Governance
- Basic Viewpoint Concerning Corporate Governance
- 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 FY2022: 11
Attendance rate during FY2022: 100%Ratio of Outside Officers
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 every other month and extraordinary board meetings as needed. In addition, we have established forums for facilitating information exchange and developing shared awareness, such that involve having Outside Directors participate in meetings of the Board of Executive Officers and actively holding discussion sessions among the Outside Officers beginning in FY2022. -
The Audit & Supervisory Board
Chairperson Kazuhiro Tsukada
Number of meetings held during FY2022: 7
Attendance rate during FY2022: 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, 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. The Audit & Supervisory Board also collects information in a timely and appropriate manner in cooperation with the Internal Auditing Division.
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The Nomination and Compensation Advisory Committee
Chair Yoshiro Nagashima (Outside)
Number of meetings held during FY2022: 4
Attendance rate during FY2022: 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 strengthening the fairness, transparency, and objectivity of procedures related to nominating Directors and Executive Officers and remuneration for Directors and others.
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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.
Successor Planning
In order to engage in the process of achieving the management plan, establish policies and standards for the selection of Directors and Executive Officers, and select as Representative Director an individual worthy to act the representative of the Group, the Nomination and Compensation Advisory Committee plays a central role in drawing up succession plans for President and Representative Director.
Based on the successor plans, the Nomination and Compensation Advisory Committee draws up a vision of "the ideal president" that incorporates the required abilities, potential, experience, knowledge, and skills, and prescribes specific evaluation methods and standards for the same, as well as taking a lead role in selecting, nurturing, and checking on the state of development of candidates.
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 (65) |
8 | President (Representative Director) |
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| Futoshi Moriya (60) |
3 | Senior Managing Director (Senior General Manager, Kansai District Office, in charge of Solution Engineering Division) |
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| Yoshiro Nagashima (71) |
7 | Director(Outside) | |
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| Yayoi Ito (59) |
2 | Director(Outside) | |
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| Tomoe Imado (48) |
1 | Director(Outside) | |
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| Hisataka Mori (63) |
7 | Director (Branch Manager, Kyushu Branch Office) |
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| Hironori Saigusa (61) |
4 | Director (Senior General Manager, Business Management Office, in charge of Management Division) |
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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 June 20, 2023
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
Changes in Corporate Governance
Analysis of Effectiveness in FY2022
The Company promoted open and dynamic discussions of the Board of Directors by increasing the proportion of Outside Directors and ensuring diversity, which again resulted in high marks with respect to (1) the composition of the Board of Directors, and (2) the operation of the Board of Directors. However, challenges remain with respect to deepening discussions due to the opinion that the amount of time for consideration is somewhat lacking relative to the volume of preliminary materials, and the opinion that the Board of Directors must increase its involvement in the medium-term management plan and the business plan.
Moreover, as a result of the Company having established a new Outside Officer engagement forum, a slight improvement was achieved relative to the previous fiscal year with respect to, (3) roles and responsibilities of the Board of Directors, (4) the display of the Board of Directors functions, and (5) support systems for the Board of Directors. However, we will engage in measures for improvement going forward given that individual items were again assigned low marks with respect to discussions regarding social and environmental issues as well as successor development and officer training.
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 FY2022
| Officer portion | 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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| Director | 272 | 130 | 105 | 18 | 18 | 10 |
| Audit & Supervisory Board Member |
20 | 20 | - | - | - | 3 |
| Of which Outside Officer | 30 | 30 | - | - | - | 6 |
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
- 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 Senior General Manager, Kansai District Office, in charge of Solution Engineering 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 (Audit and Supervisory Committee Member) of 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)
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Hisataka MoriDirector
- Apr. 1983Joined the Company
- Apr. 2014Executive Officer and Branch Manager, Chubu Branch Office, the Company
- Apr. 2016Executive Officer and Deputy Senior General Manager, Kansai District Office, the Company
- June 2016Director and General Manager, Management Strategy Office, the Company
- Apr. 2018Director and General Manager, Business Promotion Office, the Company
- June 2018Director, Executive Officer, and General Manager, Business Promotion Office, the Company
- Apr. 2019Director, Executive Officer, and Branch Manager, Kyushu Branch Office, the Company
- Apr. 2022Director and Branch Manager, Kyushu Branch Office, the Company (current position)
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Hironori SaigusaDirector
- 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)
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
Evolution of governance
It has been seven years since I assumed my position as Outside Director. During this time, I have made two observations regarding changes in our management and governance system. First, meetings of the Board of Directors and Board of Executive Officers have come to feature more concrete and meaningful discussions on matters such as root causes and findings, which is particularly a result of the Company having revamped its explanations and materials regarding status of business execution. This has played an instrumental role in terms of making it possible for us to enhance capabilities of our day-to-day sales operations, particularly with respect to gaining more orders and securing inventories and alternative products, despite the challenging business environment. Additionally, I sense that the Board of Directors has become more effective as a result of comprehensive discussions now actively taking place in meetings of the Board of Directors. This is due to a situation where reports on digital transformation (DX) as well as audit reports from the respective divisions have enabled even the Outside Officers to gain considerable understanding of realities in terms of management. Second, the Company is developing a system by which everyone in the Company can facilitate business operations, drawing on business strategy focused on inside sales and multiple party-coordinated sales while strengthening organizational coordination. Furthermore, in addition to improving our systems, we have also made steady progress with respect to training solution-oriented professionals who are a good fit with the Company’s notion of serving as an Electronics Solutions Company through giving attention to training and KPI management. The Company is facing growth challenges over the medium to long term and it needs to actively engage in M&A initiatives and new businesses. While working on this, I hope to see the company place greater focus on efforts to increase the scale of its current business segments by leveraging its elevated sales capabilities and capacity to promote business.
Yayoi Ito
Strategies and their supervision
Our Vision of “Creating New Value for Society,” set forth in our new corporate philosophy, articulates how the Company wishes to “persistently engage in business activities that create new value constantly for society overall in seeking to lead the way to a better future.” This vision is embedded in our medium-term management plan detailing performance targets and our respective business strategies. Most importantly, we need to move steadily forward by visibly managing our progress and challenges while ensuring a shared understanding among every employee regarding our plans and strategies. Employees in turn need to know details of the specific initiatives, who is responsible, when are they are to be accomplished, and how to proceed. To create new value, we must engage in initiatives cooperatively not only within our respective business divisions but also laterally between business divisions, between branches and offices, and between business divisions and branches and offices. This will also call for organizations and rules that enable effective progress of our multiple party-coordinated sales. Our efforts to visually render these initiatives overall will be key to ensuring smooth progress of such initiatives, underpinned by effective use of KPIs and dashboards, and adoption of SAP solutions. Meanwhile, initiating digital transformation (DX) without full commitment could ultimately inflict substantial damage. That said, a sense of urgency is crucial. As such, I seek to ensure that we confidently and steadily proceed in carrying out DX in a manner that involves developing a framework geared to operations, which will entail formulating and managing well-grounded and robust plans. In so doing, I hope for us to achieve significant results.
Tomoe Imado
Effectiveness of the Board of Directors
I believe that the Company’s Board of Directors operates at an adequately high level of effectiveness. During meetings of the Board of Directors, Officers with a diverse range of experience and knowledge actively put forward their questions and opinions from their unique perspectives, thereby giving rise to vibrant discussion. I feel that during meetings of the Board of Directors, opinions furnished by Outside Officers are being reflected, particularly when it comes to promptly reporting on the status of actions taken with respect to matters for which Outside Officers have sought a response. In seeking to engage in constructive discussions during meetings of the Board of Directors, Outside Officers also on occasion need to come prepared with awareness of concerns, upon having gained an understanding of the Company’s current situation. To such ends, it is essential that the Company share information with them beforehand. This preparedness enables them not only to engage in discussions regarding management strategy but also to gain a timely understanding of progress made in that regard as well as challenges and concerns faced by the Company at that point in time, particularly given that the Company arranges opportunities for them to take part in meetings on management strategy and meetings of the Board of Executive Officers, in addition to meetings of the Board of Directors. Meanwhile, the Company has established forums for communication in addition to the Board of Directors enlisting various structures, which includes meetings exclusively for Outside Officers and meetings with the President and Representative Director. This accordingly enables participants to exchange views amidst an unreserved atmosphere and facilitates deeper understanding of the Company’s current circumstances and its challenges in that regard. Going forward, I envision a situation where the Company will be increasingly called on to adopt a sustainability management perspective. Setting our sights on realizing a sustainable society on a global scale, we ourselves are learning from the various initiatives of companies while keeping a watchful eye on government policy developments in Japan and abroad, and we are committed to promoting strategies that enable the Company to continue as an enterprise that maintains growth and development in the future as well.
