Based on our management philosophy, our basic policy on corporate governance is to increase corporate value, improve management efficiency, and strengthen fair and prompt decision-making. To ensure the soundness and transparency of management, we will strive to enhance corporate governance, and recognize the importance of strengthening our management oversight function and legal compliance system.
Corporate governance structure
Board of Directors
Following internal rules regarding matters to be discussed and reported in the Board of Directors, the Board Directors formulate the basic policy concerning corporate management and receive reports on the status of the business execution. Besides, the Board of Directors meeting is held once a month in principle, and extraordinary meetings are convened from time to time when necessary. Seventeen meetings have been held in total during FY2019. To build a management system that can quickly respond to changes in the business environment, we set the Board Director's term of office to one year.
Advisory body of the Board of Directors
The Remuneration Advisory Committee receives the Board of Directors' request for consultation and deliberates the remuneration of officers. The Nomination Advisory Committee receives the Board of Directors' request for consultation, deliberates the personnel of the executive officers, and reports to the Board of Directors. Thereby, we ensure the objectivity and transparency of the decision-making by the Board of Directors. In FY 2019, the Remuneration Advisory Committee has held four meetings while the Nomination Advisory Committee has held five meetings.
Audit & Supervisory Board
Pursuant to the audit policy and audit plan formulated by the Audit & Supervisory Board, the Audit & Supervisory Board members attend the Board of Directors meetings and other important meetings to audit the execution of duties by the Board Directors.
Board of Managing Directors
According to the basic management policy determined by the Board of Directors, the Managing Directors conduct prior deliberations on matters to be discussed in the Board of Directors and deliberate on the issues delegated from the Board of Directors as an advisory body to the President & CEO. The Board of Managing Directors meeting is held once a week in principle.
Tabulated list of our corporate governance system
COMANY Group Executive Committee
Kenta Tsukamoto, the Representative Director, is the moderator of the committee. In addition to the executive officers and the officers of the consolidated subsidiary, the department directors and chiefs also participate in the meeting to share company-wide management strategy and speed up decision-making, thereby leading to respond to changes in the business environment quickly.
Compliance and Risk Management Committee
The committee meeting is held monthly with Masahiro Motoda, the chairperson of the committee. Members selected by our domestic subsidiaries attend this committee meeting every quarter, striving to reduce the Group's key risks and raise compliance awareness among executives and employees. Our overseas subsidiaries also report the details on key risks reduction to the committee every quarter.
Evaluation of the Board of Directors
The members of the Board of Directors and Audit & Supervisory Board conduct "Evaluation of the Board of Directors" every year. We gather and validate the opinions regarding the operation of the Board of Directors. We strive for improvement to enhance the healthy growth and development, as well as our corporate value.
Summary of evaluation results
・The Board of Directors and Audit & Supervisory Board consists of members with diverse knowledge and experience, including three independent outside Directors.
・The Board Directors have been able to conduct meaningful discussions on the matters reported in the Board of Directors.
・The corporate governance code has been reviewed sufficiently and discussed regularly.
・The annual agenda should be used to further enhance discussions on basic policy, medium- to long-term management strategies and management plans.
・The management team should develop an appropriate environment conducive to risk-taking strategies.
・The discussion on risks and opportunities in business execution should be enriched in a balanced manner.
・ All of the Board Directors should fulfill their roles from the standpoint of the supervisor concerning the deliberation of the Board of Directors.
Based on the results of this evaluation, we will work to further improve the effectiveness of the Board of Directors by making continuous improvements. Also, the Audit & Supervisory Board members conduct "Evaluation of the Audit & Supervisory Board" once a year. Based on the evaluation results, we work to improve the functions of the Audit & Supervisory Board by reflecting them as critical issues in the Audit Plan.
Status of audits by the Audit & Supervisory Board members
As of the filing date of this Annual Securities Report, the Audit & Supervisory Board consists of four members including two outside Audit & Supervisory Board members. Based on the audit policy and audit plan formulated by the Audit & Supervisory Board, the Audit & Supervisory Board members attend the important meetings, including the Board of Directors meetings, and oversee the Board Directors in the execution of their duties.
Also, they hold regular meetings with the Representative Director, the Outside Directors, the Independent Auditors, and the internal process audit departments to check the status of internal control development and operation. To audit each department and our group companies, we conduct interviews with Board Directors and employees, and on-site examination in cooperation with the internal process audit department.
Corporate governance initiatives
Thorough compliance awareness
To instill the COMANY philosophy, which places the human mind at its core, believing that "Our spirit is humanity and fraternity," the COMANY Group has published a "COMANY philosophy pocketbook" to be read at the morning meeting every day. And we hold "COMANY Philosophy Training" every year to spread the idea to our executive officers and employees. Besides, we established the COMANY Group Code of Conduct, which defines the compliance items to be followed by the Directors and employees in performing their duties.
To ensure that they comply with laws, regulations, corporate ethics, and internal rules, and take responsible actions following social norms, we keep disseminating the COMANY Group Code of Conduct throughout the COMANY Group. The COMANY and its domestic subsidiaries conduct compliance education for all executive officers and employees to spread and improve corporate ethics and compliance awareness in the workplace, and we further provide education chances through e-learning courses as well.
Also, we continue to disseminate information on compliance with laws and regulations using internal bulletin boards.
We have developed "Compliance Hotline Rules," and we are working to respond to whistleblowing from our executive officers, employees, and our domestic subsidiaries. Also, we have set up a third-party organization as a whistleblowing contact point outside the company to promote early detection and prevention of fraud.