GLORY’s corporate philosophy, which represents our corporate goal and raison d’etre, is: “We will contribute to the development of a more secure society through a striving spirit and cooperative efforts.” These words express our determination to achieve growth as a sustainable enterprise by contributing to a prosperous society through our uncompromising approach to product development.
This philosophy guides our efforts to continuously improve our corporate value through sound and efficient business management, so that we can exist in harmony with society and earn the trust and support of all stakeholders.
None of these goals can be achieved without a firm commitment to the continuing improvement of corporate governance. We will continue our efforts to strengthen the supervisory and executive functions of management, accelerate decision making, ensure transparency and objectivity, and enhance compliance management, thereby improving corporate value.
The Board of Directors, consisting of eight directors (including two outside directors), makes decisions on important matters and oversees business execution. The President & Representative Director serves as chairman of the Board of Directors meetings. We have sought to both energize the Board of Directors and assure quick and efficient decision making by reducing the number of directors and introducing an executive officer system.
The Board of Corporate Auditors, consisting of two corporate auditors and two outside corporate auditors, assesses directors' conduct of duties and audits the legality of execution. The corporate auditors perform regular audits based on an annual audit plan and participate in important meetings, such as those of the Board of Directors and the Management Conference, which discusses business execution policies and plans based on basic policies established by the Board of Directors.
Of the eight directors, two are outside directors. Both directors are highly independent and have been designated as independent directors as defined by the Tokyo Stock Exchange.
The current outside directors have held key positions at globally recognized companies and bring both abundant experience and global perspectives to the Board. Their veteran advice contributes to greater transparency and fairness of management.
The two outside directors also serve key roles in ensuring effective and appropriate decision making by providing alternative perspectives and opinions based on many years of management experience. They attend meetings of the Nomination Advisory Committee and the Compensation Advisory Committee, which were established to increase transparency and objectivity in the appointment of directors and executive officers and in the setting of remuneration, as well as Management Conference meetings.
We are executing "the Group Governance Strategy" in our 2017 Medium-Term Management Plan, which includes the strategy to enhance corporate governance on a group-wide basis. This strategy is part of the Corporate Management Strategy under the Plan, which aims to strengthen the foundation of the Group management.
By aggressively promoting this strategy, we will realign the Group operations, further strengthen our governance system, which encompasses overseas subsidiaries, and make compliance management an even more integral part of the Group operations.
The Board of Corporate Auditors consists of two corporate auditors and two outside corporate auditors. Each corporate auditor attends important meetings such as the Board of Directors meetings and Management Conference meetings to verify the appropriate and fair deliberation of directors, and also conducts thorough audits in collaboration with accounting auditors, the Internal Audit Department and corporate auditors of subsidiaries.
GLORY has two outside corporate auditors: One attorney-at-law and one certified public accountant. Using their professional expertise, the outside corporate auditors exercise their supervisory functions from the standpoint of securing not only the legality and appropriateness but also efficiency and objectivity of GLORY's management, thereby contributing to the promotion of sound management. The two outside corporate auditors are highly independent and have been designated as independent auditors as defined by the Tokyo Stock Exchange.
The Nomination Advisory Committee and the Compensation Advisory Committee, both chaired by outside directors, ensure higher transparency and objectivity in the appointment of directors and executive officers, and the setting of their remuneration by giving careful deliberation to committee issues prior to presentation to the Board of Directors.
To promote timely and appropriate disclosure, we have established the Disclosure Committee, which is chaired by the Chief Information Officer, the director who is responsible for Administration. This committee reviews the needs and content of disclosures before resolutions are taken by the Board of Directors.
GLORY has established a Compensation Advisory Committee to ensure the transparency and objectivity of decisions relating to remuneration for directors, corporate auditors and other executives. Before making decisions about remuneration for such executives and related matters, the Board of Directors always seeks the advice of the Compensation Advisory Committee and submits proposals to the General Meeting of Shareholders, the Board of Directors, or corporate Auditors.
Remuneration for officers consists of fixed monthly fees and performance-linked bonuses and stock compensation. However, directors and corporate auditors, whose main role is the supervision of management, receive only fixed monthly fees.
Bonuses are determined from a specific percentage of consolidated net income, which is a performance-linked indicator. Payment is based on resolutions at general meetings of shareholders. Retirement bonuses for officers have already been abolished.
The stock compensations are designed to enhance the incentives for Directors to achieve the business performance goals in our 2017 Medium-Term Management Plan. The company shares will be distributed based on the degree of the Company’s achievement of business performance goals in each fiscal year during the three years from the fiscal year ending March 31, 2016.
In addition, we have set guidelines for share ownership by officers. By encouraging officers to hold shares according to their rank, we ensure that they approach their management tasks from the same perspective as shareholders.
GLORY considers group-wide legal compliance an important management priority and the Board of Directors appoints one of its members to be the chief compliance officer, who implements variety of measures to maintain and improve the compliance framework. An example of such measures is the establishment of the Compliance Committee and compliance helplines.
The Compliance Committee, chaired by the president and including two outside experts, who are attorneys-at-law, discusses important issues relating to compliance and reports to the Board of Directors whenever appropriate. GLORY has established four compliance helplines, including an outside helpline, and strives for the early detection and correction of compliance problems in the Group and the protection of those who seek consultation.
In addition, accompanying accelerated expansion of the overseas business in recent years, we have established the GLORY Legal Code of Conduct with a global point of view that applies to domestic and overseas Group companies alike. To continue good-faith, fair business practice appropriate to the GLORY brand and maintain and ensure a high level of legal compliance and a highly developed sense of ethics, GLORY promotes awareness of compliance by distributing a handbook and scheduling compliance training seminars.
To enable shareholders to adequately review proposals addressed at the General Meeting of Shareholders, we have since June 2008 delivered materials for the meeting three weeks in advance.
In 2003, GLORY adopted electronic voting, and in 2007, we began using the electronic proxy voting system for institutional investors (the ICJ system) sponsored by the Tokyo Stock Exchange. We have since 2009 introduced colorful invitation notices which contain many photos and graphic charts. We continue to make our efforts to improve the notices to shareholders.
At the shareholders’ meeting, audio-visual presentations and narrations, etc. are used by the President to report in detail on proposals to be acted upon and matters reported for shareholders to fully consider each proposal. After the meeting, the Company's showroom is open to shareholders, at which time directors, executive officers and staff members actively promote communication with shareholders by explaining about products and the history of GLORY.
Summaries and voting results for the current and past General Meetings of Shareholders are posted on our corporate website at http://corporate.glory-global.com/ir/meeting/.