The Company believes that building good relationships with all stakeholders of the Group such as shareholders, clients, business partners and employees and winning their trust are essential for maximizing its corporate value. For this purpose, the Company regards strengthening corporate governance as one of its most important management issues. Based on this recognition, we endeavor to operate with a focus on transparency and soundness while improving management efficiency.
From the perspective of enhancing the oversight function of the Board of Directors, the Company has adopted a system of a company with a board of corporate auditors based on the judgment that combining the supervisory function of Outside Directors who make up a majority of the Board of Directors with the audit function of the Corporate Auditors, including Outside Corporate Auditors, effectively provides a monitoring function for overall management. In addition, to respond promptly to changes in the business environment surrounding the Group, the Company has adopted an executive officer system for the purpose of accelerating both management and corporate governance by enabling business to be executed in a flexible manner.
The Board of Directors meets each month and at other times as required to decide on important matters and supervise the execution of business by the Directors and the Executive Officers according to laws, regulations, the Articles of Incorporation, the Board of Directors Regulations and other company regulations. The Board of Directors consists of nine Directors, including three Independent Outside Directors to strengthen its supervisory function. Three Corporate Auditors, including one Independent Officer, also attend meetings of the Board of Directors.
The Board of Corporate Auditors consists of three Corporate Auditors (including two Outside Corporate Auditors, of which one is an Independent Officer) and meets each month and at other times as required to audit the execution of duties by the Directors. The Corporate Auditors ascertain an understanding of the Company's situation by attending meetings of the Board of Directors and through attendance of the Full-Time Corporate Auditor at Executive Committee meetings and other important meetings, inspection of important documents, on-site audits of the business sites around the nation, etc. They also check the process of making important decisions and the status of business execution, audit the status of compliance with laws, regulations, the Articles of Incorporation and company regulations and the effectiveness of internal controls (status of response to possible risks) and appropriately provide the executive team with recommendations on areas for improvement. Moreover, Corporate Auditors receive quarterly review reports from the accounting auditor, regularly cooperate with the accounting auditor and confirm the appropriateness of audits by the accounting auditor. The Board of Corporate Auditors holds quarterly liaison meetings with the accounting auditor and Internal Audit Department based on the three-party audit system for sharing information about risks and exchanging opinions, thereby working to improve audit quality.
Executive officers execute business operations based on authority delegated to them by the Directors within the scope resolved at meetings of the Board of Directors.
The Executive Committee consists of President & CEO and persons designated by President & CEO. It meets once a week, in principle, with Full-time Corporate Auditor attending. The Executive Committee is positioned as an advisory organ for the President & CEO to decide on important matters based on authority delegated to Executive Officers within the scope resolved at meetings of the Board of Directors. It also functions effectively as a forum for information sharing and discussions among the Executive Officers.
The Company has appointed PricewaterhouseCoopers Aarata LLC as its accounting auditor and has entered into an audit agreement with the accounting firm to receive appropriate audits in accordance with auditing standards generally accepted in Japan. The Corporate Auditors ensure close cooperation with the accounting auditor through meetings held regularly and when needed to receive reports, as well as by exchanging opinions when appropriate.
The Company implemented evaluation of the effectiveness of the Board of Directors targeting the Directors and Corporate Auditors as of February 28, 2023. Please see below for a summary of evaluation results.
The Company conducted an evaluation of the effectiveness of the Board of Corporate Auditors, targeting three Corporate Auditors (one Full-Time Corporate Auditor and two Outside Corporate Auditors) as of February 28, 2023. Please see below for a summary of evaluation results.
The Company has established standards for determining the independence of outside officers. Please see below for standards for determining the independence of outside officers.
