Corporate Governance

Approach

Based on our mission of “Acting with sincerity, we contribute to progress and harmony among our customers, consumers, and society by exploring the unlimited potential of technology,” ISID recognizes the important role of corporate governance for the business environment in order to execute swift, fair and transparent management that realizes healthy and continuous growth. ISID’s Corporate Governance Policy reflects this approach. The Board of Directors works to enhance corporate governance by reviewing policies as related laws and regulations are revised, and the social and economic business environment changes.

Structure

Board of Directors and Audit and Supervisory Board

The Board of Directors determines important matters affecting ISID and supervises how business is conducted, while the Audit and Supervisory Board and its members are responsible for auditing management.

The Board of Directors comprises six directors, of whom two are Outside Directors. The Outside Directors have been appointed as independent officers as provided for by the Tokyo Stock Exchange, and the ratio of independent Outside Directors on the Board of Directors is more than one-third. Directors hold office for only one year, to ensure that they are able to swiftly respond to changes in the business environment and reflect management responsibilities.

The Audit and Supervisory Board has three members, of whom two are Outside Audit and Supervisory Board members.

Nomination and Remuneration Committee

This is a voluntary committee, under the aegis of the Board of Directors. The chairman and more than half the committee members are independent Outside Directors. It serves to discuss the appointment and dismissal of directors, and executive officers, etc. representative directors and others (including the CEO), as well as matters related to the remuneration of directors (including representative directors).

Executive Officers

ISID introduced an executive officer system with the aim of strengthening its business execution function. Additionally, all directors involved in conducting business serve as executive officers. This is done to expedite decision-making and clarify business execution responsibilities.

Management Council, Other Committees

The Management Council was set up to help expedite management decisions and streamline operations, in order to resolve important management matters other than those resolved by the Board of Directors and, in advance, to deliberate matters to be resolved by the Board of Directors.

The President and CEO chair the council, the members of which are selected from among executive officers (at the managing executive officer level or higher) by a resolution of the Board of Directors and full-time Audit and Supervisory Board members.

In addition, under the Sustainability Policy, we have established the Sustainability Promotion Council with the aim of comprehensively promoting initiatives related to sustainability in the Group, summarizing information on risks assumed in ISID and Group's business activities and promoting responses in accordance with the level of importance of risks from a company-wide perspective.

The ISID corporate governance structure is as follows.

Organizational chart

Evaluating the Board of Directors

ISID evaluates the effectiveness of the Board of Directors to improve its effectiveness and enhance corporate value.

Method

Once a year, the questionnaire that combines a five-point evaluation and free description is circulated to all directors and Audit and Supervisory Board members. Subsequently, the results of the evaluation based on the analysis and opinions of the content of responses by external consultants are reported to the Board of Directors to evaluate the effectiveness of the Board of Directors as a whole.

Major evaluation items are as follows.

  • Composition and Management of the Board of Directors(Member composition, materials and briefings, information provision, etc.)
  • Review, implement and monitor medium-term management plan and budget
  • Compliance with corporate ethics and risk management
  • Nomination, Remuneration, and Evaluation of the Management Team
  • Dialogue with Shareholders

Results Overview

The Board of Directors, which is evaluated effective or generally effective for all items subject to the evaluation, and has confirmed its improvement efforts, such as responding to the increase in the number of independent outside directors with management experience at other companies and enhancing the provision of information to outside directors, thereby ensuring effectiveness of our Board of Directors as a whole. On the other hand, we recognize the following two points as issues to be considered, and will proceed with initiatives.

  • (1)Improving the composition and operation of the Board of Directors
    ・Promote deliberation toward the appointment of a majority of independent outside directors, and strive to ensure further diversity of the Board of Director.
    ・Based on the change of members of the Board of Directors, hearings on operations will be held with newly appointed directors, which will be used for improvement.
    ・Endeavor to provide materials as soon as possible, and will devise ways such as providing prior explanations to independent officers and/or non-executive director on important matters, conducting advance reports at Board of Directors meetings, and providing supplementary explanations on the points of discussions at Management Council, as appropriate.
  • (2)Strengthen monitoring of investment projects
    ・In order to more effectively advance the examination of investment projects, we will strengthen the screening process for investment projects. At the same time, we will also report to the Board of Directors on issues and countermeasures that we recognize in the process, and strengthen monitoring to realize our investment objectives.

ISID will continue to make improvements and address all issues indicated, in order to increase the Board’s effectiveness.

As required by Tokyo Stock Exchange regulations, matters pertaining to ISID’s corporate governance can be found in the Corporate Governance Report.

Internal Controls

The ISID Group has a Basic Policy on Internal Control Systems, according to which it strives to maintain and improve the systems so that business can be conducted appropriately.

For more information, see Basic Policy on Internal Control Systems.

An overview of the operational status of our internal control systems is disclosed in the Securities Report.