Corporate Governance
Basic policy
In order to bolster the relationship of trust with shareholders and other stakeholders, the MKK Group believes it is fundamental to ensure corporate governance in which the management structure is highly efficient and the company's business is conducted fairly and in a highly transparent manner. In addition to recognizing our social responsibility, the MKK Group is focused on promoting efficient business activities with the goal of ensuring trust in the company and ensuring proper conduct in line with our corporate philosophy and strict compliance with relevant laws and regulations.
List of governance structures
| Design of organizations | Company with an audit and supervisory committee |
|---|---|
| Executive officer system | Exist |
| Number of directors | 10 |
| Number of outside directors (independent executives) among them | 5（4） |
| Term of office of directors (excluding members of the audit and supervisory committee) | 1 year |
| Number of members of the audit and supervisory committee | 4 |
| Number of outside directors among them | 3 |
| Frequency of a meeting of the board of directors | 17 times |
| Frequency of a meeting of the audit and supervisory committee | 14 times |
| Appointment, dismissal and remuneration system for executives and others | Establishment of a nomination and remuneration committee |
April 1, 2022 to March 31, 2023
Characteristics of the corporate governance structure
Our company has an audit and supervisory committee, in which outside directors account for 50% or over. Directors who belong to the audit and supervisory committee have voting rights in the board of directors, so as to be involved with the selection of a representative director and decision making processes for business execution.
- The company holds meetings of the Board of Directors at least once a month. In addition to deliberations and decisions regarding basic management policies, matters involving stipulated laws and other important items related to management, the Board supervises the execution of business and monitors progress toward achievement of company plan targets.
- The company shifted to a "company with an audit and supervisory committee" format in June 2016. The audit and supervisory committee is comprised of four Directors, three of which are outside Directors. Members of the audit and supervisory committee attend key management meetings, including Board of Director meetings, review important documents, supervise divisions and subsidiaries, and audit and monitor the execution of business by the representative directors and directors.
- The company has also introduced an executive officer system with the aim of improving efficiency in organizational management and promoting swift and appropriate decision making.
Corporate governance and internal control chart
Progress in the development of an internal control system
In line with its commitment to risk management and entrenched compliance, the MKK Group is broadening and strengthening the internal control system to ensure the reliability of the company's financial reporting and the proper and efficient execution of business activity at each of the divisions and subsidiaries.
The internal control committee serves as an auxiliary function to the Board of Directors (with the internal control team as a subordinate organization), while the internal audit office operates directly under the president. These organizations not only monitor the management of the internal control system for the group as a whole, but also confirm the appropriateness of individual business operations and the efficiency of checks within divisions.
This system allows appropriate corrective action to be taken whenever an internal control problem is detected.
| Board of directors |
The board of directors of our company is composed of 10 directors (including members of the audit and supervisory committee and 5 outside directors), and chaired by the director and president Toshikazu Tanaka. The board of directors is positioned as an organization that determines the basic policy for business administration, items set forth in laws and regulations, and other important items regarding business administration and oversees business execution. A meeting of the board of directors is held once or more times per month. At meetings of the board of directors, directors in charge of respective businesses report the outline of each business and share information, deliberate on individual projects, make decisions about important matters regarding business administration, and have discussions based on questions and opinions about each issue with our company from outside directors. |
|---|---|
| Audit and supervisory committee | Our audit and supervisory committee is composed of 4 directors, including 3 outside directors, and chaired by Yasuhide Hayashi. In addition, Yasuhide Hayashi and Kazuya Yamaguchi were appointed as full-time members of the audit and supervisory committee, in order to improve the information gathering process, make audits more effective through the sufficient cooperation with the internal audit division, etc., and strengthen the auditing and supervising functions. The audit and supervisory committee members attend major meetings in our company, browse important documents, survey divisions and subsidiaries, audit the business execution of the representative director and directors, and report audit results at a meeting of the audit and supervisory committee. A meeting of the audit and supervisory committee is held once a month. |
| Nomination and remuneration committee | In December 2019, our company established a nomination and remuneration committee as a discretionary advisory organ of the board of directors, in order to further enrich the corporate governance structure by further improving the objectivity and transparency of procedures for nominating directors and determining their remuneration amounts. This committee is composed of 3 or more directors or external experts selected through a resolution of the board of directors, a majority of members are independent outside directors, and its chairperson is appointed through a resolution of the board of directors. As of the date of submission, this committee is composed of the director and president Toshikazu Tanaka, the managing director Masahiko Saito, and the independent outside directors Masaaki Kusunoki, Hiroshi Kanki, Tomohiro Kikkawa, and Junko Kamei, and chaired by the director and president Toshikazu Tanaka. |
| Management council | Our company established a management council, which is composed of directors, executive officers, and others. This council deliberates and make decisions on the items to be discussed by the board of directors and other important matters, to streamline decision making and business operations. The management council is composed of full-time directors, executive officers, and section chiefs related to the items to be discussed, and chaired by the director and president Toshikazu Tanaka. It holds a meeting once or more times per month. |
Regarding the board of directors
The board of directors of our company is composed of 6 directors and 4 members of the audit and supervisory committee, and the balance and diversity of the entire board of directors are secured by combining the technical skills and knowledge in respective fields.
| Post | Name | Business administration | Finance and accounting | Legal affairs and risk management | Personnel/labor affairs and personnel development | Environment, safety, and quality | Technology, development, and information | Experience of business related to our company |
|---|---|---|---|---|---|---|---|---|
| Director and President | Toshikazu Tanaka | ○ | ○ | ○ | ○ | |||
| Managing Director | Masahiko Saito | ○ | ○ | ○ | ○ | |||
| Board of Directors | Kouichi Hayashi | ○ | ○ | ○ | ||||
| Shiro Yajima | ○ | ○ | ○ | |||||
| Outside Directors | Masaaki Kusunoki | ○ | ○ | ○ | ||||
| Hiroshi Kanki | ○ | ○ | ○ | |||||
| Audit and Supervisory Committee Member (Full-time) |
Yasuhide Hayashi | ○ | ○ | |||||
| Kazuya Yamaguchi | ○ | ○ | ||||||
| Audit and Supervisory Committee Member (Part-time) |
Tomohiro Kikkawa | ○ | ||||||
| Junko Kamei | ○ |
＊The above list indicates up to 4 fields where each one can exert his/her expertise, so there may be other fields where they can exert their expertise.
Evaluation on the effectiveness of the board of directors
Since FY 2016, our company has been analyzing and evaluating the effectiveness of the board of directors, and checking improvements.
For evaluation, we hold a questionnaire survey targeted at all directors, including the members of the audit and supervisory committee, regarding the composition, operation, etc. of the board of directors, and the results are reported and discussed at meetings of the board of directors.
We entrust an external consultant with the collection and summarization of answers to each questionnaire, in order to gather candid opinions and secure objective analysis.
Primary measures for improving the effectiveness of the board of directors in FY 2022
The timing of analysis and evaluation of the effectiveness of th e board of directors in FY 2022 is as follows.
- Questionnaire survey during a period from March 15 to 31, 2023
- Reporting and discussion at a meeting of the board of directors held on May 31, 2023
The items of the questionnaire for analyzing and evaluating the effectiveness of the board of directors in FY 2022 are as follows. The questionnaire items have been partially revised, while considering the results in the previous fiscal year and discussions about corporate governance last year.
- Composition and operation of the board of directors
- Management and business strategies
- Corporate ethics and risk control
- Monitoring of business performance, evaluation and remuneration of management staff
- Dialogue with shareholders and others
As a result of the evaluation, it was confirmed that the board of directors is appropriately operated, securing its effectiveness. Regarding the problems found in the evaluation in the previous fiscal year, some improvements were observed thanks to the measures we took, but some problems were recognized and constructive opinions were given for further improvements, mainly in the items related to "deliberation on management and business strategies" and "necessary information for deliberation." In addition, "diversity of core personnel" has been recognized as an issue this fiscal year.
Our company will continue our efforts to improve the effectiveness of the board of directors, by addressing extracted issues, including those found in the previous fiscal year.
Risk management
Situation of the development of the risk management structure
Our company strives to prevent risks that would affect the business of our corporate group seriously and minimize their impact. A risk management committee was established under the board of directors, to assess risks while roughly classifying the risks in our corporate group into law-related risks and business risks, discuss concrete measures, and report the progress of each measure to the management council and the board of directors.
In particular, we recognize thorough compliance with laws and regulations as the most important item, so we established a compliance committee, to implement measures for establishing a system for promoting the directors and employees of group companies to comply with laws and regulations, and maintaining and improving their mindsets.
For the management of evident risks, we established a crisis management headquarters, to take swift and appropriate measures in emergency circumstances.
Code and charter of behavior
Our company enacted "Mitsubishi Kakoki Group's Charter of Behavior" and "Mitsubishi Kakoki Group's Code of Behavior for Compliance" to follow laws and regulations, distributed them to all directors and employees of our corporate group, including employees of affiliated companies, and holds lectures on compliance regularly to disseminate them.
In particular, in order to follow the Act on the Protection of Personal Information and the law concerning the use of numbers for identifying individuals, etc., we set a policy for protecting personal information, information on certain individuals, etc. (privacy policy), and disseminate it among all employees. Regarding information security, which is indispensable for following the privacy policy, we produced "Mitsubishi Kakoki Group's regulations for information security management" and other regulations for using information assets safely and properly in the entire group, and make efforts to control the risks of leakage, destruction, and loss of information assets. We also established an information security committee for risk control, realizing a system for improving items related to information security swiftly.
Tightening of group governance
In order to realize the Mitsubishi Kakoki Group's Management Vision for 2050, we are proceeding with group management. In order to support the mutual business development and corporate value improvement of group companies, we reviewed the management structure for affiliated companies, and make efforts to streamline business operations for affiliated companies and optimize management.
In detail, we set and share internal control policies, including compliance, risk control, and crisis management, clarified our policy for involvement in group-wide business in "Regulations for managing affiliated companies," and defined business management and governance, to share information on planning, execution, follow-up, and results of business plans and corporate governance, and give necessary guidance and support.
Regarding internal control and risk management, the internal control committee and the risk management committee, which take central roles in conducting related activities, include staff from major group companies. These committees monitor the statuses of development and operation of internal control systems in the entire corporate group, the extraction and analysis of risks, and countermeasures, to improve governance further.