Management Policy

Basic perspective

In the interest of sustainable corporate growth, the Company prioritizes above all the maximization of shareholders’ interests. By being fair-minded in our efforts to satisfy requests from our various stakeholders (including employees, customers and business partners), we strive to boost management soundness and efficiency and ensure swift decision-making. At the same time, we recognize ensuring high levels of transparency and compliance as topmost priorities.
We conduct IR activities that are driven by top management. We strive to maintain disclosure that is timely and appropriate and to augment corporate transparency.

Reason for choosing the current corporate governance structure

The Company has a corporate governance structure with the appropriate functioning of the directors, who have an extensive knowledge of the current business climate, the outside directors, who have much knowledge and experience concerning corporate law, finance and investments, the full-time auditors, who have an extensive knowledge of the current business climate, and the outside auditors, who have much knowledge about laws, finance and accounting. The Company believes that this structure ensures the transparency, efficiency and legality of management decisions.

Overview of the current corporate governance structure

(1) The Company has a Board of Directors which is the supervisory unit for decision-making and conducting business operations related to management and other issues, and a Board of Auditors which is the auditing unit.
(2) As of June 17, 2025, the Board of Directors was composed of six directors: Yoshihisa Sato, Yasushi Akiba, Masumi Nishida, Kazutaka Mizuochi, Keita Nagura and Reiko Kinoshita. The board was chaired by President and Representative Director Yoshihisa Sato.
Keita Nagura and Reiko Kinoshita, the Company’s two outside directors, have no personal, business or other interest-based relationships with the Company. Their role is to strengthen the supervisory function of the directors and Board of Directors from a perspective that is independent of the Company’s operations. The Board of Directors meets regularly, as well as on an as-needed basis, using a thorough exchange of opinions that leads to proactive management, rapid exchanges of viewpoints involving management and other issues, and the efficient execution of operations. The term of office of directors has been set at one year, in order to maintain dynamism within the management team and to clarify directors’ rights and responsibilities with respect to management.
(3) The Company uses the executive officer system for the purposes of strengthening the supervisory and decision-making functions of the Board of Directors and conducting business operations with even greater speed and agility. This system reflects the operations, business diversity, global scale and other aspects of all group operating subsidiaries and has the goal of contributing to the medium to long-term growth of corporate value and the consistent growth of the Group. Executive officers who are appointed by the Board of Directors are responsible for business units. This results in the clear separation of the role of conducting business operations from the role of the Board of Directors. In accordance with the rules for executive officers, the Board of Directors delegates authority to these officers that enables them to perform their roles by conducting business operations with speed and agility backed by fast decision-making.
(4) As of June 17, 2025, the Board of Auditors was composed of three auditors: Tatsuya Onitsuka, Satoko Suzuki and Takashi Kiuchi. The board was chaired by full-time auditor Tatsuya Onitsuka. Satoko Suzuki and Takashi Kiuchi, the Company’s two outside auditors, have no personal, business or other interest-based relationships with the Company. The outside auditors work closely with the full-time auditors and collect information within the Company as needed. Their role is to strengthen the auditing function of the Board of Auditors from a perspective that is independent of the Company’s operations. The board meets as necessary, reporting the results of audits conducted in accordance with the audit policies and audit plans determined at the beginning of the year, mutually exchanging opinions and information, and stating opinions at regular meetings of the Board of Directors, in which the auditors participate. This allows the auditors to audit the performance of the directors.
(5) At operating subsidiaries, the Company has strengthened its operations by using a Management Committee composed of directors, auditors and general managers. The committee is chaired by operating subsidiary president. Information concerning the discussions of this committee is passed on to the Board of Directors for making accurate decisions about business operations. In addition, the committee’s discussions and decisions must be reported to the Company. This ensures the transparency and accuracy of decisions at operating subsidiaries and provides a framework that allows appropriately reflecting the committee’s discussions and decisions in decisions made by the Company.
(6) There is an Internal Audit Office (one staff member) which serves as the internal auditing unit and subsidiaries have their own internal audit offices (two staff members, including the Internal Audit Office staff member). Based on the audit plan for the fiscal year, this office conducts business audits of the Group from the standpoint of operational efficiency, rationality and compliance. The office points out any issues that may exist at a departmental level from an internal control standpoint, proposes improvements for each department, and checks the implementation status of each improvement, as it works to improve and increase operational soundness. In addition, internal audits, auditing by auditors and accounting audits go beyond subsidiaries. Auditors use activities throughout the Group in an effort to improve the quality of auditing operations.
The Company’s Internal Audit Office receives reports about the results of internal audits at all subsidiaries and the subsidiaries of these companies while working closely with the internal audit offices of the subsidiaries. Results are reported to the Company’s auditors and president. Although there is no system for directly reporting the results of internal audits to the Board of Directors, items requiring a review by the directors are reported to the board by the auditors or president or to the Internal Controls Committee, which consists of all directors. Matters that are discussed by the Internal Controls Committee are reported to the first subsequent meeting of the Board of Directors.
(7) Decision on director nominations is made in a manner aimed to ensure director objectivity and on the basis of deliberation.
(8) Director remuneration is determined in accordance with the basic policy. Both monetary compensation and restricted stock compensation are determined by deliberation at the Board of Directors where accounting auditors will attend, within the scope of the total amount approved at the general meeting of shareholders. Auditor remuneration consists of only basic compensation and is determined by deliberation at the Board of Auditors within the scope of the total amount approved at the general meeting of shareholders.The maximum amount of auditor remuneration
was resolved at the 36th General Meeting of Shareholders held on June 22, 2012 to be no more than 60 million yen per year.