online Service. Nomura Securities: 158 branches in Japan (As of March 31, 2017) Hokuriku 4 branches Chubu 16 branches Kinki 27 branches 1 private banking office Chugoku 8 branches, 1 office Shikoku 4 branches Kyushu 10 branches A b o u t N o m u r a S t r a t e g e s i l f o r V a u e C r e a t i o n S t r e n g t h s S u p p o r t i n g V a l u e C r e a t i o n C o r p o r a t e I n f o r m a t i o n / D a t a Nomura’s call center and internet service was awarded a ‘five star’ rating by the Help Desk Institute for three consecutive years for its defined contribution pension plan services Hokkaido 4 branches, 1 office Tohoku 8 branches, 1 office Tokyo metropolitan area 1 Head office, 33 branches 1 private banking office Branches operating after 5 p.m. on weekdays and on Saturday and Sunday Saturday and Sunday Keio Shinjuku Branch Shinagawa Branch After 5 p.m. After 5 p.m. Okinawa 1 branch Kanto 36 branches, 1 office Branches operating after 5 p.m. on weekdays and on Saturday, Sunday, and holidays After 5 p.m. Saturday, Sunday and holidays Aeon Mall Funabashi Office Nomura Report 2017 Nomura Report 2017 97 97 Component ratio of shareholders http://www.nomuraholdings.com/csr/gri/index.html Corporate Data / Share Information / Credit Rating CORPORATE DATA Company name Nomura Holdings, Inc. Date of incorporation December 25, 1925 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. Head office 1-9-1, Nihonbashi, Chuo-ku, Tokyo 103-8645, Japan Paid-in capital ¥594,493 million Group employees 28,186 Common stock issued 3,822,562,601 shares Number of shareholders 379,603 (Unit shareholders: 357,883) Securities code 8604 (Tokyo Stock Exchange), NMR (New York Stock Exchange) Transfer agent and registrar Depositary for American Depositary Receipts (ADRs) Date of record for dividend payments Mitsubishi UFJ Trust and Banking Corporation Corporate Agency Department The Bank of New York Mellon September 30, March 31 SHARE INFORMATION (As of March 31, 2017) Major shareholders (Top 10)*1 Name of shareholder Number of shares owned (thousands)*2 Ownership (%)*2 Japan Trustee Services Bank, Ltd. (Trust Account) The Master Trust Bank of Japan, Ltd. (Trust Account) Japan Trustee Services Bank, Ltd. (Trust Account 5) State Street Bank and Trust Company State Street Bank West Client-Treaty 505234 Japan Trustee Services Bank, Ltd. (Trust Account 1) Japan Trustee Services Bank, Ltd. (Trust Account 2) Japan Trustee Services Bank, Ltd. (Trust Account 7) Japan Trustee Services Bank, Ltd. (Trust Account 9) The Bank of New York Mellon SA/NV 10 204,409 152,015 74,128 61,747 55,202 54,864 54,364 54,153 46,852 44,288 5.8% 4.3% 2.1% 1.7% 1.6% 1.6% 1.5% 1.5% 1.3% 1.3% *1 The Company has 293,373 thousand shares of treasury stock as of March 31, 2017 which is not included in the major shareholders list above. *2 Figures for Number of Shares Owned are rounded down to the nearest thousand and figures for Percentage of Shares Owned are calculated excluding treasury stock. Total Shareholder Return (TSR)*1 Individuals and others (including treasury stock) 33.3% Financial institutions (including Financial instruments firms) 25.9 % Other legal entities 3.7% Foreign legal entities 37.1% Nomura Holdings TOPIX TSR (annual average) Holding Period*2 Nomura Holdings TOPIX 1 year 42.57% 14.75% 3 years 4.31% 10.14% 5 years 16.41% 14.42% Relative value of stock price with dividends reinvested, assuming the closing price of stock on March 30, 2012 was set at 1. Mar. 2012 Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017 3.00 2.50 2.00 1.50 1.00 0.50 0.00 *1 TSR: Total shareholder return, combining capital gains and dividend. Dividend is to be reinvested. Source: Nomura, based on Bloomberg *2 Holding period until March 31,2017 < Basic Information in the Report > Period covered April 1, 2016 to March 31, 2017 (Some content may be outside this time frame.) Reporting cycle Previous: Current: Once a year August 2016 August 2017 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 • GRI Sustainability Reporting Standards (GRI Standards) 2016 This report contains information regarding the standard disclosure items contained in the GRI Standards 2016. Please access the following URL on our corporate website for our GRI Guidelines Index. • Environmental Reporting Guidelines (2012 Version) of Japan’s Ministry of the Environment • Charter of Corporate Behavior of Keidanren Editing Nomura Report 2017 Since 2012, we have been publishing the Nomura Report as an integrated version of our Annual Report and CSR Report. In this sixth edition of the Nomura Report, we place the spotlight on Nomura’s activities and what defines us, starting with our mission to contribute to economic development and realization of a prosperous society through its involvement in the securities industry. We take as our entry points our business, people, governance, and financial and non-financial perspectives. We hope to deepen readers’ understanding of Nomura Group’s initiatives, including our efforts to realize our management targets for 2020 and to create corporate value over the medium to long term, as well as our endeavors to embrace change and achieve sustained growth through 2020 and beyond. In preparing this report, we took into consideration the global trend towards integrated reports, and have referenced the international integrated reporting framework advocated by the International Integrated Reporting Council (IIRC) and GRI Standards 2016. In addition, we have received guarantees from independent external organizations, thereby enhancing the reliability and transparency of certain CSR data. With the aim of having this report help to deepen dialogue with all of our stakeholders, we will continue to proactively disclose information while working to improve its reliability. Hajime Ikeda SMD, Group Corporate Communications, Corporate Citizenship and Tokyo 2020 Olympic and Paralympic CREDIT RATING (As of June 30, 2017) R&I JCR Moody’s Standard & Poor’s Fitch Ratings 98 Nomura Report 2017 Nomura Securities Nomura Holdings Long-term Short-term Long-term Short-term INQUIRIES Nomura Holdings, Inc. A+ AA- A3 A A- a-1 — P-2 A-1 F1 A+ AA- Baa1 A- A- a-1 — — A-2 F1 • Investor Relations • Corporate Citizenship Department Urbannet Otemachi Building, 2-2-2, Otemachi, Chiyoda-ku, Tokyo 100-8130, Japan Tel: +81 (3) 5255-1000 (Main switchboard) Otemachi Nomura Building, 2-1-1, Otemachi, Chiyoda-ku, Tokyo 100-8170, Japan Tel: +81 (3) 5255-1000 (Main switchboard) e-mail: csr@jp.nomura.com Nomura Report 2017 99 About NomuraStrategies for Value CreationStrengths Supporting Value CreationCorporate Information / Data N o m u r a R e p o r t 2 0 1 7 This report was produced using non VOC inks. All electricity to print this booklet was generated by green energy. (399kWh) Printed in Japan
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