Pan Pacific International Holdings Corporation

Pan Pacific International Holdings Corporation

Summary of Corporate Governance

Purpose of Establishment of Company with Audit & Supervisory Committee

The establishment of the Audit & Supervisory Committee and the granting of voting rights to directors, who are audit & supervisory committee members, at the Board of Director's meetings is intended to strengthen the audit and supervisory functions of the Board of Directors, enhance corporate governance and improve corporate value.

Merits of Transitioning to Company with Audit & Supervisory Committee

  • Separate duties for execution of operations from those for supervision by adding several outside directors who do not execute operations of their own
  • Strengthen the audit and supervisory functions of the Board of Directors by granting directors, who are audit & supervisory committee members, the right to vote at Board of Director's meetings
  • Promote prompt decision-making through the delegation of some key decisions on execution of operations to directors in charge of business execution

Merits of Transitioning to Company with Audit & Supervisory Committee Image

Details of the Organization

Board of Directors The highest decision-making body within the Company with regard to the execution of operations is the Board of Directors, which chaired by the representative president, meets at least once a month to discuss and determine important issues concerning business activities. The Board of Directors comprises fifteen members, ten of which are directors (excluding those that are Audit & Supervisory Committee members), of which one is the outside director, and five are directors that are Audit & Supervisory Committee members, of which four are outside directors.
The execution of duties by directors is audited by the Audit & Supervisory Committee (four out of five members are outside directors) and, when necessary, the Audit & Supervisory Committee will work with the independent auditor to facilitate the execution of audits. In addition, management has designated all the five outside directors as independent directors, who contribute broad-based knowledge from an objective position free from any conflicts of interest with general shareholders. Such input is applied to issues important from a corporate administration perspective, such as the formulation of companywide business strategies, and management, therefore, believes that the current Board of Directors structure is conducive to suitable decision-making processes.
Compliance Committee Takayuki Hyuga, Executive Officer in charge of Legal & Compliance, is in charge of fraud prevention planning, planning of inspections and investigations, verification of inspection and investigation results, sharing and verification of other companies' fraud cases, etc.
The members of this committee are as follows. The committee is chaired by Takayuki Hyuga, Executive Officer in charge of Legal & Compliance, and consists of six members: Junpei Nishitani, Director (Audit & Supervisory Board Member), Hideki Moriya , Director and Managing Executive Officer, Keiji Hayakawa, Executive Officer, Shuichi Takeuchi, Executive Officer, and one other member. Note that Junpei Nishitani, Director (Audit & Supervisory Board Member), is an outside director.
Nomination/Compensation Committee The Company has established the Nomination and Compensation Committee as a voluntary advisory body to the Board of Directors in order to enhance the fairness, objectivity and transparency of the evaluation and decision-making process regarding the nomination and compensation of directors, etc., and to further enhance the corporate governance system.
The role of the Nomination and Compensation Committee of the Company is to deliberate and report on matters concerning the election and dismissal of Directors, matters concerning the selection and dismissal of Representative Directors, etc., matters concerning the remuneration, etc., of Directors, and other matters consulted by the Board of Directors.
The Committee is chaired by Yukihiko Inoue, Director (Audit & Supervisory Board Member), and consists of two members: Naoki Yoshida, Representative Director, and Mr. Yasunori Yoshimura, Director (Audit & Supervisory Board Member). Yukihiko Inoue and Yasunori Yoshimura are outside directors.
Outside Directors The Company has five outside directors. The outside directors are appointed on the expectation that the individuals will offer opinions and point out issues helpful to management from an external perspective, based on specialized knowledge and experience in corporate management, and thereby contribute to enhanced management soundness and transparency. Outside Director Jumpei Nishitani, as a professor of a university's faculty of business administration, has a high level of specialized knowledge and possesses considerable insight regarding finance and accounting.
All five directors were designated as independent directors in accordance with rules set by the Tokyo Stock Exchange, to which notifications were submitted.
The Company has no clear-cut criteria or policies regarding the independence of individuals appointed as outside directors. However, in the appointment process, a candidate for an outside director is evaluated on the ability to maintain a sufficient degree of independence to perform assigned duties independent of the management team.
Internal Audit Department The Internal Audit Department, under the direct authority of the Board of Directors, is independent from divisions that execute operations. This department provides a point of contact, as necessary, between the independent auditor and Audit & Supervisory Committee members and undertakes audits, based on an auditing plan, to ascertain the legality and appropriateness of the activities of divisions and subsidiaries. In addition, the department applies an internal control perspective to its monitoring of key business practices in all divisions, at stores, and at subsidiaries. There are five employees in Internal Audit Department.

Corporate Governance Structure

Corporate Governance Structure Image

As of December 29, 2021