Basic Approach and Corporate Governance System

Basic approach to corporate governance

Corporate governance is a top priority for us.
We strive for rigorous corporate governance across the group so that we can earn the trust of our shareholders and other stakeholders and conduct our business impartially and effectively.

Corporate governance principles

We have established the following corporate governance principles, which reflect the principles of Japan’s Corporate Governance Code.

  1. We protect the rights and ensure the equitable treatment of all shareholders. We strive to create a climate in which all shareholders can duly exercise their rights.
  2. We recognize that our sustainable growth and mid-to-long-term value depend on us engaging and cooperating with stakeholders, including our shareholders, employees, customers, trading partners, creditors, and the local communities we serve. We foster a corporate culture that respects stakeholder rights and emphasizes sound business relationships with them.
  3. We disclose financial and non-financial information when required to do so by law. Even when disclosure is not mandated, we voluntarily disclose any information that could affect the investment decisions of shareholders or other investors.
  4. We understand that members of the Board of Directors are accountable to shareholders. To promote sustainable growth and enhance mid-to-long term corporate value, the board provides effective oversight of the management, ensuring that the management takes reasonable risks and that it contributes to the company’s profitability.
  5. To promote sustainable growth and enhance mid-to-long term corporate value, we actively engage in constructive dialogue with shareholders and other stakeholders. To earn stakeholders’ support and confidence, members of the Board of Directors actively listen to stakeholders and relay their feedback to the management, while ensuring that our corporate strategy is clear and transparent to stakeholders.

Corporate Governance System

Compensation Committee

To ensure objectivity and transparency for the compensation of Directors and Officers, the Company established a Compensation Committee under the Board of Directors. This committee is chaired by an external director, with external directors making up the majority of members.
The compensation of Directors and Officers includes a fixed base salary, bonuses, and performance-linked stock. This system was designed to motivate improving the Company’s performance as well as increasing medium- to long-term corporate value, retaining talented personnel, and sharing value with shareholders.
The Compensation Committee determines basic policies related to the compensation of Directors and Officers, the total amount of compensation and individual compensation, among other factors. Additionally, the committee accepts inquiries from and reports opinions to the Board of Directors on matters related to basic the compensation of Directors and Officers and bonuses submitted by the Board of Directors at the General Shareholders’ Meeting.

Compensation of Directors and Officers

Directors

To ensure the objectivity and transparency of compensation for Directors and Officers, the Company established a Compensation Committee under the Board of Directors. This committee is chaired by an external director, and a majority of its members are external directors.
Compensation for Directors and Officers includes a fixed base salary, bonuses, and performance-linked stock. This system was designed to motivate improving the Company’s performance as well as increasing medium- to long-term corporate value, retaining talented personnel, and sharing value with shareholders.
The Compensation Committee determines basic policies related to the compensation of Directors and Officers, the total amount of compensation, and individual compensation, among other factors. Additionally, the committee accepts inquiries from and reports opinions to the Board of Directors on matters related to the compensation of Directors and Officers submitted by the Board of Directors at the General Shareholders’ Meeting.

Statutory Auditors

Compensation for statutory auditors consists of monthly compensation only, with the limit on the amount of compensation determined at the General Shareholders’ Meeting and basic compensation for internal, external, full-time and part-time statutory auditors determined by the Board of Statutory Auditors.

Cross-Shareholdings

The Company maintains cross-shareholdings to strengthening business relationships, as well as to facilitate financial activities and to strengthen business alliances considered to be beneficial for medium- to long-term business development.
Every year, the Board of Directors verifies the appropriateness of individual cross-shareholdings in overall consideration of yields and capital costs, as well as whether they are useful for medium- to long-term business development and are in line with Company objectives including strengthening business relationships, facilitating smooth financial activities and enhancing business alliances.
If, as a result of this verification, holdings are determined to be inappropriate, they are reduced through disposal by sale after considering for share prices and market trends.
The Company deliberates on each proposal regarding the exercising of voting rights from the perspective of the issuing company’s prospects for sustained growth, corporate value enhancement over the medium- to long-term and increased shareholder value, while confirming that the issuing company has not engaged in any anti-social acts, been involved in major scandals and that there are no serious concerns regarding corporate governance.
In addition, the Company thoroughly investigates the appropriate reasons, objectives, and other factors regarding proposals that have the potential to affect corporate value and shareholder value, and then determines whether or not to grant approval.

Proper Information Disclosure and Dialog with Shareholders

  1. The Company announces the "Policies for the Establishment/Improvement of and Initiatives for the System to Promote Constructive Dialog with Shareholders" approved by the Board of Directors.
  2. The department in charge of IR ensures information control to prevent the leakage of unannounced important insider information outside the Company through dialog according to the regulations for the control of insider information and the prevention of insider trading.
  3. To promote sustainable growth and enhance the corporate value in the medium and long term, the Company sets and publishes medium- and long-term goals for capital efficiency, etc. after accurately grasping the capital cost when the Company formulates management strategies and management plans and works to achieve the goals and explains its efforts to that end to shareholders and others.

Corporate Governance Guidelines

A guideline describing the framework of corporate governance.

Defense Measures Against Takeover

Details on the Defense Measures Against Takeover introduced by the Company.

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