Corporate Governance

In addition to fulfilling our social responsibility to all of our stakeholders, including our stockholders, customers, employees, and society, we will find a balance between supervising operations and carrying out business and aim to conduct decision-making that is transparent, fair, timely, and resolute, and strengthen corporate governance, all to realize sustainable growth and improvements to our corporate value.

We hold a meeting of the board of directors once a month and reciprocally check one another's performance while deciding on the execution of important business. Group companies can make their move as independent companies. However, the board decides on the dispatch of directors and also requests the holding of deliberations and announcements regarding the progress of business execution and results.

In addition, we hold a management meeting twice a month in principle in order to accelerate the business execution and clarify responsibilities. The management meeting is comprised of directors and full-time members of the audit and supervisory committee (attendance by third parties related to the proceedings to give opinions or explanations can also be requested as necessary.).
Further, as a complementary role in the carrying out of management, we have established committees made up of all types of employees from all over the company as the company-wide organizations to deal with important management themes, in addition to our Compliance Committee.

Based on the resolutions of the June 29, 2016 annual meeting of the stockholders, we changed from a company with a board of company auditors to a company with an audit and supervisory committee. By changing to a company with an audit and supervisory committee, voting rights were granted to directors who are members of the audit and supervisory committee. This both strengthened auditing and supervision while also raising the level of transparency, compliance, and fairness of our management.

On the other hand, with regard to auditing of finance, we are undergoing the necessary auditing of things such as our consolidated financial statements through PricewaterhouseCoopers Arata LLC, based on the stipulations in the Companies Act and the Financial Instruments and Exchange Act.

There are four members of the audit and supervisory committee, and of these, three are external directors. Audit and supervisory committee members attend important board of directors meetings, observe the decision-making process and the business execution of directors through investigations of the company's business and financial status and enact the necessary measures at suitable times. Additionally, they are conducting daily supervision and verification of the maintenance and operation of internal control systems.
Further, we have established an internal auditing office as our internal auditing organization. Our internal auditing office is independent from our executive structure, and they mainly engage in internal auditing to evaluate the efficacy of our internal control systems while working with the audit and supervisory committee and the financial auditors.

To clarify our stance on compliance with laws and ordinances and towards the conducting of business with ethics, we established scope and standards for behavior, and are ensuring that this takes root with all directors and employees.

Additionally, as an organization that integrates compliance activities, we established the Shikibo Compliance Committee, with the representative director president as the chair, and our directors, executive officers, management staff, and representatives from each subsidiary of the Shikibo Group as members. We regularly hold meetings of the compliance committee and, for those in charge at subsidiaries, we hold the compliance subcommittee. Further, in addition to checking the maintenance and operational situation of the group's overall compliance structure, we thoroughly educate everyone with regard to legal and internal stipulations.

We drafted our Fundamental Corporate Governance Guidelines as the basic matters that we need to attend to based on the above policies. Moving forward, we are going to raise the efficacy of our corporate governance and work towards the sustainable growth of our company and improve our corporate value.

We are a company with an audit and supervisory committee, and we have deemed that the primary role of the board of directors is to monitor the determination and execution of both management strategies and policies.