IRInvestor Relations

Corporate Governance Structures

Overview of corporate governance structure

The Company made the transition from a company with a board of corporate auditors to a company with an audit committee following the 4th Ordinary General Meeting of Shareholders on March 29, 2017 and has established a Board of Directors and Audit Committee. In addition, the Board of Directors established a voluntary Nomination and Compensation Committee on January 18, 2021.

The Board of Directors comprises seven directors, including three who are members of the Audit Committee (“Audit Committee Members”). Its members are Miki Igarashi (Chairman, Representative Director, President and CEO), Koji Onozuka, Masahiro Sugimura, Seiji Tominaga, Jun Narimatsu (Outside Director), Teruki Uchida (Outside Director), and Yasuaki Tabaru (Outside Director). In principle, meetings are held monthly, with extraordinary meetings held as necessary. The Board of Directors makes decisions on fundamental management policies, matters provided by laws and regulations, and material matters relating to management, and supervises the execution of business by each director.

The Audit Committee comprises three Audit Committee Members. Its members are Jun Narimatsu (Chairman and Outside Director), Teruki Uchida (Outside Director), and Yasuaki Tabaru (Outside Director). In principle, meetings are held monthly, with extraordinary meetings held as necessary. The Audit Committee discusses auditing policies, auditing plans, and the status and results of audits. All three Audit Committee Members have been elected as independent outside directors and audit the overall legality and propriety of management from their independent and objective perspectives. The auditing structure allows them to receive reports on the status and results of internal audits from the Internal Audit Office, and request direct reports from directors and business divisions of the Company and its group companies as necessary.

The voluntary Nomination and Compensation Committee comprises three directors who are Audit Committee Members, as well as one other director. Its members are Jun Narimatsu (Chairman and Outside Director), Miki Igarashi (Representative Director, President and CEO), Teruki Uchida (Outside Director), and Yasuaki Tabaru (Outside Director). Meetings are held as necessary, and the Committee deliberates and decides matters relating to the election and removal of directors and matters related to the individual compensation terms of directors pursuant to the Nomination and Compensation Committee Regulations.

Internal audits of the Company are conducted by the Internal Audit Office (three employees), which directly reports to the Representative Director, President and CEO. It implements business audits and internal control assessments of each division from the viewpoints of business efficiency, internal checks through rules and distribution of business authority, internal control systems concerning financial reporting, and compliance. Audit results are reported to the Representative Director, President and CEO, and there is a policy of information sharing and coordination with the Audit Committee from time to time to conduct effective audits. The audited divisions are given the audit results and guidance regarding matters that require improvement and are required to regularly report on the state of implementation of improvements. We are making efforts to realize highly effective auditing.

The nomination of officer candidates is discussed at a General Meeting of Shareholders after candidates have been determined by the Board of Directors following deliberation by the voluntary Nomination and Compensation Committee, of which a majority of members and the Chairman are independent outside directors, with a comprehensive determination as to the candidates’ ability to grasp the issues in their areas of responsibility and cooperate with other officers and employees to resolve issues; their knowledge to ensure compliance with laws, regulations, and corporate ethics, etc.; considering the current scale and stage of the business of the Company and based upon the corporate philosophy of the Company. The compensation of directors who are not Audit Committee Members is determined pursuant to the “Policy Relating to Determination of Individual Compensation and Other Terms for Directors” resolved by the Board of Directors after deliberation by the voluntary Nomination and Compensation Committee, of which a majority of members and the Chairman are independent outside directors, by delegation to the Nomination and Compensation Committee by resolution of the Board of Directors and within the total compensation limits resolved by the General Meeting of Shareholders, taking into consideration company performance, details of management, economic conditions, etc. The compensation of directors who are Audit Committee Members is determined through discussion by the Audit Committee within the total compensation limits resolved by the General Meeting of Shareholders, taking into consideration company performance, details of management, economic conditions, etc.

Directors

Number of Directors specified in the Articles of Incorporation 12
Term of office for Directors specified in the Articles of Incorporation 1 year
Chairman of the Board of Directors President
Number of directors 7
Election of outside directors Elected
Number of outside directors 3
Number of outside directors designated as independent directors 3

Activities of Outside Directors (January 1, 2019 to December 31, 2019)

Classification Name Main activities
Director
(Audit Committee Member)
Jun Narimatsu Attended all 15 meetings of the Board of Directors and all 15 meetings of the Audit Committee during the business year, and made necessary statements related to the proposals for deliberation, etc. with a high level of insight due to his professional knowledge as a certified public accountant and many years of business experience.
Director
(Audit Committee Member)
Teruki Uchida Attended all 15 meetings of the Board of Directors and all 15 meetings of the Audit Committee during the business year, and made necessary statements related to the proposals for deliberation, etc. mainly from his experience in securities and finance administration, management experience at other companies, and viewpoint as an attorney at law.
Director
(Audit Committee Member)
Yasuaki Tabaru Attended all 15 meetings of the Board of Directors and all 15 meetings of the Audit Committee during the business year, and made necessary statements related to the proposals for deliberation, etc. based upon his management experience at other companies and his knowledge of the fields of accounting and finance.
Diagram of Corporate Governance Structure