Basic Views

The Corporate Philosophy of the Infocom Group (the “Group”) is “The Infocom Group contributes to social innovations through ICT advancements.”
Based on this philosophy, the Company works to strengthen corporate governance to realize sustainable improvement of corporate value, earn the trust of various stakeholders, including shareholders, and fulfill its
corporate responsibility. 

Corporate Governance System

The Company has adopted the format of a Company with Audit and Supervisory Board.
The Board of Directors appoints multiple Independent Outside Directors to enhance the appropriateness and
reasonableness of decision-making, and strives to achieve the sustainable growth corporate value by overseeing the execution of business from a diverse perspective.
The Board of Statutory Auditors and Auditors strive to ensure the soundness of the company and sustainable growth of corporate value through efforts such as auditing the performance of duties by Directors from an independent perspective.
In this way, the Company believes that the current system is ideal for the Company because it functions to ensure and enhance the effectiveness of corporate governance.

 

 

Organizational Composition

 Board of Directors

Organizational CompositionThe Board of Directors of the Company consists of eight Directors (four of which are Outside Directors). The Board of Directors holds regular monthly Board of Directors meetings, and extraordinary Board of Directors meetings as needed. The Board of Directors adopts resolutions on matters stipulated by laws, regulations, and the Articles of Incorporation and on other important matters in accordance with the Board of Directors Rules, and oversee the executive function. In addition, all Auditors attend Board of
Directors meetings, enabling them to monitor the execution of business by Directors.
 

Board of Statutory Auditors

The Company has adopted an Audit and Supervisory Board system, to which it refers to as the “Board of Statutory Auditors.” The Board of Statutory Auditors consists of four members (two of which are Outside Auditors). The Board of Statutory Auditors holds regular monthly Board of Statutory Auditors meetings, and extraordinary Board of Statutory
Auditors meetings as needed. Full Time Auditors attend Board of Directors and other important meetings, enabling them to monitor the status of business execution by Directors and express opinions as needed, etc. In addition, Auditors strive to enhance the audit function through cooperation, via means such as exchanging opinions and information with the Internal Auditing Office and Accounting Auditor.
 

 Special Committee

The Company has established a Special Committee under the Board of Directors composed of Independent
Outside Directors to contribute to strengthening corporate governance, ensure transparency in corporate
management, protect the interests of minority shareholders, and ensure fairness and impartiality for
shareholders. The committee consists of four Outside Directors.
 

Nomination Advisory Council
The Company has established the Nomination Advisory Council under the Board of Directors to deliberate on matters related to the appointment and dismissal of the President and CEO with objectivity, timeliness, and transparency. The council consists of four Outside Directors and Chairman.

Compensation Advisory Council

The Company has established the Compensation Advisory Council under the Board of Directors to deliberate on the evaluation of the performance of the President and CEO with transparency, fairness, and objectivity.
 The council consists of four Independent Outside Directors and Chairman.

Executive Function

Chief Officers

The Company has established chief officers, the matters and scope of which are delegated by the CEO, to strengthen company-wide measures and cross-functional efforts to address issues.
 

Executive Officers

The Company has established Executive Officers to separate the corporate management decision-making and supervisory function with the executive function, and for other purposes such as accelerating the execution of business and forming a flexible organizational structure. Executive Officers execute business operations as the head of their respective area in accordance with decided matters such as policies decided by the Board of Directors.

 

Status of Auditing

Status of audits by Auditors

The Company’s Board of Statutory Auditors consists of four people. There are two Outside Auditors, one of which is an Independent Outside Auditor. The Board of Statutory Auditors monitors corporate management and audits the execution of business by Directors, which includes attending Board of Directors meetings, auditing business operations, attending other important meetings, and conducting audits of Directors and Executive Officers.

Matters for deliberation by the Board of Statutory Auditors consist mainly of reviewing audit policies and plans, verifying the development and operation of internal control systems, verifying the reasonableness of audits by the Accounting Auditor and the appropriateness of audit remuneration, and exchanging opinions on
the selection of Key Audit Matters (KAM).

 

Status of internal audits

The internal audit system consists of the Internal Auditing Office, an organization under the direct control of the President which is composed of a total of five members, consisting of the Internal Auditing Office Manager and four other members. The office conducts audits across the Group based on the policy to “minimize potential risks in order to contribute to continuously strengthening the business foundation that underpins the growth of the Group.” 
The Internal Audit Office promotes internal controls such as compliance, information security management, and personal information protection, in accordance with the internal audit regulations, based on the audit plan approved by the Board of Directors after the prior approval of the President and Representative Director.   After discussing and agreeing on an improvement plan with the audited department based on the audit results, we submit an audit report to the president, directors and auditors. Regarding audited departments, we follow up on the implementation status of improvements to ensure the effectiveness of internal audits. In addition, the status of internal audits is reported to the Board of Directors as a regular quarterly report.
In terms of cooperation between internal audits, audits by Auditors, and accounting audits, an environment has been put in place enabling information on the status of internal audits to be shared with Auditors. In addition, the Board of Auditors receives explanations of accounting audit plans, internal control audit plans, and quarterly review plans from the Accounting Auditor, as well as explanations of issues in accounting and internal controls and other matters through accounting audit reports, internal control audit reports, quarterly review reports, and other reports. Auditors explain to and exchange information with the Accounting Auditor in regard to audit policies, audit plans, etc.
 

Status of accounting audits

・Name of Accounting Auditor: KPMG AZSA LLC
・Continuous Period of Auditing: 13 years

 

Composition of each meeting

Name

Position

Attribute

Board of

Directors

Board of Statutory Auditors

Special

Commit-

tee

Nomination
Advisory
Council

Compensation
Advisory
Council

Norihiro Takehara

Chairman

Jun Kuroda

President

Mototaka Kuboi

Director

Naohiko Moriyama

Director

Kazuhiko Tsuda

Director

Outside

Independent

Kazuhiko Fujita

Director

Outside

Independent

Sachiko Awai

Director

Outside

Independent

Akihisa Fujita

Director

Outside

Independent

Kazumasa Nakata

Auditor

Full Time

Outside

Makoto Sakurai

Auditor

Full Time

Akio Nakaishi

Auditor

Kiyo Morikawa

Auditor

Outside

Independent

※ ●:Chairperson □:Members

 

Skill Matrix

Appointment Policy for Directors and Auditor

The Company’s policies and procedures for the appointment of senior management of candidates for Directors and Auditors are as follows.
Directors are decided by the Board of Directors from people who have the capabilities, experience, character, and other qualities that will enable them to contribute to the growth and advancement of the Group. Auditors are decided by the Board of Directors with the consent of the Board of Statutory Auditors from those who have the capabilities, experience, character, and other qualities that will enable them to audit and supervise the duties and executive function of Directors and contribute to the sound management of the Group.
In addition, Independent Outside Directors and Auditors are decided by the Board of Directors from those who show promise in fulfilling the role of management supervisor due to their outstanding insight, on the condition they have no particular personal or capital relationship with the Company or other conflict of interest in accordance with the requirements for independence established by the Tokyo Stock Exchange.
The reasons the eight current Directors and four current Auditors were nominated are as follows.

Assessing Board Effectiveness

The Company analyzes and evaluates the effectiveness of the Board of Directors as a whole to ensure the effectiveness and strengthen the functions of the Board of Directors. Specifically, all Directors and Auditors respond to questions mainly concerning the structure of the Board of Directors, deliberations by the Board of Directors, operation of Board of Directors meetings, support structure for the Board of Directors, and dialogue with shareholders and other stakeholders, and the results are analyzed by a specialized third-party organization.
The Board of Directors verifies the results of said analysis to confirm that the Board of Directors as a whole is effective, discusses how to address identified issues, and takes measures to further improve its effectiveness.

Summary of Board of Directors Effectiveness Evaluation Results (FY2022)

Summary

  • An analysis by a third-party expert organization evaluated that the Company's Board of Directors is generally effective.
  • In particular, regarding the operational status of the Board of Directors, active deliberations were held in an atmosphere in which members could speak freely.

Improvements

  • In the previous analysis and evaluation, the issues facing the Board of Directors were "effective use of management resources with an awareness of capital costs" and "appropriate reflection of changes in the environment in management strategies and plans.” These were improved by utilizing the business portfolio created based on the new medium-term management plan when deliberating proposals.

Future issues

  • Deliberations of the Board of Directors
    ・Incorporating sustainability into management and strategy
    ・Supervision of strategy (human resources)
  • Operation of the Board of Directors
    ・Exchange of information and sharing of recognition by independent outsiders

Amount of Directors and Auditors Remuneration

The composition of remuneration for the Company’s officers is set to enable them to fulfill their duties in order to improve the business performance of the Group over the mid- to long-term, increase corporate value, and contribute to society. Furthermore, the policy for determining the amount of officers’ remuneration, etc. and calculation method thereof is decided by the Board of Directors.

Amounts of Remuneration, etc. for Officers and the Calculation Methods

Compensation category

Summary

Fixed

Remuneration

Basic

Remuneration

  • Setting in accordance with job rank in the internal rules regarding remuneration for Directors

Performance-linked

Remuneration

  • Calculating based on the ROE (Return On Equity) and EBITDA (Earnings Before Interest, Taxes, and Amortization) of the previous fiscal year, to which the level of improvement and achievement of consolidated operating income and the evaluation of the status of business execution by individual Directors is added.
  • Evaluation of the Director that serves as CEO is approved by the Board of Directors after consulting the Compensation Advisory Council.
  • The calculation method is specified in the internal rules regarding remuneration for Directors.

Restricted

Stock-based

Remuneration

  • Remuneration of further boost motivation to achieve Medium-Term Management Plan targets and share the benefits and risks of stock price fluctuations with stakeholders.

The amount of remuneration, etc. for officers of the Company(FY2023)

Executive

Classification

Total Amount of Remuneration, etc.

(million yen)

Total amount of Remuneration, etc. by type

(million yen)

Number of Eligible

Officers

Basic Remuneration

Performance-linked

Remuneration

Restricted Stock-based

Remuneration

Director

Excluding Outside Director

168

107

37

23

3

Auditors

Excluding Outside Auditors

18

18

-

-

1

Outside Director

29

29

-

-

4

Outside Auditor

23

23

-

-

2

Total

238

178

37

23

10

In addition to the above remuneration, there is no remuneration received by the outside officers from the Company's parent company, etc. or subsidiaries, etc. of the Company's parent company, etc. as officers of the Company.

Internal Control System

Corporate Governance Report