Basic Approach
We regard corporate governance as the means to harmonize our responsibilities to society, shareholders, customers, business partners, and employees with our fulfillment of corporate social responsibility (CSR) as a good corporate citizen. By promoting fair, transparent, and sincere business activities guided by our Corporate Philosophy, we aim to contribute to society and enhance corporate value. In addition, we strive to foster a strong ethical foundation within the Takachiho Koheki Group, build a vibrant corporate culture, and lay the groundwork for sustainable business growth.
To achieve this, we prioritize ensuring transparency, fairness, and efficiency in management, continually strengthening our compliance framework, risk management, and internal control systems, and embedding these values deeply into the corporate culture shared by all officers and employees.
Corporate Governance Framework
Diagram of the Corporate Governance Framework
(As of June 27, 2024)
Board of Directors
We have introduced a system of executive officers to separate business execution functions from management supervisory functions. The Executive Officers Meeting, comprising all executive officers, meets regularly once a month to discuss and report on the status of business execution. The Board of Directors, consisting of six directors (including two outside directors) and three Audit & Supervisory Board members (including two outside Audit & Supervisory Board members), convenes regularly once a month to make decisions on matters stipulated by laws, regulations, and the Articles of Incorporation, as well as other critical matters.
Additionally, outside directors, acting independently from the management team, oversee the execution of duties by the directors. Based on their extensive experience and broad knowledge gained through years of corporate management, they provide valuable advice as needed.
Audit & Supervisory Board
Audits by Audit & Supervisory Board members at the Company are conducted by the members of the Audit & Supervisory Board, comprising one full-time Audit & Supervisory Board member and two outside Audit & Supervisory Board members. The audits cover the entire Group, including the Company and its subsidiaries.
Following the audit policies and work assignments established by the Audit & Supervisory Board, the audits review directors’ execution of duties to identify any fraudulent acts or violations of laws, regulations, or the Articles of Incorporation, as well as the implementation and effectiveness of corporate governance and internal controls. Close collaboration is maintained with the financial auditor through mutual reviews and reporting during interim and year-end audits. Regular monthly meetings and discussions are also held with the internal audit division to exchange opinions and maintain strong coordination.
In principle, the Audit & Supervisory Board convenes once a month, before the Board of Directors meeting, and holds additional meetings as needed.
Internal Audits
Internal audits of the Company are conducted by two dedicated internal auditors who directly report to the president. Their audits encompass the entire Group, including the Company itself, its subsidiaries, and both domestic and international Group companies.
Internal audits are carried out to assess whether the Company’s operations are being conducted appropriately and efficiently, aiming to preemptively prevent fraud and errors, whereby the internal auditors contribute to improving operations, maintaining external credibility, safeguarding assets, and enhancing managerial efficiency. Additionally, the representative director and the Audit & Supervisory Board members hold monthly regular meetings to exchange opinions and gather information.
Financial Audits
Financial auditor audits are conducted by Ernst & Young ShinNihon LLC., which reviews the accuracy and appropriateness of the consolidated financial statements and other accounting-related documents prepared by the directors.
Voluntary Committees
Nomination and Compensation Committee
To enhance fairness, transparency, and objectivity when nominating officers and determining compensation, as well as to strengthen corporate governance, the Company established a Nomination and Compensation Committee as an advisory body to the Board of Directors on October 15, 2021. The majority of its members are independent outside directors, and it is composed of inside directors and independent outside directors who are selected by a resolution of the Board of Directors.
Board of Directors
Status of Activities
| Name |
Board of Directors |
Nomination and Compensation Committee |
| Takanobu Ide |
100% (15/15 meetings) |
100% (3/3 meetings) |
| Yoshiaki Hirata |
100% (15/15 meetings)
|
- |
| Masazumi Uematsu |
100% (15/15 meetings) |
- |
| Ichido Tatsumi |
100% (15/15 meetings) |
- |
| Michitoshi Tsuruoka |
100% (15/15 meetings) |
100% (3/3 meetings)
|
| Kazuhiko Kushima |
100% (15/15 meetings) |
100% (3/3 meetings)
|
Effectiveness Evaluation of the Board of Directors
Method of Analysis/Evaluation
A survey was conducted anonymously among all officers, with a third-party lawyer compiling, summarizing, and analyzing the results. The evaluation was then carried out by the Board of Directors.
Outline of the Results of Analysis/Evaluation
Based on the evaluation, the Company’s Board of Directors concluded that its effectiveness is sufficiently ensured. It determined that the processes for officer nomination and compensation are properly structured, management strategy and business portfolio management are effectively guided, and the scheduling and agenda-setting of board meetings are conducted properly, sufficient quality and depth of discussion on important agenda items, and enabling prompt decision-making. On the other hand, the Board acknowledged the need to implement measures to enhance the governance of our overseas subsidiaries.
Future Initiatives
Based on the evaluation results mentioned above, the Company’s Board of Directors is committed to making further improvements to enhance its effectiveness.
Takeover Response Policies
Takeover Response Policies