Corporate Governance

Basic Concepts of Corporate Governance

The Kewpie Group defines corporate governance as the mechanisms used to secure transparent, fair, swift and resolute decision making. We observe the Group Policies, and take measures to develop and enhance appropriate and effective systems in accordance with the following basic policies. To this end, we have established the Corporate Governance Guidelines as our basic framework and philosophy of our corporate governance policy.

Basic Policies on the Development and Enhancement of Corporate Governance Systems

  • 1.The Company shall respect the rights of its shareholders and ensure the equal treatment of shareholders.
  • 2.The Company shall respect the positions and rights of its various stakeholders, including its customers, employees, business partners, shareholders and investors, as well as local communities, and foster appropriate relationships with such parties.
  • 3.The Company shall disclose its corporate information in a proper manner and ensure the transparency of its operations.
  • 4.The Company shall build mechanisms to facilitate the cooperation of all management resources for its corporate governance systems.
  • 5.The Company shall engage in constructive dialog with shareholders who expect medium- to long-term investment returns.

Corporate Governance System

Corporate Governance Structure

Management / Supervision

Overview (As of February 26, 2021)

Organizational Form Company with Audit & Supervisory Board
Number of Directors (Members of Board of Directors) 9 (3 of which are outside directors)
Number of Corporate Auditors (Members of Audit & Supervisory Board) 5 (3 of which are outside corporate auditors)
Number of Independent Officers 6
Voluntarily-formed Committee Nomination and Remuneration Committee
Accounting Auditors Ernst & Young ShinNihon LLC

Outside Directors and Outside Corporate Auditors

The Company employs the following six outside directors and outside corporate auditors (the “outside officers”) so that they are able to share with the Company independent advice and opinions regarding the overall management of the Company, based on their extensive knowledge and experiences.
These six outside officers fall into the definition of “independent corporate officers” as stipulated by the Tokyo Stock Exchange, Inc.

Outside Directors Kazunari Uchida Shihoko Urushi
Reason for Appointment With a long history as a business consultant, Mr. Uchida possesses a high level of expertise and broad ranging insights regarding corporate management. He has no special interests in the Company. He is therefore well qualified for the independent corporate officer position. Ms. Urushi not only has abundant experience as an educator, but has also gained insight as a corporate executive. She has no special interests in the Company. She is therefore well qualified for the independent corporate officer position.
Important Concurrent Posts Held Professor of Graduate School of Commerce at Waseda University, External Director of Lion Corporation,
Outside Director of BROTHER INDUSTRIES, LTD.
President of Shinagawa Joshi Gakuin,
Member of the Education Rebuilding Implementation Council (Cabinet Office),
Outside director of Culture Convenience Club Co., Ltd.,
Outside Director of Nisshin Fire & Marine Insurance Co., Ltd.
Attendance to Board Meetings 10/11 10/11
Outside Directors Hitoshi Kashiwaki
Reason for Appointment Mr. Kashiwaki has abundant experience and deep insight as a manager of an operating company. He has no special interests in the Company. He is therefore well qualified for the independent corporate officer position.
Important Concurrent Posts Held Outside Director of ASICS Corporation,
Outside Director of Matsuya Co., Ltd.,
Outside Director of TBS HOLDINGS, INC.
Attendance to Board Meetings -
Outside Corporate Auditors Emiko Takeishi Kazumine Terawaki
Reason for Appointment In addition to her experience in the government offices, Ms. Takeishi possesses a broad range of knowledge regarding human resource management and labor policies. She has no special interests in the Company. She is therefore well qualified for the independent corporate officer position. Mr. Terawaki possesses professional legal knowledge and broad insight as a legal expert. He has no special interests in the Company. He is therefore well qualified for the independent corporate officer position.
Important Concurrent Posts Held Professor, Faculty of Lifelong Learning and Career Studies, Hosei University,
Outside corporate auditor of Tokio Marine & Nichido Fire Insurance Co., Ltd.
Attorney at law,
Outside Corporate Auditor of The Shoko Chukin Bank, Ltd.,
Outside Director of SHIBAURA MACHINE CO., LTD.,
Outside Corporate Auditor of Kajima Corporation
Attendance to Board of Directors Meetings 11/11 11/11
Attendance to Audit & Supervisory Board Meetings 12/12 12/12
Outside Corporate Auditors Mika Kumahira
Reason for Appointment Ms. Kumahira has experiences in company management in and out of Japan and possesses knowledge on reform of corporate organization and leadership development as well. She has no special interests in the Company. She is therefore well qualified for the independent corporate officer position.
Important Concurrent Posts Held Representative Director of Atech Kumahira Co., Ltd.,
Representative Director of KUMAHIRA SECURITY FOUNDATION,
Principal of Institute of Diversity Promotion, Career College of Showa Women’s University,
Representative Director of Learning-21 Organization,
Outside Director of NITTAN VALVE CO., LTD.
Attendance to Board of Directors Meetings 8/9 (after assuming Corporate Auditor)
Attendance to Audit & Supervisory Board Meetings 8/9 (after assuming Corporate Auditor)

Evaluation of the Effectiveness of the Board of Directors

The Company analyzes and evaluates the effectiveness of the Board of Directors by incorporating the views and suggestions from independent third parties, and works to improve the operations of the Board of Directors based on those results.

Nomination and Remuneration Committee

We have established the Nomination and Remuneration Committee as an advisory body to the Board of Directors to enhance the objectivity, reasonableness, and transparency of the structure of the Board of Directors, the nomination of Director, and other remuneration systems, and to improve the Group’s medium-to long-term growth and corporate value.

Composition

The Nomination and Remuneration Committee consists of five or more members (limited to our Director and Corporate Auditor), more than half of the members are outside officers who meet the independence criteria. The chairman selected from among the members of the Outside Director is also the chairman of the Nomination and Remuneration Committee.

<List of Members (As of February 26, 2021)>

Outside Director Kazunari Uchida (Chairman)
Outside Director Shihoko Urushi
Outside Director Hitoshi Kashiwaki
Outside Corporate Auditors Kazumine Terawaki
Chairman of the Board of Directors Amane Nakashima
Representative Director, President and
Chief Executive Corporate Officer
Osamu Chonan
Director, Executive Corporate Officer Nobuo Inoue

Roles of the Committee

The Nomination and Remuneration Committee deliberates on the following matters, and makes decisions as necessary, with respect to:

  • 1)Structure of the management systems and member composition of the Board of Directors;
  • 2)Criteria for election and dismissal of directors, corporate auditors, and corporate officers;
  • 3)Nomination of respective candidates for positions as directors and corporate auditors;
  • 4)Criteria for evaluating directors and corporate officers;
  • 5)Design of compensation systems for directors and corporate officers; and
  • 6)Other matters regarding the Group’s corporate governance as deemed necessary by the Nomination and Remuneration Committee.

Execution of Business

Management Advisory Board

The Management Advisory Board has been set up as an advisory body to the Company’s Representative Director, President and Chief Executive Corporate Officer (“CEO”). In addition to the five experts and our Representative Director, President and Chief Executive Corporate Officer as outside members, other Director and others participate in the meeting depending on the agenda. Regular meetings are held twice a year and whenever necessary.

The Company’s CEO receives the Board’s advice and proposals for maintaining and improving the soundness, fairness and transparency of our Group and reflects their advice in his decision making.

Internal Control and Risk Management

Risk Management Committee

The Company’s risk management basic policy has set systematic procedures for its risk management, under which each responsible unit exercises continuous oversight of each individual risk factor. In addition, the Risk Management Committee (the Sustainability Committee, chaired by the director in charge of sustainability for some risks related to society and the environment) shares company-wide risk information and undertakes comprehensive risk management in evaluating, prioritizing and addressing risk factors. The director in charge of risk management reports on the status of its activities to the Board of Directors and to the Audit & Supervisory Board.
The members of the Risk Management Committee include representatives of the Company’s principal subsidiaries. Furthermore, each subsidiary reports on its operational risks to the directors in charge of risk management, as needed.

Compliance Committee

The Company shall appoint a director in charge of compliance to supervise the Compliance Committee (chaired by the directors in charge of compliance issue, with administrative work performed by members of the Internal Audit Office). Through doing this, the Company strives to establish a compliance supervision system that extends laterally across the Company and keep abreast of problematic issues. The Compliance Committee also formulates a plan, raises awareness and conducts training sessions for the enhancement of compliance system. The director in charge of compliance reports on the status of its activities to the Board of Directors and to the Audit & Supervisory Board.

Helpline

The Company has set up a helpline as an internal reporting system in accordance with the whistleblower protection system, in which third-party bodies or outside lawyers engage in a role of the information recipient for the whistleblowing. Upon receiving a report or notice from an information recipient, the Compliance Investigation Committee shall investigate the facts and, if the committee finds a violation of a law or rule, it will discuss with the relevant department and decide upon measures to prevent reoccurrence. In addition to making an announcement within the Company that includes disciplinary action, the Compliance Investigation Committee shall carry out company-wide measures to prevent reoccurrence of such event.

Information Promotion Committee

With regard to information security, the Company has formulated internal rules governing the handling of Company information and basic policies on personal data protection. The Company has also prepared operational manuals to deal with the storage and management of information in accordance with those internal rules and policies. In addition, the Information Promotion Committee (chaired by the corporate officer in charge of IT and Operational Reform Promotion or a person who is appointed by the said officer) conducts training sessions for employees regarding information management, monitors the information management status, and reviews each information management rule and policy.

Internal Audit Office

Internal Audit Office conducts audits in accordance with its annual auditing plan and in accordance with requests from the Representative Director, President and Chief Executive Corporate Officer, the director in charge of Internal Audit Office, or corporate auditors to ensure that the organizational activities of the Group are conducted in an appropriate and efficient manner in accordance with laws, regulations, internal regulations, and management policies. In addition, we are collaborating with corporate auditors and the accounting auditors as required. Internal auditing activities also involve cooperation with voluntary audit staff in areas such as quality, the environment, safety, and labor.

Sustainability Committee

In fiscal 2020, we established and commenced activities for the main roles of determining priority issues (especially environmental aspects) and targets for realizing sustainability and promoting initiatives. The Sustainability Committee comprehensively manages certain company-wide risks related to society and the environment.

Group Governance Committee

The main roles of this committee are to formulate policies for the establishment of appropriate group governance, to decide on priority issues, and to promote initiatives. In fiscal 2020, the committee established a new system and has begun activities accordingly.

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