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Policies and Procedures for Appointment/Dismissal and Nomination of Directors and Audit & Supervisory Board Members, and Training
Last update: December 1, 2022
1. Board policies and procedures in the appointment/dismissal of senior management and the nomination of Director and Audit & Supervisory Board Member candidates [CGC Principle 3.1 (iv)] [CGC Supplementary Principle 4.11.1]
(1) Basic policy
The Company established the "Nomination Committee" as an advisory committee to the Board of Directors. The committee's chair and the majority of its members are Independent Outside Directors. Through the committee's deliberations on the nomination of Representative Directors, Directors, Audit & Supervisory Board Members, and executive officers (in this paragraph, "Officers, etc."), the Company utilizes the knowledge and advice of Outside Directors and Outside Audit & Supervisory Board Members and ensures objectivity and transparency in the procedures for deciding the nomination of Officers, etc., thereby enhancing the supervisory functions of the Board of Directors and further substantiating corporate governance functions. Please refer to the "Nomination Committee and Compensation Committee system" regarding the Nomination Committee system, etc.
(2) Reporting process (an example of the nomination process)
2. Requirements and qualities of Directors and Audit & Supervisory Board Members [CGC Principle 3.1 (iv)]
The Company has stipulated the requirements and qualities of the Directors and Audit & Supervisory Board Members in the "Guidelines for Directors and Audit & Supervisory Board Members."
(1) Formulation of the Guidelines for Directors and Audit & Supervisory Board Members
To improve the Company's corporate governance, the "Governance Roundtable Talks" have been held several times since January 2016 comprising all of the Outside Directors and Outside Audit & Supervisory Board Members and the management team to discuss corporate governance based on the main themes of Japan's Corporate Governance Code. This is a discretionary initiative to enable intensive discussion and receive free and open advice from the Outside Directors and Outside Audit & Supervisory Board Members.
In the above process, the members discussed the standards for nomination of Directors and Audit & Supervisory Board Members to determine what kind of personnel are "needed" and "desirable" for the Group's Directors and Audit & Supervisory Board Members. The results of the discussion regarding the requirements and qualities for these personnel have been formulated as the "Guidelines for Directors and Audit & Supervisory Board Members."
The "Guidelines for Directors and Audit & Supervisory Board Members" were formulated with the approval of the Nomination and Compensation Committee meeting held in April 2016 and of the Board of Directors meeting held on April 7, 2016. (Some of the wording was revised at the Board of Directors meetings held on May 26, 2016, November 1, 2018 and October 7, 2021).
(2) Basic perspective on the requirements and qualities of Directors and Audit & Supervisory Board Members
The Company believes that discussion of corporate governance concerning Officers, etc. should begin with the assumption that "nobody is perfect."
Thus, the Company has clarified "conditions that must be satisfied by Directors and Audit & Supervisory Board Members" as universal "requirements." Meanwhile, the "strengths" of each individual can vary; thus, the Company has treated these "personnel selection analysis and perspective that allows for individual strengths and weaknesses" as "qualities" separately from the requirements.
The desirable "qualities" differ depending on the duties assigned to each Director and Audit & Supervisory Board Member, and have been set separately depending on the positions as set forth below:
1. Directors responsible for business execution
2. Directors and Audit & Supervisory Board Members responsible for supervision and audits
3. Group representative (Company President)
On the assumption that each individual Director and Audit & Supervisory Board Member has different strengths and weaknesses with regard to his/her "qualities," the Company considers it important to select Board members by utilizing and combining individual "strengths" while emphasizing the diversity of the Directors and Audit & Supervisory Board Members.
If any Director or Audit & Supervisory Board Member has come to lack these "requirements" or "qualities," the Company shall consider dismissing such Director or Audit & Supervisory Board Member.
Conceptual drawing of "requirements" and "qualities"
- (Reference) Directors and Audit & Supervisory Board Member "Requirements": Conditions that must be satisfied
-
Candidate director A Candidate director B Candidate director C Requirement 1 ○ ○ ○ Requirement 2 × ○ ○ Requirement 3 ○ × ○ Result × × ○
(Reference) Director and Audit & Supervisory Board Member "Qualities": Personnel selection analysis and perspective allowing for individual strengths and weakness
3. Basic policy regarding qualities and appointment/dismissal of Group representative (Company President) (Group representative succession plan) [CGC Principle 3.1 (iv)]
The Company has stipulated the following qualities desired for Group representative (Company President) in the Guidelines for Directors and Audit & Supervisory Board Members.
| Appropriate qualities and viewpoints for Group representative | |
|---|---|
| Qualities | Viewpoints |
| Business management capability |
|
| Leadership ability |
|
| Personal qualities |
|
The basic policy regarding appointment/dismissal of Group representative is as follows.
- Evaluate the candidate through a sincere process using multifaceted and objective materials
- Examine in detail whether the candidate has the management capabilities required for solving management issues facing the Group companies
- Specifically check and evaluate the leadership style and ability of the candidate
4. Training for Directors and Audit & Supervisory Board Members [CGC Supplementary Principle 4.14.2]
The Company has built and implements a training system tailored to each position for its Directors, Audit & Supervisory Board Members, executive officers, and other officers and employees.
Training for Directors covers corporate governance, relevant laws and regulations such as the Companies Act and the Financial Instruments and Exchange Act, which is also provided for executive officers who have responsibility for administrative divisions. The expenses for the training are borne by the Company.
In addition, the Company's Directors and Audit & Supervisory Board Members make use of all opportunities to train themselves through their own efforts, and the Company affords opportunities for improvement. The Company's training policy for Directors and Audit & Supervisory Board Members is set out in the Guidelines for Directors and Audit & Supervisory Board Members.
The Company provides Outside Directors and Audit & Supervisory Board Members with opportunities to visit the places of business of the major subsidiaries.
Inspection tours
To promote a deeper understanding of the Group's business, inspection tours of operating companies' places of business (stores, etc.) and business partners' production facilities, etc., are conducted primarily for newly appointed Outside Directors.
These inspection tours have produced results that go beyond providing an understanding of the Group's business, such as leading to various proposals and advice regarding superstore operations, Last Mile measures, and the like, from Outside Directors based on their expertise.