Governance

Basic Viewpoint Concerning Corporate Governance

We are recognizes that enhancing corporate governance is one of the most important management issues as a foundation for the KANADEN group to realize sustainable growth, increase corporate value over the medium to long term, and fulfill its responsibilities to its diverse stakeholders. Based on this basic approach, we are working to enhance our corporate governance system.

Corporate Governance System

  • The Board of Directors

    Chairperson Futoshi Moriya

    Number of meetings held during FY2024: 13
    Attendance rate during FY2024: 100%

    Ratio of Outside Officers 43%

    The Board of Directors consists of seven Directors, including three Outside Directors, in order to ensure swift and appropriate managerial decision- making. It holds ordinary board meetings each month and extraordinary board meetings as needed. In addition, we are increasing the opportunities to be able to grasp information related to topics through having Outside Directors participate in the meetings of the Board of Executive Officers and holding forums for facilitating information exchange.

  • The Audit & Supervisory Board

    Chairperson Kazuhiro Tsukada

    Number of meetings held during FY2024: 6
    Attendance rate during FY2024: 100%

    Ratio of Outside Officers 66%

    The Audit & Supervisory Board comprises three Audit & Supervisory Board Members, including two Outside Audit & Supervisory Board Members. In accordance with the audit policy, etc. it has formulated, Audit & Supervisory Board Members attend meetings of the Board of Directors, Management Meetings, the Board of Executive Officers, and other key meetings, and carry out audits such as by learning from Directors and other personnel about the status of execution of their duties and inspecting documents whereby important decisions were made, etc. In addition, it collaborates with the Internal Auditing Division as necessary to gather appropriate information before conducting audits.

  • The Nomination and Compensation Advisory Committee

    Chair Yoshiro Nagashima (Outside)

    Number of meetings held during FY2024: 3
    Attendance rate during FY2024: 100%

    Ratio of Outside Officers 75%

    指名・報酬諮問委員会は、社外取締役を委員長とし、社外取締役3名、社内取締役1名からなる4名で構成しています。取締役および執行役員の選任・解任（解職）、サクセッションプランの策定ならびに取締役の報酬について、取締役会または代表取締役からの諮問を受け、審議・答申を行っています。

  • Executive Officers

    The Company has adopted the Executive Officers' system to achieve agility in business execution.
    This system is prescribed in the Company's Articles of Incorporation, following the approval of shareholders. At present, 6 Executive Officers serve as the heads of operating divisions. They execute business efficiently and without delays with a view to accomplishing the medium-term management plan.

  • The Audit & Supervisory Board

    The Audit & Supervisory Board comprises 4 Audit & Supervisory Board Members, including 3 outside Audit & Supervisory Board Members. In accordance with the audit policy it has formulated, Audit & Supervisory Board Members attend meetings of the Board of Directors, the Board of Executive Officers and other key meetings and learn from Directors and other personnel about the status of execution of their duties. They also carry out audits including the inspection of significant decision-making documents and the investigation of operations and assets at the Head Office and principal offices. If necessary, the board also audits related companies, for example, by asking them for reports on their operations.

  • Internal audits

    The Company has set up an Internal Auditing Division. With five staff members including its chief, it works independently of the execution of business to check if business operations and activities in individual segments comply with laws and ordinances, with the Articles of Incorporation and internal regulations, and with the Company's management policy and business plan and offers specific advice and recommendations in an effort to maintain the soundness of the Company. Internal audits are conducted in accordance with the annual plan. Their results are reported to representative Directors and Audit & Supervisory Board Members. Management thus understands the status of implementation and results, and Executive Officers, who are subject to auditing, carry out follow-ups.

Activities of the Board of Directors

In FY2024, the Board of Directors held a total of 13 meetings (including one extraordinary meeting). Each Board meeting lasted approximately 1 hour and 35 minutes. A wide range of issues were discussed, including the Succession Plan and other general governance issues, M&A, overseas strategies, and materiality, with an increasing number of issues being discussed from the consideration stage to the reporting agenda, resulting in effective discussions.

Main Agenda for the Board of Directors Meeting in FY2024

Management Policy and Business Strategy Discussions were held on the annual financial plan, materiality identification, overseas expansion, etc. Not only financial but also non-financial risks and opportunities in the market environment are identified and reflected in the linkage with each business strategy. Overseas, we discussed initiatives for the ASEAN region as a whole, with a focus on the India base to be opened in April 2025.
(Group) Governance Along with the establishment of the Succession Plan Committee, we had a lively discussion regarding the development of next-generation leaders. We also discussed how to strengthen the governance of the group as a whole, including domestic and overseas affiliates that have implemented M&A in 2023.
Strengthening Human Capital With the start of the new personnel system, we discussed monitoring the penetration of each system and strengthening development and training. The number of training programs for executives has actually increased, and the effectiveness of these programs and other issues were discussed.
Strategic Investments (M&A) We discussed the business transfer of affiliated companies implemented in September 2024 and M&A implemented in December 2024, among other communications. We will continue discussions on building synergies with grouped companies and monitoring investment results.
KANADEN DX Discussions were held on the effectiveness of the core system, which was renewed in November 2024, and the progress of inside sales. Discussions will also continue regarding further use of digital marketing, including Ai, and internal penetration measures.

Changes in Corporate Governance

Directors/Audit & Supervisory Board Members

Directors

  • Futoshi MoriyaPresident (Representative Director)

    • Apr. 1986
      Joined the Company
    • June 2016
      Executive Officer and Senior General Manager, Factory Automation Division, the Company
    • Apr. 2020
      Executive Officer and Senior General Manager, Kansai District Office, the Company
    • June 2020
      Director, Executive Officer, and Senior General Manager, Kansai District Office, the Company
    • June 2021
      Managing Director, Executive Officer, and Senior General Manager, Kansai District Office, and in charge of Branch office, the Company
    • Apr. 2022
      Managing Director and Senior General Manager, Kansai District Office, and in charge of Branch office, the Company
    • June 2023
      Senior Managing Director and Senior General Manager, Kansai District Office, and in charge of Sales Unit, and Solution Engineering Division, the Company
    • Apr. 2024
      Senior Managing Director and Senior General Manager, Business Management Office, and in charge of Sales Unit, Solution Engineering Division, and ICT Promotion Division, the Company
    • June 2025
      President and Representative Director, the Company (current position)

  • Harumi NakatakeManagement Director (Senior General Manager of Business Management Office)

    • Apr. 1984
      joined Mitsubishi Electric Corporation
    • Apr. 2018
      Senior General Manager, Chubu Branch, Mitsubishi Electric Corporation
    • Apr. 2023
      Joined the Company
      Senior Executive Officer and Senior General Manager, System Integration Division, the Company
    • Apr. 2024
      Senior Executive Officer and Senior General Manager, Building Facilities Division, the Company
    • June 2024
      Director and Senior General Manager, Building Facilities Division, the Company
    • June 2025
      Management Director, Senior General Manager of Business Management Office, the Company (current position)

  • Yoshiro NagashimaDirector (Outside, Independent)

    • Apr. 1975
      Joined The Mitsubishi Bank, Ltd. (currently MUFG Bank, Ltd.)
    • May 2002
      Regional Director, Toranomon Branch Office, MUFG Bank, Ltd.
    • June 2004
      Representative Director and President, Tokyo Diamond Collection Service Co., Ltd. (currently MU Frontier Servicer Co., Ltd.)
    • Oct. 2005
      Representative Director and Deputy President, MU Frontier Servicer Co., Ltd.
    • June 2009
      Standing Auditor, NIPPON CARBIDE INDUSTRIES CO., INC.
    • June 2016
      Outside Director, the Company (current position)
    • June 2018
      Outside Director, ZENKOKU HOSHO Co., Ltd. (current position)

  • Yayoi ItoDirector (Outside, Independent)

    • Apr. 1986
      Joined NIPPON TELEGRAPH AND TELEPHONE CORPORATION
    • July 1988
      Joined NTT DATA Communications Systems Corporation (currently NTT DATA Corporation)
    • Apr. 2008
      General Manager, Business Planning Promotion Office, Headquarter of Public System Business, NTT DATA Corporation
    • Apr. 2016
      Joined Microsoft Japan Co., Ltd.
      Senior General Manager, Headquarter of Enterprise Partner Sales Division
    • Feb. 2017
      Joined YAMATO HOLDINGS CO., LTD.
      General Manager, Digital Innovation Promotion Office
    • Apr. 2018
      General Manager, Information Technology Strategy Department, YAMATO HOLDINGS CO., LTD.
    • May 2019
      Joined UNIZO Holdings Company, Limited Managing Executive Officer
    • Nov. 2020
      Joined SG SYSTEMS CO., LTD.
    • Apr. 2021
      Executive Officer, in charge of Corporate Planning, SG SYSTEMS CO., LTD.
    • June 2021
      Outside Director, SUMIKEN MITSUI ROAD CO.,LTD.
    • June 2021
      Outside Director, the Company (current position)
    • June 2023
      Outside Director, Japan Post Holdings Co., Ltd. (current position)
    • June 2023
      Outside Director, Nishimatsu Construction Co., Ltd. (current position)

  • Tomoe ImadoDirector (Outside, Independent)

    • Oct. 2003
      Registered as an attorney with Daini Tokyo Bar Association
      Joined Mori Hamada & Matsumoto
    • Apr. 2008
      Deputy Director, Economic Treaties Division, International Legal Affairs Bureau, Ministry of Foreign Affairs
    • July 2010
      Joined OKUNO & PARTNERS
    • May 2018
      Joined IR Japan, Inc. (current position)
    • Jan. 2019
      Partner at Miura & Partners (current position)
    • June 2020
      Outside Director, ZENKOKU HOSHO Co., Ltd. (current position)
    • June 2022
      Outside Director, the Company (current position)
    • Oct. 2023
      Executive Director, Tokyo Medical and Dental University (currently Institute of Science Tokyo) (in charge of governance reform)
    • Oct. 2024
      Executive Director, Tokyo Medical and Dental University (in charge of legal affairs) (current position)

  • Takanori SugaiDirector (Senior General Manager of Kansai District Office)

    • Apr. 1991
      Joined the Company
    • Apr. 2022
      Deputy General Manager, Building Facilities Division, the Company
    • June 2023
      Executive Officer and Senior General Manager, Building Facilities Division, the Company
    • Apr. 2024
      Executive Officer and Senior General Manager, Kansai District Office, the Company
    • June 2024
      Director and Senior General Manager, Kansai District Office, the Company (current position)

  • Nobuhiro KurodaDirector (Senior General Manager of Administration Division, In charge of Management Division)

    • Apr. 1990
      Joined the Company
    • Apr. 2022
      Executive Officer and General Manager, General Affairs and Personnel Office, the Company
    • Apr. 2023
      Executive Officer and Senior General Manager, Administration Division
    • June. 2025
      Director, Senior General Manager of Administration Division, In charge of Management Division (current position)

Audit & Supervisory Board Members

  • Keiji UchidaAudit & Supervisory Board Member (Outside)

    • Apr. 1985
      Joined the Company
    • Apr. 2015
      Executive Officer and Senior General Manager, System Integration Division, the Company
    • June 2018
      Executive Officer and Senior General Manager, Facilities Operation Division, the Company
    • June 2023
      Audit & Supervisory Board Member, the Company (current position)

  • Keiji UchidaAudit & Supervisory Board Member (Outside)

    • Apr. 1992
      Joined Mitsubishi Electric Corporation
    • Apr. 2023
      General Manager of Corporate Administration Division, Tohoku Branch Office, Mitsubishi Electric Corporation
    • May 2023
      Outside Audit & Supervisory Board Member, Aomori Mitsubishi Electric Sales Corporation
      Outside Audit & Supervisory Board Member, Ryomei Mitsubishi Electric Sales Corporation
    • June 2023
      Outside Audit & Supervisory Board Member, Yamagata Mitsubishi Electric Sales Corporation
    • Apr. 2025
      Deputy General Manager, Market Planning & Administration Department, Corporate Marketing Group, Mitsubishi Electric Corporation (current position)
    • June. 2025
      Outside Audit & Supervisory Board Member, the Company (current position)

  • Yoshikuni NoguchiAudit & Supervisory Board Member (Outside, Independent)

    • Oct. 1990
      Joined Eiwa Audit Corporation (currently KPMG AZSA LLC)
    • Apr. 1997
      Registered as a Certified Public Accountant
    • June 2005
      Appointed Partner at KPMG AZSA LLC
    • Sept. 2023
      Representative, Noguchi Certified Public Accounting Office (current position)
    • June 2024
      Outside Audit & Supervisory Board Member, Daio Paper Corporation (current position)
    • June. 2025
      Outside Audit & Supervisory Board Member, the Company (current position)

Skills Matrix of Directors

With regard to the composition of Directors, the Company selects individuals with extensive experience and knowledge in various fields, and seeks to improve the functioning of the Board of Directors, etc.
The main areas of specialist experience and knowledge for the Directors are as follows.

Name (Age) Tenure
(Year)		 Position and responsibilities Main areas of specialist experience and knowledge
Management Sales Technology Finance/
Accounting		 Legal
affairs		 International
business		 Human
resources		 DX
Futoshi
Moriya
(62)		 5 President
(Representative Director)		 ● ● ● ●
Harumi
Nakatake
(63)		 1 Management Director
(Senior General Manager of Business Management Office)		 ● ● ●
Yoshiro
Nagashima
(73)		 9 Director(Outside) ● ● ●
Yayoi
Ito
(61)		 4 Director(Outside) ● ● ● ●
Tomoe
Imado
(50)		 3 Director(Outside) ● ●
Takanori
Sugai
(56)		 1 Director
(Senior General Manager of Kansai District Office)		 ● ● ●
Nobuhiro
Kuroda
(58)		 - Director
(Senior General Manager of Administration Division, In charge of Management Division)		 ● ● ●
  • * The professional experience and knowledge that each director has that are particularly strong and relevant to the Company's business are listed (maximum of 4).
  • * Age and years of service are as of June 27, 2025.

Evaluation of effectiveness of the Board of Directors

The Company seeks to heighten effectiveness of its Board of Directors and to strengthen its corporate governance. To such ends, it has the Board of Directors discuss and consider matters upon having administered written surveys in questionnaire format annually to its Directors and Audit & Supervisory Board Members.

Implementation approach: Questionnaire format; Implementation date: March of each year; Evaluation method: Each evaluation category rated on a scale of 1 to 6

Improvement
Implementation of improvements based on initiative policy
Survey
Questionnaires administered to all Directors and Audit & Supervisory Board Members
Analysis
Evaluation and analysis of survey questionnaires
Deliberation
Initiative policy determined upon discussion among the Board of Directors

Questionnaire Items

Questionnaire Items

Analysis of Effectiveness in FY2024

In the effectiveness evaluation conducted in 2024, the average rating was 3.8 out of 6 (0-5), indicating that the Company's Board of Directors is generally effective. Improvements since last year include the evolution of the Succession Plan Committee's efforts established in 2024, enhancement of the content of internal information provided, and acceleration of sustainability-related efforts through the identification of materialities.
On the other hand, as issues to be addressed in the future, they mentioned increasing the ratio of outside directors in the future, utilization of external organizations, and group governance including overseas affiliates.

Analysis of Effectiveness in 2023

Issues and Responses Revealed by the Effectiveness Evaluation for FY2024

Efforts to Strengthen Group Governance

To strengthen group governance, which has been a challenge, we established the Affiliated Companies Section in October 2024, which is responsible for management of domestic affiliated companies. We are promoting the creation of a framework that includes the strengthening of inter-group cooperation and the structure of the management function by holding meetings of the management division for the entire Company group on a regular basis. We will continue to further strengthen our management and supervisory functions in line with changes in the business environment surrounding the Company's group.

Message from Outside Directors

Yoshiro Nagashima

The Company’s nomination and compensation system
As part of our nomination system, a succession plan was formulated in the previous fiscal year after extensive discussions at the Nomination and Compensation Advisory Committee, and its operation commenced in FY2024. The succession plan has two main components. The first is a combination of diverse range of on-the-job training, external training, and coaching into a management leadership development program. The other component is additional factors such as an evaluation of the human resource requirements as a management leader and external evaluations together with the personnel evaluation. We intend the selection of the management leaders who will lead the future of the Company to be as objective and transparent as possible, and will continually nurture them.
Regarding the remuneration system, the remuneration of executive directors consists of basic remuneration, performance-based remuneration, and share remuneration. The Nomination and Compensation Advisory Committee carefully discusses the details of remuneration every year and submits recommendations with a view to appropriately reviewing the remuneration system and its details in response to changes in the business and social environment. In general, executive remuneration is linked to business performance to a relatively high extent, encouraging our executives to manage the company with a strong awareness of expanding business performance and improving corporate value.

Yayoi Ito

Initiatives for management issues
We have entered into the second half of the Medium-Term Management Plan. To achieve our targets, we must clearly organize the issues we face, develop strategies and plans, ensure that everyone understands them, share and manage the progress and issues in a visible way, and conduct management in a way that allows for steady progress. Concrete steps are being taken and positive discussions are being held regarding M&A and new businesses, and I feel that progress is also being made in collaborative business, which has been an issue.
Regarding KANADEN DX, it is important to ensure that the introduction proceeds smoothly and that we quickly enter the stage of implementation and utilizing concrete strategies in order to ensure that it leads to increased corporate value. The keys to achieving this are demonstrating leadership with a greater sense of presence and strengthening our management.
As part of our human resources strategy, we have launched a new personnel system and begun concrete efforts to nurture the next generation of management talent, which I feel is an important step forward. We aim to establish a PDCA cycle that will strengthen our human capital.
I will endeavor to provide supervision and advice to encourage a virtuous cycle that spirals upward throughout the company and steadily increases corporate value.

Tomoe Imado

The Company’s initiatives relating to sustainability
We will be highly mindful of and practice sustainability in all of our company activities, with the goal of building a sustainable society and increasing our corporate value as an Electronics Solutions Company.
Sustainability initiatives can be made to look impressive simply by listing some plausible goals, but in order to ensure that our initiatives are truly worthwhile, last year we established a Sustainability Committee. The Committee’s members are provided with learning opportunities to deepen their true understanding of sustainability, and the committee continues to hold discussions which involve the Board of Directors about what specific issues the company should focus on in order to remain a company that is trusted by society, while achieving sustainable growth and contributing to the resolution of social and environmental issues, as the company strives for “Opening the Future with Technology and Ingenuity.” As a member of this committee, I feel that this is a good opportunity to think again about where the Company’s corporate value comes from and what we need to appreciate in order to achieve that, as well as to share the same thoughts with other officers and employees.

Nurturing the Next Generation of Management

The Company considers the development of human resources that will contribute to the sustainable development of its business to be one of its most important management priorities, and has formulated a succession plan to develop a successor to the President and a next-generation leader development plan to nurture the next generation of executive officers. These two plans are structured to develop managers over the medium to long term, with the executive officers acting as the link between them.

Succession plan

In order to identify and develop candidates to be the president (chief executive officer) in the future, we have established a Succession Plan Committee (chaired by an Outside Director) consisting of Outside Directors and the Representative Director. Candidates who meet the selection criteria will participate in a development program that will be held over a two-year cycle in principle, with a curriculum tailored to each individual based on the areas of “knowledge necessary for a manager,” “mindset required for a manager,” and “abilities required for a manager.”
The Succession Plan Committee will select from among the candidates the person who is most suitable to take on the management of the Company and report their selection to the Board of Directors. The Board of Directors will select the next chief executive officer after consulting with the Nomination and Compensation Advisory Committee.

サクセッションプランのイメージ

Next-generation leader development plan

In order to discover and develop candidates who may become future Executive Officers from a wide range of people, we will implement selection programs at senior (division managers and deputy division managers), middle (department managers), and junior (section managers) levels.

Executive remuneration

Executive remuneration at KANADEN consists of three elements: basic remuneration, which is fixed remuneration; the bonus, which is performance-based remuneration, etc.; share remuneration, which is non-monetary remuneration (restricted share remuneration). However, in view of the nature of their duties, only basic remuneration is paid to Outside Directors.

Determination process for remuneration

When it comes to the mix of different remuneration components for Directors, the higher a Director’s position, the higher the ratio of performance-based remuneration. We calculate amounts of basic remuneration for each Director, the extent of each Director’s contribution to earnings performance, allocation of bonus according to position, and allotment of share remuneration based on our internal regulations and within the range approved by the General Meeting of Shareholders.
We furthermore seek to ensure greater transparency by having the Board of Directors make decisions on matters such as the decision-making process and remuneration for individual Directors, in alignment with findings reported by the Nomination and Compensation Advisory Committee, chaired by an independent Outside Director.

Determination process for remuneration

1) Basic remuneration (monetary remuneration)

Basic remuneration for the Directors of the Company consists of fixed monthly remuneration at a level appropriate to their position, which is determined by a comprehensive view that takes into account objective remuneration survey data (such as industry, business category, net sales, market capitalization, and number of employees) obtained from specialized external third-party organizations, and the salary level of employees.

2) Performance-based remuneration (bonus)

The funding of performance-based remuneration, etc. at KANADEN is determined by profits generated in each fiscal year, and remuneration is paid as a bonus on a fixed date every year. In order to raise awareness of trends in performance, individual remuneration amounts are determined with reference to individual track records, which are computed in accordance with performance indicators set for each business segment. However, in the case of Directors for whom divisional performance cannot be evaluated, indicators for the entire company are applied.

3) Non-monetary remuneration (share remuneration)

Non-monetary remuneration at KANADEN is in the form of restricted share remuneration. The Company and eligible Directors enter into an allotment agreement for restricted shares, under which the eligible Directors are unable to freely transfer the allocated shares of the Company for a specified period of time. Share remuneration consists of two types of remuneration: performance-based restricted share remuneration with respect to which lifting of transfer restrictions is contingent on the extent to which indicators set forth the medium-term management plan have been achieved, and; service-based restricted share remuneration, which is contingent on an eligible Director continuing to hold the position of Director of the Company during the transfer restriction period. The Company will acquire such common shares without compensation in the event that the Company fails to achieve the indicators of its medium-term management plan or any other event stipulated in the Restricted Share Allotment Agreement.

Total amount of remuneration for FY2023

Category Total amount of
remuneration
(Millions of yen)		 Total amount of remuneration by type
(Millions of yen)		 Eligible
Officers
(Persons)
Basic
remuneration		 Performance-
based bonus		 Restricted
share
remuneration
Performance-
based		 Service-
based
Directors
(Of which Outside Officers)		 257
(25)		 115
(25)		 108
(-)		 16
(-)		 16
(-)		 9
(3)
Audit & Supervisory
Board Members
(Of which Outside Officers)		 24
(12)		 23
(12)		 -
(-)		 -
(-)		 -
(-)		 3
(2)
Total
(Of which Outside Officers)		 281
(37)		 139
(37)		 108
(-)		 16
(-)		 16
(-)		 12
(5)
  • * The above amount paid includes one Director who retired at the conclusion of the 174rd General Meeting of Shareholders held on June 28, 2024.
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  2. Sustainability
  3. Governance

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