Corporate Governance Report
Corporate Governance
Report
Basic Policies
Our basic policy to corporate governance is to strive to increase shareholder profits by establishing an appropriate
basic frameworks for corporate management (management oversight, risk management, compliance, accountability, and
management efficiency) in relation to various stakeholders, including shareholders, customers, employees, business
partners, and local communities.
Corporate Governance Structure
As of October 1, 2024
Board of Directors
As of the date of submission, the Company has eight directors, three of whom are outside directors.
Audit & Supervisory Board
Two of the three corporate Audit & Supervisory Board Member are outside corporate Audit & Supervisory Board Member,
and they conduct audits based on the annual audit plan of the corporate auditors.
Optional Organizations
Advisory Board
At its meeting held on August 5, 2021, the Board of Directors resolved to establish an Advisory Board as a optional
organization of the Board of Directors.The Advisory Board, with the aim of improving the self-purification,
autonomy, and transparency of governance at the Company, will make recommendations to the Board of Directors, as
appropriate, after consulting on the nomination of directors and executive officers, individual director
compensation, and important transactions or actions that may cause conflicts of interest with the controlling
shareholder (parent company).The Advisory Board consists of three members selected by the Board of Directors
(Independent Outside Director (Chairman), Outside Audit & Supervisory Board Member, and the President).
Executive Officer System
Our Company has introduced an executive officer system to separate the execution and supervision of business
operations, accelerate management decision-making, and clarify responsibility for business execution.
Board of Directors
Activities in the fiscal year ending June 30, 2024
Effectiveness Assessment
Our company conducts an annual evaluation of the effectiveness of the Board of Directors beginning in the fiscal year
ending June 30, 2019.
For the fiscal year ending June 30, 2024, our Board of Directors prepared a questionnaire on the effectiveness of the
Board of Directors based on the advice of a third-party organization, and the third-party organization collected and
analyzed the questionnaires from the Board members and exchanged opinions with each other at the Board of Directors.
As a result, we evaluated that the effectiveness of the Board of Directors is ensured, as we were able to confirm
that the Board of Directors plays an effective role in improving corporate value over the medium to long term
through active and open discussions at the Board meetings, backed by a well-balanced composition of the Board of
Directors.
On /the other hand, to further improve effectiveness, the results call for further discussion from a medium- to
long-term perspective, the development of a system to promote constructive dialogue with shareholders and investors
to enhance IR activities, and the further enhancement of director training.
In preparing and collecting the survey forms and conducting some of the analysis, we will utilize an outside
organization to increase the transparency of the evaluation and ensure its effectiveness.In preparing and
collecting the survey forms and conducting some of the analysis, we will utilize an outside organization to increase
the transparency of the evaluation and ensure its effectiveness.
Reasons for Appointment
Director
As of October 1, 2024
Audit & Supervisory Board Member
As of October 1, 2024
Skill Matrix
Training
While we recognize that our company's board of directors and Audit & Supervisory Board Member are equipped with
sufficient knowledge, we will provide training and learning opportunities as needed, and will cover the costs of
such training and learning upon request.
Remuneration for board of director
Basic Policy on Determination of Remuneration
Our basic policy for the compensation of directors is to incorporate a compensation system that is linked to
shareholder interests in order to fully function as an incentive to sustainably increase corporate value, and in
determining the compensation of individual directors, our basic policy is to set an appropriate level based on the
responsibilities of each position through a combination of fixed compensation and performance-linked compensation.
In light of their responsibilities, outside board of directors who are responsible for the supervisory function
shall be paid only the basic remuneration.
Procedures for Determining Remuneration
In determining the remuneration of Board of Directors, the Board of Directors shall delegate the responsibility to
the President and CEO subject to resolution at a meeting of the Board of Directors to be held after the annual
general meeting of shareholders for each fiscal year, in order to make decisions in line with the evaluation of each
Board of Director, while taking into consideration the performance of the entire Group and other relevant factors.
The reason for delegation is that we has determined that the President and CEO is best suited to evaluate the
divisions for which each board of director is responsible while taking into consideration the overall performance of
our company.When making a decision on the delegated content, we shall consult with the Advisory Board on the
appropriateness of the content, etc. in advance and shall respect the report of the Advisory Board.The Advisory
Board consists of three members selected by the board of directors, two of whom are outside directors, and is
chaired by an independent outside director.
Remuneration for corporate Audit & Supervisory Board Member will be determined by discussion among the Audit &
Supervisory Board Member within the total amount of remuneration determined by resolution of the general meeting of
shareholders.
Total amount of remuneration for board of directors and Audit & Supervisory Board Member
（FY2023）
Independence Criteria for Outside Board of director and Outside Audit & Supervisory Board Member
In order to ensure the objectivity and transparency necessary for the proper governance of our company, we will
establish independence criteria for candidates for o Outside Board of director and Outside Audit & Supervisory Board
Member, and if none of the following items applies, the candidate will be deemed to have sufficient independence for
our company.
Independent Director Notification Form(Available in Japanese Only)
1．A person who falls under any of the items defined below (hereinafter referred to as “Conflicts”) at the present
time or in the past three years
2．A spouse, a relative within the second degree of kinship, or a relative living in the same household as the
applicant who currently falls under any of Conflicts.
3．Notwithstanding the provisions of any of the foregoing paragraphs, any other person who is deemed to have a
special reason that could cause a conflict of interest with our company.
Conflicts
- ① Executive directors, executive officers, and other similar persons and employees of our company and our
consolidated subsidiaries (hereinafter referred to as “our group”) (hereinafter referred to as “executive
officers”)
- ② Our group's major business partners or their executive officers (Note)
- ③ Lawyers, certified public accountants, tax accountants, consultants, or other professionals who receive more
than ¥10 million per year in cash or other assets from our company group, other than remuneration for directors
and corporate auditors.
- ④ If (iii) is an organization such as a corporation, partnership, etc., the criteria specified in (ii) shall
apply.
- ⑤ Persons or entities that receive donations or grants of more than 10 million yen per year from our group or
belong to organizations such as corporations
- ⑥ In the event that an executive director or full-time Audit & Supervisory Board Member of our company group
concurrently serves as an outside board of director or outside Audit & Supervisory Board Member of another
company, the executive director or full-time s Audit & Supervisory Board Member of that other company
- ⑦ A person who directly or indirectly holds 10% or more of the total voting rights of our company or a person
who executes the business of such a person
- ⑧ A person in which our company directly or indirectly holds 10% or more of the total voting rights, or a person
who executes the business of such a person
- ⑨ A partner of our company's accounting auditor or a person engaged in the audit of our company
Note: Our group's major business partners are defined as follows.
＊ Suppliers of our group's goods or services whose annual transaction value exceeds 2% of our company's consolidated
net sales on average for the past three fiscal years.
＊ Our company's suppliers of goods or services whose annual transaction value exceeds 2% of the other party's
consolidated net sales on average over the past three fiscal years.
＊ Our group's borrowers whose outstanding loans exceed 2% of our company's consolidated total assets as of the end
of our fiscal year