The EBARA Group has established the “EBARA Way,” composed of its “Founding Spirit,” “Corporate Philosophy” and the “EBARA Group CSR Policy” as the EBARA Group’s identity and set of values to be shared across the Group. Under the EBARA Way, EBARA upholds the enhancement of corporate value through sustainable business development and sharing the results with all stakeholders including shareholders as its most important management objectives. To achieve such objectives, the Company constantly seeks the best possible corporate governance and strives toward its further enhancement.
The EBARA Group has also established the “EBARA Corporate Governance Basic Policy,” and will endeavor to ensure the implementation of the basic policy and to further enhance its corporate governance.
EBARA Corporate Governance Basic Policy - revised on May 12, 2022
The EBARA Group’s basic views on corporate governance are as follows.
1.
The Company respects shareholders’ rights and is engaged in establishing an environment which enables shareholders to appropriately and effectively exercise their rights and ensures equality among shareholders. In addition, the Company establishes the IR Basic Policy and exchanges constructive dialogues with shareholders and investors to facilitate the sustainable growth and medium- to long-term enhancement of corporate value.
2.
The Company strives to co-create values with various stakeholders, including shareholders, customers, business partners, creditors, employees and local communities in an appropriate manner.
3.
The Company strives to ensure management transparency through appropriate disclosure of its corporate information.
4.
The Company has developed a governance system in which Independent Directors play important roles, and that is centered on Independent Directors and non-executive inside Directors who do not concurrently serve as Executive Officers. The Company has adopted the organizational form of a “Company with a Nomination Committee, etc.,” with a nomination committee, a compensation committee and an audit committee as statutory committees under the Board of Directors, to achieve clear separation between supervision and business execution in management.
5.
The Company clearly stipulates expected roles and required qualifications and competencies for each Director, and strives to enhance effectiveness of the Board of Directors, etc. by utilizing them for selection of candidates and training for the Directors, etc.
1.
Board of Directors
2.
Nomination Committee
The Nomination Committee makes resolutions on the contents of proposals for the General Meeting of Shareholders concerning the election and dismissal of Directors, basic policies regarding the election and dismissal of Directors, and the establishment, amendment and abolition of regulations and procedures. The Nomination Committee also presents recommendations regarding the election and dismissal of Executive Officers. In addition to formulation of succession plans for the President, Representative Executive Officer. The Nomination Committee comprises all non-executive Directors to ensure its independence and objectivity, and the majority of the committee is made up of Independent Directors.
As of March 30, 2022, the Nomination Committee comprises three (3) Directors, two (2) of whom are Independent Directors (Hajime Sawabe and Hiroshi Oeda) and one (1) of whom is a Non-executive Inside Director (Toichi Maeda). Hajime Sawabe, an Independent Director, acts as Chairperson of the Nomination Committee.
3.
Compensation Committee
4.
Audit Committee
5.
Executive Session
The Executive Session, comprising only Independent Directors, has been established as a venue for Independent Directors to freely discuss matters necessary to fulfill their responsibilities. The Lead Independent Director, who is elected by mutual voting, serves as Chairperson of the Session.
As of March 30, 2022, Hajime Sawabe, an Independent Director, acts as the Lead Independent Director.
6.
External Independent Auditor
The Company has entered into an audit agreement with Ernst & Young ShinNihon LLC, which conducts the Company’s accounting audits with respect to audits required by the Companies Act and the Financial Instruments and Exchange Act.
1.
Executive Officers
Executive Officers are elected by a resolution of the Board of Directors based on the proposal by the Nomination Committee. Executive Officers determine the execution of duties as delegated by the Board of Directors and perform such duties in line with the overall direction of management philosophy and strategies such as Long-term Vision “E-Vision2030” and Medium-term Management Plan “E-plan2022” as determined by the Board of Directors. Although all fifteen (15) of the Executive Officers are males, the Company is considering appointment of female Executive Officers in the future from the standpoint of diversity.
2.
Internal Audit System
The Corporate Audit Department conducts internal audits, the results of which are reported to the President and Representative Executive Officer. The role of internal audits is, in accordance with the Internal Audit Rules, to develop and strengthen the corporate governance system, compliance, risk management and internal controls of each business execution division of the Company and its subsidiaries, and the Corporate Audit Department checks, assesses and evaluates whether business is being executed appropriately in line with management policy and rules and regulations, and gives advice and recommendations toward improvement.
3.
Meeting bodies for business execution
1)
Management Meeting
The Management Meeting made up of all Executive Officers is in place as a business execution meeting structure for deliberation necessary for facilitating decision making by the President and Representative Executive Officer about important matters concerning the execution of business in management. Each Executive Officer actively expresses their opinions and discusses not only their own scope of duties delegated by the Board of Directors, but also all other matters for deliberation in the Management Meeting from the perspective of optimization for the EBARA Group as a whole, based on their own experience and knowledge. The Management Meeting is held every month.
2)
Management Planning Committee
In order to specifically implement the Medium-term Management Plan each year, a Management Planning Committee chaired by the President and Representative Executive Officer and made up of all Executive Officers has been established as a business execution meeting structure for deliberating, determining and following up on the budgets and management issue action plans of each organization every year. After phased deliberation for each business unit, the Management Planning Committee determines the budgets and management issue action plans to clarify the responsibility of divisions and promote management efficiency. The Management Planning Committee reviews the progress of the annual consolidated management plans on a quarterly basis.
3)
Risk Management Panel
4)
Sustainability Committee
5)
Disclosure Committee
The Disclosure Committee has been established as a companywide organization to provide fair, timely and appropriate disclosure of corporate information such as the occurrence of incidents, decisions and financial information pertaining to the EBARA Group as a whole. The Disclosure Committee collects all company information subject to the decision on whether or not to disclose the information without omission, deliberates on whether or not to disclose the information, the content and timing of the disclosure, and disclose the information after obtaining the approval of President and Representative Executive Officer.
To ensure corporate governance functions effectively, the Company’s Board of Directors itself performs analysis and evaluation of the effectiveness of the Board of Directors, identifying issues and making improvements. Overviews of the results are disclosed.
FY2021 Evaluation of the Effectiveness of the Board of Directors
Around the turn of the century, the Company re-acknowledged the importance and necessity of corporate governance systems. Since then, we have been introducing improvements to our governance systems in phases to facilitate the Company’s sustainable growth and fulfill its social responsibilities. We will continue to improve our governance systems as necessary to achieve further improvements and move them toward the ideal state in which the Board of Directors can fully exercise its functions.
Evolution of EBARA’s Corporate Governance System
The EBARA Group continuously reinforces its Group governance and risk management systems in order to support the global expansion of its business. We have established the Risk Management Guidelines*1 and the Internal Control Guidelines*2 as shared risk management guidelines for the Group and utilize them to further support Group companies in developing their risk management and internal control systems. We additionally clearly communicate to all subsidiaries the requirements of the regulations for Group administration, which indicate the essential operating rules and systems for the Group. Based on these frameworks, subsidiaries are required to perform assessments prior to exposure to serious risks with the potential to impact the entire Group and to submit reports after risks have been assumed.
*1.
Guidelines targeting improvements in risk management at overseas Group companies that were formulated by having each company conduct self-evaluations of their risk management level based on 12 areas, including the environment, anti-corruption, occupational safety, and human rights, and then establish a plan for the development of risk management systems to be implemented by the fiscal year ending December 31, 2019
*2.
Guidelines for self-inspections designed to help EBARA Group companies practice autonomy in establishing, implementing, and improving internal controls
The EBARA Group strives to act as a good corporate citizen that earns the trust of stakeholders. For this reason, the “EBARA Way” and the EBARA Group Code of Conduct are shared among all employees to form a common identity and set of values. With this as the foundation, it is our basic policy to practice legal compliance along with faithful adherence to internal rules, social norms, and common sense and to act with good intentions and integrity.
Our Risk Management Guidelines, which are based on the principle of spreading compliance awareness, guide us in creating systems for detecting risks and preventing their actualization and in establishing comfortable and open workplace environments.