The Company is committed to reinforcing corporate governance to ensure sustainable growth of the Group and medium- to long-term enhancement of corporate value. The establishment of a corporate governance system that is optimal for the Company is one of its important tasks, and as part of further strengthening of systems, the Company transitioned from a company with Audit & Supervisory Board to a company with three committees (Nomination, Audit and Remuneration Committees) with approval at the Company’s Annual Shareholders Meeting held on May 25, 2017.
The purposes of transition to a company with three committees (Nomination, Audit and Remuneration Committees) are as follows:
The Company will strengthen the oversight function for business execution of the Board of Directors by separating oversight from execution. In addition, the Company aims to promote sophistication of strategy by having the Board of Directors actively include the insights of external persons in order to hold rigorous discourse on important issues relating to the management of the Group.
The Company will enable decisions of business execution to be delegated to Executive Officers, clarify the authority and responsibility between the Board of Directors and Executive Officers and between the holding company and the business subsidiaries, and carry out speedy management decision making.
The Company will improve the transparency and objectivity of management by transitioning to a company with three committees including Nomination, Audit and Remuneration Committees. The majority of the members of each committee are Outside Directors.
The Company will build a governance system that is easy to understand from global perspectives, such as those of overseas investors.
The Company is a pure holding company and, with the exception of authority for important matters relating to the management of the Group, it delegates authority to its respective business subsidiaries with respect to matters involving business execution by the business subsidiaries in an effort to speed up business decisions and to make managerial responsibilities clear.
The roles and responsibilities of the Company, as a pure holding company, are as described below:
The Company has four supervisory units (Management Strategy Unit, Affiliated Business Unit, Financial Strategy Unit and Administration Unit) as management bodies to clarify each unit’s roles, responsibilities and authorities, thereby strengthening the oversight function and improving the internal control system of the entire Group.
Directors who are appointed by shareholders and are entrusted with the management of the Company are to carry out the following roles and responsibilities in the Board of Directors in accordance with their fiduciary responsibility and accountability to shareholders with the aim of realizing the Basic Mission Statement, Group Vision, etc.:
The Board of Directors of the Company is comprised of the appropriate number of 15 or less Directors as set forth in the Articles of Incorporation. Currently the number of Directors is thirteen (five of whom are independent Outside Directors including one female Director) and the term of office is one year. From the standpoint of separating oversight from execution and enhancing the effectiveness of discussions at the Board of Directors meetings, one-third or more of Directors are independent Outside Directors and the majority of Directors are independent Outside Directors and internally promoted Directors who do not execute business. The Chairperson of the Board of Directors is chosen from among internally promoted Directors who do not execute business from the standpoint of separating oversight and execution and ensuring the smooth operation of the Board of Directors.
When nominating Director candidates, the Company ensures diversity in consideration of the balance of knowledge, experience and ability on the Board of Directors as a whole.
The Nomination Committee is composed of three Outside Directors, the Chairperson of the Board of Directors who does not execute business and President and Representative Executive Officer. The chairperson is chosen from among independent Outside Directors from the standpoint of ensuring transparency and objectivity. The Nomination Committee determines the content of the proposals relating to the election and dismissal of Directors to be submitted to the Shareholders Meeting as well as the content of the reports relating to the election and dismissal of the members of the management teams of the Company and Daimaru Matsuzakaya Department Stores and the appointment and removal of the chairpersons and members of the three committees to be submitted to the Board of Directors.
The Audit Committee is composed of three Outside Directors and two full-time Inside Directors who do not execute business and are well informed about the Company’s internal information to maintain and improve the accuracy of audit. In addition, at least one of the Audit Committee members must have appropriate knowledge of finance and accounting. The Audit Committee audits the performance of duties by Directors and Executive Officers in line with the overall policy and plan determined by the Board of Directors and audits important matters to be discussed at the Board of Directors meetings and other individual matters deemed necessary by the Audit Committee as well as building and operation of internal control and prepares audit reports.
In addition, the Audit Committee oversees accounting auditors to ensure the reliability of accounting information and determines the content of proposals relating to the election and dismissal of accounting auditors to be presented to the Shareholders Meeting.
In fiscal year 2017, an internally promoted Director who does not execute business chairs the Committee from the standpoint of achieving a smooth transition from the Audit & Supervisory Board system. However, the Company will reconsider this system to establish the most appropriate system in the future.
The Remuneration Committee is composed of three Outside Directors, the Chairperson of the Board of Directors who does not execute business and President and Representative Executive Officer. The chairperson is chosen from among independent Outside Directors from the standpoint of ensuring transparency and objectivity. The Remuneration Committee determines policies concerning the decision of remuneration for each member of the management teams of the Company and Daimaru Matsuzakaya Department Stores and the details of remuneration for each member.
We have established the “Governance Committee” whose membership consists of the Chairperson of the Board of Directors, Representative Executive Officers and all Outside Directors. The Committee has free, vigorous and constructive discussions and exchange of views on the issues relating to corporate governance and overall corporate management including the reform of the Board of Directors based on the evaluation of the Board of Directors and shares information and develops cooperation with Outside Directors.
The “Risk Management Committee” systematically manages and addresses risks as a whole from a company-wide perspective, particularly with respect to risk related to strategies, and makes management decisions from a perspective focused on risk management. The Committee is chaired by President and Representative Executive Officer and consists of members including the senior executive general managers of supervisory units and the presidents of major subsidiaries. Drawing on extensive specialized knowledge of the committee members elected from supervisory units, the Committee assesses a variety of risks, prepares necessary measures and monitors progress in that regard.
The Company has established a “Compliance Committee” (whose membership includes a corporate lawyer) for the purpose of appropriately addressing issues concerning the Group’s compliance management practices. The Committee draws up a policy for addressing matters involving serious compliance-related violations, and through close collaboration with departments in charge of promoting compliance, develops the foundation of compliance system (e.g. the preparation of promotion systems and plans) and continuously oversees the status of implementation to promote compliance with laws and regulations, corporate ethics and other such standards.
Both committees report the details of their deliberations to the Audit Committee regularly (twice or so a year) and in a timely manner.