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
- 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.
Toshiya Takeuchi (President and Representative Director)
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.
Minoru Kusama (Outside Director, Full-time Audit and Supervisory Committee Member)
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
Toshiya Takeuchi, Akihiko Kobayashi, Michio Iwabuchi and Yuko Miyata
Remuneration Advisory Committee
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
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.
We have set up risk management rules to maintain a management system for recognizing, minimizing and preventing risks that could occur in our business operations and to respond to risks that have materialized.
Risks that could influence investors' decisions
Shown below are issues related to Takeuchi Group's business operations and accounting that could have an important influence on investors' decisions.
Forward-looking statements are based on the Group's judgement as of the date of submission of the annual securities report (May 25, 2023).
1. Exchange rate fluctuations
2. Fluctuations in raw material prices
3. Natural disasters, etc.
4. Economic and market conditions
6. Credit management
7. Securing human resources
8. Environmental regulations, climate-related regulations, and other official regulations, etc.
9. Geographical concentration of production sites
10. Product quality
11. Information security and intellectual property rights
Business continuity plan (BCP)
We have written the BCP Manual (administered by the General Affairs Department) that has prepared us to maintain business continuity.
Procedure after BCP activation
Disaster recovery scenarios
We believe that it is our social responsibility to protect information assets, and we are consistently working to strengthen information security, focusing on the following:
- Prohibiting anyone from storing or removing any internal documents outside the company
- Preventing data loss and falsification
- Prohibiting all unauthorized access
- IT security policy (Approved at the Board of Directors meeting on August 30, 2023)
Through dialogues and joint initiatives with stakeholders, we demonstrate the importance of stakeholder engagement. In this way, we grasp stakeholders' opinions, requests, and concerns, then apply that information to improve business management.
Our main stakeholders are the customers we provide products and services to; suppliers who support our production; shareholders and investors who are directly affected by the results of our business activities; employees working in the Takeuchi Group; and local communities. In addition, there are administrative bodies for compliance, such as local governments and supervisory ministries, and industry-academia-government collaboration and industry groups for information gathering and sharing necessary for business activities. Furthermore, we believe that the younger generation—children and students—are important stakeholders because they have the potential to become members of the Takeuchi Group in the future as well as being "treasures of society."
Main opportunities and points of contact for dialogue with stakeholders
|Stakeholders||Main opportunities for dialogue and joint activities||Main points of contact for dialogue|
|Shareholders and investors||
|Local governments and supervising ministries||
|Industry- Academia -Government Cooperation||
|Next generation (children, students, etc.)||
*All stakeholders are important, and we do not prioritize one stakeholder group over another.
Organization Memberships (Domestic)
|Business Organizations||Nagano Employers' Association|
|Nagano Economic Research Institute|
|Sakaki-machi Commerce and Industry Association|
|Togura Kamiyamada Commerce and Industry Association|
|The Tokyo Chamber of Commerce and Industry|
|Industry Associations||Safety Association of Construction and Loading Vehicles|
|Japan Machinery Center for Trade and Investment|
|Japan Construction Equipment Manufacturers Association|
|Japan Construction Machinery and Construction Association|
|Industry-Academia-Government Cooperation||Sakaki Industry-Academia-Government Cooperation Institute|
|Educational Research and Development Association of Nagano Prefectural Institute of Technology|
|Technology Promotion Association of National Institute of Technology, Nagano College|
|Technology Exchange||Nagano Institute of Invention and Innovation|
|Sakaki Technology Exchange Institute|
|Japanese Standards Association|
|The Institution of Professional Engineers, Japan|
|Other Organizations||Sakaki-machi Council for the Promotion of Human Rights and Social Integration Education of Companies|
|Sakaki-machi International Exchange Association|
|Sakaki-machi Council for the Promotion of International Industrial Research|
|Koshoku Labor Standards Association|
|Koshoku Employment Security Association|
|Minaminagano Koshoku Welding Engineering Society|
|Koshoku-Area Cooperative Society|
|Nagano Industrial Relations Research Association|
|Nagano Prefecture Driving Safety Manager Association (Chikuma branch)|
|Nagano Association for Conserving Environment|
|Nagano Supporting Future Generations Prefectural Assembly|
|Nagano Social Insurance Association|
|Nagano Probation Association|
|Association for the Welfare of the Visually Impaired|
|Japan International Trainee & Skilled Worker Cooperation Organization|
|Practical Seminars for the Preparation of Disclosure Documents|
|Financial Accounting Standards Foundation|
Organization Memberships (Overseas)
|United States||American Rental Association (ARA)|
|Associated Equipment Distributors (AED)|
|Association of Equipment Manufacturers (AEM)|
|United Kingdom||Construction Equipment Association|
|Northwest England Japanese Companies Association|
|France||FICIME (Federation of International Mechanical and Electronic Companies)|
|SEIMAT affiliated at FICIME (Union of International Companies of Public Works Equipment, Building and Lifting, Handling)|
|China||Qingdao Japanese Association|
|Huangdao Japanese Association|
To improve management soundness and develop sustainably, we conduct corporate activities that obey all laws and social rules; that is, we see compliance as the foundation of management.
Basic Compliance Policy
To be trusted by customers and society, we comply with the letter and the spirit of the law, and we conduct corporate activities that follow social ethics and good conscience.
We will work to strengthen compliance, as we have recognized compliance as a basic management policy.
We have appointed a director as Compliance Officer with the ultimate responsibility for compliance, and have established a system where directors report to the Board of Directors and the Audit and Supervisory Committee (or its members) through the compliance officer in the event of a critical compliance issue.
As the responsible department, the Business Management Department conducts compliance-related work, and appoints Compliance Managers and other necessary personnel to each department. The Business Management Department also manages and supervises the state of compliance based on the Compliance Manual and establishes effective training systems for all employees, including executives. For audits, we set up an internal auditing department, which is independent of the Business Management Department, to audit the level of compliance within the Group.
Initiatives to instill the spirit of compliance
An Our Promises card is distributed in an easy-to-carry size to encourage the spirit of compliance
"Our Promises" card
We distribute Our Promises cards, showing our Corporate Policies, Corporate Philosophy, and Code of Conduct, to all employees. To fulfill our corporate social responsibilities, we then ensure that they thoroughly understand the content and act responsibly and with good conscience.
We publish a Compliance Manual and distribute it to all employees, including executives. In April 2022, the manual was revised, updated and redistributed to all employees.
Compliance Newsletter (monthly)
Compliance education and training
We provide education and training to raise employees' awareness of compliance. Specifically, we hold compliance training sessions during new employee training and other internal training sessions, send out a compliance newsletter (12 times a year), test understanding (four times a year), and conduct follow-up training sessions (based on test results). In these ways, we work continually to bolster compliance.
In fiscal 2021, we held antiharassment training sessions for the company's managers, led by an external lecturer.
Record of compliance tests
|Year of implementation||Month||Theme||Number of respondents|
|Jul.||Industrial Safety and Health Act. and the Labor Standards Act||-|
|Oct.||Mixing of business and personal affairs||-|
|2016||Feb.||Unfair Competition Prevention Act||-|
|Jun.||Abuse of authority (harassment)||-|
|Aug.||Business entertainment and gifts||-|
|Nov.||Manners and morals||462|
|2018||Feb.||Acting with integrity||457|
|May||Dealing with harassment||447|
|Aug.||Dealing with a breach of manners||438|
|Nov.||Emotional control at work||442|
|2019||Feb.||Road Traffic Act||444|
|May||Business entertainment and gifts||489|
|Aug.||Insider trading terms||484|
|May||Abuse of authority (harassment)||520|
|Nov.||COVID-19 pandemic morals||518|
|Nov.||Manners and Morals||623|
|Nov.||Worker dispatching and contracting||677|
- From February 2015 to November 2020, the test was conducted for regular employees of Takeuchi Manufacturing (non-consolidated), and since February 2021, the test is conducted for regular and contract employees. Temporary employees are not covered.
- A five-question test is given once every three months.
- Based on the results of compliance testing, follow-up training is conducted as needed.
- Guided by our Basic Compliance Policy, we prohibit all bribery of public officials in any country.
- Our employment regulations and Compliance Manual prohibit employees from giving or receiving any money or goods to/from business partners, etc.
- In fiscal 2016 and 2019, we tested the understanding of business entertainment and gifts.