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Governance

Corporate Governance System

The Group seeks to improve its corporate value by emphasizing the establishment of good relationships with all stakeholders including shareholders, employees and business partners.

To achieve that, the Group believes it is essential to reinforce and enhance its corporate governance, and is making sincere efforts to establish an optimal management and administrative structure to ensure sound, efficient and transparent management.

Corporate Governance System Corporate Governance Report

Overview of the Current Corporate Governance System

Pursuant to the Companies Act, the Company has established the general meeting of shareholders, the Board of Directors, and the Audit and Supervisory Committee, and has elected directors, audit and supervisory committee members and an accounting auditor. The Company has also established, as voluntary organizations, the Nomination and Compensation Advisory Committee, Group Budget and Performance Review Meeting, Sustainability Committee, Group Risk Management Committee, Group Compliance Committee, and the Group's Internal Audit Office.

In the nomination of directors, the Company employs highly independent outside directors.

The Company has adopted the current corporate governance system because it believes the system ensures sound, efficient and transparent management through the oversight functions of such outside directors and collaboration among the above-mentioned organs.

Board of Directors

The Board of Directors of the Company, which consists of six directors (including four outside directors), is authorized to determine the Company's business execution and supervise the directors' execution of duties.

The Company attaches great importance to the presence of outside directors to enhance the shared supervisory function among directors.

The members of the Board of Directors as of June 16, 2023 are two directors (excluding those who are audit and supervisory committee members), Shirou Terashita and Yutaka Fujiwara; and four directors who are audit and supervisory committee members, Kazufumi Onishi, Nobuyoshi Yamori, Kimikazu Noumi, and Akira Kimura (all four of whom are outside directors). The chairperson is Shirou Terashita, Representative Director, President and Chief Executive Officer.

Skills matrix

  Management and corporate strategy Business strategy Marketing ESG management Finance Global Legal and risk management Audits and internal control
Shirou Terashita    
Yutaka Fujiwara        
Kazufumi Onishi      
Nobuyoshi Yamori      
Kimikazu Noumi  
Akira Kimura    

Audit and Supervisory Committee

The Company is a company with an Audit and Supervisory Committee, which comprises four outside directors who are audit and supervisory committee members.

Using the internal control system, the Audit and Supervisory Committee conducts audits of the execution of duties of directors, as well as other general execution of duties relating to the Group's business management.

Its members are four directors (Kazufumi Onishi, Nobuyoshi Yamori, Kimikazu Noumi, and Akira Kimura) who are audit and supervisory committee members, and its chairperson is Nobuyoshi Yamori.

Nomination and Compensation Advisory Committee

The Company has established the Nomination and Compensation Advisory Committee, which is composed of a majority of outside directors and chaired by an outside director, as an advisory body to the Board of Directors. By consulting the Nomination and Compensation Advisory Committee on the nomination of and compensation for directors, the Company ensures fairness and objectivity.

Its members are four directors (Kazufumi Onishi, Nobuyoshi Yamori, Kimikazu Noumi, and Akira Kimura), who are audit and supervisory committee members, and Shirou Terashita, Representative Director, President and Chief Executive Officer. The chairperson is Nobuyoshi Yamori.

Group Budget and Performance Review Meeting

To calculate the Group's earnings forecast and examine the disclosure thereof, the Company has established a Group Budget and Performance Review Meeting. Chaired by the general manager of the Corporate Planning Department, who is responsible for the overall management of the Group's budget, the Meeting is composed of the heads of the business divisions of each Group company and other appropriate members. By gathering and consolidating the necessary information, the Group Budget and Performance Review Meeting considers disclosure policies appropriate to the Company's business type, based on trends in the Group's performance, market conditions, and the specifics of each large-scale project for which orders either have been received or are expected.

The results of the review and other matters are specifically explained by the person who is responsible for the overall management to the Board of Directors through the Representative Director, President and Chief Executive Officer using verifiable materials such as the review process and the basis for the decision.

Sustainability Committee

In June 2023, the Company established a Sustainability Committee for the purpose of promoting the Group's sustainability initiatives.

The Committee, chaired by the director in charge of the Administration Department, is composed of the heads of the business divisions of each Group company and other appropriate members. It meets, in principle, after the end of each quarter and on an ad hoc basis upon the initiative of the chairperson to discuss, review, propose, and monitor basic policies and specific action measures concerning sustainability.

The results of the review and other matters are reported to the Board of Directors through the Representative Director, President and Chief Executive Officer.

Group Risk Management Committee

In June 2023, the Company established a Risk Management Committee for the purpose of identifying and evaluating risks that may be assumed in the course of the Group's business activities and examining countermeasures.

The Committee, chaired by the director in charge of the Administration Department, is composed of the heads of the business divisions of each Group company and other appropriate members. It meets, in principle, after the end of each quarter and on an ad hoc basis upon the initiative of the chairperson to confirm issues regarding Groupwide risks and monitor the progress of improvement measures. In addition, the Committee will also consider, make recommendations on, and monitor the establishment of an enterprise risk management (ERM) framework.

The results of the review and other matters are reported to the Board of Directors through the Representative Director, President and Chief Executive Officer.

Group Compliance Committee

The Company has established a Group Compliance Committee.

By formulating policies, systems, and operation methods of compliance, the Committee is tasked with ensuring that the entire Group has deep awareness of the corporate social responsibility, observes relevant laws and regulations in daily business operations, and performs behavior that conforms to social ethics. The Committee is chaired by the director in charge of the Administration Department and consists of the general manager of the Internal Audit Office and the senior general manager of the Administration Department of each Group company, and other appropriate members. In order to accurately grasp the status of Group compliance, prevent violations, and respond to occurrences of violations, the Committee meets, in principle, after the end of each quarter and on an ad hoc basis upon the initiative of the chairperson.

The results of the review and other matters are reported to the Board of Directors through the Representative Director, President and Chief Executive Officer.

Group's Internal Audit Office

The Company has established the Group's Internal Audit Office. The Group's internal audits are conducted by three Group internal auditors who are dedicated to auditing work.

As a general rule, the Group's Internal Audit Office conducts audits of the Company and Group companies once every year with a view toward improving business efficiency, complying with regulations, the growing importance of compliance and a shared supervisory function based on the authorization of duties.

Audit results are promptly reported to the Representative Director, President and Chief Executive Officer, while the results and issues for improvement are referred to the Company and Group companies. To increase audit effectiveness, projected plans for remedial actions on those issues must be submitted to the Representative Director, President and Chief Executive Officer, who is responsible for audits.

In addition, the Group's Internal Audit Office reports directly to the Representative Director as well as to the outside directors who are audit and supervisory committee members, on the audit results and projected plans for remedial actions on issues for improvement. This strengthens its monitoring function toward management while ensuring the effectiveness of internal audits.

Outside Directors

In nominating outside directors, the Company ensures independence of the candidates and determines that they do not have the possibility of conflicts of interest with general shareholders by complying with the standards prescribed by the Tokyo Stock Exchange, as well as the independence standards for outside directors prescribed by the Company.

The independence standards set by the Company are stated in “Independent Directors,” in the Corporate Governance Report.

Kazufumi Onishi The Company has elected Mr. Kazufumi Onishi as an outside director who is an audit and supervisory committee member because it has determined that with his extensive track record and experience as a corporate manager of a subsidiary of a leading advertising agency, he is well suited to rigorously monitor and supervise the Company's management as well as to provide a broad range of advice and recommendations regarding important managerial judgment and decision-making of anticipated risks, etc. For these reasons, the Company expects Mr. Onishi to give advice and make comments to ensure the validity and legality of the decision-making of the Board of Directors, including the provision of necessary and appropriate advice and recommendations, based on his extensive track record and experience as a corporate manager.
Nobuyoshi Yamori The Company has elected Mr. Nobuyoshi Yamori as an outside director who is an audit and supervisory committee member because it has determined that he is an expert in fields such as financial theory and corporate governance, and accordingly, he is well suited to rigorously monitor and supervise the Company's management as well as to provide a broad range of advice and recommendations regarding important managerial judgment and decision-making of anticipated risks, etc. For these reasons, the Company expects Mr. Yamori to give advice and make comments to ensure the validity and legality of the decision-making of the Board of Directors, including the provision of necessary and appropriate advice and recommendations, based on his expert opinion on financial theory and corporate governance.
Kimikazu Noumi The Company has elected Mr. Kimikazu Noumi as an outside director who is an audit and supervisory committee member because it has determined that with his experience gained through his extensive activities, such as management of the financial business at financial institutions including The Norinchukin Bank, and fostering and supporting the businesses of companies through investment activities, as well as serving as an outside officer at various companies, he is well suited to provide a broad range of advice and recommendations regarding important managerial judgment and decision-making of anticipated risks, etc. For these reasons, the Company expects Mr. Noumi to give advice and make comments to ensure the validity and legality of the decision-making of the Board of Directors, including the provision of necessary and appropriate advice and recommendations, based on his extensive track record and experience in management, as well as in fostering and supporting the businesses of companies through investment activities.
Akira Kimura The Company has elected Mr. Akira Kimura as an outside director who is an audit and supervisory committee member because it has determined that with his wealth of experience and insight in global companies, he is well suited to assume the role of supervising the overall management of the Group from a broad, objective and sophisticated viewpoint based on his extensive knowledge gained from his professional experience, and thus to provide a broad range of advice and recommendations regarding important managerial judgment and decision-making of anticipated risks, etc. For these reasons, the Company expects Mr. Kimura to give advice and make comments to ensure the validity and legality of the decision-making of the Board of Directors, including the provision of necessary and appropriate advice and recommendations from an independent standpoint in order to further strengthen the corporate governance of the Group.

Evaluation of Effectiveness of the Board of Directors

During the period from March 2022 to April 2022, the Company conducted an evaluation of effectiveness of the Board of Directors by means of a questionnaire.

To ensure the questionnaire's anonymity, the Company requested a third-party organization to carry out the assessment and received a report of an evaluation conducted based on the questionnaire responses received from 12 directors, including all five directors of the Company, and all 10 directors of IR Japan, Inc. and Japan Originated Investment Bank, Inc., wholly owned subsidiaries of the Company (including three directors who serve as directors of IR Japan Holdings, Ltd. and IR Japan, Inc.; all seven directors of Japan Originated Investment Bank, Inc. concurrently serve as directors of IR Japan, Inc.), as of the time of this evaluation.

Questions asked in the questionnaire and the evaluation results are as follows.

(Questions) A total of 16 questions were asked (including open-ended questions) regarding the following major categories.

  1. Composition of the Board of Directors
  2. Effectiveness of the Board of Directors (Discussions at the Board of Directors)
  3. Effectiveness of the system of nomination of and compensation for directors and senior management
  4. Operation of the Board of Directors

(Evaluation results)

The Company received a report that, as in the previous fiscal year, it had practiced management emphasizing corporate governance. The Company is engaged in initiatives toward compliance as its most important task, as indicated by the comments of outside directors, to the effect that compliance adherence is shown by the awareness and behavior of the executive side. In addition, by conducting meetings in a manner that allows outside directors to actively express their opinions, the Board of Directors was operated in full consideration of the effective supervision of management by outside directors.

On the other hand, as future issues for deliberation, the report noted the method of discussing sustainability issues as well as the method of sharing the policy for training successors to the representative director as topics for more in-depth deliberation, along with deliberations on improving the timing for distributing materials for Board of Directors meetings and the method of holding pre-meeting briefings.

Considering the above evaluation results, the Company will continue to make further efforts in improving the corporate governance system to enhance its corporate value.