ー GOVERNANCE ―

For Sustainable Management

While working to expedite management decisions and improve corporate value, we recognize that ensuring compliance is crucial for our sustainable growth. Based on this recognition, we have established a corporate governance system to systematically ensure compliance.

Corporate Governance System

 We, as a corporate group that coexists with society and contributes to the development of the Japanese economy and local communities, recognize the importance of:

  1. building a management organization structure capable of responding promptly and properly to changes in the business environment;
  2. pursuing reasonable management decisions and efficient business execution that can sufficiently fulfill accountability;
  3. ensuring transparency and fairness in decision making;
  4. ensuring sound ethics based on good sense of society, besides legal compliance; and
  5. disclosure of information to stakeholders in a timely and proper manner. We will thus develop and enhance the corporate governance system to systematically secure them, with the aim of achieving the sustainable growth of our Group and improving its corporate value.

 

 

■Corporate Governance Structure 

 

Board of Directors

The Board of Directors is the management decision-making body of our company and consists of ten directors, four of whom are external directors. 
External directors are appointed as independent directors in accordance with the regulations of the Tokyo Stock Exchange. 
In implementing corporate strategies, the Board of Directors functions as the responsible body that covers all our group companies both in Japan and overseas to bring together the collective strengths of the Group.

Outline of the systems for internal control and risk management

The Internal Auditing Dept., established as a department under the direct control of the President, conducts regular audits to make sure that the management activities of our company and our group companies are appropriately carried out based on the corporate internal regulations and standards, and monitors the business execution of the executive directors and employees. 
We have also established the Risk and Compliance Committee to oversee the Group’s risk management and compliance promotion activities. Regarding the prevention of Group-wide risks, the Committee is responsible for providing education, setting priority tasks and annual plans, and grasping/assessing the progress of initiatives.

Board of Auditors

Pursuant to the Companies Act and other relevant laws and regulations, we have introduced the Board of Auditors system. 
The Board of Auditors consists of four Board of Auditors Members, of whom one is a full-time member who is familiar with the operations and businesses of the Company and the industry (and the other two are external auditor). One of the Board of Auditors Members is appointed as an independent officer who has no conflict of interest with general shareholders. 
Each member of the Board of Auditors monitors the effectiveness of governance and audits the execution of management practices, including the execution of duties by Directors. 
In addition, we work closely with our accounting auditor (KPMG AZSA LLC), our Internal Auditing Dept., and auditors of affiliated companies, with the aim of enhancing the audit structure in the execution of business operations.

Evaluating the effectiveness of the Board of Directors

To maintain and improve the effectiveness of the Board of Directors, we analyze and evaluate its effectiveness. For the evaluation, we conducted a questionnaire survey of all board directors and corporate auditors to comprehensively self-evaluate the operation of the Board of Directors.

As a result of the aggregation and analysis of the evaluation, we confirmed there were no particular problems in the operation of the Company’s Board of Directors and that its effectiveness has been assured.

Cross Shareholding

 The Group’s basic policy is to reduce the number of cross shareholdings, and we strictly assess these investments by examining the benefits and the capital cost of holding the shares. The amount of listed shares held by the Group for cross shareholdings on the consolidated balance sheets as of March 31, 2021 was 2.4 billion yen.

 

Shareholding Status

(1)   Standard and approach for share investment classes

        Looking at shares held for pure investment and shares held for other purposes, the Company classifies some as shares purely

        for investment if the investment is made solely to receive gains from share value fluctuations or from dividends. Shares

        other than the above are classified as investment shares held for purposes other than pure investment.

 

(2)    Investment shares held for purposes other than pure investment

        a.   Holding policy, the method for verifying the rationale for holding, and details of verification by the Board of Directors, etc., 

              regarding the suitability of holding individual shares

               When the Company holds investment shares for purposes other than pure investment, we comprehensively determine the

               rationale of holding them over the medium to long term, as well as the investment’s profitability, the maintenance and

               strengthening of business relationships with investee companies, the importance of the investment in terms of business

               strategies, and other factors. In addition, the Company’s basic policy is to reduce holdings of this type of shares. The

               Company determines the suitability of holdings at the Board of Directors meeting, etc., each fiscal year, including by

               verifying whether or not holding the shares meets the intended purpose and whether or not the associated benefits and

               risks are proportionate to the cost of capital.

 

        b.   Number of shares and balance sheet amount

 

Number of shares

(stock listings)

Total balance sheet amount

(millions of yen)

Unlisted shares 3 328

Shares other than

unlisted shares

9 2,257

 

        c.   Information on the number of shares and balance sheet amount, etc., for each specified investment

               Specified investment shares
               For details about the specified investment shares, see the following PDF.