Basic Corporate Governance Policy
We aim to fulfill our social responsibilities as a good
corporate citizen so that we can gain and retain the respect
from stakeholders and be recognized as a valuable enterprise. We
work to establish a high degree of transparency in management
systems to ensure full legal and regulatory compliance and
respect for social norms.
In addition to participating in many corporate social responsibility (CSR) activities, we have established the CSR Committee and use a commitment to CSR management to make our corporate brand even more respected.
Basic overview of the corporate governance structure
We have adopted a corporate auditors' system, which includes the
Board of Auditors that comprises five corporate auditors (of
whom three are outside corporate auditors) selected at the
General Shareholders' Meeting. The system is used to audit and
perform oversight on the Board of Directors, and to monitor the
performance of duties by the Company's administrative
organizations operating under the Management Committee. We then
report our findings at the General Shareholders' Meeting after
completing our own reviewing process.
In April 2012, we introduced an executive officer system to establish a system that enables more detail-oriented business operations and to promote more efficient and quicker decision-making.
The Board of Directors, consist of directors elected at the General Shareholders' Meeting ,meets once a month as a rule to make decisions on matters stipulated by laws and articles of incorporation, important business plans and to oversee business operations.
As a rule, the Management Committee meets twice a month. The members of this committee, all of whom are executive officers, discuss issues of significance concerning management and each decision. They also submit issues to the Board of Directors that involve the Group's management and promote the efficient performance of duties in accordance with the management policy determined by the Board of Directors.
Regarding director's selection and compensations, we have introduced a three-committees’ system of the Officer Evaluation Committee, the Nomination Advisory Committee and the Remuneration Advisory Committee, and adopted the following procedures.
Regarding the director's evaluation we have introduced the Officer Evaluation Committee, which is chaired by the President and consist of members that include outside directors and outside corporate auditors as advisors. As a rule, the Officer Evaluation Committee meets twice a year and performs evaluation of the directors’ performance including self-evaluation and mutual evaluation for all directors. then the evaluation results are provided to the Nomination Advisory Committee and the Remuneration Advisory Committee.
Based on the results of director's evaluations and personnel evaluations of employees,the Nomination Advisory Committee, where outside directors and an outside corporate auditor join as voting members, examines the composition of officers for the next fiscal year and create a draft. A draft is then submitted to the Board of Directors , and the Board of Directors proposes candidates for directors to the Ordinary General Meeting of Shareholders.
The results of the director's evaluation provided by the Officers Evaluation Committee are used by the Remuneration Advisory Committee, which is chaired by the President and the majority of the members are outside directors and outside corporate auditors, to determine each director's compensation. The fixed monthly compensations then submitted as a regular salary plan to the Board of Directors. In terms of the directors' bonuses, we use a system that awards a bonus directly linked to profits and clearly reflects each individual director's achievement level. The Board of Directors approves this profit-based calculation model after the Officers Evaluation Committee examines it. We have introduced the effectiveness evaluation of the Board of Directors.The Board of Directors Evaluation Committee, which is chaired by one of the full-time corporate auditors and consist of all outside directors and corporate auditors, report the evaluation results to the board of directors and propose improvement plans.
Evaluation of the effectiveness of the Board of Directors
We have been analyzing and evaluating the effectiveness of the Board of Directors since fiscal 2019, and are working to further improve the functions of the Board of Directors. We have conducted the second evaluation of the effectiveness of the Board of Directors, and we will disclose the outline and results as follows.
- Evaluation method
- The Board of Directors Evaluation Committee, which is chaired by one of the full-time corporate auditors and consists of all corporate auditors and all outside directors, conducts an anonymous questionnaire survey of all directors and corporate auditors, and based on the results of the survey and analysis, the Board of Directors deliberated on the effectiveness of themselves and made the final decision on the evaluation.
- Questionnaire contents
1) Questions regarding the functions and roles of the Board
2) Questions about Board materials
3) Questions concerning deliberations at the Board of Directors
4) Questions regarding the management and support system of the Board of Directors
5) Questions regarding the basic policy of the 9th Medium-Term Business Plan
- Evaluation results
It was confirmed that the Board of Directors appropriately
discusses factors and viewpoints that directors and
corporate auditors should emphasize in decision-making and
supervision concerning basic management policy, business
strategy and important business execution.
In addition, as an approach to the issues recognized in the previous effectiveness evaluation, we reviewed the criteria for proposals by the Board of Directors and improved the deliberation process of the Investment Examination Committee.
On the other hand, from the viewpoint of further enhancing the effectiveness, the following recommendations were made by the Board of Directors Evaluation Committee.
 In order to deepen discussions on major company policies
such as management strategies, devise ways to set the agenda
of the board of directors and proceed with business
 Review how to proceed with the proceedings and the structure of the materials in order to proceed with the deliberation of investment and loan projects more effectively and efficiently.
 To strengthen risk management for the entire group, enhance the regular reporting system for internal control
We will continue to strive to improve the effectiveness of the Board of Directors, strengthen its functions ,and continuously improve corporate value.
- [The Corporate Governance Structures]
Internal Control Policy
Hanwa is committed to using an effective corporate governance
system to achieve sustained growth and other progress while
reducing exposure to risks associated with achieving business
goals. To accomplish this, we need to work on the establishment
and operation of a system of internal controls for performing
business activities properly and efficiently.
Our goal of internal control systems is to achieve (1) operational effectiveness and efficiency; (2) reliability in financial reporting; (3) strict compliance with laws and regulations in operating activities; and (4) appropriate preservation of assets.
- [Flowchart (Design, Operation and Assessment of Internal Control)]
UK Tax Strategy
The publication of this strategy statement is regarded as satisfying the duty under Paragraph 16(2),Schedule 19, Finance Act 2016 in UK.