Corporate Governances

Corporate Governance

【Overview of Corporate Governance】

(i) Basic policy on corporate governance

Our corporate philosophy is “Aim to be a company that has an international perspective, creates new value and contributes to society, using our strong information gathering and technological capabilities.” To execute our basic policy, we have adopted the following guidelines: complying with laws and regulations, increasing management transparency through disclosure, and making and executing decisions promptly. We will strengthen our corporate governance based on these guidelines.

(ii) Overview of the corporate governance system and reasons for adopting the system

<The Board of Directors>

The Board of Directors consists of six Directors who are not members of the Audit and Supervisory Committee, including an Outside Director, and three Directors who are also members of the Audit and Supervisory Committee, including two Outside Directors (as of the date of submission of this report). The Board of Directors makes decisions on important matters in Group management. It also audits and supervises business execution. The Board of Directors holds a regular monthly meeting, as well as extraordinary meetings for any urgent matters. The term of office of Directors who are not members of the Audit and Supervisory Committee is one year. The term of office of Directors who are also members of the Audit and Supervisory Committee is two years.

<The Committee of Executive Officers>

The Company introduced an executive officer system in 2003. The committee consisted of nine members (including four Directors) as of the time of preparing this report. The Committee of Executive Officers meets monthly to share information. Each Executive Officer strives to improve day-to-day operations in their area of responsibility. Representatives of domestic and overseas subsidiaries participate in meetings of the committee and report on their respective situations.

<The Audit and Supervisory Committee>

The Company has established an audit and supervisory committee to strengthen its functions to audit and supervise the Board of Director’s execution of its duties and to increase agility and speed in decision making by separating auditing and supervision from business execution. The committee consisted of three Directors (a full-time Director and two Outside Directors) as of the time of preparing this report. These Directors audit and supervise the legality and adequacy of the execution of duties of the Directors who are not members of the Audit and Supervisory Committee. The committee holds a regular monthly meeting, as well as extraordinary meetings as needed. Each member of the Audit and Supervisory Committee follows the policies set by the committee and requests Directors who are not members of the Audit and Supervisory Committee, among others, to provide reports and conduct investigations as needed. They audit and supervise management in cooperation with the Internal Audit Section and the accounting auditor.

Chart of Corporate Governance Structure

コーポレート・ガバナンス体制図

Basic Policy for Internal Control System

The Group has built and operates an internal control system as described below.
The Group will continue to review and improve the internal control system in response to revisions to laws and regulations and changes in the business environment. Systems to Ensure the Proper Business Operation of the Group

  1. (1)System to ensure that the directors and employees of the Company and its subsidiaries will execute their duties in compliance with laws and regulations and the Articles of Incorporation
    1. (i) The Company has established Sanyo Trading Group’s Code of Conduct Manual a code specifying how the officers and employees of the Company and its subsidiaries should act in accordance with the Group’s mission and in compliance with laws and regulations and the Articles of Incorporation. To ensure the effectiveness of the manual, the President appoints a Director responsible for compliance. In addition, the Company has established the Compliance Committee under its Compliance Regulations and has built a system where the committee supervises compliance companywide. The committee periodically reports the status of compliance to the Board of Directors.
      The Group has a system where the subsidiaries report their situation periodically to the Board of Directors and the divisions in charge and may report their situation regularly by participating in meetings of the Committee of Executive Officers or by other means under the Subsidiary Management Regulations and the Standards for Decision-Making Authority. Depending on the maters stipulated by related regulations, the Company secures compliance by making final decision at the headquarters’ Board of Directors.
    2. (ii) The Internal Audit Section audits whether the business activities of the Company and its subsidiaries are efficient and comply with laws and regulations, internal regulations and trade practices, among other rules, and reports the audit results to the Board of Directors.
    3. (iii) Regarding whistleblower hotlines for reporting acts that violate laws and regulations or social norms or acts at risk of violating them, the Company has the Compliance Committee internally and a third party (lawyer) externally. The Company has established internal regulations to prohibit the unfair treatment of informants and protect them.
  2. (2)System for Storage and Management of Information on the Directors of the Company’s Execution of Their Duties
    The Company has established a system where important documents and electromagnetic records, including Board of Directors’ meeting materials and the minutes of the Board of Directors meetings, are stored and managed and can be perused by the Directors and Auditors as needed under the Document Handling Rules and other internal regulations.
  3. (3)Regulations and Systems Related to Management of Risks of Losses at the Company and Its Subsidiaries
    The Company identifies a variety of risks caused by business execution using standards that are consistent as much as possible, and aims to have a comprehensive risk management while ensuring sound management and maximizing shareholder value.
    Under the Risk Management Regulations, the Company clarifies its risk management system, specifying the divisions responsible for different types of risks and managing risks and managing risks exhaustively and comprehensively. The President appoints a Director responsible for risk management. The Company has the Risk Management Committee, which monitors various risks attributable to the Company’s operations and risks that the Company should avoid for business continuity, and promptly responds to changes. The committee regularly provides to the Board of Directors an overview of risk management, including countermeasures to be taken if risks to be avoided occur. The Company has established a system where it prepares for losses at its subsidiaries through interviews with the representatives of the subsidiaries, among others, as needed, under the Risk Management Regulations.
  4. (4)Systems to Ensure That the Directors of the Company and Its Subsidiaries Will Execute Their Duties Efficiently
    The Company has built a system where it sets management targets and formulates management plans for the Group and examines the plans, comparing them and progress towards their achievement.
    For efficient execution of duties based on decisions made by the Board of Directors, the tasks are assigned to each Director and Executive Officer under internal regulations, including the Organization Rules, Administrative Authority Regulations, and Standards for Decision-Making Authority. The Company seeks to clarify the decision-making rules and expand the system of checks and balances by reviewing the relevant regulations and developing the delegation of authority system. The Company thereby develops a system to ensure that the Directors perform their duties systematically, properly and efficiently. The Company has its subsidiaries formulate management plans in line with the Group’s management targets and compares the plans and progress towards their achievement.
  5. (5)System to Ensure the Proper Business Operation of the Group Consisting of the Company and Its Subsidiaries
    To ensure the proper business operation of the Group, the Company has defined a management mission shared by the Group companies and has formulated the Subsidiary Management Regulations, which specify basic rules for the Company and its subsidiaries cooperating for the Group’s prosperity and development of overall business operations, and the Standards for Decision-Making Authority Related to Management of Subsidiaries. The Company has appointed supervisors in charge of each subsidiary who supervise the subsidiaries’ business and receive reports from the subsidiaries about their operations as necessary.
  6. (6)Systems to Ensure Effective Audits by the Audit and Supervisory Committee
    1. (i) Directors and employees who shall assist with the duties of the Audit and Supervisory Committee
      The Audit and Supervisory Committee has reported that it will not have any Directors or employees who shall assist the committee with its duties for some time to come.
    2. (ii) Independence of Directors and employees who shall assist with the duties of the Audit and Supervisory Committee
      Refer to (i).
    3. (iii) Systems for reporting to the Audit and Supervisory Committee
      The Group’s Directors and employees submit statutory documents, resolutions and reports at important meetings, and important documents about the Directors who are not members of the Audit and Supervisory Committee on the Directors’ execution of their duties to the Audit and Supervisory Committee and report matters that may have significant effects on the Company as necessary.
      The Company periodically receives reports from the management of its subsidiaries and checks the management of the subsidiaries in cooperation with the Internal Audit Section and the auditors of the subsidiaries.
    4. (iv) System to ensure that persons who reported to the Audit and Supervisory Committee will not be treated unfairly as a result
      The Group has established a whistleblowing system to prevent the unfair treatment of persons who give information to the Audit and Supervisory Committee and protect the informants.
    1. (v) Policy on advance payments and other expenses resulting from the Audit and Supervisory Committee members’ execution of their duties
      If members of the Audit and Supervisory Committee claim advance payments of expenses for their execution of duties, the Company prepays the expenses unless it decides the expenses are unnecessary for the execution of duties.
    2. (vi) System to ensure effective audits by the Audit and Supervisory Committee
      The Audit and Supervisory Committee members participate in the meetings of the Board of Directors and the Committee of Executive Officers and other important meetings, and exchange opinions with the President & CEO, accounting auditor and Internal Audit Section as necessary.
  7. (7)System Related to Antisocial Forces
    1. (i) Basic Policy for Exclusion of Antisocial Forces
      Article 3 of the Antisocial Forces Handling Regulations of the Company states: “We shall never make payments to antisocial forces or have relationships with them. The Company’s officers and employees shall not allow any unjustified involvement of antisocial forces and shall be determined to exclude them to adhere to social justice and win the trust of customers, the market, and society.”
    2. (ii) Preparation for Excluding Antisocial Forces
      The Company has adopted the Sanyo Trading Group’s Code of Conduct Manual, Antisocial Forces Check Manual, among other regulations, and communicates its code of conduct for excluding antisocial forces to the entire Group to ensure full compliance.

Reason for the Appointment of Outside Directors and Outside Auditors

Name Audit & Supervisory Committee member Independent officer Supplementary explanation about relationships with the Company Reason for appointment
Yukio Miyajima No applicable information The Company has determined that Mr. Miyajima will fulfill his duties from a neutral position, taking advantage of his extensive experience and knowledge and deep insight, which he has achieved through work at a trading company for many years. We examined his personal, capital and business relationships with the Company and his stake in the Company and have determined that he is independent and is not at risk of having conflicts of interest with general shareholders.
Yonosuke Yamada No applicable information The Company has determined that Mr. Yamada will fulfill his duties from a neutral position, taking advantage of his extensive experience and knowledge and deep insight as a lawyer. We examined his personal, capital and business relationships with the Company and his stake in the Company and have determined that he is independent and is not at risk of having conflicts of interest with general shareholders.
Asako Hasegawa No applicable information Ms. Hasegawa is conversant with financial accounting and tax practice as a certified public accountant. The Company has determined that she will fulfill her duties from a neutral position, taking advantage of her insight and experience. We examined his personal, capital and business relationships with the Company and his stake in the Company and have determined that he is independent and is not at risk of having conflicts of interest with general shareholders.

Implemetation of Measures for Shareholders and Other Stakeholders

1. Initiatives to revitalize the General Meeting of Shareholders and to facilitate the exercise of voting rights

  Explanation
Sending the notice to call a General Meeting of Shareholders early We strive to send the notice to call a General Meeting of Shareholders early and post the notice on the Company’s website.
Avoiding days on which many companies hold shareholders’ meetings We arrange the schedule to facilitate the attendance of many shareholders at the meeting.
Participating in the electronic voting platform for investors
Other initiatives to improve the environment for the exercise of voting rights by institutional investors
Those shareholders that are institutional investors can use the electronic voting platform for investors.

2. IR activities

  Explanation Explanation by representative
Creating and publishing the disclosure policy We post the disclosure policy on the Company’s website.  
Holding regular explanatory meetings for analysts and institutional investors We hold meetings after the closing of accounts for the first half and the annual closing. Yes
Posting of IR materials on the website On the website, we post materials such as accounting summaries, timely disclosure materials, annual securities reports and quarterly reports.  
Establishing the IR department (person in charge) The Corporate Strategy Department (Head of the Corporate Strategy Department) is in charge of IR.  

3. Initiatives related to respect for stakeholders

  Explanation
Environmental conservation activities, CSR activities, etc. We have achieved ISO 14001 certification and consider environmental conservation in our business activities.
Registration date: September 2004; renewal date: September 2019; expiration date: September 9, 2022
Formulation of policy, etc. on the provision of information to stakeholders We believe that providing information to stakeholders appropriately in a timely manner is important, and offer the information on the website and at company information sessions.

Diversity

The Sanyo Trading Group’s employees are diverse in terms of gender, nationality and age. Employees come from a variety of backgrounds and have diverse values. As business rapidly diversifies and globalizes, it becomes necessary for diverse workforces to respect each other’s values to get the most out of themselves to achieve the Group’s Management Mission: With an unwavering and enterprising spirit and a free and open corporate culture, we will supply the best solutions in a flexible and timely fashion, working to realize a process of “co-creation” by which we contribute both to the sustainable development of the international community and the happiness of employees.

As a trading company, our employees are our greatest asset. We consider diversity an important corporate strategy that enables everyone to work without worry.

We strive to develop our training systems and work environments for all employees to ensure they continue to develop their own careers and work without worry for a long time. Looking at work environments, the regular work hours are seven hours a day. Childcare leave is a maximum of two years, and employees can choose flexible work hours, including shorter work hours, when they return to work. We have rules that enable employees to change their job types in accordance with their diverse attitudes toward work.

Regarding diversity, we continue to hire women for career-track positions. With the expansion of overseas subsidiaries, we are hiring more local employees and are hiring more foreign employees at the head office. We aim to develop an environment where all employees are able to work comfortably, regardless of nationality or gender.

As for education, investing in human resources is one of the basic strategies in our long-term management plan. We aim to cultivate employees able work on the global stage. To this end, we are developing training systems, including an overseas training system, external training, e-learning and training for employees of different levels. Employees receive training to learn mindsets and actions that support interactions with diverse people utilizing the Universal Manners Test.

Through these initiatives, we develop systems enabling our diverse workforce to grow.