ONO believes that, in order to respond to the trust of all of our stakeholders and build our corporate value, it is vital not only to comply with laws and regulations but also to enhance management transparency and strengthen corporate governance.
We have adopted a management structure with a Corporate Auditor (or Board of Corporate Auditors) and we working to enhance our corporate governance with a focus on strengthening the functions of the Board of Directors and the Board of Corporate Auditors. In addition, to ensure the independence and objectivity of decisions related to the nomination, compensation, etc. of directors and senior management, we have established the Executive Appointment Meeting and the Executive Compensation Meeting, both with outside directors making up the majority.
Regarding business execution, we have adopted a corporate officer system to improve management efficiency and speed up decision-making. On the other hand, depending on the importance and contents of the management issues, important matters related to business execution are deliberated and determined by the Management Meeting and other meetings chaired by the responsible Members of the Board of Directors or Corporate Officers. Thus we strive to achieve optimal business operations by ensuring effective working of mutually supervisory functions.
Corporate Governance Structure
As for board members, we select the candidates taking into consideration the balance and diversity of their knowledge, experience, and proficiency, so that the Board of Directors as a whole can make technical and comprehensive management decisions. The term of office for each director is limited to one year. This serves to clarify their responsibility, and it allows the board to respond flexibly to changes in the management environment.
The board system are determined in a way that is optimally suited to enforcing management transparency, enhancing corporate governance, and expediting the decision-making process. Currently, the board consists of eight members, including three outside directors. The board holds meetings every month in principle to deliberate and make decisions on important management issues and to assess how each board member is conducting his or her duties. In addition, the board places great weight on the opinions of the auditors, and also incorporates the perspectives of legal, financial and accounting experts, as well as gender perspectives, into its deliberations.
To maintain a strong auditing function, the Board of Auditors comprises two independent outside auditors along with two full-time auditors who have expert knowledge on our business operations and who are highly skilled in collecting auditing information. These full-time and outside auditors work together to achieve high auditing efficiency.
The Board of Auditors holds meetings regularly. Working with the internal auditing department (Business Audit Department) to enforce auditing efficiency, the Board of Corporate Auditors endeavors to improve its functions of the management oversight by enhancing the effectiveness of audits in cooperation with the accounting auditor.
The Executive Appointment Meeting comprises the company president, one internal director and three external directors. It is charged with deliberating our company’s approach to corporate governance, including ensuring transparency and objectivity in the nomination of members of senior management, as well as candidate board-members and auditors. Its duties also include formulation of plans for succession for the chief executive officer (president/CEO) and other senior management. Executive appointments, requiring consultation by the Board of Directors, are decided after being placed on its agenda upon deliberative review by the Executive Appointment Meeting.
The Executive Compensation Meeting comprises the company president, one internal director and three external directors. Its duties include ensuring transparency and objectivity in the determination of the methods by which compensation is to be calculated for each individual board-member. It also deliberates the appropriateness of the compensation system for board-members and our company’s ongoing approach to maintaining the system. Executive compensation, requiring consultation by the Board of Directors, is decided after being placed on its agenda upon deliberative review by the Executive Appointment Meeting.
The outside directors attended all meetings of the Board of Directors held in FY2019. From an independent and objective standpoint, they oversee our business operations and take part in our decision-making process. They are involved in the process of making important decisions such as nomination of officers and executive compensation, help to ensure the transparency and objectivity and enhance the functions of the board by serving as members of the Executive Appointment Meeting and the Executive Compensation Meeting. In FY2019 the Executive Appointment Meeting was held three times and the Executive Compensation Meeting was held twice, and all meetings were attended by the outside director.
The outside auditors (excluding Corporate Auditors who designated due to Medical Treatment) attended all meetings of the Board of Directors and the Board of Auditors held during FY2019. As experts in law and corporate accounting, the outside auditors carry out the audits from an independent and objective standpoint to ensure that our management remains sound and strong.
Outside officers provide useful advice and suggestions for our business management based on their abundant experience and profound knowledge. There is no special interest relationship between these outside officers and ONO such as personal relationships, capital relationships, and business relationships, based on which we believe there is no risk of conflict of interest with general shareholders.
We adhere to all principles of the Corporate Governance Code stipulated by the Tokyo Stock Exchange. In accordance with the intent of the "Corporate Governance Code", we continue to improve the efficiency, soundness and transparency, etc. of the management, and promoting our system more suitable for our business operations, through the evaluation on the effectiveness of the annual meeting of the Board of Directors.
Please refer to the “Corporate Governance Report” below for details on our corporate governance situation.
We have laid out our operational system in compliance with the corporate governance guidelines set out by the board of directors. Implementation of the system is inspected regularly by the Internal Auditing Department (Business Audit Department). Results are reported to the board of directors with the aim of constantly improving the system.
Furthermore, we adopt a firm stance of fighting against any antisocial forces or organizations that may threaten social order or security.
For the improved efficiency and accuracy of our decision making and business operations, we hold Management Meetings and other meetings attended by the president, board members, corporate officers in charge of each division, and managers of relevant departments. At these meetings, we take a multifaceted approach to addressing important management issues, including those that are to be deliberated on at board meetings. We also aim to maintain and improve management efficiency and make quicker decisions by introducing a corporate officer system and promoting transfer of authority.
Auditors are obliged to attend Management Meetings and inspect their minutes, as these meetings are also subject to auditing.
As specified in our Codes of Conduct, we strive to establish transparent corporate management and recognize the importance of taking various opportunities to disclose information on our business activities in a timely and appropriate manner. We actively conduct investor relations (IR) activities based on a policy of pursuing accuracy, promptness, fairness, and impartiality.
We disclose financial results and other timely disclosure information on our website and at the same time through TDnet, the timely disclosure network of the Tokyo Stock Exchange. Information that is not subject to the timely disclosure rules is also disclosed swiftly through our website and by other means. For securities analysts and institutional investors, we actively hold individual meetings and phone conferences in addition to a financial results briefing or a conference call at the time of each quarterly statement, having held 220 meetings in total in FY 2019. We also participate diligently in investor conferences sponsored by securities firms and the like in order to facilitate individual investors’ understanding of our business activities and management strategy.
Our website contains an IR library that provides useful current and past data, including development progress updates, as well as financial highlights for the last five years. Also, we endeavor to convey our corporate information to a wider range of people in an easy-to-understand manner by issuing business reports (shareholder newsletters) and corporate reports. We continue to disclose the information more accurately and promptly.