Our fundamental philosophy about corporate governance
For us, the fundamental principles of corporate governance are based on a basic recognition of our goal to maximize our shareholders’ profits and corporate value while contributing to the local community through specialized real estate business, as well as the importance of compliance. Specifically, in order to have a thorough awareness of compliance, in addition to setting up various kinds of organizations in terms of corporate law, we need to respond to changes in our business environment in a flexible way, construct internal control systems and disclosure structures, and manage our operations appropriately. We recognize the importance of emphasizing shareholders’ rights, proving worthy of trust from society, and continuing to achieve sustainable growth and development, and strive to improve our corporate governance.
Corporate governance structure
As organizations that are based on corporate law, in addition to establishing a general shareholders’ meeting, a board of directors, a board of auditors and an accounting auditor, we appoint someone to be responsible for internal auditing, to serve as a monitor for everyday operations and take action.
In addition, in order to strengthen our management oversight function from an external perspective, we appoint one outside director and four outside auditors. We have adopted our current corporate governance structure to recognize that we can guarantee soundness and efficiency for management through the coordination of each of these organizations.
Corporate governance organizational chart
Board of directors
Our board of directors, comprising five directors (one of whom is an outside director), decides how our company executes business and has the authority to oversee directors’ execution of their duties. We have appointed an outside director who came from a different industry banking—and have set up a structure for making management decisions based on a broader perspective, and for externally monitoring operations. In addition, we will clarify directors’ recognition of their management responsibilities and responsibility for the execution of their duties, and also do our best to create a structure for making decisions quickly and accurately.
Board of auditors
The four-person board of auditors consists of one full-time auditor and three part-time auditors. In order to monitor directors’ execution of their duties from an objective and neutral perspective, a majority of auditors are from outside the company. The structure allows auditors to grasp important concerns relating to important administrative matters, risk and compliance management issues and other concerns as needed, through measures such as attendance at major meetings, inspection of meeting minutes, inspection of all written decisions (whenever there is a decision), regular meetings with directors, and hearings about the status of directors’ execution of duties when necessary.
In addition, we have set up opportunities for auditors to give advice as one reporting item at regular directors’ meetings, and the system makes it possible for us to receive reports, requests and recommendations. Through these, we audit the decision-making process at the board of directors and the status of directors’ execution of duties.
The managing board deliberates and reports on important matters relating to our basic management policy, management, and the execution, administration and management of each business. The managing board is composed of executives and staff above director and individuals selected by executives. As a general rule, it meets once a month.
Risk and compliance committee
We established a risk and compliance committee, comprising the heads of departments and other employees, to conduct risk assessments, thoroughly enforce compliance, improve employee awareness and provide instruction. In addition, we maintain an internal control system, and validate the status and efficacy of its operations.
Status of our internal control system maintenance
In order to guarantee the effectiveness of our internal controls, we aim to thoroughly improve compliance through abiding by laws and regulations, social norms and corporate ethics. We recognize that guaranteeing proper operations is the most important thing. At the Board of Directors, we decided on basic policy relating to the construction of our internal control system, and we review this policy regularly.
In terms of specific initiatives, for carrying out everyday operations, we maintain regulations relating to administrative authority and division of duties, and establish who has decision-making power for carrying out duties, as well as the scope of that power. Together with aiming to properly delegate authority and make quick decisions by utilizing circular letters to gain approval, we discuss matters and issue reports at meetings of the board of directors in relation to decision-making for important issues.
In addition, we set goals such as understanding the progress of our performance, reviewing our management strategy policies, and sharing information. By regularly convening management board meetings via the board of directors, etc. as well as risk and compliance committee meetings via the heads of departments, we strive to build an environment where the people in charge at each level are able to make proper decisions.
With regard to our operational status, we receive audits through internal auditing—a supervisory function via management—and audits by outside auditors, who are independent from organizations that conduct operations and conduct audits from a third-party perspective, as well as accounting audits by an accounting auditor.
In addition, as a response to the internal whistleblower system regarding the Financial Instruments and Exchange Act, we follow the basic policy of the internal control system structure. We strive to enhance our internal control development, operations and evaluations that pertain to financial reports, as well as the systems related to those reports.