The Glosel Group places the utmost priority on enhancing corporate governance to improve management transparency and strengthen corporate management. In addition, we establish an organizational structure capable of responding quickly to changes in the business environment and take necessary measures in order to enhance and develop our corporate value.
The Glosel Group works to enhance and strengthen corporate governance by supervising business execution through the Board of Directors and other important meetings.
(1) Schematic diagram of the corporate governance system
(As of June 28, 2023, after the 69th Annual General Meeting of Shareholders)
(2) Other matters related to the corporate governance system
The status of our internal system for timely disclosure of company information is as follows.
[1] Decisions
Important decisions are made at monthly meetings of the Board of Directors in principle, and extraordinary meetings of the Board of Directors are held as necessary to make prompt decisions. The director in charge of planning and administration takes a lead in reviewing the important matters decided on whether disclosure is necessary or not, and if disclosure is necessary, we strive to do so promptly.
[2] Incidents
Accidents, disasters, and lawsuits are reported by the relevant department to the management and to the General Affairs Department or the Management Planning Department after an event occurs. Upon receiving the report, the General Affairs Department or the Management Planning Department determines whether the information is a matter for timely disclosure or information that should be communicated to stakeholders, and if necessary, we promptly disclose the information following a resolution by the Board of Directors.
[3] Financial information
Financial information is prepared, managed, and disclosed by the accounting department. Financial results are determined by the Board of Directors after being audited by the accounting auditor and the Audit & Supervisory Board and are disclosed promptly and in a timely manner by the accounting department.
The Special Personnel Committee (a discretionary committee equivalent to a nominating committee or remuneration committee) has been established to enhance transparency, fairness, and objectivity of the process by putting an objective perspective into the process to determine nomination and remuneration of directors, and to strengthen supervision and checks through appropriate monitoring functions by outside directors. The Special Personnel Committee must have a majority of independent outside directors to ensure transparency in the process.
(1) Process to determine remuneration of directors
As for remuneration of directors, we have introduced performance-linked remuneration in addition to basic remuneration. The amount of remuneration is calculated by taking into account not only the position, responsibility, and years of service, but also the economic situation and the level of other companies, as well as the expected business performance of the company and the quantitative and qualitative performance of each individual with respect to each individual’s mission. Based on this policy, the President, Representative Director consults the Special Personnel Committee on the draft prepared by the President, Representative Director, and upon receiving a report, the President, Representative Director determines the remuneration for each director. As for remuneration of the President, Representative Director, the Chairperson of the Special Personnel Committee consults the Committee. Based on these drafts and the report of the Special Personnel Committee, the remuneration of each director is determined, and the total amount of director remuneration is resolved by the Board of Directors.
(2) Procedures to determine appointment or dismissal of directors
As for appointment or dismissal of directors, the President, Representative Director will consult the Special Personnel Committee on candidates deemed appropriate by utilizing the skills matrix or the like, in consideration of their backgrounds, personalities, perceptions, capabilities, and their balance, regardless of gender, nationality, etc., and the Chairperson of the Special Personnel Committee will consult with the Committee on a candidate for the President, Representative Director. The Committee reviews the candidates, and the Chairperson reports the results of the review to the President, Representative Director. The President, Representative Director prepares a draft of candidates, which is then resolved by the Management Meeting and the Board of Directors. In the event of misconducts, serious violations of laws and regulations, violations of the articles of incorporation, etc., we will consult the Special Personnel Committee, and the Committee will report the results of the review to the President, Representative Director. The President, Representative Director prepares a draft for dismissal, which is then resolved by the Management Meeting and the Board of Directors. As for nomination of Audit & Supervisory Board Member candidates, the Board of Directors will approve the person who has knowledge of internal control, corporate governance, etc. after obtaining the consent of the Audit & Supervisory Board. Through these procedures, we ensure fairness and transparency by submitting proposals to the General Meeting of Shareholders.
The skills matrix of the Directors and Audit & Supervisory Board Members of Glosel is as follows.
(As of June 28, 2023, after the 69th Annual General Meeting of Shareholders)
The Glosel Group provides newly appointed directors and Audit & Supervisory Board members with the opportunity to take external training as needed to acquire the knowledge necessary for their operations and to update it appropriately. We also provide them with the necessary opportunities to fulfill their role, such as providing the information and knowledge necessary to supervise management, at the expense of the company.
In addition to the Companies Act and the standards set forth by the Tokyo Stock Exchange*, the Board of Directors selects candidates for independent outside directors based on discussions and deliberations with the Board of Directors, considering the importance of having extensive experience and deep insight in company management and business performance. Our standards for judging independence are in accordance with the Companies Act and the standards set forth by the Tokyo Stock Exchange.
https://www.jpx.co.jp/equities/listing/ind-executive/index.htmlThe progress of compliance, internal control regarding financial reporting, and risk is reported to the members of the Board of Directors on a regular basis (at least once every six months) or as needed, and necessary instructions are given to supervise the company.
Audit & Supervisory Board Members are present at the planning of audits and reporting of audit results by the accounting auditors to ensure a sufficient exchange of views. They also exchange information and opinions as necessary even in the middle of the reporting period. We strive to conduct coordinated audits, such as accompanying and attending inventory checks of logistics subsidiaries and outsourced warehouses by the accounting auditor. In addition, the Auditing Department strives to enhance its auditing system by exchanging information and opinions with the accounting auditors on audit issues through annual internal control audits to enhance the effectiveness of audits.
As for remuneration of directors, we have introduced performance-linked remuneration in addition to basic remuneration. Performance-linked remuneration reflects performance indicators to raise awareness of improving performance in each fiscal year and is paid monthly based on the evaluation of individual directors. Performance indicators are determined by taking into account individual performance for each fiscal year (profit levels and profit margins of the company as a whole, and comparison with the previous year, etc.) as well as quantitative and qualitative individual performance for each individual mission. The target performance indicators and the missions of the Directors are reviewed by the Special Personnel Committee chaired by an independent outside director, as appropriate, in response to changes in the environment.
Glosel’s policy on constructive dialogue with shareholders is as follows.
