Corporate Governance

Corporate governance system

  1. 1. Overview of the corporate governance system

    The Morinaga Group will enhance its corporate governance in an effort to maximize the corporate value and growth of the company, by improving the health and efficiency of management, ensuring the reliability of financial reporting, committing to a timely and appropriate disclosure of information, complying with laws and regulations, and strengthening the trust and relationship with all stakeholders.

    (1) Relationship with Stakeholders

    We are committed to maintain and further develop a strong relationship with our stakeholders and to fulfill our social responsibility in all areas of our business, in order to ensure coexistence and sustainable growth in accordance with our corporate philosophy and the charter of conduct.

    (2) Management Monitoring System

    We are committed to building an effective internal control system through the enhancement of the management monitoring functions of the Board of Directors, assigning external officers and auditors, requiring attendance by standing auditors at important meetings, and placing the Audit Department under the direct control of the President.

    (3) Consistency within the entire Group

    While placing importance on the independence of our subsidiaries and partners, we also strive to maintain a strong relationship within the entire group.

  2. 2. Corporate Governance System

    (1) Executive Board

    In accordance with the Rules for Decision-making Criteria, the Board of Directors, management meetings, individual directors, executive officers, division managers and directors, etc. all have specific responsibilities and authority assigned to them.

    - Board of Directors
    Makes decisions related to statutory matters and important business operations based on managerial judgment, and oversees business operations. The Board consists of 9 members, of which one member is an external officer and 8 are male, one female.

    - Management Meetings
    Attended by the Board and standing auditors, deliberation and decisions are made regarding important management issues and matters that have been referred by the Board of Directors. In order to insure the practicality and efficiency of the decisions made by the Board of Directors and at the management meetings, detailed deliberations are made in advance by each of the related committees who act in an advisory role. For instance, the IR committee is consulted with regard to disclosure of information, and the Officer Appointment and Remuneration Committee is consulted with regard to personnel and compensation for the Board of Directors.

    - Executive Officers System
    The Company has adopted an executive officer system to improve its agility in responding to changes in the business environment as well as to speed up the decision-making process. Under this system, the executive authority and responsibilities of daily operations in respect to strategic corporate activities are assigned to executive officers to ensure the efficiency and certainty of management.

    - Board of Executive Officers
    In order to ensure execution of operations, the Board of Executive Officers, consisting of the President, executive operating directors, and executive officers, has been established.

    (2) Audit Department

    Operating under the direct supervision of the President, the Audit Department is made up of 6 staff who regularly audit all divisions including partners and subsidiaries, and exchange information with standing auditors and maintain open lines of communication with each division. There are four auditors, two of whom are external auditors. Of the two external auditors, 1 is a standing auditor and all four auditors are male. Operating under the Guidelines for Auditors, the auditors oversee the Board of Executive Officers. In addition, standing auditors regularly meet with the Board of Directors and attend important meetings such as Management Meetings in order to monitor and oversee the activities of the Board. The accounting auditors meet with all auditors and the Auditing Manager meets with the standing auditor on a regular basis to exchange information and opinions. The Auditing Manager and standing auditor also attend Internal Control Management Committee meetings, made up of members of the primary departments within the corporation. The company has appointed Deloitte Touche Tohmatsu LLC for account auditing.

    (3) Officer Selection and Compensation

    Assignment to the Board and the compensation for each member is deliberated by the Officer Appointment and Remuneration Committee, and approved at the Board of Directors meeting.

    (4) Compensation for Auditors

    Compensation for auditors is determined by the auditors.

    Corporate Governance System

  3. 3. Internal Control

    In order to maximize the potential of our company’s value and growth, we are committed to strengthening our internal control system and management, increasing the reliability of our business, and establishing an effective audit and monitoring system. The Board of Directors is committed to establishing an effective internal control system that fulfills both legal and Articles of Incorporation guidelines, and relies on the auditors to monitor the effectiveness and functionality of the control system. Furthermore, a helpline has been established for both internal and external use for all related entities including our partner companies as a means of gathering information related to compliance matters.

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