Corporate Governance

Basic Approach

Rather than simply pursuing profit, Takara Leben strongly believes that it must comply with laws and corporate ethics and carry out its duties as a responsible member of society.

While maintaining close relationships with customers, shareholders, and employees—our core stakeholders—we continuously consider how we can deliver further satisfaction. In addition, we believe that reflecting the feedback received from various other stakeholders in our business while responding in ways that keep in mind what our company should achieve and for whom will lead to sound and efficient business management as a going concern.

Furthermore, by not limiting ourselves to a systematic check and balance function but rather by spreading the roots as indexes or systems, we will work so that the check and balance across the entire company will function in sync with each person’s awareness.

Corporate Governance System

In addition to prudent and swift decision-making by the Board of Directors, Takara Leben has built a system to ensure management proprieties, such as appropriate mutual supervision by directors over the state of business execution, and audit and supervision by auditors over directors’ state of business execution. We also introduced an executive officer system to clarify the management supervisory roles of directors and the business execution responsibilities of executive officers.

Corporate Governance System

Corporate Governance System Trends

Takara Leben has 12 directors, four of whom are independent outside directors with diverse backgrounds. The terms of office of directors end at the conclusion of the final Ordinary General Meeting of Shareholders held by the end of the fiscal year that ends within one calendar year of the date of the director’s appointment. In fiscal 2020, 21 Board of Directors meetings were held.

There are three auditors, all three of whom are independent outside auditors. Our structure ensures that outside management supervision functions can be fully leveraged. The Audit & Supervisory Board meets so that auditors can share issues and information with each other, request information from directors and departments when necessary, and improve the overall auditing level of the company. In fiscal 2020, 14 Audit & Supervisory Board meetings were held.

FY Form of Organization Total Number of Directors Number of Outside Directors Total Number of Auditors Number of Outside Auditors
FY2016 Company with Audit & Supervisory Board 10 2 3 3
FY2017 Company with Audit & Supervisory Board 10 3 3 3
FY2018 Company with Audit & Supervisory Board 11 3 3 3
FY2019 Company with Audit & Supervisory Board 13 3 3 3
FY2020 Company with Audit & Supervisory Board 13 4 3 3
FY2021 Company with Audit & Supervisory Board 12 4 3 3

Board of Directors

Takara Leben has appointed 12 directors, four of whom are outside directors. All four outside directors have been designated as independent officers. In addition to carrying out prudent and swift decision making, directors mutually supervise the status of business execution at Board of Directors’ meetings, which in principle are held once a month, and also at extraordinary board meetings which are held on an as-required basis.

Auditors are always in attendance at the Board of Directors’ meetings and state their opinions as necessary. At the same time, auditors work closely with outside directors and, as necessary, audit and oversee the running of the Board of Directors’ meetings and the status of business execution. Also, in attendance at the Board of Directors’ meetings are executive officers, the head of the Internal Audit Office, and the heads of other departments, who have received requests from the Board of Directors based on internal regulations, and express their opinions on each issue or reporting matter.

The Takara Leben Executive Committee, which deliberates on management issues, and the Sales Conference, which discusses the progress of sales, each meet once each month. In addition to sharing the achievement status of management targets at these and other meetings, the Company gleans information on problem areas and issues in the form of performance reports from each department and deliberates important matters relating to overall management. The content of those reports is raised at the Board of Directors’ meetings on an as-required basis.

Evaluating the Effectiveness of the Board of Directors

To examine the effectiveness of the Board of Directors as a whole in fiscal 2020, all directors including outside directors as well as corporate auditors completed an anonymous questionnaire, and based on the results, the Board of Directors analyzed and evaluated its effectiveness with cooperation from an external consulting agency. The questionnaire results revealed generally positive evaluations and confirmed the effectiveness of the Board, but also identified some issues. Going forward, the Board will carefully examine the identified issues and take ongoing measures to enhance its performance.

Executive Remuneration

Directors’ remuneration is determined on the basis of the degree of each director’s contribution to business expansion and improvement in corporate value towards sustainable growth. The limit of the annual amount of remuneration is deemed to be ¥600 million (not including, however, the employee portion of the salary), and the limitation of the special stock option remuneration to ¥600 million annually, is decided by a resolution at the Ordinary General Meeting of Shareholders. The remuneration of the Audit & Supervisory Board member is limited to an annual amount of ¥60 million or less.

Audit & Supervisory Board

As a system for check and balance of decision making, all three auditors of Takara Leben are outside corporate auditors. Each auditor is equipped with adequate background, experience, and mettle to objectively carry out assessments and verifications.

Besides audits for Takara Leben, the auditors are also involved in audits for our Group companies, such as attending their board meetings and interviewing their directors, maintaining firm relationships with these companies. Furthermore, the auditors and the accounting auditor work to further improve the effectiveness and efficiency of audits by understanding and adjusting each other’s annual schedules; going together to events such as ground inspections and checks on show rooms, and exchanging information as appropriate.

Takara Leben also established guidelines on internal audits and established an Internal Audit Office as an independent organization reporting directly to the representative director to enhance and strengthen internal audits. In the proposal and execution of the internal audit plan, the office coordinates the schedules of auditors and the Accounting Auditor and adjusts the scopes of audits to seek efficient operation of various functions. Auditors accompany and witness operation audits conducted by the Internal Audit Office, and work on building an effective and efficient audit system by means such as verifying the scope of the audit and collecting opinions as appropriate.

Nomination and Remuneration Committees

With the objectives of increasing objectivity and transparency in decision-making processes relating to personnel appointments and compensation of directors and others and further enhancing and reinforcing corporate governance structures by providing appropriate opportunities for outside directors to participate and give advice, Takara Leben established Nomination and Remuneration Committees as voluntary advisory bodies of the Board of Directors.

Each committee comprises three or more directors selected by resolution of the Board of Directors, of which a majority are independent, outside directors. The chairman of each committee is also selected by resolution of the Board of Directors. The committees deliberate and submit reports primarily on the matters indicated to the rights based on advice from directors.

  • Nomination Committee
  • (1) Matters relating to nomination of candidate directors, executive officers, and others;
  • (2) Matters relating to nomination and succession of the representative director;
  • (3) Matters relating to basic policies and criteria on nomination of directors and others; and
  • (4) Other matters referred to the Nomination Committee by the Board of Directors.
  • Remuneration Committee
  • (1) Matters relating to remuneration of directors and executive officers;
  • (2) Matters relating to basic policies and criteria on remuneration of directors and others; and
  • (3) Other matters referred to the Remuneration Committee by the Board of Directors.

Message from an Outside Director

Kenji Kawada Director (Outside)
Kenji Kawada
Director (Outside)

We interviewed Kenji Kawada, who has served as an outside director of Takara Leben since 2017, about how he regards the new Medium-Term Management Plan, initiatives to enhance the governance system, and the roles of directors.
With his many years of involvement in the management of financial and business firms, Mr. Kawada has a wealth of experience in business management and governance system building, including his appointment as Representative Director and President of Resona Holdings in 2003, where he led the effort to become the first financial institution in the banking industry to make the shift to a Company with three Committees system.

Kenji Kawada Director (Outside)
Kenji Kawada
Director (Outside)