Corporate Governance(As of June 21, 2019)
The Company believes that the cornerstone of corporate governance is ensuring management soundness and transparency by establishing a management system that enables quick decision-making to respond promptly to changes in the operating environment, and by practicing timely, appropriate disclosure. To that end, the Company has adopted a Board of Corporate Auditors system and has established a corporate governance system in which the Board of Directors and Board of Corporate Auditors play key roles.
I. Description of Corporate Organs
(1) Board of Directors and Board of Corporate Auditors
The Board of Directors is composed of ten directors, including three outside directors. In addition to maintaining the number of directors at an optimum level for quick decision making, the Company has regulate the terms of directors to one year in order to clarify the management responsibility of directors and strengthen its management structure.
The Board of Corporate Auditors consists of four corporate auditors, including two outside auditors. It decides audit policies and related matters, and reports on the status of audits performed by each auditor. Corporate auditors also attend Board of Directors meetings and other important meetings, examine significant documents related to final decisions, and listen to directors and employees on performance of their duties, thus contributing to a system for sufficiently scrutinizing directors' performance of their duties. The Company is staffed to assist the execution of duties of corporate auditors.
(2) Executive Officers, Executive Committee, and Business Execution Committee
The Company has adopted an executive officer system to clearly demarcate the supervisory function and the business execution function. Based on the executive officer system, the Company also formed the Executive Committee, to discuss policies pertaining to key management and operating issues, consisting of mainly executive officers at senior vice president level and higher and corporate auditors, and the Business Execution Committee, to monitor the progress of and report on significant matters concerning business execution.
(3) Corporate Auditing Division
The Corporate Auditing Division has been established as an internal audit unit independent from the business execution divisions. It examines through internal audits whether business execution is being conducted legally and properly according to relevant laws, regulations and Company rules.
(4) Accounting Auditors
The Company has an audit contract with KPMG AZSA LLC as its accounting auditors. KPMG AZSA LLC expresses its views on the financial statements as an auditor from an independent viewpoint.
II. Development of Internal Control Systems
The Company has established a basic policy for the development of internal control systems, as shown below, under Article 362, Paragraph 4, Item 6 of the Company Law and Article 100, Paragraphs 1 and 3 of the Enforcement Regulations of the Company Law. The Company maintains the appropriate execution of operations under the basic policy, laws and regulations, and internal regulations.
III. Situation of Outside Director and Outside Corporate Auditors
Of the Company’s ten directors, three are outside directors. The Company believes that this is a sufficient number for giving advice and participating in decision making from a fair and objective standpoint, thereby strengthening the Company’s corporate governance.
Outside Director Hisayoshi Fuwa utilizes the extensive experience that he has acquired in global business operations for the Company’s business management. He also gives appropriate advice and provides proposals on all matters relating to the business management of the Company from a standpoint that is independent from that of the Company’s executives. Mr. Fuwa attended all 13 meetings of the Board of Directors held in the fiscal year ended March 31, 2019. He has been designated as an independent director as defined in Rule 436-2, Paragraph 1 of the Securities Listing Regulations of the Tokyo Stock Exchange.
Outside Director Michiko Ashizawa possesses expertise in business administration as a whole. She gives appropriate advice and provides supervision relating to the business management of the Company using her knowledge and experience from a standpoint that is independent from that of the Company’s executives. Ms. Ashizawa attended all 11 meetings of the Board of Directors held in the fiscal year ended March 31, 2019 after her appointment on June 21, 2018. She has been designated as an independent director as defined in Rule 436-2, Paragraph 1 of the Securities Listing Regulations of the Tokyo Stock Exchange.
Outside Director Kuniko Muramatsu possesses variety of experiences including an advisor to improve corporate ethics and promote CSR and diversity, a representative director of a non-profit organization and a university lecturer while managing the business. The Company believes she will be capable of giving appropriate advice and providing supervision relating to management of the Company from an objective standpoint by making use of her global mindset and deep insight on compliance matters and CSR. Ms. Muramatsu became an outside director at the ordinary general meeting of shareholders held on June 21, 2019. She has been designated as an independent director as defined in Rule 436-2, Paragraph 1 of the Securities Listing Regulations of the Tokyo Stock Exchange.
Of the Company’s four corporate auditors, two are outside corporate auditors. We believe that this is a sufficient number for auditing the directors’ execution of their duties from a fair and objective standpoint, thereby strengthening the Company’s corporate governance.
Outside Corporate Auditor Yuji Kikuchi is qualified as a lawyer and has considerable knowledge of company law and corporate governance. Using his professional knowledge and perspective, Mr. Kikuchi audits the directors’ performance of their duties from the fair and objective standpoint of an outsider. Mr. Kikuchi attended all 13 meetings of the Board of Directors and all 15 meetings of the Board of Corporate Auditors held in the fiscal year ended March 31, 2019. Mr. Kikuchi has been designated as an independent auditor as defined in Rule 436-2, Paragraph 1 of the Securities Listing Regulations of the Tokyo Stock Exchange.
Outside Corporate Auditor Masayuki Horie audits the directors' performance of their duties from the fair and objective standpoint of an outsider using his expert knowledge of business administration, including internal control. Mr. Horie attended 12 of 13 meetings of the Board of Directors and14 of 15 meetings of the Board of Corporate Auditors held in the fiscal year ended March 31, 2019. Mr. Horie has been designated as an independent auditor as defined in Rule 436-2, Paragraph 1 of the Securities Listing Regulations of the Tokyo Stock Exchange.
There are no special interests between the Company and its outside directors or outside corporate auditors.
The outside director and the outside corporate auditors regularly exchange information and consult with the Corporate Auditing Division and staff departments, receiving reports on business execution at meetings of the Board of Directors and on other occasions.
The outside corporate auditors cooperate with the independent auditors, exchanging information and consulting with them regularly at meetings of the Board of Corporate Auditors and on other occasions.
IV. Internal Audits and Audits by Auditors
The Corporate Auditing Division cooperates with the corporate auditors. The division reports the results of audits carried out under an audit plan for each fiscal year to the corporate auditors at least twice a year and exchanges opinions with them as necessary.
The corporate auditors, the Corporate Auditing Division, and the accounting auditors cooperate with each other, exchanging opinions as necessary for statutory audits.