The AOKI Group Philosophy is based on the three pillars of business integrity, social responsibility, and community service. We recognize the importance of corporate governance through pursuing this philosophy and increasing medium- to long-term corporate value. Our basic approach is to strengthen the administrative organization to increase the transparency and fairness of management, and to conduct sound and efficient management in practice.

 

For that reason, we are also working to further enhance corporate governance by improving the internal control system, which includes reviewing the organization and reinforcing the risk management structure, as well as by engaging in appropriate information disclosure, ensuring the rights of shareholders, engaging in dialogue with shareholders, and appropriately cooperating with other stakeholders.

 

The majority of the Board of Auditors are External Directors, and they are responsible for auditing and supervising the legality and appropriateness of business execution and granting voting rights to directors who are members of the Board of Auditors, thereby strengthening the supervisory and auditing functions of the Board of Directors and further enhancing corporate governance. To this end, we have transitioned over to being a company with an Audit and Supervisory Committee in 2023.

As a company with an Audit and Supervisory Committee, the Audit Committee has three members, two of whom are External Directors. Excluding the Audit Committee, the Board of Directors consists of 10 directors, including 4 External Directors. As well as monthly and other extraordinary meetings of the Board of Directors, management meetings are held weekly, including those with directors who are standing Audit Committee members, and these make decisions on important matters, report on management issues, and exchange information. We have also introduced an executive officer system to speed up management decision-making.

 

In order to further enhance fairness and transparency in the selection of directors and in the determination of their compensation, we have established a Nomination and Remuneration Committee chaired by an External Director. This comprises three members, including another External Director and one Director.

 

The Compliance Committee reviews compliance-related issues in principle monthly, while a legal consultation is held monthly to discuss individual matters with legal advisors. Furthermore, rules and manuals are prepared as necessary to strengthen the Group’s internal control system, and workshops and other training sessions are held for employees to raise awareness of the system.

 

The Risk Management and Information Security Committee meets in principle monthly (several times a year for risk-related issues and monthly for information security issues) to evaluate anticipated risks to the Group and deliberate on measures to address them. It puts together Basic Risk Management Guidelines and regularly reviews the content therein.