The Tamura Group is enhancing corporate governance through management to help maximize corporate value.
Approach to Corporate Governance
The basic policy of the Tamura Group for corporate governance is to increase the transparency and efficiency of management. With a management team possessing a keen sense of responsibility and sound ethical standards, we aim at management all our stakeholders, including shareholders, expect by ensuring compliance and maximizing corporate value.
Corporate Governance Framework
◆Board of Directors and system of executive officers
As a means to avoid inconsistencies between management decision-making and executive functions, the directors of the board for the Tamura Group take on executive roles with responsibility over each of the business divisions under a “system of executive officers.” Efficient implementation of business operations by the directors is ensured through monthly convening of the Board of Directors, as well as executive meetings held about six times annually, which are attended by both directors and division officers who discuss matters relating to the operations of the Group and the monitoring of management.
◆Statutory Auditor System and Internal Auditing
The Board of Statutory Auditors comprises three statutory auditors (including two outside auditors). Statutory auditors audit the performance of directors’ duties by attending the Board of Directors meetings and executive meetings, listening to the directors and other executives about current performance of their duties, inspecting important documents requiring approval, and investigating operations and finances at major business sites, among others.
In accordance with annual audit plans, the Integrated Audit Division works with the statutory auditors to conduct internal audits of the Head Office as well as the domestic and overseas bases of the Group companies.
◆Nomination/Remuneration Advisory Committee
With the objective of making fair and transparent decisions on the nomination and compensation of board members, etc., the Tamura Group has established a Nomination/Remuneration Advisory Committee that holds meetings several times a year. The Committee is composed of two representative directors and three outside directors, and is chaired by the lead outside director.
◆Corporate Governance Framework (as of June 25,2021)
Basic Policy for Internal Control Systems
The Tamura Group acknowledges “stable and efficient management,” “appropriate accountability,” and “compliance with laws and regulations, as well as in-house rules,” as the objectives of internal systems established to enhance management control. “Risk management,” “compliance,” and “internal auditing” have been identified as methods for achieving these objectives with structures being put in place accordingly.
Effectiveness Evaluation of Board of Directors
With the aim of improving the effectiveness of the Board of Directors, analysis/evaluation of the Board of Directors is conducted every year.
◆Analysis and evaluation method
An anonymous questionnaire survey is carried out for all directors and auditors regarding the effectiveness of the Board of Directors including the Nomination/Remuneration Advisory Committee that was arbitrarily formed by the Company. Based on the results of the questionnaire survey and the analysis/evaluation reported by an outside third party (a lawyer), measures for improvement, etc. are discussed at board meetings.
◆Summary of 2021 results of effectiveness evaluation of board meetings
Based on the results of a questionnaire survey and an analytical assessment by an external third party, the effectiveness of Tamura Group’s board meetings was confirmed, namely, the board meetings are functioning properly, the risk management system is appropriately in place and how it is operated is supervised properly, outside directors and auditors contribute to meaningful discussions at the board meetings, and the board of directors conducts in-depth reviews from a multifaceted perspective, thereby helping management team members make decisions. Furthermore, in the light of the results of the effectiveness evaluation of the board meetings for the previous year, in order to further enhance the quality of discussions at the board meetings, the board strived to improve the management of board meetings and the way of providing information to board members, and those efforts have produced results steadily.
To increase the effectiveness of the board meetings even further, the board will continue to and more vigorously promote efforts from the previous year, and based on the results of this year's effectiveness evaluation of the board meetings, it will continue efforts to identify issues associated with efforts and initiatives toward the Group's sustainable growth, such as how to optimize the board meetings and ensure diversity of the core personnel; review them; and rectify them as needed.
Compensation of Board Members
Remunerations of directors and auditors are paid within a compensation limit that is resolved at the general meeting of shareholders.
The performance-based compensation system and the stock option system have been introduced into the directors’ compensations (excluding outside directors). In the performance-based compensation system, compensation based on performance is evaluated from the perspective of increased profitability and shareholder value using sales amount/operating profit/net income attributable to shareholders of the parent company/ROA/ROE, etc. as the evaluation indices. In accordance with the regulations on compensations for directors, the compensations are subject to examination by the Nomination/Remuneration Advisory Committee and are determined by the Board of Directors.
Compensations for auditors are determined by the Board of Auditors (including outside auditors) in accordance with the regulations on compensations for auditors.
The timely and proper disclosure of company information in line with laws and regulations gives shareholders and investors an accurate understanding of the Tamura Group and wins their trust.
◆Financial briefings for investors
Our financial statements are announced quarterly with its accounts for the full year ending March. At the announcement of the full year results (in May) and the announcement of the second quarter results (in November), the financial results briefing is held for analysts and institutional investors within a few days following the announcement, where the president and the senior management report the business results, the business prospect, etc. The written materials used there are posted on the Group’s website without delay following the announcement. A questionnaire survey on the IR activity is also conducted at the financial results briefing and we make efforts to improve the method of information dissemination to the shareholders and investors.
◆Information Disclosure to Investors via Website
To ensure that information is released in an expeditious and fair manner, a Web site for investors (IR Information) has been set up as a way to foster communication.* Financial statements and materials distributed at financial briefings are posted on the Web site immediately after the financial results are announced. We also issue quarterly financial reviews and shareholder notices as other forms of com- munication with shareholders and investors.Click here to refer IR information.
◆Our Philosophy of Returning Profits to Shareholders
The Tamura Group, while working to increase corporate value through mid- and long-term management plans and reinforce financial strength by expanding operating revenue and securing internal reserves, shall continue to make efforts to further stabilize and improve the dividend level based on the recognition that returning profits to shareholders is its top priority.