Corporate Governance Policy
With the mission of “Changing Energy for a Better World – Creating the Future of Energy”, our group has been focusing on the 4Ds of Energy: Deregulation, Digitalization, Decarbonization, and Decentralization. Our main business domains are the fields that contribute to these 4Ds of the energy revolution. As an energy tech company group, we will develop businesses that take advantage of common ground and build relationships by promoting the use of energy-related data.By promoting digital transformation (DX) in the 4Ds of Energy, we will become a unique data platformer in the energy field. In order to realize this mission, the Board of Directors has decided to appoint several directors. The directors and all employees will comply with laws and regulations and the Articles of Incorporation, perform their duties and conduct corporate activities under the Group’s Charter of Corporate Behavior in order to enhance management efficiency and transparency, achieve sustainable growth, and maximize corporate value.
Governance Structure and Initiatives
The Board of Directors consists of six directors, with the majority (four) being outside directors to ensure strong governance. Each director has experience and expertise in the energy field, as well as expertise and experience in management, finance, accounting and other fields. The Board of Directors meets once a month in principle and on an ad-hoc basis as necessary to make decisions regarding basic management policies and important business operations, as well as to supervise and report on the execution of business by the Directors. In addition, three corporate auditors attend the Board of Directors meetings to audit the execution of duties by the directors. The Nomination and Compensation Committee, which is an advisory body to the Board of Directors, deliberates on the remuneration of Directors within the upper limit resolved at the General Meeting of Shareholders, taking into consideration the results of the previous year and the expected contribution to business performance in the current year. For full-time, internal directors, the amount of remuneration is determined based on the current remuneration and the evaluation and performance of the past year. For outside directors, the amount of remuneration is determined based on a comprehensive consideration of factors such as performance and expectations.
The Company has adopted a Board of Corporate Auditors system. The Board of Corporate Auditors consists of one full-time and two part-time Corporate Auditors, all of whom are outside Corporate Auditors. The Board of Corporate Auditors is composed of one full-time and two part-time corporate auditors, all of whom are outside corporate auditors. The Company has established a system that enables auditing from multiple perspectives by having personnel with expertise and experience in accounting, legal affairs, human resources, etc. The Board of Corporate Auditors meets once a month in principle and as needed. Full-time Corporate Auditors monitor the execution of duties by the Directors by attending important internal meetings such as the Executive Committee, inspecting important documents, and conducting other auditing procedures. In addition, we strive to improve our auditing functions by exchanging opinions with representative directors, outside directors, accounting auditors, and internal audit staff in order to gather information.
The Executive Committee, attended by directors (excluding outside directors), executive officers, general managers of each division, and full-time corporate auditors, meets once a week to confirm the progress of business, share issues, and make practical decisions in a flexible manner.
The Compliance and Risk Management Committee, consisting of Directors, Corporate Auditors, and the General Manager of the Internal Audit Department, has been established to recognize and appropriately respond to risks surrounding the Group, and meets once a quarter in principle. The Compliance and Risk Management Committee will share information necessary for risk management of the Company and its subsidiaries, promote compliance-related initiatives, take prompt action in the event of a compliance violation, investigate the facts, and plan measures to prevent recurrence.
The Company has established the Nomination and Compensation Committee as a voluntary advisory body to the Board of Directors for the purpose of strengthening the independence, objectivity and accountability of the Board of Directors’ functions and further enhancing the Group’s corporate governance system by ensuring the transparency and objectivity of the evaluation and decision-making processes related to the nomination and compensation of the Board of Directors. The committee reports to the Board of Directors on matters such as the composition of the Board of Directors, individual nominations of Directors, and drafts concerning the composition, level, and maximum total amount of compensation for Directors. For the fiscal year ended December 31, 2021, the committee consisted of Representative Director Mr. Kiguchi, Independent Outside Directors Mr. Takeda and Mr. Mori, and the committee was chaired by Mr. Takeda.
The Company has entered into an audit contract with KPMG AZSA LLC, and timely and appropriate audits are being conducted. There is no special interest between the Company and KPMG AZSA LLC or its managing partners engaged in the audit of the Company.
The Internal Audit Office was established as a department directly under the control of the Representative Director for the purpose of ensuring the efficiency, legality and soundness of the management of the entire Group. However, since the Company is a small organization, we do not have a full-time person in charge. In addition, to avoid self-auditing, several people concurrently serve as internal auditors and conduct audits based on the audit plan. The Internal Audit Office conducts internal audits of all departments and subsidiaries of the Company’s group, and reports the results of each audit to the CEO, COO, and the department that conducted the audit, and also reports the status of audit implementation to the Corporate Auditors.
Skill Matrix of Directors
We have established governance by outside directors with management experience at listed companies in the energy industry. Each director is selected based on their expertise in their respective fields, including experience in the energy industry, engineering, and finance-related fields.
The Company has established a policy regarding the determination of the amount of remuneration, etc., of officers and the method of calculating such amount, which consists of basic remuneration and bonuses. Based on this policy, the Company sets the upper limit of the total amount of remuneration for officers by a resolution of the General Meeting of Shareholders, and within this limit, the Nomination and Compensation Committee, an advisory body to the Board of Directors, deliberates and determines the amount to be paid based on the report of the Nomination and Compensation Committee. Basic remuneration is determined as compensation for the execution of duties by the Directors in accordance with their position and contribution to the Company’s business, taking into consideration such factors as industry standards and the Company’s business performance. Bonuses are determined in consideration of the Company’s business performance and the contribution of each director to the Company’s business performance.
The Company has not adopted a performance-linked compensation system for its officers.
On the other hand, the Company has introduced an incentive plan utilizing the Market Issuance Stock Acquisition Rights Trust®, which was established by Yohei Kiguchi, CEO and Representative Director of the Company, as a trustee as mentioned above, for the purpose of creating and preventing damage to the Company’s shareholder value and providing incentives to maintain the Company’s credibility by sharing value with shareholders. As mentioned above, the Company has introduced an incentive plan utilizing the Market Issuance Stock Acquisition Rights Trust®, which was established by Yohei Kiguchi, CEO and Representative Director of the Company, as the trustee. In addition, stock acquisition rights that will become exercisable in stages over a period of 10 years starting in 2018 have been granted to Yohei Kiguchi, Representative Director and CEO of the Company, who is the trustee, for the purpose of securing his commitment and incentives for long-term shareholder value creation. As a result of these measures, the Company has determined that the establishment of new non-monetary remuneration, etc. (including stock-based compensation and stock options) is unnecessary for the time being.
Details of Remuneration for Auditing Certified Public Accountants, etc. in Fiscal 2020
Risk Management and Compliance
In accordance with our compliance policy, we will always strive to improve trust in our company through fair, transparent, and free competition.
We will not engage in any form of corruption, whether directly or indirectly, including but not limited to bribery, kickbacks, inappropriate entertainment gifts, illegal political contributions, donations, and sponsorships.