Overview of Corporate Governance “Systems”

Last update: June 2, 2021

Corporate Governance System (as of May 27, 2021)

Corporate Governance System

1Reason for adoption of current corporate governance system

The Company ensures the effectiveness of its corporate governance by coordinating “audits” conducted by the Audit & Supervisory Board Members (Audit & Supervisory Board), including multiple Outside Audit & Supervisory Board Members who maintain their independence and have specialized knowledge in such areas as legal affairs and financial accounting, through their actively cooperating with the accounting auditor and the internal audit division, and “formulation of management strategies” and “supervision of business execution” conducted by the Board of Directors, including multiple Outside Directors who maintain their independence and have advanced management knowledge and experience.
 The Company has adopted this corporate governance structure because it judges the structure to be workable for realizing and ensuring the Company’s corporate governance and for conducting appropriate and efficient corporate management.

Utilization of the company with Audit & Supervisory Board Member system

The Company considers the following characteristics and advantages of the Audit & Supervisory Board Member system to be effective for ensuring the appropriateness of the Company’s Group governance and has therefore adopted it as the corporate governance system:

1. Each Audit & Supervisory Board Member independently has its own auditing authority (individual independence system), which allows audits to be conducted from the perspectives of each Audit & Supervisory Board Member.

2. The independence of the Audit & Supervisory Board Members is clearly specified by law, which enables independent and objective audits.

3. The Audit & Supervisory Board Members have legally specified authority to investigate subsidiaries, which is effective also from a Group audit perspective.

Composition and attendance rate of Directors and Audit & Supervisory Board Members at each meeting body (as of May 27, 2021) Updated

(◎: Board or committee chair)

Name Position in the Company Board of Directors Audit & Supervisory Board Nomination Committee Compensation Committee CSR Management Committee Risk Management Committee Information Management Committee
Ryuichi Isaka Representative Director and President
Executive Officer and President
Katsuhiro Goto Representative Director and Vice President
Executive Officer and Vice President
Information Management Supervisor
Junro Ito Director and Managing Executive Officer
General Manager of the Corporate Development Division
Kimiyoshi Yamaguchi Director and Executive Officer
General Manager of the Corporate Communication Division
Yoshimichi Maruyama Director and Executive Officer
General Manager of the Corporate Finance & Accounting Division
Fumihiko Nagamatsu Director
Shigeki Kimura Director
In charge of the President Office
In charge of Group Cooperation
Joseph M. DePinto Director
Yoshio Tsukio Independent Outside Director
Kunio Ito Independent Outside Director
Toshiro Yonemura Independent Outside Director
Tetsuro Higashi Independent Outside Director
Kazuko Rudy
(Real name:
Kazuko Kiriyama)
Independent Outside Director
Noriyuki Habano Standing Audit & Supervisory Board Member
Yoshitake Taniguchi Standing Audit & Supervisory Board Member
Kazuhiro Hara Independent Outside Audit & Supervisory Board Member
Mitsuko Inamasu Independent Outside Audit & Supervisory Board Member
Kaori Matsuhashi
(Real name:
Kaori Hosoya)
Independent Outside Audit & Supervisory Board Member

2Separation of the Board of Directors’ supervisory functions and executive officers’ business execution functions through introduction of the executive officer system (clarification of the scope of matters delegated to management)

To facilitate prompt decision making and business execution even amid a dramatically changing operating environment, the Company has introduced the executive officer system and separated the Board of Directors’ supervisory functions from the executive officers’ business execution functions. This developed an environment where the Board of Directors is able to focus on the “formulation of management strategies” and the “supervision of business execution,” while the executive officers can focus on “business execution.” The executive officers comprise 17 members (16 men and 1 woman) as of May 27, 2021.
 The term of office of the Directors is set to one year in order to reflect the intentions of shareholders regarding the appointment of the management team in a timely manner.

Clarification of the scope of matters delegated to management
[CGCSupplementary Principle 4.1.1]

Matters to be decided by the Board of Directors at the Company are stipulated in the Board of Directors Regulations, the Decision Authority Regulations, and so forth, and matters stipulated by the Companies Act and the Company’s internal regulations are decided by the Board of Directors.
 The Decision Authority Regulations clearly set forth the scope of matters to be decided by the Representative Director and President. This clarifies the decision-making process for management and the structure of responsibility, while also expediting decision-making by rational delegation of authority.

3Nomination Committee and Compensation Committee system[CGC Principle 3.1 (iii) (iv)][CGC Supplementary Principle 4.11.1]

(1) Outline of basic policy and system

In 2016, the Company established the “Nomination and Compensation Committee” with an Independent Outside Director as the Chair to be an advisory committee to the Board of Directors. It has been utilizing the knowledge and advice of Outside Directors and Outside Audit & Supervisory Board Members to ensure objectivity and transparency in the procedures for deciding the nomination and compensation of Representative Directors, Directors, Audit & Supervisory Board Members, and executive officers (in this paragraph, “Officers, etc.”), thereby enhancing the supervisory functions of the Board of Directors and further substantiating corporate governance functions. Responding to feedback from shareholders and investors, etc., and as a result of deliberations through effectiveness evaluations of the Company’s Board of Directors, we have decided to make the following improvements to the advisory committees of the Board of Directors, effective since the Annual Shareholders’ Meeting held on May 28, 2020, to utilize a more diverse range of knowledge of Outside Directors and Outside Audit & Supervisory Board Members in committee deliberations and further improve their objectivity and transparency.

Overview of improvements to advisory committees since 2020

1. The Nomination Committee and the Compensation Committee are separated;

2. Each committee is composed of three Independent Outside Directors and two internal Directors (the majority of committee members are Independent Outside Directors);

3. Each committee is chaired by an Independent Outside Director; and

4. Internal committee members of the Compensation Committee are selected from among Directors other than Representative Directors.

Main items for deliberation Nomination Committee Compensation Committee
Basic policies and standards for nomination of candidates for the Company’s Officers, etc. and candidates for the Representative Directors of the core operating companies Basic policies and standards for compensation, etc., for Officers, etc. of the Company and of the core operating companies
Contents of proposals for the limit on the total amount of compensation, etc. for Directors and Audit & Supervisory Board Members of the Company and of the core operating companies
Contents of appointment proposals for candidates for the Company’s Officers, etc. and candidates for the Representative Directors of the core operating companies Contents of individual compensation, etc. for Officers, etc. (excluding Audit & Supervisory Board Members) of the Company and for the Representative Directors of the core operating companies
Development of a stock-based compensation system for Officers, etc. of the Company and its subsidiaries, the establishment and change of criteria for granting stocks, and important matters regarding operation thereof (including determination of renewal of the stock-based compensation system)

* As of May 27, 2021, the above “core operating companies” are SEVEN-ELEVEN JAPAN CO., LTD., Ito-Yokado Co., Ltd., Seven & i Food Systems Co., Ltd., York-Benimaru Co., Ltd., Sogo & Seibu Co., Ltd., and York Co., Ltd. (York Mart Co., Ltd. changed its name to York Co., Ltd. on June 1, 2020.)

(2) Proper Group management and utilization of the Nomination Committee and Compensation Committee

The Company’s “Nomination Committee and Compensation Committee” (in this paragraph, “the Committees”) deliberate on the nomination and compensation of not only the Company’s Officers, etc., but also Representative Directors of the core operating companies.
 The Representative Directors of the core operating companies occupy an important position for the Group’s management and are included within the purview of deliberations by the Committees from the perspective of emphasizing the objectivity and transparency of the principal nomination and compensation procedures for the management of not only the Company but also the Group.
 The Company will also appropriately determine the companies to be “core operating companies” with an emphasis on the objectivity and transparency of the Group management procedures, in accordance with the Group’s business portfolio strategy and governance system.

(3) Involvement of Audit & Supervisory Board Members from the perspective of ensuring correct procedures

One internal Audit & Supervisory Board Member and one Outside Audit & Supervisory Board Member act as observers at the Committees.
 This is because deliberations by the Committees include nomination of candidate Audit & Supervisory Board Members, whose duty is to audit the performance of duties by the Directors, and it is important to ensure due process at the Committees as advisory committees to the Board of Directors.

4Auditing

(1) Audits by the Audit & Supervisory Board Members

The Company’s Audit & Supervisory Board develops audit plans with the basic audit policies of ensuring sound and sustainable growth of the Company and its Group companies and establishing high-quality corporate governance systems to respond to public trust. The Audit & Supervisory Board sets the establishment and management of internal control systems, and the system to promote legal compliance and risk management, as key audit items.
 The Audit & Supervisory Board Members attend the Board of Directors meetings and other important meetings. They conduct audits in the following manner: exchanging opinions with the Representative Directors and periodically interviewing Directors and others on the status of business execution; viewing important documents for approval such as request forms; and surveying the status of operations and assets at the Head Office and others. For subsidiaries, they communicate and share information with the Directors and Audit & Supervisory Board Members of subsidiaries, visit the subsidiaries’ Head Offices and stores to survey the actual status of operations in accordance with the audit plans, and receive reports.

Appointment of Audit & Supervisory Board Members with expertise with regard to finance and accounting

The Company has appointed the following three Audit & Supervisory Board Members who have expertise with regard to finance and accounting.

• Standing Audit & Supervisory Board Member Yoshitake Taniguchi was engaged in operations relating to finance and accounting in the finance and accounting division in the Company and its Group companies for a total period of seven (7) years or more.

• Audit & Supervisory Board Member Kazuhiro Hara is a certified public accountant and certified tax accountant.

• Audit & Supervisory Board Member Kaori Matsuhashi is a certified public accountant.

(2) Internal audits

In order to enhance and reinforce its internal auditing function, the Company has appointed, within the Auditing Office, the “operational auditing staff” and the “internal control evaluation staff,” which are independent internal auditing divisions.

Operational auditing staff
  • 1. Verifies and provides guidance on internal auditing, including the status of the maintenance and management of compliance systems, by core operating companies or to directly audit them.
  • 2. Audits the Company, the holding company
Internal control evaluation staff Evaluates internal controls regarding the financial reporting of the whole Group

(3) Coordination between Audit & Supervisory Board Member audits, internal audits, and accounting audits

In order to improve the overall quality of audits, the Company ensures that the Audit & Supervisory Board Members (including the Outside Audit & Supervisory Board Members), the Auditing Office, and the auditing firm proactively exchange information and endeavor to maintain close ties with each other, by such means as periodically holding meetings as follows.

Coordination method Frequency Participants Main proceedings
Tri-partite meetings Basically
twice a year
  • • Audit & Supervisory Board Members (including Outside Audit & Supervisory Board Members)
  • • Auditing Office
  • • Auditing firm
Exchanges information on the performance of accounting audits with the auditing firm, the performance of internal audits with the Auditing Office, and the performance of Audit & Supervisory Board Member audits with the Audit & Supervisory Board Members and conducts exchanges of opinions.
Reporting sessions for accounting audits Basically
twice a year
  • • Standing Audit & Supervisory Board Members
  • • Representative Directors and other officers
  • • Auditing Office, etc.
  • • Auditing firm
Receives reports from the accounting firm on the accounting audits, and confirms, among other matters, the results of accounting audits.
In addition, conducts exchanges of opinions on the status of audits as necessary.
Meetings between the Standing Audit & Supervisory Board Members and the Auditing Office Basically
a month
  • • Standing Audit & Supervisory Board Members
  • • Auditing Office
  • • The Auditing Office reports on the results of operational audits and the progress of internal control evaluations, etc.
  • • Actively exchanges opinions on, among other matters, priority matters that should be examined in order to improve the quality of audits.
Audit & Supervisory Board meetings, etc. Basically
twice a month
  • • Audit & Supervisory Board Members (including Outside Audit & Supervisory Board Members)
  • • Auditing Office (as necessary)
  • • Auditing firm (as necessary)
The Standing Audit & Supervisory Board Members report to the Outside Audit & Supervisory Board Members on, inter alia, the contents of the meetings with the auditing firm and Auditing Office and conduct discussions. The Standing Audit & Supervisory Board Members also provide the Auditing Office and the auditing firm with feedback on the matters thus discussed.
Close collaboration to improve the quality of audits

(4) Framework for checking related party transactions
[CGC Principle 1.7]

With regard to transactions with related parties, the Company investigates and identifies related parties and checks if there are any transactions with related parties and the details thereof. The Company discloses the transactions in accordance with the Companies Act, the Financial Instruments and Exchange Act, and other applicable laws and regulations, as well as the regulation of the Tokyo Stock Exchange.
 Furthermore, with regard to any competing transactions and conflict-of-interest transactions between the Company and any Directors, the Company makes it a rule for the Directors to obtain approval of the Board of Directors in accordance with laws and regulations and the Board of Directors Regulations and to report material facts if the Directors carry out such transactions.

5Corporate governance by various committees Updated

The Company has established the “CSR Management Committee,” “Risk Management Committee,” and “Information Management Committee,” which report to the Representative Directors. Each committee determines Group policies in cooperation with the operating companies, and strengthens corporate governance by managing and supervising their dissemination and execution.

CSR Management Committee

The Company has established the CSR Management Committee based on CSR Basic Rules for the purpose of promoting, administrating and supervising the CSR activities of the entire Group through operating activities in order to contribute to solving social issues and aim for sustainable growth for both society and the Group. The Company has also established five subcommittees under the CSR Management Committee tasked with the examination and promotion of concrete measures to promote operating activities that will contribute to solving the “Five Material Issues” identified to address the expectations and demands of stakeholders and realizing a more thorough compliance practice. Through these subcommittees, the Company has carried out initiatives to find solutions to issues and implemented preventive measures.
  In March 2020, the Company newly established the “Compliance Subcommittee” for the purpose of promoting ESG and strengthening compliance and internal controls. Furthermore, to address the relevant issues of the “Five Material Issues,” the Company tasks the “Environment Subcommittee” with helping mitigate climate change, depletion of resources, and other environmental burdens, the “Supply Chain Subcommittee” with building a sound supply chain that takes human rights and the environment into consideration and with improving quality and ensuring safety for products and services, the “Corporate Ethics and Culture Subcommittee” with ensuring thorough awareness and adoption of the Corporate Creed and the Corporate Action Guidelines, building worker-friendly workplaces, promoting advancement of diverse human resources and improving the labor environments, and the “Social Value Creation Subcommittee” with the planning, proposal and operation of new businesses originating from addressing social issues through the main business, by utilizing business characteristics and management resources. These subcommittees have formulated and carried out measures to address such individual issues on a Group-wide basis.
 The Company operates an internal whistleblowing system available to the Group’s Directors and Audit & Supervisory Board Members, employees and business partners as part of the internal controls of the whole Group. The executive officer in charge of the CSR Management Committee is tasked with strengthening the compliance structure, which involves regularly reporting and confirming the operational status of the internal whistleblowing system at the Board of Directors’ meetings, along with other activities.

Risk Management Committee

In accordance with the basic rules for risk management, the Company and its Group companies establish, streamline, and manage comprehensive risk management systems, centered on the Risk Management Committee, in order to properly analyze, evaluate, and appropriately respond to risks associated with each business, with consideration for changes in the management environment and risk factors.
 The Risk Management Committee receives reports from the departments in charge of risk management regarding the risk management status of the Company. The committee comprehensively determine, assess, and analyze risks and discuss measures, and determine the future direction going forward.
 Meanwhile, the Company carries out efforts to further strengthen risk management of the entire Group through assisting with risk evaluation and analysis and execution of mitigation measures at each Group company, and sharing risk-related information from inside and outside the Company, using group-wide cross-organizational meeting bodies led by each of the Company’s various departments in charge of risk management.

Information Management Committee

In accordance with the Information Control Regulations, which were redesigned in FY2020, the Company has carried out risk analysis, evaluation and measures regarding the information management of all operations-related information that is learned, created or retained by officers and employees of the Group under the Information Management Committee, chaired by the information management supervisor.
 During FY2021, the committee continued initiatives carried on from FY2020 and worked at strengthening information collection and management systems. While gathering important information from each company in an appropriate and timely manner, and revamping the system for the cooperative framework for dealing with this, the committee centrally managed this information and strengthens the system for reporting that information without omission or delay to management and relevant divisions.
  Regarding information security, the Company has taken steps to build and strengthen a group-wide security system. Specifically, the Company has established the security management division with independence from business execution as an organization directly under the control of the Representative Director of the Company and redeveloped information security policies, guidelines, etc., the Group’s common basis. For operating companies, the Company assists in building security environments, strengthens monitoring, upgrades trainings, and evaluates internal controls, among other measures. In addition, guided by the Information Management Committee mentioned above, the Company is raising awareness of security throughout the Group, further enforcing rigorous security measures through a specialized subcommittee, and ensuring Group-wide safety and security.
  Through these measures, the Company has worked to strengthen the Group’s information management and information security.

6Risk management

(1) Basic approach to risk management

The Company is taking steps to appropriately manage the various risks associated with business continuity, in an effort to secure the soundness of its management and the efficiency of its business, while ensuring the lasting preservation and development of the Group and continuing to provide the products and services required by its customers. In the management of the Group’s risks, the Company quantifies the risks of every business domain to the extent possible, verifies that these risks are within an acceptable range based on the Company’s owners’ equity, and employs an integrated risk management method, which implements measures that avoid, transfer, mitigate, and retain risks.

(2) Group risk management system

The Company and its Group companies have established a Risk Management Committee, with the departments that oversee the overall risk management of the respective companies as the secretariat.
 As a general rule, the Risk Management Committee meets once every six months to receive reports on the risk management status of the respective companies from the departments responsible for the management of risks, to comprehensively determine, assess, and analyze risks and discuss measures, and to determine the future direction going forward.
 Meanwhile, with regard to individual risks, Group policies related to such risks, initiatives to mitigate risks undertaken by each company, and various internal and external examples illustrating signs of materializing risks, etc., are shared through a group-wide meeting body, etc., headed by the Company’s departments responsible for the management of risks.

Group Risk Management System

Group Risk Management System

(3) Risks to be managed

The Company has established a basic policy on risk management that is shared by the whole Group.
 The Company classifies the risks to be managed into the four categories of governance risk, operational risk, B/S risk, and business risk.
 In order to assess the group-wide status of each risk and effectively make improvements, the Company has clarified the departments responsible for the management of risks within the Company, while also establishing the Risk Management Department to centrally and comprehensively manage all risk areas.

Risk category Major examples of the key risks of the Group
Governance risk Risk of degradation of the entire Group’s brand due to deficiencies in internal controls and compliance violations, etc.
Operational risk
Information management risk Risk of incurring loss due to leakage of the personal information of customers, employees, etc., and confidential information
System risk Risk of incurring loss due to cyberattacks and system and network failures
Quality assurance and labeling risk Risk of incurring loss due to product safety issues, inappropriate labeling, and human rights and environmental problems in the supply chain
IR risk Inappropriate disclosure risk and the risk of incurring loss due to unfair disclosures
PR risk Risk of incurring loss due to inappropriate handling of the media, inappropriate news releases, etc.
Reputational risk Risk of incurring loss including brand degradation from inappropriate information, including information on social media
Legal risk Risk of incurring loss due to inadequate handling of litigation and statutory regulations
Risk associated with intellectual property rights (rights of trademark, etc.) Risk of the intellectual property rights, etc., held by or attributed to the Group being violated by a third party, or of the Group violating the rights of a third party
Business continuity risk Risk of incurring loss due to the impact of climate change, disasters, etc., and due to infectious diseases and epidemics, such as new strains of pandemic influenza
Risk of incidents and accidents Risk of incurring loss due to bodily injury to customers, arson, fires and other accidents, etc.
Risk associated with antisocial groups Risk of incurring loss as a result of relationships with antisocial groups
Accounting risk Risk of incurring loss due to the introduction of new accounting standards or changes thereof
Tax-related risk Risk of incurring loss due to inadequate handling of the introduction of new tax systems or changes thereof, etc.
Personnel- and labor-related risk Risk of incurring loss due to inadequate development of the labor environment, ideal working conditions, etc.
Environmental risk Risk of incurring loss due to inadequate handling of organic waste recycling, reduction of containers and packaging, waste disposal, climate change, etc.
B/S risk (Risk occurring as a result of, or derived from assets and liabilities)
Asset risk Risk of incurring loss due to a decline in the asset value of inventories, non-current assets, etc.
Business credit risk Risk of incurring loss due to receivables management, including the collection of guaranty deposits
Financial credit risk Risk of incurring loss in financial transactions for asset management, etc., due to deterioration of the financial standing of borrowers, etc.
Market risk Risk of incurring loss due to fluctuating values of assets and liabilities, as a result of fluctuations in interest rates, foreign exchange rates, stock prices, etc.
Liquidity risk Risk of incurring loss due to difficulties in fundraising as a result of deteriorating financial conditions, etc.
Business risk
Existing business risk Risk of incurring loss due to the procurement of products and raw materials, etc., and fluctuations in purchase prices
Risk of incurring loss due to compliance with store-opening regulations
Investment return risk Risk of incurring loss due to failure to achieve the initially anticipated effects of M&As and business alliances with other companies, etc.

(4) To further strengthen risk management

The environment surrounding the Group, including recent technological innovations and social values, has changed drastically, and we are continuously revising our views on risk management, accordingly.
 In particular, regarding risks associated with information security, in July 2019, unauthorized access to certain accounts in our “7pay” barcode settlement service, which was operated by the Company’s subsidiary, occurred. The Company took this incident extremely seriously, and worked on measures to prevent the recurrence of such incidents. Specifically, as recurrence prevention measures, the Company has been engaged in the redevelopment of security policy and guidelines, etc., expansion of personnel with expertise in security, and provision of internal training to instill awareness about security in the Group.
 Furthermore, the Company has set up the “Security Management Office,” which supervises the Group’s operations related to information security as an organization with independence from business execution.

Toward further strengthening of risk management: detecting the warning signs of risk

Toward further strengthening of risk management: detecting the warning signs of risk

 In addition, as the business environment changes drastically, recognizing that prevention and early detection of incidents are crucial, the Company is promoting company-wide initiatives that require each line of defense, i.e., the operating division—the first line of defense, the administrative divisions—the second line of defense, and the internal auditing division—the third line of defense, to function properly.
 In the first line of defense, the operating division strengthens communication in the regular business line to ensure the early detection and reporting of/responses to risks onsite. In addition, in March 2020, the Company established a new Compliance Subcommittee under its CSR Management Committee to thoroughly enforce compliance at each Group company, and is also making efforts to support the strengthening of the compliance systems of each Group company and ensure effective supervision.
 In the second line of defense, the internal control promotion division, which is independent from the regular business lines (e.g., the administrative divisions and monitoring divisions), has established a system to give feedback, advice and support to the operating division, the first line of defense, regarding the information gathered daily, while engaging in mutual coordination, as necessary.
 In the third line of defense, the Auditing Office of the Company and its Group companies deliberate the risk management audits that analyze and evaluate whether the first and second lines of defense of each company are functioning properly.
 In addition to the above, given the lightning speed of changes in today’s business environment, the Company is strengthening analysis of information on social media as well as the content of opinions from its customers and other parties, as part of its efforts to strengthen early understanding of the warning signs of risk.

7Internal whistleblowing Updated

As part of the internal controls of the whole Group, the Group operates a “Groupwide Employee Help Line” for blowing the whistle by Group employees, a “Business Partner Help Line” for blowing the whistle by business partners, and an “Audit & Supervisory Board Member Hotline” regarding management team members, with the aim of preventing, rapidly identifying, rapidly rectifying, and preventing the recurrence of violations of laws and regulations, social norms, and internal rules.

  • • The Company has established a point of contact for reporting at an outside third-party organization to thoroughly protect those who issue reports by enabling reports to be made anonymously, ensuring the confidentiality of report content, protecting the personal information and privacy of the reporting person (whistleblower), and preventing the whistleblower from being subjected to disadvantageous treatment for having used the help line.
  • • When a serious violation is found to have occurred, it is reported immediately to a Representative Director. The relevant department and relevant companies then confer about the response and take necessary measures.
  • • The executive officer in charge of the secretariat of the CSR Management Committee at the Company regularly reports and confirms the operational status of the internal whistleblowing system at the Board of Directors’ meeting.
WCMS WCMS

Registration of conformity with the “Whistleblowing Compliance Management System (Self-Declaration of Conformity Registration Program)”

For the Seven & i Group to be trusted by society and continue its sustainable growth, it must comply with all laws and regulations. To do so, it is important for the Group to prevent, rapidly identify, rapidly rectify, and prevent the recurrence of violations. In July 2019, the Company’s whistleblowing system was recognized as being designed to protect whistleblowers and maintain the confidentiality of reports, and the Company was registered as conforming to the Consumer Affairs Agency’s Whistleblowing Compliance Management System (Self-Declaration of Conformity Registration Program). It has already renewed its registration. The Company will continue to fully inform employees of the whistleblowing system to maintain thorough compliance.

Internal reporting

8Cross-shareholdings
[CGC Principle 1.4] Updated

(1) Policy on cross-shareholdings

Overall, the Group’s cross-shareholdings as of the end of February 2021 comprise 54 stocks, with a market value of ¥74.3 billion accounting for 2.6% of consolidated net assets.
 In principle, the Group does not hold cross-shareholdings except where there is an accepted rational for doing so, such as maintaining or strengthening business alliances or business relationships, in order to maintain and strengthen business competitiveness.
 Stocks held are reviewed annually and shares with less rationale or less effectiveness for holding are to be sold in view of the circumstances of the investee companies.

* The market value is rounded down to the nearest 10 million yen and the ratio is rounded to the first decimal place.

(2) Standards for exercising voting rights

When exercising voting rights as to listed cross-shareholdings, based on the following Detailed Rules regarding Standards for Exercising Voting Rights, the Company decides whether to vote for or against proposals from the perspective of increasing the medium- to long-term corporate value of the Company and the investee companies, and engages in dialogue with the investee companies about the proposals before exercising its voting rights if necessary.

Detailed Rules regarding Standards for Exercising Voting Rights

a. Whether proposals at each Shareholders’ Meeting inure to medium-to long-term improvement of corporate value?

b. Whether proposals at each Shareholders’ Meeting will maximize the benefits of shareholders of the company that convenes the Shareholders’ Meeting?

c. Whether a convocation notice of Shareholders’ Meetings and other materials such as documents that explain proposals are timely and appropriate as information disclosure?

(3) Method for determining the rationale and effectiveness of shareholding

The Company’s Board of Directors assesses the matters below regarding the rationale for and effectiveness of holding listed cross-shareholdings and makes comprehensive decisions regarding the appropriateness of holding said shares. The Company will continually review the matters to be assessed.

Matters reviewed

Qualitative Matters

1. Background of acquisition

2. Presence or absence of business relationship

3. Strategic significance at the time of holding

4. Possibility of future business

5. Risks related to survival or stability, etc. of business if shares are not held

6. Continuity of advantages, future outlook for business, and risks if shares continue to be held

Quantitative Matters

1. The most recent amounts of transactions and profits if any business is conducted through business alliances, etc.

2. Annual dividends received and gain or loss on valuation of shares

3. Whether the benefits and risks from each holding cover the Company’s cost of capital

(4) FY2021 assessment of cross-shareholdings

The results of the Board of Directors’ FY2021 assessment of all of the Company’s listed cross-shareholdings are as below. (The review was performed at the Board of Directors meeting on April 8, 2021.)

Results of the assessment of the Company's listed cross-shareholdings in FY2021

Stock Purpose of shareholding Qualitative/quantitative rationale and effectiveness of shareholding Holding of the Company’s shares
AIN HOLDINGS INC. Further reinforcement of business collaboration in promotion of joint product development, etc. Yes* No
Credit Saison Co., Ltd. Further reinforcement of business collaboration through the Group financial business companies, etc. Yes* Yes
Mitsui Fudosan Co., Ltd. Further reinforcement of business collaboration in transactions, etc., related to stores, logistics facilities, and other real estate for the Group operating companies Yes* Yes
SEIBU HOLDINGS INC. Further reinforcement of business collaboration in joint development of stores, areas, etc., of the Group operating companies Yes* Yes
TBS HOLDINGS, INC. Further reinforcement of business collaboration in sales promotion leveraging media content, etc. Yes* Yes
Dai-ichi Life Holdings, Inc. Further reinforcement of business collaboration in life insurance and other financial transactions, etc., with the Group companies Yes* Yes

* The qualitative and quantitative matters in “Matters reviewed” were assessed and it was comprehensively determined that rationale and effectiveness existed for all stocks held. (The quantitative effects of shareholding are not indicated in view of confidentiality of contracts and agreements pertaining to individual transactions.)

 The Company’s Board of Directors confirms that its Group companies other than listed subsidiaries also assess the Group's cross-shareholdings based on the same shareholding policy as the Company.

9Advisors, etc. (as of May 27, 2021)

Status of the advisors for the Company and major operating companies is as below.

The Company

Name Masatoshi Ito
Title/position Honorary Chairman
Duties Provide advice when needed by the Company’s management team
Working arrangement/conditions Full-time/with compensation
Term of office 1 year
Name Toshifumi Suzuki
Title/position Honorary Advisor
Duties Provide advice when needed by the Company’s management team
Working arrangement/conditions Full-time/with compensation
Date of retirement of the Company’s president, etc. May 26, 2016
Term of office 1 year

Main operating companies

Name Noritomo Banzai
Title/position Advisor of SEVEN-ELEVEN JAPAN CO., LTD.
Duties Provide advice when needed by the Company’s management team
Working arrangement/conditions Full-time/with compensation
Term of office 1 year
  • • Regarding the assumption of office by advisors of the Company and major operating companies, the Company’s Board of Directors deliberates and confirms matters and appropriately supervises their work.
  • • Upon consultation from the Company’s Board of Directors, the Company’s Nomination Committee deliberates and confirms the duties, work arrangements, and conditions, such as compensation terms for the advisors of the Company and major operating companies.
  • • The roles of advisors of the Company and major operating companies are to provide advice when needed by the management team of each company, and advisors have no authority to affect the management decisions of each company.