Corporate Governance Structure

Board of Directors

• The Board of Directors is the highest decision-making body for business execution. The Board of Directors meets monthly to decide management policies, to review legal and other important issues, and to supervise the performance of directors' duties. As of May 23, 2025, the Board of Directors consists of 11 members: Toshiya Takeuchi, President and Representative Director and Chair; Akio Takeuchi, Takahiko Watanabe, Clay Eubanks, Osamu Kobayashi, Hiroshi Yokoyama, and Minoru Kusama, all of whom are directors; and Michio Iwabuchi, Yuko Miyata, Eiko Ori, and Kunitake Ando, who are outside directors.
• The Board of Directors appoints executive directors and executive officers who are responsible for business execution. If necessary, executive officers are invited to Board meetings to ensure that management decisions are communicated reliably and that business execution is carried out promptly.
• The Board of Directors formulates a medium-term business plan and an annual plan, and each department formulates its business plan based on these plans. The Board of Directors also receives regular reports on the progress of the annual plan from the executive directors.

Audit and Supervisory Committee

The Audit and Supervisory Committee consists of four outside directors and one internal director. In principle, the Committee meets once a month. In addition, the committee members attend important meetings, such as Board of Directors meetings, and audit the performance of directors' duties as well as the operation of internal control systems. As of May 23, 2025, the Audit & Supervisory Committee consists of five members: Minoru Kusama, a full-time Director and Audit & Supervisory Committee member, serving as Chair, and four outside Directors, Michio Iwabuchi, Yuko Miyata, Eiko Ori, and Kunitake Ando.

Nomination Advisory Committee and the Remuneration Advisory Committee

The Nomination Advisory Committee and the Remuneration Advisory Committee are both voluntary advisory bodies to the Board of Directors. These committees deliberate on the nomination, dismissal, remuneration, etc. of directors based on an inquiry from the Board of Directors and submit their recommendations to the Board of Directors. The Board of Directors considers the advisory committees' recommendations when making decisions. As of May 23, 2025, the Nomination Advisory Committee and Remuneration Advisory Committee are chaired by Michio Iwabuchi, an outside director, and consist of three outside directors, Yuko Miyata, Eiko Ori, and Kunitake Ando, as well as Toshiya Takeuchi, President and Representative Director, and Minoru Kusama, Director.

Sustainability Promotion Committee

The Sustainability Promotion Committee is chaired by the President and Representative Director of the Company, and its members include directors and executive officers of the Company, chief operating officers of subsidiaries, and other members deemed appropriate based on the duties of their responsibilities. 

Learn More information about the Sustainability Promotion Committee

Main Deliberation Topics of the Board of Directors

In addition to matters explicitly stated in laws and regulations, the specific deliberation and reporting matters for the Board of Directors in fiscal year 2024 are as follows:

Management Strategy

Progress of the Third Medium-Term Management Plan, Formulation of the Fourth Medium-Term Management Plan, Formulation of the annual business plan, Reports on business execution based on the annual business plan, Monthly profit and loss performance reports, Research and development, and Capital investment

Governance

Internal audit reports, Organizational changes, Revision of regulations, Risk management, and Effectiveness evaluation of the Board of Directors

Sustainability

Climate change measures (reporting on the content of CDP responses), Investment in human capital, and Occupational safety and health

Engagement

Content of engagement with shareholders and investors, and Initiatives aimed at achieving management conscious of cost of capital and share price

Independence Criteria

In consideration of the "Independence Criteria" stipulated by the Tokyo Stock Exchange, our company has established the following independence criteria for Outside Directors. An Outside Director (including a candidate) is deemed to possess sufficient independence if they do not fall under any of the following items:

1. A person who is currently, or has been at any point in the past 10 years, a director (excluding outside directors), corporate auditor (excluding outside corporate auditors), executive officer, or other employee of our company or our subsidiaries.
2. A person who is currently, or has been at any point in the past 3 years, any of the following (1) to (10):
   1. A person who considers our company as a major client (*1) or their executive officer.
   2. A major client of our company (*2) or their executive officer.
   3. A major lender to our company (*3) or their executive officer.
   4. A consultant, accounting professional, or legal professional who receives a significant amount of money (*4) or other property from our company other than executive remuneration.
   5. A person who belonged to the audit firm that serves as our company's accounting auditor.
   6. An executive officer of our company's lead securities underwriter.
   7. A major shareholder of our company (*5) or their executive officer.
   8. An executive officer of a company of which our company is a major shareholder (*5).
   9. A person who receives a significant amount of donations or similar (*6) from our company, or their executive officer.
   10. An executive officer of a company with which we have a reciprocal secondment arrangement.
3. A spouse or a relative within the second degree of kinship of a person who is currently, or has been at any point in the past 1 year, any of the following (1) or (2):
   1. A director (excluding outside directors), corporate auditor (excluding outside corporate auditors), executive officer, or other employee of our company or our subsidiaries.
   2. A person falling under any of the above 2 (1) to (10) who is a significant person (*7).

*1: A person for whom our company is a major client refers to a person whose transaction amount with our company in any fiscal year over the past three fiscal years exceeds 2% of that person's net sales.

*2: A major client of our company refers to a person whose transaction amount with that client in any fiscal year over the past three fiscal years exceeds 2% of our company's net sales.

*3: A major lender to our company refers to a person whose loan amount from that lender in any fiscal year over the past three fiscal years exceeds 2% of our company's total assets.

*4: A significant amount of money refers to an amount exceeding JPY 10 million per year in any fiscal year over the past three fiscal years.

*5: A major shareholder refers to a shareholder with a voting rights ownership ratio of 10% or more.

*6: Significant donations, etc., refer to an amount exceeding JPY 10 million per year in any fiscal year over the past three fiscal years.

*7: A significant person refers to an executive director, executive officer (shikkouyaku), corporate officer (shikkouyakuin), and employees holding managerial positions or higher, such as department managers.

Analysis and Evaluation Results of the Overall Effectiveness of the Board of Directors

Method of Analysis and Evaluation

The Audit and Supervisory Committee determines the content of a questionnaire regarding the Board of Directors' composition, operations, agenda, supporting structure, and improvement status from previous evaluations. All directors conduct a self-assessment using this questionnaire. Based on the aggregated results of this questionnaire, the Board of Directors conducts an analysis and evaluation annually.

Overview of Analysis and Evaluation Results

Summary of Evaluation Results

The overall effectiveness of the Board of Directors was evaluated as largely ensured.

Last Year's Challenges and Response Status

1. Strengthening the Board of Directors' Supervisory Function: The organizational structure was changed so that directors no longer simultaneously hold department manager positions, thereby strengthening the supervisory function of the Board of Directors.
2. Information Sharing among Full-Time Directors: Regular meetings are held to share information on changes in the business environment and anticipated future challenges. This will lead to discussions on enhancing corporate value at Board of Directors meetings.
3. Enrichment of Discussions on the Next Medium-Term Management Plan: To deepen discussions at the Board of Directors towards the formulation of the next Medium-Term Management Plan, several discussions were held on the plan, and a three-year Medium-Term Management Plan for the fiscal year ending February 2026 and beyond was formulated.
4. Delegation of Board of Directors' Authority: A portion of the Board of Directors' authority was delegated to the executive side, increasing the time allocated for discussing strategies for enhancing corporate value over the medium to long term.

Challenges for the Current Year

1. Discussion of Management Strategy from a Long-Term Perspective: Reflecting on the insufficient discussion of management strategy from a long-term perspective during the formulation of the three-year Medium-Term Management Plan for the fiscal year ending February 2026 and beyond, the Board of Directors will lead in creating an environment to discuss goals for 10 years in the future.
2. Further Strengthening of the Board of Directors' Supervisory Function: To achieve the Medium-Term Management Plan decided for the fiscal year ending February 2026 and beyond, the Board of Directors will regularly receive reports on its progress and provide supervision.