Corporate Governance

(as of July 7, 2017)

Business Management Organization and Other Corporate Governance Systems Regarding Decision Making, Execution of Business, and Oversight in Management

1.Organizational Composition and Operation

Structure of Organization Company with Board of Auditors

Directors

Maximum Number of Directors Stipulated in Articles of Incorporation 12
Term of Office Stipulated in Articles of Incorporation 1 year
Chairperson of the Board President
Number of Directors 6
Election of Outside Directors Elected
Number of Outside Directors 2
Number of Independent Directors 2

Outside Directors’ Relationship with the Company (1)

Name Attribute Relationship with the Company*
a b c d e f g h i j k
Yukihiro Yamamura From Other Company
Yuji Nishiura From Other Company
  • * Categories for “Relationship with the Company”:
  • “○” When the director currently falls or has recently fallen under the category
  • “△” When the director fell under the category in the past
  • “●” When a close relative of the director currently falls or has recently fallen under the category
  • “▲” When a close relative of the director fell under the category in the past
  • a. Executive of the Company or its subsidiaries
  • b. Non-executive director or executive of a parent company of the Company
  • c. Executive of a fellow subsidiary company of the Company
  • d. A party whose major client or supplier is the Company or an executive thereof
  • e. Major client or supplier of the Company or an executive thereof
  • f. Consultant, accountant, or legal professional who receives a large amount of monetary consideration or other property from the Company other than compensation as a director/auditor
  • g. Major shareholder of the Company (or an executive of said major shareholder if the shareholder is a legal entity)
  • h. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f) (the director himself/herself only)
  • i. Executive of a company, between which and the Company outside directors/auditors are mutually appointed (the director himself/herself only)
  • j. Executive of a company or organization that receives a donation from the Company (the director himself/herself only)
  • k. Others

Outside Directors’ Relationship with the Company (2)

Name Designation as Independent Director Supplementary Explanation of the Relationship Reasons for Appointment
Yukihiro Yamamura ――― Appointed an outside director in recognition of his wealth of experience and breadth of insight as an executive; designated an independent director since he is an outside director with no risk of developing a conflict of interest with general shareholders.
Yuji Nishiura ――― Appointed an outside director in recognition of his wealth of experience and breadth of insight as an executive; designated an independent director since he is an outside director with no risk of developing a conflict of interest with general shareholders.
Voluntary Establishment of Committee(s) Corresponding to Nomination Committee or Remuneration Committee Established

Committee’s Name, Composition, and Attributes of Chairperson

Committee Corresponding to Nomination Committee Committee Corresponding to Remuneration Committee
Committee’s Name Remuneration and Nomination Committee Remuneration and Nomination Committee
All Committee Members 3 3
Full-time Members 0 0
Directors 1 1
Outside Directors 2 2
Outside Experts 0 0
Other 0 0
Chairperson Director Director

Supplementary Explanation

The Company has at its discretion established a Remuneration and Nomination Committee with a membership that includes outside directors and the President and Representative Director as an advisory body to the Board of Directors. By making recommendations to the Board of Directors and the Board of Auditors on matters concerning the Guidelines on the Executive Remuneration System and the Guidelines on the Nomination Criteria for Directors and Auditors, the Remuneration and Nomination Committee works to ensure the objectivity and transparency of the executive remuneration system and the nomination criteria for directors and auditors.

Auditors

Establishment of Board of Auditors Established
Maximum Number of Auditors Stipulated in Articles of Incorporation 4
Number of Auditors 3

Cooperation Among Auditors, Accounting Auditors, and Internal Audit Department

Coordination between Auditors and Accounting Auditors The auditors and accounting auditors meet at the timing of quarterly and full-year results (i.e., a total of 4 times per annum) to report and exchange views. In addition, they arrange forums for exchanging views as appropriate, and incorporate the results of such discussions into the performance of their auditing duties.

Coordination between Auditors and Internal Audit Department The auditors and internal Audit Department exchange views on an ongoing basis and incorporate the results of such discussions into the performance of their auditing duties.

Appointment of Outside Auditors Appointed
Number of Outside Auditors 3
Number of Independent Auditors 3

Outside Auditors’ Relationship with the Company (1)

Name Attribute Relationship with the Company*
a b c d e f g h i j k l m
Ryoichi Kobayashi From Other Company
Ryuji Matsuda Lawyer
Tadao Toyoshima CPA
  • * Categories for “Relationship with the Company”:
  • “○” When the director currently falls or has recently fallen under the category
  • “△” When the director fell under the category in the past
  • “●” When a close relative of the director currently falls or has recently fallen under the category
  • “▲” When a close relative of the director fell under the category in the past
  • a. Executive of the Company or its subsidiary
  • b. Non-executive director or accounting advisor of the Company or its subsidiaries
  • c. Non-executive director or executive of a parent company of the Company
  • d. Auditor of a parent company of the Company
  • e. Executive of a fellow subsidiary company of the Company
  • f. A party whose major client or supplier is the Company or an executive thereof
  • g. Major client or supplier of the Company or an executive thereof
  • h. Consultant, accountant, or legal professional who receives a large amount of monetary consideration or other property from the Company other than compensation as an auditor
  • i. Major shareholder of the Company (or an executive of said major shareholder if the shareholder is a legal entity)
  • j. Executive of a client or supplier company of the Company (which does not correspond to any of f, g, or h) (the auditor himself/herself only)
  • k. Executive of a company, between which and the Company outside directors/auditors are mutually appointed (the auditor himself/herself only)
  • l. Executive of a company or organization that receives a donation from the Company (the auditor himself/herself only)
  • m. Others

Outside Auditor’s Relationship with the Company (2)

Name Designation as Independent Auditor Supplementary Explanation of the Relationship Reasons for Appointment
Ryoichi Kobayashi ――― Appointed an outside auditor in recognition of his wealth of experience and breadth of insight as a manager; designated an independent auditor since he is an outside auditor with no risk of developing a conflict of interest with general shareholders.
Ryuji Matsuda ――― Appointed an outside auditor since he is a qualified lawyer and also possess significant knowledge of both finance and accounting; designated an independent auditor since he is an outside auditor with no risk of developing a conflict of interest with general shareholders.
Tadao Toyoshima ――― Appointed an outside auditor since he is a certified public accountant and also possess significant knowledge of both finance and accounting; designated an independent auditor since he is an outside auditor with no risk of developing a conflict of interest with general shareholders.

Independent Directors/Auditors

Number of Independent Directors/Auditors 5

Matters Relating to Independent Directors/Auditors

The Company designates as independent directors/auditors all outside directors/auditors that fulfill the independent director/auditor criteria.

Incentives

Incentive Policies for Directors Stock Options

Supplementary Explanation

Stock options are granted based on the Company’s performance, with the number of stock options granted determined based upon the individual’s contribution to the Company’s performance. As of June 30, 2017, the Company had granted 1,819 stock options (181,900 shares) to its 6 directors.

Recipients of Stock Options Directors, Outside Directors, Employees, Subsidiaries’ Directors and Subsidiaries’ Employees

Supplementary Explanation

Stock option recipients are determined on the bases of their contribution to the Company’s performance. The Company does not grant stock options to its or its subsidiaries auditors.
As of June 30, 2017, the Company had granted 3,820 stock options (382,000 shares) to a cumulative total of 71 persons.

Remuneration for Directors

Disclosure of Individual Directors’ Remuneration Partial Disclosure

Supplementary Explanation

The total remuneration for the Company’s 6-member Board of Directors (of which, 2 are outside directors) in the fiscal year ended March 31, 2017 was ¥352 million (of which ¥29 million was paid to the outside directors). Yosuke Matsuda, President and Representative Director, received a remuneration of ¥ 192 million.

Policy on Determining Remuneration Amounts and Calculation Methods Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods

The Company’s basic policy and determination process regarding director remuneration is as described below.
Moreover, the Company has at its discretion established a Remuneration and Nomination Committee as an advisory body to the Board of Directors with a membership that includes outside directors and the President and Representative Director. By engaging in deliberations regarding the Guidelines on the Executive Remuneration System and making recommendations to the Board of Directors and the Board of Auditors, the Remuneration and Nomination Committee works to ensure the objectivity and transparency of the executive remuneration system.

・Basic Policy on Director Remuneration

  • 1.The remuneration system shall be more tightly linked to corporate performance and shall establish a linkage between shareholder value and remuneration, thereby incentivizing the creation of corporate value over the longer term.
  • 2.Remuneration shall comprise base remuneration, which is monetary, and equity remuneration, meaning stock options.
  • 3.Individual remuneration amounts shall be set within the confines of the remuneration allocation approved at the General Shareholders’ Meeting and shall be determined based upon a comprehensive consideration of annual earnings and each director’s performance in his/her role and contribution to corporate earnings, remuneration in past years, the need to retain talented human resources, remuneration trends at other comparable companies, and economic conditions.

・Director Remuneration Determination Process

    1.Determination of Procedures
  • 1)Based on the Basic Policy on the Executive Remuneration System, the Remuneration and Nomination Committee engages in deliberations regarding the procedures by which director remuneration shall be determined and advises the Board of Directors on the outcome of their discussions.
  • 2)Based on the advice of the Remuneration and Nomination Committee, the Board of Directors deliberates and finalizes the procedures for determining director remuneration.
    2.Determining Individual Remuneration Amounts
  • 1)The Board of Directors votes to entrust the determination of each director’s remuneration to the President and Representative Director.
  • 2)The President and Representative Director determines the remuneration of each director on an annual basis, making reference to the advice of the Remuneration and Nomination Committee.
  • 3)After determining the remuneration of each director, the President and Representative Director informs the Remuneration and Nomination Committee of his/her decisions.

Supporting System for Outside Directors and/or Auditors

The President and Representative Director makes reports as appropriate to the outside directors on key corporate matters and exchanges views with them. The President and Representative Director also arranges opportunities as appropriate for the outside directors to exchange information and views with the executive management.
The full-time auditor makes reports as appropriate to the outside auditors on key corporate matters and exchanges views with them.
Business line managers also at appropriate times make reports to and exchanges views with the outside directors.

Page Top

PDF