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.
In principle, a majority of the Board of Directors of JAFCO consists of independent directors to enhance the effectiveness of corporate governance. As members of the Board of Directors and/or the Board-Audit Committee, independent directors supervise management from a neutral and objective standpoint.
JAFCO shall select independent director candidates who have abundant experience and deep insight into corporate management or specialist fields, and can be expected to fulfill the roles and responsibilities of an independent director. The selection is in accordance with the "Standards for Independence of Independent Directors" of JAFCO.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee has been established as a voluntary committee to perform functions of both of a nomination committee and a remuneration committee.
The Nomination and Remuneration Committee is composed of all members of the Board-Audit Committee and the President, with a majority consisting of independent directors. The chairperson is selected from the committee members who are independent directors to ensure independence, objectivity and fairness. Currently, the Nomination and Remuneration Committee consists of four independent directors and the President.
The Nomination and Remuneration Committee carries out deliberations of important items related to the nomination (including succession planning) and remuneration of directors, corporate officers, and partners prior to its presentation to the Board of Directors, based on the nomination policy in the Corporate Governance Policy and the policy on remuneration of directors, etc. The Board of Directors discusses and decides the relevant nomination and remuneration based on the deliberation at the Nomination and Remuneration Committee.
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, 2022 is as follows:
The Board of Directors ("BOD") evaluates the effectiveness of the BOD on an
annual basis. In the fiscal year ended March 31, 2022, BOD deliberations over
items such as composition, operation, role, duties, etc. of the BOD were held as
in previous years based on questionnaires and interviews administered to all
As the majority of the BOD consisted of independent directors, it was confirmed that the BOD composition was appropriate in terms of internal-external balance and size to fulfill its function to supervise business executions.
In the fiscal year under review, the BOD deepened mutual discussions further from a medium- and long-term perspective, which was an issue indicated in the evaluation results for the fiscal year ended March 31, 2021. In addition to the BOD meetings, we provided opportunities for BOD members to allow active opinion exchange and mutual discussions in a timely and appropriate manner.
Through such discussions, the BOD determined to introduce the stock compensation plan, carried out share buybacks and cancellation of treasury shares continuing from the previous year, and decided to change the BOD structure from April 2022 onward (appointment of new CEO and change of BOD composition). We evaluate that further progress has been made in terms of the effectiveness of the BOD.
As upcoming issues to be addressed, the need was confirmed to further enhance the effectiveness of the BOD under the new structure after the aforementioned change and continue to deepen discussions with a medium- to long-term perspective.
Based on the above results, it is evaluated that the effectiveness of the BOD
increased in general compared to the previous year. We will continue to conduct effectiveness evaluations regularly and further increase the effectiveness of the BOD.
(updated as of Mar. 9, 2022)
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 on an as-needed basis.
JAFCO has appointed Ernst & Young ShinNihon LLC as its external auditor.
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.
Nomination and Remuneration of Directors, etc.
Nomination of Directors, etc.
- Directors, including CEO, and corporate officers are appointed by the Board of Directors after deliberations by the Nomination and Remuneration Committee.
- All directors (excluding directors serving as Board-Audit Committee members) are subject to election/re-election every year at the General Meeting of Shareholders. The Board-Audit Committee expresses its opinion on directors' election/ dismissal at the General Meeting of Shareholders when it deems it necessary.
- JAFCO shall select director candidates who have business skills, insight, experience, and expertise to serve as a director to allow the Board of Directors to fully exercise its operational and supervisory functions. JAFCO proactively selects suitable candidates from diverse background regardless of gender and nationality.
- In a case where a director has caused JAFCO to incur a tremendous loss or operational problems by committing a wrongful act, or violating laws, regulations, the Articles of Incorporation or JAFCO's internal rules, or has become difficult to execute duties by other reasons, such director shall be subject to dismissal proposal.
- A Partner is nominated with consensus of all partners and appointed upon the approval of the Board of Directors after deliberations by the Nomination and Remuneration Committee.
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
Remuneration of Directors, etc.
- The Board of Directors decides the remuneration of directors (excluding directors serving as Board-Audit Committee members), corporate officers and partners after deliberations by the Nomination and Remuneration Committee. The decision on remuneration adequately reflects evaluation of JAFCO's business results, fund performance, and the degree of individual contribution.
The remuneration of directors (excluding directors serving as Board-Audit Committee members), corporate officers and partners comprises a basic salary and an extraordinary compensation. Part of the basic salary corresponds to JAFCO's ordinary income and other business results, while the extraordinary compensation additionally takes into account fund performance.
- The Board-Audit Committee expresses its opinion on directors' remuneration at the General Meeting of Shareholders when it deems it necessary.
Disclosure and Constructive Dialogue with Shareholders
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.
Initiatives for Preventing Misconduct
Initiatives to Prevent Bribery
In response to the global trend in the establishment and strengthening of bribery prevention systems, we have established the Basic Policy on Bribery Prevention to address prevention of improper transactions. We ask our business partners for their understanding and cooperation.
Initiatives to Prevent Improper Use of Public Funds
Clarification of the Responsibility System
We have established the necessary matters with regard to the handling of public research funds, etc. in accordance with the Guidelines for Managing and Auditing Public Research Funds at Research Institutions (implementation standards) to ensure their proper management and promote appropriate and smooth operation. Under the President as the chief administrative officer, the Director in charge has been appointed as the supervising officer and the Manager of the department handling competitive funds, etc. as the officer responsible for compliance promotion.
Consultation and Contact Desks
We have established the following consultation and contact desks for the purpose of appropriate use of public research funds etc. (Japanese only)