Corporate Governance

Basic Views on Corporate Governance

At the Company, we believe that sound corporate activities based upon high ethical standards and fairness make a crucial part of our business philosophy, and thus we shall endeavor to strengthen corporate governance according to the principles stated below, ensuring the transparency and compliance across our management and operations as our fundamental objective:

  1. (1) Strive to protect shareholders’ rights and ensure the equitable treatment of all shareholders
  2. (2) Strive to appropriately collaborate with stakeholders other than shareholders
  3. (3) Strive to ensure proper disclosure and transparency of information
  4. (4) Strive to have the board of directors appropriately fulfill its roles and responsibilities, reflecting upon fiduciary duty and accountability to the shareholders
  5. (5) Strive to have constructive dialogue with shareholders

Current Corporate Governance System

The board of directors shall make decisions on statutory matters and other significant items concerning the overall management, at the same time as being a body that supervises business execution undertaken by directors. The board of directors, consisting of eight directors including three outside directors, holds a meeting as required and has a system that enables swift and flexible management decision-making.

The Company also has an audit and supervisory board, appointing four members, of which two are outside members. The audit and supervisory board members attend a board of directors meeting and other important meetings, entrusted with the mission of ensuring the sound management of the Company and an increase in social trust. They also oversee corporate governance by reviewing business conditions, and going through sales reports from the directors and inspections on the operational and financial situation, as well as by examining important documents.

The Company will continue to further enhance its organizational system and mechanism primarily with its legal functions such as a general shareholders’ meeting, the board of directors, audit and supervisory board and accounting auditors. At the same time, it will work to ensure accountability by having swift disclosure of management and financial information and being actively involved in IR activities.

Corporate Governance Guidelines

The Company shall set forth the Corporate Governance Guidelines for the purpose of clarifying the basic views and the initiatives to be taken by it concerning corporate governance.

 

Corporate Governance Report

For details of the Company’s corporate governance, please refer to the “Corporate Governance Report” that we have submitted to the Tokyo Stock Exchange.

 

Independence Standards for Outside Officers

The Company has established “Independence Standards for Outside Officers” with the aim of clarifying standards for the independence of outside directors and outside audit and supervisory board members.

 
 

Status of outside directors and outside audit and supervisory board members

The Company appointed one outside director at the ordinary general meeting of shareholders held for the period ended in March 2014 in order to further enhance and strengthen its corporate governance. It subsequently added one director in April 2015 and another in June 2016, making the present total of three outside directors. The outside directors and outside audit and supervisory board members are elected according to the Independence Standards for Outside Officers set by the Company, ensuring the selection of those who do not pose any risk of a conflict of interests with the general shareholders, and who are unable to be significantly influenced by the management and are unable to significantly influence the management.

Reasons for appointment of outside directors

Name Reasons for appointment Participation in meetings of the Board of Directors
(Period ended in March 2021)
Number of times of attendance/meetings
Michiyoshi Mazuka Mr. Michiyoshi Mazuka, who held management posts at a global company and also served as a member of various advisory committees, possesses not only expertise as a business manager but also deep insight on corporate governance. From that perspective, he is overseeing business execution appropriately as Outside Director of the Company, such as by actively expressing his opinions at the Board of Directors meetings. As Chairman of the Nomination Committee and a member of the Compensation Committee, he attends meetings of these committees, where he gives timely and appropriate opinions. Therefore, we have appointed Mr. Mazuka as a candidate for Outside Director, expecting that he will appropriately perform his duties as Outside Director of the Company based on his experience and knowledge. 7/7 meetings
Toshitake Chino Mr. Toshitake Chino has expertise as company manager and insight into the industrial society acquired from his experience working as the editor and later president at Nikkan Kogyo Shimbun Ltd. From that perspective, he is overseeing business execution appropriately as Outside Director of the Company, such as by actively expressing his opinions at the Board of Directors meetings. As Chairman of the Compensation Committee and a member of the Nomination Committee, he attends meetings of these committees, where he gives timely and appropriate opinions. Therefore, we have appointed Mr. Chino as a candidate for Outside Director, expecting that he will appropriately perform his duties as Outside Director of the Company based on his experience and knowledge. 7/7 meetings
Hidekazu Miyoshi Mr. Hidekazu Miyoshi has expertise in intellectual property rights, which he acquired through many years of service as a patent attorney, and experience as a business manager of a patent office. From that perspective, he is overseeing business execution appropriately as Outside Director of the Company, such as by actively expressing his opinions at the Board of Directors meetings. As a member of both the Nomination Committee and the Compensation Committee, he attends meetings of these committees, where he gives timely and appropriate opinions. Therefore, we have appointed Mr. Miyoshi as a candidate for Outside Director, expecting that he will appropriately perform his duties as Outside Director of the Company based on his experience and knowledge. 7/7 meetings

Notes:

  1. There is a contract between the Company and the outside directors that limits their liability for damages, stipulated in Article 423, paragraph 1 of the Companies Act to the extent of the amount defined in Article 425, paragraph 1 of the Act as the minimum liability amount, pursuant to the provisions of Article 427, paragraph 1 of the Act.
  2. The Company has entered into a directors and officers liability insurance contract, including all Directors as insured parties. This contract will cover damages if Directors who are insured parties are found liable to pay compensation for damages resulting from their duties.
  3. Each outside director is an independent officer as defined in the provisions set forth by the Tokyo Stock Exchange, Inc.

Reasons for appointment of outside audit and supervisory board members

Name Reasons for appointment Participation in meetings of the Board of Directors
(Period ended in March 2021)
Number of times of attendance/meetings
Akira Takenouchi Mr. Akira Takenouchi is a lawyer familiar with legal affairs, and has broad experience and track record in the legal circle, including his position as President of TOKYO BAR ASSOCIATION. Therefore, although Mr. Takenouchi has never been directly involved in the management of a company, we have appointed him as a candidate for Outside Audit & Supervisory Board Member, having determined that he is an appropriate candidate capable of providing beneficial advice to the Company’s audit system based on his experience and knowledge. 8/8 meetings
Seiji Nishiura Mr. Seiji Nishiura, who served as district director of tax offices, etc., is well-versed in corporate taxation as a tax accountant and possesses high-level professional expertise in finance and accounting. Therefore, although Mr. Nishiura has never been directly involved in the management of a company, we have appointed him as a candidate for Outside Audit & Supervisory Board Member, having determined that he is an appropriate candidate capable of providing beneficial advice to the Company’s management and its audit system based on his experience and knowledge. 8/8 meetings

Notes:

  1. There is a contract between the Company and the outside audit and supervisory board members that limits their liability for damages, stipulated in Article 423, paragraph 1 of the Companies Act to the extent of the amount defined in Article 425, paragraph 1 of the Act as the minimum liability amount, pursuant to the provisions of Article 427, paragraph 1 of the Act.
  2. The Company has entered into a directors and officers liability insurance contract, including all Audit & Supervisory Board Members as insured parties. This contract will cover damages if Audit & Supervisory Board Members who are insured parties are found liable to pay compensation for damages resulting from their duties.
  3. Both of the outside audit and supervisory board members are independent officers as defined in the provisions set forth by the Tokyo Stock Exchange, Inc.

Voluntary Advisory Committees

In April 2020, the Company established the Nomination Committee and Compensation Committee, both of which are chaired by an outside director, to serve as voluntary advisory bodies for the Board of Directors with the purpose of utilizing the knowledge and advice of outside directors and enhancing the independence,objectivity, and accountability of the Board of Directors. Each committee is composed of four members, with three members—over half of each committee—being independent outside directors.

The Nomination Committee deliberates on the appointment and dismissal of directors, and the Compensation Committee deliberates on the policies and specifics of remuneration and other compensation received by directors and key employees.Both committees provide advice and recommendations to the Board of Directors.

  Independent outside directors Internal director
Michiyoshi Mazuka Toshitake Chino Hidekazu Miyoshi Tsutomu Isobe
Nomination Committee Chairman Member Member Member
Compensation Committee Member Chairman Member Member

Cross-Shareholdings

  1. (1) Policies regarding cross-shareholdings
    The number of shares of other companies that the Company holds shall be kept to the minimum necessary, and the Board of Directors shall annually assess whether or not to hold individual cross-shareholdings, closely examining whether the benefits and risks from each holding cover the Company’s cost of capital. Any cross-held shares, except for those that are deemed rational to continue to be held as a result of such assessment, will be sold.
  2. (2) Policies regarding the exercise of voting rights associated with cross-held shares
    The Company will vote for an agenda that it considers will contribute to increasing the value of shares it holds, whereas it will vote against if it believes that such agenda may damage the value of shares, after examining the business policies and strategies of the companies invested in.

Stock Options

Stock acquisition rights are not be issued.

Adoption of Anti-Takeover Measures

Not Adopted

Contact for repair/recovery of AMADA products and our corporate activities.