The Group believes that it wants to become a corporate group that continues to support the intellectual activities of customers through our products and services, expressing this as "KOKUYO aims to be a Life & Work Style Company that contributes to society by realizing an 'improvement in the Quality of Life' of customers to enhance the way they work, learn, and live, by providing value that enhance their creativity through our products and services." The Group believes that the securing management efficiency, transparency, and fairness are important elements in order to realize the continuous and long-term increase in corporate value. We will engage in efforts to continuously enhance these elements in constructing and operating our management system.
Corporate Governance System
In Japan, companies can choose one of three systems of corporate governance. Of these, we have chosen that of a “company with a kansayaku (audit and supervisory) board.” Under this system, the corporate governance is the responsibility of the Board of Directors and the Audit & Supervisory Board. The Board of Directors monitors the execution of business, while the Audit & Supervisory Board, acting independently of the Board of Directors, monitors whether directors are duly discharging their fiduciary obligations. We recognize that we can only command trust among our stakeholders with a robust system of oversight, clearly delineated roles and responsibilities among the layers of management, efficient business operations, and transparent and impartial processes.
1. Entities Related to the Board of Directors and Execution of Business
The Board of Directors has six members. Four of the members are outside directors. One of these outside directors serves as the board's chair. Board members serve one-year renewable terms.
This practice helps ensure a dynamic board membership, capable of responding swiftly to changing business conditions.
The Board of Directors holds regular monthly meetings, as well as ad-hoc meetings when necessary.
We have adopted a corporate officer system, in which the board delegates authority for day-to-day operations to a group of managers known as “corporate executive officers” (shikko yakuin).
This practice helps to keep monitoring separate from execution. It also streamlines board decision-making, enabling slicker operation. The board can devote itself to the bigger picture, such as the company's broad strategic direction, its capital structure policy, and its key business policies. It can also focus on its role of monitoring the execution of business.
The company has an executive body called the Group Management Board. This board exercises decision-making authority over matters affecting the whole corporate group. The membership consists of the heads of group companies, and the Board of Directors appoints the members.
2. Advisory Body for the Board of Directors
The company has an advisory body called the Nomination and Compensation Committee. Most of the members of this committee are outside directors or outside experts.
The Nomination and Compensation Committee vets the potential candidates to be nominated for election to the Board of Directors or to the Audit & Supervisory Board, as well as the potential candidates to be appointed as a corporate executive officer. It also reviews proposals to dismiss individuals in such roles. Additionally, the committee reviews director compensation, including the compensation system in general as well as the specific amounts of compensation and the personnel evaluations related to such. After deliberating on such matters, the committee advises the board of its opinion.
The committee has five members. Three are outside directors, one is an outside expert, and one is the President and CEO. The outside expert serves as chair.
The Nomination and Compensation Committee holds regular monthly meetings.
3. Board of Auditors
The Board of Auditors consists of three members. One member serves on the board full time. The other two are Outside Auditors. The members attend meetings of the Board of Directors, as well as other important company meetings, in order to monitor whether directors are duly discharging their fiduciary obligations. As well as scrutinizing the directors' actions, the members interface regularly with operating staff and managers of business units, and work closely with the company's Internal Audit Division as well as with their counterparts in the main group companies.
The Audit & Supervisory Board holds regular monthly meetings, as well as ad-hoc meetings when necessary.
4. Internal Audit Division
We have established an Internal Audit Division for our internal audit system, and the Company and its affiliated companies are subject to audits At the Headquarters Management Board, audit reports are made directly to the President and executive officers, and activities reports are also made to the Board of Directors as appropriate.
The persons in charge of internal audits, the auditors, and the corporate auditors hold meetings on a regular basis, exchange opinions and information, and strengthen mutual collaboration. The full-time auditors are also present for the audit reports that are made at the Headquarters Management Board. In addition, auditors also conduct exchanges of opinions and information on a regular basis with the auditors of Group consolidated subsidiaries.