Governance
Corporate Governance
Shinnihonseiyaku believes that streamlining management and increasing soundness, transparency and compliance will lead to long-term improvements in corporate value, and is actively working to build an organizational structure that can respond quickly and flexibly to changes in the business environment, while strengthening corporate governance.
Changes in corporate governance
| 2016 | Establishment of Board of Directors |
|---|---|
| 2018 | Establishment of Risk Management and Compliance Committee Establishment of Audit & Supervisory Board |
| 2019 | Listed on Tokyo Stock Exchange Mothers |
| 2020 | Establishment of Nomination and Compensation Advisory Committee Changed listing market to the First Section of the Tokyo Stock Exchange Introduction of stock compensation system |
| 2021 | Appointment of female Outside Director |
| 2022 | Transitioned from the First Section to the Prime Market of the Tokyo Stock Exchange Establishment of Sustainability Committee |
Corporate governance system
The company has adopted a company with an Audit & Supervisory Board as the organizational design under the Companies Act, and has adopted the following corporate governance system in the belief that the soundness, objectivity and appropriateness of management can be ensured through inter-organizational cooperation.
*The company became a company with an Audit and Supervisory Committee on December 19, 2023.
Board of Directors
The Board of Directors makes decisions based on open and natural discussion of basic policies such as management strategy and management plans. The Board of Directors consists of six Directors of the Board, three of whom are Independent Outside Directors. Outside Directors express their high insights and objective opinions from an independent standpoint, and the Board of Directors conducts discussions from multiple perspectives.
| Chair | President & Representative Director of the Board and Chief Executive Officer |
|---|---|
| Number of meetings | 15 times |
| Attendance rate | 100% |
Audit & Supervisory Board
The Audit & Supervisory Board consists of three members, one full-time Audit & Supervisory Board Member and two part-time Audit & Supervisory Board Members, all of whom are Outside Audit & Supervisory Board Members. Under the chairpersonship of the full-time Audit & Supervisory Board Member, the Board monitors the governance and its operational status and audits the day-to-day activities of Directors of the Board, including their execution of duties. In accordance with the Audit & Supervisory Board Member Audit Plan and Regulations, the system is set up so that the full-time Audit & Supervisory Board Member can always monitor the execution of duties of Directors of the Board, such as by attending important meetings such as the Management Strategy Conference as well as the General Meeting of Shareholders and the Board of Directors meeting and others, and making statements of opinions as necessary.
| Chair | Full-time Audit & Supervisory Board Member |
|---|---|
| Number of meetings | 20 times |
| Attendance rate | 98% |
Nomination and Compensation Advisory Committee
The Nomination and Compensation Advisory Committee, a voluntary advisory body to the Board of Directors, serves as both the Nomination Committee and the Compensation Committee. The committee is chaired by the President & Representative Director of the Board and Chief Executive Officer and consists of five members, including three Outside Directors. In principle, meetings are held once a year, but issues are set for each fiscal year and extraordinary committee meetings are held as necessary. The committee deliberates on the policy for nomination and selection/dismissal of Directors of the Board and Audit & Supervisory Board Members, the policy for remuneration, etc. of Directors of the Board and the details of remuneration, etc. for each individual Director of the Board, succession planning, and other advisory matters deemed necessary by the Board of Directors, and reports to the Board of Directors on the results of its deliberations.
| Chair | President & Representative Director of the Board and Chief Executive Officer |
|---|---|
| Number of meetings | 6 times |
| Attendance rate | 100% |
Risk Management and Compliance Committee
The Risk Management and Compliance Committee, which is established as part of the corporate governance structure, is chaired by the President & Representative Director of the Board and Chief Executive Officer and is composed of full-time Directors of the Board, Corporate Officers, and General Managers. In principle, meetings are held once a quarter, but when necessary, extraordinary committee meetings are held to discuss and decide on the overall management of all risks associated with Shinnihonseiyaku, compliance, and specific issues and responses to specific risks. It also plans, manages, and implements compliance education for officers and employees.
| Chair | President & Representative Director of the Board and Chief Executive Officer |
|---|---|
| Number of meetings | 4 times |
| Attendance rate | 100% |
Sustainability Committee
The Sustainability Committee, which has been established to strengthen the sustainability promotion system, is chaired by the President & Representative Director of the Board and Chief Executive Officer, and is composed of full-time Directors of the Board and Corporate Officers. The committee formulates targets for key issues related to sustainability, and conducts progress management, supervision, and monitoring. In addition, matters to be discussed are reported to the Board of Directors as appropriate.
| Chair | President & Representative Director of the Board and Chief Executive Officer |
|---|---|
| Number of meetings | 5 times |
| Attendance rate | 100% |
Evaluation of the effectiveness of the Board of Directors
We conducted an analysis and evaluation of the effectiveness of the Board of Directors with the aim of improving its functions. All Directors of the Board and Audit & Supervisory Board Members participated in the analysis and evaluation, and Outside Directors also participated in the discussion.
Summary
- Implementation period: September 2023
- Respondents: All Directors of the Board (6) and All Audit & Supervisory Board Members (3)
- Methods: Self-evaluation method using questionnaire
- An anonymous effectiveness evaluation questionnaire was administered to all Directors of the Board and all Audit & Supervisory Board Members.
- Reported the summary of the results of the effectiveness evaluation questionnaire at a meeting attended by Directors of the Board and Audit & Supervisory Board Members, and discussed the summary of the results and future issues.
- The Board of Directors confirmed the evaluation of the effectiveness of the Board of Directors.
Question
- Questions about the composition of the Board of Directors (7 questions)
- Questions about the operation of the Board of Directors (9 questions)
- Questions on the Board of Directors' agenda (12 questions)
- Questions about the structure that supports the Board of Directors (8 questions)
Evaluation
In the effectiveness evaluation questionnaire for the fiscal year ended September 2023, a high percentage of the respondents answered "sufficient" or "appropriate" on most questions. All Directors of the Board and Audit & Supervisory Board Members responded that (2) Questions about the operation of the Board of Directors, (3) Questions on the Board of Directors' agenda, and (4) Questions about the structure that supports the Board of Directors were generally appropriate.
On the other hand, when asked about (1) Questions about the composition of the Board of Directors, there was an opinion that the number of members of the Board of Directors and its diversity should be strengthened on the executive side, including Directors of the Board, and that specialist personnel and Corporate Officers should be trained. Based on these opinions, we will further enhance our efforts by promoting the succession plan formulated last year to develop specialist personnel and Corporate Officers.
In addition, in the effectiveness evaluation for the fiscal year ended September 2022, with regard to (3) the agenda of the Board of Directors, we have set as a challenge the creation of a system that enables strategic and big-picture discussions at Board of Directors meetings. In response to these issues, the Board of Directors reviewed the content of deliberations and increased and created opportunities for Directors of the Board to discuss the issues. As a result, in the effectiveness evaluation questionnaire for the fiscal year ended September 2023, the majority of the respondents answered that it was being discussed appropriately, confirming that improvements are being made.
Taking the above results into consideration, we believe that the effectiveness of the Board of Directors for the fiscal year ended September 2023 has been appropriately ensured. Our Board of Directors will fulfill the roles and responsibilities of the Board of Directors, including addressing the above issues, and work to further improve its effectiveness. By doing so, we will further enhance our corporate governance and aim to continuously improve our corporate value.
Executive Compensation System
Shinnihonseiyaku's executive compensation system is designed to enhance its commitment not only to the short-term but also to the medium- to long-term improvement of business performance and the sustainable improvement of corporate value in order to continuously improve corporate value.
Basic Policy on Executive Compensation
Executive compensation consists of fixed monetary compensation paid in consideration of the execution of duties, stock-based compensation linked to performance in the fiscal year under review and over the medium to long term, and stock-based compensation in lieu of retirement benefits for Executives.The 32nd Annual General Meeting of Shareholders held on December 23, 2020 approved the introduction of the stock-based compensation system. With regard to compensation for the Company's executives, the 27th Annual General Meeting of Shareholders held on June 20, 2016 resolved that the maximum amount of compensation for Directors of the Board shall be 200 million yen per year (the number of Directors of the Board at the close of such meeting was 3), and the maximum amount of compensation for Audit & Supervisory Board Members shall be 50 million yen per year (the number of Audit & Supervisory Board Members at the close of such meeting was 1).
Directors of the Board
Compensation for executive Directors of the Board consists of monetary compensation and stock-based compensation performance share unit system and restricted stock system). The payment ratio is designed to be approximately 75% for monetary compensation and 25% for stock-based compensation (when performance-linked compensation is paid at the base amount).
Outside Directors
Compensation for Outside Directors consists of monetary compensation only.
Audit & Supervisory Board Members
Compensation for Audit & Supervisory Board Members consists of monetary compensation only.
Process of determining compensation
Regarding compensation for Directors of the Board, the Nomination and Compensation Avisory Committee, an advisory body to the Board of Directors, comprehensively considers each Director of the Board's duties, contributions, and performance, and compares them with other companies in the same industry and of the same size, before reporting its deliberations to the Board of Directors. In response to the report of the Committee, the Board of Directors makes decisions within the limits resolved at the General Meeting of Shareholders. Compensation for Audit & Supervisory Board Members is determined by consultation of Audit & Supervisory Board Members within the limit amount resolved at the General Meeting of Shareholders.
Total amount of remuneration of executives
The total amount of remuneration for executives for the fiscal year is as follows.
| Executive classification | Number of people receiving compensation | Monetary compensation | Stock-based compensation | Total amount of remuneration, etc. |
|---|---|---|---|---|
| Director of the Board | 3 people | 99 million yen | 8 million yen | 107 million yen |
| Outside Directors | 3 people | 17 million yen | ー | 17 million yen |
| Audit & Supervisory Board Member (of which Outside) | 3 (3) people | 24 (24) million yen | ー | 24 (24) million yen |
Risk Management and Compliance
Risk management
Under the Basic Risk Management Policy, Shinnihonseiyaku strives to accurately identify the various risks facing our company and reduce the possibility of such risks, minimize losses in the event of such risks, and prevent early recovery and recurrence.
Risk assessment
We create a matrix to evaluate critical risks on two axes, the degree of impact on the business and the frequency of occurrence, and assign points to prioritize and determine critical risks. Based on this, we determine the main division responsible for responding to risks, and form a team including related divisions to respond. Critical risks are reviewed by the Risk Management and Compliance Committee at the beginning of the fiscal year, and progress is checked approximately once a quarter. The committee is chaired by the President & Representative Director of the Board and Chief Executive Officer, full-time Directors of the Board, Corporate Officers and General Managers.
Compliance
In accordance with our Mission and Charter of Conduct, Shinnihonseiyaku complies with laws, regulations, and internal regulations, and strives to be a company that is trusted by all stakeholders, including customers, business partners, employees, shareholders, and local communities. Under the Basic Compliance Policy, executives and all employees understand the significance of compliance and conduct corporate activities in compliance with it. We also strive to promote, improve, and enhance compliance by continuously evaluating and reviewing our policies and management systems.
Compliance Consultation Desk (Internal Reporting System)
We have established a Compliance Consultation Desk (Legal Division) as an internal consultation desk for compliance violations. In addition, we have an external consultation service (at our legal advisory office) that allows direct consultation and reporting without going through the internal consultation service and the company, and the external consultation service also allows anonymous reporting. In addition, we have established whistleblower protection regulations aimed at protecting whistleblowers, and have taken appropriate measures, such as conducting follow-up surveys to ensure that counselors and whistleblowers are not treated unfavorably.
| Number whistlebloeing and consultations | 3 cases |
|---|
*There were no reports of serious violations of law.
Compliance promotion and whistleblowing system
*Whistleblowing concerning the President & Representative Director of the Board and Chief Executive Officer shall be reported to the Audit & Supervisory Board.
Information Security/Personal Information Protection
Shinnihonseiyaku regards the appropriate management and protection of confidential information related to research and products development, including about 6 million pieces of personal information possessed by Shinnihonseiyaku, as one of its important management issues, and focuses on strengthening the governance of information security and educating employees.
Information Security Policy
Based on our Mission, Shinnihonseiyaku has established and strictly adheres to an information security policy to ensure and improve confidentiality, integrity, and availability, the three major requirements for information security, in order to earn the trust of our customers and society as a whole.
- Compliance with laws
- Establishment of information security management system
- Establishment of Information Security Regulations
- Implementation of information security measures
- Implementation of information security education and training
- Evaluation of implementation of information security measures and continuous improvement
Initiatives to improve information security literacy
We are working to improve the information security literacy of our employees in order to prevent serious incidents due to human causes. We conduct e-learning for all employees once a year on information security and personal information protection, and continue to raise awareness on our intranet.
| Percentage taking e-learning courses on information security | 100% |
|---|
Information security promotion system
Thorough protection of personal information
Shinnihonseiyaku considers the safe and appropriate management of customer personal information and other personal information entrusted to it by all stakeholders in our company to be a top priority and has established a privacy policy. We also conduct training and education in accordance with the Personal Information Protection Regulations and strive to ensure the protection of personal information.
| Percentage taking e-learning courses on protection of personal information | 100% |
|---|
Obtaining Privacy Mark
In April 2005, we obtained the Privacy Mark, which is recognized as proof that a business has an appropriate system for handling personal information, and we continue to renew it.
Stakeholder Engagement
Communication with key stakeholders
| Stakeholders | Dialogue and communication | Frequency |
|---|---|---|
| Customers |
|
Daily Daily Always Daily As needed |
| Shareholders and investors |
|
Once per year Four times per year As needed As needed As needed As needed |
| Suppliers |
|
Daily As needed Regular Regular Regular |
| Employees |
|
As needed Once per year As needed Daily |
| Local communities |
|
As needed As needed |
| NPOs・NGOs |
|
As needed |
| Government, local government, industry, and academic societies |
|
As needed As needed |
Dialogue with customers
Customer questionnaire
At Shinnihonseiyaku, we conduct a questionnaire in the delivery document that is included when we deliver prpducts to customers who have placed an order. The results of the questionnaire are used for business activities such as products development, sales promotion, and advertising.
Company-wide sharing of VOC*
In addition to the voices of customers gathered at call centers on a daily basis, messages sent to subscriber news magazines are shared throughout the company on the intranet and through internal postings, and reflected in products improvements and service improvements.
*Short for Voice Of Customer
Dialogue with shareholders and investors
Financial results briefings, individual interviews, and small meetings
In addition to dialogue at the General Meeting of Shareholders, we hold quarterly financial results briefings for shareholders and investors, as well as individual interviews and small meetings for follow-up. A total of 74 individual interviews and small meetings were held in FY2023.
Dialogue with employees
Management Policy Presentation
Once a year, at the beginning of each fiscal year, we hold a presentation called the Midterm Strategy Conference (MSC) as an opportunity to deliver management strategies and execution plans for the fiscal year directly from top management and department managers to each employee. After the conference, we conduct a questionnaire for all employees. The results of the questionnaire are reported to the management and reflected in the management of the conference to enable better communication.
Dialogue with local communities
CSR/Campaign to eradicate drunk driving
Shinnihonseiyaku is committed to CSR activities that create smiles in the community in order to realize “a beautiful smile” in our Purpose. One of the CSR activities we continue to carry out is the campaign to eradicate drunk driving. In FY2023, an event to eradicate drunk driving was held at Hakata High School (Fukuoka City) in conjunction with the NPO Heart Space (Fukuoka City, President: Miyako Yamamoto) to coincide with Drunk Driving Eradication Week set by Fukuoka Prefecture.
