Strengthening Governance Structure
We are working to strengthen governance by separating oversight and execution, and establishing a structure in which the Board of Directors is responsible for overseeing the Management Committee, Internal Control Committee, Sustainability Promotion Committee, etc.
Corporate Governance
Basic Concept
Our basic approach to corporate governance is to have a management structure that enables management to personally verify compliance with laws, regulations, the 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. 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 believe that this system (monitoring model) can accelerate decision-making regarding business execution by enhancing the transparency and objectivity of the Board of Directors and further strengthening corporate governance, as well as by promoting the separation of business execution and supervision and delegating authority to executive officers overseen by the Representative Director and President.
Board of Directors
The Board of Directors (8 directors, 6 of whom are outside directors, chaired by Representative Director Masahiro Yamamoto) is composed of individuals from both inside and outside the company who have a wealth of experience, deep insight, advanced expertise, as well as strong ethical standards and outstanding personalities, striving to ensure an optimal balance of diversity and knowledge, experience, and ability. The Board of Directors serves as a forum for discussing management policies and medium- to long-term strategic issues, determines basic group management policies and other important matters, and supervises (monitors) the execution of duties based on business execution reports.
Nomination and Remuneration Committee
In order to enhance 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 remuneration systems and determination of remuneration amounts) of executive officers, including the Representative Director and President, as well as the formulation and implementation 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 monitor 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, and reviewing important documents, conducting investigations, and hearing reports. We have established a system for immediately reporting to the Audit and Supervisory Committee if any violations of laws, regulations, the Articles of Incorporation, or internal rules are discovered or are suspected of being violated, and by ensuring cooperation with the Internal Audit Department, we strive to establish an effective audit system for the early detection and deterrence of fraudulent or improper conduct.
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 also discusses matters to be resolved by the Board of Directors and considers other important management matters delegated to it by the Board of Directors.
Sustainability Promotion Committee
Please check our sustainability management philosophy and promotion system.
◎Corporate Governance Structure
Dialogue with shareholders and management that takes into account capital costs and stock prices
For details, please see page 2 “Principle 5-1: Dialogue with Shareholders” and page 3 “Principle 5-2: Formulation and Publication of Business Strategies and Business Plans” in the Corporate Governance Report.
Compliance
Management system
Based on our corporate philosophy, we strive to ensure thorough compliance by adhering to laws, regulations, social norms, codes of conduct, various policies, and internal company regulations. To that end, 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 all group companies. We have established a system for immediately reporting to the Audit and Supervisory Committee and the Internal Control Committee any serious violations or other serious facts that are discovered or are likely to be discovered. The Internal Control Committee reports on the status of compliance to the Board of Directors on a regular basis each year and is supervised by them.
Code of conduct
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.
Compliance training
In order to raise awareness of compliance and instill the importance of complying with laws and regulations, we provide compliance training to employees, including training on the prevention of unfair competition, bribery, and corruption, which are included in the Code of Conduct. In FY24, eight training sessions were held 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%.
Internal reporting system (hotline)
We have established reporting and consultation hotlines for various compliance violations, including harassment, discrimination, and other violations of human rights, labor standards, the environment, unfair competition, and corruption, including bribery, in order to quickly identify and resolve issues. We also ensure the rights and anonymity of whistleblowers to prevent any retaliation. Our main hotlines include a “hotline” for dealing with violations of laws, regulations, and internal rules; a “mental health consultation hotline” for dealing with mental health issues related to severe stress; a “helpline” for dealing with workplace and interpersonal issues; and a “compliance consultation hotline” for dealing with misconduct, harassment, and workplace issues. When a report or consultation is received, the Compliance Office, working with legal and other experts, requests the relevant department to investigate as necessary and takes appropriate action based on the results (e.g., disciplinary action, training, and progress checks). We also promote awareness of these hotlines among employees through helpline cards and educational posters.
Risk Management
Management system
In order to identify all risks that threaten the company’s sustainable development and establish a risk management system, we have established “Risk Management Regulations” and established an Internal Control Committee. The Internal Control Committee meets regularly to identify, analyze, and evaluate important risks to the group’s management, formulate improvement measures, and otherwise implement appropriate crisis management. It regularly reports to the Board of Directors and receives supervision. Furthermore, we have established “Crisis Management Regulations” as a measure to deal with emergencies, establishing 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 and provides guidance to audited departments for improvement, and reports audit results to the President in a timely manner. The Internal Audit Office, Audit and Supervisory Committee, and accounting auditors work closely together, exchanging information as needed, to eliminate risks.
Risk Management Regulations
The purpose of the “Risk Management Regulations” is to centrally view and identify various risks, prevent them, and respond quickly and appropriately when they occur to minimize damage and prevent recurrence, thereby preserving corporate value. The regulations stipulate policies for complying with relevant laws and regulations, definitions of risks, the risk management system, the roles of the Internal Control Committee and department and office managers, and the emergency system.