Corporate Governance

Last updated on November 4, 2016

Basic Concepts

As the core of the unified governance of the Group, J. Front Retailing as a holding company puts the strengthening of corporate governance at the top of its business agenda to ensure transparency, soundness and legal compliance of the management of the whole Group and focus on and thoroughly fulfill its accountability to its stakeholders (customers, shareholders, employees, business partners, communities and others).
 The Company has four supervisory units (Management Strategy Unit, Affiliated Business Unit, Financial Strategy Unit and Administration Unit) in its corporate organization to clarify each organization’s roles, responsibilities and authorities, thereby improving supervisory function and the internal control systems of the whole JFR Group. In addition, an executive officer system is in place to separate between decision-making and implementation, which facilitates speedier decision-making and implementation.
 The term for Directors and Executive Officers is one year and the Human Resources and Remuneration Committee, on which Outside Directors sit, is entrusted to determine their remuneration based on their individual annual performance to clarify their responsibilities for the enhancement of management and business results.
 The Company is a company with an Audit & Supervisory Board and it has a Shareholders Meeting, a Board of Directors, an Audit & Supervisory Board and Accounting Auditors as the company organizations provided in the Companies Act, while adopting an executive officer system as a body to perform operations. The Compliance and Risk Management Committee is also in place as an advisory body to the Board of Directors and a whistleblowing system is adopted to resolve various issues related to compliance and risk management. A post in charge of Corporate Governance Promotion was created in the Management Strategy Unit to address the sustainable growth of the Group and the medium- and long-term enhancement of corporate value.

Corporate Governance Guidelines(PDF 196KB)

Corporate Governance Report(PDF 622KB)

Board of Directors

The Company has nine Directors, two of whom are Outside Directors including one female, as a management decision-making body and basically they meet once a month under the chairmanship of President and Representative Director and in the presence of Audit & Supervisory Board Members to discuss and resolve the matters required by laws and regulations or prescribed by the articles of incorporation as well as the matters stipulated in the rules of the Board of Directors.
Two Outside Directors assume a role in strengthening the functions of and activating the Board of Directors by considering the management from a different perspective from Inside Directors. We invite TACHIBANA FUKUSHIMA Sakie and OTA Yoshikatsu as highly independent outside directors who can make appropriate decisions concerning decision-making and oversight by the Board of Directors independently of the top management. They are both in an objective position independent of the management team performing operations and reflect their involvement in the development of management strategies of domestic and foreign companies based on a global vision and their broad experience and extensive knowledge as managers of business corporations in the management of the Company.
With regard to the agenda for discussion at the Board of Directors meetings concerning important policies related to the Group’s overall management, we discuss in advance at the Group Management Meeting, which consists of Inside Directors, Full-time Audit & Supervisory Board Members and others, and the Group Strategy Meeting, which consists of Inside Directors.

Audit Function

In order to support the soundness of its management functions, the Company has an Audit & Supervisory Board, which consists of five Audit & Supervisory Board Members (including three Outside Audit & Supervisory Board Members) to determine its audit policy and approach, while having a system that enables their views concerning important audit matters to be reflected in the Board of Directors. In accordance with the auditing standards established by the Audit & Supervisory Board, audit policies for the period under review, the division of duties and others, each of Audit & Supervisory Board Members works to communicate with Directors, Internal Audit Divisions and other employees in collecting information and improving the audit environment. Audit & Supervisory Board Members attend the Board of Directors meeting and other important meetings, receive reports from Directors, Executive Officers, employees and others on their performance of duties, seek explanations as necessary, review important decision-making documents, investigate the business and financial conditions, and monitor and verify the condition of internal control systems. The Company has set up an Internal Audit Division reporting directly to President to verify the appropriateness and effectiveness of the business processes of the daily routine and financial operations of the Company and other companies in the Group according to the annual audit plan. Important matters are duly reported to the Board of Directors and the Audit & Supervisory Board.

Appointment of Outside Executives

Two of the Company’s nine Directors are Outside Directors and three of its five Audit & Supervisory Board Members are Outside Audit & Supervisory Board Members. When appointing outside executives, we confirm that there are no applicable items in the guidelines developed by the Tokyo Stock Exchange regarding independent executives and that they are in an objective position independent of the management team performing operations. Thereby the Company judges from the viewpoint of strengthening corporate governance that they can contribute greatly to the management of the Company.