Information, Organizational Structure & corporate Governance

Corporate governance in the business context refers to the systems of rules,

practices, and processes by which companies are governed. In this way, the
corporate governance model followed by a specific company is the distribution of
rights and responsibilities by all participants in the organization.
Governance ensures everyone in an organization follows appropriate and
transparent decision-making processes and that the interests of all stakeholders
(shareholders, managers, employees, suppliers, customers, among others) are
protected.

OECD Official Definition of Corporate Governance in Business

The purpose of corporate governance is to help build an environment of trust,
transparency and accountability necessary for fostering long-term investment,
financial stability and business integrity, thereby supporting stronger growth and
more inclusive societies.
Corporate Governance deals with the way the investors make sure they get a fair
return on their investment. In Corporate Governance, there is a clear distinction
between the role of the owners of a company (the shareholders) and the managers
(the executive board of directors) when it comes to making effective strategic
decisions.

In today’s market-oriented economy and with the effects of globalization, the

importance of corporate governance is growing. This is due to the fact of governance
being an important way of ensuring transparency that makes sure the interests of all
shareholders (big or small) are safeguarded.
9 Positive Impacts of Corporate Governance in Companies
A good corporate governance system:

 Ensures that the management of a company considers the best interests of everyone;
 Helps companies deliver long-term corporate success and economic growth;
 Maintains the confidence of investors and as consequence companies raise capital
efficiently and effectively;
 Has a positive impact on the price of shares as it improves the trust in the market;
 Improves control over management and information systems (such as security or risk
management)
 Gives guidance to the owners and managers about what are the goals strategy of the
company;
 Minimizes wastages, corruption, risks, and mismanagement;
 Helps to create a strong brand reputation;
 Most importantly – it makes companies more resilient.

Corporate Governance Structures:

Corporations can have many different structures, but the most
typical structure consists of the shareholders, board of directors, officers and the
employees. The structure of corporate governance determines the distribution of
rights and responsibilities between the different parties in the organization and sets
the decision-making rules and procedures. It is usually up to the management board
to decide how the company will develop. But what does truly influence the structure
of a board of directors?
 What makes the structure of the Board of Directors?
Boards – and directors – are not all the same. In fact, they face different challenges
and their structure is shaped by different factors. A KMPG report synthesized some
of the variables that can affect the foundations of a board:

 The legal and regulatory obligations of the relevant geography – which may range from a
highly regulated environment that dictates board composition and responsibilities to no
applicable laws at all, depending on the country in which the business is based.
 The company’s ownership structure – which may range from a business closely held by a
few family members who see each other on a daily basis, to one with numerous,
geographically dispersed distant family members, to the inclusion of other investors, either
through private equity investment or publicly traded stock.
 The expectations and interests of key stakeholders including owners, other interested family
members (such as the owners’ likely heirs), customers, and insurers.
 The company’s attributes – size, resources, maturity, culture, and level of complexity.

In the end, companies with a good corporate governance system, together with an
experienced board that has a growth-mindset and sustainability concerns, will be
better positioned to prosper both in the short term and on the long run.
Corporate Governance & Sustainable Development
First of all, it is important to clarify what sustainable development is. And according
to the Brundtland Commission report, sustainable development is “the one that
satisfies the needs of the present without jeopardizing the ability of future
generations to meet their needs.” In order to achieve this long-term corporate
sustainability goal, the sustainable development concept is built on top of three
important “pillars” that must be fulfilled by companies: economic development, social
equity, and environmental protection (check our complete sustainable
development definition for more information).
Although companies have been working on developing the economic “pillar” that has
to do with production, sales, and profit, it hasn’t always been like this for
the environmental protection and social responsibility pillars that are nowadays
getting inside the companies’ agendas.

Corporate Governance Structure

The Company has established the Audit & Supervisory Board to ensure that
the Board of Directors carries out appropriate decision-making and
supervisory functions, as well as ensure that Audit & Supervisory Board
members, who are appointed on an individual basis, appropriately carry out
their audit functions. Through the strengthening of the functions of both the
Board of Directors and the Audit & Supervisory Board, the Company is
working to enhance corporate governance. The Company has established a
system of executive officers, thereby clarifying the division of roles in the
execution of operations, delegating authority, and ensuring expeditious
execution of operations. Furthermore, the Company aims to realize effective
and transparent corporate governance. Specifically, it has established the
Nominations Advisory Committee and the Remuneration Advisory
Committee as advisory bodies to the Board of Directors, and the Corporate
Governance Committee as a body reporting directly to the Board of
Directors.

Executive officers hold responsibility and authority for the execution of

operations. Executive officers comprise the CEO, COO, CFO, executive
officers responsible for supervising specific functions, and executive officers.
Executive officers are appointed through resolution of the Board of
Directors.
Board of Directors
The Board of Directors determines the Company's basic management
policies, and makes decisions regarding important operational matters and
other matters delegated by resolution of the General Meeting of
Shareholders. The Board of Directors also makes decisions on matters
stipulated by law and the Company's Articles of Incorporation, and receives
reports regarding the status of significant operational matters. Based on this
structure, the Board of Directors oversees the operational execution of the
Company's management.
The Board of Directors shall comprise at least three but no more than 13
members. Of those, at least two members shall be independent outside
directors.
Audit & Supervisory Board Members and the Audit & Supervisory
Board
As independent officers functioning under a mandate from the General
Meeting of Shareholders, the Audit & Supervisory Board Members audit the
directors' execution of duties and have the role of carrying out a supervisory
function over the Company in cooperation with the Board of Directors. The
Audit & Supervisory Board is a body that holds discussions and makes
decisions regarding the audits undertaken by the Audit & Supervisory Board
Members for the purpose of formulating opinions. Each Audit & Supervisory
Board Member utilizes the Audit & Supervisory Board as a means of
ensuring effectiveness. As a body to support the Audit & Supervisory Board
Members' execution of duties, the Company has established the Audit &
Supervisory Board Members' Secretariat and has appointed dedicated staff
to this body.
Management Committee
As an advisory body to the COO, the Management Committee comprises
mainly executive officers responsible for supervising each function of the
Company's business organization. In principle, the Management Committee
convenes three times per month and broadly considers and debates matters
delegated by the Board of Directors, important operational matters, and
various issues.
Audit Office
The Company has established an Audit Office, which reports directly to the
CEO, as an independent internal audit unit. The Audit Office considers and
evaluates the effectiveness of business risk management control and
governance processes for the overall operations of each JACCS Group
business site. The Audit Office carries out internal audit operations based on
the "Fundamental Policy relating to the Internal Control System," etc.
Accounting Auditor
The Company appoints an auditor based on the selection criteria of the
Audit and Supervisory Board.
Committees
Nominations Advisory Committee
 The Company has voluntarily established the Nominations Advisory
Committee as an advisory body to the Board of Directors. This committee
considers and debates nomination and dismissal proposals for directors and
executive officers responsible for supervising specific functions. The
committee reports its findings to the Board of Directors. The committee also
considers and debates the content of the "Standards for the Independence
of Outside Officers," and reports its findings to the Board of Directors. The
committee includes outside directors as members, and ensures objectivity
and transparency are maintained.
Remuneration Advisory Committee
The Company has voluntarily established the Remuneration Advisory
Committee as an advisory body to the Board of Directors. The committee
considers and debates the performance of directors and executive officers
responsible for supervising specific functions and the content of their
remuneration, and reports its findings to the Board of Directors. The
committee includes outside directors as members, and ensures objectivity
and transparency are maintained.
Corporate Governance Committee
The Company has established the Corporate Governance Committee as a
body reporting directly to the Board of Directors. The Committee considers
and debates matters relating to the following, and reports its findings to the
Board of Directors.

 Enterprise risk management (ERM) for the JACCS Group

 JACCS Group compliance and the internal control situation

 Evaluation of the activities of such committees as the Compliance Committee,

Internal Control Committee, and Personal Information Protection Committee, as
well as review of important matters handled by these committees

The Corporate Governance Committee includes outside directors as

members, and maintains effectiveness.
Outside Directors and Outside Audit & Supervisory Board Members
The Company has appointed four outside directors and two outside Audit &
Supervisory Board Members.

Based on the Companies Act and stipulations by stock exchanges regarding

the independence of outside directors and outside Audit & Supervisory
Board Members, the Company has established the following as its
"Standards for the Independence of Outside Officers." If none of the
 following stipulations apply to an outside officer, the officer is judged to
have independence.
Corporate Governance and Rules and Regulations

 Corporate Governance

o Corporate Governance Basic Policies

o Corporate Governance structure
o List of Management
 Disclosure Policy
 AML/CFT Global Policy