Corporate Governance
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 coexist with the Earth and society and to
develop sustainably, we have established the Sustainability
Promotion Committee and promoted management initiatives with a
focus on sustainability.
Corporate Governance Structure
The Company adopts the governance system of a company with an
Audit and Supervisory Committee. The Audit and Supervisory
Committee consists of four directors who are Audit and
Supervisory Committee members (three of whom are outside
directors) appointed at the General Shareholders Meeting. The
committee will conduct audits and other duties for the execution
of duties by directors from the perspectives of legality and
adequacy through interviews with executive directors, attendance
at meetings of the Management Committee and other bodies by a
full-time Audit and Supervisory Committee member, etc. The
results approved by the Audit and Supervisory Committee will be
reported to the General Shareholders Meeting.
Since April 2012, the Company has introduced an executive
officer system to establish a system that enables more
detail-oriented business operations and to promote quicker and
more efficient decision-making.
The Board of Directors has
13 directors (six of whom are outside directors) appointed by
the General Shareholders Meeting. It meets once a month, in
principle, to make decisions on matters stipulated by laws and
regulations and in the Articles of Incorporation, draft plans
for important management for the Group, and supervise business
execution.
The Management Committee mainly consists of
officers at the level of managing executive officer or above and
full-time Audit and Supervisory Committee members. It meets
twice a month, in principle, to submit important issues related
to the management decisions of the Group to the Board of
Directors as agenda items, and to promptly execute business in
accordance with the management policy determined by the Board of
Directors, as the highest body for business execution.
Regarding personnel matters and treatment for officers,
the Company has established the Nomination and Remuneration
Advisory Committee, which is chaired by an outside director and
whose majority members consist of outside directors, and the
following procedures have been adopted.
Regarding the
appointment of officers, the Nomination and Remuneration
Advisory Committee will review the composition of officers for
the following fiscal year based on the evaluation of officers
and the results of performance evaluations of employees. A draft
will then be submitted to the Board of Directors where a
proposal of the list of candidates will then be forwarded to the
Ordinary General Shareholders Meeting.
Regarding executive
remuneration (excluding that of directors who are Audit and
Supervisory Committee members), the Nomination and Remuneration
Advisory Committee prepares a draft of the basic remuneration
for the next fiscal year, after reviews based on the results of
officer evaluation, and the Board of Directors makes the final
decision. In terms of executive bonuses, we use a system of
performance-linked salary for executive directors which
specifically reflects the achievements and responsibilities of
each executive. After the Nomination and Remuneration Advisory
Committee reviews a draft of calculation rules for the
performance-linked salary for each fiscal year, the Board of
Directors makes the final decision. In addition, restricted
stock remuneration for executive directors is positioned as
remuneration for the responsibility that each management team
has to shareholders for enhancing corporate value. The
Nomination and Remuneration Advisory Committee reviews the
appropriate level for each position, and the specific number of
shares to be paid (the amount of monetary compensation claims to
be applied to pay the acquisition price of the shares) is
determined by the Board of Directors.
Regarding the
evaluation of the effectiveness of the Board of Directors, we
have introduced a system in which the Board of Directors
Evaluation Committee, chaired by one of the outside directors
and composed of all outside directors, plays a central role. The
committee reports the results of its evaluation and makes
proposals for improvement to the Board of Directors.
Evaluation of the Effectiveness of the Board of Directors
Since FY 2019, we have been analyzing and evaluating the effectiveness of its Board of Directors and working to further enhance its functions. The summary and results of the effectiveness evaluation of the Board of Directors recently performed are disclosed as follows.
- Evaluation Method
-
For FY2025, we conducted the Evaluation of the Effectiveness
of the Board of Directors with the support of a third-party
organization.
- An anonymous questionnaire survey of all directors (Respondents: 14 directors)
- Discussions at meetings of the Board of Directors Evaluation Committee (Attendees: 8 members)
- Discussions at the Board of Directors meeting (Attendees: 14 directors)
- Questionnaire Contents
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- Questions about the ideals, composition and operation of the Board of Directors
- Questions about effectiveness of Board Discussions and Oversight and Monitoring Functions
- Questions about composition, roles, and operational status of each committee (Evaluation, Nomination, Compensation) and the Audit and Supervisory Committee
- Questions about performance and training of inside/ outside directors
- Questions about dialogue with Shareholders (Investors)
- Overview of Evaluation Results
-
（1）Summary
Based on the results of this evaluation, we assessed that the operation of the Company’s Board of Directors is fundamentally appropriate and that the effectiveness of the Board is ensured. Furthermore, we confirmed that, under the leadership of the Chair, frank and constructive discussions are taking place among inside and outside directors.
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（2）Status of Improvements Based on the Results of the
Previous Effectiveness Evaluation
As part of efforts to address the issue identified in the previous effectiveness evaluation—namely, “enhancing the Board’s oversight functions, including the delegation of authority to the Management Committee and reviewing corporate governance structure”—progress has been made in discussions regarding the delegation of authority to the executive side, including the Management Committee, following the completion of the transition to a company with an Audit and Supervisory Committee. Furthermore, we confirmed the implementation of regular reporting on risk assets and the effective exercise of monitoring functions centered on the Audit and Supervisory Committee.
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（3）Mid- to Long-term Issues
- Further Enhancement of Discussions Regarding Medium- to Long-Term Management Strategy, Business Portfolio, and Human Resources Strategy
- Conducting discussions on processes regarding succession planning, including the President and clarifying the plan
- Further improvement in the quality and organization of information provided by management to the Board of Directors
- Enhancing the IR framework to promote investors’ understanding of the Company’s medium- to long-term growth strategies
Based on the results of this evaluation and the issues identified through previous effectiveness assessments, our Board of Directors is committed to enhancing the Board’s effectiveness and our governance framework to achieve sustainable growth in corporate value.
- [The Corporate Governance Structures]
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Internal Control Policy
Hanwa is committed to utilizing an effective corporate governance system to achieve sustained growth and other progress, while minimizing exposure to risks associated with achieving business objectives. To this end, we have established a fundamental policy regarding the development and implementation of an internal control system to ensure that business activities are conducted properly and efficiently.
Risk Management
We define "risk" as "uncertainty that may affect the achievement of the Company's business strategy and business objectives" in the Company's “Basic Policy on Risk Management”. And we implement specific measures to control various risks that may arise from business operations within our company group. It is basic concept of the risk management that we contribute to achieving dramatic business growth through proactive investments and business expansion with these measures.
- Risk Management Framework
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We recognize the strategic importance of risk management as
a material issue, and we have established a framework under
the basic policy determined by the board of directors. We
have appointed the head of risk management within the
management section as the overall responsible person for
risk management. Additionally, we have implemented necessary
risk management structures and specific management methods.
Furthermore, we are actively promoting initiatives to
enhance the overall risk management awareness among top
management. To prevent the occurrence of risks and mitigate
those that do arise, we definitize the departments to
address each risk. Additionally, we develop various
regulations and response manuals.
Specifically, within the various risks surrounding our company—including credit risks (including credit risks related to creditworthiness and country risks), business investment risks, market risks (such as commodity price fluctuations), and compliance risks (including adherence to security trade management and various economic sanctions)—we identify significant risks that could significantly impact our company’s management. We establish a Risk Management Department as a specialized unit to manage these risks effectively. This department collaborates with relevant divisions to develop necessary policies and regulations, ensuring an integrated risk management system on a consolidated basis.
Among these significant risks, for those that can be quantitatively assessed, we calculate risk assets based on the maximum potential loss that could occur in the future on a consolidated basis. Regularly, we assess the overall risk exposure across the entire organization. With this information, we practice management that controls risks within the scope of shareholder capital (risk buffer). To achieve ambitious business growth through proactive investments and expansion, we strategically take risks within the risk buffer, aiming to enhance profitability while considering risk factors. Our goal is to balance improved corporate value with securing of soundness of the management.
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.
Basic Information Security Policy
Hanwa Co., Ltd. and our group companies (hereinafter “We”) recognize the need for proper management of information assets in a society where the importance of information security is increasing. Therefore, we have established a basic information security policy and will strive to handle information obtained, held, managed, and disseminated in the course of business appropriately.
- Commitment to Information Security
- We will establish information security-related regulations and rules and strive to manage information assets appropriately.
- Information Asset Management
- Through the proper management of information assets, including personal information, we will ensure confidentiality, integrity, and availability, and strive for safety management to prevent unauthorized access, leakage, loss, and damage.
- Compliance with Laws and Regulations
- We will comply with laws, regulations, and other social norms related to information security.
- Risk Management
- We will evaluate information security risks and implement measures to minimize the risk of information asset leakage, etc.
- Education and Awareness
- We will conduct education and awareness activities on information security for officers and employees to raise awareness.
- Regular Improvement
- We will evaluate the effectiveness of information security measures and strive for improvement.
- Response to Information Security Incidents
- We will strive to prevent information security incidents, and if they occur, we will take appropriate measures and investigate the cause to implement recurrence prevention measures.
Established: January 27, 2026