Corporate Governance

Latest Update : Dec.26, 2023

Corporate Governance System

Diagram of Corporate Governance Structure

Corporate Governance Structure

Board of Directors Meeting	Meetings of the Company's twelve member Board of Directors (of which five are Outside Directors) are held basically once every month and as needed to facilitate a swift and strategic decision-making process. In addition, the Board of Directors oversees management. Significant business matters related to our domestic and overseas Group Companies are reported to and resolved by the Board of Directors.
Nomination and Compensation Committee	This committee was established as an advisory body to the Board of Directors to improve the transparency and objectiveness of the Director candidate nomination and compensation decision processes. The chairperson of this committee is an independent Outside Director and at least half of the members are independent Outside Directors.
Senior Executive Officer Council	This is the Representative Director, Chairman CEO advisory panel. Matters related to business operations are discussed by the Senior Executive Officer Council in basically a monthly meeting or in extraordinary Senior Executive Officer Council meetings when necessary.
Executive Officers Meeting	Business operations of domestic and overseas Group Companies are reported on at quarterly Executive Officers meetings as well as other Executive Officers meetings held on an as-needed basis in order to enhance cooperation between Executive Officers.
Audit & Supervisory Board Meeting	The Ordinary Audit & Supervisory Board meetings are held basically once every month and extraordinary meetings are held accordingly, to discuss and adequately analyze specific issues. Also, meetings with the Representative Director, Chairman CEO and Outside Directors are held every quarter to exchange opinions.
Internal Auditing Office	The Internal Auditing Office regularly audits the Group Companies. Internal audits are designed to correct nonconforming or inappropriate operational procedures and improve the quality and efficiency of operations in accordance with internal audit regulations.
Other Committees	Committees are established for specific matters necessary for adequate business operations, such as Compliance, Risk Management, Information Security, etc.

Members of each institution (◎ is chairperson)

Positions	Name	Board of Directors Meeting	Nomination and Compensation Committee	Senior Executive Officer Council	Audit & Supervisory Board
Representative Director, Chairman CEO	Yoshihisa Kainuma	◎	○	◎
Representative Director, Vice Chairman	Shigeru Moribe	○		○
Director, President COO & CFO	Katsuhiko Yoshida	○		○
Director, Vice President Executive Officer	Ryozo Iwaya	○		○
Director, Senior Managing Executive Officer	Shigeru None	○		○
Director, Senior Managing Executive Officer	Satoshi Mizuma	○		○
Director, Managing Executive Officer	Katsutoshi Suzuki	○		○
Outside Director	Yuko Miyazaki	○	◎
Outside Director	Atsuko Matsumura	○	○
Outside Director	Yuko Haga	○	○
Outside Director	Hirofumi Katase	○
Outside Director	Takashi Matsuoka	○
Standing Audit & Supervisory Board Member	Masahiro Tsukagoshi				◎
Standing Outside Audit & Supervisory Board Member	Hiroshi Yamamoto				○
Outside Audit & Supervisory Board Member	Shinichiro Shibasaki		○		○
Outside Audit & Supervisory Board Member	Makoto Hoshino				○
(Executive Officers' and other equivalent officers)	Other 21 people^*1			○^*1

*1 The Senior Executive Officers Meeting is comprised of seven Representative Directors and Executive Directors, as well as Managing Executive Officers and Executive Officers appointed by Representative Director, Chairman CEO.

* 12 males and 3 female (ratio of females among executives: 25.0%)

Reasons for Adoption of Current Corporate Governance System

In addition to establishing a Board of Directors and an Audit & Supervisory Board as bodies under the Companies Act, the Company has established a Nomination and Compensation Committee and Senior Executive Officer Council as discretionary bodies to supplement those functions.
The Company has adopted this system because it achieves effective governance. It does this by the Board of Directors, including Outside Directors, overseeing business execution and making rapid and highly strategic management decisions while the Audit & Supervisory Board Members, including Outside Audit & Supervisory Board Members, audit the execution of the responsibilities of Directors from an objective and independent standpoint.

Disclosure of Summary of the Results on Analysis and Evaluation its Effectiveness as a whole

We periodically verify the members, agenda and operational status of the Board of Directors in terms of whether the entire Board of Directors is functioning appropriately. This is to ensure that the Board of Directors effectively fulfills its roles.

With this, we evaluated the effectiveness of the Board of Directors to extract issues and identify problems and strengths. Every Director and Audit & Supervisory Board Member undertakes a self-assessment with a written questionnaire in March every year. The purpose of this is to look back at progress on improvements from the previous fiscal year and to discover important issues for the next fiscal year.

For the effectiveness evaluation in 2022, the contents of the questionnaire were reviewed and evaluated with the involvement of a third party and the analysis results of the questionnaires were reported to the Board of Directors in June 2023.

As a result of free discussion among Directors and Audit & Supervisory Board Members, it was acknowledged that the effectiveness of the Board of Directors has been secured in general from the questionnaire scores and content of the comments.

As an improvement from the previous time, it was decided to have periodic discussions to further deepen debate in the Board of Directors about recognize risk management, compliance, DX, and sustainability.

To help Outside Directors deepen their understanding of the Company's diverse businesses, we will enhance the information provided to them as follows: increase opportunities for dialogue with the Representative Director, Chairman CEO and the officers and managers in charge of business execution divisions; have them participate as observers in important internal meetings and provide them with the agenda details for such meetings; and arrange tours to major domestic and overseas plants for them.

Supporting System for Outside Directors and/or Outside Audit & Supervisory Board Members

Support for Outside Directors is basically handled by the Secretariat of the Board of Directors, but the relevant departments appropriately handle as necessary. With regard to Outside Audit & Supervisory Board Members, the Company strives to maintain close contact with full-time Audit & Supervisory Board Members and share information. In addition, the Company distributes materials and gives advance explanations on the necessary agenda items for the Board of Directors meetings in advance to Outside Directors and Outside Audit & Supervisory Board Members in order to ensure that they understand the details of the agenda and reported items as soon as possible.

Also, the Company establishes opportunities for visits to major business sites including overseas and explanations by members of these business sites for Outside Directors and Outside Audit & Supervisory Board Members in order for them to gather information about the Company's organization, business operations and business sites, etc.

Certified Public Accountants

KPMG AZSA LLC carries out the Company's accounting audits pursuant to the audit service agreement it has concluded with the Company for the implementation of audits under the Companies Act and audits under the Financial Instruments and Exchange Act.

The Audit & Supervisory Board reviews the details of the audit service agreement and compensation packages for the financial auditors to ensure the integrity of the auditing process by verifying the independence of the audit company.

Cooperation among Audit & Supervisory Board Members, Independent Auditors and Internal Audit Departments

The Audit & Supervisory Board periodically holds meetings with the Internal Auditing Office, listens to and given opinions on annual audit plans and their objectives, etc., and receives reports about all internal audit results. In implementing audits, the Audit & Supervisory Board holds prior discussions on important auditing points and other matters, and joins and observes internal audits where necessary. In addition, the Audit & Supervisory Board receives explanations of the audit structure, audit plan, and audit implementation status from KPMG AZSA LLC, the Company's independent auditor, as well as carries out information sharing and information exchanges, etc. It also joins accounting audits conducted of domestic business sites and Group Companies, through which it regularly checks the suitability of the auditing method.