Evaluation of the Board of Directors
At J. Front Retailing we believe it is of utmost importance to ensure the effectiveness of the Board of Directors in order to achieve sustainable growth for the Group and improve our corporate value in the medium and long term. And to ascertain whether we are achieving adequate effectiveness, we carry out third-party evaluations of the Board of Directors every year since 2015.
A third-party organization conducts individual interviews with all members of the Board based on prior questionnaires and compiles a tabulation and analysis of the results into a report which is then discussed by the Board of Directors.
We select a third-party organization after confirming its validity as appropriate. Recognizing that the framework of the governance system has been established at a high level after improvements based on the evaluation of the Board of Directors, in fiscal 2019, the Company changed the third-party organization and adopted a new perspective with an emphasis on materializing substantive issues.
The evaluations and analysies are designed to give us a better understanding of the responses given by the Inside and Outside Directors and members of the various committees in their respective roles, while giving due consideration to a balance between new questions and existing questions which ensure continuity, all in light of the roles and responsibilities of the Board of Directors.
[Main Evaluation Items in 2019]
●Composition of the Board of Directors and overview of activities;
●Level of explanation of agenda materials and items;
●Evaluation of the importance of items discussed by the Board of Directors over the past year and amount of discussion;
●Issues to be resolved in the medium to long term;
●Roles expected of Directors themselves;
●Effectiveness of activities by the three committees (Nomination, Remuneration, Audit);
●Ideal Group Governance; etc., for a total of around thirty items
Evaluation Results and Improvement Measures
The third-party organization's report on the fifth evaluation of the Board of Directors conducted in October and November of 2019 stated that with the current makeup of the Board of Directors active discussions are had from a variety of viewpoints and a heightened level of objectivity regarding what is being discussed. Based on the report, the Board of Directors recognized that it needs to:
●Further fulfill the functions of the Audit Committee;
●Strengthen the oversight of the progress of business plans; and
●Further improve the quality of its deliberations.
In response, we will enhance the effectiveness of the Board of Directors by:
●Strengthening cooperation after clarifying the roles and functions of the Audit Committee (legality and appropriateness) and the Internal Audit Division (business perspective);
●Verifying the consistency of business plans with profits and losses and clarifying the implementation structure and schedule;
●Clarifying and deeply discussing the expected roles of each Director in discussions; and
●Reflecting the results of deliberations in the execution of business (strengthening PDCA).