In addition to the appropriate statutory disclosure and timely disclosure, Hodogaya Chemical strives to proactively provide shareholders and investors with relevant information, such as management strategies, in order to gain understanding of business activities. It engages in constructive bilateral dialogue with shareholders in an effort to achieve effective corporate governance that can contribute to sustainable growth and increase corporate value.
Hodogaya Chemical also establishes measures to ensure shareholders can more easily attend the General Meeting of Shareholders, such as avoiding dates on which many companies hold meetings, early mailing of the Notice of Annual General Meeting of Shareholders, provision of the Notice of Annual General Meeting of Shareholders in English, and use of electronic voting (smart voting) and an electronic voting platform.
The Board of Directors generally meets monthly, but meetings are also held irregularly as needed. To enable thorough discussions based on diverse opinions and prompt, rational decision-making, the Board of Directors consists of members who satisfy the extensive level of experience and education required by the Company.
In FY2023, the Board of Directors deliberated on authorizing the continuance of takeover defense measures and the introduction of a Board Benefit Trust system (presented as agenda items at the 165th Annual General Meeting of Shareholders) and authorizing quarterly financial results, financial summaries, and year-end reports.
Moreover, the Board received regular reports on the results of monitoring progress in implementing the Mid-term Management Plan SPEED 25/30 from executive departments, as well as reports on promoting sustainability, managing large-scale capital investments, and investments in and financing for affiliated companies.
Outside directors provide comments and opinions based on their wealth of experience from an objective and expert point of view. Information is shared as needed with the Board of Directors, allowing discussions encompassing a diversity of views.
The Audit & Supervisory Committee audits the legality of business execution by Directors and Officers, appropriateness of the Company’s business operations, internal control, and financial status, etc., through attendance at important meetings and through timely and appropriate reporting.
The Audit & Supervisory Committee also maintains close relations with the Financial Auditor to take necessary measures in relation to the audit work.
In FY2023, the Audit & Supervisory Committee discussed audit plans, the division of duties among the Audit & Supervisory Committee members, approval of audit compensation for the Financial Auditor, and audit reports from the Financial Auditor.
The Committee also reported on the status of internal controls and internal audits, the Risk Management Committee, and the audit status of affiliated companies.
In order to strengthen the independence, objectivity, and accountability of the Board of Directors’ functions on matters of nomination and compensation, the Nominating & Compensation Committee serves as an advisory body to the Board of Directors and deliberates and submits reports to the Board of Directors on the election and dismissal of Directors and compensation of Directors. The Board of Directors respects the content of such reports.
An Outside Director serves as chairperson.
In FY2023, the Nominating & Compensation Committee reported on and gave their opinions regarding primarily the following issues.
In regard to Director election proposals made at the General Meeting of Shareholders, the Committee confirmed the backgrounds and skills of each candidate and found that the proposal was reasonable.
After completing a comparative investigation of major companies in Japan, the Committee found that the compensation of Directors who are not Audit & Supervisory Committee members was in line with the detailed policy and reasonable.
When electing Executive Officers, General Managers of departments, and Presidents of affiliated companies, the Committee confirmed the detailed background of each candidate and conducted interviews when necessary, leading the Committee to express the opinion that the proposal details were reasonable.
The executive officer system was introduced to (1) promote management efficiency (2) enable quicker decision-making (3) specialize functions (4) strengthen supervisory and monitoring functions (5) strengthen our business management Executive Officers who can fulfill these goals have been elected by President to execute the business of our core departments.
Hodogaya Chemical appoints Grant Thornton Taiyo LLC as its Financial Auditor, and in addition to financial audit services, receives advices on accurate and fair business practices through internal control audit.
Hodogaya Chemical has the Internal Control Department that continuously reviews and evaluates that a group-wide internal control systems required under the Companies Act and the Financial Instruments and Exchange Act are in place and implemented, and ensures that any existing business risks are maintained lower than the predetermined level.
The Internal Control Department is responsible for compliance and risk management. It maintains and strengthens the level of internal control across the Hodogaya Chemical Group, and it promote various policies to ensure that our business operations are conducted in an appropriate and effective manner.
In order to ensure its independence, Hodogaya Chemical has an Internal Auditing Department that uses a dual reporting system to make internal audit reports to the President and direct reports to the Auditing Committee.
It also serves as the secretariat of the Auditing Committee and supports the Committee’s operations to maintain and improve the audit quality.