Governance
Guided by our management philosophy of “Turning Challenge into Value,” we view corporate governance as essential to corporate sustainable development. We therefore committed to earning the trust of all stakeholders, including shareholders, business partners, employees, and local communities. To this end, we are further enhancing our corporate governance and rigorously implementing internal controls across the organization.
Corporate Governance Structure
We have adopted an Company with an Audit and Supervisory Committee as our organizational design under the Companies Act, and established the Board of Directors and the Audit and Supervisory Committee as corporate bodies, as well as the Executive Management Board as a body for consultation and decision-making concerning management and business execution.
The details of our various departments are as follows:
Functions | Responsible Body | Details |
|---|---|---|
| Decision-making and audit/supervision functions | Board of Directors | The Board of Directors comprises 13 directors (excluding Audit & Supervisory Committee members), of whom four are Outside Directors, and six directors who are Audit & Supervisory Committee members (all six members are Outside Directors). In addition to the regular board meetings held every month, extraordinary meetings of the Board of Directors are held as and when necessary. As well as making important management decisions, the Board of Directors seeks to ensure efficiency and transparency in the Company’s management by supervising and monitoring the execution of directors’ duties from all angles. |
| Audit & Supervisory Committee | The Audit & Supervisory Commitee comprises six members: one full-time and five part-time Audit & Supervisory Committee members (all six members are Outside Directors). Audit & Supervisory Committee members attend meetings of the Board of Directors and other important meetings in line with Audit & Supervisory Commitee and audit plan rules, where they express their views as appropriate. They also interview directors and heads of each department to provide effective oversight of management. Moreover, members of the Audit & Supervisory Commitee work closely with internal auditors and accounting auditors to improve the effectiveness and efficiency of audits. | |
| Nomination and Compensation Committee | On September 1, 2022, we established a voluntary Nomination and Compensation Committee as an advisory body to the Board of Directors. The purpose was to enhance our corporate governance by bolstering the independence, objectivity, and accountability of the Board of Directors’ functions with respect to the nomination and compensation of directors. The Nomination and Compensation Committee comprises five directors (three of whom are independent Outside Directors) selected by the Board of Directors. It discusses matters related to the appointment and dismissal of directors, selection and dismissal of the Representative Director, director remuneration, and similar matters. The Committee also provides advice and recommendations to the Board of Directors. In nominating candidates for the Board of Directors and Audit & Supervisory Committee, we select individuals of excellent character and insight who will fulfill their duty of care. Candidates’ various work experiences and areas of expertise are also considered to ensure they can contribute to corporate value from a range of unbiased perspectives. For Audit & Supervisory Committee candidates in particular, we endeavor to appoint at least one candidate with in-depth accounting knowledge. | |
| Decision-making and Executive functions | Executive Management Board | In principle, our Executive Management Board comprised of executive directors and full-time Audit & Supervisory Committee members holds meetings once a month. The Board holds important discussions, approves and makes decisions on management and business operations, and reports on business execution by each department. It provides all attendees with the opportunity to share information and fully discuss these matters. |
| Internal Audit Office | We established the Internal Audit Office as an independent organization for making internal audits. The head of the Internal Audit Office, appointed by the Representative Director, conducts internal audits based on the annual plan for internal auditing and reports the results to the Representative Director, Audit & Supervisory Committee, Risk Management and Compliance Committee, and related departments. The results are also shared with the Board of Directors by way of the Risk Management and Compliance Committee’s implementation report made to the Board of Directors. Based on the audit results report, the Representative Director and President instructs the audited departments to make improvements and then report on the results of these improvements to maintain and improve internal controls. Additionally, information is exchanged as appropriate in order for internal auditors, Audit & Supervisory Committee members, and accounting auditors to conduct audits effectively and efficiently. |
List of Officers and Skill Matrix
For details about our executive officers, please refer to the Main Members section in our Company Information.
We believe that the composition of our officers should be structured to ensure the skills required to promote our management policies and Medium-Term Management Plan while also considering diversity. We strive to achieve a balance when appointing candidates, with real estate, finance, and operations viewed as key areas of expertise for officers as a whole and global, IT/technology, ESG/sustainability, financial accounting, and legal/risk management viewed as important skills.
For the skills matrix of current directors, please refer to the Notice of the 14th Annual General Meeting of Shareholders (Japanese only).
Evaluation of the Board’s Effectiveness
To ensure the ongoing effectiveness of the Board of Directors, it conducts a self-evaluation once a year. Based on this evaluation, its operation is reviewed as appropriate.
Method of Calculating Compensation for Officers
At the Board of Directors meeting held on November 28, 2024, it was resolved to amend the Basic Policy for Determining Officer Compensation. The details are as follows.
Compensation for our directors (excluding directors who are Audit & Supervisory Committee members and Outside Directors) is comprised of financial compensation, which is a fixed amount corresponding to their role and responsibilities, and non-financial compensation, which includes restricted stock compensation (pre-delivery type), stock options (“stock compensation”), and company housing.
Stock compensation was introduced to provide an incentive for directors to enhance performance and drive continuous improvement of corporate value, as well as promoting further sharing of values with shareholders. It is determined separately from the fixed remuneration framework via a resolution of the Board of Directors, comprehensively taking into account the company’s performance, the economic conditions, and the individual’s responsibilities, background, achievements, etc.
We are working to fulfill our social responsibility as a corporation, earning the trust of our customers and other stakeholders by having each of our employees strictly comply with laws, regulations and internal rules, and conducting corporate activities with the highest ethical standards.
Code of Ethical Conduct
As a guideline for complying with the law and corporate ethics, we created a Code of Ethical Conduct, which outlines basic standards that employees should meet.
Risk Management and Compliance System
We are working to fulfill our social responsibility as a corporation, earning the trust of our customers and other stakeholders by having each of our employees strictly comply with laws, regulations and internal rules, and conducting corporate activities with the highest ethical standards.
Risk Management and Compliance Committee
The Risk Management and Compliance Committee evaluates and manages compliance risk by verifying that compliance requirements are rigorously followed, including information management, and monitoring the implementation of compliance programs. Furthermore, this information is regularly reported to the Board of Directors, which then makes decisions on important matters related to compliance based on it.
In the event of a serious incident in the course of our business activities, a report is made to the Risk Management and Compliance Committee, which will then discuss countermeasures as necessary.
Moreover, in an effort to prevent risks and detect them as quickly as possible, we have established a system where we can receive advice from outside specialists such as attorneys, certified public accountants, certified tax accountants, and social insurance labor consultants when required.
Policies to Ensure Sound Business Activities
Policies to Ensure Sound Business Activities
In addition to complying with the Anti-Monopoly Act and other laws, we do not engage in unfair trading practices and unfair competitive practices, including insider trading. Furthermore, we also deal honestly with our business partners, treating them as equals, and handle the procurement of goods and services based on fair standards.
- Code of Ethical Conduct 2: maintenance of fair trade and transparency
We ensure that all business transactions are conducted in a fair and transparent manner. We respond faithfully to all stakeholders and endeavor to act in a way that earns their trust.
Furthermore, we secure transparency in trade procedures to promote business that can live up to internal and external monitoring.
Preventing corruption
The provision of illegal payoffs to public officials and the like is prohibited. We have also established rules that prohibit the provision or acceptance of excessive entertainment or gifts between business partners and related parties. Moreover, with the aim of actively preventing bribery, we have established and implemented a system for anti-bribery initiatives and rules for complying with it.
- Code of Ethical Conduct 10: prohibition of bribery and rules on entertainment and gift-giving
Regardless of the country or region, we do not offer bribes to public officials or persons in equivalent positions, nor do we provide or accept excessive entertainment or gifts. Furthermore, we have established rules that prohibit excessive entertainment or gifts between business partners and related parties.
Elimination of transactions with antisocial forces
In each of our departments, before beginning a transaction, we investigate to verify that the other party is not an antisocial force. In the event that we receive an unlawful request or face violent behavior from antisocial forces, we will contact the local police station, as well as taking any legal measures that are required.
- Code of Ethical Conduct 9: elimination of antisocial forces
We do not engage with antisocial forces and respond resolutely to any unreasonable demands from them. Further, we take great measures to educate our employees on the elimination of antisocial forces and are strengthening our cooperative relationships with external parties.
Protection of personal information
We have stipulated information management regulations and personal information protection regulations, comply with the Act on the Protection of Personal Information, related laws and regulations, and guidelines from regulatory authorities, and have established a system for formulating and managing internal regulations, as well as appointing a personal information protection and management officer, who ensures that employees are aware of the relevant standards indicated above and adhere to them.
Protecting and respecting intellectual property rights
We comply with laws related to intellectual property rights and ensure that employees are aware of and adhere to them through training and other measures.
Internal Audits
With the aim of monitoring our legal compliance system and ensuring the appropriateness of business execution, the Representative Director and President nominates the head of the Internal Audit Office and internal auditors, who conduct internal audits based on the Internal Auditing Regulations.
Establishment of Whistleblowing Hotline
Establishment of Whistleblowing Hotline
Officers and employees must report any conduct that violates or may violate compliance matters specified in risk management and compliance regulations to the whistleblowing hotline without covering them up. Furthermore, the Risk Management and Compliance Committee must protect whistleblowers and promptly take steps to rectify and improve the situation. In accordance with the Compliance Manual, the anonymity of whistleblowers’ personal information is maintained and reported information is kept confidential. In addition, whistleblowers are legally protected under the Whistleblower Protection Act, which ensures they will not be subjected to any detrimental treatment.
Implementation of an Internal Consultation and Reporting System
To visualize the views of officers and employees and the challenges facing them and reflect them in our organization-building measures, we have introduced an internal consultation and reporting system for company staff to collect opinions and requests from officers and employees. Opinions submitted to comment boxes are provided directly to the Representative Director in summarized form.
Compliance Training
We regularly conduct compliance training on topics based on our Compliance Manual, such as the prohibition of bribery, entertainment and gift-giving, intellectual property rights, insider trading regulations, and severing of ties with antisocial forces.
Main training topics in FY08/2025
Topic | Details | Target |
|---|---|---|
| Insider seminar | Seminar on insider trading regulations and internal rules | All employees |
| Stealth marketing regulations | Explanation of points to note regarding stealth marketing regulations for social media marketing beginning in October 2023 | ActEmployees in charge of hotel sales promotion, sauna sales promotion, etc. |
| Information security training | Handling of confidential information, Unfair Competition Prevention Act | All employees |
| Preventing kickbacks: Key points for building appropriate relationships with business partners | Explanation of prohibition of kickbacks based on case studies from other companies | All sales staff |
| Harassment training | Ongoing training on preventing harassment | All officers from vice managers or above All officers from Senior Vice Presidents or below |
| Financial Instruments and Exchange Act | Type-II financial instruments business | Department Head or above responsible for financial instruments business |
| Training on trademarks | Explanation to help understand the basics of trademarks | All sales staff |
Information Security
To maintain appropriate information security, we have established and operate a robust management system based on our information management regulations. Given the growing use of cloud technology in particular, we are pursuing comprehensive measures both internally and externally, including controlling connections to networks and various devices and monitoring usage logs.
Through compliance training and other measures, we seek to enhance each employee’s awareness by thoroughly informing them about the importance of information management, system-related information security measures, etc. Moreover, we are striving to maintain an effective management approach through initiatives such as conducting internal audits of compliance with the information management regulations.
Business Continuity Planning (BCP) Initiatives Prepared for Emergencies
We have created a Risk Management Manual for the purpose of outlining our response in the event of emergencies such as a natural disaster or accident and minimizing the losses suffered by the company and stakeholders. It stipulates details such as the reporting channels if an emergency occurs and establishing an emergency response office supervised by the Representative Director and President.
Furthermore, we practice setting up a disaster response headquarters via disaster response training held at least once a year, operate and verify a safety confirmation system, and conduct training on communication and information-gathering, as well as reminding officers and employees about the importance of business continuity and the code of conduct when responding to a disaster.