About GLORY

Corporate Governance

Basic Policy

Based on our “Corporate Philosophy,” which embodies our etermination to grow as a sustainable enterprise by contributing to a prosperous society through our commitment to product development, the Company and its subsidiaries (collectively, the “Group”) aim to improve the corporate value by striving to exist in harmony with society and promoting sound and efficient corporate management that is trusted and supported by all stakeholders.
To this end, we strive to improve corporate governance thus further improve our corporate value, through enhanced supervisory and executive functions of management, expedited, transparent, and objective decision-making, and enhanced compliance management. 

Corporate Governance Framework

Glory has adopted a “Company with Audit & Supervisory Committee” as a form of corporate organization to further strengthen the supervisory function of the Board of Directors and increase the efficiency of management decision-making.
For further enhancement of the supervisory function of the Board and for swift and efficient business management, decisions regarding the execution of important operations are flexibly delegated to Directors and business execution function of management are delegated to an executive officer upon the executive officer system.
Furthermore, the Company has established committees such as the Nomination Advisory Committee and the Compensation Advisory Committee as consultative bodies for the determination of appointment and remuneration to ensure the transparency and objectivity of management decision-making while the Audit & Supervisory Committee addresses to enhance the audit and supervisory functions.

Glory’s basic policy on corporate governance is set out in the Corporate Governance Guidelines.

Corporate Governance Guidelines

 

Outline of Main Governing Bodies

Directors and Board of Directors

The Company’s Board of Directors is composed of twelve Directors, nine of which are Directors who are not Audit & Supervisory Committee Members and three Directors who are Audit & Supervisory Committee Members, including five independent Outside Directors. The Board decides on the important business policies of the Group, and supervises and receives reports on the business execution, in accordance with the Rules of the Board of Directors. To enable expedited decision-making, the authority regarding decisions on execution of important operations is delegated to the Directors as necessary.
In FY2022, the Board of Directors met 16 times and made necessary resolutions and received reports on the status of business execution. Major agenda items in FY2022 included progress of the 2023 Medium-Term Management Plan and direction of the next medium-term management plan, M&As and post-investment monitoring, internal controls, Board effectiveness evaluation, procurement difficulties and geopolitical risks, and investments on major system development.
 

Audit & Supervisory Committee

The Company’s Audit & Supervisory Committee is composed of three Directors who are Audit & Supervisory Committee Members, including two independent Outside Directors. The Company ensures that the Audit & Supervisory Committee with a full-time committee member and a chairperson therein. The chairperson who is a full-time committee member presides over its meetings. The Audit & Supervisory Committee works closely with the Company’s Internal Audit Department positioned thereunder and the accounting auditor to conduct audits based on the committee’s annual corporate audit plan in accordance with the audit policy and the assignment of duties determined thereby. 
The Audit & Supervisor Committee Members meet once per month in principle to  deliberate on the status and results of audits.
The two Outside Directors who are Audit & Supervisory Committee Members apply their extensive knowledge and experience in audits and supervisions of the Company’s management to ensure legitimacy and adequacy. 
Mr. Keiichi Kato, Outside Director, is an attorney-at-law who possesses extensive experience regarding corporate legal affairs and Ms. Yukako Ikukawa, Outside Director and Certified Public Tax Accountant, possess considerable expertise in finance and accounting. Their experience and expertise contribute to the effectiveness of audits and enhance the Board’s supervision in enhancing legitimacy and adequacy in the Company’s management. 
Moreover, the Company assigns two employees to assist in the execution of duties of the Audit & Supervisory Committee for further effective auditing.

Cooperation among Audit & Supervisory Committee, Accounting Auditors and Internal Audit Departments

The Audit & Supervisory Committee and the Company’s accounting auditors work closely to enhance the efficiency and effectiveness of audits. In addition to regular meetings held several times a year, they meet as required to ensure appropriateness and credibility in their execution of duties. This is achieved through such measures as briefing, consultation or inquiries, and confirmation on matters that require special attention, regarding the annual audit plans and site audit plans (including audits of consolidated subsidiaries) prepared at the beginning of each fiscal year.

Further, Audit & Supervisory Committee works closely with the Internal Audit Department positioned thereunder to enhance efficiency and effectiveness of the audits. Each time the Internal Audit Department conducts an audit pursuant to the annual audit plan, Audit & Supervisory Committee Members receive the copies of the audit notification from the Internal Audit Department and confirm such matters as schedule, subject, purpose, method and other matters of the relevant audit stated therein. After completion of the audit, Audit & Supervisory Committee Members receive an internal audit report concerning matters pointed out and the status of improvement, upon which they discuss and exchange opinions with the Internal Audit Department personnel.
In addition, the general manager of the Internal Audit Department reports to the committee quarterly on results of internal audits and other important matters for discussion, reports to the President & Representative Director on a monthly basis, and meet with the accounting auditor regularly and as necessary for discussion.

Nomination Advisory Committee

The Company has established a Nomination Advisory Committee to ensure transparency and objectivity concerning the nomination of directors. As required by the Board of Directors, the Nomination Advisory Committee deliberates on the nomination of candidates for Directors and Executive Officers, the selection of senior management executives, and the planning for their successors.
In FY2022, the committee met 14 times to deliberate on matters including the election of candidates for Directors and Executive Officers, succession planning for executives, and future direction of the Executive Officer System. 

Compensation Advisory Committee

The Company has established a Compensation Advisory Committee to ensure transparency and objectivity in determining remuneration for Directors and Executive Officers. As required by the Board, the Compensation Advisory Committee deliberates and reports to the Board on the fairness of the amount, structure and decision-making process in relation to remuneration consisting of fixed compensation, bonuses and stock compensation.
In FY2022, the committee met four times to deliberate on matters including the amount of Fixed Compensation for Directors and Executive Officers, target values, formulas, and the amount calculated for Bonuses, and points to be awarded under the Stock Compensation Plan.


<Members of main governing bodies> 

Title Name Board of Directors
Audit & Supervisory Committee
Nomination Advisory Committee Compensation Advisory Committee
 Chairman of the Board & Representative Director Hirokazu Onoe      
President &
Representative Director
Motozumi Miwa  
Director Hideo Onoe      
Director Kaname Kotani      
Director Akihiro Harada      
Director Tomoko Fujita      
Outside Director Joji Iki  
Outside Director Junji Uchida  
Outside Director
Ian Jordan
 
 
 
Director
(Audit & Supervisory Committee Member)
Masato Inuga    
Outside Director
(Audit & Supervisory Committee Member)
Keiichi Kato    
Outside Director
(Audit & Supervisory Committee Member)
Yukako Ikukawa    

 "◎" in the above table shows chairperson of each committee.


Remuneration for Directors

Basic Policy

Remuneration for Directors is designed in such a manner that values can be shared with the shareholders and the level is appropriate for their duties. Due consideration is given to incentives for continued improvement of corporate performance and securing of talented human resources.

Policy on remuneration structure
・Remuneration for executive Directors consists of fixed compensation (“Fixed Compensation”), short-term performance-based
    bonuses (“Bonuses”) and mid- to long-term performance-based stock compensation (“Stock Compensation”).
    Bonuses or Stock Compensation may not be paid to Directors who serve as executive directors of the Company’s subsidiaries,
    considering the remuneration paid by such subsidiaries and the levels of their duties in the Company.
・Remuneration for Outside Directors consists of monthly Fixed Compensation, considering their supervisory roles and
    independency.
・No retirement benefits are paid to any Director

 

Policy on determining the contents and calculation of amount and numbers of remuneration 
・The amounts of remuneration for Directors are based on broad consideration of factors including the Company’s performance of
    and the compensation standard of other companies.
・Fixed Compensation is determined according to the position and responsibilities of each Director.
・Bonuses are cash compensation based on short-term business performance and are aimed at improving the Group’s business
    performance for each fiscal year covered in the medium-term management plan. The target performance indicators for Bonuses
    are consolidated net sales (40%) and operating income (60%) as set out in the 2023 Medium-Term Management Plan. Bonuses
    are paid at a certain time every fiscal year of the amount determined according to the level of achievement of those targets,
    within the range of zero times (achievement rate less than 60%) to two times (achievement rate 140% or more)
    the predetermined base amount. No Bonuses will be paid if net income before goodwill amortization is less than the
    total amount of dividends (excluding extraordinary dividends) for the previous fiscal year.
・Stock Compensation is non-cash compensation based on mid- to long-term business performance and is aimed at improving the
    Group’s business performance for the three fiscal years covered in the medium-term management plan. The performance
    indicators for Stock Compensation are consolidated ROE and operating income (both before goodwill amortization) and net
    sales in new business domains as set out in the 2023 Medium-Term Management Plan.
    According to the level of achievement of the targets of those indicators for the three fiscal years, the number of shares allotted is
    determined by the number of “points” given at a certain time during the trust period and upon retirement as stipulated in the
    Share Distribution Regulations. No shares will be distributed if the level of achievement against the target for each fiscal year
     is less than 70%.

The calculation method for Bonuses for FY2023 has partially been changed as below, expecting significant changes in the Company’s performance in FY2023 compared to the previous two fiscal years (FY2021 and FY2022) of the 2023 Medium-Term Management Plan. This was resolved at the Board meeting on May 31, 2023, following the deliberations by the Compensation Advisory Committee on May 30, 2023.

(Before)
As set out in the 2023 Medium-Term Management Plan, target indicators for Bonuses are consolidated net sales (40%) and operating income (60%). Bonuses are paid at a certain time every fiscal year of the amount determined according to the degree of achievement of those targets, within the range of zero times (achievement rate less than 60%) to two times (achievement rate 140% or more) the predetermined base amount. No Bonuses will be paid if net income before goodwill amortization is less than the total amount of dividends (excluding extraordinary dividends) for the previous fiscal year.

(After)
As set out in the 2023 Medium-Term Management Plan, target indicators for Bonuses are consolidated net sales (40%) and operating income (60%). The formula is base amount multiplied by the achievement rate, with 0% used for the rate under 60% for each indicator. 
Performance-based indicators may be changed to decrease the amount of bonuses if net income attributable to the parent is impacted by significant changes in business environment. 
No Bonuses will be paid if net income before goodwill amortization is less than the total amount of dividends (excluding extraordinary dividends) for the previous fiscal year.

 

Policy on determining compensation ratio by type
・The ratio between the base amount of cash compensation (Fixed Compensation and Bonuses) and that of Stock Compensation
    is set approximately at 80% and 20% respectively.
・For the President, the ratio between the base amount of Fixed Compensation and that of performance-based compensation
    (Bonuses and Stock Compensation) is set approximately at 50% and 50% respectively. The ratios applied for Directors other
    than the President are determined by the ratio applied for the President, considering their responsibilities and general
    compensation standard.
 
Matters on determining remuneration of individual Directors
The Company believes that the following process is necessary to ensure transparency and objectivity. Total amount of monthly Fixed Compensation and Bonuses to be paid to Directors who are not Audit & Supervisory Committee Members, is deliberated upon by the Compensation Advisory Committee before being determined by a resolution of the Board of Directors within the ranges approved at a general meeting of shareholders. To enable timely decision-making, the authority is delegated to the President, who will then determine the amount to be paid to each Director upon confirmation of its fairness by the Compensation Advisory Committee. 
As for Stock Compensation, the Company grants the Company’s shares equivalent to the points calculated based on the Share Distribution Regulations as resolved by the Board of Directors, upon confirmation by the Compensation Advisory Committee.

Remuneration for Directors who are Audit & Supervisory Committee Members consists of monthly Fixed Compensation only, as they serve mainly with audits and supervision of corporate management. The amount for each Director who is an Audit & Supervisory Committee Member is determined by deliberations of the Audit & Supervisory Committee Members within the ranges approved at a general meeting of shareholders.
 
Amount of Remuneration for Directors
The remuneration for Directors for FY 2022 (fiscal year ended March 31, 2023) is as follows:
Category
Total amount of remuneration
(million yen)
Amount of remuneration by category
(million yen)
Number of eligible persons
Fixed compensation
Performance-based bonuses
Performance-based stock compensation
Directors who are not Audit & Supervisory Committee Members
(including Outside Directors)
139
(32)
134
(32)

(-)
5
(-)
10
(3)
Directors who are Audit & Supervisory Committee Members
(including Outside Directors)
37
(16)
35
(16)
3
(2)
(Notes)
1.The remuneration for Directors who are not Audit & Supervisory Committee Members for FY2022 includes the remuneration
    paid to a Director who retired at the conclusion of the 76th Ordinary General Meeting of Shareholders held on June 24, 2022.
2. The amounts paid to Directors who are not Audit & Supervisory Committee Members do not include employee salary
    portions for Directors who have concurrent responsibilities as employees.
3. Performance-based Stock Compensation for FY2022 are paid to five executive Directors (excluding Outside Directors)
    who are not Audit & Supervisory Committee Members. The amount of performance-based Stock Compensation refers to
    grant allowance for the current fiscal year.
4. No Bonuses were paid for FY2022 as the condition below has not been met.
    Condition for paying Bonuses:
    Net income before amortization of goodwill for FY2022 (Net loss of 2,834 million yen)
    is more than total amount of ordinary dividend paid in FY2021 (4,132 million yen)

Policy for Training of Directors

It is the Company’s basic policy to appropriately provide Directors with training as are necessary and on a regular basis for them to fulfill their respective roles and responsibilities. Directors acquire, update, and develop necessary knowledge through in-house training and/or seminars by Tokyo Stock Exchange and other workshops given by outside professionals such as lawyers and other subject matter experts, as necessary. Opportunities such as factory tours and on-site visits in the Company and its subsidiaries are also given for them to refine their knowledge and understanding towards the Group’s business, finance, and structures.

Corporate Governance Report

 

Evaluation on Effectiveness of the Board of Directors

The Company has conducted an annual analysis and evaluation of the effectiveness of its Board of Directors based on its Corporate Governance Guidelines since fiscal year 2015, thereby endeavors to strengthen the function of the Board of Directors as a whole.

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