Overview of Corporate Governance
Basic Approach to Corporate Governance
ShinMaywa Industries, Ltd. believes that it is vital to conduct our business in accordance with relevant laws and regulations, social norms and common sense, as well as ensuring transparency and rationality in management, in order to sustainably increase our corporate value, and in addition to creating and operating a corporate governance system, to consider and work to improve the contents of that system.
Overview of Corporate Governance System and Reasons for Adopting that System
In consideration of its business format and scale, the Company has introduced an executive officer system subsequent to its adoption of a corporate auditor system and establishment of the Board of Directors and the Audit & Supervisory Board.
The following chart provides an overview of the Company’s corporate governance system.
Board of Directors’ meetings are held 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 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. The Company’s Articles of Incorporation provide that the number of Board Members should not exceed ten (10). The Board of Directors is comprised of nine (9) Board Members (including three (3) Outside Board Members). The names of the Board Members are listed in Company Profile. President and Chief Executive Officer Tatsuyuki Isogawa serves as the Chairman of the Board of Directors.
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 certified public accountants/tax accountants, corporate executives, and lawyers.
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 such agreements, the maximum amount of their liability for damages is the minimum amount provided for under 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.
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.
ShinMaywa has the following fifteen (15) Executive Officers (including five (5) Executive Officers concurrently serving as Board Members) and they are mainly responsible for conducting individual business operations. President and Chief Executive Officer Tatsuyuki Isogawa and these Executive Officers take part in deliberations on important Company management matters as key members of the Senior Executive Committee, which meets twice a month, in principle. President and Chief Executive Officer Tatsuyuki Isogawa serves as the Chairman of the Senior Executive Committee.
|Deputy Chief Executive Officer||(Technology, Quality Assurance, CSR Management) (Responsible for Aircraft Business, Corporate Planning Division, Research & Development Department)
Vice President of Corporate Planning Division
|Senior Managing Executive Officer||(Responsible for Special Purpose Truck Business)
President of Special Purpose Truck Division
|Managing Executive Officer||Senior Vice President of Special Purpose Truck Division, and Vice President of Sales & Marketing Department||Atsushi Itami|
|Managing Executive Officer||(Human Resources Management) (Responsible for Human Resources & General Affairs Department, Legal Department)
General Manager of Human Resources & General Affairs Department
|Managing Executive Officer||(Finance & Accounting Management) (Responsible for Finance & Accounting Department)
General Manager of Finance & Accounting Department
|Managing Executive Officer||(Responsible for Fluid Business)
President of Fluid Division
|Managing Executive Officer||(Responsible for Industrial Machinery Systems Business)
President of Industrial Machinery Systems Division
|Managing Executive Officer||(Responsible for Parking Systems Business)
President of Parking Systems Division
|Managing Executive Officer||President of Aircraft Division||Katsuo Tanaka|
|Executive Officer||General Manager of Information Technology & Security Department, Corporate Planning Division||Koji Fukai|
|Executive Officer||General Manager of Business Development Department, Special Purpose Truck Division||Masayuki Tomita|
|Executive Officer||Vice President of Sano Plant, Special Purpose Truck Division||Koichiro Oda|
|Executive Officer||Vice President of Hiroshima Plant, Special Purpose Truck Division||Yoshihiro Nagao|
|Executive Officer||Senior Vice President of Parking Systems Division||Masatsugu Nakase|
|Executive Officer||Senior Vice President of Industrial Machinery Systems Division, Vice President of Wire Processing Systems Department||Satoshi Nii|
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” which is comprised of a majority of Outside Directors. It was established with a view to further improving the transparency and appropriateness of personnel affairs and compensation programs. The members of the Committee are as follows.
|Name||Position in ShinMaywa||Position in Management Personnel Committee|
|Tatsuyuki Isogawa||President and Chief Executive Officer||Member|
|Yoshifumi Kanda||Outside Director||Chairman|
|Nobuya Hideshima||Outside Director||Member|
|Seiko Nagai||Outside Director||Member|
Other Matters Relating to Corporate Governance
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 common sense 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. Also, 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.
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 officers and employees to Group companies to concurrently serve as their board members, auditors, etc., in order to ascertain the status 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 dialogue 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.
(a) Requirements for resolutions for election of Directors
The Articles of Incorporation provide that resolutions for the election of Directors shall be adopted by a majority vote of the attending shareholders who hold one-third (1/3) or more of the voting rights of shareholders entitled to exercise voting rights. It is also provided in the Articles of Incorporation that resolutions for the election of Directors shall not be by cumulative voting.
(b) Matters for resolution by the General Meeting of Shareholders that may be resolved by the Board of Directors
(i) Acquisition of Treasury Shares
To enable the implementation of flexible capital policies in response to changes in the management environment, the Articles of Incorporation provide that the Company may by resolution of the Board of Directors acquire treasury shares by market transactions or other means pursuant to Paragraph 2 of Article 165 of the Companies Act.
(ii) Interim Dividends
The Articles of Incorporation provide that, for flexible profit sharing with shareholders, the Company may by resolution of the Board of Directors distribute the dividends of surplus (interim dividends) specified in Paragraph 5 of Article 454 of the Companies Act to shareholders who are listed or recorded in the final shareholder register or registered pledgees of shares on September 30 each year.
(c) Requirements for special resolutions of the General Meeting of Shareholders
The Articles of Incorporation provide that special resolutions of the General Meeting of Shareholders of the Company pursuant to Paragraph 2 of Article 309 of the Companies Act shall be adopted by two-thirds (2/3) or more of the votes of the attending shareholders who hold one-third (1/3) or more of the voting rights of shareholders entitled to exercise voting rights. The purpose of this provision is to facilitate the operation of General Meetings of Shareholders by relaxing the quorum for special resolutions of the General Meeting.
Company's Management System
As of June 21, 2019
An overview of the Company's management system.