The Company applies all the General Principles of Japan's Corporate Governance Code.
Supplementary Principle 2.4.1 Ensuring diversity in appointing core personnel, etc.
The Company recognizes that securing a diverse workforce is an important issue. Accordingly, the Company is promoting the hiring of women and non-Japanese as new graduate hires, while actively recruiting mid-career hires and promoting them to management positions. At present, the percentage of women and non-Japanese who are candidates for management positions is small, and the Company will continue to strengthen recruitment and career development support in order to expand the pool of candidates.
In addition, the Company discloses the status of its personnel development policy and personnel arrangements on its website, and plans to deliberate on disclosing voluntary and measurable goals by June 2022.
Supplementary Principle 4.1.3 CEO succession planning
The Board of Directors of the Company recognizes that succession planning for the CEO position is an important matter, and the President and CEO assumes the central responsibility for the planning and training of successors.
In addition to supervising the execution of business at the Board of Directors meetings, Outside Directors attend other important meetings to understand and oversee the competencies of the succession candidates and provide necessary advice to the President and Representative Director regarding the development of the candidates.
Principle 4.2 Roles and responsibilities of the Board of Directors
Supplementary Principle 4-2-1 Design of management remuneration system
Directors remuneration consists of fixed base remuneration, bonuses linked to each fiscal year's business results, and retirement benefits to be paid at the time of retirement, taking into consideration the responsibility of Directors for increasing the Group's corporate value over the medium to long term as well as for improving performance in each fiscal year. Regarding bonuses for Directors, the Board of Directors resolves the details of the proposal to be submitted to the General Meeting of Shareholders, after comprehensively taking into account the business results for each fiscal year (approximately 4% of net income) and the degree of achievement of the annual business plan, and refers the proposal to the General Meeting of Shareholders for approval. The Company grants retirement benefits to Directors upon their retirement in accordance with the standards prescribed in the Company's Rules for Directors, subject to approval by the General Meeting of Shareholders.
At present, the Company does not employ a system of remuneration linked to medium- to long-term business results or remuneration in the form of Company shares, but will consider appropriate remuneration for Directors from various angles in the future.
Supplementary Principle 4.3.3 Procedures for dismissal of the CEO
Currently, the Company does not have evaluation criteria or procedures for dismissal of the CEO. In the unlikely event that a member of the Company's senior management commits an act that violates or may violate laws and regulations or the Articles of Incorporation, or if any other event occurs that makes it difficult for a member of the Company's senior management to perform his or her duties properly, the Board of Directors will discuss the reasons for the dismissal in a timely manner, including for cases where the dismissal is proposed by an Outside Director. In addition, the Company will examine the establishment of more objective, timely, and transparent procedures from various angles going forward.
Supplementary Principle 4.10.1 Establishment of committees in cases where Independent Outside Directors do not constitute a majority of the Board of Directors
The number of Independent Directors does not constitute a majority of the Company's Board of Directors; however, even without establishing optional advisory committees, in view of the number of Board of Directors members, their composition, and the state of communication, the Company considers that it already receives appropriate involvement and advice from Independent Directors.
Principle 4.11 Preconditions for ensuring the effectiveness of the Board of Directors and Board of Corporate Auditors
The current Board of Directors is composed of nine Directors, all of whom are men and Japanese nationals. However, the Company believes that the Board of Directors is composed of Executive Officers who are familiar with the Company's business, and Outside Directors who have abundant experience and knowledge outside the Company and can effectively fulfill their roles and responsibilities.
In addition, the Company's policy is to appoint candidates for Directors on the basis of their knowledge, experience, and abilities, regardless of nationality or gender, as long as they are deemed to have sufficient qualifications. Although the Company has not appointed any female Directors or Corporate Auditors at this time, it has appointed one female Director and one female Executive Officer for each of its subsidiaries in 2021, and plans to gradually increase diversity in the future.
Furthermore, the Company currently has one Corporate Auditor who has worked for a financial institution in the past and one who is concurrently serving as an Executive Officer in charge of accounting at another company, and both Corporate Auditors have considerable knowledge of finance and accounting.
Supplementary Principle 4.11.1 Disclosure of the Board of Directors’ approach to overall balance, diversity, and size, as well as skills, etc.
The Company's Articles of Incorporation stipulate that there shall be no more than 15 Directors. In appointing Directors, taking into account the nature of the Company as a corporate group providing technology and skills globally, the Company's basic policy is to appoint Executive Officers having specialized skills and knowledge in general business administration, manufacturing, development, sales, financial accounting, etc., while appointing Outside Directors having a wealth of management experience in other companies, industries, or countries, etc. The Company plans to disclose the Skill Matrix in the Convocation Notice for Fiscal 2021 , which is scheduled to be sent in June 2022.
All four of the Company's Independent Outside Directors have management experience at other companies.
Supplementary Principle 4.11.3 Analysis and evaluation of the effectiveness of the Board of Directors
The Secretariat of the Board of Directors conducts interviews of Directors and Corporate Auditors, and improvements are carried out as applicable based on evaluations and studies together with the Board Chairman. The Company will carefully consider the matter of disclosing the results of the evaluations.