We recognize that the promotion of 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, is an important management issue.
In pursuing these initiatives, we will work to further enhance corporate governance by thoroughly adhering to corporate ethics and legal compliance, strengthening our organizational structure and 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, a Board of Corporate Auditors, and an Independent Auditor, and have adopted a Company with Board of Corporate Auditors. We believe that mutual cooperation among these organizations will enable us to ensure the efficiency and soundness of management.
Board of Directors
We have established a Board of Directors consisting of six directors (including two external directors) to deliberate and decide on basic policies related to overall corporate management, including matters to be resolved in 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 held when important matters requiring resolutions arise.
Board of Corporate Auditors and Corporate Auditors
We have established the Board of Corporate Auditors, which is composed of three members, one full-time auditor and two part-time auditors (including two external auditors), with the aim of auditing the state of corporate governance and the day-to-day management activities related to the execution of duties by directors and the status of assets. The Board of Corporate Auditors 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 Board of Corporate Auditors holds a regular meeting once a month, and extraordinary meetings as necessary.
In addition to attending meetings of the Board of Directors and other important meetings, the corporate auditors conduct proper monitoring of 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 is chaired by an external director and the majority of its members consist of external directors.
For the purpose of deliberating and reporting important management matters, we hold an Executive Committee chaired by the President and composed of directors, corporate auditors and executive officers. In addition to the regular Executive Committee, which are held once a month in principle, extraordinary Executive Committee may be held as necessary.
Risk and Compliance Committee
To promote risk management, we have established the Risk and Compliance Committee, which is chaired by the President and composed of members deemed necessary by the Chairman depending on risk management issues to be discussed. The Committee is responsible for the identification and analysis of overall risk conditions and education and awareness-raising 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.
We have an audit agreement with Ernst & Young ShinNihon LLC and have been audited for the details of our financial results. There are no special interests between this auditing firm and us.
We have established the Internal Audit Office (one person) as a department under the direct control of the President. The Internal Audit Office conducts operational audits to cover all of our departments and reports the audit results to the President and the Board of Directors. Upon receiving the audit results, the President notifies the audited department of the audit results and matters requiring improvement, and requires the Internal Audit Office to submit a report on the status of improvement. The Internal Audit Office conducts audits in cooperation with the Board of Corporate Auditors and the auditing firm.