We believe that, as an enterprise made up of numerous stakeholders, the INTAGE Group has an important responsibility not only to improve business results but also to ensure the soundness, fairness and transparency of management.
Our corporate philosophy, "THE INTAGE GROUP WAY," is the cornerstone of our management. To act consistent with that philosophy, the INTAGE Group's "Ethical Charter" has been established as a set of guidelines that all of the Group's executives and employees must follow in conducting business activities.
Based on this charter, the Group has formulated the INTAGE Group "Employee Code of Conduct," which defines the basic attitude and behavior expected of employees. The Code of Conduct is instilled in the Group's executives and employees to ensure that they carry out sound business activities in compliance with laws and regulations. In addition, the Group's internal control system is managed in accordance with its "Basic Policy on Internal Control Systems."
CORPORATE GOVERNANCE BASIC POLICY
On June 17, 2016, we formulated the Basic Policy on Corporate Governance. This policy statement defines our basic approach, structure, and management policy concerning corporate governance, with the objective of increasing corporate value through our sound business activities in adherence to compliance standards under our corporate philosophy "THE INTAGE GROUP WAY."
CHANGE IN GOVERNANCE
Since 2013 when we adopted a holding company structure, we have changed our corporate governance structure and system.
In 2016, we transitioned from being a company with a Board of Corporate Auditors to a company with an Audit & Supervisory Committee, with the objective of arranging an environment that supports appropriate risk taking on the business execution side. We have also aimed at strengthening the oversight and supervision function of the Board of Directors, accelerating decision-making through the delegation of authority, and raising the level of fairness, transparency, and effectiveness in business execution.
In 2022, in addition to the external evaluation of the effectiveness of the Board of Directors which has taken place since 2019, we have decided to introduce a restricted stock compensation plan with the aim of providing incentives to continuously improve the corporate value of the Company and promoting further sharing of value with shareholders.
We have also changed the composition of outside directors and have strived to foster optimal corporate governance in accordance with the business and management environment.
|- Moved to a holding company structure and changed the corporate name to INTAGE Holdings Inc.
|- Adopted the performance-linked, share-based compensation plan
|- Appointed a woman as director (outside director)
|- Changed to a company with an Audit & Supervisory Committee
- Implemented the first evaluation of effectiveness of the Board of Directors by external persons
- The share of outside directors in the Board of Directors exceeded 30%
|- Revised the performance-linked, share-based compensation plan
- Increased the number of female directors to two
|- Implemented the evaluation of effectiveness of the Board of Directors by external persons
- Increased the number of directors from six to seven
|- Implemented the external evaluation of effectiveness of the Board of Directors
|- Implemented the evaluation of effectiveness of the Board of Directors by external persons
- Increased the number of outside directors by one
- Appointed two outside directors with management experience
- Introduced a restricted stock compensation plan
CORPORATE GOVERNANCE STRUCTURE
The Board of Directors consists of eight directors (excluding directors serving as Audit & Supervisory Committee members; including two outside director), and four directors serving as Audit & Supervisory Committee members (including three outside directors).
The Board identifies job authority and operations responsibility for directors, makes decisions on important matters, and oversees the execution of duties by directors.
Based on the Board of Directors Regulations, the Board meets once a month and holds an extraordinary meeting when needed.As a body to report, discuss, and decide management policy, diverse measures, and various matters concerning business management, a Group Management Meeting is held once a month and is attended by directors (excluding directors serving as Audit & Supervisory Committee members), a full-time director serving on that committee, and executive officers.
In addition, in order to support functions of the Board of Directors, report and discuss various matters, and enhance the efficiency of management, the Executive Committee meets every two weeks, with attendance by directors (excluding directors serving as Audit & Supervisory Committee members), a full-time director serving on that committee, and executive officers.
The Company has also established several committees: the Internal Control Committee, in order to promote internal control initiatives of the Group; the Crisis Management Committee, to respond to crises involving business operations of the Group; the Management System Committee, to further improve management systems of the Group; and the Information Security Committee, to identify and resolve information security issues.The Audit & Supervisory Committee consists of four directors serving as Audit & Supervisory Committee members (including three outside directors). Ordinarily, they meet Basic ApproachCorporate Governance StructureChange in Governance2013Moved to a holding company structure and changed the corporate name to INTAGE Holdings Inc.2014Adopted the performance-linked, share-based compensation plan2015Appointed a woman as director (outside director)2016Changed to a company with an Audit & Supervisory CommitteeImplemented the first evaluation of effectiveness of the Board of Directors by external personsThe share of outside directors in the Board of Directors exceeded 30%2019Revised the performance-linked, share-based compensation planIncreased the number of female directors to two2020Implemented the evaluation of effectiveness of the Board of Directors by external personsIncreased the number of directors from six to seven2021Implemented the external evaluation of effectiveness of the Board of Directors2022Implemented the evaluation of effectiveness of the Board of Directors by external personsIncreased the number of outside directors by oneAppointed two outside directors with management experienceIntroduced a restricted stock compensation planComposition of Management (September 2022)Inside and Outside ExecutivesGender CompositionDirectorsDirectors Serving on the Audit & Supervisory Committeeonce a month.
The committee strives to enhance its audit and supervisory functions concerning the management. For example, a full-time director serving on the committee attends important meetings, such as the Internal Control Committee, and compiles opinions of the Audit & Supervisory Committee on reports of his work to other directors serving on the Audit & Supervisory Committee (outside directors). Further, directors serving as Audit & Supervisory Committee members attend, in addition to the Board of Directors meetings, important meetings, such as the Group Management Meeting, Executive Committee, Internal Control Committee, Crisis Management Committee, Management System Committee, and the Information Security Committee, in order to understand the process of making important decisions and the status of execution of operations, inspect requests for approval and other important documents on execution of operations, and ask employees for explanations on an as-needed basis.
They also understand the conditions of group companies, through collaboration with the Internal Audit Department, regular briefings from it, and communications with auditors of the INTAGE Group.The Internal Audit Department, which is in charge of the Company's internal audits, consists of eight persons and conducts auditing of the Company and Group companies, from the perspective of whether the companies are fairly, appropriately, and effectively managed and execute operations, based on both shared management philosophy and policy as well as various rules.
With regard to the audit process, the Department checks audit plans, execution of audits, reporting of audit results, and status of improvement, based on the Company's "Internal Audit Rules and Execution Standard."The Audit & Supervisory Committee and the Internal Audit Department also hold regularly scheduled liaison meetings, with the aim of improving effectiveness and efficiency of audits by both.
Liaison meetings confirm the audit policy and plan at the beginning of a fiscal year, and members closely collaborate by exchanging opinions on internal audit reports, during and at the end of the year.
CORPORATE GOVERNANCE STRUCTURE CHART
COMPOSITION OF MANAGEMENT (AS OF SEPTEMBER 2022)
COMMENTS FROM AN OUTSIDE DIRECTOR
Atsuhiro Imai Outside Director
I will contribute to the growth and development of the INTAGE Group by understanding its corporate culture
EVALUATION REGARDING THE EFFECTIVENESS OF THE COMPANY'S BOARD OF DIRECTORS (FISCAL 2021)
Each year, the Board of Directors analyzes and evaluates its effectiveness as a whole, by taking into consideration relevant matters, including the self-evaluation of each director, which is obtained by means of questionnaires and hearings, and a summary of the results is disclosed. In addition, the chairman of the Board of Directors regularly listens to opinions on the management of the Board from outside directors.
For fiscal June 2022, interviews of 11 directors and the analysis of the results were conducted in August 2022. Since 2020, we have been working with external consultants in order to objectively identify matters to be improved to further enhance the effectiveness of the Board of Directors. We invited an outside consultant to help us prepare and conduct interviews and analyze the results, in order to more objectively understand points for improvement with the ultimate objective of raising effectiveness of the Board of Directors. This year, we prepared the questionnaire, made interviews, analyzed the response results, received a report from the external consultant at the Board of Directors meeting in September, and confirmed the evaluation results and measures to be taken.
The evaluation results confirmed that, based on the recognition that the composition of the Board of Directors is appropriate, there exists assurance that outside directors have acquired appropriate knowledge about the Group's business and organization, as well as to have opportunities for cooperation and communication among themselves.
Assurance was also found to exist in regard to outside directors' used of their insight and their provision of advice that contributed to the company's sustainable growth.
Further, the Board of Directors has discussed management issues in a manner that respects their opinions. The results also concluded that the effectiveness for appropriately conducting the resolution of important managerial matters and supervision in execution of operations has been ensured. Specific examples include the appropriate composition and roles played by the Nomination and Compensation Committee, which is mainly comprised of outside directors.
Given this evaluation of effectiveness, we will continue to implement and consider further improvement, so that the Board can exert its effectiveness to the maximum extent. Specific actions will include the enhancement of discussions concerning the medium- to long-term management plans, capital policies, and financial strategies, and sustainability issues with outside directors from the viewpoint of shareholders, the verification of the structure of the Board of Directors (additional criteria) and the skillsets of directors, and the continued review of the way in which information is provided to directors.