Basic Policy for Corporate Governance
The Company's management philosophy is to implement “employee well-being,” “betterment of local communities” and “responsibility to provide returns to shareholders.” The Company's Board of Directors and Operating Officers believe that the Company's social responsibility and managerial mission is to establish/maintain good social and public relationships, protect public interests and achieve sustainable business development from a global perspective.
The Company's corporate vision is “to be an excellent company that enjoys the trust and highest regard from our customers.”
To implement our management philosophy and vision steadily, we promote earnings improvement measures consisting of both growth strategies and structural reforms; emphasize management transparency, fairness and information disclosure; and establish a structure and schemes that allow swift decision making and business execution to enhance our competitiveness.
Corporate Governance Structure
Outline of the corporate governance structure and the reasons for adopting such a structure
The Company is a company with an Audit & Supervisory Board and established organizations: Board of Directors, Audit & Supervisory Board and the Accounting Auditors. In addition, the Company has adopted a corporate governance structure under which all the Outside Directors and Outside Audit & Supervisory Board Members are designated as Independent Officers for whom there is no possibility of conflicts of interest with general shareholders. Consequently, the Outside Directors and Outside Audit & Supervisory Board Members work closely with the Audit & Supervisory Board Members and the internal audit department, thereby enabling the effective utilization of the Audit & Supervisory Board Members' functions and enhancing the authority of management oversight.
Board of Directors
- Roles and responsibilities of the Board of Directors
(1) The Board of Directors shall aim for corporate management to be an excellent company that enjoys the trust and highest regard from stakeholders, including shareholders, customers, employees and local communities, to accomplish the fiduciary responsibility entrusted by shareholders and increase the Company's interests and the common interests among shareholders.
(2) The Board of Directors shall deliberate and determine important matters for the entire Group with ample time, including management policies, management strategies, business plans, capital policy and the matters on internal control, for the purpose of continuously increasing corporate value from a long-term perspective.
(3) The Board of Directors shall strengthen the management system for risk factors surrounding corporate management of the Company and always monitor the execution of business operations.
- Delegation of authority by the Board of Directors to top management
(1) To ensure the effective decision making by the Board of Directors, the Management Implementation Committee shall deliberate in advance policy matters regarding business operations for Group management, whereas the TM (Top Management) Meeting shall deliberate in advance matters concerning personnel, organization and remuneration systems for the entire Group. Both organs shall determine matters delegated by the Board of Directors.
(2) Operating Officers are in place in order to further clarify roles and responsibilities of Directors who monitor and supervise the management of business and persons who execute business operations. The Operating Officers shall conduct business flexibly and quickly as an executor responsible for the section he or she is in charge, under the direction of the Chief Executive Officer, in accordance with management policies and strategies determined at meetings of the Board of Directors.
- Effectiveness of the Board of Directors
(1) To ensure the fairness of meetings and strengthen the authority of management oversight, the Board of Directors shall be chaired by the Chairman of the Board of Directors If the Chairman of Board of Directors is absent, the President and Chief Executive Officer shall be chaired the Board of Directors.
(2) At the Board of Directors meeting, the Directors and the Audit & Supervisory Board Members shall evaluate by themselves the effectiveness of the Board of Directors every year. The Board of Directors shall disclose issues to be addressed and others based on analysis results and address how to resolve such issues.
- The Company has six (6) Directors, at present. Two (2) of them are appointed as independent Outside Directors.
- To clarify management responsibilities during a given fiscal year and increase shareholders' confidence, Directors' term of office is one (1) year.
- The reason for the selection of directors is disclosed by taking into account knowledge, experience, history of achievement and other factors.
- Except for Outside Directors, the Directors concurrently serve as Operating Officers who are in charge of both oversight and the execution of operations. Directors shall report with emphasis on the business performance and oversight operations of the divisions/departments they are in charge of to the Board of Directors.
Audit & Supervisory Board and Audit & Supervisory Board Members
- The Company has adopted an Audit & Supervisory Board Members system. The Audit & Supervisory Board meeting is held monthly, in principle.
- The Company has four (4) Audit & Supervisory Board Members including Outside Audit & Supervisory Board Members. Two (2) of them are appointed as independent Outside Audit & Supervisory Board Members. Furthermore, the Company elects at least one (1) Audit & Supervisory Board Member with an appropriate knowledge of finance and accounting, to ensure the effectiveness of audits.
- To raise the effectiveness of audits, each Audit & Supervisory Board Member attends Board of Directors meetings and attends meetings related to the execution of business operations and other important meetings by sharing the tasks with each other. Moreover, Audit & Supervisory Board Members strive to strengthen the auditing system through frequent communications with the Accounting Auditors and the internal audit department by meeting regularly, witnessing accounting audits as observers and conducting joint audits with the internal audit department.
- The Audit & Supervisory Board has its own dedicated staff to smoothly conduct auditing operations such as information communications and data management.
Related party transactions
The Company can, by resolution of its Board of Directors, determine a Competition and Conflicting Interest Transaction by a Director of the Company in accordance with the Board of Directors Regulations. In case related party transactions occur, such transactions shall be disclosed, complying with the Companies Act, the Financial Instruments and Exchange Act and relevant laws and regulations, as well as rules stipulated by the stock exchange. The Board of Directors shall monitor such related party transactions to ensure that such transactions are being conducted appropriately.
Voluntary advisory panels
- For the purpose of conducting “highly transparent and fair management,” the Company has established a Nominations Committee and a Remuneration Committee.
- Both Committees are composed of the President and Chief Executive Officer, Outside Directors and one (1) Audit & Supervisory Board Member. They are chaired by independent Outside Directors to ensure objectivity of each deliberated matter.
- The Nominations Committee deliberates matters such as the designation of candidates for Corporate Officers to be elected/dismissed and disciplinary actions. The Remuneration Committee deliberates systems of remuneration to Corporate Officers, as well as details of remuneration to each Corporate Officer. The matters deliberated at the respective committees are discussed at the Board of Directors for determination.
General policy regarding the roles and election of Outside Corporate Officers
- In electing Outside Directors, to ensure transparency in the authority of management oversight, the Company has established rigorous “Standards for the Independence of Outside Directors/Outside Audit & Supervisory Board Members” as requirements for their appointment referencing, and making it more rigorous than, other standards for independence established by financial instrument exchanges and organizations advising the exercise of voting rights, including the “Securities Listing Regulations” set forth by the Tokyo Stock Exchange.
- The two (2) Outside Directors meet the Company's independency requirements. They make efforts to strengthen the supervisory capability of the Company and strive to strengthen objective management. Specifically, they fulfill a role that is important to the decisionmaking process and provide opinions from the perspective of either technical experts or shareholders independent of executive management, based on a broad view that leverages knowledge of corporate legal affairs and the experience of corporate managers.
- The two (2) Outside Audit & Supervisory Board Members meet the Company's independency requirements. They cooperate with each other to monitor the status of internal control of operations on a daily basis. Specifically, they are responsible for investigating and verifying whether the Directors' duties are legally conducted in compliance with the relevant laws. In addition to possessing technical and practical knowledge of their own in the fields of law and accounting, they objectively monitor the execution of duties by Directors.