Management Policy

Corporate Governance

Basic Philosophy

The ShinMaywa Group places top priority on conducting its business in compliance with relevant laws and regulations, social norms, and common sense, as well as on ensuring transparency and rationality in the group's management in order to improve our corporate value.

ShinMaywa Corporate Governance

In consideration of its business format and scale, ShinMaywa Industries, Ltd. has introduced an executive officer system subsequent to its adoption of a corporate auditor system. The executive officer system is intended to strengthen management functions by transferring authority over individual business operations to Executive Officers in order to speed up decision-making processes and clarify executives' responsibilities while freeing up Board Members (Board of Directors) to focus on evaluating individual businesses, making decisions about the allocation of management resources, and exercising supervision over business operations from a corporation-wide perspective. Through introduction of this executive officer system, the Company aims to enhance its corporate governance and realize higher operational efficiency.

In addition to setting its Board Members' and Executive Officers' terms of office at one (1) year in order to enable the Company to evaluate management personnel's performance and clarify their responsibilities, ShinMaywa voluntarily established a “Management Personnel Committee.” This is an advisory body to the President, comprising primarily experts (lawyers and university professors) and Board Members selected from outside the Company. It was established with a view to further improving the transparency and appropriateness of personnel affairs and compensation programs.

Currently, the Company has eight (8) Board Members (including two (2) Outside Board Members) who attend Board of Directors’ meetings once a month, in principle, to make decisions regarding important management matters, including those that Japan’s Corporate Governance Code stipulates should be considered and monitored in such meetings, and to review the status of execution of duties by Board Members as appropriate. The two Outside Board Members are expected to take active roles in further enhancing the functions of monitoring management and providing advice on corporate management at the meetings of the Board of Directors. They are selected from among persons who have deep insight into company management processes and are effectively independent of ShinMaywa. Meanwhile, the Company's Articles of Incorporation stipulate that the number of Board Members should not exceed ten (10).

ShinMaywa also has thirteen (13) Executive Officers (including five (5) Executive Officers concurrently serving as Board Members) and they are mainly responsible for conducting individual business operations. These Executive Officers take part in deliberations on important Company management matters as members of the Senior Executive Committee, which is an advisory body to the President and meets twice a month, in principle.

The number of Corporate Auditors is five (5) (including three (3) Outside Corporate Auditors). These Corporate Auditors conduct audits by participating in the meetings of the Board of Directors and other important meetings within the Company, hearing reports on the Company's operations from Board Members and employees, and inspecting approved documents. The three Outside Corporate Auditors are appointed from among lawyers, certified public accountants/tax accountants, and corporate executives. Applying their varied experience and backgrounds, they help to ensure neutrality and effectiveness of auditing by expressing their opinions on execution of duties by Board Members, mainly from the perspectives of expertise in their specialized fields. In order to ensure the independence of Outside Corporate Auditors, the Company appoints them from among persons who have never been involved in the Company's business as either legal advisors or accounting auditors.

Pursuant to the provisions of its Articles of Incorporation, the Company has entered into individual agreements with all Outside Board Members and Corporate Auditors on limitation of their liability for damages, as stipulated in Paragraph 1 of Article 423 of the Companies Act. Under this agreement, the maximum amount of their liability for damages shall be the minimum amount provided for under the law.

The Company has appointed Grant Thornton Taiyo LLC as its accounting auditor, and has created an environment in which audits can be conducted in a fair and proper manner by providing the auditor with accurate management information.

Regarding measures for compliance, ShinMaywa has established a set of Corporate Principles, Group Philosophy, CSR Management Policy, and ShinMaywa Group Code of Conduct, all of which are shared with its group companies as guidelines for all employees across the organization, including group company personnel to act in accordance with laws and regulations, social norms, and commonsense principles. The Company has also designated a “ShinMaywa Corporate Ethics Day” and “Corporate Ethics Month” to promote efforts to raise compliance awareness and enable various compliance systems to take root within the organization. In addition, with the aim of clarifying responsibilities and promptly carrying out operations regarding corporate social responsibility (CSR), ShinMaywa has appointed an Executive Officer in charge of CSR, created an organizational unit dedicated to promotion of CSR activities, and set up a system under which guidance and advice on its activities are provided by the CSR Advisory Committee, a majority of whose members are appointed from outside of the Company.

In addition, the Company has been striving to eliminate compliance risks through early detection of problematic events, and through self-cleansing mechanisms, by conducting internal audits and establishing a “Corporate Ethics Helpline” whistleblowing system, which is also available to officers and employees of Group companies. The status of utilization of the Corporate Ethics Helpline, contents of reports received, and other matters are reported to the Board of Directors, which is responsible for supervising operation of the system.

With regard to development of the necessary systems for ensuring proper operations at Group companies, ShinMaywa also works to ensure proper operations by its group companies. To this end, ShinMaywa requests them to report on their execution of business operations or to consult with relevant ShinMaywa departments, as necessary, based on the regulations on group company management. Where appropriate, the Company dispatches its own board members/employees to group companies to concurrently serve as their board members, auditors, etc., in order to ascertain the statuses of their execution of business operations while facilitating reporting and discussion between ShinMaywa and group companies.

The Company also strives to promote and enhance constructive dialogues with its shareholders by providing them with information that is necessary for or useful in properly exercising their voting rights, holding investor conferences, and periodically conducting shareholder surveys. Feedback and comments gathered from the Company's shareholders through such avenues are then reported to the directors and business divisions concerned via the director in charge of public relations/investor relations, thereby maintaining effective systems for dialogue with shareholders.

Company's Management System

Company's Management System

As of June 27, 2017

An overview of the Company's management system.