Governance

The Board of Directors makes decisions about important management issues as stipulated in the Rules of Board of Directors, as well as fulfills obligations stipulated by laws and the Articles of Incorporation, all while supervising the status of business execution. The Chairman of the Board is selected by the Board of Directors in accordance with the Articles of Incorporation, with the position taken by a director who serves concurrently as Group CEO.

In addition, the majority of the directors on the Board shall be outside directors to ensure supervision remains effective, and to demonstrate sufficient diversity, due consideration will be given to gender, nationality, etc. At the same time, by appointing corporate executives, academics, and those with specialized knowledge of law, finance, and accounting to the Board, we are building a system of governance with high transparency and improved fairness.

All members of the Board of Directors, including the Chairman, are acutely aware of the need to secure and improve the effectiveness of the Board, and we have established a cycle of constant discussion and implementation throughout the year through the following initiatives.

In order to ensure that discussions within the Board of Directors are constructive and productive, preliminary briefing sessions are held for all outside directors before every meeting of the Board, during which discussion is held on any opinions or questions that arise during the briefing sessions. Integrating preliminary briefing sessions and meetings of the Board in this way allows for discussions to be both efficient and substantial, and ensures that the knowledge and perspectives of outside directors are also directly reflected in how the Board operates.

The Board is actively engaged in initiatives that demonstrate supervisory functions, such as by increasing information sharing to enable the Board to better understand performance in order to avoid creating any distance between the Board of Directors and the executive departments, and to maintain sufficient communication.

Concrete examples include the business execution reports made by business CEOs and Group CxOs at board meetings; providing observer access to directors for various executive department committees such as the Global Executive Committee, the Managerial Administrative Committee, and other such committees; holding information sharing meetings with outside directors to report on business execution items not limited to issues discussed by the Board in a timely matter; holding free discussions on business execution items from the perspective of business CEOs; and engaging in opinion exchanges between outside directors and representative executive officers.

The Board also emphasizes efforts to actively incorporate the opinions of directors through such means as annual surveys that include self-evaluation by each director, in order to create opportunities to gain an overall analysis and evaluation of the effectiveness of the Board of Directors as a whole.

In fiscal 2021, we increased the frequency and content of information sharing meetings and held multiple free discussions on business execution information from the management perspective of business CEOs in order to ensure there would be sufficient communication between directors and executive officers. Execution reports are continuously submitted before the decision-making stage and regular discussions are held between members of the Board of Directors, regardless of whether items in question are required to be submitted as proposals to the Board or not. In last year’s effective evaluation of the Board of Directors, when looking into potential operational issues under the COVID-19 response, we identified that more realistic information sharing and better communication between the Board and the executives was an urgent issue, particularly between business CEOS, and the intensive free discussions between the executives of each business and the Board were seen to have been extremely effective.

In addition, regarding the topics that should be discussed in greater detail by the Board of Directors, it has been noted that various points of view are being addressed and significant progress is being made. Particularly when touching upon purpose management and engagement, the Board has been holding active discussions and providing practical reports, and the discussions themselves are seen to have become more comprehensive. Moreover, discussions are generally conducted with the Board having sufficient awareness of the issues at hand: executives give their directives careful consideration when implementing proposals, at which point the Board of Directors is then able to deliberate again on progress made in what could be called a “virtuous cycle.”

The Group aims to strengthen the supervisory function of the Board of Directors and expedite business execution through delegating a large amount of authority to the executive departments by means of separating management oversight from business execution. By establishing the Nomination, Audit, and Compensation committees as statutory bodies within the organization, we are also able to work towards building a governance system that is highly transparent and fairer.

Between intensive deliberations on important management themes by the Board of Directors, and the Nomination, Audit, and Compensation committees appointing officers, determining their compensation, and supervising the legality and validity of their execution of duty, each of these bodies is more faithfully fulfilling its roles, and engaging in more intense discussions to remain accountable to our stakeholders. Additionally, active deliberations are being undertaken within the Global Executive Committee, the highest decision-making body in the Group, to achieve the Mid-Term Management Plan that serves as the foundation of our management strategy, and to realize our goal of becoming “A Theme Park for Security, Health & Wellbeing.”

The governance system in place allows the directors to supervise and monitor the executive departments and their decision-making, and it is our belief this system is optimized to match our management and business strategies, and that it sufficiently secures a framework for increasing the efficiency of the Board of Directors.

In order to realize our goals as a Group, we will use this governance system as the foundation for us to effectively utilize free discussions between directors and executive departments about important management topics, and by also continually improving the quality of our decision-making, we aim to meet the expectations of our shareholders and other stakeholders.