Corporate Governance System
Hoshizaki's Board of Directors comprises internal Directors who are well-versed in Hoshizaki's operations and outside Directors who possess expertise in management of listed companies, law, accounting, and other matters, thereby ensuring diversity as well as a balance of knowledge, experience, and capabilities across the entire board. Moreover, independent outside Directors account for one-third or more of the Board members. Currently, the Board of Directors comprises eight Directors (excluding Directors who are Audit & Supervisory Committee Members but including two outside Directors) and three Directors who are Audit & Supervisory Committee Members. The Audit & Supervisory Committee comprises one Director who is a standing Audit & Supervisory Committee Member and two outside Directors who are Audit & Supervisory Committee Members. Hoshizaki has also adopted the Executive Officer System and has been further enhancing its corporate governance by distinguishing the decision-making functions of the Directors from the business execution functions of the Executive Officers.
The Board of Directors, a body that makes management-related decisions, meets regularly each month to formulate Group-wide management policies and management strategies and supervise business execution.
At the meetings of the Board of Directors, Directors who are well-versed in the Group’s business and outside Directors who possess a high level of expertise and abundant experience and knowledge make prompt and precise management decisions on business management through careful deliberations.
At the Audit & Supervisory Committee, Directors with sufficient internal knowledge and outside Directors with abundant experience and insight as experts in legal affairs and accounting engage in a vigorous exchange of opinions and fairly monitor and audit the execution of duties of the Directors (excluding Directors who are Audit & Supervisory Committee Members).
Additionally, Hoshizaki has established a Compliance and Risk Management Committee comprising the Directors and other relevant members to promote risk management to the Group and share information, as well as make decisions regarding quick responses to risks and measures to avoid and mitigate their manifestation.
Reason for selecting the corporate governance structure
Hoshizaki has adopted the governance structure of a Company with an Audit and Supervisory Committee in the belief that granting voting rights at the meetings of the Board of Directors to several highly independent outside Directors who are Audit & Supervisory Committee Members will strengthen the supervisory function over the Board of Directors as well as further enhance its corporate governance.
Members of each organization
(Note) ○ indicates membership.
Corporate governance structure
Status of Outside Directors
Hoshizaki appoints corporate managers with abundant experience and deep insight in overall business management as Directors (excluding Directors who are Audit & Supervisory Committee Members), and talent capable of leveraging their perspectives based on their high level of expertise and abundant experience and knowledge as attorney-at-law and certified public accountant, in the company’s audits and monitoring its management from an objective and neutral standpoint as outside Directors who are Audit & Supervisory Committee Members. The outside Directors are independent of the members of management involved in business execution and are designated and notified as independent officers to the Tokyo Stock Exchange and the Nagoya Stock Exchange, as they are deemed to have no risk of conflicts of interest with general shareholders.
Based on the independence criteria of the Tokyo Stock Exchange forming Hoshizaki’s independence criteria, Hoshizaki selects people who are expected to enhance the Board of Directors’ supervisory function and to contribute to lively discussions at the Board as its outside Directors.
The two outside Directors who are Audit & Supervisory Committee Members attend various meetings including those of the Board of Directors, the Audit & Supervisory Committee, and the Compliance and Risk Management Committee. They also share information and coordinate with the standing Audit & Supervisory Committee Member and the internal control divisions, while periodically holding meetings of the Audit & Supervisory Committee with the Internal Audit Office and the Accounting Auditor to enhance mutual cooperation.
Evaluation of the Effectiveness of the Board of Directors
Hoshizaki conducted a questionnaire of all Directors regarding the Board of Directors, covering six items: “the effectiveness of discussions and deliberations,” “the effectiveness of the supervisory function,” “the effectiveness of leadership,” “the effectiveness of environmental improvement,” “the effectiveness of responses to shareholders and stakeholders,” and “the effectiveness of the composition of the Board.” With regard to the effectiveness of the Board of Directors in fiscal 2019, it was determined that based on the results of the questionnaire, the Board functioned favorably with regard to all six of the items described above.
Status of Audits
Status of audits of the Audit & Supervisory Committee
Hoshizaki undergoes audits of the Audit & Supervisory Committee conducted by the three Directors who are Audit & Supervisory Committee Members (including two outside Directors).
Shigeru Motomatsu, an outside Director who is an Audit & Supervisory Committee Member, is a qualified attorney-at-law and has abundant experience and knowledge in legal matters. Satoe Tsuge, an outside Director who is an Audit & Supervisory Committee Member, is a certified public accountant and has abundant experience and knowledge in finance and accounting.
The Audit & Supervisory Committee engages in information exchanges and coordination regarding compliance and risk management by attending meetings such as those of the Board of Directors and the Compliance and Risk Management Committee, while also ensuring and enhancing the effectiveness of internal controls by engaging in information exchanges and coordination, as necessary, with the Internal Audit Office and the Accounting Auditor on the results of audits of internal controls over financial reporting.
Status of internal audits
Hoshizaki has established an Internal Audit Office as an organization that audits the entire Group and reports directly to the President.
The Internal Audit Office enhances mutual cooperation with the Audit & Supervisory Committee and the Accounting Auditor by exchanging information, as necessary, including regular meetings on the yearly schedule and business reports, in order to ensure and improve the effectiveness of internal controls.
Dialogue with Shareholders
Hoshizaki is aware of the importance of proactively holding dialogue with its shareholders and investors, so that their opinions and requests are reflected in management, encouraging corporate growth toward achieving sustained growth and the long-term improvement of corporate value.
Basic IR policy and method of disclosure
Hoshizaki engages in IR activities to inform shareholders and investors of information necessary for their investment decisions in a fair and timely manner. We strive for fairness by having the information published by the Hoshizaki Group disclosed using methods such as registration with TDnet and posting on the Hoshizaki IR website. We also disclose information that does not fall under the Timely Disclosure Rules by using appropriate methods aligned with their intent. Furthermore, in light of the increase in the ratio of non-Japanese shareholders (30% as of the end of December 2019), we have been disclosing financial statements, financial briefing materials (summary versions), and convocation notices of the General Meeting of Shareholders in English and an English-language website has also been established since the second quarter of the fiscal year ended December 31, 2019.
Communication with institutional and individual investors
We hold financial results briefings every half-year period to provide a place where institutional investors can hear an explanation of our company’s performance (results and forecasts) and management strategies directly from the Representative Director and President & COO. Management and IR representatives hold telephone conferences (quarterly) and individual meetings and also attend various briefings organized by securities companies. In addition, we have been conducting factory tours for institutional investors and analysts from time to time, and we are working to further enhance communication with investors in Japan and overseas. For our individual investors, we hold briefings at various securities companies (branch offices, etc.) in order to provide them with a deeper understanding of the Hoshizaki Group. At the briefings, the Chairman & CEO provides an overview of the company as well as an explanation of the management policy and medium-term outlook. These briefings are actively held not only in cities but also in regional areas.
Major IR Activities
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