KAMIGUMI

Sustainability

Corporate governance

Basic concept of corporate governance

We strive to enhance and strengthen corporate governance under a basic policy that calls for establishing efficient management systems to realize stable long-term growth founded on swift and appropriate decision-making and business execution, with the interests of diverse stakeholders in mind at all times, including shareholders. To ensure Group member companies are managed in accordance with laws and regulations under consolidated management, we've developed an internal controls system based on the management of various risks in business operations. These are part of our good-faith efforts to fulfill our corporate social responsibility.

Basic policy on internal controls systems

In line with our management philosophy, we seek to realize sustained growth and fulfill our social responsibilities as an integrated logistics provider. We've established a basic policy on internal controls systems under which we develop and operate related systems and structures and periodically review and improve them.

State of the risk management structure

The Kamigumi Group has established Risk Management Rules to identify various risks in everyday business execution and to prevent potential problems. In accordance with these rules, the Compliance/Risk Management Committee meets regularly to ascertain risks in the Group and to draft and implement measures to address them. (The Compliance/Risk Management Committee met 12 times in FY2022.)

State of initiatives related to securing efficacy and efficiency in business execution

In FY2022, the Board of Directors consisted of 12 members (including four external Directors) and met 16 times. The four Audit & Supervisory Board members (including three external Auditors) also attended these meetings. Board meetings are generally characterized by a lively exchange of opinions on each of the motions submitted. We seek to ensure the efficacy of its decision-making and oversight.
We have also adopted an executive officer system. The Board of Executive Officers, attended by all Company executive officers, met 12 times in FY2022 to make timely decisions on business matters.

Systems to ensure the propriety and status of Group business operations

Under the Affiliate Company Management Rules, important matters related to Group management are deliberated on or reported to the Company's Board of Directors and meetings of other internal management bodies. The Company's Internal Audit Department audits major subsidiaries in accordance with audit plans to ensure the propriety of Group business operations.

Initiatives related to ensuring the efficacy of auditing by Audit & Supervisory Board members

The Company's Audit & Supervisory Board members attend meetings of the Board of Directors and other important meetings. Board members also meet regularly with the Representative Director to ensure opportunities for the exchange of opinions concerning management. Board members receive important reports and materials from related Company sections, including reports from the Internal Audit Department on the results of internal audits. They review reports and materials from Group member companies as needed and periodic reports from the accounting auditor concerning audit results. Board members check with the accounting auditor regarding audit status, as needed. These activities help ensure the efficacy of audits overseen by Audit & Supervisory Board members.

Appointing external Directors and Audit & Supervisory Board members

External Directors (three Directors)

Name Reasons for appointment
Nobuko Ishibashi Ms. Ishibashi brings wide-ranging experience and extensive knowledge as an attorney. While she does not have experience with direct involvement in corporate management except as an external director, she was appointed an external Director in the expectation that she will provide valuable advice, mainly from a compliance perspective, and will contribute to the strengthening and advancement of the Company's governance through meetings of the Board of Directors and other opportunities.
No known conflicts of interest exist between the Company and Ms. Ishibashi. Her appointment as an external Director reflects the fact that she satisfies the independence criteria of the stock exchange and criteria established by the Company for determination of independence.
Osamu Hosaka Mr. Hosaka brings considerable knowledge, primarily related to resupply and transport, gained from experience as a high-ranking officer in the Japan Ground Self-Defense Force. While he lacks experience with direct involvement in corporate management in the past, Mr. Hosaka was appointed an external Director in expectations that he will help strengthen and advance Company governance through meetings of the Board of Directors and other opportunities.
No known conflicts of interest exist between the Company and Mr. Hosaka. His appointment as an external Director reflects the fact that he satisfies the independence criteria of the stock exchange and criteria established by the Company for determination of independence.
Harumi Matsumura Ms. Matsumura brings considerable knowledge based on her experience in managing a snacks maker and a manufacturer of residential equipment. Ms. Matsumura was appointed an external Director in expectations that she will help strengthen and advance Company governance through meetings of the Board of Directors and other opportunities.
No known conflicts of interest exist between the Company and Ms. Matsumura. Her appointment as an external Director reflects the fact that she satisfies the independence criteria of the stock exchange and criteria established by the Company for determination of independence.

External Audit & Supervisory Board members (three members)

Name Reasons for appointment
Takumi Nakao Mr. Nakao was appointed an external Audit & Supervisory Board member based on the judgment that he will contribute to the strengthening and advancement of the Company's governance through various activities, including audit implementation and viewpoints expressed at meetings of the Board of Directors and other opportunities, reflecting his high degree of independence vis-a-vis the Company and experience gained from a long career as a prosecutor and expertise as an attorney.
No known conflicts of interest exist between the Company and Mr. Nakao. His appointment as an external Audit & Supervisory Board member reflects the fact that he satisfies the independence criteria of the stock exchange and criteria established by the Company for determination of independence.
Ai Kuroda Ms. Kuroda brings considerable experience and extensive knowledge as an attorney, as well as practical experience in corporate law, including experience with the Companies Act and work in overseas offices. While she lacks experience with direct involvement in corporate management, she was appointed an external Audit & Supervisory Board member in the expectation that she will contribute to overall audits of business activities as an external Audit & Supervisory Board member of the Company, which engages in business activities in global markets, and to the strengthening and advancement of the Company's governance through meetings of the Board of Directors and other opportunities.
No known conflicts of interest exist between the Company and Ms. Kuroda. Her appointment as an external Audit & Supervisory Board member reflects the fact that she satisfies the independence criteria of the stock exchange and criteria established by the Company for determination of independence.
Tomokazu Hideshima Mr. Hideshima was appointed an external Audit & Supervisory Board member based on the judgment that he will help strengthen and advance Company governance through various activities, including audit implementation and viewpoints expressed at meetings of the Board of Directors and other opportunities. While lacking experience with direct involvement in corporate management, he will draw on his various qualifications, including many years of experience with tax administration and expertise in corporate taxation gained as a certified tax accountant.
No known conflicts of interest exist between the Company and Mr. Hideshima. His appointment as an external Audit & Supervisory Board member reflects the fact that he satisfies the independence criteria of the stock exchange and criteria established by the Company for determination of independence.

Composition and meetings of the Board of Directors

To achieve swift and appropriate decision-making on important management issues and on the oversight of business execution in Company business activities, the basic policy on the composition of the Board of Directors calls for membership to include internal Directors who are highly familiar with each of its business fields, as well as multiple external Directors who are capable of offering opinions on improving management efficiency and governance from diverse stakeholder perspectives. As of July 2023, the Board included 8 Directors (including three external Directors) and four Audit & Supervisory Board members (including three external Audit & Supervisory Board members), for a total of 12 members.
During FY2022, the Board met 16 times. The following table gives the attendance of each Director in Board meetings.

Numbers of Directors and Audit & Supervisory Board members

Fiscal year Directors Audit & Supervisory Board members
Internal External Internal External
2023 5 3 1 3
2022 8 4 1 3
2021 8 2 1 3

Attendance to meetings of the Board of Directors and Audit & Supervisory Board(April 1, 2022 to March 31, 2023)

(Results for FY2022)

Name Position Number of Board of Directors meetings attended Number of Audit & Supervisory Board meetings attended
Masami Kubo Representative Director 16/16 times (100%) -
Yoshihiro Fukai Representative Director 16/16 times (100%) -
Norihito Tahara Representative Director 16/16 times (100%) -
Toshihiro Horiuchi Representative Director 16/16 times (100%) -
Katsumi Murakami Representative Director 16/16 times (100%) -
Koichi Hiramatsu Director 16/16 times (100%) -
Yukihiro Nagata Director 16/16 times (100%) -
Kazuhisa Shiino Director 16/16 times (100%) -
Nobuko Ishibashi Director (external) 14/16 times (87.5%) -
Mitsuo Suzuki Director (external) 16/16 times (100%) -
Osamu Hosaka Director (external) 13/13 times (100%) -
Harumi Matsumura Director (external) 13/13 times (100%) -
Yasuo Kobayashi Audit & Supervisory Board member 15/16 times (93.8%) 11/11 (100%)
Kuniharu Saeki Audit & Supervisory Board member - -
Takumi Nakao Audit & Supervisory Board member (external) 16/16 times (100%) 11/11 (100%)
Ai Kuroda Audit & Supervisory Board member (external) 13/16 times (81.3%) 9/11 (81.8%)
Tomokazu Hideshima Audit & Supervisory Board member (external) 13/13 times (100%) 8/8 (100%)

Note:
* Directors Osamu Hosaka and Harumi Matsumura, and Audit & Supervisory Board member Tomokazu Hideshima were appointed at the 83rd Ordinary General Meeting of Shareholders on June 29, 2022, so the number of meetings attended and total number of meetings above are based on the Board of Directors and Audit & Supervisory Board meetings held after their appointment.
* Kuniharu Saeki, the current Audit & Supervisory Board member, replaced Yasuo Kobayashi, the Audit & Supervisory Board member who resigned on March 31, 2023, and was appointed as the Audit & Supervisory Board member from the position of Substitute Audit & Supervisory Board member on April 1, 2023, so the number of attendances at Board of Directors and Audit & Supervisory Board are not stated.