Corporate Governance

As a company, we are committed to maintaining appropriate relationships with our shareholders and other stakeholders and to fulfilling our social responsibilities as we exercise our business activities. We believe firmly that this is an important challenge in our pursuit of improving long-term performance and ensuring sustainable growth.

Enhancing our corporate governance and establishing highly transparent and fair management is a vital and fundamental duty of the company. To this end, Takashima is setting up and implementing a corporate governance system that serves to strengthen management oversight and monitoring functions—centered on our Board of Directors and Audit & Supervisory Committee—and also to address issues such as internal controls and risk management.

The Company has adopted a company-with-Audit and Supervisory committee system in order to utilize the functions of outside directors to strengthen the supervisory function of the Board of Directors and the corporate governance system, and to enhance the soundness and efficiency of management through prompt decision-making and business execution by delegating authority. Our corporate governance system consists of a Board of Directors, an Audit & Supervisory Committee. There are nine directors (including five Audit & Supervisory Committee members), five of whom are outside directors who are also Audit & Supervisory Committee members.

The Board of Directors meets every month and has the authority to make decisions on matters stipulated by law and regulations and on important matters related to management.

The Audit and Supervisory Committee meets every month in principle, audits the execution of duties by Directors, and discusses the results of internal audits and other important matters. The committee is comprised of five Audit and Supervisory Committee Members (including five outside Directors) and one member is a full-time Audit and Supervisory Committee Member. The Audit and Supervisory Committee Members all possess in-depth knowledge regarding management, legal, accounting, or other specialized fields, attend the Board of Directors meetings and other important meetings, and fulfill their monitoring and supervising functions from an independent and objective standpoint.

The Nominating Committee strengthens the independence, objectivity and accountability of the functions of the Board of Directors related to Directors, and aims to contribute to building an appropriate management structure for the Takashima Group.

The Remuneration Committee aims to strengthen the objectivity and accountability regarding the determination of remuneration related to Directors. The committee is comprised of the Chief Executive Officer and all of the non-executive Directors, meets in May every year, and deliberates on the performance evaluation of Directors who execute business, the appropriateness of remuneration for Directors and other officers, and other matters.

The Management Committee meets at least once a month to ensure that the Board of Directors is thoroughly informed of decisions made by the Board of Directors and to consider major issues related to the execution of business operations. It is composed of all executive officers, and as necessary, the relevant persons are invited to attend and speak on matters to be deliberated. In addition, Audit Committee members attend and speak at the meetings as necessary.

The Compliance Committee, as an umbrella organization to promote compliance, is chaired by the President, vice-chaired by the Cheif of Business Management Divison, and consists of members appointed by the President. In principle, the committee meets once a year to deliberate on overall compliance issues and determine basic policies.

The Risk Management Committee is chaired by the Chief of Business Management Division and consists of members appointed the Chief of Business Management Division. The committee meets at least twice a year to identify and investigate risks stipulated in the regulations, and to consider measures to avoid risks before they occur, as well as measures to deal with risks that have materialized.

The Sustainability Committee, as an organization to promote sustainability, consists of the Chief Executive Officer and those who appointed by the President and Chief Executive Officer as its members. In principle, the committee meets at least twice a year to discuss issues related to sustainability set by the Chief Executive Officer and make recommendations to the Chief Executive Officer.

The Company has established the Internal Audit Department. This department investigates the status of the internal control system and the appropriateness of business execution, and provides guidance on improvements. The Audit & Supervisory Committee and the Internal Audit Department exchange opinions as necessary and work together to strengthen the auditing function. The Company employs KPMG AZSA LLC as its accounting auditor, and works closely with the Audit & Supervisory Committee and the Internal Audit Division to ensure the appropriateness of audits.

◎ indicates the chairperson or committee chairperson.

The following is a skills matrix listing the areas in which our Board of Directors should be equipped (experience, knowledge, and abilities) and in which each director can demonstrate particular expertise. Note that outside directors include those with management experience at other companies.

The Company conducted an evaluation of the Board of Directors effectiveness using a third-party organization in FY2016, and implemented self-evaluations of the Board based on the results of that evaluation. In the following fiscal years, the Audit and Supervisory Committee has conducted evaluations of the effectiveness of the Board of Directors, and the Board of Directors has held discussions on the evaluation results. For information regarding the analysis of the Board of Directors effectiveness and the results of the evaluation, please see the Corporate Governance Report (available in Japanese only) posted on the Company’s corporate website.

In addition, similar to the evaluation of the Board of Directors, an evaluation of the effectiveness is conducted every year for the Management Meeting, which was established to discuss important matters related to corporate management and is comprised mainly of Executive Officers (including those who serve concurrently as Directors).By exchanging opinions in the Management Meeting and ensuring common understanding of the issues based on the results of the evaluation of the effectiveness, the results are utilized to make improvements, etc. in the operation of the meeting in the following fiscal years.

The remuneration for Directors and other officers of the Company is comprised of basic remuneration, profit-linked monetary remuneration, and share-based remuneration. Basic remuneration is set for individual Directors and other officers, taking into account their position, business performance, remuneration levels at other companies, remuneration levels of employees, etc., and is paid in a fixed monthly amount calculated by dividing the determined annual basic remuneration by 12.

Profit-linked monetary remuneration is paid to the Company’s eligible Directors (excluding Directors who are Audit and Supervisory Committee Members and outside Directors) if profit attributable to owners of parent is ¥1.0 billion or more after recording profit-linked monetary remuneration as an expense, and the amount to be paid to the President and Representative Director is calculated by multiplying profit attributable to owners of parent by a predetermined payment rate. Next, the amount to be paid to each of the other eligible Directors is calculated by multiplying the individual amount to be paid to the President and Representative Director by a predetermined coefficient for each position. The amount to be paid to each eligible Director is paid within one month from the date of the General Meeting of Shareholders. However, the maximum total amount to be paid is ¥100 million.

The remuneration for the Company’s Directors (excluding Audit and Supervisory Committee Members) is the total of the above basic remuneration and profit-linked monetary remuneration, and is ¥320 million or less per year.

Regarding share-based remuneration, the Company has introduced a restricted share-based remuneration plan in order to provide incentive to the Company’s eligible Directors to continuously enhance the corporate value of the Company and promote further sharing of value with shareholders. The amounts to be paid and the timing of payment are determined by the Board of Directors of the Company on the condition that the eligible Directors have continuously remained in a position specified by the Board of Directors. Restrictions on the transfer of shares are lifted immediately after the eligible Directors resign from the position specified by the Board of Directors of the Company. Separate from the above remuneration for Directors of ¥320 million or less per year, the amount to be paid is ¥60 million or less per year and the total number of common shares of the Company to be issued or disposed of is 96,000 shares or less per year.