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Corporate Governance Basic Policy

Corporate Governance Basic Policy

1. Basic Concept of Corporate Governance

  Toppan Forms Co., Ltd. (hereinafter referred to as “the company”) aims to continuously enhance corporate value over the long term, to meet the expectations of our various stakeholders, including shareholders, clients, business partners, local communities, and employees.
  Corporate governance is considered extremely important as a basis to successfully meet these expectations. As such, the company has decided on a corporate governance basic policy, which it will put into practice and continuously review, in order to fully utilize its management resources and raise the level of trust of our shareholders and other stakeholders.

2. Securing the Rights and Equal Treatment of Shareholders

(1)Securing the Rights and Equal Treatment of Shareholders

  • ・The company will take measures to ensure the rights of shareholders, and develop an environment in which shareholders are able to exercise those rights.
  • ・When it is deemed that a measure proposed by the company received a considerable number of negative votes despite being approved at the general meeting of shareholders, the company will analyze the cause of the large number of negative votes, and will consider holding a dialogue with shareholders based on the results of that analysis, or communicating the results of the analysis to shareholders at a briefing session.
  • ・The company will give full attention to ensuring shareholder equality and to ensuring that minority shareholders are able to exercise their rights.
  • ・The company has not introduced takeover defense measures. If the company’s shares become the target of a takeover bid, the Board of Directors will consider measures to deal with this and disclose this information.
  • ・When implementing a capital policy that results in a change of control or large-scale dilution of shares (capital policy that may harm shareholder interests), the company will ensure that reasonable measures are taken so that the interests of existing shareholders are not unfairly harmed, as well as providing shareholders with sufficient explanation.
  • ・Transactions with the company’s officers or major shareholders (transactions between related parties) will be discussed and approved by the Board of Directors.

(2) General meeting of shareholders

  • ・The company acknowledges that the general meeting of shareholders is a place for constructive dialogue, and as such will report on its business and explain the issues that need to be dealt with, holding question-and-answer sessions and listening to the opinions of shareholders, taking care to ensure that shareholders are provided with sufficient explanation.
  • ・The company will send a convocation notice three weeks prior to the general meeting of shareholders, to ensure that shareholders have sufficient time to consider the agenda for the meeting. The details will be disclosed on the company’s website prior to dispatch of the convocation notice. An English translation of the convocation notice will also be disclosed on the company’s website.
  • ・The company will provide the opportunity for voting rights to be exercised online.

(3) Capital policy

  • ・It is the company’s basic policy to ensure the sufficient necessary shareholder capital to be able to respond to business opportunities in a timely and reliable manner, with the aim of continuously enhancing shareholder value.
  • ・The company regards the consolidated payout ratio as an important indicator and as such will work to ensure continuous and stable dividends.

(4) Shares owned for policy purposes

  • ①Policy regarding shares owned for policy purposes
  • ・It is the company’s policy to hold shares owned for policy purposes if it is considered that doing so will lead to the enhanced corporate value of the company in the medium and long term by maintaining and strengthening collaborative relationships with clients and business partners. Before deciding to purchase shares, the profit that will be earned from shareholding and the amount of investment will be considered as a whole. Once shares have been purchased, the effects will be examined and reported at regular meetings of the Board of Directors. If the results of this examination are not necessarily significant enough to justify the importance of the investment, the level of the shareholding shall be reduced.
  • ②Criteria for the exercise of voting rights
  • ・When exercising the voting rights of shares owned for policy purposes, the company will carefully examine each proposal deemed to have the potential to significantly harm or dilute the corporate value of a firm in which the company holds shares before deciding whether to approve the proposal.

3. Appropriate cooperation with stakeholders other than shareholders

(1) Action guidelines

  • ・The company has formulated the “Toppan Forms Group Action Guidelines,” which denote in more concrete terms the actions that employees should take. The company will continuously work to instill an awareness of the action guidelines through annual compliance training as well as through awareness-raising activities by compliance officers and compliance leaders assigned to each workplace.

(2) CSR

  • ・The company will promote CSR activities by assigning a theme to each stakeholder, such as compliance, labor and management autonomy, global environmental conservation, and social and community contribution. In addition, a CSR report is published annually, describing the company’s approach to CSR activities together with its initiatives.

(3) Diversity

  • ・The company will promote Diversity & Integration as a key management strategy, based on the idea that harnessing the diversity of its human resources will enhance the vitality and creativity of the organization. As well as proactively recruiting and training women, utilizing the experience of mature aged workers to further develop their careers, and making an effort to recruit foreigners and people with disabilities, the company is working to create a fulfilling work environment that respects work-life balance, in order to leverage the potential of diverse human resources.

(4) Internal reporting system

  • ・The company has set up an internal reporting system in the form of a “corporate ethics hotline.” Two points of contact to which matters can be reported have been established: the company’s Legal Department, and an external law firm. Appropriate protection according to internal regulations will be provided to informants to ensure that they do not suffer prejudicial treatment.

(5) Corporate pension

  • ・The Company adopts a contract-type defined benefit pension plan based on the Defined-Benefit Corporate Pension Act, with the Pension Committee being held responsible for establishing and reviewing basic investment policies, evaluating investment results, and updating portfolio structures. The pension committee comprises members who have particular knowledge and business experience in administering the pension plan. The Company relies on a third-party institution for independent evaluation of the pension system as needed, seeking to assure benefits for the pension beneficiaries (or employees).

4. Ensuring Appropriate Information Disclosure and Transparency

  • ・The company will ensure the appropriate disclosure of financial information such as the financial position and operating results of the company, as well as management strategy, management issues, and non-financial information, such as information relating to risk and governance, as prescribed by law, and will proactively address the provision of information in addition to disclosure as prescribed by law.

5. Responsibilities of the Board

(1) Governance system

  • ・The company has opted for a board of corporate auditors, considering that an audit system by corporate auditors that includes external corporate auditors has an effective management monitoring function.
  • ・The Board of Directors will decide the basic management policy in order to continuously enhance the corporate value in the long term, to meet the expectations of the various stakeholders including shareholders, and will monitor the execution of duties of the directors and executive officers. The company is also reinforcing the function of monitoring the fairness of its execution of operations by appointing external directors.
  • ・The company will deliberate and form resolutions at the Board of Directors meeting concerning Board of Directors resolutions prescribed under law and decisions on important matters established in the Board of Directors regulations, and will entrust other decisions to the management. The management will grant its approval in accordance with the authority stipulated depending on the type and value of the transaction or business operation.
  • ・The company has established an advisory committee on remuneration and nominations. This advisory committee includes independent outside directors, discusses matters related to the remuneration and nomination of directors and reports to the Board of Directors.

(2) Remuneration of directors

  • ・The remuneration of directors (excluding external directors) shall consist of a monthly remuneration and a bonus. Monthly remuneration shall be paid in accordance with the role and scope of responsibility for each position. The bonus shall be paid taking into consideration the company’s business results in the current period.
  • ・From the standpoint of reflecting the business results in the medium and long term, directors shall contribute a fixed minimum amount from their monthly remuneration for the purchase of the Company shares through the directors’ shareholding association, and shall hold the purchased shares in their entirety for the duration of their office.
  • ・For external directors, in order to ensure a high degree of independence, business results shall not be taken into consideration.
  • ・The remuneration of directors will be decided by the Board of Directors through deliberations of the advisory committee in accordance with the aforementioned policy, within the limit of the amount decided at the general meeting of shareholders.

(3) Appointment of directors and corporate auditors

  • ・The company will appoint candidates for directors who possess the knowledge, experience, and capability that will enable them to manage the company in an appropriate, equitable, and efficient manner. External directors will be appointed from candidates who possess extensive experience and insight in respect of business administration, compliance, internal control, and other fields, and who are deemed to be independent from the management of the company.
  • ・The company will appoint candidates for corporate auditors who possess the knowledge, experience and capability that will enable them to audit the execution of duties by directors in an appropriate, equitable, and efficient manner. External corporate auditors will be appointed from candidates who possess extensive experience and insight in respect of accounting, business administration, compliance, internal control, and other fields, and who are deemed to be independent from the management of the company.
  • ・Candidates for directors and corporate auditors will be decided by the Board of Directors through deliberations of the advisory committee on the candidates for directors in accordance with the aforementioned policy.
  • ・The reasons for the appointment of candidates for directors and corporate auditors will be disclosed in reference materials for the general meeting of shareholders at the time of appointment.
  • ・Any fraudulent act in business or material breach of legal compliance or violation of the Articles of Incorporation by a management executive shall warrant dismissal subject to a decision made by the Board of Directors based on its discussions.
  • ・The Board of Directors will develop and secure successor candidates for management executives through the auditing of the execution of duties by directors and executive officers.

(4) Risk management system

  • ・The company will construct a risk management system by establishing a company-wide RM (Risk Management) committee and an internal audit office, and the Board of Directors will ensure that the system is properly constructed and monitor its operation.
  • ・The Board of Directors will also monitor the operation of the action guidelines and internal reporting system.

(5) Independent external directors

  • ・Independent external directors shall provide appropriate advice in an independent capacity based on their own expertise from the standpoint of the sustainable growth of the company and the enhancement of corporate value over the medium and long term, as well as overseeing operations by participating in discussion and decision-making at the Board of Directors.
  • ・Independent external directors will also exchange opinions with management, including at regular meetings with representative directors, and exchange opinions with corporate auditors (including external corporate auditors) as appropriate.
  • ・The company will determine the independence of outside directors in accordance with the criteria for outside directors as stipulated in the Companies Act and the criteria for independent directors as stipulated by Tokyo Stock Exchange, Inc.

(6) Ensuring effectiveness

  • ・The Board of Directors consists of people who are able to fulfill the obligations required of the directors and who possess a variety of knowledge, experience, and capability, and will be limited to the number of members specified in the articles of incorporation. In addition, external directors will be appointed in order that the company’s management can benefit from the opinions of people who possess extensive experience and insight.
  • ・The company’s Board of Directors will select important matters for discussion as agenda proposals without exception based on the Board of Directors regulations and operational standards, and deliberate these in a timely and appropriate manner at the Board of Directors meeting held once a month in principle.
  • ・Prior to deliberations being made by the Board of Directors, the effectiveness of the discussions will be enhanced by first clarifying the issues, challenges, risks, and countermeasures at management meetings held by management executives.
  • ・In order to facilitate smooth and lively discussions by the Board of Directors and to ensure that the issues are thoroughly investigated, Board of Directors materials will be distributed in advance, with the issues being explained in advance to external directors and external corporate auditors in particular.
  • ・The Board of Directors will receive regular reports on business conditions, ensuring appropriate risk management and monitoring of execution of operations.
  • ・Directors will request the departments involved to provide information necessary for the performance of duties, and the departments requested will provide the appropriate information. Directors may also receive advice from external professionals as necessary. The Corporate Planning Department, serving as the administrative office of the Board of Directors, will support directors in the performance of their duties.
  • ・The Board of Directors will endeavor to improve its performance by conducting its own evaluation of the effectiveness of the Board of Directors as a whole each year. A summary of the results of the evaluation will be disclosed.

(7) Corporate auditors and Board of Corporate Auditors

  • ・The auditors and the Board of Corporate Auditors are part of the audit function of the company working with the Board of Directors to audit the performance of duties of directors as an independent body reporting to shareholders.
  • ・Not less than half of the company’s corporate auditors are external corporate auditors, fulfilling the duties of corporate auditors in an independent capacity. Having a high level of expertise and extensive experience in fields such as accounting, law, and corporate management, they will utilize their knowledge and experience when expressing their opinions at the Board of Directors and other meetings.
  • ・Some corporate auditors are selected as full-time corporate auditors, creating a system that allows the continuous exchange of opinions with executive directors. As well as the Board of Directors, full-time corporate auditors will attend management meetings and other important meetings on execution of operations and express their opinions, creating a highly effective Board of Corporate Auditors.
  • ・In partnership with directors and the internal audit office, corporate auditors will gather the information necessary to conduct audits, and if information is required, mainly full-time corporate auditors will explain this to directors and departments involved and request the submission of necessary information or materials. Advice may also be received from external specialists if required.
  • ・As well as the Board of Directors, corporate auditors will make efforts to cooperate with external directors, for example exchanging opinions with external directors when appropriate.

(8) Accounting auditors

  • ・The company will work with the Board of Corporate Auditors, the Finance Department, and other departments involved to ensure that external accounting auditors conduct appropriate audits by ensuring that the audit schedule and the audit system are adhered to in accordance with the audit plan of the external accounting auditor.
  • ・The Board of Corporate Auditors will discuss the appropriateness of audits through the implementation status of audits and through audit reports in accordance with the audit plan of the external accounting auditor. The Board of Corporate Auditors will also draw up evaluation criteria from sources such as the appropriateness checklist of the external accounting auditor and evaluate the criteria, confirming the presence or absence of independence and expertise through the exchange of opinions with the external accounting auditor as well as the status of audit implementation.
  • ・The company will ensure sufficient time for the audit by formulating an audit schedule after prior consultation with the external accounting auditor based on an “audit plan outline”.
  • ・The external accounting auditor will hold interviews with management, such as executive directors including representative directors.
  • ・The company ensures cooperation between external accounting auditors and corporate auditors through financial audits and quarterly review reports.
  • ・When instructed by the external accounting auditor, mainly full-time corporate auditors and the internal audit office, in cooperation with the departments involved, will carry out an investigation and request any necessary revisions.

(9) Training

  • ・The company will conduct training with a focus on compliance to provide newly-appointed directors with the opportunity to acquire the necessary knowledge as well as to understand their role and responsibilities. Following their appointment, they will participate in a variety of training and will be afforded opportunities for interaction with external talent in order to enhance their ability to acquire new knowledge and to respond to changes in the business environment. An annual training session will also be conducted for the benefit of all directors, providing an opportunity to develop their management competency and for mutual self-improvement.
  • ・The company will endeavor to provide opportunities for corporate auditors to acquire the knowledge they need and to promote understanding in respect of the role and responsibilities of corporate auditors, through participation in external training sessions and network meetings for the purpose of self-improvement and learning how to respond to changes in the audit environment.

6. Dialogue with Shareholders

  To ensure continuous growth and enhance corporate value in the medium and long term, the company will engage in dialogue with shareholders and other stakeholders and communicate to management the opinions and requests received with the aim of growing together with its stakeholders.
  Specifically, we will work to promote dialogue with shareholders through the following systems and initiatives:

  • ・The company has set the Public Relations Department as the point of contact to ensure smooth communication with shareholders. Further, the company will operate the IR Committee, consisting of the Corporate Planning Department, the General Affairs Department, the Finance Department, and the Public Relations Department, which will engage in the lively exchange of opinions in respect of information disclosure at the time of settlement of results and the timely disclosure of information based on the expert perspectives of each department, to ensure that information disclosure is transparent and easy to understand for the large number of recipient stakeholders.
  • ・When engaging in dialogue with shareholders, the Public Relations Department will consider how to respond in cooperation with the IR Committee, and will provide an appropriate response.
  • ・The company will engage in activities for the purpose of deepening understanding on the part of shareholders in respect of the company’s management strategy and business environment, such as individual consultations, financial results briefings, information disclosure via the company website, publication of summary reports, and holding inspection tours of facilities.
  • ・The company will brief shareholders on the details and progress of the mid-term management plan.
  • ・The company will arrange visits by senior management to overseas investors in the United States, Europe, and Asia at least once a year in principle, based on the shareholder composition.
  • ・Opinions, questions, and useful information received through dialogue with shareholders will be communicated to the management in a timely and appropriate manner, and will be actively utilized when reviewing management strategy.
  • ・The company will conduct a shareholder identification survey once a year in principle in order to determine the shareholder structure.
  • ・The company will maintain strict information management based on the “Management Regulations for the Prevention of Insider Trading,” in order to prevent important internal information that has not yet officially been announced (insider information) from being leaked externally.

(Formulated) November 27, 2015
(Revised) December 21, 2018
(Revised) June 27, 2019

Corporate Governance Basic Policy276KB)