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Corporate 
Governance

Basic Policy on Corporate Governance

The Company endeavors to steadily increase shareholder value on a long-term basis, based on the recognition that it is essential for corporate governance to function effectively in order to pursue sustainable enhancement of corporate value in the IT industry, where the operating environment is subject to constant change.
In addition to respecting all stakeholders and raising corporate soundness and transparency, with an aim to achieve a steady increase in shareholder value on a long-term basis, the Company strives to develop an internal structure which allows for prompt and rational decision-making as well as streamlined business execution, and to thereby solidify its corporate governance.

Corporate Governance Report (English)PDF(799KB)

Transition of Corporate Governance Enhancement

The Company considers the development and strengthening of its corporate governance system to be one of its highest management priorities, and is implementing ongoing initiatives to this end.

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Overview of Corporate Governance Structure

The Company, which offers a platform service as its core business, has adopted an Audit & Supervisory Board system. This is to ensure managerial efficiency and soundness, it is effective to have in place a structure where the Board of Directors, consisting of directors who are familiar with the Company’s business, decides on basic management policies and important business execution, while Audit & Supervisory Board members, with strong legal authority, audit the directors’ execution of duties from an independent position.
The Company has strengthened the supervisory function of its Board of Directors by appointing independent external directors as the majority for the board. It has also set up the Nomination and Compensation Committee, in which external directors comprise the majority, and the Council of External Officers, which consists solely of external officers (external directors and external Audit & Supervisory Board members).
The Company aims to maintain a compliance structure for deploying business management grounded in sound ethical standards, secure corporate soundness and transparency, and firmly increase long-term shareholder value. To achieve this end,the Company is building an internal structure that drives prompt and rational decision-making as well as efficient business execution. In this vein, it has set up three committees under the Board of Directors (focused on investment, sustainability, and compliance and risk management, all chaired by the Representative Director, President and CEO) as well as an Executive Officer and CxO System.
For details of the Company’s top management (Directors and Group Executive Officers), please click here.

Organizational FormCompany with Audit & Supervisory Board
Chairperson of
the Board of Directors
Yosuke Tsuji
DirectorsMembers9 (among whom 1 is female)
% of External Members55.5%(5 persons. All of them have experience of managing other companies.)
Board of Directors
Meetings(FY11/22)
No. of Meetings14
Attendance Rate100%
Audit & Supervisory
Board Members
Members4(All are independent external Audit & Supervisory Board members with knowledge and experience in finance and accounting, with 1 also having knowledge and experience in legal affairs)
% of External Members100%(4 persons all of them.)
Audit & Supervisory
Board Meetings
(FY11/22)
No. of Meetings14
Attendance Rate100%
CommitteeNomination and Compensation Committee、Investment Committee、Sustainability Committee、Compliance and Risk Management Committee
Group Executive Officers14
CxOCEO、CFO、CTO、CISO、CDO(Chief Design Officer)、CIO、CoPA(Chief of Public Affairs)、CLO(Chief Legal Officer)、CCO(Chief Compliance Officer)、CQO(Chief Quality Officer)
Accounting AuditorsDeloitte Touche Tohmatsu LLC

Board of Directors

The Company currently has nine directors. Independent external directors are to comprise a majority of the Board of Directors, and accordingly, five among the nine are independent external directors.
In addition to the requirements of independent officers set forth in the Companies Act and by the Financial Instruments and Exchange, the Company has stipulated independence criteria for appointing independent external directors. The Company appoints external directors in accordance with these standards, with all five external directors being registered as independent directors. The term of office for Directors is one year, with an aim to clarify Directors’ managerial responsibilities and develop a management structure that can respond promptly to changes in the business environment.

Policy on the Composition of the Board of Directors

The Company has established the following policy on the composition of the Board of Directors by a resolution of the Board of Directors after deliberation by the voluntary Nomination and Compensation Committee.

  • ・The number of members of the Board of Directors shall be determined in accordance with the Company’s Articles of Incorporation and shall be considered appropriate for the purpose of stimulating deliberations and ensuring accurate and prompt decision-making.
  • ・The number of Independent External Directors shall be large enough such that Independent External Directors comprise the majority of the Board of Directors.
  • ・To ensure the independence of external directors, the total term of office of independent external directors shall be six terms (six years), and reappointment shall not be prevented for up to eight terms (eight years). In cases where a director is aged 72 by the end of an Annual General Meeting of Shareholders, the director shall resign as of the end of that meeting.
  • ・In order to effectively fulfill the roles and responsibilities of the Board of Directors, the Board of Directors shall be composed of individuals with knowledge, experience, and abilities in “corporate management,” “global business,” “business and industry understanding (SaaS and Fintech),” “investment and M&A,” “finance and accounting,” “human resources development,” “legal compliance and risk management,” “technology,” “sustainability and ESG,” and shall also be composed of diverse Officers with regard to gender, internationality, age, and other factors.
  • ・Independent External Directors shall include those with management experience at other companies.
Analysis and Evaluation of the Effectiveness of the Board

The Company conducted a survey of all Directors and Audit & Supervisory Board Member asking them 24 questions on the following topics, and all Directors and Audit & Supervisory Board Member responded to the survey.
(i) Operation and information provision of the Board; (ii) composition and operation of the Board; (iii) supervision and confirmation of strategies by the Board; (iv) risk management; (v) monitoring of corporate ethics and performance; (vi) evaluation and compensation of top management; and (vii) dialogues with institutional investors.

  • ・As in the previous fiscal year, the average score of all evaluation items was high, indicating that the respondents considered that the Board generally ensured its effectiveness. The discrepancies between the evaluations of Directors and Audit & Supervisory Board Member and between Internal and External Officers were generally small, with no significant bias.
  • ・The item that received a particularly high score was “establishment of a system for dialogue with shareholders (the Board of Directors has confirmed that a system for promoting constructive dialogue with shareholders is established and that opinions captured through the dialogue have been appropriately and effectively communicated and shared.).” Respondents appreciated the Company’s engagement in continuous financial results reporting, English language briefing (Investor Day), shareholder relations activities fully launched during the current fiscal year, and the minimum of quarterly IR reporting to the Board of Directors.
  • ・Of the items that received relatively low scores in the previous fiscal year and were included in “future actions” for improvement, training for Officers received relatively low scores again, albeit with improvement from the previous year. Moreover, the scores for the items on appropriate provision of non-financial information improved significantly to join the top five items, owing to initiatives such as disclosures with the Integrated Report and ESG Data and constant information disclosure on our website.
  • ・Issues identified included risk-management-related items such as “establishment of an environment for risk-taking,” “establishment of the risk assessment process,” and “strengthening of internal control with the establishment of risk management framework”; deeper discussion on topics such as sustainability, DX, and HR strategy; further input and discussion on industry, peer, and customer conditions; in addition to the “training of Officers” which received relatively low scores again following the previous fiscal year.
Current Operations of the Board of Directors

The Company’s Board of Directors is chaired by Yosuke Tsuji, Representative Director, President and CEO. In addition to monthly meetings (normally two hours; four hours twice a year), extraordinary meetings are held as necessary to make critical managerial decisions and supervise the execution of duties by each director.
The Company has stipulated the regulations of the Board of Directors, under which the Board of Directors deliberates and resolves 1) matters stipulated in laws and ordinances and the Articles of Incorporation, 2) important matters regarding management in general, including management policies and plans, 3) basic matters regarding the Company’s management, including key organizational and personnel agenda, and 4) important matters regarding business execution, including highly significant investments and loans to Group companies. As to critical managerial issues, and matters requiring a medium- to long-term outlook, the Board of Directors holds discussions on the assumption that a resolution need not be reached during the meeting in which the agenda was raised.
Key matters deliberated or discussed, and Key contents reported for the Fiscal Year Ended November 2022 are as follows.

Key Matters Deliberated
or Discussed
FY11/23 Budget, Group join of Nexsol CO., LTD., Additional investment in Mekari, Financing (initiatives with Funds, Inc. and bank loans), Sustainability initiatives, Examination of the appropriateness of strategic shareholdings, Overseas expansion, Initiatives to visualize and improve productivity
Key Contents ReportedHR-related reports (including diversity and integration activity reports), Investor/shareholder relations activities, Compliance report, Information security activity report, Performance evaluation report of Group

Audit & Supervisory Board

All four Audit & Supervisory Board members are independent external members, including one lawyer. In addition to the requirements of independent officers set forth in the Companies Act and by the Financial Instruments and Exchange, the Company has stipulated independence criteria for appointing external Audit and Supervisory Board members. The Company appoints external members in accordance with these standards, with all four external members being registered as independent officers.
The Audit & Supervisory Board is chaired by a full-time Audit & Supervisory Board member, and holds monthly meetings as well as extraordinary meetings on an as-needed basis (approximately one hour).

Main Topics Shared and Discussed for the Fiscal Year Ended November 2022

Basic policy, priority audit policy, division of roles of each Corporate Auditor, appropriateness of audits by Accounting Auditors, audit results related to internal control systems, and status of operation of internal controls of the corporate group

Skill Matrix

Set forth below is a skill matrix for Director and Audit & Supervisory Board members.

This table does not represent all the skills possessed by the Directors and Audit & Supervisory Board members. For each officer, it maps four fields in which the Company expects each of them to contribute to discussion at the Board of Directors meetings, inlight of each of their specific knowledge, experience, etc.

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SkillDefinitionReason for
selection
Corporate
management
Experience as a Representative Director or as a Director of a listed company.Management experience is required for sustained growth and development during changes in the business environment.
Global
business
An overseas posting or knowledge, experience and skill in supporting and managing an overseas business.The Company has established overseas offices and invests in overseas companies, thus this skill is required to formulate the future growth strategy and execute appropriate management supervision.
Understanding
of
business
and industry
(SaaS Fintech)
Knowledge and experience of the SaaS and Fintech industries.The Company manages businesses in the SaaS and Fintech field, so this skill is required to formulate a sustained growth strategy and understand the business environment.
Investment/
M&A
Knowledge, experience and skills in investment and M&A.The Company has enjoyed non-organic growth due to Knowledge, experience and skills in M&A and investment activities. This skill is required for investment and M&A. sound investment activities without a drop in the pace of future growth.
Finance/
Accounting
Knowledge, experience and skills in finance and accounting.Together with undertaking accurate financial reporting, the Company needs to continuously undertake investment Knowledge, experience and skills in activities (not limited to investment in M&A and business finance and accounting. companies, but including investment in existing businesses) to build a solid financial base and for future sustained growth, thus how and when to procure funds for such purpose are important.
TechnologyKnowledge, experience, and skills in technology.The speed of innovation and change in customer needs in Knowledge, experience, and skills in internet-related markets is rapid, thus the Company continuously needs to understand and respond to the latest technological trends and changes in the environment.
Human
resources
development
Knowledge, experience, and skills in human resources development.To realize its Mission and Vision, the Company has focused on the development of its business and organization, together with the growth of its members. The Company believes that talent development is critical.
Legal affairs/
Compliance/
Risk
management
Knowledge, experience and skills in legal affairs, compliance, and risk management.In order to pursue sustainable enhancement of corporate value in the IT industry, where the operating environment is subject to constant change, the Company needs to implement a compliance structure based on sound ethics. The Company also requires appropriate risk management for sound growth.
Sustainability/
ESG
Knowledge, experience, and skills on non-financial matters that support corporate sustainability such as the environment, social and governance issues.The Company aims to realize a society that is sustainable for individuals and businesses and to steadily increase corporate value by facing the universal and expansive inancial issues and eliminating financial issues and concerns from the world.

Nomination and Compensation Committee

The Company has established the Nomination and Compensation Committee as a voluntary body in order to strengthen the independence, objectivity, and accountability of the Board of Directors’ functions and to further enhance the Group’s corporate governance system by ensuring the transparency and objectivity of the nomination of Directors and the evaluation and decision-making processes related to compensation, etc. for Directors and Group Executive Officers.
The Nomination and Compensation Committee makes reports in response to an inquiry regarding the composition of the Board of Directors, the appointment and dismissal of Directors, the appointment and dismissal of the Representative Director, the composition and level of compensation for Directors, and a draft concerning limits on the total amount of compensation for Directors and Audit & Supervisory Board Member, etc. The Nomination and Compensation Committee also determines the compensation of individual Directors, as delegated by the Board of Directors.
The Nomination and Compensation Committee consists of at least three Directors appointed by a resolution of the Board of Directors, and External Directors shall comprise the majority of the Nomination and Compensation Committee.

Members

The committee for the Fiscal Year ended November 2022 is comprised of the following three members who were selected by resolution of the Board of Directors.
Chair  : Yosuke Tsuji, Representative Director and President
Members : Masaaki Tanaka (Independent External Director), Etsuko Okajima (Independent External Director), Ryoko Ueda (Independent External Director)

Main Topics of Discussion for the Fiscal Year Ended November 2022

Policy on the composition of the Board of Directors, policy on appointment and dismissal of Directors, nomination of candidates for Directors, policy on the determination of compensation, etc. for Directors (composition and level of compensation for Directors), amount of compensation, etc. for individual Directors, and limit on the total amount of compensation for Directors and Audit & Supervisory Board Member

Council of External Officers

The Company has established the Council of External Officers consisting of all External Directors and External Corporate Auditors in order to improve the monitoring of executive departments and to contribute to the Company’s sustainable growth and medium- to long-term corporate value enhancement by having External Officers (External Directors and External Corporate Auditors), who play a role in corporate governance, work together and exchange opinions on a regular basis. The meeting of the Council of External Officers is held once every three months as a principle to discuss and exchange opinions on matters including significant managerial issues, corporate governance, and risks regarding management and business performance and action plans for such risks. The content of discussions at the council meeting is shared by its chair Masaaki Tanaka with the Company’s Representative Director, President, and CEO, Yosuke Tsuji, and recommendations are made to the executive departments, as necessary.

Main Topics of Discussion for the Fiscal Year Ended November 2022

Improved operation method of Board of Directors meetings, Review of contents deliberated and reported at Board of Directors meetings, strengthened the internal audit department and its functions, bolstered SR activities, revised and upgraded the incident response structure pertaining to IT systems

Officer Compensation

Director Compensation

The annual upper limit of directors’ compensation has been set to 500 million yen byresolution of the General Meeting of Shareholders (among which the total amount ofmonetary compensation receivables for granting restricted stocks to eligible directorsis set to 200 million yen or less per year).Compensation of internal directors consists of 1) a base compensation as a fixedmonetary compensation according to one’s responsibilities, with the aim ofencouraging the execution of respective duties, 2) a short-term variable compensationas an incentive to firmly achieve corporate performance targets for each fiscal year,and 3) a stock compensation as an incentive to raise corporate value over the mediumto long run.Meanwhile, compensation of external director consists of 1) a base compensationas a fixed monetary compensation according to one’s responsibilities, with the aim ofencouraging the sufficient execution of managerial supervision functions, and 2) astock compensation as a medium- to long-term incentive for boosting corporate value,to which external directors must also commit.The amount of short-term variable compensation fluctuates according to the degreeto which each director achieves their goals every year, including on performance anddeveloping organizations. As for stock compensation, we have adopted a restrictedstock compensation system. This is positioned as a medium- to long-term incentive toincrease corporate value by sharing value with shareholders and raising awareness ofstock prices among directors.

 
500 million
yen or less
  
200 million
yen or less
categoryBase
Compensation
(Fixed Monetary
Compensation)
Short-Term
Variable
Compensation
Stock
Compentasion
(Non-Monetary
Compensation)
Internal
Directors
External
Directors
 
Decision-Making Process on Compensation

Individual directors’ compensation is deliberated by the Nomination and Compensation Committee, set up on a voluntary basis, within the upper limit resolved at the General Meeting of Shareholders. Based on the committee’s proposal, the Board of Directors makes the final decision. The Company thereby ensures the transparency and objectivity of evaluations and decision-making process pertaining to compensation. Based on the Policy for Determining the Specifics of Individual Director’s Compensation, the Board of Directors considers and makes decisions based on the Director Compensation Table according to one’s position, and taking into account the role expected of each director. Directors’ compensation is set to a level that appropriately compensates for sufficiently executing the Company’s managerial decision-making and supervisory functions, taking into account social and market conditions, as well as comparison with other companies. With regard to short-term variable compensation, the Nomination and Compensation Committee deliberates and decides on the specifics after each director performs a self-evaluation on the achievement of one’s goals. As for the compensation of the representative director, deliberations and decisions are made by members of the Nomination and Compensation Committee excluding the representative director, while taking into account the opinions of external directors as needed. Because the majority of both the Board of Directors and the Nomination and Compensation Committee is composed of independent external directors, no resolutions are made only by internal directors.

Audit & Supervisory Board Member Compensation

Compensation of Audit & Supervisory Board members has been set to no more than 50million yen per year by resolution of the General Meeting of Shareholders. It is composed solely of a base compensation in the form of a fixed monetary compensation in accordance with one’s responsibilities, so that members will sufficiently fulfill auditing and managerial supervision functions and execute their duties. Compensation of individual Audit & Supervisory Board member shall be determined upon discussion by the Audit & Supervisory Board within the upper limit resolved at the General Meeting of Shareholders.

Total Amount of Compensation, etc. for the Fiscal Year Ended November 2022

Total amount of Director Compensation and Audit &Supervisory Board Member Compensation for the Fiscal Year Ended November 2022 is as follow. The figure for short-term variable compensation is the amount booked as a provision before taking into account performance evaluation for FY11/22.
The table blow includes values associated to one director who resigned as of the end of the tenth Annual General Meeting of Shareholders held on February 21, 2022.

TitleTotal
Compensation,
etc. (¥mn)
Breakdown by Compensation Type (¥mn)No. of
Eligible
Officers
BaseShort-Term
Variable
Non-
Monetary, etc.
Directors
(External Members)
222
(58)
126
(45)
38
(-)
57
(12)
11
(7)
Audit & Supervisory
Board Members
(External Members)
32
(32)
32
(32)
3
(3)
Total
(External Members)
255
(91)
159
(78)
38
(-)
57
(12)
14
(10)

Executive Officer System and Chief Officer System

The Company has adopted an Executive Officer System since October 2014.
The Company aims to expedite the decision-making process and clarify the responsibilities and authorities of business execution by separating the business execution functions from the management decision-making and business supervision functions of Directors. Group Executive Officers are appointed by the Board of Directors and are responsible for business execution including decision-making pertaining to their duties as determined by resolution of the Board of Directors, and promptly execute business based on the management decision-making by implementing the matters determined by the Board of Directors.
The Company adopts a Chief Officer System to further clarify the separation of supervision and execution functions to enable agile business execution.

Internal Audit Office

The Company has established a dedicated Internal Audit Office, and five employees belonging to the office are responsible for conducting an internal audits.
The Internal Audit Office prepares internal audit plans based on the Internal Audit Rules established by the Company, and subject approval by the Representative Director, President and CEO, audits all Divisions and Offices of the Company and all Group Companies. The result of the audit is reported to the Representative Director, President and CEO, and the Board of Audit & Supervisory Board Member.
The Internal Audit Office conducts internal audit under the basic policy of investigating the status of the Company’s business operation and property management; confirming compliance with the management policy, laws and regulations, Articles of Incorporation, and various rules; and aims to secure preservation of company property and appropriateness of business operation, to contribute to streamlining management and improving efficiency.
While the Internal Audit Office conducts audit independently from the Audit & Supervisory Board Member and Accounting Auditors, it exchanges information as necessary through the three-party audit meetings and reports on individual audit results, etc., to share information necessary for audits and to improve efficiency through mutual cooperation.

Accounting Auditors

The Company has concluded an auditing agreement with Deloitte Touche Tohmatsu LLC, and audits are performed in a timely and appropriate manner.

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