Corporate Governance

Summary of Corporate Governance Structure of the Submitting Company and Reason for Selection of the Structure

Our vision is that it is crucial to place emphasis on the health, transparency and efficiency of corporate management, as well as to establish a corporate structure that will allow us to respond expeditiously and appropriately to rapid changes in our business environments. Specifically, in addition to speeding up decision-making and implementing mutual supervision of Directors that are well-versed in the business, we have enhanced our ability to supervise our management from a third-party perspective by Outside Directors and Outside Audit & Supervisory Board Members. By introducing a division structure / business division, we work toward efficient business execution, while we have established the Management Meeting consisting of Executive Directors, including the President, and Division Presidents in order to execute business flexibly and promptly. We are also engaged in implementing and enhancing our structure to ensure more openness in our disclosure to shareholders and investors.

The Company Group places the following corporate ideals at the root of its management, making it the starting point for all corporate activities.

Slogans

  • Inspire the Enjoyment of Creativity
  • Be the BEST rather than the BIGGEST
  • The Roland Family – Cooperative Enthusiasm

Mission

Bringing new opportunities to society through digital technology

Vision

Transforming your imagination into reality

Additionally, the Company has also defined the following “Code of Conduct” to conduct business activities in line with the corporate ideals.

Code of Conduct

  • Creation of New Value

    • We will maintain a spirit of creative inquiry to help make people’s lives better by creating innovative value.
    • We will strive harder towards making the company the best rather than the biggest and will work to improve corporate value through the excellence, sustainable business development.
    • We will continually challenge new fields with unrestricted imagination and originality.
  • Global Business Expansion

    • We will constantly pursue new opportunities and engage in business activities with the goal of global expansion.
    • We will respect the diversity in various regions around the globe, including their histories and cultures, and will remain conscious of the importance of harmonious coexistence as we conduct our business activities.
    • We will do our part to conserve the global environment in order to ensure a pleasant society for the people of the world.
  • Clean and Open Corporate Culture

    • Each one of us will remain conscious of social responsibility and will observe laws and social ethics when conducting ourselves.
    • Each one of us will build trust by following our consciences to make fair decisions and by maintaining transparency and accountability.
    • We will create a corporate culture in which everybody can work with enthusiasm and passion.

Reasons for Not Implementing the Principles of the Corporate Governance Code

The Company is implementing all principles of the Corporate Governance Code.

Disclosure Based on Each Principle of the Corporate Governance Code

  • Principle 1-4 Cross-Shareholdings

    As a general principle, the Company will not conduct cross-shareholding. However, in the event that showing the intention to maintain a strong relationship such as business partnerships or strengthening of transactional relationships is valid from a business perspective, the Company may hold shares at a minimum to the extent necessary. The Company currently holds shares of one financial institution with which it has a transactional relationship for the purpose of strengthening relationships. In addition, the Board of Directors examines every year the adequacy of holding objectives, the benefits and risks associated with holding for each cross-shareholding of the Company, verifies the suitability of holdings, and confirms the appropriateness of holding for all securities. Exercise of voting rights for such shares will be determined based on whether or not the proposal serves to contribute to the objectives of the holding.

  • Principle 1-7 Related Party Transactions

    When the Company engages in transactions with its Directors, Audit & Supervisory Board Members or major shareholders (i.e., related party transactions), designated approval is required as defined by internal regulations such as the “RULES OF THE BOARD OF DIRECTORS” and “APPROVAL RULES.” The Company deliberates and confirms that such transactions will not harm the interests of the Company or the common interests of its shareholders. Following disclosure standards, information on related party transactions is disclosed in the Business Report and the Securities Report.

  • Principle 2-6 Roles of Corporate Pension Funds as Asset Owners

    The Company has established the "Retirement Pension Assets Management Committee" by selecting employees from Corporate Division who are well-versed in pension management. The committee deliberates on important matters for the safe and efficient management of pension assets, repots them to the Board of Directors, and receives counsel from external consultants as necessary to complement and improve their expertise. Conflicts of interest which could arise between corporate pension fund beneficiaries and the Company are appropriately managed by leaving the exercise of voting rights to the discretion of fund management institutions and having no involvement in such exercise of voting rights.

  • Principle 3-1 Full Disclosure

    1. Corporate ideals, business strategy and business plans: The Slogans, Mission, Vision, and Medium-Term Business Plan are disclosed on the Company’s website and in its financial results briefing materials and disclosure materials, etc.
    2. Basic views and guidelines on corporate governance: Basic views are disclosed on the Company’s website and Securities Reports.
    3. Policies and procedures in determining the compensation of Directors: When determining the compensation for Directors, compensation is deliberated fairly and transparently by the Appointment and Compensation Committee consisting of at least three but not more than five Directors who were elected by the Board of Directors (the majority of such Directors are Independent Outside Directors), and receiving appropriate participation and counsel. In addition, with regard to the amount of Directors’ compensation, etc., information is disclosed on the Company’s website, the NOTICE OF THE ORDINARY GENERAL MEETING OF SHAREHOLDERS, and Securities Reports.
    4. Policies and procedures for the appointment of candidates for Director and Audit & Supervisory Board Member: When nominating candidates for Director and Audit & Supervisory Board Member, the appropriateness of candidates is discussed in the Appointment and Compensation Committee, consisting of at least three but not more than five Directors who were elected by the Board of Directors (the majority of such Directors are Independent Outside Directors), based on the appointment standards stipulated in the “RULES OF APPOINTMENT AND COMPENSATION COMMITTEE” and is reported to the President. The President submits this candidate appointment proposal to the Board of Directors and Audit & Supervisory Board, and upon their resolution, it is proposed to the General Meeting of Shareholders.
    5. Explanations with respect to individual appointments of senior management and appointment of Directors and Audit & Supervisory Board Members: Reasons for appointment of all candidates are disclosed in the NOTICEOF THE ORDINARY GENERAL MEETING OF SHAREHOLDERS.
  • Supplementary Principle 4-1-1 Clarification of Scope of Delegation to Management

    The Company defines in its internal regulations such as the “RULES OF THE BOARD OF DIRECTORS” with regard to items defined by laws and regulation, items for resolution by the Board of Directors as important items, and items for reporting concerning execution status; and the “AUTHORITY RULES” with regard to the authority of Executive Directors. The Company defines in its internal regulations such as the “APPROVAL RULES” with regard to the range of decision-making delegation to management, etc.

  • Principle 4-9 Independence Standards and Qualification for Independent Outside Directors

    The Company has defined the “Standards Concerning Independency of Outside Directors and Outside Audit & Supervisory Board Members,” and discloses them on its website. With regard to appointment of personnel, in addition to standards presented by the Tokyo Stock Exchange, candidates must fulfill the Company’s proprietary standards, and while placing emphasis on diversity, the Company works to appoint individuals who can attend Board of Directors Meetings in person.

  • Supplementary Principle 4-11-1 Disclosure of Views Concerning the Composition, etc., of the Board of Directors

    Policies and procedures regarding the appointment of the Company’s Directors are as shown in Principle 3-1 4, and the Board of Directors of the Company shall be appointed within the framework of a maximum of 10 members, as defined in the Articles of Incorporation. While considering areas of expertise and experience, by creating a balanced composition, the Company increases the diversity of its Board of Directors.

  • Supplementary Principle 4-11-2 Disclosure of Status of Concurrent Positions

    With regard to Outside Directors and Outside Audit & Supervisory Board Members of the Company, appointment is made, with the ability and will to attend various meetings in person, including the General Meetings of Shareholders and Board of Directors Meetings, as appointment standards. Active discussions are made from various angles, and the Company works to strengthen the structure to allow for the Board of Directors to function effectively. Furthermore, concerning the concurrent holding of officer positions at other companies, these items are resolved by the Board of Directors for Executive Directors. For Outside Directors (Non-executive Directors), these items are notified in advance to the President in writing and reported at the immediate meeting of the Board of Directors. Additionally, the maximum number of listed companies at which Outside Directors serve as directors concurrent positions is limited to a maximum of five. If it exceeds this limit, these items are resolved at the Board of Directors. For Audit & Supervisory Board Members, these items are reported to the Board of Directors following resolution of the Audit & Supervisory Board. Furthermore, the Company believes that the current status of concurrently held positions and attendance is in a reasonable range, as the rate of attendance is extremely high. The current status of attendance is disclosed every year in the NOTICE OF THE ORDINARY GENERAL MEETING OF SHAREHOLDERS, and the status of concurrently held positions in the NOTICE OF THE ORDINARY GENERAL MEETING OF SHAREHOLDERS and the Securities Report.

  • Supplementary Principle 4-11-3 Disclosure of Outlines of Analysis and Evaluation Results on Effectiveness of the Board of Directors

    The Company conducts questionnaires to Directors and Audit & Supervisory Board Members on the effectiveness of the Board of Directors and reports the questionnaire results to the Board of Directors by the Board of Directors Secretariat. The Company then discusses improvement plans for the Board of Directors with more effectiveness, and makes improvements as necessary. Based on the questionnaire results, the Company considers that the effectiveness of the Board of Directors as a whole is ensured without any major problem.

  • Supplementary Principle 4-14-2 Disclosure of Training Policy

    With regard to the Company’s Directors and Audit & Supervisory Board Members, the Company’s policy is to hold timely training sessions by outside instructors, etc., as necessary, based on the following framework with the objective of achieving the appropriate fulfillment of duties and responsibilities expected of a Director or Audit & Supervisory Board Member.

    • Create opportunities for new Directors and Audit & Supervisory Board Members to acquire necessary knowledge concerning business, finance, and organizations, etc.
    • Create opportunities for Outside Directors and Audit & Supervisory Board Members to share and deepen understanding of business content and management issues
    • Create opportunities to acquire other knowledge, etc., necessary to fulfill responsibilities
  • Principle 5-1 Policy for Establishing Systems and Efforts to Promote Constructive Dialogue with Shareholders

    With regard to dialogue with institutional investors and individual investors, the Company positively responds to them to a reasonable extent. Additionally, the Company has defined the “Policy for Constructive Dialogue with Shareholders” and discloses it on the Company’s website.

    Policy for Constructive Dialogue with Shareholders

    PDF:69.8KB

    * Titles of supplementary principles are provided for convenience in the interest of readability.

Information on Corporate Institutions

The Company adopts an Audit & Supervisory Board Members system. Details of the main bodies of the Company including the Board of Directors are as follows:

  • a. Board of Directors

    The Board of Directors consists of seven Directors (including four Outside Directors) and meets at least once every month to make decisions on crucial operational matters and oversee the execution of Directors’ duties.

  • b. Management Meeting

    The Management Meeting consists of Executive Directors including the President, and the Division Presidents meets typically once every month to make decisions on crucial operational matters, hold advanced discussion on the agenda of the Board of Directors, and oversee the execution of Division Presidents’ duties by reporting and proposing business activity.

  • c. Audit & Supervisory Board

    The Audit & Supervisory Board consists of four Audit & Supervisory Board Members (including two Outside Audit & Supervisory Board Members) and meets in principle at least seven times a year to receive reports on important matters relating to audits, as well as carry out discussions and make resolutions on these matters. Additionally, a forum for sharing information and exchanging views, etc., among Audit & Supervisory Board Members will be installed as necessary, in order to contribute to the formulation of audit opinion and enhance the effectiveness of audits. In order to gain an understanding of important decision-making processes and the status of business execution, Audit & Supervisory Board Members also participate in Board of Directors meetings, Management Meetings, and other important meetings within the Company. Audit & Supervisory Board Members also conduct audits on various business locations and subsidiaries in addition to engaging in strengthening its function of monitoring the execution of Directors’ duties.

Members of each corporate institution are as follows:

ChairmanChairman for corporation institutions,
MemberMember

Role Name Board of Directors Management Meeting Audit & Supervisory Board
President Kohei Tanabe Chairman Chairman
Director Toshiharu Uwai Member Member
Director Eli Keersmaekers Member Member
Outside Director Takuo Hirose Member
Outside Director Osamu Hosokubo Member
Outside Director Naoko Okada Member
Outside Director Brian K. Heywood Member
Audit & Supervisory Board Member Masayasu Suzuki Chairman
Audit & Supervisory Board Member Naoki Nagano Member
Outside Audit & Supervisory Board Member Shigeki Matsuda
Member
Outside Audit & Supervisory Board Member Mitsuhiro Honda Member

In addition to the above, the Management Meeting is made up of five Division Presidents.

Corporate Governance Structure

  • Corporate Governance Structure

Other matters related to corporate governance

  1. a. Status of the internal control system and risk management system

    The Company carries out activities based on the “Basic Policies for Establishing an Internal Control System” which is resolved at the Board of Directors meeting each fiscal year. We have placed the three slogans of “Inspire the Enjoyment of Creativity,” “Be the BEST rather than the BIGGEST,” and “The Roland Family – Cooperative Enthusiasm” at the foundation of our management, and use them as the starting point for all corporate activities.

    To secure conformity with laws and regulations and the Articles of Incorporation for execution of business by Directors and employees, our compliance structure includes internal education activities on Codes of Conduct, and the whistleblowing system to promote compliance with laws and regulations within the Group.

    The President assumes responsibility for the risk management structure, and a person responsible for risk management, designated by the person responsible for the risk management structure, conducts comprehensive management of company-wide risk management, periodically reporting to the Management Meeting and the Board of Directors.

    Additionally, a structure is established to receive periodic reports on risk management from subsidiaries, and matters related to the group-wide risk management are treated as risk management issues of the Company.

    Furthermore, to secure the appropriateness of operations of the Group, we have defined “RULES FOR MANAGEMENT OF AFFILIATED COMPANIES”, and while receiving reports on management status from subsidiaries, we supervise the management of key subsidiaries by seconding our Directors, etc., based on the business content and scope of subsidiaries. We secure appropriateness of operations by placing management advisory bodies at key subsidiaries to deliberate on significant management matters. With respect to the internal control reporting structure for financial reporting as required by the Financial Instruments and Exchange Acts, the management procedures and structure, etc., for development, operation and evaluation of the internal control system are defined, with the Finance & Accounting Department in charge. The evaluation of effectiveness is conducted through evaluation of the status of development and operation in each department and subsidiary, as well as independent evaluation by the Internal Audit Department.

    Apart from the above, the following procedures have been developed to realize appropriate internal control and risk management: a structure to secure efficient execution of duties by the Directors of the Group; a structure related to storage and management of information regarding the execution of duties by the Directors; a structure for the Directors and employees to make reports to Audit & Supervisory Board members; a structure regarding employees to assist the duties of Audit & Supervisory Board Members should they request assistance from such employees; and a structure to ensure that persons making reports to Audit & Supervisory Board Members do not receive detrimental treatment as a result of such reporting.

    Furthermore, we have defined “Basic Views and Maintenance Status Toward Elimination of Anti-social Forces ” with respect to anti-social forces, and under the basic principle of “taking a firm stance and having no relationships, and not conducting any transactions,” we strive to inculcate this to all employees while assigning the General Manager of the Corporate Affairs Department in charge of preventing wrongful requests, and through cooperation with related internal departments, we work to terminate relationships with anti-social forces across the entire company.

    In addition to the above, in order to respond to various legal contingencies, we have in place advisory contracts with multiple law firms with whom we consult and develop solutions to issues as needed.

  2. b. The fixed number of Directors

    The Articles of Incorporation stipulate that the Company shall not have more than ten (10) Directors.

  3. c. Requirements for resolution to appoint Directors

    The Articles of Incorporation stipulate that the resolution for electing a Director shall be adopted by a majority of the voting rights held by the shareholders present, whose number shall constitute at least one-third of the voting rights of all shareholders of the Corporation who are entitled to vote at the meeting and the resolution shall not be made by cumulative votes.

  4. d. The decision-making body for interim dividend

    In order to enable flexible return of profits to shareholders, the Articles of Incorporation stipulate that the Company may, by a resolution of the Board of Directors, distribute interim dividends with a record date being June 30 of each year.

  5. e. The decision-making body for the acquisition of own stock

    The Articles of Incorporation stipulate that the Company may, by a resolution of the Board of Directors, acquire its own stock through the market transactions, etc. pursuant to Article 165, Paragraph 2 of the Companies Act in order to enable the Company to flexibly acquire own shares.

  6. f. Requirements for special resolutions at the General Meetings of Shareholders

    The Articles of Incorporation stipulate that a special resolution as stipulated in Article 309, Paragraph 2 of the Companies Act shall be adopted by a two-thirds majority of the voting rights held by the shareholders present, whose number shall constitute at least one-third of the voting rights of all shareholders of the Corporation who are entitled to vote at the meeting.

  7. g. Limited liability agreement with Nonexecutive Directors and Audit & Supervisory Board Members

    The Company may enter into contracts, pursuant to Article 427, Paragraph 1 of the Companies Act, with Nonexecutive Directors and Outside Audit & Supervisory Board Members to the effect that, if such Directors are not aware of any problems and are not grossly negligent in performing their duties, the liability of the Directors under Article 423, Paragraph 1 of the same law shall be limited. The limited liability amount under such contracts shall be the minimum limited liability amount specified by the same law.

The Status of Internal Audits, Audits by Audit & Supervisory Board Members, and Accounting Audits

  • With regard to internal audits, the Company has established the Internal Audit Department as an organization under the direct control of the President, which reports the results of internal control and internal audits at the meeting of the Board of Directors. Audit & Supervisory Board Members and Internal Audit Department liaise on various matters, such as the development of audit plans, to improve the effectiveness and efficiency of audits. The state of audits by Audit & Supervisory Board Members is described in “c. Audit & Supervisory Board” presented in “Information on Corporate Institutions.” Audit & Supervisory Board Members receive explanations of the audit plan and reports of audit results from, and exchange views and information as necessary with, accounting auditors. The Audit & Supervisory Board Members and Internal Audit department liaise on various matters, such as the development of audit plans, to improve the effectiveness and efficiency of audits. Full-time Audit & Supervisory Board Member, Mr. Masayasu Suzuki, has been involved in operations in a financial institution for many years as well as accounting operations in the Company, and Full-time Audit & Supervisory Board Member, Mr. Naoki Nagano, has been involved in operations in a financial institution for many years as well as corporate planning and accounting operations in the Company. Outside Audit & Supervisory Board Member, Mr. Shigeki Matsuda, is licensed as a certified public accountant and tax accountant, and Outside Audit & Supervisory Board Member, Mr. Mitsuhiro Honda, has abundant experience in international tax affairs. All four individuals are well-versed in finance and accounting matters.

    While the Company has no special vested interest with the accounting auditor, Deloitte Touche Tohmatsu LLC, or its engagement partners, the two parties maintain close contact with each other so that the Company is able to receive appropriate advice on an ongoing basis. As for consolidated subsidiaries, accounting audits are consigned to independent auditors in order to ensure the appropriateness of our consolidated accounting. Furthermore, the accounting audit for the fiscal year under review was conducted by Certified Public Accountants Messrs. Hirohisa Kato and Masanori Toyoizumi who are designated limited liability partners and engagement partners. (As the number of consecutive years conducting audits is within seven years, the number of years is omitted.) Assistance for audit operations is provided by five Certified Public Accountants and eight other persons.

    The Internal Audit department, Audit & Supervisory Board Members, and the accounting auditor hold joint meetings in principle two times a year to execute audits from their respective standpoints in collaboration with each other.

Overview of Personal Relationships, Capital Relationships, or Transactional Relationships and other Interests between the Company and the Company’s Outside Directors, or Outside Audit & Supervisory Board Members

  • Outside Director, Mr. Takuo Hirose, is a partner of Anderson Mori & Tomotsune, a law firm with which the Company has business transactions including the receiving of various services that are based on our legal advisory contract. However, the Company receives legal advisory services from different attorneys of the said law firm.

    Outside Director, Mr. Brian K. Heywood, is the CEO of Taiyo Pacific Partners L.P., a major and largest shareholder of the Company. The Company has entered into an advisory contract with said company for the purpose of mainly receiving counsel and suggestions on management and business strategies. However, the Company receives advisory services under the advisory contract from different members of said company.

    Outside Audit & Supervisory Board Member, Mr. Mitsuhiro Honda, is an Outside Audit & Supervisory Board Member of YUASA TRADING CO., LTD with which the Company has business transactions including the sales of products.

    Additionally, there are no personal, capital or transactional relationships and other interests with companies, etc., at which other Outside Directors and Outside Audit & Supervisory Board Members serve or served as executives or employees either at present or in the past. (The “past” is defined as within the past 10 years, pursuant to the “range of confirmation of affiliation information” stipulated by Tokyo Stock Exchange.)

Views on the Functions and Roles of Outside Directors and Outside Audit & Supervisory Board Members in Corporate Governance of the Company, the Independence Standard or Policy for Selecting Outside Directors and Outside Audit & Supervisory Board Members and the State of Their Appointment, and Collaboration between the Outside Directors, Outside Audit & Supervisory Board Members and Internal Control Division and Audits

  • We expect Mr. Takuo Hirose, Outside Director, to leverage his knowledge and experience as an attorney, and Mr. Osamu Hosokubo, Outside Director, to leverage his knowledge and experience as a corporate executive and investor, and Ms. Naoko Okada, Outside Director, to leverage her knowledge and experience in corporate management and corporate communications, in all aspects of our corporate management and provide independent oversight and counsel regarding our corporate operations as well as to contribute to enhancing the transparency of Board of Directors proceedings and our supervisory functions.

    Additionally, Mr. Brian K. Heywood has knowledge and experience as a corporate executive and investor. We expect him to contribute to the enhancement of corporate value through providing advice on all aspects of our corporate management as a shareholder and investor.

    Furthermore, we can expect two Outside Audit & Supervisory Board Members to work with our Full-time Audit & Supervisory Board Members, drawing on their extensive knowledge of accounting and tax matters, and execute objective and neutral audits in their independent capacities regarding all aspects of our corporate management as described in “c. Audit & Supervisory Board” in “Information on Corporate Institutions” and “The Status of Internal Audits, Audits by Audit & Supervisory Board Members, and Accounting Audits.”

    As such, we believe Outside Directors and Outside Audit & Supervisory Board Members in our current organization are able to fulfill the functions and roles that are required with regard to our corporate governance.

    The Company has stipulated the “Standards Concerning Independency of Outside Directors and Outside Audit & Supervisory Board Members” which satisfies the requirements of independent officers stipulated by the Tokyo Stock Exchange, and posted it on the Company’s website. We have judged that three of Outside Directors, Takuo Hirose, Osamu Hosokubo and Naoko Okada and two Outside Audit & Supervisory Board Members satisfy these standards and have secured adequate independence, and have reported three Outside Directors and two Outside Audit & Supervisory Board Members as independent officers.

Directors’ Compensation, etc.

Total amount of compensation and other remuneration for different officer categories, total amount of compensation and other remuneration by type, and the number of eligible officers (Results in the 40th Fiscal Year)

Category Total amount of compensation and other remuneration
(Millions of yen)
Total amount of compensation and other remuneration by type
(Millions of yen)
Number of recipients
Basic compensation Bonuses Performance-linked compensation
Share compensation
Directors
(excluding Outside Directors)
137 137 0 0 5
Audit & Supervisory Board Members
(excluding Outside Audit & Supervisory Board Members)
25 25 0 - 3
Outside Directors and Audit & Supervisory Board Members 34 34 - - 6
Total 197 197 0 0 14
(Notes)
  1. The Company has established the Appointment and Compensation Committee. The majority of members consist of Independent Outside Directors to ensure independence, fairness and transparency. The limit for the amount of basic compensation and officer bonuses for Directors was set by resolution of the 33rd Ordinary General Meeting of Shareholders held on June 18, 2014 (six members including one Outside Director at the time of resolution) at up to 300 million yen per year (including up to 30 million yen for Outside Directors).
  2. Providing performance-linked share compensation for Directors of the Company (excluding Outside Directors, hereinafter referred to as “eligible officers”) was resolved at the 38th Ordinary General Meeting of Shareholders held on March 20, 2019. Concerning extension and partial revisions, these items were resolved separately from the limit for the amount of basic compensation and officer bonuses.
  3. The limit for the amount of compensation, etc. for Audit & Supervisory Board Members was set by resolution of the 29th Ordinary General Meeting of Shareholders held on June 16, 2010 at up to 60 million yen per year.
  4. The number of recipients includes one Director and one Audit & Supervisory Board Member who retired at the conclusion of the 39th Ordinary General Meeting of Shareholders held on March 19, 2020 but excludes one Outside Director who serves without compensation.
  5. The Company has decided not to pay officer bonuses in the fiscal year under review.
  6. Performance-linked compensation for Directors is not recorded as the conditions were not met in the fiscal year under review.

The total amounts, etc. of consolidated compensation, etc. for each officer of the submitting company

This information is not included because there is no individual earning a consolidated compensation, etc. equal to or greater than 100 million yen.

Policy regarding the determination of the amount and the method for calculation of the compensation for Directors and the method of determination

The Company has defined the following policy for determining the compensation, etc. for each Director.

  1. 1. Basic policy

    With regard to compensation for Directors, the Company has adopted a remuneration system linked to business performance and shareholders’ interests so as to fully function as an incentive to realize a sustainable increase in corporate value. When determining the compensation for each Director, the Company’s basic policy is to set an adequate level based on the person’s responsibilities. Specifically, the compensation for Executive Directors consists of basic compensation, bonuses for Directors, and performance-linked share compensation, and for Outside Directors who have supervisory functions, the Company provides only basic compensation based on their duties.

    For foreign Directors, the Company sets a level based on compensation levels in the country of origin as well as on their responsibilities.

  2. 2. Policy for determining the amount of basic compensation

    1) Policy for determining the total amount

    With regard to basic compensation for Directors, the Board of Directors determines the total amount from April to March of the following year, based on the deliberation of the Appointment and Compensation Committee, with the majority of the committee members being Independent Outside Directors.

    2) Policy for determining the amount for each Director

    With regard to the amount of basic compensation for each Director, the determination of amounts is delegated to the President by resolution of the Board of Directors, and the President determines amounts taking into consideration the post and responsibilities of each Director based on the compensation standards for Directors, within the limit for the compensation, etc. as resolved at the General Meeting of Shareholders. With regard to compensation standards for Directors, the President, based on reports of the Appointment and Compensation Committee, drafts the compensation standards for Directors, and the Board of Directors finalizes it by its resolution.

    The Company provides basic compensation on a monthly basis.

  3. 3. Policy for determining the amount of Executive Directors’ and Audit & Supervisory Board Members’ bonuses

    1) Policy for determining the total amount

    With regard to Executive Directors’ and Audit & Supervisory Board Members’ bonuses, payment and the total amount are approved up to the estimated amount of Executive Directors’ and Audit & Supervisory Board Members’ bonuses as determined at the Board of Directors meeting for approval of financial results held every February.

    With regard to the estimated amount of Executive Directors’ and Audit & Supervisory Board Members’ bonuses, the Board of Directors approves the total estimated amount of Executive Directors’ and Audit & Supervisory Board Members’ bonuses and total amount of basic compensation for Directors for the period from April to March of the following year, at the Board of Directors meeting following the closing of the Ordinary General Meeting of Shareholders.

    When determining the total amount to be paid, the total amount shall not exceed 300 million yen, the approved amount of basic compensation and Executive Directors’ and Audit & Supervisory Board Members’ bonuses at the General Meeting of Shareholders, and shall comply with the numerical standards prescribed in the OFFICERS’ BONUS PAYMENT RULES (the total amount of Executive Directors’ and Audit & Supervisory Board Members’ bonuses will be up to 2% of operating profit and 3% of net profit). In addition, in the event that one of the following applies before the settlement of financial results, the Company will not pay Executive Directors’ and Audit & Supervisory Board Members’ bonuses pursuant to the OFFICERS’ BONUS PAYMENT RULES.

    1. (1) If consolidated operating profit or net profit is in deficit
    2. (2) If the business results fall below the following criteria compared to the consolidated business forecast disclosed at the beginning of the term
      Net sales: 30%
      Operating profit, ordinary profit, and net profit: 50%
    3. (3) If the President decides to postpone payment even if the preceding item 2 does not apply

    2) Policy for determining the amount for each Director

    With regard to the amount of bonuses for each Director, the determination of the amount is delegated to the President by resolution of the Board of Directors, and the President determines the amount taking into consideration the post and contribution to the business performance of each Director, within the limit for the total amount of compensation, etc. as resolved at the General Meeting of Shareholders.

    The Company pays officer bonuses every March.

  4. 4. Policy regarding the determination of the contents and the method for calculation of the performance-linked share compensation

    The performance-linked share compensation plan is a share benefit trust that covers the five fiscal years from the fiscal year beginning on January 1, 2019.

    Under the plan, pursuant to the RULES CONCERNING PROVISION OF SHARES (FOR OFFICERS), eligible Directors receive points that are calculated by summing basic points based on their position and points (number of shares) multiplied by a coefficient according to achievement level and weight (consolidated net sales 30%, consolidated operating profit 40%, ROE 30%) against a target value of consolidated net sales (growth), consolidated operating profit (profitability) and ROE (management efficiency). When said Directors will no longer be Directors or employees of the Company or its subsidiaries, such Directors will receive the Company’s shares based on the points awarded (or in the event that the Company’s shares cannot be delivered, the amount of money obtained through disposition of such shares, excluding expenses). If any of performance-linked indicators represents less than 80% of the achievement rate, the Company will not award points in that fiscal year.

  5. 5. Policy for determining the ratio by type of compensation, etc.

    The ratio by type of compensation for Executive Directors is examined by the Appointment and Compensation Committee based on a remuneration level taking as a benchmark companies with the same business scale as the Company and companies belonging to related industries and business categories. The Board of Directors respects report of the Appointment and Compensation Committee and decides compensation, etc. for Directors. The standard ratio for each type of compensation, etc. is as follows; basic compensation 50%, officer bonuses 25%, performance-linked share compensation 25% (when KPI achievement rate is 100%).

    Position Basic compensation Bonuses Performance-linked share compensation
    Executive Director 50% 25% 25%

Standards Concerning Independency of Outside Directors and Outside Audit & Supervisory Board Members

The Company has defined the “Standards Concerning Independency of Outside Directors and Outside Audit & Supervisory Board Members” in order to clarify the standard for independency of Outside Directors and Outside Audit & Supervisory Board Members.

Policy for Constructive Dialogue with Shareholders

With regard to dialogue with institutional investors and individual investors, the Company positively responds to them to a reasonable extent. Additionally, the Company has defined the “Policy for Constructive Dialogue with Shareholders” and discloses it on the Company’s website.

Policy for Constructive Dialogue with Shareholders

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