TORIDOLL Group has a policy of demonstrating agility by accelerating decision making, increasing the pace of business expansion, maintaining soundness and transparency, and has established organization management structures and mechanisms.
We also established an Audit and Supervisory Committee as a management audit and supervisory body. Members of the committee attend Board of Directors meetings to make statements, provide necessary advice, and exercise voting rights from the perspective of ensuring management soundness when managerial decisions are made. Members of the Audit and Supervisory Committee also share information at committee meetings and strive to achieve highly transparent management and timely disclosures of information.
Policy and Management System
Corporate Governance Systems
At TORIDOLL Holdings, we are reinforcing our governance systems to improve our corporate value in the medium- and long-term.
Our Board of Director consists of six members, which includes three external directors. Thus, our governance systems enable decisions to be made flexibly by a small number of leaders. We have appointed three independent external directors, who are qualified as public accountants or lawyers, to ensure the execution of our business is supervised appropriately. We have also appointed all external directors as Audit and Supervisory Committee members as part of our efforts to reinforce our auditing systems.
Board of Directors
The TORIDOLL Holdings Board of Directors formulates and approves medium-term management plans and makes decisions on key business matters aligned with those plans.
Matters that must be determined by resolution of the Board of Directors are specified by laws, regulations, the Company’s Articles of Incorporation as well as the Board of Directors Provisions.
Audit and Supervisory Committee
TORIDOLL Holdings established an Audit and Supervisory Committee to reinforce corporate governance systems. The committee is made up of the three independent external directors.
Audit and Supervisory Committee members attend meetings of the Board of Directors and other important bodies, receive business reports from the directors, review the financial audits of affiliated companies and the audit methods of the accounting auditors, hold monthly meetings with the Internal Audit Office, and engage in other audit activities to monitor the overall status of the execution of business. They report the results of audits to the Board of Directors and provide advice and recommendations for corrective action as necessary.
Attendance at Meetings of the Board of Directors and Audit and Supervisory Committee(FY2021)
|Title||Name||Board of Directors||Audit and Supervisory Committee|
|No. of meetings attended||Attendance rate (%)||No. of meetings attended||Attendance rate (%)|
|President and CEO||Takaya Awata||19||100||-||-|
|Executive Vice President and COO||Takashi Sugiyama||15||100||-||-|
|Director and CSCO||Masatoshi Kamihara||19||100||-||-|
|Director (Audit and Supervisory Committee member)||Toshiyasu Umeki||19||100||14||100|
|Director(Audit and Supervisory Committee member)||Hiroaki Umeda||18||95||13||93|
|Director (Audit and Supervisory Committee member)||Maki Kataoka||19||100||14||100|
Assessment of the Effectiveness of the Board of Directors
TORIDOLL Holdings analyzes and assesses the effectiveness of the Board of Directors as a whole annually.
In FY2019, issues relating to the current effectiveness of the Board presented by the outside directors were examined based on prior discussions conducted in advance by all three external directors (Audit and Supervisory Committee members) as discussed below.
- Issues examined in the assessment of effectiveness
- Effectiveness as a deliberative body
Although the Board engages in discussions with a focus on the external directors, both executive directors and external directors should deliberate at board meetings the results of discussions conducted by each group of directors in advance and achieve deep understanding of the matters presented, and engage in active exchanges on opinions on each resolution proposal.
- Individual specific issues
- With respect to governance by the Board from a financial focus in response to the expansion of business, the Board formulated and enacted Capital Management Provisions in 2016 and Business Investment Provisions in 2019 to establish the necessary systems. It is crucial to enforce these provisions appropriately in the future.
- Director training should include case studies of crisis management relating to compliance at other companies, training on Group corporate management as well as other responsibilities of directors in light of recent judicial decisions.
- Effectiveness as a deliberative body
Going forward, the Board will move toward implementation of measures while taking these issues into consideration and provide regular progress updates.
Internal Control Systems
TORIDOLL Holdings has formulated clear fundamental policies that the President and CEO must comply with, enacted various provisions necessary for the establishment of internal control systems, and positioned them for implementation as quickly as possible under the guidance of the person-in-charge. We continually review and improve internal control systems and seek to create efficient and lawful corporate structures.
Internal Audit Systems
TORIDOLL Holdings has established Internal Audit Provisions and an Internal Audit Office which reports directly to the President and CEO. The Internal Audit Office formulates audit policies and annual plans, audits the status of business execution in accordance with the designated rules for Group companies and each headquarters division, evaluates the status of internal control development and operation, and makes proposals for improvements. Audit results are reported to the President and CEO and the Audit and Supervisory Committee members (external directors).
TORIDOLL Holdings has an audit contract with KPMG AZSA LLC, which provides an environment in which independent and fair accounting audits are conducted.
The Audit and Supervisory Committee and the Internal Audit Office of the Company works closely with KPMG AZSA LLC to conduct quarterly audits.
TORIDOLL Group does not hold listed shares as strategic shareholdings. The Group policy is to not engage in such holdings in order to avoid the risks of fluctuations in share prices and to enhance capital efficiency.
Production of Group Management Book
As TORIDOLL Group undergoes remarkable growth and expansion, reinforcing global Group governance systems has become an important management issue.
In 2020, we prepared a Group Management Book summarizing points that require particular care, the types of action that will enhance business efficiency, and how to prevent errors and improper conduct when managers and other responsible personnel carry out managerial duties.
The Group Management Book is used as a support tool (guidebook) for undertaking action tailored to the scale and culture of each Group company. In addition to the Japanese version, an English version will be prepared and distributed throughout the Group.
Election of Directors and Officer Compensation
Election of Directors, Audit and Supervisory Committee Members, and Other Officers
TORIDOLL Holdings’ policy on the nomination of director candidates (excluding directors who are Audit and Supervisory Committee members) is to select individuals who have the qualities and experience to contribute to continued growth and corporate value creation over the medium to long term, fully understand business, have the capabilities to properly carry out business management, to make timely and accurate decisions, and have appropriate risk management skills.
In addition, our policy for nominating candidates for directors who will also serve on the Audit and Supervisory Committee is to select individuals with advanced knowledge in areas such as corporate management, finance and accounting, law, and so on, and who are capable of fully performing their duties relating to auditing the execution of work by directors and as members of the Audit and Supervisory Committee.
Independent External Directors
TORIDOLL Holdings made the transition to a company with an Audit and Supervisory Committee in order to reinforce its corporate governance systems and elected three independent external directors with the qualities necessary for their expected roles and responsibilities. Based on the criteria for independence established by the Tokyo Stock Exchange and the Companies Act, the Company’s criteria for the independence of external directors are defined as persons who satisfy the conditions set forth below.
The Company elects independent external directors to half (three) of the seats on the six-member Board of Directors in order to appropriately reflect opinions that are independent from management when making various decisions on investment and other matters for the future growth of business.
TORIDOLL Holdings’ approach on the independence of outside directors
The TORIDOLL Holdings ("Company") has designated External Directors Toshiyasu Umeki, Hiroaki Umeda, and Maki Kataoka as independent officers.
Persons who are not Executive Personnel of a corporation, partnership, or other group of which the Company is a major shareholder.
Persons who are not Executive Personnel of a key lender of the Company (a lender whose loan amount to the Company exceeds 2% of the Company’s consolidated total assets).
Persons who are not certified public accountants affiliated with an accounting firm that serves as the Company’s accounting auditor.
Persons who are not attorneys, certified public accountants, judicial scriveners, patent attorneys, or other professionals or consultants and the like (in the case of a corporation, partnership, or other group, persons affiliated with such group) that receive more than ¥10 million annually from the Company in compensation other than officer compensation.
Persons who did not fall under any of (b) to (f) in the three years prior to appointment.
Persons who are not spouses or family members within two degrees of consanguinity who falls under any of (a) to (g) (limited to an officer, general manager, Partner Staff member, associate, or other key person).
Persons who have not received donations exceeding ¥10 million annually form the Company and are not Executive Personnel of such a recipient.
Persons who do not have a reciprocal dispatch relationship with the Company for the dispatch of directors, executive officers, or corporate auditors.
Further to (a) to (j), there is no likelihood of conflicts of interest with the Group.
List of outside directors
Reason for election
Mr. Umeki was elected as an external director based on the Company’s determination that he is suitable for this position as he can provide insightful opinions based on his specialized knowledge as a certified public accountant. He is also familiar with the Company’s internal operations as a result of serving as an advisor to the Company. The Company determined that Mr. Umeki has no interests in the Company and can perform supervision from an independent standpoint, and there is no likelihood of conflict of interest with general shareholders, and accordingly, elected him as an independent director.
Mr. Umeda was elected as an outside director based on the Company’s determination that he is suitable for this position as he can provide insightful opinions based on his specialized knowledge as a certified public accountant. He is also familiar with the Company’s internal operations as a result of serving as an advisor to the Company. The Company determined that Mr. Umeda has no interests in the Company and can perform supervision from an independent standpoint, and there is no likelihood of conflict of interest with general shareholders, and accordingly, elected him as an independent director.
Ms. Kataoka was elected as an outside director based on the Company’s determination that she is suitable for this position as she can provide insightful opinions based on her specialized knowledge as an attorney. The Company determined that Ms. Kataoka has no interests in the Company and can perform supervision from an independent standpoint, and there is no likelihood of a conflict of interests with general shareholders, and accordingly, elected her as an independent director.
Based on the criteria for independence established by the Tokyo Stock Exchange and the Companies Act, the Company’s criteria for the independence of external directors are defined as persons who satisfy the conditions set forth below.
Policy on Determination of Officer Compensation
TORIDOLL Holdings makes comprehensive determinations regarding the compensation of directors (other than directors who are members of the Audit and Supervisory Committee) taking into account the degree of contribution to the Company’s performance and enhancement of corporate value. The ratios of compensation linked to medium- to long-term performance and stock-based compensation has been increased since 2017. The new compensation scheme described below was introduced to provide incentives to eligible directors to sustainably enhance the Group’s corporate value and align the interests of directors with those of shareholders.
- Base compensation
- Short-term incentive compensation (performance-linked bonuses)
- Long-term incentive compensation (transfer-restricted shares and stock options)
Officer compensation is determined by the Board of Directors within the range of the maximum amount of director compensation as set by resolution of the General Shareholders Meeting. When making decisions on compensation, the Board receives advice based on officer compensation survey data from a specialized external agency to ensure objectivity in director compensation awards.
Also, the Audit and Supervisory Committee members deliberate the appropriateness of director compensation taking into account the performance and execution of duties.
Total amount of director and Audit and Supervisory Committee Member compensation(FY2021)
|No. of persons||Total amount (million yen)|
|Directors (exc. Audit and Supervisory Committee members)||4||139|
|Directors (Audit and Supervisory Committee members)||3
(of which 3 are outside directors)
(of which 3 are outside directors)
- - The above total amount of remuneration includes expenses concerning share acquisition rights granted as stock options for the fiscal year under review, pursuant to the resolution of the General Meeting of Shareholders and the resolution of the Board of Directors on June 29, 2021 (Directors (excluding Audit and Supervisory Committee Members): 6 million yen; Directors (Audit and Supervisory Committee Members): 2 million yen). It also includes expenses concerning shares granted as restricted shares for the fiscal year under review, pursuant to the resolutions of the Board of Directors on July 9, 2018, July 9, 2019, July 14, 2020, and July 13, 2021 (Directors (excluding Audit and Supervisor Committee): 6 million yen).
- - It was determined that the compensation of directors (excluding directors who are Audit and Supervisory Committee members) is appropriate with regard to the fairness of compensation calculation, connection to performance, and other factors through an exchange of opinions between the three external directors (who are Audit and Supervisory Committee members) and the President cum CEO and deliberations by the Audit and Supervisory Committee.