TAKARATOMY

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Sustainability Initiatives | Corporate Governance

Corporate Governance System

Basic Views

TOMY places responding to expectations of its stakeholders, including shareholders and customers, and achieving continued improvement of its corporate value and highly transparent and sound management as top priorities. While striving to improve management proficiency, we seek to enhance management check functions, strengthen our risk management and compliance systems, and deepen our corporate governance.

Management Structure

Corporate Governance System

Corporate Governance System

1. Board of Directors

The TOMY Board of Directors determines the fundamental direction and policy of the entire Group, makes decision on the implementation of important business, and supervises overall business implementation. The Board convenes once a month for regular meetings, and also holds extraordinary meetings if required. The Board, which is chaired by one of the representative directors, consists of 11 members (six outside directors, all independent directors). Four Audit & Supervisory Board members also attend Board meetings to offer advice when required.

Attendance in fiscal 2019 (Number of meetings held: 16)

Name Participation
(number of times)
Participation rate
(%)
Outside director
Kakuei Miyagi
16 100
Outside director
Shigeyuki Mito
14 87.5
Outside director
Mariko Mimura
16 100
Outside director
Fumitoshi Sato
11 100
Outside auditor
Tsunekazu Umeda
16 100
Outside auditor
Toshi Yoshinari
16 100
Outside auditor
Koichiro Watanabe
16 100
* Fumitoshi Sato was elected at the 68th annual General Meeting of Shareholders held on June 21, 2019, so the total number of Board meetings that he could have attended differs from other outside directors. Eleven Board meetings were held since his appointment.

2. Audit & Supervisory Board

The Audit & Supervisory Board is convened, in principle, once a month. The meetings are tasked with discussing and determining important items required for the effective audit and supervision of executive officers’ business execution. Audit & Supervisory Board members attend regular important meetings and ad hoc meetings to hear reports on management conditions, business execution, financial affairs, internal audit implementation, risk management, and compliance. All members of the Audit & Supervisory Board have broad experience and a high level of expertise. Three of the four members are outside auditors. In the case of internal audits, the Internal Auditing Department investigates business execution and compliance of each division and submits reports to the director in charge and the Audit & Supervisory Board when necessary.
The appointment, transfer and other decisions related to personnel who assist corporate auditors require the prior consent of Audit & Supervisory Board members. These employees perform their duties under the direct supervision of the Audit & Supervisory Board to ensure they remain independent from company directors. The Audit & Supervisory Board exchanges opinions and information on important audit-related issues with accounting auditors, the Internal Control Department, Internal Auditing Department and Group Auditing Department to cooperate in monitoring of internal control throughout the Group.

Attendance in fiscal 2019 (Number of meetings held: 14)

Name Participation
(number of times)
Participation rate
(%)
Outside auditor
Tsunekazu Umeda
14 100
Outside auditor
Toshi Yoshinari
14 100
Outside auditor
Koichiro Watanabe
14 100

3. Board Director Nominating Committee/Remuneration Committee

We established the Board Director Nominating Committee and the Remuneration Committee, comprising outside directors and outside Audit & Supervisory Board members, as advisory bodies to the Board of Directors. The committees offer advice and suggestions to the Board on policy matters relating to the evaluation, appointment, and remuneration of directors.
The Board Director Nominating Committee is chaired by Kantaro Tomiyama, chairman of the Board of Directors, with outside directors Shigeyuki Mito, Mariko Mimura and Fumitoshi Sato, and outside auditor Tsunekazu Umeda serving as committee members. The Remuneration Committee is chaired by outside director Fumitoshi Sato, with chairman Kantaro Tomiyama, outside directors Shigeyuki Mito and Mariko Mimura, and outside auditor Tsunekazu Umeda serving on the committee.

4. Risk/Compliance Committee

The Risk/Compliance Committee was set up to help build a fuller and more thorough compliance structure and risk management framework. Chaired by one of the representative directors, the committee comprises primarily outside directors and Audit & Supervisory Board members (over half the committee are independent directors), and is expected to deliberate important risk and compliance-related issues and report its findings to the Board of Directors. The Internal Control Department and the Internal Auditing Department, both under the direct control of the representative directors, audit the TOMY and Group’s compliance status and report the results to the representative directors and the Audit & Supervisory Board.
We seek to develop and strengthen a Group-wide risk management system with integrated internal control by the Risk/Compliance Committee and the Internal Control Department. If an unforeseen event occurs, we will swiftly set up a Risk Management Task Force to ensure a fast and appropriate response, minimize damage and loss, and prompt measures to prevent a recurrence. We have also established the Safety & Quality Assurance Group as a dedicated team that works to guarantee the safety of our products, in order to strengthen our processes to deliver reliable and superior products.
The Risk/Compliance Committee is chaired by Kantaro Tomiyama, chairman of the Board of Directors. Committee members include company president Kazuhiro Kojima, Audit & Supervisory Board member Hajime Matsuki, the Head of Corporate Administrations, outside directors Shigeyuki Mito, Mariko Mimura, Fumitoshi Sato, Miwako Iyoku and Reiko Yasue. The Committee also enlists the help of other outside executives or specialist advisors as necessary.

5. Advisory Committee/ Financial Advisory Committee

The Advisory Committee serves as an advisory body for the representative directors while the Financial Advisory Committee serves as an advisory body for the CFO. Both committees consist of outside directors and Audit & Supervisory Board members to offer broad-ranging advice on the efficacy of business operations and the reliability of finances for TOMY and the Group.

6. Officers Meeting

Each headquarters has an Officers Meeting, which meets at least once a month, to ensure the smooth and efficient management of Group operations, encouraging agile decision making on general business execution. Meeting decisions are reported to the Board of Directors when necessary.

7. Executive Officer System

TOMY introduced an executive officer system to promote the delegation of authority, heightening the speed and efficiency of business execution in each Group company and division under the Board of Directors’ policy, strategy and supervision.

8. Executive Officer Assessment Committee

The Executive Officer Assessment Committee includes Director & Supervisory Board members who offer broad-ranging advice to the representative directors regarding the evaluation of executive officer performance.

Outside Director/Outside Audit & Supervisory Board Member Support Mechanism

Corporate Planning Division staff send invitations to Board meetings to outside directors and outside Audit & Supervisory Board members, explain the proposal summaries in advance wherever possible, and provide other necessary information. Also, we assign one full-time employee to assist the Audit & Supervisory Board members. We work hard to provide a framework that supports the execution of business management and supervision by, among other things, establishing the dedicated department to manage and support Group companies based on internal regulations depending on their specific operations and circumstances, and sharing the independently compiled minutes of major meetings held at each Group company with all outside directors.

Effectiveness Assessment and Its Processes

The Board of Directors conducts a self-assessment of its effectiveness as a whole by distributing questionnaires to the members of the Board of Directors once a year (or more if necessary). Based on the result of the questionnaire, evaluation results and issues to be addressed are discussed at the Risk/Compliance Committee, which is an advisory body to the Board of Directors, and are shared at a Board of Directors meeting to improve the effectiveness of the Board of Directors.
TOMY confirmed that all directors and Audit & Supervisory Board members had held active discussions at the Board of Directors meetings and that systems to approve important management matters and to appropriately supervise execution of operations had been established.
In addition, we recognized that the Board of Directors had developed a medium-term management plan to improve the Company’s corporate value, and had actively disclosed information and established an internal control system. At the same time, issues to be addressed include the need to deepen discussions on issues such as how to progress the medium-term management plan and manage risks, strengthen monitoring functions, ensure a greater diversity of the Board of Directors, and develop a plan to nurture future senior executives. We will work to ensure the further effectiveness of the Board of Directors, taking into consideration these issues.

  • December 2019
    – January 2020
    Distributed questionnaire
  • March 2020
    Collected questionnaire responses
    Discussed in Risk/Compliance Committee
  • May 2020
    Reported to the Board

Risk Management

The Risk/Compliance Committee and the Internal Control and Audit Departments were established to create a Company-wide risk management system integrated with the internal control system. Please see the Company’s website for further information.

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Continuation of Anti-Takeover Measures

Please refer to the Company's official website for details.