Basic Stance on Corporate Governance
Guided by the slogan "Challenging Tomorrow's Changes" and the CTC Group Philosophy, which sets out our mission of leveraging IT's potential to change future for the Global Good, we are working to reinforce corporate governance in order to enhance management transparency and fairness as part of our efforts to maximize the Group's corporate value.
Corporate Governance Structure
CTC's corporate governance structure is as shown in the following diagram.
Overview of Corporate Governance Structure (as of June 23, 2016)
|Organization type||Company with auditors|
|Chairman of the Board of Directors||President & CEO|
|Number of directors
(of which outside directors)
|Term of duty for directors||One year|
|Number of corporate auditors
(of which outside auditors)
|Number of independent officers||Outside directors: 2, Outside auditors: 1|
Board of Directors & Board of Corporate Auditors
|Board of Directors meetings||19|
|Board of Corporate Auditors meetings||17|
|Attendance of Board of Directors meetings by outside directors||97|
|Attendance of Board of Directors meetings by outside auditors||97|
|Attendance of Board of Corporate Auditors meetings by outside auditors||100|
CTC has established both a Board of Directors and a Board of Corporate Auditors.
The Board of Directors is composed of nine directors, including two outside directors. The Board makes decisions on important management-related matters and supervises the execution of work duties by the directors; in accordance with applicable laws and regulations, the CTC Articles of Incorporation, resolutions made by the General Meeting of Shareholders, the Board of Directors Regulations, the CTC Group Philosophy and the CTC Group Code of Conduct.
The Board executes company business (based on its determined role, as determined by the Board itself) in accordance with applicable laws and regulations, the CTC Articles of Incorporation, resolutions made by the Board itself, Occupational Authority Regulations and other internal regulations.
In order to enhance the decision making and supervisory capabilities of the Board of Directors, and to increase the efficiency with which work duties can be executed, we have adopted an executive officer-based system of corporate governance. Executive officers are appointed based on resolutions by the Board of Directors, and engage in work duties within their designated scope based on decisions made by the Board and delegation of authority by the Board, and by CTC's representative directors (i.e. President & CEO, etc.). Directors who are responsible for the execution of work duties within a designated scope hold joint positions as both directors and executive officers.
Outside Directors and Auditors Nominations
Outside directors are nominated for their objectivity and specialized perspective on corporate management in an attempt to create the Board of Directors with the appropriate decision-making and management supervisory functions from a variety of perspectives. Outside auditors are nominated based on their wealth of knowledge and experience in their area of specialization and ability to conduct audits with an objective perspective to ensure management health and transparency.
Of the four outside directors and auditors, three are independent and not affiliated with CTC, our parent company or any of our major suppliers, and have no inherent conflicts of interest with regular shareholders.
|Category||Name||Independent officer||Reason for selection|
|Directors||Makiko Nakamori||Yes||Ms. Nakamori has excellent personality traits as a director, including a high sense of ethics and fairness. She has fulfilled her occupational duties as an outside director since her appointment as a CTC director in June 2013. She has high-level specialist expertise and extensive knowledge as a certified public accountant, and was reappointed to continue in her role as an outside director because it was judged that she is indispensable to the management of the company. She is also designated as an independent officer, because she is in an independent position that poses no risk of conflicts of interest with regular shareholders.|
|Toshio Obi||Yes||Mr. Obi has excellent personality traits as a director, including a high sense of ethics and fairness. He has fulfilled his occupational duties as an outside director since his appointment as a CTC director in June 2014. He has high-level specialist expertise and extensive knowledge as an experienced academic, and was reappointed to continue in his role as an outside director because it was judged that he is indispensable to the management of the company. He is also designated as an independent officer, because he is in an independent position that poses no risk of conflicts of interest with regular shareholders.|
|Auditors||Toshiaki Tada||Yes||Mr. Tada has fulfilled his duties as an outside auditor since his initial appointment in June 2012. He has high-level specialist expertise as an attorney, and voices his opinions from a specialist viewpoint at meetings of both the Board of Directors and the Board of Corporate Auditors. In light of these traits, he was reappointed to continue in his role as an outside auditor because it was judged that he is capable of suitably auditing the execution of duties by corporate directors. He is also designated as an independent officer, because he is in an independent position that poses no risk of conflicts of interest with regular shareholders.|
|Shintarou Ishimaru||No||Mr. Ishimaru has been appointed as an outside auditor because it is considered that he can utilize his extensive experience and knowledge, gained through his many years of finance-related duties and information systems work (from an end-user perspective) as a CIO* in executing his duties as an auditor at CTC.|
- CIO(Chief Information Officer)
A position of responsibility within a company that involves formulation and execution of informatization strategies that match the company's management philosophy.
Policy Regarding Remuneration, etc., for Directors and Auditors
Remuneration for directors consist of standard remuneration (fixed remuneration) and bonuses (remuneration given in relation to work results achieved) given in accordance with our officer remuneration system, designed based on the opinions of the Remuneration Committee. Standard remuneration is determined by the President & CEO (who is granted sole discretion by the Board of Directors to do so) based on an overall consideration of the officer's working status (full-time or part-time), role of responsibility and individual evaluation, etc., and corresponding to the officer's rank within the organization; utilizing a pre-determined standard remuneration table. Bonuses are given based on profit attributable to owners of the Company in the publicly-announced business plan for the relevant fiscal year. A total bonus fund amount is calculated by multiplying the profit figures by pre-determined percentage values (bonus fund percentage, percentage target achievement rate for the current fiscal year, and percentage growth year-over-year rate), and ultimately determined by the Board of Directors.
Based on this total bonus fund, individual bonus amounts are calculated according to evaluations of individual results and positions of the various corporate officers within the organization, based on our officer evaluation system. The President & CEO (who is granted sole discretion by the Board of Directors) then makes the final decision regarding individual bonuses.
The amounts of remuneration for corporate auditors are determined for each auditor based on discussion between the auditors.
Remuneration for part time directors (including outside directors) and auditors are limited to fixed remuneration only, and bonuses (results-based remuneration) are not paid.
Remuneration for Corporate Officers (as of the year ended March 2015)
|Directors: 8 people (excluding outside directors)||Basic remuneration||226 million yen|
|Bonuses||94 million yen|
|Auditors: 2 people (excluding outside auditors)|
|Basic remuneration||51 million yen|
|Outside Auditors and Directors: 5 people|
|Basic remuneration||54 million yen|
Internal Control System
CTC has created an internal control system, comprising systems to ensure directors perform their duties in accordance with legal requirements and the Articles of Incorporation and systems to ensure business activities are conducted in an appropriate manner across the Group. The internal control system is continually improved through an ongoing review process designed to create a more adequate and efficient system.
Systems to Ensure Appropriate Financial Reporting
CTC is stepping up efforts to ensure appropriate financial reporting in accordance with the Group's accounting regulations, sales administration regulations, procurement administration regulations and other internal company rules.
CTC also has a chief financial officer who is tasked with ensuring financial reporting complies with accounting standards and other relevant laws and regulations. In addition, the Internal Control Committee is responsible for establishing, regularly evaluating and improving internal systems to ensure appropriate financial reporting.
Regulations Concerning Loss-Related Crisis Management and Other Management Systems
CTC recognizes risk management as an important management issue. In addition to establishing a Risk Management Committee and major core departments to handle various risks (including CSR and compliance risks, information security risks, disaster risks, currency exchange rate risks and other market risks, credit risks, investment risks, and technology-related risks), we also work to handle risks both comprehensively and on an individual basis by establishing the necessary risk management frameworks and management techniques; such as in the establishment of various management regulations, business continuity plans, investment standards, credit limits, and reporting and monitoring frameworks. We also conduct regular reviews with regard to the effectiveness of these management systems.