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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 System

(Organizational structure)

(As of March 27, 2023)

Governance System

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.
In addition, the Group considers the combination of knowledge, experience, and abilities that the Board of Directors as a whole should possess in light of the Group's management strategy, and discloses the skills that executive directors uses in their work, and skills that the Group especially expects external directors to use as a skill matrix in Notice of the Annual General Meeting of Shareholders.

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 and CEO
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., it has established an “Evaluation and Compensation Committee,” composed of external directors who have no interest in decision of evaluation which will guarantee the fairness of evaluation, to determine the goal, evaluation, and compensation of directors and corporate officers.

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

Cooperation between Corporate Auditor, Accounting Auditor, and Internal Audit Office

The Board of Corporate Auditors consists of three corporate auditors, including two external corporate auditors, and holds meetings regularly (held 13 times in FY2022). 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.
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 and President and explained to directors and corporate auditors in charge. Internal Audit Office, corporate auditors, and accounting auditors exchange opinions and monitor business operations in cooperation with each other. They identify and point out problems and recommends improvements.

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

Specialties and Experiences of Directors and Corporate Auditors (Skill matrix)

Support System for External Directors (External Corporate Auditors)

As a system to support the Group’s external directors and external corporate auditors, Board of Directors Secretariat is established within the General Affairs Department, and one corporate auditor assistant is appointed to follow the direction and orders of corporate auditors. A person in charge of supporting external directors and external corporate auditors is appointed to provide internal information necessary for supervision or auditing at the request of external directors or external corporate auditors. In addition, a system is established to enable all members of the Board of Directors to share materials of Board of Directors meetings in advance via e-mail, etc., for the purpose of gaining a deeper understanding of the deliberations prior to the meeting.
In addition, the Group provides regular opportunities for external directors and external corporate auditors to share information with the Group’s corporate officers for the purpose of deepening their understanding of the Group's business operations.

Reasons for Selecting the Current Corporate Governance Structure

The Group believes that in order to respond flexibly and speedily to changes in the business environment, it is important to ensure the appropriateness and speed of decision-making and to build a highly transparent corporate management system.
To this end, the Group adopted a company-with-corporate-auditors system, in which the Board of Directors, of which the majority is composed of external directors, supervises the execution of business operations, while the corporate auditors audit the legality and appropriateness of such operations.