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 Report
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, Group Internal Audit Office, and Group Compliance 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.
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 19, 2024 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, Akira Kimura, Nobuyoshi Yamori, and Kimikazu Noumi (all four of whom are outside directors). The chairperson is Shirou Terashita, Representative Director, President and Chief Executive Officer.
| 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 | ○ | ○ | ○ | ○ | ○ | |||
| Akira Kimura | ○ | ○ | ○ | ○ | ○ | ○ | ||
| Nobuyoshi Yamori | ○ | ○ | ○ | ○ | ○ | |||
| Kimikazu Noumi | ○ | ○ | ○ | ○ | ○ | ○ | ○ |
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, Akira Kimura, Nobuyoshi Yamori, and Kimikazu Noumi) who are audit and supervisory committee members, and its chairperson is Nobuyoshi Yamori.
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, Akira Kimura, Nobuyoshi Yamori, and Kimikazu Noumi), who are audit and supervisory committee members, and Shirou Terashita, Representative Director, President and Chief Executive Officer. The chairperson is Nobuyoshi Yamori.
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.
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.
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.
The Company established a Group Compliance Committee in June 2023. By formulating policies, systems, and operation methods of compliance, the committee is tasked with ensuring that the entire Group is deeply aware of corporate social responsibility, observes relevant laws and regulations in daily business operations, and acts according to social ethics.
The Committee is chaired by the director in charge of the Administration Department and consists of the general manager of the Group Compliance Office, 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.
The Company has established the Group Internal Audit Office. The Group internal audits are conducted by three Group internal auditors who are dedicated to auditing work.
As a general rule, the Group 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 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.
The Company is deeply aware of the Group’s social responsibility, observes relevant laws, regulations, and internal rules in our daily business operations, and follows a code of conduct that conforms to high standards for corporate ethics. To accurately gauge whether these efforts are proceeding correctly, we established a Group Compliance Office in July 2023. The office is supervised by the director in charge of the Administration Department and consists of two dedicated members and one another member. Its task is to accurately gauge the status of compliance in business operations throughout the entire Group to prevent violations from occurring. In particular, the office closely monitors efforts to prevent insider trading and efforts to comply with the Unfair Competition Prevention Act and the Act on the Protection of Personal Information.
The office concurrently serves as the secretariat of the Compliance Committee. By monitoring compliance and strengthening the system throughout the Group, it creates a structure that enables prompt decision-making.
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. |
|---|---|
| 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. |
| 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. |
From April 2024 through May 2024, the Company conducted an evaluation of the effectiveness of the Board of Directors by means of a written questionnaire and interviews based on the questionnaire with all relevant personnel. To ensure anonymity, the Company requested a third-party organization to carry out the assessment. Responses were received from all six directors of the Company and all 12 directors of IR Japan, Inc. and Japan Originated Investment Bank, Inc., wholly owned subsidiaries of the Company, and IRJ Business Consulting Staff, Inc., a wholly owned subsidiary of IR Japan, Inc., as of the time of this evaluation. (One director concurrently serves as a director of the Company and Japan Originated Investment Bank, Inc.; two directors concurrently serve as directors of IR Japan, Inc. and Japan Originated Investment Bank, Inc.; and two directors concurrently serve as directors (or corporate auditors) of the Company, IR Japan, Inc., Japan Originated Investment Bank, Inc., and IRJ Business Consulting Staff, Inc.) The Company received an evaluation report based on the questionnaire and interview responses after the results of the questionnaire were compiled and the overall trends analyzed. Questions asked in the questionnaire and the evaluation results are as follows.
The Company received the following evaluation from the third-party organization: “It is apparent that the Company continues to make efforts to enhance the administrative division structure and the transfer of authority, etc., in response to issues that came to light the previous fiscal year, such as weakness in the administrative division structure and a concentration of authority on the president. It can therefore be evaluated that the Board of Directors is being managed with due full consideration for effective supervision by outside directors.”
On the other hand, as future issues for deliberation and improvement, the report noted the following three items: (1) a discussion on business strategies for enhancing corporate value over the medium to long term; (2) a discussion on the training of successors, succession planning, etc.; and (3) the personnel and structure of administrative divisions.
Considering the above evaluation results, the Company will continue to make further efforts in improving the corporate governance system to enhance its corporate value.
