Initiatives for All Stakeholders Governance

Management Audit Functions

As the Company’s highest decision-making management entity, the Board of Directors meets one or more times every month and decides on important matters focused on the exclusive authority matters prescribed in Article 416 of the Companies Act. The Board of Directors comprises six directors, four five of whom are outside directors. The Company has established the following committees:

1. Nominating Committee

   The body that decides the content of proposals concerning the appointment and dismissal of directors to be submitted to the Shareholders’ Meeting. It comprises three directors, two all of whom are outside directors.

2. Compensation Committee

   The Compensation Committee is the body that decides the details of the compensation awarded to individual directors and executive officers. It comprises three directors, all of whom are outside directors.

3. Audit Committee

   Meeting in principle once a month, this is the body that decides on audits with regard to any illegality or impropriety on the part of directors or executive officers in the execution of their business duties. It determines the content of proposals concerning the appointment and dismissal of the accounting auditor to be submitted to the Shareholders’ Meeting. It comprises three directors, all of whom are outside directors.

Successor planning for the CEO
and other officersmanagement members

The Board of Directors continuously monitors the cultivating of personnel to take up the reins of management in the next generation, from short-, medium-, and long-term perspectives, in light of the Company’s management principles and strategies. Meanwhile, the Nominating Committee selects candidates for such positions at the appropriate time. We will continue to consider a range of issues as basic initiatives to be discussed by the Nominating Committee and in other forums, while also taking into account the opinions of the current Group CEO, including the issues of: (1) necessary human resources requirements, (2) the timing of succession, (3) forming a candidate pool and appropriately cultivating candidates over time (including key career appointments of candidates), (4) grasping the character of candidates on the part of each member of the Nominating Committee, and (5) selection of candidates. We will furthermore focus on devising and implementing specific training programs to ensure that adequate time and resources are given to systematically training successor candidates.

Director compensation and skill matrix

Director compensation

Director compensation considers factors that include a director’s career, expert knowledge, level of ability, compensation history, responsibilities and the results of a survey on the compensation rates of other companies. Individual remuneration amounts are decided at Compensation Committee meetings. Compensation for directors who have no concurrent executive officer status is comprised of basic compensation (fixed) of an amount that reflects their duties.

Executive Officer compensation

Executive officer compensation is decided on an individual basis by the Compensation Committee. It considers the required role, the authorities given, and the extent of the responsibilities to be fulfilled in his or her delegated duties. In addition, it incorporates the results of a survey on the compensation levels of other companies. The compensation amount for executive officers resident in Japan consists of “basic compensation (fixed)”, “performance-linked compensation”, and “shares with restriction on transfer”.
Performance-linked compensation is decided based on our policy and is awarded as an incentive to improve Group business performance. Group revenue and operating profit are used as the benchmarks for earnings performance, with the total amount paid decided by the following method:
Shares with restriction on transfer are awarded to eligible executive officers to expose them to the same advantages and disadvantages of share price fluctuation as shareholders, and to further increase their motivation to contribute to increasing the share price and improving corporate value.

*Total amount payable = the total amount based on target criteria for each executive officer x {(a coefficient linked to the rate of achievement of the Group revenue target for the fiscal year x 40%) + (a coefficient linked to the rate of achievement of the Group operating profit target for the fiscal year x 60%)}

Disposal of treasury stock as shares with restriction on transfer for compensation

The objective of the Compensation Committee is to encourage executive officers to share the benefits and risks of stock price fluctuations with shareholders and to give them greater motivation to contribute to raising the stock price and enhancing corporate value. To this end, we have introduced a stock compensation system that grants shares with restriction on transfer to executive officers. In 2022, we disposed of treasury stock to provide such shares with restriction on transfer to four executive officers, totaling 25,400 shares valued at ¥27,254,200.

Total compensation for FY6/2023

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Directors’ skill matrix

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