Corporate Governance System
Outline of the Corporate Governance System
The outline of the Company’s corporate governance system is as follows:
(1) The Company has the Board of Directors as an organization responsible for supervision and decision-making of important matters. As an audit organization, the Company has the Audit & Supervisory Board. The Company appoints executive officers as those responsible for the execution of operations.
(2) The Company holds monthly meetings of the Board of Directors, in principle, where its members have discussion and make decisions concerning important management matters, and supervise the execution of operations. By holding the meetings, the Company seeks rational and efficient decision-making of its management. Since 2005, the Company has had one non-Japanese Director with the aim of building a system that makes it possible to respond well to continual changes in its global business.
(3) For the Company’s management, the Company has four Outside Directors. The Outside Directors supervise the decision-making and the execution of operations, from a professional, objective and independent standpoint to enhance the management and supervisory functions of the Board of Directors.
(4) Concerning the internal audit, the internal audit organization is engaged in periodic and occasional auditing activities, including but not limited to auditing activities regarding the effectiveness and efficiency of the Company’s business, reliability of its financial statements, compliance with relevant laws and regulations, and conservation of corporate assets.
(5) Pursuant to the audit policies and the divisions of roles specified by the Audit & Supervisory Board, its members conduct rigorous auditing activities. Specifically, they attend important meetings, including those of the Board of Directors, hear reports on the Company’s business from Directors and other responsible individuals, check important written resolutions and other papers, and investigate the Company’s business operations and the state of its assets.
(6) Accounting auditors conduct accounting audits and provide suggestions so as to improve the Company’s business operations.
(7) The Company keeps fairness and objectivity in nomination and remuneration for the Directors, in the following ways:
The Nomination and Remuneration Advisory Committee whose members include Outside Directors discusses nomination and remuneration for Directors, and advises the Board of Directors on the result of the discussion. The Board of Directors resolves the determination of the nomination and remuneration, based on the advice from the said Committee.
The Nomination and Remuneration Advisory Committee whose members include Outside Directors discusses nomination and remuneration for Directors, and advises the Board of Directors on the result of the discussion. The Board of Directors resolves the determination of the nomination and remuneration, based on the advice from the said Committee.
Diagram of Corporate Governance
State of Outside Officers
The Company has appointed four Outside Directors and two Outside Audit & Supervisory Board Members.
Appointment of Outside Officers
| Outside Director Kazuo Ichijo |
Mr. Ichijo is a professor majoring in international business strategy and has been appointed as an Outside Director to fulfill his expected role as an Outside Director by providing advice and proposals based on his broad knowledge and insight on corporate management. In light of the Independence Standards specified by Tokyo Stock Exchange, Inc. (TSE) and the “Independent Criteria for Outside Officers” of the Company, the Company has appointed him as an independent officer and submitted the relevant notification to TSE. |
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| Outside Director Mitsuhiro Katsumaru |
Mr. Katsumaru held important posts at the Ministry of Justice and the Public Prosecutors Office for many years and now practices as an attorney-at-law. He has been appointed as an Outside Director to fulfill his expected role as an Outside Director by providing advice and proposals from an independent standpoint based on his wealth of experience and profound insight as a prosecutor and legal practitioner. In light of the Independence Standards specified by Tokyo Stock Exchange, Inc. (TSE) and the “Independent Criteria for Outside Officers” of the Company, the Company has appointed him as an independent officer and submitted the relevant notification to TSE. |
| Outside Director Sadayuki Sakakibara |
Mr. Sakakibara has been appointed as an Outside Director to fulfill his expected role as an Outside Director by making decisions and executing his duties from an independent standpoint based on his wealth of experience and profound insight as a manager of international corporations. In light of the Independence Standards specified by Tokyo Stock Exchange, Inc. (TSE) and the “Independent Criteria for Outside Officers” of the Company, the Company has appointed him as an independent officer and submitted the relevant notification to TSE. |
| Outside Director Hiromi Wada |
Ms. Wada has been appointed as an Outside Director to fulfill her expected role as an Outside Director by making decisions and executing her duties from an independent standpoint based on her wealth of experience and profound insight in IT and digital fields. In light of the Independence Standards specified by Tokyo Stock Exchange, Inc. (TSE) and the “Independent Criteria for Outside Officers” of the Company, the Company has appointed her as an independent officer and submitted the relevant notification to TSE. |
| Outside Audit & Supervisory Board Member Kanako Nozue |
To ensure adequacy of the Company’s business operations, it has appointed Ms. Kanako Nozue as an Outside Audit & Supervisory Board member in recognition of her expertise in law and legal affairs as well as her experience as a lawyer. In light of the Independence Standards specified by Tokyo Stock Exchange, Inc. (TSE) and the Company’s own criteria for the independence of outside officers, the Company has appointed her as an independent executive and submitted the relevant notification to TSE. |
| Outside Audit & Supervisory Board Member Toshihiko Hashimoto |
To ensure adequacy of the Company’s business operations, it has appointed Mr. Toshihiko Hashimoto as an Outside Audit & Supervisory Board member in recognition of his expertise in taxation and accounting as well as his experience as a licensed tax accountant. In light of the Independence Standards specified by Tokyo Stock Exchange, Inc. (TSE) and the Company’s own criteria for the independence of outside officers, the Company has appointed him as an independent executive and submitted the relevant notification to TSE. |
To objectively judge the independence of Outside Directors and Outside Audit & Supervisory Board Members, the Company has established its own criteria "Independent Criteria for Outside Officers" in addition to the Independence Standards specified by Tokyo Stock Exchange, Inc.
Independent Criteria for Outside Officers
The Company’s Board of Directors has determined the criteria for independence of Outside Directors and Outside Audit & Supervisory Board Members (hereinafter collectively called, “Outside Officers”) as follows:
(1) If none of the following attributes applies to an Outside Officer, the Company judges that such Outside Officer is independent from the Company. (*1)
1. A major shareholder of the Company (holding 10% or more of the voting rights of the Company at the end of the most recent fiscal year) or an executive officer (*2) thereof
2. A person whose major business partner (*3) is the Company or an executive officer thereof
3. A person who is a major business partner of the Company or an executive officer thereof
4. A person engaged in auditing of the Company or any of its consolidated subsidiaries as the Accounting Auditor of the Company or a consolidated subsidiary or as an employee thereof
5. An attorney-at-law, judicial scrivener, patent attorney, certified public accountant, certified tax accountant, consultant, etc. who has received cash or other property exceeding 10 million yen from the Company in the most recent fiscal year other than officer remuneration (or if such person is an organization, such as a corporation or an association, a person who is affiliated with an organization whose revenue from the Company exceeds 2% of its annual revenue)
6. A principal lender to the Company (a lender whose name is indicated as a principal lender in the business report for the most recent fiscal year) or an executive officer thereof
7. A person who has received a donation exceeding 10 million yen from the Company in the most recent fiscal year (or if such person is an organization, such as a corporation or an association, an executive officer of an organization whose revenue from the Company exceeds 2% of its annual revenue)
8. A person to whom any of 1 to 7 above applied in the most recent three fiscal years
9. A spouse or relative within the second degree of kinship of a person to whom any of 1 to 8 above applies (only a significant person)
10. A spouse or relative within the second degree of kinship of an executive officer of the Company or a subsidiary (if a person is an employee, only a significant person)
11. A spouse or relative within the second degree of kinship of an executive officer of the Company or a subsidiary (if a person is an employee, only a significant person) in the most recent three fiscal years
12. In addition to the preceding items, a person who has a special reason that prevents him/her fulfilling his/her duty as an independent Outside Officer, such as a risk of causing permanent conflict of interest with the Company
13. Even in the case of a person to whom any of the preceding items applies, if the Company considers the person is appropriate as an independent Outside Officer in light of his/her personality and insight, etc., the Company may appoint such person as an Outside Officer, provided that the Company explains the reasons why the Company considers him/her appropriate as an Outside Officer to external parties.
(2) An Outside Officer who is considered to be independent in accordance with the above criteria shall notify the Company immediately if he/she loses his/her independence.
*1. An investigation shall be conducted to the extent that is economical and reasonable.
*2. An executive officer is a person to whom any of the following applies.
(1) An executive director, an executive or any other officer who executes business of a corporation etc.
(2) An employee who executes business, a person who executes duties stipulated in Article 598, Paragraph 1 of the Companies Act, or any person with a similar role
(3) An employee
*3. A major business partner is a person to whom sales exceed 2% of annual consolidated sales for the most recent fiscal year.
Enacted on May 24, 2016