• Home
  • Company Infromation
  • Business Outline
  • Investor Relations
  • CSR
Page Top

IR

Home  >  Investor Relations  >  Corporate Governance

Corporate Governance

YAMAZEN’s management places the highest importance on the issue of elevating fairness and transparency in corporate management, as well as on maintaining and improving the corporate management structure to ensure that it is capable of providing appropriate responses to changing business environments in a timely manner. Determined to become a corporate entity that is trusted, supported, and looked favorably on by a broad spectrum of society, YAMAZEN and its group companies have established committees for the promotion of various Corporate Social Responsibility activities, formulated the “Charter for the Corporate Behavior of the Yamazen Group,” and built a corporate governance structure so as to not only ensure risk control and legal compliance but also to reciprocate the trust accorded by society.

(Updated Jun.26, 2019)

Overview of the Corporate Governance Structure

The Company is a company that has adopted an Audit and Supervisory Committee mainly in order to strengthen the management supervisory function of the Board of Directors and accelerate decision making. Audit and Supervisory Committee consists of three directors who are audit and supervisory committee members (of whom, two are outside directors) which carries out the auditing and supervision of the execution of duties of the Board of Directors.

1. Board of Directors

The Board of Directors makes decisions regarding important matters concerning management and supervises business execution at the monthly meetings of the Board of Directors.

In principle, the Company’s directors will consist of at least one-third independent outside directors in order to ensure the effectiveness of the supervisory function of the Board of Directors. There are currently nine directors (including directors who are audit and supervisory committee members) of whom, three are outside directors (of whom, two are outside directors who are audit and supervisory committee members).

Pursuant to the provisions of Article 399-13, paragraph 6 of the Companies Act, in order to ensure sufficient deliberation and strengthen the supervisory function of the Board of Directors regarding important matters, as well as accelerate decision making procedures by the representative director, president regarding other matters, the Board of Directors delegates parts of the executions of important operations to the representative director, president on the condition that the decisions by the Executive Committee, which is made up of the representative directors, corporate officers concurrently serving as directors, corporate officers with a rank of executive officer or above, and presidents of each division headquarters who are corporate officers, go through.

In addition, a system is in place to receive comprehensive reports at the meeting of the Board of Directors regarding decisions made on matters at the Executive Committee, which ensures auditing and supervisory function of outside directors and the Audit and Supervisory Committee.

2. Audit and Supervisory Committee

Through attendance at the monthly meetings of the Board of Directors and auditing activities as the Committee, the Audit and Supervisory Committee audits and supervises matters regarding the legality of the directors’ execution of duties and decision making, as well as the adequacy and appropriateness of management decisions made by directors.

3. Accounting Auditor

The Company appointed Deloitte Touche Tohmatsu LLC as accounting auditor, based on the provisions of the Companies Act, to audit financial statements and internal controls, as well as perform quarterly reviews based on the provisions of the Financial Instruments and Exchange Law.

4. Operations Structure

The Company introduced a corporate officer system and is aiming to increase the flexibility of management by separating the responsibilities and roles of the supervision of management (monitoring) from those of the business execution (management). There are currently twenty-nine corporate officers (of whom five are concurrently serving as directors).

The Company’s main organizations that carry out business are as follows.

(Executive Committee)

The Executive Committee discusses and decides on the Company’s basic and significant matters related to business execution (excluding matters to be resolved at the meeting of the Board of Directors) in accordance with the provisions of the Company’s management principles and management targets. The meeting of the Executive Committee is attended by the representative directors, corporate officers concurrently serving as directors, corporate officers with a rank of executive officer or above, and presidents of each division headquarters who are corporate officers.

(Management Meeting)

The Management Meeting holds monthly meetings as a meeting body for the purpose of reports, exchanging information, etc. regarding business execution, and is attended by all corporate officers (including corporate officers concurrently serving as directors) and full-time audit and supervisory committee members

(Corporate Officers Committee)

The Corporate Officers Committee holds monthly meetings as a meeting body for corporate officers to smoothly report business conditions, exchange information, and communicate, as well as deliberate on important management issues and examine and discuss business execution in response to inquiries from the Board of Directors and/or the Executive Committee, in addition to assisting the execution of the company-wide management plan.

YAMAZEN considers internal control and compliance a crucial management issue, especially in today’s business environment, which is underscored by increasing globalization and complexity. To achieve greater fairness and transparency in corporate management, YAMAZEN has established an Internal Control Committee. In addition, based on the belief that active, voluntary, and ongoing CSR activities are indispensable for any corporation that aspires to be a business entity that is trusted, supported, and looked favorably on by a broad spectrum of society, a Compliance Committee has been created to ensure the specific and effective implementation of actions for the full enforcement of and familiarization with this policy.
The current state is as follows.

1. Systems for Ensuring Efficient Performance of Directors' Duties

Authority exercisable by the directors in the course of performing their duties has been explicitly defined upon taking into account managerial risks and the scope thereof and upon further clarification of the assignment of duties to the directors.

Pursuant to the provisions of Article 399-13, paragraph 6 of the Companies Act, in order to ensure sufficient deliberation and strengthen the supervisory function of the Board of Directors regarding important matters, as well as accelerate decision making procedures by the representative director, president regarding other matters, the Board of Directors delegates parts of the executions of important operations to the representative director, president on the condition that the decisions by the Executive Committee, which is made up of the representative directors, corporate officers concurrently serving as directors, corporate officers with a rank of executive officer or above, and presidents of each division headquarters who are corporate officers, go through.

2. Rules and Systems for Management of Risks Against Losses

The sharing of functions and responsibilities, operational flows and operational rules (control procedures) with respect to the identification of important risks inherent in the Company and the avoidance and minimization thereof, have been defined and placed in order (documented) in the form of rules and regulations, which are to be followed when performing any important processes.

For the promotion of CSR activities, the Corporate Planning Department, which provides administrative support for CSR activities, is responsible for comprehensive risk management and the administration of oversight with respect to the execution of risk management. The Internal Control Committee evaluates the effectiveness of CSR activities from an independent point of view, and the Compliance Committee rolls out specific and effective actions designed to mitigate risks and prevent risks from becoming full-fledged issues.

3. Systems for Preservation and Management of Information Related to Directors' Performance

Systems based on Yamazen's document control rules and other relevant company regulations are in place to ensure the preservation and management of information concerning the execution of the directors' duties, which may be viewed by the directors and at any time.

4. System for reporting to YAMAZEN on matters regarding execution of duties by directors and others of subsidiaries

YAMAZEN requires subsidiaries to report regularly to YAMAZEN in accordance with the internal rules, concerning the subsidiary’s operating performance, financial position, and other important information.

5. Systems for Ensuring Proper Business Operations within the Yamazen Group

In an effort to ensure proper business operations at Yamazen's Japanese and overseas affiliate companies, systems will be implemented at respective locations commensurate with their sizes and in conformance with the provisions concerning the seconding of officers, rules governing authority (sharing of authority between Yamazen and its affiliates), business reporting, document storage, internal auditing, risk management and education.

6. Systems for Ensuring Compliance with Laws of Incorporation

In solemn recognition of the importance of corporate social responsibility, YAMAZEN has embarked on a structure to advance CRS activities. It has also formulated the “Charter for the Corporate Behavior of the Yamazen Group” to ensure compliance, which is an important issue in corporate management.

For the full enforcement of legal compliance and corporate ethics, every attempt is made by management to voluntarily set a good example and demonstrate good practices to employees to facilitate the penetration of the principles throughout the group. Education and training are also administered to ensure compliance. For employees, the “Charter for the Corporate Behavior of the Yamazen Group” serves as a code of conduct, and YAMAZEN carries out systematic programs to familiarize employees with the charter.

In an effort to prevent corporate misdemeanors, Yamazen has set up a window within the Company through which company members can report suspicious activities (a system for internal reporting). The system is also designed to ensure the protection of informants with due cause and help corporate ethics take root.

As in the case of above 2., the Internal Control Committee evaluates the effectiveness of CSR activities from an independent point of view, and the Compliance Committee rolls out specific and effective actions designed to mitigate risks and prevent risks from becoming full-fledged issues.

7. Matters relating to directors and employees who assist in the duties of the Audit and Supervisory Committee

More than one staff member with a prescribed level of knowledge and experience (“Staff of the Audit and Supervisory Committee”) are assigned to assist in the duties of the Audit and Supervisory Committee.

8. Matters relating to independence of the directors and employees of the previous item from other directors (excluding directors who are audit and supervisory committee members), and matters relating to ensuring the effectiveness of instructions of Audit and Supervisory Committee to such directors and employees

Matters relating to human-resource management of Staff of the Audit and Supervisory Committee shall require the consent of the Audit and Supervisory Committee. 

The duties of the Staff of the Audit and Supervisory Committee shall be carried out under the direction of the Audit and Supervisory Committee.

9. Systems for Reporting by Directors and Employees to the Audit and Supervisory Committee

Directors and employees are required to immediately report to the Audit and Supervisory Committee in accordance with the internal rules, if they become aware of an incident that has caused or might cause significant damage to the Company or a violation of any law or of the Articles of Incorporation.

10. System to ensure that the reporting person of preceding item does not receive unfavorable treatment for making such report 

In YAMAZEN’s internal rules, it states that a point of contact that is independent from the management must be established, that the reporting person must remain anonymous, and that any dismissal or other unfavorable treatment for making such report is prohibited.

11. Matters relating to procedures for prepayment or reimbursement of costs arising from the execution of duties of audit and supervisory committee members (limited to matters relating to the execution of duties of the Audit and Supervisory Committee) and policy related to the handling of costs and liabilities arising from the execution of other duties 

YAMAZEN shall promptly handle expenses and liabilities such that have been incurred by an audit and supervisory committee member in executing his or her duties (limited to matters relating to the execution of duties of the Audit and Supervisory Committee; the same applies hereinafter this item), in cases where a request is made to the Company for advance payment of expenses or the like, and whereby, after deliberations at the department or section responsible, except for the case where it is deemed that the expense or liability pertaining to such request is not necessary for the audit and supervisory committee member to execute his or her duties.

12. Systems for Ensuring Effective Auditing by the Audit and Supervisory Committee

The Audit and Supervisory Committee holds periodic meetings with representative president in an attempt to confirm the management principles of the Company and to exchange opinions regarding challenges that need to be met by the Company, risks surrounding the Company, the state of the auditing environment for audits by the Audit and Supervisory Committee, and significant auditing issues, among others, for better mutual communication.

The Audit and Supervisory Committee makes efforts to share views and thoughts with the Internal Audit Department and the account auditors to deepen mutual understanding by maintaining an appropriate relationship and coordination with the Internal Audit Department and by holding periodic discussions with the account auditors.

The Audit and Supervisory Committee may attend Management Meetings and other important meetings, as well as maintain files on meeting minutes, reports, approvals, and other important documents, in order to allow easy and timely browsing only when they deem it necessary.

Documents whose disclosure is required by law are subject to reporting to and inspection by the Audit and Supervisory Committee in advance of such disclosure.

13. System for ensuring the reliability of financial reports

To ensure the reliability and appropriateness of financial reports, an internal control system designed for the appropriate and valid filing of internal control reports is in place in conformance with the provisions of the Financial Instruments and Exchange Act. For the operation of the system, an Internal Control Committee has been established. To reasonably ensure the reliability and appropriateness of the system, the committee, in cooperation with the Auditing Department responsible for internal audits, assesses the effectiveness of the system and its operational state.

14. Basic policy toward the elimination of antisocial forces and actions implemented to date

YAMAZEN’s basic policy calls for a resolute stance when dealing with anti-social forces, which threaten order and safety of civil society and impede sound economic and social development.

This basic policy has been expressly incorporated into the “Charter for the Corporate Behavior of the Yamazen Group,” which stipulates YAMAZEN’s code of conduct as a basic concept of compliance matters. A companion guidebook has been prepared and distributed to all employees of the YAMAZEN Group for full enforcement.

As a member of the Osaka Corporate Defense Countermeasures Federation, YAMAZEN receives its guidance and shares pertinent information with the federation.

A diagram of Yamazen's corporate governance structure is as follows.

governance