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CORPORATE GOVERNANCE

CORPORATE GOVERNANCE image

Basic Views on Corporate Governance

Broadleaf Group attaches a high value to benefits for all stakeholders who support the Group’s corporate activities, and positions the enhancement of corporate governance as one of the top priority issues for the management. Therefore, the Group seeks to ensure the soundness and transparency of the management, while embodying the corporate philosophy “gratitude and happiness” in order to sustainably increase the corporate value.

Corporate Governance Systems

(Organizational structure)

Governance Systems

Organizational Structure and Operation

Organization Form Company with Corporate Auditors

Board / Director

In principle, the number of directors on the Board shall not exceed the number specified in the Articles of Incorporation (maximum of ten) and shall be the number considered appropriate for substantive discussions within the Board of Directors, considering the balance and diversity of their knowledge, experience, and expertise in different business categories. The Board consists of six directors, including four external directors. Meetings of the Board of Directors are held once a month, and extraordinary meetings are held as necessary. External directors shall be selected from those who are unlikely to cause any conflict of interest with general shareholders, who comply with the requirement for externality stipulated in the Companies Act and the corporate policies regarding the appointment of external directors.

Maximum Number of Directors Stipulated in Articles of Incorporation 10
Director’s term of office stipulated in Articles of Incorporation 1 year
Chairperson of the Board President
Number of directors 6
Election of external directors Elected
Number of external directors 4
Number of External Directors designated as independent 4

Establishment of Voluntary Committee (Evaluation and Compensation Committee)

Although Broadleaf is not a company with a nominating committee, etc., the company has established the evaluation and compensation committee consisting of external directors appointed by the Board of Directors. The committee provides recommendations and advices about the policies regarding the goals, evaluation and compensations, etc. of the directors and operating officers.

Number of members 4
Full-time members 0
Internal directors 0
External directors 4
Other 0
Chairperson External Director

Board of Corporate Auditors / Corporate Auditors

The Board of Corporate Auditors consists of three corporate auditors, including two external corporate auditors, and holds meetings once a month. Corporate auditors have established a system where they support management transparency in accordance with audit plans and in cooperation with the accounting auditor and the Internal Audit Office.

Establishment of Board of Corporate Auditors Established
Maximum number of corporate auditors stipulated in Articles of Incorporation 5
Number of corporate auditors 3
Election of external corporate auditors Elected
Number of external corporate auditors 2
Number of external corporate auditors designated as independent 2

Cooperation with Accounting Auditor and Internal Audit Office

The Internal Audit Office consists of six members and audits each divisions of Broadleaf and its subsidiaries to see whether their operations are appropriate under laws and regulations, the Articles of Incorporation, and internal regulations. The results of audits are reported to the representative director & president and explained to directors and corporate auditors in charge of divisions and subsidiaries. At the Company, the Internal Audit Office, the corporate auditors, and the accounting auditor exchange opinions and monitor business operations in cooperation with each other. They identify and point out problems and recommends improvements.

Reasons of Appointment of External Directors and External Corporate Auditors and Their Main Activities

  
Name Reasons for appointment Meeting attendance in FY2019
Morio
Kizawa
Mr. Morio Kizawa has served as Representative Director at Autodesk, Inc. and other companies and played an active role as the manager of an IT company and a global company that engage in software development and sales, etc. He has specialist knowledge and extensive experience in the industries related to the Company’s business. The Company appointed Mr. Morio Kizawa as an External Director because, by leveraging his knowledge and experience, it can expect to obtain advice from various perspectives on the general management of the Company. Attended 14/14 Board meetings (100%)
Hiroshi
Takada
Mr. Hiroshi Takada engaged in the management of advertising, sales, marketing and other operations at Toyota Motor Corporation and served as an officer of the company and a representative director at its group’s sales and marketing affiliates. In addition, he plays an active role as the head of an organization that undertakes support for the management of medium- and small-sized companies. He has specialist knowledge and extensive experience for the promotion of a range of businesses.
The Company appointed Mr. Takada as an External Director because by leveraging his knowledge and experience, it can expect to obtain advice from various perspectives on sales, marketing-related matters and new business strategies of the Company.
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Kumiko
Igushi
Ms. Kumiko Igushi engaged in business planning, overseas market development and other operations at Hewlett-Packard Japan, Ltd. after developing her management consulting career. In addition, she acquired the Master of Public Administration degree (MPA) at Graduate School of Public Administration, Harvard University. She has extensive knowledge and experience that can be utilized for a variety of areas including corporate management.
The Company appointed Ms. Igushi as an External Director because by leveraging her knowledge and experience, it can expect to obtain advice on overall managerial matters such as new business strategies, operational reforms, and the reform of organizational and personnel schemes.
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Risa
Tanaka
Ms. Risa Tanaka is experienced in corporate advertising and marketing. She has been executive editor for industry magazines and newspapers. As president of The Graduate School of Project Design, she has experience in the management of diverse human resources and business-academia collaboration. She has been involved in policy recommendations for years. She has expertise and experience in a wide range of fields, such as brand communication, including publicity and risk management, and corporate management, among other fields. The Company expects that she will be able to give practical and academic advice about overall management and appointed her as an External Director.
She is an External Director at Japan Post Co., Ltd., which has received administrative punishment for illegal sales practices on December 27, 2019 from the Minister of Internal Affairs and Communications and the Financial Services Agency. As an External Director, she regularly gives advice about compliance. After the illegal practices were revealed, she requested that the Board of Directors of Japan Post take steps to prevent a recurrence and has been performing her duties appropriately.
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Name Reasons for appointment Meeting attendance in FY2019
Tsuyoshi
Nishimoto
Mr. Tsuyoshi Nishimoto has dealt with lawsuits related to the Companies Act and other lawsuits related to corporate management, including group restructuring, from a position close to management. As an expert on corporate legal affairs, he has expertise and extensive experience.
Although Mr. Nishimoto has never been involved in corporate management, the Company judges that he will be able to help ensure adequate business execution, particularly enhancement of the audits by Corporate Auditors, because of the reasonsoutlined above and considers him an adequate External Corporate Auditor. The Company has thus appointed him as an External Corporate Auditor.
Attended 12/12 Board of Auditors meetings (100%)
Hideto
Ozaki
Mr. Hideto Ozaki has long been involved in the management of Toyota Motor Corporation, including accounting and finance, etc., and has served as Director at Toyota Motor Corporation and Representative Director of a finance-related company of the Toyota Group. Moreover, he took the post of Chairman of Aioi Non-Life Insurance Co., Ltd. and has specialist knowledge and extensive experience in the areas of accounting and finance and corporate management, beyond the automobile industry.
The Company appointed Mr. Hideto Ozaki as an External Corporate Auditor because, by leveraging his knowledge and experience, based on the judgement that he is the right person in terms of ensuring the appropriateness of the execution of the Company’s business, focusing on the reinforcement of the audit capabilities of the Corporate Auditor.
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Remuneration

(Disclosure of remuneration for individual directors)
Selected directors and total amounts disclosed

(Total remuneration for directors and corporate auditors)
*from the notice of the 11th annual general meeting of shareholders

Classification Number of officers Amount of remuneration
Directors
(External directors)
5
(3)
225,878,000 yen
(18,000,000 yen)
Corporate auditors
(External corporate auditors)
3
(2)
25,500,000 yen
(9,450,000 yen)
Total
(External officers)
8
(5)
251,378,000 yen
(27,450,000 yen)