Corporate Governance System

Overview of Corporate Governance System

We have adopted the following corporate governance system to improve the efficiency of the Board of Directors, to supervise the execution of operations by the directors, and to monitor the Audit & Supervisory Board.

1. Board of Directors

(1) Purpose
The Board of Directors, given their fiduciary responsibility to shareholders, fulfills the following roles and others to boost shareholder value over the medium to long term through management decision-making and the supervision of operations.
The Board of Directors formulates medium-term management plans and business plans based on our corporate philosophy and, after careful discussions on the direction of the management strategy, allocates management resources, etc. The President and Directors oversee management issues and risks that arise in the execution of business under the medium-term management plans as well as provide advice on how to overcome any issues.
The Board of Directors advises the President and Directors on formulating management strategies and on allocating management resources, etc. from an independent and objective viewpoint.
(2) Authority
The Board of Directors meets at least once a month on a general basis to discuss and decide important matters, including legal matters, and to supervise business execution by the directors.

2. Audit & Supervisory Board

(1) Purpose
The Audit & Supervisory Board combines the advanced internal information gathering of the full-time Audit & Supervisory Board members with the strong independence of the outside Audit & Supervisory Board members to enhance the effectiveness of audits.
(2) Authority
The Audit & Supervisory Board defines the responsibilities and mindsets of the Audit & Supervisory Board members and the Audit & Supervisory Board members' auditing standards and encourages every Audit & Supervisory Board member to put these into practice. The Audit & Supervisory Board members fulfill the function of monitoring management by attending meetings of the Board of Directors and other meetings.

3. Management Committee

(1) Purpose
We assure prompt and appropriate decision-making by directors through the Regulations of the Board of Directors and the Regulations of the Management Committee.
(2) Authority
Items on the agenda of the Board of Directors are discussed in advance, and those items are resolved based on the Management Committee Regulations.

4. Operating Officer Committee

Purpose and Authority
We have adopted an operating officer system under which the executive directors manage and supervise the operating officers, while the board of operating officers deliberates on items related to important executive operations.

5. Internal Control Committee and Risk Management Committee

(1) Purpose
The Internal Control Committee was established to enhance internal control systems.
The Risk Management Committee was established to define the items necessary for risk management within our Group, preventing risks from occurring as well minimizing our losses.
(2) Authority
We have established and manage the systems to ensure proper business operation as required by the Companies Act as well as internal control over financial reporting as required by the Financial Instruments and Exchange Act.
We have formulated policies, etc. related to risk management, developed systems based on these policies, etc., and manage these systems.

The following chart shows the relationship between our corporate governance and internal controls.