Corporate Governance System

Ryoden is working to maximize its corporate value by promoting beneficial and sufficient corporate governance.

The Guidelines for Action, stipulated in the Management Philosophy, specify the basic practices that all Ryoden Group directors and employees must follow, including beneficial and sufficient corporate governance. Ryoden is undertaking a suite of measures to ensure transparency, ethics, duty of explanation, disclosure and compliance, and to build a comprehensive governance framework as called for in the Ryoden Corporate Governance Code.

1) Board of Directors
As Ryoden’s highest decision-making body, the Board of Directors decides key items regarding the execution of the duties of the Company and oversees executives’ execution of their professional duties.
Ryoden has implemented an executive director system. This system enables appropriate response to the business environment affecting the Company and faster decision-making, while clarifying professional responsibilities through clear separation of supervisory and executive functions. At the June 29, 2018 meeting of the Board of Directors, Ryoden revised its Articles of Incorporation to limit the number of directors to 12. Currently the Board of Directors of Ryoden consists of seven directors, of whom three are outside directors and two are independent directors.

2) Nomination and Remuneration Advisory Committee
To safeguard the fairness, transparency and objectivity of director nomination and remuneration processes, and to ensure comprehensive corporate governance, Ryoden has established a Nomination and Remuneration Advisory Committee. This Committee deliberates on inquiries referred to it from the Board of Directors to advise the Board regarding director nomination, remuneration and related matters. A majority of Committee members are outside directors, while the chair is selected by the Committee from among its own members.

3) Board of Auditors and Auditors
Ryoden’s Board of Auditors is composed of two statutory auditors and two outside auditors.
Each auditor attends meetings of the Board of Directors and other important meetings, in accordance with the Auditing Policy and Auditing Plan specified by the Board of Auditors. These auditors examine the reports tabled by Ryoden and Ryoden Group directors, employees and others, surveying the operations and finances of the Company and auditing and supervising directors’ execution of their duties to ensure compliance with the law.
The Board of Auditors also regularly exchanges information and opinions with internal control officers and account auditors, to ensure comprehensive auditing.

4) Management Conference
The Company also convenes a Management Conference. The purpose of the Management Conference is to discuss agenda items referred from the Board of Directors, as well as important matters related to the execution of Company operations.
Currently the Management Conference consists of the president of Ryoden and seven executive directors with portfolio. Statutory auditors attend the Management Conference to ensure the appropriateness of deliberations.

Ryoden has established the following Committees for the purpose of strengthening and expanding the Ryoden Group’s CSR and internal control systems. The Committees coordinate with each other in the execution of their functions.
Ryoden’s Basic Policy on the Internal Control System can be found below.Basic Policy on the Internal Control System

Risk Management Supervisory Committee
The Risk Management Supervisory Committee consists of the president, who chairs the Committee, and the executive directors with portfolio. Its purpose is to examine the Group’s basic policy on internal controls and confirm the actions of each Committee, thereby supervising each Committee’s activities.

Ethics and Legal Compliance Committee
Ryoden positions compliance as one of its most critical management issues. For this reason, the Company has established an Ethics and Legal Compliance Committee, chaired by the responsible Director and have a Compliance Manager to take regular action to ensure compliance with laws and regulations, fairness and morality in our activities.

FIEA Internal Control Evaluation Committee
Chaired by the responsible Director in charge, the FIEA Internal Control Evaluation Committee is established to furnish the internal controls mandated under the Financial Instruments and Exchange Act and to secure the integrity of financial reporting. This Committee evaluates Ryoden’s internal controls based on the results of internal audits of implementation and operation of actions in each category evaluated by the internal-auditing and systems segments.

Business Risk Committee
To secure continuous and stable development of its operations, Ryoden has established a Business Risk Committee, chaired by the responsible Director. This Committee analyzes risks Group-wide and seeks to diminish said risks by proposing measures, based on probability of occurrence and degree of severity, and confirming the status of their implementation.

Ryoden regards thoroughgoing compliance as a management issue of the greatest importance. The Company establishes regulations on compliance and carries out diligent training to ensure that all directors and employees Group-wide are fully familiar with them.
To strengthen and broaden the internal control systems of the Company and the Group, Ryoden has established a Risk Management Supervisory Committee, chaired by the president, which supervises the status of activities related to internal controls.
In addition, to ensure full compliance in business activities, Ryoden has established an Ethics and Compliance Committee, chaired by the director in charge of ethics and compliance. This Committee regularly determines and implements measures to promote compliance. It also audits the status of adherence by internal control organizations to the compliance requirements of the Company and Group.
Ryoden has also established the Ryoden Group Guidelines for Action, which calls on the Group to adopt a resolute stance against anti-social forces. All directors and employees of the Company and Group abide strictly by these Guidelines and establish an appropriate framework for this purpose.
A director or employee of Ryoden or the Ryoden Group who notices or suspects a compliance violation can report the incident using the provided hotline system, without fear of disadvantageous treatment.

Ryoden has established Basic Regulations on Risk Management. The Business Risk Committee, chaired by the responsible Director in charge, identifies risks and devises countermeasures based on factors such as their probability of occurrence and severity. The most important risk items are deliberated upon by the Management Conference and Board of Directors. In this way Ryoden and the Ryoden Group carry out multifaceted risk management.

Ryoden is constantly advancing measures to prevent unlawful access to its IT systems and leakage of confidential corporate and personal information. To this end Ryoden provides thorough training to all directors and employees of Ryoden and the Ryoden Group.
Ryoden is strengthening its security measures, with steps such as establishing security guidelines for offices, zone management of workplaces and entry/exit management using IC cards. We have also introduced a central management system for all business-use PCs and servers and eliminated software whose use is prohibited from clients.