Investor Relations

The overview of the corporate governance structure and the reasons for adopting this system

1. Board of Directors

The Board of Directors, chaired by Representative Director and President Koichi Kameda and composed of all directors listed in Board of Directors, meets regularly once a month and hold additional meetings as needed. The Board of Directors reports monthly financial results and deliberates on matters stipulated in the Companies Act and the Board of Directors Regulations. The specific details of business execution, background strategies, and policies for important matters are deliberated, and based on the results of these deliberations, the chief executive officer makes decisions.

2. Audit & Supervisory Board

By attending important meetings such as the monthly meetings of the Board of Directors, the corporate auditors confirm the status of business execution by each director and express appropriate opinions as necessary to ensure compliance with laws and regulations that must be observed in business execution, thereby fulfilling a check-and-balance function. The Board of Auditors is chaired by Takeshi Agari, a Standing Corporate Auditor, and consists of all the auditors listed in Board of Directors. To improve management transparency and strengthen the management oversight function, two part-time corporate auditors are outside corporate auditors. Each corporate auditor has expertise and experience in general management, accounting, and corporate legal affairs, etc. The Company has adopted the current system based on the judgment that the appointment of the two part-time corporate auditors as independent officers will sufficiently ensure the objectivity and neutrality of the management oversight function in decision making regarding the Company's management and business execution.

3. Internal Audit Department

The Company has an Internal Audit Office, which is independent of the business divisions. Trial Company, Inc., a consolidated subsidiary, also has an Internal Audit Office with a total of 10 members. The Internal Audit Office of Trial Company conducts audits of retail stores in the retail distribution business, while the Internal Audit Office of the Company conducts audits of the Company and its subsidiaries, excluding retail stores, and the two internal audit offices collaborate on a timely basis. Each internal audit office conducts regular audits in accordance with the "Internal Audit Standards" and annual audit plans. Audit results are reported to the Representative Director and President and the Audit & Supervisory Board, and specific guidance and follow-up are provided to the audited departments.

4. Accounting Auditor

The Company has entered into an audit contract with PricewaterhouseCoopers Japan LLC, and timely and appropriate audits are conducted. There are no special interests between the Company and the said audit firm or the managing partners of the said firm who are engaged in auditing the Company.

5. Management Conference

The Management Conference is chaired by Representative Director and President Koichi Kameda and consists of three full-time directors and one full-time corporate auditor. The Management Conference is held once a month for the purpose of prompt and efficient decision-making, to deliberate and review important management matters affecting the entire company, to confirm the progress of business performance, and to share various important communications.

6. Nomination and Compensation Advisory Committee

In order to strengthen the independence, objectivity and accountability of the Board of Directors' functions regarding the nomination (including succession planning) and compensation of senior management and officers, the Company has established the Nomination and Compensation Advisory Committee as a voluntary advisory body under the Board of Directors with a majority of independent outside directors (one full-time director (Hiroyuki Nagata) and two independent outside directors (Hirofumi Tatsumoto and Chang Sangsoo) and chaired by independent outside director Chang Sangsoo. The selection and dismissal of management executives and directors, as well as their compensation, are discussed with this committee in advance, and decisions are made by the Board of Directors with the utmost respect for the committee's recommendations.

The reasons for adopting a corporate governance structure

In September 2021, the Company transitioned to a company with a board of corporate auditors to ensure transparency in its management structure and to further enhance and strengthen corporate governance. By appointing two outside directors out of six directors, the Company receives advice and recommendations from an objective standpoint in their respective fields of expertise and strengthens the supervisory function of the Board of Directors. In addition, two of the three corporate auditors are outside corporate auditors to ensure the objectivity and neutrality of the management oversight function. In addition to the above, the Nomination and Compensation Advisory Committee, consisting of a majority of outside directors, and the Management Conference, consisting mainly of internal directors and corporate auditors, have been established to ensure transparency in management and to realize speedy management through prompt decision making.