SINANEN and our group companies recognize that continuously increasing corporate value by ensuring the transparency and soundness of management and promoting swift decision-making and execution is the basis of corporate governance and see this as an important management issue.
We are a company with an audit/supervisory committee.
We transitioned to a holdings company structure in October 2015 to address changes in the environment surrounding us.
The characteristics of a company with an audit/supervisory committee are enhanced audit and supervisory functions and swift decision-making. These characteristics align with the purpose of transitioning to a holdings company structure, so we have adopted the structure of a company with an audit/supervisory committee.
Our officer system consists of three Directors (excluding those who are members of the Audit/Supervisory Committee; no Outside Directors) and three Directors who are members of the Audit/Supervisory Committee (all three of whom are Outside Directors). Our Articles of Incorporation set for that we will have no more than six Directors (excluding Directors who are members of the Audit/Supervisory Committee) and no more than four Directors who are members of the Audit/Supervisory Committee. They also state that resolutions to appoint Directors of the Company shall be made at the General Meeting of Shareholders by majority vote when shareholders with at least one-third of voting rights are in attendance and that such resolutions shall not be made by cumulative voting.
The Board of Directors, which supervises the execution of duties by the Representative Director, meets regularly (once a month) and as necessary to discuss and consider important matters related to management, the progress of business operations, measures to resolve problems, and other such matters. A Management Meeting is also in place to provide advice on decision-making by the President and CEO on important matters related to the execution of business, and it is held regularly (once a month) and as necessary.
Decision-making authority for the execution of business is classified according to importance by law, Articles of Incorporation, Rules of the Board of Directors, Rules on Decision-Making, etc.
Additionally, as previously mentioned, there is a Management Meeting in place as an advisory body on execution of business by the President and CEO. The Management Meeting consists of full-time Directors and discusses management policy and important management matters.
Our basic policy for appointment and dismissal of officers is to appoint officers who are personally familiar with the Group's business and are capable of properly carrying out group management, exhibiting the mentality of our foundational principles: "Shingi," "Shinshu," and "Rakugyo" (keeping our promises, making progress, and feeling joy in our work). The balance of knowledge and capabilities within the Board of Directors as a whole is taken into account when selecting candidates for Director (excluding Directors who are members of the Audit/Supervisory Committee). Our basic policy for selecting candidates for Directors who are members of the Audit/Supervisory Committee is that they possess the extensive experience and deep knowledge required of Outside Directors or exceptional knowledge in the fields of law and corporate accounting as well as the ability to express fair and objective opinions from an independent standpoint in order to improve our corporate governance. Based on these policies, a voluntary Nominating and Compensation Committee not based on the Companies Act discusses appointment and dismissal of Directors (excluding Directors who are members of the Audit/Supervisory Committee) and makes recommendations to the Board of Directors. As for appointment and dismissal of Directors who are members of the Audit/Supervisory Committee, resolutions are adopted by the Board of Directors with the consent of the Audit/Supervisory Committee. In this way, we believe we increase the transparency and objectivity of procedures related to decisions on officer nominations and contribute to further enhancement of corporate governance functions and healthy growth of the SINANEN Group as a whole.
|Number of Directors as set forth in articles of incorporation||10|
|Term of office of Directors as set forth in articles of incorporation||1 year|
|Chair of Board of Directors||President|
|Number of Directors||6|
|Status of appointment of Outside Directors||Appointed|
|Number of Outside Directors||3|
|Number of Outside Directors designated as Independent Officers||2|
We have established a structure so that, without exception, Outside Directors are invited to meetings of the Board of Directors and are offered the same explanations from the departments submitting proposals as the other Directors. The notices, materials, and other information sent to Outside Directors is the same as what is sent to the other Directors.
Additionally, the board is set up so that Outside Directors are given access to important management information and are able to express their opinions. Furthermore, they attend meetings of the Board of Directors from an independent standpoint and leverage their expert knowledge as they actively offer their opinions.
|Name||Member of Audit/
|Independent Officer||Reason for election||Attendance
Number of meetings attended/Number of meetings, percentage of meetings attended (FY 2020)
|Kazuhisa Hirano||○||○||We elected Mr. Hirano because we determined that his expertise as a US certified public accountant and certified internal auditor can be utilized to improve the Company's corporate governance.||ー|
|Yutaka Shigemori||○||○||We elected Mr. Shigemori because we determined that his extensive business experience can be utilized to improve the Company's corporate governance.||Board of Directors: 13/15 (86.7%)
Audit/Supervisory Committee: 11/13 (84.6%)
|Ren Shino||○||○||We elected Mr. Shino because we determined that his extensive experience and broad knowledge as a lawyer can be utilized to improve the Company's corporate governance.||Board of Directors: 15/15 (100.0%)
Audit/Supervisory Committee: 13/13 (100.0%)
*Mr. Hirano is a newly elected Outside Director.
We are a company with an audit/supervisory committee. The committee is comprised of three members: one full-time and two part-time (all Outside Directors).
・Main activities of members of Audit/Supervisory Committee
The full-time member of the Audit/Supervisory Committee attended important meetings, including those of the Board of Directors and the Nominating Committee (voluntary) and the Management Meeting, attended audits of major operating companies, internal audits, and reporting meetings of the accounting auditor, and looked over important documents such as approval requests. Moreover, they received reports from Directors and persons in charge and shared opinions with them as necessary. In addition, they provided a report to the Board of Directors on the status of audit activities once every quarter.
The member of Audit/Supervisory Committee attends meetings of the Board of Directors and the Nominating Committee (voluntary), observes officer training sessions, and receives reports on activities of the full-time Audit/Supervisory Committee member to share opinions.
In addition, all members of the Audit/Supervisory Committee interview the president and CCO to provide their opinions on Group strategies and offer suggestions on how to improve risk management.
We have established a voluntary Nominating and Compensation Committee not based on the Companies Act. It is chaired by the Company President and is comprised of the chairman, three Directors who are members of the Audit/Supervisory Committee, and one external expert.
The Representative Director provides recommendations for nominating candidates for Director (excluding Directors who are members of the Committee), which are discussed by the Nominating and Compensation Committee and voted on by the Board of Directors. The consent of the Audit/Supervisory Committee is obtained for nominations of candidates for Director who are members of the Audit/Supervisory Committee.
Officer compensation is based on internal rules. After discussion at the Nominating and Compensation Committee, Director (excluding Directors who are members of the Audit/Supervisory Committee) compensation is decided by the Board of Directors, and Audit/Supervisory Committee member compensation is decided by the Audit/Supervisory Committee. As a matter of course, the amounts are within the ranges set forth by resolution of the General Meeting of Shareholders.
Director compensation consists of fixed compensation and performance-linked compensation. Performance-linked compensation is designed to function as a sound and appropriate incentive to improve corporate value. Directors who are members of the Audit/Supervisory Committee only receive fixed compensation.
At the 82nd Ordinary General Meeting of Shareholders held on June 24, 2016, the maximum annual compensation for Directors (excluding Directors who are members of the Audit/Supervisory Committee) was set at 276 million yen (not including the employee portion of pay for Directors who are also employees), and the maximum annual compensation for Directors who are members of the Audit/Supervisory Committee was set at 72 million yen.
The Secretariat of the Board of Directors regularly conducts paper-based surveys on the effectiveness of the Board of Directors and reports the results to the company-wide executive decision-making body.
The most recent survey indicated that the operations and affairs of the Board of Directors was generally effective in the fiscal year ended March 31, 2020. Specifically, the frank discussions, including critical opinions from Outside Directors, and the careful review of the risks and benefits of cross-shareholdings according to capital cost were recognized. On the other hand, distribution of materials for meetings of the Board of Directors well in advance and the reduction of special terminology/industry-specific terms within the materials were noted as issues.
In response, we will continue to promote proper operations of the Board of Directors and implement improvement measures to address the issues to enable the Board of Directors to further contribute to improvement of corporate value.
For director training, we have established an environment that allows active participation in external seminars and training to promote acquisition of the necessary knowledge and understanding of roles and responsibilities.
In addition, for newly elected Directors who are not members of the Audit/Supervisory Committee, we carry out training primarily utilizing external training programs.
Based on the Companies Act and the Ordinance for Enforcement of the Companies Act, we have passed a resolution on the status of development and implementation of a "system for ensuring appropriate operations" (internal control system) and are promoting highly sound management and business operations based on solid internal control.
We recognize that having relationships with antisocial forces is a violation of compliance and have implemented measures to firmly refuse such dealings as an ongoing priority.
We hold investment shares for which purpose of holding is something other than pure investment in order to strengthen and facilitate business relationships and partnerships.
We review the purpose of the holdings and status of dealings and compare them with the capital cost to determine the appropriateness and reasonableness on a case-by-case basis.
Every year, the Board of Directors reviews the economic rationale of major shareholdings of this type from a medium- to long-term perspective to determine whether or not to keep them.
Additionally, exercising of voting rights with respect to these shareholdings is carried out based on a comprehensive consideration of whether the matter will contribute to improving our corporate value and the common benefit of the investee's shareholders.
Our officer in charge of IR oversees dialog with shareholders and works to realize constructive dialog. Specifically, the officer seeks information from the General and Legal Affairs Department, Finance and Accounting Department, and other major departments to build a system of cooperation with the relevant departments.
In regard to dialog and interviews with shareholders, basically either the President or the officer in charge of IR participates in interviews directly. This is to fulfill our accountability as a listed company and to faithfully reflect the knowledge and ideas gained through constructive dialog with shareholders in future management decisions. In such dialog, we do not communicate insider information (material facts that have not been made public).
In addition, we actively disclose IR information on our website to promote a deeper understanding of the Group's management policies, basic strategies, financial situation, etc. and will continue working on enhancing that information.
|Early notice of convening of General Meetings of Shareholders||We make an effort to send out notices of General Meetings of Shareholders three weeks prior to the meetings to facilitate the exercise of voting rights.|
|Avoidance of days on which many companies hold shareholders meetings||We make an effort to avoid days on which many companies hold shareholders meetings when setting the date for ours.|
|Electronic exercise of voting rights||We have made it possible to exercise voting rights electronically.|
|Participation in platform for exercising voting rights electronically and other efforts to improve environment for institutional investors to exercise voting rights||We have adopted a platform for institutional investors to exercise voting rights operated by ICJ, Inc.|
|Provision of notices of convocation (summaries) in English||These are published on the platform for exercising voting rights electronically and our website.|
|Supplementary descriptions||Explanations by representative|
|Regular IR conferences for individual investors||We hold briefings on our business and medium-term management plan several times a year.||No|
|Regular IR conferences for analysts and institutional investors||We hold briefings on our year-end financial results and medium-term management plan once a year.||Yes|
|Publishing of IR material on website||We have set up an IR page and publish various material under the headings of "Stock Information," "Management Policy," "IR Library," "IR News," and more.
Some of the above material is also provided in English.
|Establishment of IR department (persons in charge)||We have established a PR/IR team within the Corporate Planning Department.|
|Other||We work to communicate with our investors by issuing shareholder notices, accepting visits by institutional investors, and responding to telephone interviews.|
|Provision on respect for stakeholder's perspective within internal rules||The SINANEN HOLDINGS Group Charter of Corporate Conduct stipulates the fulfillment of our corporate social responsibility.|
|Implementation of environmental conservation and CSR activities||The SINANEN HOLDINGS Group Charter of Corporate Conduct recognizes the importance of the global environment and stipulates that we will actively work to address environmental problems.
In addition, every year, we hold the Itsumo Arigato (Thank You) Essay Competition for elementary school students in Japan and carry out social contribution activities on a continual basis to develop feelings of gratitude.
|Establishment of policy on providing information to stakeholders||The SINANEN HOLDINGS Group Charter of Corporate Conduct stipulates the appropriate disclosure of corporate information.|