Corporate Governance

In order to continuously obtain the trust of our customers, investors, and other stakeholders, we believe it is necessary not only to comply with laws and regulations, but also to establish and continuously improve corporate governance that can achieve both higher levels of checks and balances and “Open discussion” from both internal and external perspectives. Recognizing that ESG activities are an active part of our CSR activities, we will continue to develop steady, down-to-earth activities such as information security initiatives and training for employees, not to mention the prompt and effective decision-making and business execution, through the constant and accurate operation of our ESG promotion system.

Basic Policy on Corporate Governance

Aspiring to the Company's sustainable growth and improvement of long-term corporate value, we recognize the fundamentals of ideal corporate governance, which includes ensuring transparency and fairness in decision-making, effective use of the managerial resources at hand, and increasing operational dynamism through rapid and bold decision-making, all based on the resolution of our Board of Directors. This policy allows us to manage more effectively, improving operational dynamism through rapid and decisive decision-making. Accordingly, we will keep working to enhance corporate governance in line with the following basic ideas.

We respect the rights of shareholders and treat them impartially according to their holdings. We endeavor to provide equal access to information and other areas for all of our shareholders.
We cooperate as appropriate with our stakeholders, including our shareholders, employees, customers, suppliers, creditors, the local community, and a variety of others.
We always disclose corporate information properly, to ensure transparency.
In addition to our Board of Directors, independent directors sit on our Advisory Committee, which is composed primarily of independent officers, and the Outside Director and Auditor Liaison Committee, comprising entirely independent officers. Through this arrangement, we ensure the effectiveness of business execution and the supervisory function.
With consideration for (1) mentioned above, we offer occasions for active and constructive dialogue with the shareholders.

Corporate Governance Structure

Our group's management structure is as depicted below.

*1 Outside Director and Auditor Liaison Committee: This committee, which is composed entirely of Independent directors and independent Audit & Supervisory Board members, meets to enable external executives to share and exchange specific information from an independent perspective related to Board of Directors operation and the management and supervision of our Group.
*2 Advisory Committee: This committee, comprising independent directors, independent Audit & Supervisory Board members, and our president and representative director, evaluates the operation of the Board of Directors. This exchange of honest opinions between the external executives and the president and representative director ensures transparency and objectivity of the evaluations.
*3 Operating Committee of Top Management: As an organization for considering and formulating basic strategies for the overall Group, this committee meets as appropriate. Meetings are attended by top management and related directors.
*4 Internal Audits Division: This division is composed of staff who are well versed in operations and have high levels of specialized expertise. It objectively verifies and evaluates business legality and rationality and reports audit results to president and representative director.
*5 Operating Control Committee: This committee deliberates our Group's medium-term plans, budgets, and capital investments, and manages business plan profit and loss. Convening business division and production plant representatives and through other ways, it swiftly deliberates on the matters at hand.
*6 Management Liaison Committee: This committee provides a venue for reporting on activities related to departmental management of the overall Group. At the committee, appropriate themes are selected, information shared, and opinions exchanged.

Decision Making and Our System for Executing Business

Important matters concerning the management of our Group are decided by the Board of Directors which meets on a regular basis. The Operating Committee of Top Management and the Operating Control Committee also meet as needed. Working through the overall Group's basic strategies and important managerial matters such as the medium-term plan and delivering progress reports allow for a system to appropriately execute the needed measures. By deciding company regulations relating to job authorities, streamlining responsibilities for corresponding job titles, and shifting power appropriately, directors are able to swiftly make decisions regarding management policies.

Audit System

We have an Audit & Supervisory Board.
Each Audit and Supervisory Board member attends Board of Directors meetings and important company assemblies to voice their concerns as needed, view crucial transcripts and approvals, and examine the directors' execution of duties. Furthermore, we are actively working to cooperate with the Internal Audits Division and the external accounting auditors to enhance supervisory functions, as well as examining whether or not operations within our Group are conducted lawfully and correctly at regular Group Auditors Liaison Committee.

Appointment of Independent Directors and Independent Audit & Supervisory Board Members

As of June 29, 2022, three of the Group's eight directors and two of its four auditors are appointed from outside the Company. We are thus enhancing the monitoring and supervisory functions of our decision-making by incorporating views independent from those of management.

Internal Control System

Our Group believes that it is necessary to build and operate an internal control system to secure effectiveness, efficiency and transparency in management and to ensure total legal compliance and risk management. In an effort to enhance governance functions, we established six Committees underneath Group CSR and Risk Management Headquarters that will serve as a promotion organization for related initiatives. Additionally, we are strengthening structures that promote an internal control system that is appropriate for our circumstances by establishing two Task Forces. These Task Forces will engage in the development of risk management and compliance systems, as these are central issues for internal control.