Management Policy

Corporate Governance

Basic perspective

In the interest of sustainable corporate growth, the Company prioritizes above all the maximization of shareholders’ interests. By being fair-minded in our efforts to satisfy requests from our various stakeholders (including employees, customers and business partners), we strive to boost management soundness and efficiency and ensure swift decision-making. At the same time, we recognize ensuring high levels of transparency and compliance as topmost priorities.
We conduct IR activities that are driven by top management. We strive to maintain disclosure that is timely and appropriate and to augment corporate transparency.

Reason for choosing the current corporate governance structure

The Company’s two outside directors and two outside auditors maintain no personal, business or other interest-based relationships with the Company. Accordingly, we believe they are able to supervise and audit management from a perspective that is independent of the Company’s operations. The role of the outside directors is to strengthen the supervisory function of the directors and Board of Directors from an independent perspective. The outside auditors liaise closely with the full-time auditors and collect information within the Company as needed. Their role is to strengthen the auditing function of the Board of Auditors. In this manner, the Company has adopted a corporate structure in which the outside directors and the outside auditors function appropriately. As a result, we believe this structure ensures appropriate and efficient decision-making by the Board of Directors.

Overview of the current corporate governance structure

(1) In the Company’s business administration structure, the “Board of Directors” serves as the supervisory institution for decision-making and the execution of operations related to management and other issues, and the “Board of Auditors” serves as the auditing institution.
(2) As of June 21, 2023, the Board of Directors was composed of four directors (of whom one was the representative director and two were outside directors). The Board of Directors meets regularly, as well as on an as-needed basis, engaging in an energetic exchange of opinions that leads to proactive management, rapid exchanges of opinion in relation to management and other issues, and the efficient execution of operations.
(3) The term of office of directors has been set at one year, in order to maintain dynamism within the management team and to clarify directors’ rights and responsibilities with respect to management.
(4) As of June 21, 2023, the Board of Auditors was composed of three auditors. The board meets as necessary, reporting the results of audits conducted in accordance with the audit policies and audit plans determined at the beginning of the year, mutually exchanging opinions and information, and stating opinions at regular meetings of the Board of Directors, in which the auditors participate. In such ways, the auditors audit the execution of duties by directors.
(5) At operating subsidiaries, the Company has augmented its operations by putting in place a “Management Committee” which, composed of directors, auditors and general managers, serves an advisory function for the president. The content of deliberations by this council is reflected at the Board of Directors, appropriate executive decisions are made thoroughly, and the council is required to report to Company.
(6) The Company has established the Internal Audit Office, which serves as the internal auditing organization within the entire Group. Based on the audit plan for the fiscal year, this office conducts business audits of all departments and subsidiaries from the standpoint of operational efficiency, rationality and compliance. The office points out any issues that may exist at a departmental level from an internal control standpoint, proposes improvements for each department, and checks the implementation status of each improvement, as it works to improve and augment operational soundness. In addition, internal audits, auditing by auditors and accounting audits go beyond subsidiaries. Auditors liaise across the Group in an effort to improve the quality of auditing operations.
(7) Decision on director nominations is made in a manner aimed to ensure director objectivity and on the basis of deliberation.
(8) Director remuneration is determined in accordance with the basic policy. Both monetary compensation and restricted stock compensation are determined by deliberation at the Board of Directors where accounting auditors will attend, within the scope of the total amount approved at the general meeting of shareholders. Auditor remuneration consists of only basic compensation and is determined by deliberation at the Board of Auditors within the scope of the total amount approved at the general meeting of shareholders.The maximum amount of auditor remuneration
was resolved at the 36th General Meeting of Shareholders held on June 22, 2012 to be no more than 60 million yen per year.
(9) Based on Article 427-1 of the Companies Act, the Company enters into agreements that limits the liability for damages as specified in Article 423-1 of the Companies Act between directors (excluding executive directors, etc.) and auditors. The maximum liability for damages based on these agreements is defined by the Articles of Incorporation. To be recognized for this limited liability, the duties of such directors (excluding executive directors, etc.) and auditors must have been performed in good faith and without gross negligence.