Relia, Inc.

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Corporate Governance

Basic Views

The Relia Group's position on Corporate Governance is as follows.

  1. We have the utmost respect for the rights of shareholders, and endeavor to ensure that shareholders are treated fairly and their rights are not infringed.
  2. We endeavor to create corporate value and employment while maintaining sound corporate management by building fruitful relationships with stakeholders.
  3. We ensure transparency in regard to all important matters as well as timely and appropriate information disclosure.
  4. In addition to rigorously enforcing regulatory compliance, the Board of Directors and the Audit & Supervisory Board monitor and supervise business operations, thereby working to maximize corporate value.

Corporate Governance System

Corporate Governance System

Outside Directors

Outside Director
Junichi Kishigami

Reasons of Appointment
Mr. Kishigami has been involved in the ICT industry for many years and possesses specialized expertise in digital fields, which will be of increasing importance to the Company going forward. He frequently provides recommendations and guidance from a technical, ICT perspective at meetings of the Board of Directors and greatly contributes to promoting discussion by the board and enhancing its effectiveness. In addition, as chair of the Remuneration Council, he contributed to discussions on increasing the transparency of the remuneration decision-making process by management, including the President & CEO. In light of these considerations, the Company has determined that Mr. Kishigami can be expected to continue to provide appropriate advice and supervision on the Board of Directors from a specialized viewpoint and has therefore elected him as an Outside Director. The Company has designated Mr. Kishigami as an Independent Officer because he meets the requirements for independent officers stipulated by the Tokyo Stock Exchange and the independence standards established by the Company and is therefore judged as having no potential conflicts of interest with general shareholders.

Outside Director
Mikako Yusa

Reasons of Appointment
Ms. Yusa is Partner at Co-Creation Creators LLC. She has been involved in the human resources industry for many years and has direct experience in management. She frequently provides recommendations and guidance from a human resources development perspective in particular on the Board of Directors and greatly contributes to promoting discussion by the board and enhancing its effectiveness. The Company has determined that Ms. Yusa can be expected to continue to provide appropriate advice and supervision on the Board of Directors from the standpoint of human resources utilization, which is an emphasis of the Company's management, and has therefore elected her as an Outside Director. The Company has designated Ms. Yusa as an Independent Officer because she meets the requirements for independent officers stipulated by the Tokyo Stock Exchange and the independence standards established by the Company and is therefore judged as having no potential conflicts of interest with general shareholders.

Outside Director
Isao Kohiyama

Reasons of Appointment
Mr. Kohiyama has been involved in electronics-related businesses for many years at a general trading company and has experience as the president and representative director of an ICT-related operating company in Japan. He therefore possesses specialized experience and broad expertise in business management. He currently serves as Managing Officer at Mitsui & Co., Ltd. and Chief Operating Officer of its IT & Communication Business Unit. The Company has determined that Mr. Kohiyama can be expected to contribute as an Outside Director by utilizing this experience and expertise and has therefore elected him as an Outside Director. Mitsui & Co., Ltd. is a major shareholder of the Company, but the Company has instituted a system so that when transactions with related parties exceed a certain amount, the validity of the transactions, the existence of any problematic transaction terms compared to other customers or suppliers, and other related matters are put before the internal Case Review Committee. Transactions are executed at the Company's independent discretion in the same manner as other regular customers or suppliers. Accordingly, the Company concludes that there are no de facto restrictions from Mitsui & Co. and that a certain degree of independence is maintained.
【Supplementary Explanation of the Conformity Items】
He is Managing Officer at Mitsui & Co., Ltd., which is a major shareholder of the Company, and Chief Operating Officer of its IT & Communication Business Unit.

Outside Director
Naonori Kimura

Reasons of Appointment
Mr. Kimura has been involved in corporate reform and business strategy for many years and has extensive experience as a director at foreign and domestic operating companies and broad expertise in overall business management. He currently serves as Partner at Industrial Growth Platform, Inc. The Company has determined that he can be expected to contribute by utilizing his experience and expertise as an Outside Director to help the Company achieve business growth and raise corporate value into the future and has therefore elected him as an Outside Director. The Company has designated Mr. Kimura as an Independent Director because he meets the requirements for independent officers stipulated by the Tokyo Stock Exchange and the independence standards established by the Company and is therefore judged as having no potential conflicts of interest with general shareholders.

Outside Audit & Supervisory Board Members

Outside Audit & Supervisory Board Member
Shinichiro Kamada

Reason for Appointment
The Company has determined that Mr. Kamada can be expected to provide auditing from an independent outside perspective and checking and advice for the Company's management based on his extensive experience and broad expertise related to management cultivated as an executive at other companies and has therefore elected him as an Outside Audit & Supervisory Board Member. The Company has designated Mr. Kamada as an Independent Audit & Supervisory Board Member because he meets the requirements for independent officers stipulated by the Tokyo Stock Exchange and the independence standards established by the Company and is therefore judged as having no potential conflicts of interest with general shareholders.
【Supplementary Explanation of the Conformity Items】
Mr. Kamada was previously Executive Director at East Japan Railway Company, and now is Chairman and Director of CENTRAL SECURITY PATROLS Co., Ltd.

Outside Audit & Supervisory Board Member
Rika Kawaguchi

Reason for Appointment
Ms. Kawaguchi has worked as an attorney at law for over 20 years, serving on the Labor Law Committee, as a labor consultant for the Tokyo Metropolitan Government Labor Consultation Center, and last fiscal year in the key position of vice-president of the Dai-Ichi Tokyo Bar Association. The Company has determined that Ms. Kawaguchi can be expected to provide auditing for compliance in particular and checking and advice for the Company's management while incorporating into audits from an independent, outside perspective based on her specialized experience and broad expertise as an attorney and has therefore elected her as an Outside Audit & Supervisory Board Member. The Company has designated Ms. Kawaguchi as an Independent Audit & Supervisory Board Member because she meets the requirements for independent officers stipulated by the Tokyo Stock Exchange and the independence standards established by the Company and is therefore judged as having no potential conflicts of interest with general shareholders.

Outside Audit & Supervisory Board Member
Tsuyoshi Saito

Reason for Appointment
The Company has determined that Mr. Saito can be expected to provide auditing from an independent outside perspective and checking and advice for the Company's management based on his extensive experience cultivated during his career in the banking industry and has therefore elected him as an Outside Audit & Supervisory Board Member. The Company has designated Mr. Saito as an Independent Audit & Supervisory Board Member because he meets the requirements for independent officers stipulated by the Tokyo Stock Exchange and the independence standards established by the Company and is therefore judged as having no potential conflicts of interest with general shareholders.
【Supplementary Explanation of the Conformity Items】
Mr. Saito was previously Deputy President and Representative Director at Sumitomo Mitsui Trust Bank, Ltd. and Sumitomo Mitsui Trust Holdings, Inc. and is currently Director and Chairman at Sumitomo Mitsui Trust Club Co., Ltd. and Advisor at Sumitomo Mitsui Trust Business Service Co., Ltd.

Dialogue with Shareholders

This policy expresses the Company's basic views to dialogue between the Company and shareholders and investors based on the “policy on constructive dialogue with shareholders” in the Corporate Governance Code and from the standpoint of fair disclosure.

  1. Constructive dialogue with shareholders and investors contributes to the sustained growth of the Company and to raising its long-term corporate value, and requests for dialogue made by shareholders or investors are addressed by Directors and management within a reasonable scope based on the wishes and main concerns, etc. of shareholders and investors.
  2. The President has overall responsibility for dialogue with shareholders and investors, and in the role of assistant to the President, the Corporate Communications Div. engages in dialogue with cooperation from internal divisions as necessary.
  3. The Company works to actively and fairly disclose information so that shareholders and investors can judge the Company's long-term corporate value. To this end, along with individual meetings, the Company works to further enhance IR activities through various measures that include enhancing its earnings briefings and website.
  4. Opinions and requests to the Company obtained through dialogue are appropriately presented to Directors in a timely manner and utilized in management decision-making.
  5. From the standpoint of fair disclosure, the purpose of dialogue is to exchange constructive opinions based on publicly available information. The Company has established 「Relia Group Compliance Standard」, Insider Trading Prevention Rules, and other internal rules to prevent important internal information that has not been publicly disclosed (insider information) from being divulged externally. When engaging in dialogue, the Company complies with these internal rules and domestic and foreign laws and regulations.

The Internal Control System

The Company's fundamental views on its internal control system are as follows.

“In order to ensure good faith management with a high degree of transparency such that the trust of stakeholders is maintained, the Company works to strengthen corporate governance and enhance internal controls aimed at further increasing the effectiveness of governance. The Company constantly evaluates the internal control system built based on this basic policy and makes necessary improvements to it; this basic policy is also constantly reviewed in response to changing conditions to ensure the appropriateness of business operations. ”

Basic Views on Eliminating Anti-Social Forces and State of Related Efforts

Fundamental Views

Based on the 「Relia Group Compliance Standard」, the Company raises the awareness of officers and employees and ensures enforcement in order to eliminate anti-social forces.

  1. The Company takes a resolute stance against anti-social forces such as corporate extortionists and criminal syndicates and does not engage in payoffs when improper requests are made from such groups.
  2. The Company does not conduct any transactions with anti-social forces or clients or suppliers with any relationship to anti-social forces.

Specific Measures

  1. The Company is a member of Tokubouren, has established a framework for coordinating with the organization, actively participates in related meetings, and works to gather information.
  2. The Company has appointed a manager responsible for preventing improper requests, and the manager attends seminars given by public bodies on handling such requests.
  3. Contracts such as service outsourcing agreements and goods purchase agreements concluded by the Company include clear clauses on cutting off relationships with anti-social forces, and, regarding transactions conducted by the Company, transactions with anti-social forces and clients or suppliers with relationships to anti-social forces are eliminated.

Independence Standards and Qualifications for Independent Directors

The Company has established the following standards for judging independence.
Relia, Inc. (hereinafter, the "Company") has established the following standards related to the independence of Outside Directors and Outside Audit & Supervisory Board Members (hereinafter, collectively, "Outside Officers") in order to ensure the objectivity and transparency of corporate governance. If any of the following apply, the person is treated as not having independence as an independent Outside Officer.

  1. Executives at the Company or the Company's subsidiaries (hereafter, collectively, "the Group") or executives at the Group within the past ten years.
    *"Executives": Refers to executive directors, executive managers, executive officers and other equivalent persons and employees at corporations or other entities. When judging the independence of Outside Audit & Supervisory Board Members, this includes Non-executive Directors.
  2. The Company's current main shareholders or its executives *"Main shareholders": Refers to shareholders with an ownership stake of 10% or more on a voting rights basis, either in their own or other person's name, as of the end of the Company's most recent fiscal year. If the main shareholder is a corporation, this includes its parent company and subsidiaries.
  3. Executives of entities (including its parent company and subsidiaries) in which the Group owns 10% or more of total voting rights either directly or indirectly
  4. The Group's main clients or suppliers or executives thereof
    *"Group's main clients or suppliers" refers to entities that made payments to the Company of over 2% of the Company's annual consolidated net sales in the most recent fiscal year. If the main client or supplier is a corporation, this includes its parent company and subsidiaries.
  5. Entities that have the Group as a main client or supplier or executives thereof
    *"Entities that have the Group as a main client or supplier" refers to entities that received payments from the Company of over 2% of that entity's annual consolidated sales in the most recent fiscal year. If the entity is a corporation, this includes its parent company and subsidiaries.
  6. Persons affiliated with an auditing firm that audits the accounts of the Company or its consolidated subsidiaries
  7. Persons who provide specialized services such as consultants, attorneys and certified public accountants and receive large sums of monetary consideration or other property other than executive remuneration from the Group (if the person receiving property is a consulting firm, law office, accounting office or other such corporate entity, union or other group, the persons affiliated with this group)
    *"Large sums" in this context refers to an amount of property received in the most recent fiscal year that exceeds 10.0 million yen per annum in the case of an individual receiving the compensation, or, in the case of a corporation, union or other group, that exceeds 2% of the group's consolidated sales or total revenue.
  8. Persons receiving large sum donations from the Group (if the person receiving the large sum of donation is a corporation, union or other group, the executives of the group) *"Large sum donations" refers to a donation amount received by the person in the most recent fiscal year that exceeded 10.0 million yen per annum in the case of an individual, or in the case of a corporation, that exceeded 2% of its total revenue.
  9. Executives of financial institutions or other large creditors which are indispensable to the Company's fund procurement and on which the Company depends to the extent of there not being alternatives, or the parent companies or key subsidiaries of those institutions or creditors
  10. Executives of companies at which executives of the Group have been appointed as corporate officers
  11. Persons to which any of the aforementioned 2 through 10 have applied the past three years
  12. Spouses or relatives within the second degree of kinship that qualify as any of the aforementioned 1 through 10
  13. Other persons that potentially have conflicts of interest with general shareholders and that can be reasonably judged as not being able to fulfill the duties of an independent Outside Officer
    [Supplementary Principle 4-11-1]
    (View on the appropriate balance between knowledge,