Corporate Governance

Basic Policies on Corporate Governance

The ACOM Group, guided by its lifelong “circle of trust” spirit, maintains an ongoing corporate commitment to respecting other people, putting the customer first, and conducting creative and innovative management. Based on this commitment, we are seeking to deepen mutual trust between our stakeholders and ourselves and thus progress in partnership with society.

In order to meet the expectations of stakeholders and build stronger trust, we will strengthen corporate governance as a key management priority. To this end, we will take steps to enhance the soundness, transparency, and efficiency of our operations and achieve sustained increases in our shareholder value.

We recognize that effective internal control systems are essential to creating an appropriate corporate governance framework. Based on this recognition, we are encouraging all members of our organization to join forces in building internal control systems and assuring their effectiveness, under the leadership of the President & CEO. At the same time, we are constantly evaluating, verifying, and improving the effectiveness of internal control mechanisms already in place.

Reasons for Non-compliance with the Principles of the Corporate Governance Code

[Applicable Code]
The contents are based on the Corporate Governance Code revised in June 2021.
[Supplementary Principle 4.2.1]
ACOM has performance-linked compensation system based on single year performance in place for compensation for directors (excluding directors serving as members of Audit & Supervisory Committee).
ACOM will continue reviewing medium- to long-term performance-linked compensation system with aim of making compensation for directors effective and sound incentive for sustainable growth of the Company.
[Supplementary Principle 4.2.2]
Regarding “Basic Polices for Sustainability initiatives”, ACOM is currently under consideration along with the sophistication of the content of the initiative and is scheduled to be formulated by the end of May 2022.
[Supplementary Principle 4.10.1]
ACOM has Appointment and Remuneration Committee in place as optional committee in charge of appointment of and compensation for senior management and directors. The structure of appointment and remuneration committee is as follows:
  • The Number of Inside Directors and Independent Outside Directors.
    • Board of Directors: 7 inside directors and 2 independent outside directors
    • Appointment and Remuneration Committee: 4 inside directors and 2 independent outside directors
  • The Number of Directors not Serving as Members of Audit & Supervisory Committee and Those Serving as Members of Audit & Supervisory Committee.
    • Board of Directors: 6 directors who are not members of the committee and 3 directors who are members of the committee
    • Appointment and Remuneration Committee: 3 directors who are not members of the committee and 3 directors who are members of the committee
Independent outside directors do not constitute the majority of Appointment and Remuneration Committee, however, the Company ensures their appropriate involvement and receives their suitable advice upon consideration of appointment and compensation.
[Principle 4.11]
In order to be able to effectively fulfill the roll and responsibility of the Board of Directors, ACOM has created a skill matrix for directors after identifying the skills that the directors should hold in particular.
The Board of Directors of the Company consists of nine members, and as described in the skill matrix, the Company strives to ensure a good balance of knowledge, experience, abilities and age while ensuring diversity.
There are no female directors or foreigner directors at the Company at this point. However, the Company is willing to nominate any individuals who meet criterion in appointment policy as candidate and who holds the skill that the directors should hold, regardless of one’s gender and nationality.
[Principle 5.2] [Supplementary Principle 5.2.1]
ACOM has formulated a new profit plan based on its capital expenses. Consequently, it has set new basic policy on capital as “for increasing return to shareholders while placing top priority on optimizing shareholders’ equity.” Additionally, it has set ROE target of 12% or more.
Regarding the revision of profit plan, the basic policy on capital and the target of profitability and capital efficiency, etc., and the basic policy of business portfolio, etc., the Company plans to consider them with respect to the formulation of next medium-term management plan with 2022 as the first year.

Disclosure Based on the Principles of the Corporate Governance Code

[Applicable Code]
The contents are based on the Corporate Governance Code revised in June 2021.
[Principle 1.4]
The Company currently does not have any strategic shareholdings and does not plan to do so in the future.
[Principle 1.7]
Pursuant to relevant laws, it is provided in our regulations of board of directors that transactions with directors and material transactions with major shareholders require prior approval of the board of directors.
[Supplementary Principle 2.4.1]
<Approach to Ensure Diversity>
Under the situation where competition between companies is intensifying and changes in needs are accelerating, in order to implement “creative and innovative management” that the Company advocates in its corporate philosophy, and to continue to meet the expectations from stakeholders, it is necessary to create a new value by fusing abilities, ideas and values from diverse human resources.
With that in mind, ACOM is actively taking measures to secure diversity, including recruitment, promotion, and human resource development of female and mid-career employees.
<Status of Voluntary and Measurable Goals for Ensuring Diversity>
To ensure the diversity of core human resources, ACOM has set the following targets for the ratio of females and mid-career hires in managerial or higher positions.
Category Current Target
As of October 1, 2021 By March 31, 2024
Percentage of Females in managerial positions 18.3% 20.0%
Percentage of Mid-Career Hires in managerial positions* 5.8% Increase from current level

*For the purpose of this tabulation, mid-career hires are defined as “those who joined the company mid-career hires are defined as “those who joined the company mid-career and have been with the company for 10 years or less.

In addition, the Company promotes employees to managerial position with an emphasis on their ability and personality regardless of their nationality.

< Policies on Human Resource Development, Internal Environmental Development, and Implementation Status to Ensure Diversity>
Through training for female and mid-career hires, as well as enlightenment activities related to diversity, ACOM aims to promote the understanding of diversity within the company and respect and make maximum use of the abilities, ideas, values, etc. of diverse human resources and develop human resources who can lead the organization in a unified and appropriate manner.
ACOM will also create an internal environment that allows employees from various backgrounds to choose a flexible work style that suits their lifestyle.
Based on the above policy, ACOM is implementing the following human resource development and internal environment development.
Category Status
Human Resource Development
  • Implemented leadership training for female, career design training for female, training for those returned to work after childcare leave, and training for mid-career hires when they join the company.
  • Teaching materials to learn about “diversity and human rights”, “LGBT”, “balancing work and long-term care”, etc. are posted on the company intranet and provided to employees.
Internal Environment Development
  • Paying salary when taking childcare leave. (up to 5 days)
  • Able to select from 5 patterns of short working hours for childcare.
  • Granted paid special leave for fertility treatment (up to 5 days)
  • Able to take paid leave for the purpose of support for family nursing / nursing care and childbirth / childcare.
  • Implemented measures to acquire the Platinum Kurumin Mark (promotion of taking childcare leave and efforts to realize a smooth return to work).
  • Stipulated in the regulations that words and actions that worsen the working environment such as suggestion of disadvantageous treatment and harassment regarding the use of systems and measures related to pregnancy, childbirth, childcare, etc. are prohibited.
  • Paid leave is available on an hourly basis.
  • Paid leave is granted at the time of joining the company (statuary is 6 months after joining the company).
  • Introduced a course-based personnel system that allows the employee to select whether or not to be transferred.
  • Introduced a telecommuting system.
  • Established a consultation desk for employees with disabilities.
[Principle 2.6]
The Company has Corporate Pension Asset Management Committee in place to effectively manage corporate pension asset. The committee comprises of the director in charge of Human Resources Dept. and chief general managers of Human Resources Dept., Corporate Planning Dept., Finance Dept. and Treasury Dept.
The members of the committee need to deepen their understandings on investment theory, asset management system, contents of asset for investment, etc. They also need to grasp asset management environment. Therefore, the Company provides necessary information from trustee management institutions to committee members in periodic manner.
The committee discusses basic policy on corporate pension asset management, matters on investment and trustee management institutions. The Company further discusses these matters at management meeting where Audit & Supervisory Committee members attend and share their opinion. Therefore, the Company ensures appropriate management of corporate pension asset.
[Principle 3.1]

(i) Guiding Principles of the Company (Corporate Philosophy, etc.), Management Strategy and Management Plan

(1) Guiding Principles of the Company (Corporate Philosophy, etc.)

Please refer to “Corporate Philosophy” on our website.

(2) Management Strategy and Management Plan

Please refer to “Medium-term Management Plan” on our website.

(ii) Basic approach and key policies on corporate governance

Please refer to “I. 1. Basic Policy” of our “Corporate Governance Report” for our basic approach and key policies on corporate governance.

(iii) Policies and procedures for determining compensations for senior management and directors

Please refer to “II. 1. [Compensation for Directors]” of our “Corporate Governance Report” for our policies and procedures for determining compensation for senior management and directors.

(iv) Policies and procedures for appointing and dismissing senior management, and nominating candidates for directors

(1) Policies

(A) Appointing Senior Management

  • The candidate owns rich experience, in-depth insight and high expertise of Company’s business which are necessary for conducting swift and pertinent business execution.
  • The candidate possesses great humanity such as wide trust from others, dignity and high moral.
  • The candidate is sound both in mind and body, and does not possess possible concern for business performance.
  • The candidate does not have any past record of violations of law and compliance (including harassment) which inflicted significant loss to the Company and any other entities the candidate has served.
  • The candidate is not affiliated with any anti-social forces.

(B) Dismissing Senior Management

  • A senior management is dismissed when one no longer meets criterions under appointment policy.

(C) Nominating Candidates for Directors (Excluding Those Serving as Members of Audit & Supervisory Committee)

  • The candidate owns rich experience, in-depth insight and high expertise which are necessary for efficient supervision on management.
  • The candidate possesses great humanity such as wide trust from others, dignity and high moral.
  • The candidate is sound both in mind and body, and does not possess possible concern for business performance.
  • The candidate does not have any past record of violations of law and compliance (including harassment) which inflicted significant loss to the Company and any other entities the candidate has served.
  • The candidate is not affiliated with any anti-social forces.

(D) Nominating Candidates for Directors Serving as Members of Audit & Supervisory Committee

  • The candidate owns rich experience in management, laws, finance and accounting, combined with deep insight and high degree of expertise needed for achieving management transparency and improving objectivity.
  • The candidate possesses great humanity such as wide trust from others, dignity and high moral.
  • The candidate is sound both in mind and body, and does not possess possible concern for business performance.
  • The candidate does not have any past record of violations of law and compliance (including harassment) which inflicted significant loss to the Company and any other entities the candidate has served.
  • The candidate is not affiliated with any anti-social forces.

(E) Nominating Candidates for Directors Appointed as Independent Directors

  • The candidate within (C) and (D) who is appointed as Independent Directors meets all requirements below and items set forth in “Independence Standards for Outside Directors.”
    * Please refer to “I. 1. Basic Policy [Disclosure Based on the Principles of the Corporate Governance Code] [Principle 4.9]” for “Independence Standards for Outside Directors.”
  • The candidate is capable of offering advices on management policies and management improvements, by utilizing knowledge, from the viewpoint of increasing medium- to long-term corporate value by promoting sustainable growth of the Company.
  • The candidate is capable of supervising management through appointment/dismissal of senior management and other significant decision makings at the Board of Directors.
  • The candidate is capable of supervising conflict of interests between the Company, management, controlling shareholders, etc.
  • The candidate is capable of reflecting opinions of stakeholders including minority shareholders at the Board of Directors, independent from the management and controlling shareholders, in a proper manner.

(2) Procedures

(A) Appointing and Dismissing Senior Management

The board of directors resolves appointments based on policies above after examinations are conducted and proposals are made by appointment and remuneration committee.

(B) Nominating Candidates for Directors (Excluding Those Serving as Members of Audit & Supervisory Committee)

The board of directors resolves appointments based on policies above after examinations are conducted and proposals are made by appointment and remuneration committee.

(C) Nominating Candidates for Directors Serving as Members of Audit & Supervisory Committee

The board of directors resolves appointments based on policies above upon agreement by the Audit & Supervisory Committee after examinations are conducted and proposals are made by president.

(v) Explanation on Appointment of Senior Management and Nomination of Individual Candidates for Directors

Explanation on appointment of senior management and nomination of individual candidates for directors (excluding those serving as members of Audit & Supervisory Committee) and directors serving as members of Audit & Supervisory Committee is mentioned on our convocation notice for ordinary general meeting of shareholders which is available for inspection on our website.

General Meeting of Shareholders
[Supplementary Principle 3.1.3]

ACOM is implementing sustainability initiatives as follows:

Category Details
Consideration for global environment problems As part of environment conservation activity, ACOM implement reduction of electricity consumption on ATM and illumination signboard, shift to paperless operations, and participation in local cleaning projects.
Respect for human rights ACOM conducts each activity under its philosophy “The Spirit of Human Dignity”.
Consideration for employee health and working environment and fair and appropriate treatment ACOM has implement various initiatives related to creating workplace with open culture, promoting work-life balance, promoting health management, diversity, and welfare programs.
Fair and proper transactions with business partners Under ACOM’s code of conduct, it is listed “In our corporate activities, we respect the meaning of fair and free competition and follow fair market rules and appropriate commercial practices.”
Crisis management for natural disaster, etc. ACOM has established regulation and manual for crisis management, and developed a structure to ensure business continuity and prompt recovery of normal functions in the event of a crisis.
Investment in human capital ACOM has set up a Personnel Development Office, which is a specialized department for employee education, and implemented various training programs such as “on-the-job training (OJT),” “level-based training,” “selective training courses”. ACOM also has implemented self-development support such as “correspondence education”, “public qualification acquisition support”, “reading support”, and promotion of acquisition of “Chief of money lending operation” qualification.
Investment in intellectual property ACOM has implemented brand awareness activities to strengthen its brand power, AI-based data analysis to enhance credit and credit screening capabilities, and employee training and CS promotion activities to enhance customer service.
[Supplementary Principle 4.1.1]
The Company delegates decision-making on matters related to the execution of business operations other than matters to be resolved at the Board of Directors, to president and director. Moreover, the “Rules for the Board of Directors” of the Company provides the matters to be discussed at the Board based on laws and the article of incorporations. With regard to other business executions, the Board aims for expedite decision-makings and business execution, and clarification of roles of supervision and execution through following measures: appointing directors in office; providing division of duties, and roles and responsibilities on “Rules for Division of Duties within the Company”; and delegating business execution to executive officers.
[Principle 4.9]
The Company has set following “Independence Standards for Outside Directors” in order to focus on ensuring independence of Outside Independent Directors.

“Independence Standards for Outside Directors”

The Company appoints Independent Outside Directors who meet all requirement items 1 through 7 below.

1. Meet all requirements stipulated under Article 2, Paragraph 15 of the Companies Act;

2. Do not fall under any of items (1) through (3) below.

  • (1) Major creditors of the Company1 or their executors of operations, and were executors of operations in the last three years;
  • (2) Those for whom the Company is a major business partner2 or their executors of operations, and were executors of operations in the last three years:
  • (3) Major business partners of the Company3 or their executors of operations, and were executors of operations in the three years;

3. Are not consultants, accountants or legal experts who receive, in terms of the average for the past three years, \10 million or more of monetary or other property benefits other than executive remunerations from the Company, nor belong to accounting or law firms where the Company is a major business partner4;

4. Are not Directors, officers or executive officers of the Company or its subsidiaries, nor spouses or relatives within the second degree of kinship of those whom the Company judges their independences are not ensured as provided in items 2 and 3;

5. Are not current major shareholders5 of the Company or their executors of operations;

6. Those who do not belong to auditing firms of the Company or its subsidiaries, nor were in charge of auditing operations of the Company or its subsidiaries as employees of said auditing firms.

7. Were not executors of operations at the parent company and/or fellow subsidiary of the Company in the last ten years.

  • (Notes)
  • 1. “Major creditors of the Company” refer to those the Company procures 3% or more of its consolidated amount of borrowings.
  • 2. “Those for whom the Company is a major business partner” refer to those the Company accounted for 2% or more of their consolidated sales.
  • 3. “Major business partners of the Company” refer to those who accounted for 2% or more of the Company’s consolidated operating revenue.
  • 4. “Accounting or law firms where the Company is a major business partner” refers to those the Company for 2% or more of their consolidated sales.
  • 5. “Major shareholders” refer to those who hold 10% or more of the Company’s total voting rights.

* Transaction included in “Attributes of Directors” shall be omitted as within range of negligible standard when items above are fulfilled.

[Supplementary Principle 4.11.1]
The Board of Directors of the Company consists of nine members, two of whom are Independent Outside Directors, in order to expedite decision-makings and ensure effective mutual monitoring among directors. In order to ensure diverse perspectives in the Board, the Company appoints individuals with following qualifications as Directors: rich experience within the Company or from different companies; deep insight and high expertise.

The Company have created a skill matrix of the Board of Directors as follows:

Name Position Age Corporate
Management
and Planning
Business
Management
Execution
of Duties
System
and
Digital
Finance and
Accounting
Law,
Compliance,
and, Risk
Management
Director
(outside)
Shigeyoshi Kinoshita Chairman 72
Hiroshi Naruse Deputy Chairman 62
Masataka Kinoshita President & CEO 43
Tomomi Uchida Senior Managing Director 59
Takashi Kiribuchi Senior Managing Director 59
Masakazu Oosawa Director 53
Masahide Ishikawa Director, Member of the Audit & Supervisory Committee 65
Kazuo Fukumoto Director, Member of the Audit & Supervisory Committee 63
Takuji Akiyama Director, Member of the Audit & Supervisory Committee 63
Certified public accountant
  • * The above is a list of up to three major skills marked that each director possesses. It does not represent all the skills that each director possesses.
  • * The age, shown above, is as of the 44th Ordinary General Meeting of Shareholders (June 23, 2021)
[Supplementary Principle 4.11.2]

Information on individual directors who have material concurrent post including other listed companies is mentioned on our convocation notice for ordinary general meeting of shareholders which is available for inspection on our website.

General Meeting of Shareholders
[Supplementary Principle 4.11.3]
The Company distributes surveys regarding the effectiveness of the Board to all directors every year. The Company conducts analysis and evaluation on effectiveness of the Board based on the results of surveys.
The Company conducted abovementioned analysis and evaluation this fiscal year. Consequently, the Company confirmed that the Board fulfills each and all of its function in formulation of management strategies and targets, settling management challenges, supervision on risk managements and business executors. Thus, the Company concluded that its current Board functions properly and its effectiveness is ensured.
Moreover, the Company assessed that it has made certain level of advancements on further deepening of awareness on external opinions, activation of discussions held at the Board and sophisticating matters reported to the Board, which were issues recognized in previous fiscal year.
Meanwhile, the Company recognized that current issues to be addressed include: reorganization of the Board agenda and further sophistication of reference material used at the Board. Therefore, the Company strives for improvement on these issues.
While the company will operate the Board of Directors in manners as described below, the Company will sustain periodic analysis and evaluation on effectiveness of the Board and continue its efforts to ensure enhanced effectiveness of the Board.

(1) The Board will decide material business management matters, such as management strategies and business plans, and also will determine basic policies for building corporate governance and internal control systems. The Board will monitor and supervise the execution of duties.

(2) Material subjects will be exhaustively selected as agendas based on regulations for matters to be resolved at the Board, provided in rules of the Board of Directors. The Board will discuss such selected material in timely and appropriate manner.

(3) The Company will distribute materials to be used at the Board prior to the meeting to make it efficient and vigorous. Prior explanations will be given when deemed necessary.

(4) The Board will receive periodic reports on business managements, etc. and supervises business execution.

[Supplementary Principle 4.14.2]
The Company provides trainings to directors when deemed necessary upon their inaugurations. Even after their assumption of offices, the Company provides continuous training programs on diverse topics such as market trend of the Company’s business segment and global economic issues
[Principle 5.1]
(1) Development of Systems to Promote Constructive Dialogues with Shareholders

In addition to the ordinary general meeting of shareholders, the director in charge of Public Relations & CSR Dept. presides over dialogues with shareholders. Public Relations & CSR Dept. collaborates with relevant departments and conducts interim and annual earnings release conferences, domestic conferences (4 times a year), overseas IR roadshow (twice a year) and individual IR meetings (from 200 to 300 meetings per year).

Feedbacks given through these contacts with shareholders are reported to the Board of Directors.

(2) Basic Policy on Measures to Promote Constructive Dialogues with Shareholders

The Company strives for timely and appropriate dialogues with every shareholder to attain continuous growth and mid- to long-term enhancement in corporate value. With regard to information disclosure, we will endeavor to expand our disclosure proactively beyond the scope of disclosure required by laws and regulations to information deemed beneficial to facilitate understanding of the Company by shareholders.
Upon disclosing such information, we will strive to disclose information in fair and prompt manner to both the domestic and the overseas shareholders through our website and processes designated by the Tokyo Stock Exchange.
In certain cases, forward-looking statements may be included in the information that we disclose. In regard to such forward-looking statements, we will strive to fully explain our assumptions, uncertain factors, etc. in order to avoid giving a false impression to the market.
In order to prevent divulgence of financial results information and ensure fairness of information disclosure, certain period prior to announcement of financial results shall be regarded as “Silent period” where we refrain from making any comments or answering inquiries regarding financial results.

Corporate Governance and Internal Control System Structure

Corporate Governance and Internal Control System Structure Scale up

An overview of corporate governance structure and reasons for employing said structure

The Company is a company with an Audit & Supervisory Committee and aims to enable swift decision-making and enhance the Board of Directors’ supervisory functions by significantly delegating decision-making on material business executions to directors from the Board of Directors. The Board of Directors, in turn, performs thorough monitoring and other measures on delegated matters.

The Company aims to improve the transparency and objectivity of its management by having an Audit & Supervisory Committee composed mainly of outside directors conduct audit and supervisory functions.

The organs installed by the Company are as follows:

Board of Directors

The Board of Directors of the Company consists of nine members: President & CEO Masataka Kinoshita who chairs the Board, Directors Shigeyoshi Kinoshita, Hiroshi Naruse, Tomomi Uchida, Takashi Kiribuchi and Masakazu Oosawa, and Members of Audit & Supervisory Committee Masahide Ishikawa (Outside Director), Kazuo Fukumoto and Takuji Akiyama (Outside Director).

The Board deliberates and decides important business management matters, such as management strategies and business planning, and basic policies for building corporate governance and internal control systems, while ensuring objective and rational judgment. Furthermore, the Board delegates decision-making on matters related to the execution of business operations other than matters to be resolved at the Board of Directors to President and Director, and monitors and supervises the execution of duties by thorough monitoring and other measures on delegated matters.

It meets at least once every quarter, in principle, and more as deemed necessary.

Audit & Supervisory Committee

The Audit & Supervisory Committee consists of three members: Masahide Ishikawa (Outside Director) who chairs the committee, Kazuo Fukumoto and Takuji Akiyama (Outside Director).

It meets regularly to receive reports concerning important audit-related matters, hold discussions, and pass resolutions.

Committees

  1. Appointment and Remuneration Committee

    The Appointment and Remuneration Committee consists of six members: President & CEO Masataka Kinoshita who chairs the committee, Representative Directors Shigeyoshi Kinoshita and Hiroshi Naruse, and Members of Audit & Supervisory Committee Masahide Ishikawa (Outside Director), Kazuo Fukumoto and Takuji Akiyama (Outside Director).

    The Appointment and Remuneration Committee reviews and proposes the appointment of candidates and remuneration for Directors (excluding those serving as Audit & Supervisory Committee Members) for resolution at the Board of Directors Meeting. The Committee also checks management and the status of training for candidates for management and provides an overview of the same to the Board of Directors.

    The Appointment and Remuneration Committee meets three times a year, in principle, and more as deemed necessary.

  2. Compliance Committee

    The Compliance Committee consists of seven members: an expert from outside the Company Tatsuzo Honma who chairs the committee, experts from outside the Company Tan Mitchell and Yasunari Takaura, Outside Director Masahide Ishikawa (Members of Audit & Supervisory Committee) and Representative Directors Shigeyoshi Kinoshita, Hiroshi Naruse and Masataka Kinoshita. The Committee discusses and, as necessary, makes recommendations to the Board of Directors about the following compliance-related matters.

    • Items relating to formulation, revision or abolishment of the ACOM Group Code of Ethics and Code of Conduct;
    • Important items related to establishment and operation of compliance systems;
    • Items relating to formulation of basic plans;
    • Items relating to the correction of major violations, actions for improvement and recurrence prevention measures; and
    • Important items related to other compliance issues.

    The Compliance Committee meets six times a year, in principle, and more as deemed necessary.

  3. Financial Information Disclosure Committee

    The Financial Information Disclosure Committee consists of eleven members: an executive officer who concurrently serve as director in charge of Treasury Department Tomoo Shikanoya who chairs the committee, executive officers who concurrently serve as directors in charge of the relevant departments, Tomomi Uchida, Masatoshi Nabeoka, Takashi Kiribuchi, and chief general managers in charge of the relevant departments, Akifumi Kinoshita, Hiroko Shioiri, Masamitsu Iwamura, Kazuki Morishita, Masahiko Machida, Takashi Okamoto and Daishi Haraguchi.

    In the presence of Members of Audit & Supervisory Committee, the Committee deliberates in advance the items related to the improvement of the financial disclosure system and the financial information to be disclosed for resolution at the Board of Directors Meeting, in order for the disclosure of the financial information and internal control of financial reports to be made in accordance with the relevant laws in a timely and in an appropriate manner.

    The Financial Information Disclosure Committee meets at least once every quarter, in principle, and more as deemed necessary.

  4. Corporate Risk Committee

    The Corporate Risk Committee consists of seven members: Deputy Chairman Hiroshi Naruse who chairs the committee, Representative Directors Shigeyoshi Kinoshita and Masataka Kinoshita, and Members of Audit & Supervisory Committee Masahide Ishikawa (Outside Director), Kazuo Fukumoto and Takuji Akiyama (Outside Director), and an executive officer who concurrently serve as director in charge of Corporate Risk Management Department Masatoshi Nabeoka.

    The Corporate Risk Committee discusses important items related to risk management and makes proposals and reports to the Board of Directors as deemed necessary. The Committee also monitors the status of risk management and other matters and reports the results to the Board of Directors.

    The Corporate Risk Committee meets at least once every quarter, in principle, and more as deemed necessary.

  5. Conflict of Interest Advisory Committee *Established on December 23, 2021

    The Conflict of Interest Advisory Committee consists of three independent persons, chaired by independent director (outside) Masahide Ishikawa, the independent director (outside) Takuji Akiyama, and lawyer from Nozomi Sogo Attorneys at Law, Hitoshi Shimbo. The Committee deliberates on material transactions, etc. where the controlling shareholders’ interest conflicts with minority shareholders’ from the perspective of protecting the interests of minority shareholders and makes recommendations to the Board of Directors, etc.

    The Conflict of Interest Advisory Committee meets, in principle, each time when there is a material transaction, etc. where controlling shareholder’s interest conflicts with the minority shareholders’ interest.

Executive Officers’ Meeting

The Executive Officers’ Meeting consists of eleven members: President & CEO Masataka Kinoshita who chairs the committee, Representative Directors Shigeyoshi Kinoshita and Hiroshi Naruse, executive officers who serve concurrently as directors Tomomi Uchida, Takashi Kiribuchi, Masaru Kuroda, Michihito Onodera, Tomoo Shikanoya, Masashi Yoshiba, Yuji Kinoshita and Masatoshi Nabeoka.

In the presence of Members of Audit & Supervisory Committee, the Executive Officers’ Meeting discusses and makes decisions related to the execution of important business operations delegated by the Board of Directors to the President and Director, and deliberates management policies and management plans in advance for resolution at the Board of Directors Meeting in accordance with basic policies determined by the Board of Directors.

The Executive Officers’ Meeting assembles three times a month, in principle, and more as deemed necessary.

Appointment of Outside Directors and Reason Thereof

The Company has two Outside Directors. Their relationships with the Company are as shown in the chart below.

With respect to the standards for selecting candidates for independent outside directors, the Company places emphasis on how the candidates satisfy the standards regarding the independency of independent directors stipulated by the Tokyo Stock Exchange and whether or not the candidates have extensive experience, deep insight, and advanced expertise.

Name of Outside Director Relations with the Company
Masahide Ishikawa
  • Mr. Masahide Ishikawa is an Outside Director as stipulated under Article 2, Paragraph 15 of the Company Law.
  • He has a wealth of knowledge and experience acquired in the finance industry over many years, and accomplishments as a corporate manager. He has also served as Vice Chairman of the Japan Investment Advisers Association twice, and thus has wide-ranging insight. Therefore, the Company believes that he can supervise and provide appropriate advice for the management of the Company from an external viewpoint based on his knowledge and experience. Upon his election, he is expected to play the role as an Outside Director to provide advice on management policies and improvements to be made from a standpoint of accelerating sustainable growth and striving towards enhancement of medium- to long-term corporate value based on his insight, and to supervise the management from an independent viewpoint through the appointment and dismissal of its members and other important decision-making at the Board of Directors meetings.
  • As he meets all requirements for “Independence Standards for Outside Directors” the Company has formulated, he has been designated as an independent director.
Takuji Akiyama
  • Mr. Takuji Akiyama is an Outside Director as stipulated under Article 2, Paragraph 15 of the Company Law.
  • He is expected to supervise and audit the management of the Company from a neutral and objective viewpoint based on his advanced expertise and abundant experience gained in finance and accounting audits through his career as a certified public accountant over many years. Although he has not been directly involved in corporate management other than as an outside company auditor, it is anticipated that he will perform his duties as an Outside Director appropriately for the aforementioned reasons.
  • Upon his election, he is expected to play the role as an Outside Director to provide advice on management policies and improvements to be made from a standpoint of accelerating sustainable growth and striving towards enhancement of medium- to long-term corporate value based on his insight, and to supervise the management from an independent viewpoint through the appointment and dismissal of its members and other important decision-making at the Board of Directors meetings.
  • As he meets all requirements for “Independence Standards for Outside Directors” the Company has formulated, he has been designated as an independent director.

Compensation to Directors and Company Auditors

  1. Matters concerning the policy for the decision on the amounts of compensation to Directors and Company Auditors or the calculation method thereof
    The Board of Directors determined a policy concerning the decision on the details of individual compensation payable to Directors (excluding Directors serving as Audit & Supervisory Committee Members). In summary, compensation payable to Directors (excluding Directors serving as Audit & Supervisory Committee Members) is designed to sufficiently function as an incentive to aim for sustainable increase in corporate value by benchmarking the compensation levels of peer companies in related industries and segments with similar business scale. Compensation to each Director is to be payable in cash. Compensation to full-time Directors (excluding Directors serving as Audit & Supervisory Committee Members) consists of basic compensation and performance-linked compensation, while compensation to part-time Directors consists of basic compensation only. Basic compensation is fixed compensation to be paid once monthly, and performance-linked compensation is variable compensation to be paid once yearly according to business results.
    The Company determines the amount of basic compensation payable to Directors (excluding Directors serving as Audit & Supervisory Committee Members) at the Board of Directors after the Appointment and Remuneration Committee deliberates and proposes the respective amounts to be paid according to the position and other factors, in consideration of the compensation levels at other companies, the business results of the Company, the levels of employees’ salaries and other factors. The Company determines the amount of performance-linked compensation payable to Directors (excluding Directors serving as Audit & Supervisory Committee Members) at the Board of Directors after the Appointment and Remuneration Committee calculates the basic source of distribution using “Profit attributable to owners of parent” as an indicator, and deliberates and proposes the respective amounts to be paid according to the positions, individual evaluations and other factors.
    The target percentage of performance-linked compensation out of total compensation is approximately 20% (assuming a standard amount of performance-linked compensation). The reason for the selection of this indicator (“Profit attributable to owners of parent”) for performance-linked compensation payable to full-time Directors (excluding Directors serving as Audit & Supervisory Committee Members) was to establish an objective and transparent compensation system for full-time Directors (excluding Directors serving as Audit & Supervisory Committee Members) by firstly linking it to single-year performance, in light of the situation where dividends were not distributed continuously until the interim dividend for the fiscal year ended March 31, 2018. The amount of performance-linked compensation is decided by a method whereby the Appointment and Remuneration Committee first determines a range of profit, which becomes a standard for basic source of distribution, by taking into consideration special factors such as future increases in tax burden and extraordinary income or loss, and the Board of Directors determines a specific amount of performance-linked compensation by multiplying the basic source of distribution by a ratio corresponding to the ratio of distribution for each title and individual evaluation of Directors.
    While target figures for the indicator for performance-linked compensation have not been determined for the current fiscal year, the actual figure of the basic source of distribution amounted to 45 million yen, with the standard range of profit from 70,000 million yen to less than 80,000 million yen.
    Other details of the compensation payable to Directors are deliberated and proposed by the Appointment and Remuneration Committee and thereupon determined by the Board of Directors. The amount of compensation payable to Audit & Supervisory Committee Members is determined through consultation among Audit & Supervisory Committee Members in consideration of their duties and responsibilities.
    At the 40th Ordinary General Meeting of Shareholders held on June 22, 2017, it was resolved that compensation payable to Directors (excluding Directors serving as Audit & Supervisory Committee Members) per year shall be no more than 400 million yen (excluding the portion of employee’s salary payable to Directors who concurrently serve as employees). The number of Directors (excluding Directors serving as Audit & Supervisory Committee Members) as of the conclusion of the above Ordinary General Meeting of Shareholders was six. In addition, at the same Ordinary General Meeting of Shareholders, it was resolved that compensation payable to Directors serving as Audit & Supervisory Committee Members per year shall be no more than 100 million yen. The number of Directors serving as Audit & Supervisory Committee Members as of the conclusion of the above Ordinary General Meeting of Shareholders was four.
    The details of the individual compensation payable to each Director for the fiscal year under review were determined by the Board of Directors within the compensation limit approved by the general meeting of shareholders respecting the proposal from the Appointment and Remuneration Committee submitted upon deliberation based on the Director’s position, evaluation, and other factors. Therefore, the Company believes that the details are in line with the Policy.
  2. Total amount of compensations by categories for the Filing Company, total amount of compensations by type, and the number of paid officers
    Category Total amount
    (Millions of yen)
    Total amount of compensations by type (Millions of yen) Number of persons
    Fixed compensation Performance-linked compensation Retirement benefits
    Directors
    (excluding
    Audit &
    Supervisory
    Committee
    Members
    and
    Outside
    Directors)
    187 148 39 - 7
    Audit
    and
    Supervisory
    Committee
    Members
    (excluding
    Outside
    Directors)
    20 20 - - 1
    Outside
    Directors
    and
    Outside
    Company
    Auditors
    37 37 - - 2
    Total 245 205 39 - 10

    (Notes)

    1. There are no employee-directors.

    2. "Number of persons" represents the cumulative number of directors who received compensation during the current fiscal year.

  3. Total amount of consolidated compensations by Filing Company's officers.
    This is omitted as none of officers of the Filing Company received aggregated consolidated compensations of 100 million yen and above.

Status of securities held by the Company

  1. Criteria and basic stance of classification of investment securities
    For classification between investment securities held for pure investment purposes and investment securities held for other than pure investment purposes, the Company does not hold any investment securities held for other than pure investment purposes and does not have a plan to hold them in the future.
  2. Investment securities held for other than pure investment purposes
    Not applicable
  3. Investment securities held for pure investment purposes
    Category Fiscal Year Ended March 2021 Fiscal Year Ended March 2020
    Number of names
    (Name)
    Value in balance sheet
    (Millions of yen)
    Number of names
    (Name)
    Value in balance sheet
    (Millions of yen)
    Non-listed
    Securities
    18 817 19 817
    Securities
    other than
    the above
    2 0 2 0
    Category Fiscal Year Ended March 2021 (Millions of yen)
    Total dividend received Total gain or loss on sale Total valuation gain or loss
    Non-listed
    securities
    25 - (Note)
    Securities
    other than
    the above
    - 28 0

    (Note) “Total valuation gain or loss” is not shown for non-listed securities, since they have no market value and it is considered extremely difficult to obtain the value of such securities.

  4. Investment securities, of which holding purpose has been changed from pure investment to other than pure investment
    Not applicable
  5. Investment securities, of which holding purpose has been changed from other than pure investment to pure investment
    Not applicable

Promoting Prompt and Accurate Fair Disclosure

ACOM endeavors to maintain and improve transparency of management for the benefit of stakeholders through accurate and prompt disclosure of various management information. Concurrently, ACOM concentrates on diverse investor relations activities both in domestic and overseas. These consist of, but not limited to: earnings release conferences for investors and institutional analysts; individual interviews; conference calls, and overseas IR roadshow.

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