Corporate Governance
- Basic Policy
- Corporate Governance Framework
- Corporate Governance Guidelines
- Outline of Main Organs
- Remuneration for Directors
- Policy for Training of Directors
- Corporate Governance Report
- Evaluation on Effectiveness of the Board of Directors
Basic Policy
Based on our “Corporate Philosophy,” which embodies our determination 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
The Company's Board of Directors is composed of ten (10) Directors, including seven (7) Directors who are not Audit & Supervisory Committee Members and three (3) Directors who are Audit & Supervisory Committee Members. Five (5) of ten Board members are independent Outside Directors. In accordance with the Rules of the Board of Directors, the Board decides on the important business policies of the Group, supervises and receives reports on important matters regarding the Group's business execution. To enable expedited decision-making, certain business execution authorities are delegated to Directors as necessary.
In FY2024, the Board of Directors met 16 times, and in accordance with the Rules of the Board of Directors, made decisions on matters stipulated by the laws and regulations and the Group's important management policies, and received reports on the status of business execution. Major agenda items in FY2024 included formulation of the 2026 Medium-Term Management Plan and its updates, discussion around business growth investment including M&As, post-investment monitoring, decisions and implementation of measures to strengthen internal controls, Board effectiveness evaluation, optimization of inventory including components and products, and geopolitical risks.
The Company's Audit & Supervisory Committee is composed of three (3) Directors who are Audit & Supervisory Committee Members, including two (2) independent Outside Directors. The Company ensures that the Audit & Supervisory Committee by having a full-time committee member and a chairperson therein. In accordance with the Company's audit policy and the assignment of duties stipulated therein, the Audit & Supervisory Committee conduct audits in liaison with the Internal Audit Department positioned directly under the committee and the Accounting Auditor based on the committee's annual corporate audit plans.
The Audit & Supervisory Committee meets once per month in principle to deliberate on the progress and results of the audits.
The Company has two (2) Outside Directors who are Audit & Supervisory Committee Members, Keiichi Kato and Yukako Ikukawa. Mr. Kato is an attorney-at-law with extensive knowledge and experience in corporate legal affairs and Ms. Ikukawa is a Certified Public Tax Accountant with considerable expertise in finance and accounting. Their knowledge and expertise contribute to the effectiveness of audits and enhance the Board’s monitoring function in enhancing legitimacy and adequacy in the Company's management.
Moreover, the Company assigns two (2) employees to assist the Audit & Supervisory Committee with the execution of its duties.
The Audit & Supervisory Committee and the Company's accounting auditor (the “Accounting Auditor”) works closely to enhance the efficiency and effectiveness of audits. To ensure appropriateness and credibility in their execution of duties, they meet regularly and as required to discuss annual and on-site audit plans formulated at the beginning of each fiscal year (including the ones for consolidated Subsidiaries), collect information, and identify the matters that require special attention. The Audit & Supervisory Committee works closely with the Company's Internal Audit Department positioned directly under the committee to enhance efficiency and effectiveness of audits. Each time the Internal Audit Department conducts audits based on the annual audit plans, Audit & Supervisory Committee Members receive copies of notification from the Internal Audit Department and confirm the schedule, subject matters, purpose, methods, and other matters stated therein. After completion of each audit, the Internal Audit Department reports to an Audit & Supervisory Committee Member responsible for the audit, with regard to matters identified and areas of improvement for deliberations. In addition, the head of the Internal Audit Department reports quarterly to the committee on important matters including their internal audit results and monthly to the President & Representative Director, and meets with the Accounting Auditor regularly and as necessary for discussion.
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 FY2024, the committee met ten (10) times to deliberate on matters including composition of the Board and election of candidates for Directors and Executive Officers, to interview with Director candidates including substitute Directors who are Audit & Supervisory Committee Members, and to deliberate on appointment process for Directors.
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 FY2024, the committee met two (2) 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 | Motozumi Miwa | ○ | |||
|
President &
Representative Director |
Akihiro Harada | ◎ | ○ | ○ | |
| Executive Vice President & Director |
Hideo Onoe | ○ | |||
| Director | Tomoko Fujita | ○ | |||
| Outside Director | Ian Jordan | ○ | |||
| Outside Director | Ikuji Ikeda | ○ | ○ | ◎ | |
| Outside Director | Koji Naito | ○ | ◎ | ○ | |
| Director (Full-time 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
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.
- ・Remuneration for Directors who are not Audit & Supervisory Committee Members 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 their responsibilities 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.
- ・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.
- ・The amount of Fixed Compensation is determined according to 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 indicator for Bonuses is consolidated operating profit before goodwill amortization out of the performance targets set in the 2026 Medium-Term Management Plan. Bonuses are paid according to the degree of achievement, specifically, by zero (if achievement rate is less than 60%) to two (if achievement rate is 140% or more) times the predetermined amount set according to responsibilities of each Director.
- ・Stock Compensation is a 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 2026 Medium-Term Management Plan. The performance indicators for Stock Compensation are consolidated net sales outside new business domain (30%), net sales in new business domain (30%), and ROIC before goodwill amortization (40%) based on the performance targets set in the 2026 Medium-Term Management Plan. According to the achievement rate of the predetermined performance target set for each of the three fiscal years concerned, the Company distributes its shares corresponding to the point calculated based on the basic points set according to the responsibilities of each Director, multiplied by the performance-linked coefficient, which ranges from zero (if achievement rate less than 60%) to two (if achievement rate is 140% or more). The distribution weighing is 20% in the first year, 30% in the second year, and 50% in the final year of the 2026 Medium-Term Management Plan period.
- ・The ratio between the base amount of cash compensation (Fixed Compensation and Bonuses) and that of Stock Compensation for the President & Representative Director is set approximately at 70% and 30% respectively. The ratios for other Directors are determined accordingly, based on the responsibilities of each director and general compensation standard.
- ・The ratio between the base amount of Fixed Compensation and that of performance-based compensation (Bonuses and Stock Compensation) for the President & Representative Director is set approximately at 40% and 60% respectively. The ratios for other Directors are determined accordingly, based on the responsibilities of each Director and general compensation standard.
As for Stock Compensation, the Company distributes its 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.
| 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） |
564 (39) |
229 (39) |
249 (-) |
84 (-) |
10 (4) |
|
Directors who are Audit & Supervisory Committee Members
（including Outside Directors）
|
43 (21) |
43 (21) |
－ | － | 3 (2) |
- 1.The remuneration for Directors who are not Audit & Supervisory Committee Members for FY2024 includes the remuneration paid to two (2) Directors (including one Outside Director) who retired at the conclusion of the 78th Ordinary General Meeting of Shareholders held on June 21, 2024.
- 2.The amounts paid to Directors who are not Audit & Supervisory Committee Members do not include employee salaries paid to Directors concurrently serving as employees.
- 3.As resolved at the 78th Ordinary General Meeting of Shareholders held on June 21, 2024 (the 78th Shareholders Meeting), the maximum total amount of cash competition for Directors who are not Audit & Supervisory Committee Members is 700 million yen per annum (including maximum of 60 million yen for Outside Directors and excluding employee salaries paid to Directors concurrently serving as employees. In addition, it has been resolved at the 78th Shareholders Meeting that, the upper limit of money to be contributed to the trust set up by the Company for the Stock Compensation plan for Directors who are not Audit & Supervisory Committee Members (excluding Outside Directors), is 950 million yen and the upper limit of the Company's shares to be distributed is 260,000 shares during the three fiscal years from April 2025 to March 2027 or for each of the fiscal years thereafter if the trust continues.
- 4.As resolved at the 74th Ordinary General Meeting of Shareholders, the maximum total amount of cash competition for Directors who are Audit & Supervisory Committee Members is 80 million yen per annum.
- 5.Performance-based Stock Compensation for FY2024 are paid to four (4) Directors who are not Audit & Supervisory Committee Members (excluding Outside Directors). Bonuses have not been paid to a Director concurrently serving as a director of subsidiaries, considering the remuneration paid by such subsidiary and their responsibilities in the Company. The amount of performance-based Stock Compensation refers to grant allowance for FY2024.
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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