Strengthening Governance Structure
Strengthening corporate governance and compliance
Starting from the 2021 General Meeting of Shareholders, we will transition to a monitoring-type management structure that includes the President and CEO in addition to outside directors who are highly specialized and have a track record in management. We will discuss medium- to long-term strategic issues and achieve corporate growth with appropriate involvement and advice.
Corporate Governance
Basic Concept
Our basic approach to corporate governance is to have a management structure that allows management to personally verify compliance with laws, regulations, articles of incorporation, etc., and to maintain that status. We also believe that establishing a management system that can direct the awareness and business activities of all officers and employees toward the realization of our “management philosophy” and “management goals” will lead to fairer and more transparent management, which will benefit all stakeholders related to our company.
Corporate Governance Overview
Our company has adopted the structure of a company with an audit and supervisory committee. We believe that by establishing an audit and supervisory system for the audit and supervisory committee and increasing the composition and diversity of outside directors on the board of directors, we can increase the transparency and objectivity of the board of directors and further strengthen corporate governance, while also promoting the separation of business execution and supervision. By delegating authority to executive officers overseen by the President and Representative Director, we can realize a system (monitoring model) that can speed up decision-making regarding business execution.
board of directors
The Board of Directors (8 directors, 6 of whom are outside directors, chaired by Representative Director Masahiro Yamamoto) strives to ensure diversity and an optimal balance of knowledge, experience, and ability by being composed of individuals from both inside and outside the company who have a wealth of experience, great insight, advanced expertise, as well as a strong sense of ethics and excellent character. As a forum for discussing management policies and medium- to long-term strategic issues, the Board decides on basic policies for the Group’s management and other important matters, and oversees (monitors) the execution of duties based on business execution reports.
remuneration committee
In order to strengthen the fairness and transparency of procedures related to the nomination and remuneration of directors, the Nomination and Remuneration Committee has been established as a voluntary advisory body to the Board of Directors. The Nomination and Remuneration Committee is consulted by the Board of Directors and deliberates on matters related to the appointment, dismissal, and remuneration (including the design of the remuneration system and the determination of remuneration amounts) of directors, including the Representative Director and President, as well as the formulation and operation of succession plans, and then reports to the Board of Directors. To ensure independence, the majority of the committee members are independent outside directors.
Audit and Supervisory Committee
The Audit and Supervisory Committee is made up of three directors (three of whom are outside directors). They check the directors’ execution of their duties by conducting audits as needed, including attending important meetings such as the Board of Directors and the Internal Control Committee, viewing important materials, investigating, and hearing reports. In the event that a violation of laws, regulations, articles of incorporation, or internal regulations is discovered or there is a possibility of such a violation, we have established a system for immediately reporting to the Audit and Supervisory Committee and have secured a system of cooperation with the Internal Audit Department, thereby striving to establish an effective auditing system for preventing and early detection of fraudulent or unjust acts.
Management Meeting
The Management Committee is comprised of executive directors and executive officers, and supports the decision-making of the Representative Director and President, who is the Chief Executive Officer. It discusses matters to be resolved by the Board of Directors and considers other important management issues delegated to it by the Board of Directors.
Corporate Management Committee
The Corporate Management Committee is comprised of executive directors and executive officers, and supports the decision-making of the President & CEO. It discusses matters to be resolved by the Board of Directors and considers other important management issues delegated to it by the Board of Directors.
Sustainability Promotion Committee
Please check our sustainability management philosophy and promotion system.
Dialogue with shareholders and management that takes into account capital costs and share prices
In order to have constructive dialogue with shareholders and investors through general shareholders’ meetings, individual interviews, and financial results briefings, the Company has appointed directors in charge of IR and shareholders and investors, and is working to develop and implement systems. When formulating management strategies and business plans, the Company presents basic guidelines for earnings plans and capital policies, taking into account capital costs. At financial results briefings, the Company provides specific explanations of these policies and goals, as well as management strategies such as business portfolios and investment plans to achieve these goals, and the materials used at the time are published on the Company’s website. In addition to sales and operating profits, the Company has set targets for ROE, which is an index of return on capital, as KPIs for the Group as a whole. The Company has also set WACC (weighted average cost of capital) as the cost of capital, and the Board of Directors is examining the degree of return on capital achieved by each business and base, in comparison with ROIC. The Company strives to improve shareholder value by announcing medium- to long-term growth strategies and further enhancing disclosure information, and aims to ensure that the Company’s growth is properly and adequately evaluated by the market.
Executive Remuneration
Details of the policy regarding the amount of remuneration for officers and the method of calculating it, and the method of determination
The remuneration of directors (excluding audit and supervisory committee members) is determined by the Board of Directors after deliberations and recommendations from the Nomination and Remuneration Committee, an optional advisory body, within the scope of the total amount of remuneration approved at the General Meeting of Shareholders. The Company resolves the policy for determining the content of individual director remuneration at the Board of Directors meeting. The policy is as follows:
compliance
Management system
Based on our corporate philosophy, we adhere to laws, regulations, social norms, codes of conduct, various policies, and internal company regulations, and are working to ensure thorough compliance. For this purpose, we have established an Internal Control Committee, chaired by the President and CEO and composed of external experts. The committee meets regularly to implement necessary improvement measures and company-wide awareness measures across the Group. If any significant facts, such as violations, are discovered or there is a possibility of such happening, we have a system in place to immediately report them to the Audit and Supervisory Committee and the Internal Control Committee. The Internal Control Committee regularly reports on the status of compliance to the Board of Directors every year and is supervised by them.
code of conduct
In order to realize a sustainable society and corporate growth, we comply with laws and regulations and aim to be a company that is widely trusted by stakeholders, including customers, business partners, employees and their families, local communities, shareholders and investors, and we have established and practiced a code of conduct.
1. Compliance with laws, regulations and social norms
We comply with laws, regulations and social norms and conduct business based on our principles.
2. Ensuring the safety, security and quality of products and services
We provide our customers with safe, secure, and high-quality products and services.
3. Respect for employees
We respect the diversity, personality and individuality of the employees we work with, and provide a comfortable working environment that takes into consideration their health and safety.
4. Building fair relationships
We will ensure fair and free competition in all countries and regions, and will not engage in unfair competition or engage in bribery or corrupt practices.
5. Conservation and protection of the global environment
We strive to conserve and protect the global environment and strive to create a sustainable society.
6. Timely and fair disclosure of information
We strive to disclose information in a timely and fair manner.
7. Establishment and maintenance of a compliance system
We will establish a compliance system and strive to maintain it.
Compliance training
In order to raise awareness of compliance and instill the importance of complying with laws and regulations, we provide employees with compliance training, including training on the prevention of unfair competition, bribery, and corruption, which are included in the Code of Conduct. In FY24, we conducted eight training sessions on themes such as “The significance of working on compliance and the impact of misconduct” and “Fair trading,” with an average attendance rate of 97%.
Whistleblowing system (hotline)
We have established a reporting and consultation desk for various compliance violations, such as various harassment and discrimination, human rights, labor standards, the environment, unfair competition, and corrupt practices including bribery, in order to quickly identify and resolve problems. In addition, we ensure the rights and anonymity of whistleblowers so that they are not disadvantaged. The main contact points are the “hotline” for dealing with violations of laws and internal regulations, the “mental health consultation desk” for dealing with mental issues that cause severe stress, the “helpline” for dealing with the workplace environment and human relationships, and the “compliance consultation desk” for dealing with fraud, harassment, and the workplace environment. When a report or consultation is received, the Compliance Office, together with legal experts, requests the relevant department to investigate as necessary and takes action according to the results (punishment, training, progress check, etc.). In addition, we make these contact points known to employees through helpline cards and awareness posters.
Risk Management
Management system
In order to grasp all risks that threaten the continued development of the company and to establish a risk management system, we have established the “Risk Management Regulations” and established the Internal Control Committee. The Internal Control Committee meets regularly to grasp, analyze and evaluate important risks to the Group’s management, formulate remedial measures and otherwise implement appropriate crisis management, and regularly reports to the Board of Directors and receives supervision. Furthermore, we have established the “Crisis Management Regulations” as a measure to deal with emergencies, and have established a system for rapid and appropriate response. We have also established an Internal Audit Office directly under the Representative Director and President, which conducts regular business audits, requests improvement and provides guidance to audited departments, and reports the audit results to the President in a timely manner. The Internal Audit Office, Audit and Supervisory Committee members and accounting auditors work closely together, exchanging information as needed, and endeavoring to eliminate risks.
Risk Management Regulations
The purpose of the “Risk Management Regulations” is to take a unified, comprehensive view of various risks, identify and prevent them, and respond quickly and appropriately when they do occur to minimize damage, and to protect corporate value by preventing recurrence. The regulations stipulate the policy for complying with relevant laws and regulations, the definition of risks, the risk management system, the roles of the Internal Control Committee and department and office managers, and the emergency system.
Business Risks
Among the risks that may affect our financial position and business performance, we have listed below the risks that may have a significant impact on investors’ investment decisions. In addition, we will disclose matters that do not necessarily fall under such risk factors, but that we believe are important in investors’ investment decisions, from the perspective of proactive information disclosure to investors.
Important risk factors
(1) Changes in the economic situation
(2) Competition in the conveyor belt sushi industry and the restaurant industry as a whole
(3) Changing consumer tastes
(4) Food hygiene management
(5) Difficulty in procuring food ingredients and rising prices
(6) Medium-term management plan
(7) New store opening plans
(8) Real estate rental
(9) Unforeseen events such as natural disasters
(10) Risks regarding securing the workforce of employees (including part-timers and casual workers) and wage increases
(11) Risk that a shortage of personnel for new stores and overseas operations will slow business growth
(12) Information and communication systems
(13) Damage to reputations caused by rumors via the Internet, etc.
(14) Overseas business development
(15) Litigation and other legal proceedings
(16) Leaking of personal information or other confidential information
(17) Intellectual Property Rights
(18) Fluctuations in foreign exchange rates
(19) Application of impairment accounting
(20) Large amount of interest-bearing debt and violation of financial covenants
(21) Dilution of stock value due to the exercise of stock acquisition rights
(22) Legal regulations
(23) Corporate Acquisitions, etc.
(24)Environmental issues