Basic Approach
We recognize that promoting corporate management that continuously increases shareholder value by clarifying management responsibility and accountability to shareholders, customers, employees and other stakeholders, and by enhancing management efficiency, soundness and transparency are critical management issues.
In pursuing these initiatives, we will work to further enhance corporate governance by thoroughly adhering to corporate ethics and legal compliance guidelines, and by strengthening our organizational structure, internal organizational checks and risk management systems to enable rapid response to changes in the business environment.
Corporate Governance Structure
In view of the nature of our business and the size of our company, we have established a General Meeting of Shareholders, a Board of Directors, an Audit & Supervisory Board, and an Independent Auditor. We believe that mutual cooperation among these organizations will enable us to ensure the efficiency and soundness of management and have adopted the following structure.
Board of Directors
We have established a Board of Directors consisting of five directors (including two external directors) to deliberate and decide on basic policies related to overall corporate management, including matters to be resolved regarding laws and regulations and the Articles of Incorporation. The Board of Directors makes decisions on corporate management policies, management strategies, business plans, acquisition and disposal of important assets, important organizations, and personnel matters. In addition to the regular Board of Directors meetings, which are held once a month in principle, extraordinary Board of Directors meetings are convened when important matters requiring resolutions arise.
Audit & Supervisory Board and Audit & Supervisory Board Members
We have established an Audit & Supervisory Board, which is composed of three members, one full-time audit & supervisory board member and two part-time audit & supervisory board members (including two external audit & supervisory board members). Their aim is to audit the day-to-day management activities regarding the state of corporate governance, the execution of duties by directors, and the status of assets. The Audit & Supervisory Board monitors the directors’ compliance with laws and regulations and the Articles of Incorporation and strives to ensure that operational and accounting audits are conducted effectively. In principle, the Audit & Supervisory Board holds regular meetings once a month, and extraordinary meetings as necessary.
In addition to attending the meetings of the Board of Directors and other important meetings, the audit & supervisory board members properly monitor management through auditing procedures such as reviewing important documents and questioning executives and employees based on audit plans. To conduct efficient audits, they also actively collaborate and exchange opinions with internal audit staff and auditing firms as appropriate.
Nomination and Compensation Advisory Committee
We have established a voluntary Nomination and Compensation Advisory Committee as an advisory body to the Board of Directors to strengthen the fairness, transparency, and objectivity of procedures related to director nominations and compensation, and to enhance corporate governance. The Committee, in consultation with the Board of Directors or the Representative Director, provides advice and recommendations on proposals to be submitted to the General Meeting of Shareholders regarding the appointment and dismissal of directors, and on the formulation of policies regarding the compensation and other benefits received by directors. The majority of the members of the Committee are external directors, and the Committee is chaired by an external director who is also an independent director, thus creating a structure that emphasizes corporate governance.
Executive Committee
To deliberate and report important management matters, we hold Executive Committee meetings, chaired by the Representative Director and composed of executive directors and corporate officers, with non-executive directors and audit & supervisory board members joining as observers. In addition to the regular Executive Committee meetings, which are held once a month in principle, extraordinary Executive Committee meetings are held as necessary.
Risk and Compliance Committee
To oversee compliance and risk management, we have established a Risk and Compliance Committee, chaired by the Representative Director and composed of members nominated by the Representative Director. The Committee is responsible for the identification and analysis of overall risk conditions and for the education and awareness of risk management. In addition to regular meetings of the Risk and Compliance Committee, which are held at least once a quarter in principle, extraordinary meetings of the Risk and Compliance Committee are held as necessary.
Independent Auditor
We engage Ernst & Young ShinNihon LLC to audit our financial results. They conduct thorough reviews, and there are no conflicts of interest between our company and the auditing firm.
Internal Audit
We have established an Internal Audit Office (one person) as a department under the direct control of the Representative Director. The Internal Audit Office conducts operational audits covering all departments and reports the results of the audit to the Representative Director and the Board of Directors. Upon receiving the audit results, the Representative Director notifies the audited departments of the results of the audit and matters requiring improvement, and requests the Internal Audit Office to follow up on and report improvements. The audits are conducted in cooperation with the Audit & Supervisory Board and the Independent Auditor.
