Corporate Governance

Corporate Governance

Our basic policy on corporate governance

The Group's business activities are based on the business principles that "prioritize ethics and contribute to the prosperity of customers and society as a whole." We therefore strive to attain sound corporate management through strengthening and reinforcing corporate governance, while fully appreciating the significance of compliance based on corporate ethics. At the same time, we review as appropriate our management monitoring system to ensure its conformity to the changes in the business environment including social environment and relevant legislation.

Corporate governance framework

Corporate Governance Report

In Japanese only

Overview of corporate governance structure and reasons for its adoption

We have corporate bodies established in accordance with laws and regulations as well as the Articles of Incorporation, including the General Meeting of Shareholders, Directors and the Board of Directors, Audit and Supervisory Board Members and the Board of Audit and Supervisory Board Members, and Accounting Auditors.
To strengthen corporate governance, the supervision and execution functions of the Board of Directors are separated, through the adoption of a structure where the Board of Directors is mainly in charge of governance, and Operating Officers are primarily in charge of business execution. The Company strives to ensure that both the supervision function of the Board of Directors and the audit function of (the Board of) Audit and Supervisory Board Members work effectively and believes that the current system is sufficiently running.

Specifically, each of the following bodies and meeting bodies is in place to function effectively.

Directors and the Board of Directors

At its regular monthly meetings as well as extraordinary meetings held when appropriate, the Board of Directors, which is composed of seven Directors including three Outside Directors, discusses and decides on important management matters such as reports on Operating Officers' business execution and matters to be decided solely at the discretion of the Board of Directors, while supervising the execution of duties by Directors and Operating Officers.

Director Skill Matrix

We have established the following framework to ensure that our Board of Directors can fully perform its functions.

Name	Outside Directors	Areas of expertise and experience
		Corporate management	Sales／ Marketing	Research and development／ Technology	Manufacturing／ Quality control	Global business	Personnel／Labor	Accounting／Finance	Legal affairs
Akira Watanabe		●	●	●	●	●
Kenzo Terashima		●	●	●	●	●
Kenji Tanimoto		●	●				●	●	●
Jun Nukina		●	●			●		●
Taizo Makari	●	●		●	●	●
Yukiko Machida	●						●		●
Yasuaki Sugizaki	●	●	●	●	●

Audit and Supervisory Board Members and the Board of Audit and Supervisory Board Members

The Board of Audit and Supervisory Board Members is made up of four members including three External Audit and Supervisory Board Members. Audit and Supervisory Board Members oversee management by attending the Board of Directors' meetings, etc. and expressing appropriate opinions in the process of deliberating business execution reports from Operating Officers and matters to be decided solely at the discretion of the Board of Directors. In addition, Audit and Supervisory Board Members examine the business activities and assets of the Company and Group companies in accordance with audit policies and division of duties set by the Board of Audit and Supervisory Board Members.

Voluntary committees

Nomination and Compensation Advisory Committee

Under the Board of Directors, the Company has in place the Nomination and Compensation Advisory Committee, which is composed of three Outside Directors and three internal Directors. Its purpose is to list candidates for Directors and Audit and Supervisory Board Members and nominate Operating Officers, and to ensure transparency and objectivity regarding decisions on compensation for Directors and Operating Officers.

Internal Control Committee

The Internal Control Committee is in place under the Board of Directors to develop a system stipulated in the basic policy of internal control systems, check the operation status, and conduct constant reviews. In principle, the Committee meets quarterly, and the contents of deliberation are reported to the Board of Directors each time.

Sustainability Committee

The Group has stipulated the Sustainability Policy and has a Sustainability Committee in place under the Board of Directors for tracking the progress of specific initiatives and continually reviewing them. In principle, the Committee meets quarterly, and the contents of deliberation are reported to the Board of Directors each time.

Internal audit and Audit and Supervisory Board Members's audit

Internal audit

Internal audits of the Company are carried out by the Audit Division based on internal audit plans decided by the Board of Directors. The Audit Division has staff with qualifications such as the Certified Information Systems Auditor (CISA). It reports its action plans and internal audit results to the Board of Directors and the Board of Audit and Supervisory Board Members.

Audit and Supervisory Board Members' audit

Audit and Supervisory Board Members work with the Audit Division and Accounting Auditors and exchange information on audit plans and contents of accounting audits to perform appropriate auditing tasks. Audit and Supervisory Board Members receive the results of quarterly reviews from Accounting Auditors both verbally and in writing, and confirm their action plans to be taken at a fiscal year-end audit. Audit and Supervisory Board Members also receive the results of fiscal year-end audits from Accounting Auditors in statutory documents along with verbal reviews. Furthermore, Audit and Supervisory Board Members are in principle required to be present at inventory taking or on-site inspection at subsidiaries by Accounting Auditors.