Governance Initiatives

Corporate Governance

Basic approach to corporate governance

We regard the enhancement of corporate governance as an important management issue. We have positioned the timely implementation of necessary measures and fulfillment of accountability as the basis of our efforts, with the aim of realizing fair and highly transparent management that can respond quickly to changes. In order for our group to achieve sustainable growth, we are strongly aware of the need to strengthen our efforts in non-financial aspects, represented by ESG (Environmental, Social and Governance), rather than pursuing only financial growth in terms of sales and profits. We will position the resolution of social issues such as the SDGs as the foundation of our management. We will share our management vision with our shareholders and all other stakeholders by listening to what they expect from the Group. Furthermore, we will continuously review the state of our corporate governance and implement necessary measures and improvements as appropriate.

Corporate governance structure

1. Overview of the corporate governance structure
   • The Board of Directors is the highest decision-making body for business execution. It includes six directors (excluding directors who are Audit and Supervisory Committee members) and four outside directors who are Audit and Supervisory Committee members. The Board of Directors meets monthly to decide management policies, to review legal and other important issues, and to supervise the performance of directors’ duties.
   • The Board of Directors appoints executive directors and executive officers who are responsible for business execution. If necessary, executive officers are invited to Board meetings to ensure that management decisions are communicated reliably and that business execution is carried out promptly.

     [Chairman]
     Toshiya Takeuchi (President and Representative Director)
     [Members]
     Akio Takeuchi (Chairman and Representative Director), Takahiko Watanabe, Clay Eubanks, Osamu Kobayashi, Hiroshi Yokoyama, and Outside Directors and Audit and Supervisory Committee members Minoru Kusama (Full-time), Akihiko Kobayashi, Michio Iwabuchi and Yuko Miyata

   • The Audit and Supervisory Committee consists of four outside directors, one of whom is engaged full-time. In principle, the Committee meets once a month. In addition, the committee members attend important meetings, such as Board of Directors meetings, and audit the performance of directors' duties as well as the operation of internal control systems.

     [Chairman]
     Minoru Kusama (Outside Director, Full-time Audit and Supervisory Committee Member)
     [Members]
     Akihiko Kobayashi, Michio Iwabuchi and Yuko Miyata

   • The Nomination Advisory Committee and the Remuneration Advisory Committee, both voluntary advisory bodies to the Board of Directors, each have five directors (one internal director and four outside directors). These committees deliberate on the nomination, dismissal, remuneration, etc. of directors based on an inquiry from the Board of Directors and submit their recommendations to the Board of Directors. The Board of Directors considers the advisory committees' recommendations when making decisions.

     Nomination Advisory Committee
     [Chairman]
     Minoru Kusama
     [Members]
     Toshiya Takeuchi, Akihiko Kobayashi, Michio Iwabuchi and Yuko Miyata

     Remuneration Advisory Committee
     [Chairman]
     Minoru Kusama
     [Members]
     Toshiya Takeuchi, Akihiko Kobayashi, Michio Iwabuchi and Yuko Miyata

   • We formulate business plans for every business execution department based on our management plan. In addition, every business department periodically reports on the implementation of these business plans. The following is an outline of our corporate governance structure.

     Corporate Governance Structure

     
2. Other matters related to corporate governance

   [Status of internal control systems]
   To ensure that the execution of duties by directors and employees conforms to all laws and regulations as well as the Articles of Incorporation, and that the Company's social responsibilities are being fulfilled, we established our Corporate Philosophy, Code of Conduct, Compliance Regulations, and Compliance Manual, and we have appointed compliance officers to make certain that directors and employees are constantly updated.

   [Status of risk management system]
   For risk management, we have established the Risk Management Regulations, have appointed risk management officers, and we maintain a system for recognizing and managing risks.

   [System for ensuring the effectiveness of operations in Group management]
   For the Group's overall management, to ensure the effectiveness of operations at subsidiaries, we make certain that the directors and employees of subsidiaries are carefully informed of the Corporate Philosophy and Code of Conduct established by Takeuchi Mfg. In addition, we established the Group Supervision Rules as well as a system where the home office approves important aspects of the execution of the duties by subsidiaries’ directors, and we periodically receive reports on the status of their execution of duties.

Status of internal audits and audits by the Audit and Supervisory Committee

The Audit Office, reporting directly to the president, is independent from business departments. In this office, two full-time employees audit the business operations and the risk management of the business departments of the home office and all subsidiaries, then instructs them on any necessary improvements. The Audit Office also exchanges information and cooperates with the accounting auditors on internal audits and accounting audits.

Audits by the Audit and Supervisory Committee are conducted by the four outside directors based on an annual audit plan. When conducting audits. The committee regularly exchanges information with the accounting auditors and works with the internal auditing department by receiving reports from them.

Status of accounting audits

For accounting audits, we have concluded an audit agreement with Deloitte Touche Tohmatsu LLC and are audited based on this agreement.