Initiatives to Comply with the Code
The following section details disclosure pursuant to the principles of the Corporate Governance Codes. In addition, we comply with all Codes.
Principle 1-4: Cross-shareholdings
- ●Policy on Cross-Shareholdings
The Company holds listed shares for the purposes of building, maintaining, and development of transactional relationships that will contribute to enhancement of the Company’s corporate value. Reports on the transactional relationships, dividend payout, comparison of book and market value and other matters relating to share holdings are made to the Board of Directors, and confirmation regarding the continuation of holdings is periodically made.
- ●Exercise of Voting Rights regarding Cross-Shareholdings
Keeping in mind the purposes of holdings, the Company carefully examines the management policies of investment targets and the particulars of proposed resolutions and exercises its voting rights based on whether the proposed resolutions will contribute to the enhancement of corporate value over the medium to long term.
Principle 1-7: Related-Party Transactions
In cases where Company officers conduct transactions with related parties, the transactions are approved by resolution of the Board of Directors in accordance with the Rules on Corporate Officers and other rules. In addition, all officers are obligated to submit a written Confirmation of Transactions with Related Parties with regard to their transactions with related parties at the end of each year. In cases where the Company conducts transactions with major shareholders and others, the Board of Directors discusses the particulars of the transactions in accordance with the Detailed Table of Authority.
Principle 3-1: Enhancement of Information Disclosures
- 2)With regard to the Company’s fundamental approach and policies on corporate governance, refer to this report, Section I: Basic approach to corporate governance, capital structure, corporate attributes, and other basic information, Part 1: Basic approach.
- 3)With regard to policies and procedures for the determination of the remuneration of management executives and directors by the Board of Directors, refer to this report, Director Remuneration under Section II: Management decision-making, management organizations for execution and supervision, and other elements of the corporate governance system.
- 4)Policies and procedures for when the Board of Directors appoints management executives and nominates candidate directors and Supervisory Board members
● When appointing management executives and nominating candidate directors, the president makes a decision in accordance with the following standards with advice from the Board of Directors.
(1) Having extensive managerial knowledge and experience;
(2) Having outstanding managerial sensibilities;
(3) Having outstanding guidance skills, leadership skills, and planning skills; and
(4) Having the character and knowledge suitable for a management executive or director and being in sound physical and mental health.
●When nominating candidate Supervisory Board members, the president and Supervisory Board confer and the president makes a decision with the agreement of the Supervisory Board and in accordance with the following standards with advice from the Board of Directors. The Supervisory Board can also propose candidate Supervisory Board members to the president.
(1) Having extensive business knowledge and experience;
(2) Having an advanced level of specialized knowledge or broad knowledge;
(3) Being able to maintain independence from management executives;
(4) Being able to attend Board of Directors meeting and other important meetings; and
(5) Having the character and knowledge suitable for an Supervisory Board member and being in sound physical and mental health necessary to complete the term of office.
- （５）Explanation of each appointment and nomination
The candidates for director and Supervisory Board member and their personal histories and so on are set forth in the General Shareholders Meeting reference materials posted on the Company’s website.
Principle 4-1: Roles and Responsibilities of the Board (1)
[Supplementary Principle 4-1-1]
The Company established Board of Directors Rules, clarifying matters for resolution by the Board. The Company also established Rules on Work Authority, clarifying the authority entrusted to and scope of duties of the management team.
Principle 4-8: Effective Use of Independent Outside Directors
Two outside directors were elected at the 47th ordinary general shareholders meeting held on June 26, 2015. As a result, two of the 10 directors are outside directors, and notice was filed with the Tokyo Stock Exchange regarding both as independent directors. For details, refer to this report, Director Information, in Section II.
Principle 4-9: Independence Standards and Qualifications for Independent Outside Directors
In accordance with the Tokyo Stock Exchange standards on independence, the Company requires that there be no special interests with the Company with regard to the election of outside directors. In addition, to reinforce the functions of the Board of Directors, outside directors are required to have extensive experience and broad powers of judgment as corporate managers and the like.
Principle 4-11 Preconditions for Ensuring the Effectiveness of the Board of Directors and Supervisory Board
[Supplementary Principle 4-11-1]
The Company emphasizes ensuring diversity on the Board of Directors as a whole with different specialized knowledge, experience, and so on with regard to nominating candidate directors so that the Board can demonstrate maximum effectiveness and efficiency.
[Supplementary Principle 4-11-2]
The Company discloses the materials regarding the concurrent positions of directors and Supervisory Board members in its notice of convocation of the regular ordinary General Shareholders Meeting and securities reports.
Further, directors and Supervisory Board members spend the time and perform the work necessary to appropriately fulfill their roles and responsibilities.
[Supplementary Principle 4-11-3]
To analyze and evaluate the effectiveness of the Board of Directors as a whole, the Company administers questionnaires to all directors and Supervisory Board members with the participation of outside directors and outside Supervisory Board members and analyzes and evaluates the results.
Based on the results, the Company has determined that the directors and Supervisory Board members utilize their respective knowledge and are able to engage in high-quality deliberations at Board of Directors meetings. Also, the Company believes that the frequency of meetings, the method of deliberation, and other matters relating to the operation of Board of Directors meetings are appropriate and that the Board of Directors as a whole is effective.
Principle 4-14: Director and Supervisory Board Member Training
[Supplementary Principle 4-14-2]
The Company provides necessary opportunities and supports the cost of acquiring knowledge relating to the management, compliance, and so on necessary for directors and Supervisory Board members to fulfill their roles and perform their responsibilities.
Principle 5-1: Policy on Constructive Dialogue with Shareholders
● Fundamental Approach
The Company undertakes measures to engage in dialogue and other interactions with shareholders and investors in order to achieve continuous growth and raise corporate value in the medium to long term.
- 1)Investor relations structures
Under the leadership of the president, CFO and Investor Relations and Public Relations Office handle dialogues with shareholders and investors.
- 2)Methods of dialogue
The Company holds financial briefings for news organizations, analysts, and institutional investors twice annually (in May and November), conducts individual visits, and responds appropriately to requests for information and other requests. Information on management policies, business details, results, videos of financial briefings for institutional investors, and other information are posted on the Company’s website and the Company strives to enhance information disclosures and respond appropriately to individual inquiries.
- 3)Internal feedback
Feedback regarding the details of dialogues with shareholders and investors is provided by the officers responsible for management divisions and the Secretarial and Public Relations Office to the Board of Directors and other relevant divisions as necessary.
- 4)Insider trading and quiet periods
The Company does not divulge insider information during dialogues with shareholders and investors. The Company has established Rules on Internal Information Management and Restriction of Insider Trading and strives to manage insider information. The periods from the last day of each quarterly financial period until the announcement of financial results for that period are designated quiet periods and dialogue and information disclosures are restricted during those periods.
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