Corporate Governance Guidelines
1.Fundamental Policy on corporate governance
The Company pursues customers’ convenience. While working to create a well-organized distribution system to provide liquors and goods, the Company will comply with laws and regulations. In this way, we aim to offer a rich social life in which people enjoy drinking. The Company aims to meet its social requirements towards our shareholders, customers, business partners, employees, communities, and other stakeholders and implement management practices that emphasize the enhancement of corporate value. Our fundamental stance on corporate governance for achieving these goals is to ensure that we comply with corporate ethics, laws, and regulations and develop and reinforce our internal control and risk management systems.
2.Overview of the corporate governance structure and reasons for its adoption
(1) Overview of the corporate governance structure
ａ. Board of Directors and Directors
The Board of Directors consists of seven members: four (4) directors, including two (2) outside directors, and three (3) outside auditors. The Board of Directors meetings are held on monthly basis, with additional extraordinary meetings scheduled as needed to discuss and make decisions on important matters in accordance with laws, regulations, the articles of incorporation, and the Board of Directors Regulations. The Board of Directors also receives reports on the directors’ performance of their duties and oversees and monitors their performance.
The Company convened fourteen (14) Board of Directors meetings in fiscal year 2022. While one director had an attendance rate of 92.9%, the remaining Board members had an attendance rate of 100%. At that moment, outside directors accounted for 50% of the directors. And however, three (3) new directors were appointed on August 2023, and outside directors will account for 28.5% of the directors as a result. The Board of Directors will explore options to ensure that its management oversight function remains effective.
ｂ. Board of Auditors
The Board of Auditors comprises three (3) outside auditors, one of whom is a full-time auditor. Board of Auditors meetings are held regularly and as required. Each auditor attends the Board of Auditors meetings and attends other internal meetings as an observer. The auditors monitor the performance of directors and others from an objective standpoint by interviewing them about their performance of duties and inspecting documents for approval and other purposes.
The auditors share information among themselves and monitor the directors’ execution of duties and overall employee operations by interviewing them based on auditing plans that the Board of Auditors prepares. In this way, they effectively oversee management.
c.Group Compliance Committee
The Group Compliance Committee consists of members from across the Group. Generally, the members meet once every three months. The committee receives reports from the directors of each subsidiary and others about compliance systems development, internal whistleblower systems, and measures to prevent future violations. Additionally, the committee discusses other important issues related to compliance management and makes recommendations to the Board of Directors.
d. Group Risk Management Committee
The Group Risk Management Committee consists of members from across the Group. Generally, the members meet once every three months. The committee reviews risks related to business execution with the directors of each subsidiary and others every fiscal year and receives reports from them on the development of risk management systems and risk management initiatives. The committee is also responsible for overall risk management to prevent risks from materializing and minimize the negative impact of risks. In the event of an emergency, the committee will oversee risk management.
e. Group Related Party Transactions Committee
The Group Related Party Transactions Committee is an advisory body to the Board of Directors established under the Kakuyasu Group Related Party Transactions Advisory Committee Regulations. The committee primarily consists of outside officers. Chaired by an outside director, the committee reviews the business need for related party transactions and the adequacy of the terms and conditions under the Kakuyasu Group Related Party Transactions Advisory Committee Regulations and the Related Party Transactions Management Regulations when the transactions commence. The committee reports the results of their review to the Board of Directors. If related party transactions continue, the committee reviews their business need and the adequacy of the terms and conditions at least once a year based on the most recent status of the transactions and reports the results of the review to the Board of Directors.
ｆ. Group Nominating and Remuneration Committee
The Group Nominating and Remuneration Committee is a group primarily consisting of independent outside directors who advise to the Board of Directors established under the Kakuyasu Group Nominating and Remuneration Committee Regulations. The committee discusses the nominations and remuneration of directors and other officials using outside directors’ knowledge and advice and ensures the objectivity and transparency of the procedures for determining nominations and remunerations. The committee aims to improve the supervision function of the Board of Directors and enhance the corporate governance function.
ｇ．Kakuyasu Group Sustainability Committee
The Kakuyasu Group Sustainability Committee consists of members from across the Group. Generally, they meet once every three months and report about meetings to the Board of Directors regularly.
The Kakuyasu Group Sustainability Committee receives reports about sustainability initiatives from sub-committees responsible for material sustainability issues. The committee approves targets for each theme and provides necessary advice. The committee approves targets for each theme and provides necessary advice. It analyses sustainability risks and opportunities, identifies risks comprehensively, and continually monitors countermeasures for risks. Information about risks that have significant impacts is shared with the Group Risk Management Committee. These risks are managed in the entire Group’s risk management system.
(2) Reasons for adoption of the corporate governance structure
The Company is a company with a Board of Auditors. In addition, it has established a shareholders’ meeting and a Board of Directors. To promote transparency and fairness in business activities and their conformity with corporate ethics, the Company has established the Group Related Party Transactions Advisory Committee as an objective and independent committee responsible for transactions with related parties and as an advisory body to the Board of Directors. The Company holds Board meetings as the foundation for systems for ensuring the efficient execution of duties by directors.
The Organization Rules, Rules on Duties and Responsibilities, and Rules on Administrative Authority define individuals responsible for the execution of operations based on the Board of Directors’ decisions, their responsibilities, and detailed procedures for executing operations.