Corporate Information Corporate Governance

1 Basic Approach to Corporate Governance

Under the management policy of “Constructing buildings, creating towns — pioneering a new era,” with a view to enhance corporate value over the long term through sustainable and stable growth of the Group, the Company believes that fair, transparent, prompt and bold decision making is crucial to corporate governance. From these, the Company has formulated the “Basic Policy for Corporate Governance.”

The Company shall “comply with laws and regulations and conduct its operations with integrity as a member of society, acting in accordance with social norms and corporate ethics,” as prescribed in the “Group Code of Conduct (2. Legal compliance).” The Company also established the “Compliance Committee” to ensure promotion of compliance structures, aiming to ensure compliance in day-to-day operating activities.

2 Overview of Corporate Governance Framework

The Company has adopted the Audit & Supervisory Board system, having concluded that the Audit & Supervisory Board system functions effectively in providing oversight to the Company’s management. The Audit & Supervisory Board comprises four Audit & Supervisory Board members, two of whom are standing statutory members. The Audit & Supervisory Board members conduct audits in line with the policies, division of tasks and other directions of the Audit & Supervisory Board by attending meetings of the Board of Directors, examining important documents, inspecting business sites, and other means.
 Of the seven directors, two are independent outside directors, and of the four Audit & Supervisory Board members, two are outside Audit & Supervisory Board members. This management system enables objectivity to be maintained at all times.
 Pursuant to Article 427, Paragraph 1 of the Companies Act of Japan, the Company has signed an agreement with outside directors Akira Takamatsu and Shinya Hashizume as well as outside Audit & Supervisory Board member Hiroshi Tanaka limiting liability for damages, as set forth in Article 423, Paragraph 1 of the same Act. The amount of monetary damages limited based on this agreement is the minimum amount of liability defined by laws and regulations.

3 Company Bodies and Internal Control System

The Board of Directors meets once per month in principle, and otherwise as required, and decides the basic policies for overall management of the Company while also supervising the execution of duties of directors and executive officers. All important management issues are put before the Board of Directors to be deliberated and decided upon. The Board of Directors also receives reports on business execution performance as needed. In addition, a “Governance Advisory Committee” chaired by an independent outside director and comprising outside directors, the chairman and the president has been established as a voluntary advisory body to the Board of Directors. This council provides advice to the Board of Directors on matters such as the appointment and dismissal of directors and executive officers, the determination of remuneration, etc. for directors and executive officers, and succession plans for the president.
 The “Executive Committee,” comprising standing directors, meets three times per month in principle. The members of this council conduct thorough deliberations related to decision making on important individual matters related to business execution, based on the basic policies for overall management set out by the Board of Directors.
 In June 2007, the Company introduced an executive officer system to expedite decision making at the business execution level and to enhance its business operating capabilities. The representative directors delegate authority to executive officers, who are appointed by the Board of Directors, and each executive officer is responsible for the performance of the department assigned to him or her.
 Regarding the construction of internal control systems, based on the Companies Act of Japan, which came into force in May 2006, the Board of Directors decided on a system for ensuring appropriate business operations (Basic Policy regarding the Construction of Internal Control Systems).
 The Company is also making appropriate efforts to upgrade and implement internal controls over financial reporting based on the Financial Instruments and Exchange Act.

Corporate Governance Organization

Corporate Governance Organization

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