Basic Stance on Corporate Governance
In order to improve corporate value, the actions of the Company are based on an adherence to the law and social norms as a member of society. In addition, the ompany recognizes the importance of building positive relationships with customers (end users), current and potential investors, business partners, local communities, and labor unions. In line with such thinking, the Company focuses on ensuring sound, transparent and efficient management by enhancing its corporate governance system.
Board of Directors
Bando aims to further enhance auditing and oversight functions by adopting a Company with an Audit & Supervisory Committee structure.
The Company’s Board of Directors consists of eight members, with four of those eight members serving as members of the Audit & Supervisory Committee. The Board makes decisions concerning basic management policies, important management issues, and legally stipulated matters, as well as monitoring the work performance of directors and corporate executive officers. The Board’s three external directors are charged with the independent oversight of business operations. The Board meets at least once a month. In addition, the Company maintains a corporate executive officer system to improve operational efficiency and speed, and has established the Management Advisory Council to assist the president with management decisions.
Independence Standards and Qualification for Independent Directors
In nominating candidates for independent director, the Nominating Committee ensures that such persons satisfy the independence criteria set by stock exchanges and are also capable of fulfilling their role and responsibilities from an independent standpoint. The rationales for the appointment of those independent directors serving as of June 21, 2018 are summarized below.
Many years of experience and related business knowledge gained working in managerial positions in financial institutions afford Mr. Matsusaka the capacity to conduct auditing and oversight activities from general and specialist viewpoints. He is not influenced by the views of Sumitomo Mitsui Banking Corporation (SMBC), a major business partner of the Company, due to the 14 years that he has spent working at other companies since leaving SMBC. Moreover, it is judged that the Company’s decision-making is not subject to any undue influence by SMBC since (a) the Company conducts business with a number of financial institutions, (b) business with SMBC is conducted on the same terms as with other banks, and (c) loans from SMBC are equivalent to only about 3% of the Company’s total assets. Hence, since there is no conflict of interest with ordinary shareholders as defined by the Tokyo Stock Exchange, Mr. Matsusaka has a high degree of independence.
Many years of experience gained working as an engineer or manager in manufacturing firms and a related wealth of knowledge enable Mr. Shigematsu to conduct auditing and oversight activities from an independent perspective. In addition, Mr. Shigematsu concurrently holds the position of Outside Director at Murata Manufacturing Co., Ltd. As the Company does not have any special relationship with Murata Manufacturing Co.,Ltd., there is no conflict of interest with ordinary shareholders as defined by the Tokyo Stock Exchange, and Mr. Shigematsu has a high degree of independence.
Many years of experience gained working as a manager in manufacturing firms and a related wealth of knowledge enable Mr. Shimizu to conduct auditing and oversight activities from an independent perspective. In addition, Mr. Shimizu concurrently holds the position of Outside Director at Suminoe Textile Co., Ltd. As the Company does not have any special relationship with Suminoe Textile Co., Ltd., there is no conflict of interest with ordinary shareholders as defined by the Tokyo Stock Exchange, and Mr. Shimizu has a high degree of independence.
Audit & Supervisory Committee
The Audit & Supervisory Committee members comprise four directors, of whom three are external directors. Furthermore, one of the directors serves on a full-time basis.
Nominating Committee and Compensation Committee
Despite having no legal obligation under the Companies Act, the Company has established the Nominating Committee and Compensation Committee to serve as consultative bodies of the Board of Directors in an effort to further strengthen corporate governance. Specifically, the appointment of directors and the setting of their compensation are carried out by resolution of the Board of Directors after deliberation by the Nominating Committee and Compensation Committee, whose members include external directors and directors serving as Audit & Supervisory Committee members. The Audit & Supervisory Committee must approve the appointment of directors who will serve on it. The Audit & Supervisory Committee also deliberates on the remuneration of said directors.
To meet the requirements stipulated in the Financial Instruments and Exchange Act pertaining to financial reporting performed by internal control reporting systems, the Company maintains internal control in accordance with the basic frameworks for internal control outlined in Financial Services Agency criteria, and undertakes evaluations and reporting as defined by said criteria. The Bando Group will work to further improve the effectiveness of internal control based on the four objectives of internal control: (1) reliability of financial reporting, (2) operational effectiveness and efficiency, (3) legal compliance regarding business activities, and (4) asset protection.
Basic Stance on the Elimination of Antisocial Forces
The Group takes stringent measures to eliminate antisocial forces by investigating prospective business partners prior to commencing new transactions based on relevant Group policies and the Bando Group Code of Conduct, which stresses the overriding importance of adhering to the law and corporate ethics. In addition, the Group maintains an internal reporting system to thoroughly raise awareness of the necessity of avoiding any actions that are illegal or contrary to corporate ethics. In the event that a business partner is revealed to be an antisocial organization, the Group will immediately dissolve its relationship with this organization.
The Group has formulated and distributes to all Group executives and employees the Bando Group Code of Conduct, which stipulates proper actions in such areas as “compliance with laws and corporate ethics,” “product and service safety,” “honest and fair business activities,” and “fair and equitable procurement transactions.” In addition, the Group works to raise awareness of compliance by designating October as the Bando Group Corporate Ethics Month, conducting training sessions on the Bando Group Code of Conduct at Company business facilities or domestic and overseas affiliates every other year, and providing opportunities to discuss these topics internally. Moreover, the Group has established a system to further promote compliance by adopting an internal reporting system that includes external lawyers as well as a service for providing information on the formulation, revision and abolition of relevant laws.
The Company has established the Internal Audit Department, an independent organization that is staffed by four people reporting directly to the president. The Internal Audit Department implements systematic internal audits which include the internal control system (covering internal control system for financial reporting) of all departments as well as domestic and overseas affiliates. Accompanied by the Audit & Supervisory Committee members in principle, the Internal Audit Department conducts on-site audits at Company’s business facilities and affiliates, the results of which are reported to the president, directors not serving as members of the Audit & Supervisory Committee and the Audit & Supervisory Committee.
Basic Policy on Information Disclosure
The Group proactively engages in public relations and investor relations activities with the intention of quickly disclosing information to stakeholders on the basis of transparency, fairness and consistency. The Group discloses information in strict accordance with laws and regulations under the Financial Instruments and Exchange Act and set by the Tokyo Stock Exchange. In addition, the Group makes a concerted effort to disclose information in a timely fashion that furthers the understanding of its activities. At Bando, the General Administration Department is responsible for public relations, including the timely disclosure of information.