Corporate Governance System
Board of Directors
The Board of Directors is positioned as a decision-making body for future management strategies and a supervisory body for business operations.
As of June 25, 2025, the Board of Directors consists of six members, Naohiro Takao, Hiroshi Seko, Fumihiko Hirotaki, Akira Kakizaki, Keiji Kasamatsu, and Rieko Inaba.(Two directors, Keiji Kasamatsu, and Rieko Inaba, are outside Board Members.)
The Board of Directors meets on a regular basis or on an ad hoc basis as necessary. The President and Representative Director presides over the proceedings, and they make resolutions on matters stipulated by law, the Articles of Incorporation, and the Board of Directors Regulations, as well as important management decisions. The Board of Directors fulfills its monitoring and supervisory functions by having each director and executive officer report on operations.
The term of office of directors shall be one year in order to speed up the making of management decisions.
Main agenda items for the Board of Directors meeting in FY2024
| General management |
- Report on major agenda items at the Executive Board
- Approval of financial results for the fiscal year ended March 31, 2024
- Business plan for the next fiscal year
- Implementation of long-term borrowing
- Restructuring of domestic organization
- Review of cross-shareholdings
- Construction to expand factories in Japan and overseas
|
| General Meeting of Shareholders related |
- Convocation of General Meetings of Shareholders and determination of agenda items
- Approval of business reports, financial statements, etc.
- Looking back at 13th Ordinary General Meeting of Shareholders
|
| Board Members and Audit & Supervisory Board Members and organization related |
- Selection of Chief Executive Officer
- Remuneration and bonuses for Board Members and Audit & Supervisory Board Members
- Election of Executive Officers and site managers
- Updating of directors and officers liability insurance (D&O insurance)
- Resolving of matters to be disclosed
- Changes in shareholder return policy
|
| Shareholders |
- Implementation of interim dividend
- Report on the results of shareholder questionnaires
|
| Other |
- Conducting and reporting on evaluation of the effectiveness of the Board of Directors
- Reporting on business audit activities
- Amendments to regulations
|
Attendance at the Board meetings (As of March 31, 2025)
- Thirteen board meetings were held between April 2024 and March 2025.
- In addition to the number of Board of Directors meetings held as stated above, there was one instance of a written resolution deemed to have been approved by the Board of Directors pursuant to the provisions of Article 370 of the Companies Act and Article 25 of the Company's Articles of Incorporation.
Audit & Supervisory Board Meetings
The Company has adopted an Audit & Supervisory Board system. As of June 25, 2025, there are four Audit & Supervisory Board Members (including two full-time Audit & Supervisory Board Members: Kesao Tamura and Yoshiaki Kawakubo; and two outside Audit & Supervisory Board Members: Yasunori Niizawa and Yasuo Kitamura).
We believe that having a full-time Audit & Supervisory Board Member with deep expertise in our business, gained from experience as a responsible officer both domestically and internationally, enables the collection of information necessary for auditing. Furthermore, having outside Audit & Supervisory Board Members who are experienced executives or individuals with academic expertise provides opinions based on high levels of specialization and insight, thereby increasing diversity and enabling appropriate deliberation and supervision/auditing of execution.
Audit & Supervisory Board Members, in accordance with the audit policies and division of duties established by the Audit & Supervisory Board, attend Board of Directors meetings and collaborate with the accounting auditor to investigate the status of operations and assets, thereby auditing the performance of duties by directors.
Attendance at the Board meetings and Audit & Supervisory Board meetings (As of March 31, 2025)
Nomination and Remuneration Advisory Committee
The Company has established a voluntary Nomination and Compensation Advisory Committee under the Board of Directors. This committee is chaired by Keiji Kasamatsu, the Lead Independent Outside Director, and consists of three members: Naohiro Takao, President and Representative Director, and Rieko Inaba, Director. The Board of Directors consults with this committee as appropriate on important matters such as the selection of director candidates and the determination of director compensation.
Attendance at each committee meetings (As of March 31, 2025)
Executive Board and other systems
To strengthen a management structure capable of responding promptly to changes in the business environment, all officers responsible for business execution, including the President, have been appointed as non-employee executive officers. This clarifies their roles and responsibilities regarding business execution. Executive officers are required to attend Board of Directors meetings and other meetings as requested, reporting on progress and results as responsible officers. The term of office for executive officers is one fiscal year (one year).
Furthermore, to respond flexibly to changes in the business environment and accelerate management decision-making, we have established a Management Committee chaired by the President and Representative Director, who directs and oversees business operations, with members comprising department heads and above. This committee serves as a pre-decision deliberative body for the Board of Directors when making important decisions. Concurrently, the Board of Directors has been streamlined by reducing the number of its members. The Management Meeting was attended by President and Chief Executive Officer Naohiro Takao, Engineering Operations Director Hiroshi Seko, Corporate Business Planning Division Charge Officer and Overseas Operations Charge Officer Mitsutoshi Nakamoto, Sales Operations Director Fumihiko Hirotaki, Production Operations Director Takuto Fujii, Operations Director Takeshi Bamba, Overseas Operations Director Yoshitaka Suzuki, Quality Assurance Operations Director and DX Charge Officer Tomohiko Tsukiyama, and R&D Operations Director Koki Sugawara.
On the other hand, the company has implemented a system with multiple outside directors to obtain independent advice and evaluations on overall management. It also facilitates information exchange and ensures coordination through meetings between the Representative Director and the Auditors, as well as between the outside directors and the Auditors. This structure places emphasis on the direction of management and the oversight function of directors' execution of duties.
Furthermore, the organizational structure adopts a headquarters system to clarify division of responsibilities and accountability. It also promotes information sharing and collaborative advancement of operations regarding specific matters decided by the Board of Directors, Management Committee, and other bodies.
Internal Audit
To promote management rationalization and ensure proper business execution, our company maintains an Internal Audit Office (4 members). In accordance with internal audit regulations, this office conducts audits covering accounting, operations, organizational systems, and affiliated companies. Audit reports are submitted directly to the President. Additionally, improvement recommendations are provided to the audited departments alongside the audit findings.
Audit & Supervisory Board, the Internal Audit Office, and the external auditor conduct internal audits while maintaining regular meetings to enhance audit effectiveness. They collaborate by exchanging information and opinions, based on mutual recognition of their respective roles.
Accounting Audit
| Name of audit firm |
Deloitte Touche Tohmatsu LLC |
| Period continuously audited |
27 years |
| Certified public accountants who performed the audit |
會澤 正志
大橋 武尚 |
| Composition of assistants involved in the audit |
Assistants involved in the audit of the Company consist of thirteen certified public accountants and 23 other
persons. |
| Policy and reasons for selecting audit firm |
Based on the selection criteria for accounting auditors established by the Audit & Supervisory Board, we have reviewed Deloitte Touche Tohmatsu LLC's expertise, quality control system, appropriateness, independence, audit implementation system, and audit fees, and have determined that it is suitable as our accounting auditor.
As a policy for deciding on the dismissal or non-reappointment of the accounting auditor, the Audit & Supervisory Board shall dismiss the accounting auditor based on the unanimous consent of all auditors if it determines that the accounting auditor falls under any of the items specified in Article 340, Paragraph 1 of the Companies Act. Furthermore, the Audit & Supervisory Board shall determine the content of a proposal to dismiss or not reappoint the accounting auditor to be submitted to the General Meeting of Shareholders when it deems it necessary, such as when it finds it difficult for the accounting auditor to properly perform their duties. |
| Evaluation of the audit firm by the Audit & Supervisory Board |
The Audit & Supervisory Board has reviewed Deloitte Touche Tohmatsu LLC's quality control system, independence, audit fees, communication with auditors and management, group audits, and response to fraud risks, among other matters, based on the evaluation criteria for accounting auditors established by the Board of Auditors. As a result, the Audit & Supervisory Board has determined that Deloitte Touche Tohmatsu LLC is qualified to serve as the Company's accounting auditor. |
Evaluation of the Board of Directors
The Company conducts an annual survey of directors and auditors regarding the effectiveness of the Board of Directors, and shares the results with the Board.
This period's survey, conducted using the same questionnaire as the previous period, confirmed high effectiveness in areas such as the responsibilities of independent outside directors, the appropriate composition of the Board of Directors, the role and responsibilities of the Audit Committee, incentive compensation systems, and the appropriate provision of non-financial information. Furthermore, based on the previous fiscal year's evaluation results, the Board of Directors expanded its activities, leading to improvements in evaluations for items such as the appropriate oversight of human resource strategy and the verification of the appropriateness of holding policy shares. On the other hand, evaluations indicated that information sharing among outside directors and the effectiveness of the internal whistleblowing system were insufficient, resulting in remaining challenges regarding the effectiveness of the Board of Directors' operations.
To address these challenges, we plan to implement corporate governance measures aimed at strengthening the operational functions of the Board of Directors. We will continue to explore further improvement measures to enhance the effectiveness of the Board of Directors.
Stock Held
Basic policy on shareholdings and exercise of voting rights related to shares held
- We hold listed shares based on a comprehensive assessment of the need to maintain business relationships with customers, suppliers, and financial institutions, the necessity for our business operations, and economic rationality, etc. As a result of our annual review, we sell stocks that have little significance to hold, as appropriate.
- We will exercise our voting rights in relation to the shares we hold appropriately after carefully examining whether the content of each proposal is likely to damage our corporate value and whether it will help the sound management of the issuing company and is expected to enhance its corporate value.
- If a Cross-holding shareholders express an intention to sell or otherwise dispose of our shares, we will, in principle, comply with such intention and will not prevent such sale or otherwise dispose of our shares.
- We will fully examine the economic rationality of transactions with Cross-holding shareholders, and will not engage in transactions that are detrimental to the company or the common interests of shareholders.
Investment shares held for purposes other than pure investment (As of March 31, 2025)
specified investment stock (As of March 31, 2025)
Other Matters Related to Corporate Governance
Overseas Subsidiaries Management System
Regarding the management of overseas subsidiaries, the Overseas Business Division oversees the promotion of global initiatives. Additionally, under the regional headquarters system, the heads of each regional headquarters make prompt management decisions locally. A Global Management Meeting, composed of members of the Management Committee, is convened to share information. Furthermore, the Management Committee conducts prior discussions on important matters and receives regular reports. Furthermore, while respecting the autonomy of overseas subsidiaries, the Company supervises their business execution by having its directors or executive officers serve as officers of those subsidiaries.
Status of Compliance and Risk Management Systems
The company has established a Corporate Governance Committee composed of the Compliance Officer and Risk Management Officer to ensure compliance with all relevant laws and regulations in the conduct of our business activities and to build a sound operational framework capable of appropriately addressing potential business risks. Furthermore, we have established Compliance and Risk Management Subcommittees composed of the respective Officers and operational personnel to enhance our compliance and risk management systems.
Compliance Initiatives
The Compliance Subcommittee, chaired by the Compliance Officer, leads activities including self-assessment, compliance training, internal awareness campaigns, and review of proposals for improving corporate ethics.
Key initiatives during this period included advancing information security measures to counter increasingly sophisticated cyberattacks and conducting compliance training sessions focused on harassment.
Risk Management Initiatives
The Risk Management Subcommittee, chaired by the Risk Management Officer, leads ongoing efforts to identify risks, implement countermeasures, and minimize damage.
During the current period, we implemented initiatives addressing risks specific to each country where our group operates as part of our overall group risk management.
Involvement of Other Third Parties in the Company's Corporate Governance
Our company has entered into a retainer agreement with an attorney and strives to ensure compliance management by receiving legal advice on various domestic and international issues as necessary. Furthermore, regarding tax-related matters, we receive advice from an external accounting firm specializing in such services.