Summary of Corporate Governance
Transition to Company with Audit & Supervisory Committee
At the 36th Ordinary General Meeting of Shareholders, held on September 28, 2016, a resolution was passed to amend the Articles of Incorporation so that Pan Pacific International Holdings could transition to a company with an audit & supervisory committee. On the same date, the Company duly transitioned from a company with an audit & supervisory board to a company with an 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
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 14 members, nine of which are directors (excluding those that are Audit & Supervisory Committee members), of which none are outside directors, and five are directors that are Audit & Supervisory Committee members, of which five are outside directors.
The execution of duties by directors are audited by the Audit & Supervisory Committee (all 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 five of the 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||Members of the Compliance Committee are primarily outside experts, including lawyers and outside directors. Their duties include formulating misconduct prevention measures, drafting monitoring and auditing plans, examining the results of such investigations and audits, and sharing information on misconduct cases that have occurred at other companies and verifying facts as a way to preclude such incidents from occurring at the Group. It is chaired by an outside lawyer. There are five members (Tetsuji Maruyama (Director), Yukihiko Inoue (Outside director who is Audit & Supervisory committee member), two outside lawyers.)|
|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. Director Masaki Yoshino, as a lawyer, has a high level specialized knowledge and broad experience. All five outside directors have been deemed to present no risk of a conflict of interest with general shareholders and 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 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
As of September 25, 2019