Corporate Profile

Corporate Governance

Basic Views on Corporate Governance

JAFCO’s basic views on corporate governance are as outlined below. With an eye to increasing corporate value over the medium to long term, JAFCO will make continuous efforts for its enhancement.

Build respectful relationships with stakeholders

Maintain transparency and fairness in decision making

Establish an appropriate supervising structure

Establish an operating structure that ensures effective and swift business execution

Corporate Governance Policy

Based on the above basic views, JAFCO has established the “Corporate Governance Policy” that outlines our concrete corporate governance measures.

Corporate Governance Structure

Board of Directors/ Board-Audit Committee

JAFCO has adopted the “company with board-audit committee” structure for its corporate governance system.

JAFCO has established the Board of Directors and the Board-Audit Committee, through which it makes important management decisions and audits/ supervises business execution by directors.

Independent directors comprise the majority of the Board-Audit Committee. JAFCO has set out the standards for independence of independent directors as shown below.

Reasons for the appointment and nomination regarding each director are described in the Notice of Convocation of the Annual General Meeting of Shareholders.

General Meeting of Shareholders

The Evaluation of the Effectiveness of the Board of Directors

The Board of Directors analyzes and evaluates its effectiveness every year and discloses the summary of the result. The summary of the results of the evaluation of the effectiveness of the Board of Directors for the fiscal year ended March 31, 2019 is as follows:

The Board of Directors (“BOD”) has been evaluating the effectiveness of the BOD on an annual basis since the fiscal year ended March 31, 2016. In the fiscal year ended March 31, 2019, deliberations over items such as composition, operation, role, duties, etc. of the BOD were held as in previous years based on questionnaires administered to all directors and preliminary interviews with each director by the full-time Director serving as Board-Audit Committee member.

During the fiscal year ended March 31, 2019, the BOD held active discussions regarding issues on JAFCO’s future business operation structure and strategic direction. Independent directors evaluated that sufficient information had been provided for the discussions in advance and the level of support in obtaining such information continued to be adequate in the fiscal year. While evaluating that deepened and invigorated deliberations were ensured through these discussions, it was also confirmed that continued efforts were necessary to improve the contents and efficiency of presentations and reports, with the aim of increasing the effectiveness of the BOD’s monitoring function and ensuring fruitful and effective discussions.

We will regularly conduct effectiveness evaluations and further strengthen the BOD’s supervisory function to increase the effectiveness of the BOD.

(updated as of Mar. 15, 2019)

Investment Committee

The Investment Committee composed of the President and partners has an authority to make investment decisions to allow quick decision-making. Directors serving as Board-Audit Committee members also participate in the Investment Committee.

External Auditor

JAFCO has appointed Ernst & Young ShinNihon LLC as its external auditor.

Internal Audit

The Internal Audit Division, independent from other business operations, audits overall business activities. The Internal Audit Division reports internal audit results to the President and the Board-Audit Committee.

Cooperation among Board-Audit Committee, External Auditor and Internal Audit Division

The Board-Audit Committee holds regular discussions with the Internal Audit Division and External Auditor to exchange information and opinions.

The Board-Audit Committee conducts audits based on internal audit results when available. The Internal Audit Division conducts internal audits at the request of the Board-Audit Committee and reports the result to the Committee.

Disclosure and Constructive Dialogue with Shareholders

Information Disclosure

JAFCO shall make timely and appropriate information disclosures in compliance with laws and regulations, including the Companies Act, Financial Instruments and Exchange Act, and Timely Disclosure Rule of the Tokyo Stock Exchange.

In addition to the above, JAFCO shall actively provide information that is deemed essential or useful to understand about JAFCO (except for personal information, customer information and information that may violate the rights of others).

JAFCO ensures fair disclosure of information.

Constructive Dialogue with Shareholders

JAFCO has established the policy for constructive dialogue with shareholders as shown below.