Corporate governance

Basic Guidelines on Corporate Governance

basic way of thinking

By solving customer issues and social issues through "management consulting," we will achieve sustainable growth and improve corporate value over the medium to long term, We regard becoming a company that is trusted by customers as the most important management issue. In order to achieve this, we will establish a corporate governance system that ensures the soundness and transparency of management while practicing appropriate disclosure of corporate information, and at the same time increases the speed and efficiency of management. We will work according to the basic concept of

(1) Respect the rights of shareholders and ensure equality.

(2) Consider employees other than shareholders, customers, business partners and partners, and the rights and positions of society, and cooperate appropriately with these stakeholders.

(3) Appropriately disclose corporate information and ensure transparency.

(4) Establish a corporate governance system that can ensure the soundness and transparency of management and at the same time improve the speed and efficiency of management.

(5) Conduct constructive dialogue with shareholders who have investment policies that match the interests of shareholders over the medium to long term.

Our corporate governance system

At the conclusion of the Ordinary General Meeting of Shareholders held on June 26, 2019, we transitioned from a company with a board of auditors to a company with an audit and supervisory committee.
The Company's officers consist of five directors (excluding directors who are Audit and Supervisory Committee members) and three directors who are Audit and Supervisory Committee members (including three outside directors), for a total of eight (including three outside directors). Business execution is carried out by personnel who have a strong management perspective and high ethical standards, and are familiar with the local economy and local companies. We believe that giving advice, etc. as a director is the best option for the Company at present. In order to respond to the rapidly changing business environment, we will strengthen the management decision-making and supervisory functions of the Board of Directors through this corporate governance system. In addition, we will promote the delegation of decision-making authority for important business execution, including management meetings attended by executive directors, to improve the speed and efficiency of management.

1. Operation, function and activity status of each institution and department

board of directors

The Board of Directors, chaired by the President and Representative Director, meets monthly and holds extraordinary meetings as necessary. As the highest decision-making body for business execution, it makes decisions on important matters stipulated in laws and regulations, the Articles of Incorporation, and the "Board of Directors Regulations," and supervises the execution of business by each director, including the representative director.

Management meeting

The Management Committee is headed by the President and Representative Director, and is held monthly, with extraordinary meetings as necessary. It considers and decides on overall important matters related to management, such as matters to be submitted to the Board of Directors and matters related to management policies and plans.

Audit and Supervisory Committee

At the Audit and Supervisory Committee, directors who are members of the Audit and Supervisory Committee attend important internal meetings, state their opinions as appropriate, and carry out audit procedures such as reviewing important approval documents. In addition, we work to ensure the effectiveness of audits while cooperating with the accounting auditor and the internal control department.

Nomination and Compensation Committee

The Nomination and Compensation Committee selects and dismisses members by resolution of the Board of Directors, and the majority of the five members who are directors are independent outside directors.

Internal control system

In order to continuously increase corporate value and become a company that is trusted by all stakeholders, we are committed to (1) effectiveness and efficiency of operations, (2) reliability of financial reports, and (3) compliance with relevant laws and regulations. (4) It is designed to ensure the preservation of assets. We believe it is important that these internal control systems are incorporated into each business in a well-balanced manner and that they function effectively.

In April 2006, in order to achieve compliance, we established the "Code of Ethics for Officers and Employees" as action guidelines for all officers and employees.

In addition, as a check-and-balance organization for strengthening business management, we have established an internal audit office as a department that reports directly to the president and does not belong to any other office, and has assigned three full-time personnel. The purpose of the Internal Audit Office is to conduct business audits based on internal rules and regulations, and to streamline and streamline management and ensure the proper execution of business. The results are reported to the President and CEO and the Audit and Supervisory Committee, and recommendations are made to the relevant departments as necessary, requesting responses.

In addition, as a basic policy of "development of a system to ensure that the execution of duties by directors conforms to laws and regulations and the articles of incorporation, and other systems stipulated by the Ministry of Justice ordinance as necessary to ensure the appropriateness of the business of the company" has been resolved by the Board of Directors as follows.

1. System to ensure that the execution of duties by directors and employees conforms to laws and the Articles of Incorporation

1. We will appoint an officer in charge of compliance to enhance the compliance system of our group (a corporate group consisting of our company and its subsidiaries; the same shall apply hereinafter) and implement internal education on compliance.
2. We will establish a "Compliance Committee" to understand issues related to legal compliance in the Group, consider countermeasures, and verify the effectiveness of countermeasures.
3. The Group's employees, etc. (meaning directors and employees; the same shall apply hereinafter) shall comply with the "Officer and Employee Code of Ethics," "Compliance Ethics Charter," "Compliance Rules," and "Insider Trading Management Rules." In addition to enacting the rules, the officer in charge will ensure that all employees of the Group are fully aware of them.
4.In accordance with the "Internal Audit Rules", the Internal Audit Office conducts audits on the status of compliance with laws and regulations, internal rules and regulations, and the efficiency and effectiveness of operations, etc. for each department of the Group, and the results shall be reported and shared with the President and CEO and the Audit and Supervisory Committee.
5.Establish "Whistleblower Protection Rules" and develop a system to detect and respond to legal violations, etc. of the Group at an early stage.
6. The department in charge of dealing with anti-social forces shall be the General Affairs Planning Department of the Corporate Strategy Headquarters. We have no relationship with such groups or individuals.

2. System for storing and managing information related to the execution of duties by directors

1. Information related to the execution of duties by directors shall be properly stored and managed in accordance with the "Board of Directors Rules" and "Document Management Rules."
2. Responsible departments will always have the documents available for inspection or copying at the request of the directors and the Audit and Supervisory Committee.

3. Regulations and other systems for managing risk of loss

1. Establish a "Compliance Committee" to understand the status of risk management related to the operations of each department of the Group, and provide support and recommendations as necessary.
2. As rules for risk management, we will establish "Compliance Rules", "Anti-Social Forces Countermeasures Rules", "Whistleblower Protection Rules" and "Risk Management Rules".
3. Clarify administrative authority by means of the "Approval Rules" and "Approval Standards".
4.In principle, the Internal Audit Office conducts audits of all divisions of the Group at least once a year.
In accordance with 1 to 4 above, we will strive to prevent the occurrence of situations that have a serious impact on the company, and in the unlikely event that an unforeseen situation occurs, we will appoint the president and representative director as the general manager based on the "crisis management rules". We will set up a countermeasures headquarters, respond quickly, and strive to minimize damage and impact.

4. System to ensure that the duties of directors are executed efficiently

1. We will establish various rules and regulations such as "Board of Directors Regulations," "Officer Service Regulations," and "Approval Standards," clarify the duties and authority of directors, and ensure operational efficiency.
2. As a general rule, the Board of Directors and management meeting shall be held at least once a month to ensure prompt decision-making and efficient business execution.
3. The Group formulates management plans and business plans for each department, confirms the progress of these plans at the Board of Directors and Management Committee, and manages business on a monthly and quarterly basis.

5. System to ensure the appropriateness of operations in the Group

1.In order to ensure the effectiveness and appropriateness of the Group's internal control, the Corporate Strategy Headquarters conducts necessary management according to the situation according to the "Rules for Division of Duties" and "Rules for Management of Affiliated Companies."
2. The Audit and Supervisory Committee and the Internal Audit Office shall audit and investigate the management status and business activities of the Group.
3. The Corporate Strategy Headquarters receives regular reports on the business performance of the Group and important matters related thereto.
4. The Corporate Strategy Headquarters shall establish a system to promptly receive reports in the event of a serious risk to the Group.
5. Formulate a management plan and business plan for the Group, and confirm the progress thereof at the Board of Directors and Management Committee of the Company. 6. The Company dispatches executive personnel to subsidiaries to ensure that they are properly managed in accordance with the Group's management policies.

6. System for employees to assist the duties of the Audit and Supervisory Committee, matters concerning the independence of such employees from directors (excluding directors who are Audit and Supervisory Committee members), and instructions from the Audit and Supervisory Committee to such employees Matters related to ensuring the effectiveness of

1. The Audit and Supervisory Committee Secretariat shall be established to assist the duties of the Audit and Supervisory Committee.
2.For employees in charge of the Audit and Supervisory Committee Secretariat, to ensure independence from directors (excluding directors who are Audit and Supervisory Committee members) and the effectiveness of instructions, decisions on personnel transfers and personnel evaluations, etc. In this case, the consent of the Audit and Supervisory Committee is required.
3. The Audit and Supervisory Committee Secretariat shall, in accordance with the Audit and Supervisory Committee Standards for Audit and Supervisory Committee, carry out assistance, etc. related to audits by the Audit and Supervisory Committee at the direction of the Audit and Supervisory Committee. In addition, when performing such assisting work, the directors (excluding directors who are Audit and Supervisory Committee members) and employees shall not interfere with this and cooperate in ensuring the effectiveness of the audit.

7. System for reporting to the Audit and Supervisory Committee by employees, etc. of the Group or those who receive reports from such persons, and other systems for reporting to the Audit and Supervisory Committee

1. Employees, etc. of the Group and those who have received reports from such persons shall report to the Audit and Supervisory Committee, when they discover facts that violate laws and regulations, or facts that may cause significant damage to the company, Promptly report factual matters in accordance with internal rules and regulations.
2. The Company prohibits disadvantageous treatment of the person who made the report described in the preceding paragraph on the grounds of having made the report, and thoroughly informs employees, etc. to that effect.
3. We will establish a system to report the following matters to the Audit and Supervisory Committee without delay.
●Matters requested by the Audit and Supervisory Committee to report on operations
● Results of internal audits conducted by the Internal Audit Office
4. When directors who are Audit and Supervisory Committee members receive reports from directors (excluding directors who are Audit and Supervisory Committee members) and employees, they promptly report and share information at the Audit and Supervisory Committee.

8. System to ensure that audits by the Audit and Supervisory Committee are conducted effectively

1. We will strive to create an environment in which directors who are Audit and Supervisory Committee members can access important company information.
2. Hold regular meetings with the President and Representative Director. In addition, we will regularly exchange opinions and information with the accounting auditor, and request reports from the accounting auditor as necessary.
3. Employees, etc. of the Group shall fully understand the importance of audits by the Audit and Supervisory Committee and strive to improve the environment for audits by the Audit and Supervisory Committee.
4. Expenses or debts arising from the execution of duties by directors who are Audit and Supervisory Committee members shall be promptly processed after receiving a request from a director who is an Audit and Supervisory Committee member.

Development status of system to eliminate anti-social forces

1. Basic approach to eliminating anti-social forces

Our basic policy is to maintain a resolute stance against anti-social forces that pose a threat to the order and safety of civil society and strive to prevent transactions with them.

2. Development status for elimination of anti-social forces

1. Establishment status of the response control department and the person in charge of preventing unreasonable demands
Responsive department General Affairs Planning Department, Corporate Strategy Headquarters
Unreasonable Demand Prevention Manager General Affairs Planning Department, Corporate Strategy Headquarters
2.Collaboration status with external specialized institutions
We have built a system that allows us to work in close cooperation with specialized agencies so that we can flexibly report to the police and consult with lawyers, etc. in the event of an emergency.
3. Collecting and managing information on anti-social forces
The Corporate Strategy Headquarters General Affairs Planning Department collects information on anti-social forces and has a system for centralized management.
4.Preparation status of response manual
In addition to stipulating our basic stance against antisocial forces in the "Code of Ethics for Officers and Employees" and "Rules for Countermeasures against Antisocial Forces," we also stipulate specific response manuals, etc. as necessary.
5.Implementation status of training activities
We conduct training as appropriate at various workshops.