Corporate Governance

Last updated on June 28, 2018

With the aim of sustainable growth of the Group and medium- to long-term enhancement of corporate value, the Company is committed to reinforcing corporate governance to ensure the transparency and objectivity of management through collaboration with stakeholders.
The Company has adopted the Company with Three Committees (Nomination, Audit and Remuneration Committees) system. The purpose of this adoption is to further strengthen corporate governance from the following standpoints.

      1) Strengthening of the management oversight function by separating oversight from execution

      The Company will strengthen the oversight function for business execution of the Board of Directors by separating oversight from execution. In addition, the Company aims to promote sophistication of strategy by having the Board of Directors actively include the insights of external persons in order to hold rigorous discourse on important issues relating to the management of the Group.

      2)Greater clarity of authority and responsibility in business execution and promotion of agile management

      The Company will enable decisions of business execution to be delegated to Executive Officers, clarify the authority and responsibility between the Board of Directors and Executive Officers and between the holding company and the business subsidiaries, and carry out speedy management decision making.

      3)Improvement of transparency and objectivity of management

      The Company will improve the transparency and objectivity of management by transitioning to a Company with Three Committees including Nomination, Audit and Remuneration Committees. The majority of the members of each committee are Outside Directors.

      4) Building of a globally applicable governance system

      The Company will build a governance system that is easy to understand from global perspectives, such as those of overseas investors.

Overview of Corporate Governance System

The Company is a pure holding company and, with the exception of authority for important matters relating to the management of the Group, it delegates authority to its respective business subsidiaries with respect to matters involving business execution by the business subsidiaries in an effort to speed up business decisions and to make managerial responsibilities clear.
The roles and responsibilities of the Company, as a pure holding company, are as described below:

  • ・Establishment of corporate governance practices for the entire Group;
  • ・Planning and formulating of the Group Vision, Group Medium-term Business Plan and Group Management Policy and tracking of the progress and results thereof;
  • ・Optimal allocation of the Group’s management resources;
  • ・Establishment of the Group-wide risk management system and involvement in internal audits;
  • ・Decision making on important matters involving business execution relating to the management of the Group; and
  • ・Provision of advice and approval for the management policies and management strategies of respective business companies and oversight and evaluation of the progress thereof.

The Company has six supervisory units (Management Strategy Unit, Business Development Unit, Affiliated Business Unit, Financial Strategy Unit, Human Resources Strategy Unit and Administration Unit) as management bodies to clarify each unit’s roles, responsibilities and authorities, thereby strengthening the oversight function and improving the internal control system of the entire Group.

Corporate Governance Guidelines(PDF 397KB)

Corporate Governance Report(PDF 935KB)

Board of Directors

Directors who are appointed by shareholders and are entrusted with the management of the Company are to carry out the following roles and responsibilities in the Board of Directors in accordance with their fiduciary responsibility and accountability to shareholders with the aim of realizing the Group Vision:

  • ・Indicating the overall direction that the Group management is to take by engaging in constructive discussions with respect to the Group Vision, Group Medium-term Business Plan, Group Management Policy and other fundamental management policies and carrying out multifaceted and objective deliberations that include evaluation of risks with respect to the aforementioned;
  • ・Appropriately making decisions in terms of overall policy and plans pertaining to the Group management on the basis of the direction noted above and overseeing the progress and results of the plans;
  • ・Improving the environment to drive aggressive management toward discontinuous growth;
  • ・Taking steps to build and develop internal control systems of the Group overall and otherwise overseeing the operational status of such systems;
  • ・Overseeing conflicts of interest between related parties; and
  • ・On the basis of summary reports furnished by the Nomination Committee, overseeing the progress of senior management team succession planning, personnel assignment plans pertaining to managerial talent and management team training, as delegated to the Nomination Committee.

The Board of Directors of the Company is comprised of the appropriate number of 15 or less Directors as set forth in the Articles of Incorporation. Currently the number of Directors is thirteen (five of whom are independent Outside Directors including two female Directors) and the term of office is one year. From the standpoint of separating oversight from execution and enhancing the effectiveness of discussions at the Board of Directors meetings, one-third or more of Directors are independent Outside Directors and the majority of Directors are independent Outside Directors and internally promoted Directors who do not execute business. The Chairperson of the Board of Directors is chosen from among internally promoted Directors who do not execute business from the standpoint of separating oversight and execution and ensuring the smooth operation of the Board of Directors.
When nominating Director candidates, the Company ensures diversity in consideration of the balance of knowledge, experience and ability on the Board of Directors as a whole.

Three Committees

(Nomination Committee)

The Nomination Committee is composed of three Outside Directors, the Chairperson of the Board of Directors who does not execute business and President and Representative Executive Officer. The chairperson is chosen from among independent Outside Directors from the standpoint of ensuring transparency and objectivity. The Nomination Committee determines the content of the proposals relating to the election and dismissal of Directors to be submitted to the Shareholders Meeting as well as the content of the reports relating to the election and dismissal of the members of the management teams of the Company and Daimaru Matsuzakaya Department Stores and the appointment and removal of the chairpersons and members of the three committees to be submitted to the Board of Directors.

(Audit Committee)

The Audit Committee is composed of three Outside Directors and two full-time Inside Directors who do not execute business and are well informed about the Company’s internal information to maintain and improve the accuracy of audit. In addition, at least one of the Audit Committee members must have appropriate knowledge of finance and accounting. The Audit Committee audits the performance of duties by Directors and Executive Officers in line with the overall policy and plan determined by the Board of Directors and audits important matters to be discussed at the Board of Directors meetings and other individual matters deemed necessary by the Audit Committee as well as building and operation of internal control and prepares audit reports.
In addition, the Audit Committee oversees accounting auditors to ensure the reliability of accounting information and determines the content of proposals relating to the election and dismissal of accounting auditors to be presented to the Shareholders Meeting.
An internally promoted Director who does not execute business chairs the Committee from the standpoint of achieving a smooth transition from the Audit & Supervisory Board system. However, the Company will reconsider this system to establish the most appropriate system in the future.

(Remuneration Committee)

The Remuneration Committee is composed of three Outside Directors, the Chairperson of the Board of Directors who does not execute business and President and Representative Executive Officer. The chairperson is chosen from among independent Outside Directors from the standpoint of ensuring transparency and objectivity. The Remuneration Committee determines policies concerning the decision of remuneration for each member of the management teams of the Company and Daimaru Matsuzakaya Department Stores and the details of remuneration for each member.

Governance Committee

We have established the “Governance Committee” whose membership consists of the Chairperson of the Board of Directors, President and Representative Executive Officer and all Outside Directors. The Committee has free, vigorous and constructive discussions and exchange of views on the issues relating to corporate governance and overall corporate management including the reform of the Board of Directors based on the evaluation of the Board of Directors and shares information and develops cooperation with Outside Directors.

Risk Management / Compliance

The “Risk Management Committee” systematically manages and addresses risks as a whole from a company-wide perspective, particularly with respect to risk related to strategies, and makes management decisions from a perspective focused on risk management. The Committee is chaired by President and Representative Executive Officer and consists of members including the senior executive general managers of supervisory units and the presidents of major business companies. Drawing on extensive specialized knowledge of the committee members elected from supervisory units, the Committee assesses a variety of risks, prepares necessary measures and monitors progress in that regard.
The Company has established a “Compliance Committee” (whose membership includes a corporate lawyer) for the purpose of appropriately addressing issues concerning the Group’s compliance management practices. The Committee is chaired by President and Representative Executive Officer and draws up a policy for addressing matters involving serious compliance-related violations, and through close collaboration with departments in charge of promoting compliance, develops the foundation of compliance system (e.g. the preparation of promotion systems and plans) and continuously oversees the status of implementation to promote compliance with laws and regulations, corporate ethics and other such standards.
Both committees report the details of their deliberations to the Audit Committee regularly (twice or so a year) and in a timely manner.