Governance
- Basic Viewpoint Concerning Corporate Governance
- Nurturing the Next Generation of Management
- Evaluation of effectiveness of the Board of Directors
- Executive remuneration
- Directors/Audit & Supervisory Board Members
Basic Viewpoint Concerning Corporate Governance
We are enhancing our corporate governance system, recognizing that strengthening corporate governance is one of the most important management tasks for laying a foundation to achieve sustainable growth of the KANADEN Group, increase its corporate value over the medium to long term, and fulfill its responsibilities to its diverse stakeholders.
Corporate Governance System
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The Board of Directors
Chairperson Nobuyuki Motohashi
Number of meetings held during FY2023: 12
Attendance rate during FY2023: 99%Ratio of Outside Officers
The Board of Directors consists of eight 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.
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The Audit & Supervisory Board
Chairperson Kazuhiro Tsukada
Number of meetings held during FY2023: 6
Attendance rate during FY2023: 100%Ratio of Outside Officers
The Audit & Supervisory Board comprises four Audit & Supervisory Board Members, including three 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.
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The Nomination and Compensation Advisory Committee
Chair Yoshiro Nagashima (Outside)
Number of meetings held during FY2023: 6
Attendance rate during FY2023: 100%Ratio of Outside Officers
The Nomination and Compensation Advisory Committee is chaired by an Outside Director and consists of four Directors, including three Outside Directors and one Inside Director. The Committee seeks to further enhance corporate governance by ensuring the fairness, transparency, and objectivity of procedures related to the appointment and dismissal of Directors and Executive Officers, formulation of succession plans, and the remuneration of Directors.
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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, 10 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.
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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.
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.
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.
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
Issues and Responses Revealed by the Effectiveness Evaluation for FY2023
Initiatives to enhance effectiveness of Outside Directors
Our initiatives to enhance effectiveness of Outside Directors entail holding information exchange sessions attended by the Outside Directors and the Representative Director, and information exchange sessions attended by the Outside Directors and the Audit & Supervisory Board. We have strived to create an environment for deepening Outside Directors’ understanding of our operations and markets so they can provide more appropriate advice, which has entailed ongoing efforts to have them participate in our longstanding quarterly meetings of the Board of Executive Officers and also have them participate in the meeting of the Growth Strategy Committee, which is held in April.
In addition, we established a Sustainability Committee in May 2023 to promote sustainability initiatives, and established a Succession Plan Committee in June 2024 to promote successor development plans.
Changes in Corporate Governance
Analysis of Effectiveness in FY2023
The results of the effectiveness evaluation showed an overall trend toward improvement due to factors such as the establishment of the Sustainability Committee and an increase in the number of agenda items that were explained and discussed from the consideration stage.
In addition, there were opinions that discussion of non-financial issues such as social and environmental issues at Board of Directors meetings is still insufficient, that it is necessary to further strengthen group governance in relation to the execution of M&A, and that progress regarding nomination, remuneration, and succession plans should be shared appropriately. Going forward, I will strive to cooperate with each committee and provide appropriate reports to Board of Directors meetings.
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.
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) |
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|---|---|---|---|---|---|---|
| Basic remuneration |
Performance- based bonus |
Restricted share remuneration |
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| Performance- based |
Service- based |
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| Directors | 261 | 110 | 119 | 15 | 15 | 8 |
| Audit & Supervisory Board Members |
20 | 20 | - | - | - | 4 |
| Of which Outside Officers | 32 | 32 | - | - | - | 5 |
- * The above payment amounts include one Director and one Audit & Supervisory Board Member who retired at the conclusion of the 173rd Ordinary General Meeting of Shareholders held on June 20, 2023.
Officer Selection
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 | |||
| Nobuyuki Motohashi (66) |
9 | President (Representative Director) |
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| Futoshi Moriya (61) |
4 | Senior Managing Director (Senior General Manager, Business Management Office, and in charge of Sales Unit, Solution Engineering Division, and ICT Promotion Division) |
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| Yoshiro Nagashima (72) |
8 | Director(Outside) | |
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| Yayoi Ito (60) |
3 | Director(Outside) | |
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| Tomoe Imado (49) |
2 | Director(Outside) | |
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| Hironori Saigusa (62) |
5 | Director (in charge of Administration Division) |
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| Harumi Nakatake (62) |
- | Director (Senior General Manager of Building Facilities Division) |
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| Takanori Sugai (55) |
- | Director (Senior General Manager of Kansai District Office) |
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- * The table shows up to four areas of each Director’s specialist experience and knowledge that should be particularly noted as his or her strong suits and that are highly relevant to the Company’s businesses
- * Ages and tenures given as of July 1, 2024
Directors/Audit & Supervisory Board Members
Directors
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Nobuyuki MotohashiPresident (Representative Director)
- Apr. 1980Joined the Company
- June 2013Executive Officer and Senior General Manager, Factory Automation Division, the Company
- June 2015Director and Senior General Manager, Factory Automation Division, the Company
- June 2016President and Representative Director, the Company (current position)
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Futoshi MoriyaSenior Managing Director (Senior General Manager, Business Management Office, and in charge of Sales Unit, Solution Engineering Division, and ICT Promotion Division)
- Apr. 1986Joined the Company
- June 2016Executive Officer and Senior General Manager, Factory Automation Division, the Company
- Apr. 2020Executive Officer and Senior General Manager, Kansai District Office, the Company
- June 2020Director, Executive Officer, and Senior General Manager, Kansai District Office, the Company
- June 2021Managing Director, Executive Officer, and Senior General Manager, Kansai District Office, and in charge of Branch office, the Company
- Apr. 2022Managing Director and Senior General Manager, Kansai District Office, and in charge of Branch office, the Company
- June 2023Senior Managing Director and Senior General Manager, Kansai District Office, and in charge of Sales Unit, and Solution Engineering Division, the Company
- Apr. 2024Senior Managing Director and Senior General Manager, Business Management Office, and in charge of Sales Unit, Solution Engineering Division, and ICT Promotion Division, the Company (current position)
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Yoshiro NagashimaDirector (Outside, Independent)
- Apr. 1975Joined The Mitsubishi Bank, Ltd. (currently MUFG Bank, Ltd.)
- May 2002Regional Director, Toranomon Branch Office, MUFG Bank, Ltd.
- June 2004Representative Director and President, Tokyo Diamond Collection Service Co., Ltd. (currently MU Frontier Servicer Co., Ltd.)
- Oct. 2005Representative Director and Deputy President, MU Frontier Servicer Co., Ltd.
- June 2009Standing Auditor, NIPPON CARBIDE INDUSTRIES CO., INC.
- June 2016Outside Director, the Company (current position)
- June 2018Outside Director, ZENKOKU HOSHO Co., Ltd. (current position)
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Yayoi ItoDirector (Outside, Independent)
- Apr. 1986Joined NIPPON TELEGRAPH AND TELEPHONE CORPORATION
- July 1988Joined NTT DATA Communications Systems Corporation (currently NTT DATA Corporation)
- Apr. 2008Head, Business Planning Promotion Office, Headquarter of Public System Business, NTT DATA Corporation
- May 2019Joined UNIZO Holdings Company, Limited Managing Executive Officer
- Apr. 2021Executive Officer, in charge of Corporate Planning, SG SYSTEMS CO., LTD.
- June 2021Outside Director, SUMIKEN MITSUI ROAD CO.,LTD. (current position)
- June 2021Outside Director, the Company (current position)
- June 2023Outside Director of Japan Post Holdings Co., Ltd. (current position)
- June 2023Outside Director, Nishimatsu Construction Co., Ltd. (current position)
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Tomoe ImadoDirector (Outside, Independent)
- Oct. 2003Registered as an attorney with Daini Tokyo Bar Association
- Oct. 2003Joined Mori Hamada & Matsumoto
- Apr. 2008Deputy Director, Economic Treaties Division, International Legal Affairs Bureau, Ministry of Foreign Affairs
- July 2010Joined OKUNO & PARTNERS
- May 2018Joined IR Japan, Inc. (current position)
- Jan. 2019Joined Miura & Partners as a Partner (current position)
- June 2020Outside Director, ZENKOKU HOSHO Co., Ltd. (current position)
- June 2022Outside Director, the Company (current position)
- Oct. 2023Executive Director, Tokyo Medical and Dental Univercity (current position)
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Hironori SaigusaDirector (in charge of Administration Division)
- Apr. 1985Joined the Company
- Apr. 2016Executive Officer and General Manager, General Affairs and Personnel Office, the Company
- Apr. 2018Executive Officer and Senior General Manager, Administration Head Office, the Company
- June 2019Director, Executive Officer, and Senior General Manager, Administration Head Office, the Company
- Oct. 2020Director in charge of Internal Auditing Division, the Company
- June 2021Director in charge of Management Division, the Company
- June 2023Director Senior General Manager, Business Management Office, in charge of Management Division, the Company ( current position)
- Apr. 2024Director in charge of Management Division, the Company (current position)
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Harumi NakatakeSenior Executive Officer and Senior General Manager, Building Facilities Division
- Apr. 1984Joined Mitsubishi Electric Corporation
- Apr. 2006General Manager, e-Government System Department, Mitsubishi Electric Corporation
- Apr. 2007General Manager, Public Utility Systems Department 2, Mitsubishi Electric Corporation
- Apr. 2009General Manager, Electrical Facilities Department, Mitsubishi Electric Corporation
- Apr. 2011General Manager, Government & Public Systems Department, Mitsubishi Electric Corporation
- Apr. 2013General Manager, Public Utility Systems Department, Kansai District Office, Mitsubishi Electric Corporation
- Apr. 2015General Manager, Strategic Business Development Department, Mitsubishi Electric Corporation
- Apr. 2018Senior General Manager, Chubu Branch, Mitsubishi Electric Corporation
- Apr. 2023Joined the Company
- Apr. 2023Senior Executive Officer and Senior General Manager, System Integration Division, the Company Chubu Branch, Mitsubishi Electric Corporation
- Apr. 2024Senior Executive Officer and Senior General Manager, Building Facilities Division, the Company (current position)
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Takanori SugaiExecutive Officer and Senior General Manager, Kansai District Office
- Apr. 1991Joined the Company
- Apr. 2017General Manager, Factory Automation Systems Department 2, Kansai District Office, the Company
- Apr. 2021General Manager, Industrial Systems Department, Kansai District Office, the Company
- Apr. 2022Deputy General Manager, Building Facilities Division, the Company
- June 2023Executive Officer and Senior General Manager, Building Facilities Division, the Company
- Apr. 2024Executive Officer and Senior General Manager, Kansai District , the Company (current position)
Audit & Supervisory Board Members
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Kazuhiro TsukadaStanding Audit & Supervisory Board Member
- Apr. 1985Joined the Company
- Apr. 2015Executive Officer and Senior General Manager, System Integration Division, the Company
- June 2018Executive Officer and Senior General Manager, Facilities Operation Division, the Company
- June 2023Audit & Supervisory Board Member, the Company (current position)
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Osamu OkamotoAudit & Supervisory Board Member (Outside)
- Apr. 1990Joined Mitsubishi Electric Corporation
- Oct. 2019General Manager of Corporate Administration Division, Tohoku Branch Office, Mitsubishi Electric Corporation
- Nov. 2019Outside Audit & Supervisory Board Member, Aomori Mitsubishi Electric Sales Corporation
- Dec. 2019Outside Audit & Supervisory Board Member, Yamagata Mitsubishi Electric Sales Corporation
- Feb. 2020Outside Audit & Supervisory Board Member, Ryomei Mitsubishi Electric Sales Corporation
- Apr. 2023Deputy General Manager, Market Planning & Administration Department, Corporate Marketing Group, Mitsubishi Electric Corporation (current position)
- June 2023Outside Audit & Supervisory Board Member, the Company (current position)
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Yutaka NomiyamaAudit & Supervisory Board Member (Outside, Independent)
- Apr. 1977Joined The Daiwa Bank, Ltd. (currently Resona Bank, Limited)
- Apr. 2004Joined TERAOKA SEISAKUSHO CO., LTD.
- June 2007Operating Officer and Deputy General Manager, Corporate Management Division, TERAOKA SEISAKUSHO CO., LTD.
- June 2008Director and General Manager, Corporate Management Division, TERAOKA SEISAKUSHO CO., LTD.
- June 2011Audit & Supervisory Board Member, TERAOKA SEISAKUSHO CO., LTD. (current position)
- June 2011Outside Audit & Supervisory Board Member, the Company (current position)
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Nobutake IpposhiAudit & Supervisory Board Member (Outside, Independent)
- Aug. 1971Joined Peat Marwick Mitchell (currently KPMG)
- Mar. 1975Registered as a Certified Public Accountant
- Jan. 1976Joined Tokyo Marunouchi Auditing Corporation (currently Deloitte Touche Tohmatsu LLC)
- July 1995Director, The Japanese Institute of Certified Public Accountants
- July 2001Managing Director, The Japanese Institute of Certified Public Accountants
- Apr. 2005Professor, Tohoku University Accounting School
- June 2007Audit & Supervisory Board Member, TACHI-S CO., LTD.
- June 2016Outside Audit & Supervisory Board Member, the Company (current position)
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.
