Organization and Initiatives
Corporate Governance Structure and Initiatives
The Company transitioned from the former institutional structure of a company with an Audit & Supervisory Board to a company with an Audit & Supervisory Committee at the Ordinary General Meeting of Shareholders held on June 26, 2020.
The main purpose of transitioning to a company with an Audit & Supervisory Committee is as follows.
(a) In order for the Directors who are members of Audit & Supervisory Committee having right to vote in the Board of Directors as well as having the right to express position statement on nomination and remuneration at shareholder’s meetings to further enhance the supervisory function by utilizing the legal authority.
(b) In order to further enhance discussions on management strategies, etc. by transferring the Board of Directors meeting to a monitoring type, since a substantial portion of the Board of Directors' authority to make decision on business execution can be transferred to the Executive Director.
(c) In order to further promote the separation of supervision and execution with regard to the executive officer system introduced in June 2003, in combination with transition of authority mentioned in the previous section (b).
Corporate Governance Structure: Supervision and Management and Internal Control System
Outline of Corporate Governance Structure
Form of Organization |
Company with an Audit & Supervisory Committee |
Directors |
Number of directors (outside directors): 9 (2) |
Directors (Audit & Supervisory Committee Members) |
Number of directors (outside directors): 5 (3) |
Number of Independent Officers |
5 (2 outside directors and 3 outside directors (Audit & Supervisory Committee members)) |
(1) The Company’s Board of Directors
In principle, the Board of Directors convenes on a regular monthly basis and holds ad-hoc meetings as necessary, to discuss major executive matters, business issues, and management issues related to the Company's business execution. In fiscal 2019, the Board of Directors held 13 meetings, and attendance rate of all Directors was 100%.
① Composition of Board of Directors
The Company's Board of Directors consists of 14 Directors, including five directors who are Audit & Supervisory Committee members, and five Outside Directors, including three Audit & Supervisory Committee members.
In order to ensure the effectiveness of the supervisory functions of outside directors, the Company attempt to ensure that at least one-third of the Board of Directors meets the Company's Criteria for Determining the Independence of outside directors.
Meidensha’s outside directors satisfy the requirements of independent directors as stipulated in the rules of the Tokyo Stock Exchange.
② Policy for Appointment of Candidates for Director and Appointment/Dismissal Process
The basic policy of the appointment of Directors of the Company is to ensure the diversity of the Board of Directors as a whole and to balance the knowledge, experience, or abilities.
The basic policy of the appointment of Directors who are Audit & Supervisory Committee members is to balance the accounting, finance, and legal knowledge. The number of directors is stipulated as a number that is sufficient to fully deliberate on management issues, with an upper limit of 15 members.
Based on the above, we conduct a nomination of candidates for director that will contribute to the enhancement of the Board of Directors decision-making function and oversight function, by resolution of the Board of Directors, with advice from the Nomination and Remuneration Committee* (voluntary committee), which is chaired by an independent outside director. The candidates are then presented at the General Meeting of Shareholders.
Furthermore, with regard to the dismissal of directors, if it is discovered that a director has breached the law or the Articles of Incorporation, or committed acts that flagrantly breach the director’s nomination policy, the Board of Directors will take the necessary steps to dismiss said director with the advice of the Nomination and Remuneration Committee.
*Meidensha established a voluntary Remuneration Committee in December 2017. In December 2018, the Committee took on the functions of a voluntary nomination committee to become the Nomination and Remuneration Committee. The Nomination and Remuneration Committee is chaired by an independent outside director and is comprised of two outside directors, the chairman of the Board of Directors, and the president of the Board of Directors.
③ Executive Officer System and Executive Structure
Meidensha introduced an executive officer system in June 2003 in order to streamline the Board of Directors, as well as to accelerate management decision-making and to enhance supervisory functions. At the same time, we sought to reinforce the functions of the Board of Directors by promoting the separation of the decision-making authority and supervisory function from the business performance function held by the Board of Directors.
Executive officers selected by the Board of Directors assume responsibility for the execution of specified tasks within the scope of authority transferred by the representative directors, and nimbly perform executive functions under the supervision of the representative directors, in accordance with the Meiden Group’s management policies determined by the Board of Directors.
The executive committee, which comprises executive directors and executive officers with specific roles, is created for executive decision-making, and decides matters based on the rules of internal approval, as well as matters for which consultation from a full-company perspective is required.
Furthermore, apart from the meeting body to make decisions, we established advisory and internal bodies such as review and strategy meetings, and with regard to important management matters, we created a system wherein thorough discussion and deliberation are conducted prior to decision-making, and follow-up strategy and planning and improvement initiatives are conducted following decision-making.
The outline and main points of the proceedings at the Executive Committee and other internal meetings are reported as the status of business execution at the Regular Board of Directors meetings to ensure and improve the effectiveness and supervisory functions of the Board of Directors. As to execute business, executive directors and executive officers with the authority are taking attempt initiatives agilely by making resolutions and settlements. In this way, we are working to conduct executive functions autonomously and nimbly.
With the significant transfer of the authority for business execution from the Board of Directors to the executive officers, officers and executive officers must submit a business execution status report to the Board of Directors at least once every three months in order to ensure the effectiveness of functional supervision by the Board of Directors.
(2) Effectiveness Evaluation of the Board of Directors
Meidensha has a mechanism in place to conduct an analysis and evaluation of the effectiveness of the Board of Directors in order to strengthen the supervisory function of the Board of Directors.
With regard to the activities of the Board of Directors in fiscal 2019, all members of the Board of Directors, including outside officers, conducted self-evaluations of the effectiveness of the Board of Directors, and the following discussions took place at the meeting of the Board of Directors in May 2020.
i. Items Evaluated
Composition and operation (resolution and deliberation methods, etc.) of the Board of Directors, self-evaluations concerning effectiveness of the Board of Directors, other opinions
ii. Outline of Analysis and Evaluation Results
The results of the evaluation of each director and Audit & Supervisory Board Member were collected, and after deliberation by the Board of Directors, it was determined that the quality of operation and deliberation is sufficient, sufficient opinions and advice have been received from outside directors and outside Audit & Supervisory Board Members, and the effectiveness of the Board of Directors is currently secure.
In addition, through the establishment of a system in line with the transition to a company with an Audit & Supervisory Committee, we confirmed our evaluation that there is a trend to promote further deliberation and enhancing of the supervisory function of the Board of Directors.We will also improve understanding of Meidensha’s business environment and strategy and provide ongoing opportunities for discussion such as through explanations in advance, meetings to exchange opinions, and explanatory programs outside of the initiatives of the Board of Directors referred to below.
Composition of the Board of Directors, Nomination & Remuneration Committee, and Audit & Supervisory Board and FY2019 Attendance (Period: April 1, 2019 to March 31, 2020)
Name |
Position (as of March 31, 2020) |
Board of Directors |
Nomination & Remuneration Committee |
Audit & Supervisory Board |
Yuji Hamasaki |
Representative Director, Chairman Member of Nomination and Remuneration Committee |
(13 / 13)
〇 |
(4 / 4) |
- |
Takeshi Miida |
Representative Director, President Member of Nomination and Remuneration Committee |
(13 / 13) |
(4 / 4) |
- |
Masamichi Kuramoto |
Representative Director, Executive Vice President |
(13 / 13) |
- |
- |
Shosuke Mori |
Director, Executive Vice President |
(13 / 13) |
- |
- |
Nobutoshi Ohashi |
Director, Senior Managing Executive Officer |
(13 / 13) |
- |
- |
Norio Takekawa |
Director, Senior Managing Executive Officer |
(13 / 13) |
- |
- |
Nobuaki Tamaki |
Director, Senior Managing Executive Officer |
(13 / 13) |
- |
- |
Hiroyuki Takenaka |
Outside Director
Member of Nomination and Remuneration Committee |
(13 / 13) |
(4 / 4)
〇 |
- |
Junji Yasui |
Outside Director
Member of Nomination and Remuneration Committee |
(13 / 13) |
(4 / 4) |
- |
Taketora Ito |
Audit & Supervisory Board Member |
(13 / 13) |
- |
(6 / 6)
〇 |
Seiji Kato |
Audit & Supervisory Board Member |
(13 / 13) |
- |
(6 / 6) |
Yoshiaki Shin |
Outside Audit & Supervisory Board Member |
(12 / 13) |
- |
(6 / 6) |
Mitsuru Nawata |
Outside Audit & Supervisory Board Member |
(13 / 13) |
- |
(6 / 6) |
Note 1: Refers to the chair of the Board of Directors, Audit & Supervisory Board, and each committee
Note 2: Attendance of each type of meeting is market as XX out of XX
Training for Officers
Legal training is conducted for officers on an annual basis, for the purpose of improving the effectiveness of the Board of Directors and internal control.
In fiscal 2019, we conducted training for our officers by outside instructors, relating to compliance and risk management, as part of internal control activities conducted at all companies.
The Meiden Group conducted trainings on the Companies Act for new officers of Meidensha and affiliated companies.
(3) Initiatives to Utilize Outside Directors
Meidensha seeks active participation in management by outside officers, in order to enhance the supervisory function of the Board of Directors. As such, we are conducting the following initiatives to ensure free and active debates.
① Initiatives at the Board of Directors
i. Advance Explanation of Agendas of the Board of Directors
We give explanations in advance so that directors are able to confirm the content of agenda items prior to participating in meetings of the board of directors. Our system allows us to accept questions, etc., relating to the content of agendas in advance and prepare an explanation to be given at the meeting of the Board of Directors, and this revitalizes and enriches deliberations.
ii. Timely and Appropriate Sharing of Information
Besides the agenda for the meeting, Meidensha provides briefings on current topics relating to the company at meetings of the Board of Directors, with the aim of timely and appropriate sharing of information with outside directors, so that they can share the status of the Company in a timely fashion.
② Initiatives Outside of the Board of Directors
i. Introductory Sessions
We create opportunities to explain the Company’s business and structures, primarily to aid the understanding of newly appointed outside officers.
The officers or general managers in charge of each business explain their business and Meidensha’s governance system to the outside officers, answer their questions and exchange opinions with them.
ii. Meeting for Exchange of Opinions
Apart from legally-required board meetings, we hold monthly discussion meetings in order to best utilize the knowledge of the outside directors and outside audit & supervisory board members.
In these meetings, participants vigorously exchange opinions, mainly concerning matters relating to corporate governance and the Company’s management issues and strategy. The meetings also serve as preliminaries to discuss matters prior to passing resolutions at the Board of Directors.
(4) Auditing System
The Company transitioned from the prior institutional structure of a company with an Audit & Supervisory Board to a company with an Audit & Supervisory Committee at the Ordinary General Meeting of Shareholders held on June 26, 2020.
The Audit and Supervisory Committee consists of five directors, including three outside directors, who are Audit & Supervisory Committee members, and there is also a Support Department for the Audit and Supervisory Committee has been established as a staff organization to support the Audit and Supervisory Committee.The committee communicates with directors, the Internal Auditing Division, and other related divisions, while adhering to the auditing policies, allotted duties, and auditing rules, etc., for Audit & Supervisory Committee members stipulated by the Audit & Supervisory Committee. Committee members attend meetings of the Board of Directors and other important meetings, and audit the execution of directors’ duties through investigations of business and financial conditions.
Directors who are Audit & Supervisory Committee members are granted new authority, such as voting rights at meetings of the Board of Directors and the right to present a position statement at meetings of the Board of Directors relating to nomination and remuneration of officers. We are therefore promoting the establishment of an auditing framework and the enhancement of various initiatives to further strengthen the supervisory function of the Board of Directors, which is the aim of altering our institutional design, through new activities such as monitoring and auditing, etc. of the transfer of authority to executive directors and the status of the governance that guarantees it, in addition to the auditing activities previously undertaken, and by further strengthening cooperation with outside directors, etc.
(5) Internal Auditing System
The Internal Auditing Division conducts internal audits to check the effectiveness and efficiency of business operations, the reliability of financial reporting, the status of compliance with laws and regulations, and the maintenance of assets, covering the Company and all Group companies at home and abroad.
Since fiscal 2016, we have conducted risk management using control self assessment (CSA) at each Meidensha factory and each Japanese subsidiary in order to enhance internal control and increase the efficiency of risk audits at each business unit.
In fiscal 2019, we engaged in activities under the three basic policies of “promoting the three lines of defense and CSA (Control Self Assessment),” “strengthening prevention of faults and misconduct,” and “improving audit quality and thoroughly following up audits.” We conducted new initiatives such as external evaluation of risk management and individual audit reports for officers in charge of specific functions, and we enhanced internal control functions.
In April 2020, we improved the framework to promote internal control by establishing the Internal Control Promotion Headquarters comprising the Management Auditing Division and the newly established Risk Management Division. We will further promote internal control functions by monitoring internal control systems through internal audits in conjunction with the Audit & Supervisory Committee and having a full-time department develop a risk management structure that covers the entire Group.