Our Policy on Corporate Governance
The Daifuku Group emphasizes the fulfillment of its corporate social responsibility (CSR) based on the following management philosophy:
- Provide the best solutions to benefit the global markets and the development of society.
- Focus on healthy, growth-driven global management under a diverse and positive corporate culture.
Daifuku has enhanced its corporate governance framework by developing the Board of Directors, including two independent outside directors, and the Audit & Supervisory Board consisting of five members, three of whom are elected from outside the Company. Daifuku believes that the management oversight system functions sufficiently through the close collaboration of the two Boards. In addition, Daifuku has introduced the corporate officer system to encourage rapid decision-making on business execution.
Daifuku acknowledges that a firm internal control system will make corporate governance more workable, thereby leading to enhanced corporate credibility in addition to efficient and effective operations, and will seek to ensure compliance with laws and regulations, risk management, secured assets, and credible financial reporting.
Corporate Governance Report
Corporate Governance Framework
1. Board of Directors
Daifuku’s Board of Directors consists of 10 directors. The directors’ term of office is one year. Daifuku holds regular monthly meetings of the Board of Directors to make decisions on fundamental management issues, with extraordinary meetings convened as necessary, on six occasions during the fiscal year ended March 31, 2017.
The Board of Directors shall delegate matters other than the important matters stipulated in the regulations of the Board of Directors, such as the determination of management policies, management plans, and corporate governance system, to directors and corporate officers.
The two independent outside directors provide insightful advice and recommendations to the Board of Directors based on their abundant experience and extensive knowledge of corporate operations, corporate legal affairs, and accounting, etc. They also ensure the transparency of management and supervise business execution by the inside directors.
2. Audit & Supervisory Board
Daifuku maintains an Audit & Supervisory Board made up of five Audit & Supervisory Board members, three of whom are elected from outside the Company. Daifuku held meetings of the Audit & Supervisory Board on six occasions during the fiscal year ended March 31, 2017.Audit & Supervisory Board members and the Audit & Supervisory Board shall fulfill their duties by stipulating and promoting the effective applications of the Rules of the Audit & Supervisory Board, Audit Standards, and Standards on Audit Concerning the Internal Control System, with regard to audit of directors’ fulfillment of duties, decisions over resolutions to be submitted to the Ordinary General Meeting of Shareholders regarding election/dismissal and non-reappointment of the accounting auditor, and others, with due attention to their fiduciary responsibilities to shareholders and with an aim for sustainable growth and medium- and long-term improvement of the corporate value.
3. Advisory Committee
A voluntary Advisory Committee has been established to strengthen the independence, objectivity and accountability of the Board of Directors’ functions on the matters of the nomination and remuneration of directors and corporate officers. The Committee is comprised of three representative directors and two outside directors, and meets at least three times a year. The Committee, which is chaired by one of the outside directors to ensure its transparency in the course of resolutions, held meetings on four occasions during the fiscal year ended March 31, 2017.
4. Other bodies, etc.
The Management Advisory Meeting is held to confer important management matters. With directors and full-time members of Audit & Supervisory Board in attendance, this meeting also seeks the opinions of external specialists on an as-needed basis. Convened by the president as he sees fit, the Management Advisory Meeting meets on a timely basis as appropriate. In the fiscal year ended March 31, 2017, the Company held one meeting.
In addition, Daifuku introduced the corporate officer system for the purposes of the following:
(1) Accelerating decision-making on business execution through a reduction in the number of directors as well as further revitalizing the Board of Directors by promoting more rigorous deliberations.
(2) Engage in functional and efficient business operations to serve as corporate officers and execute business based on authority bestowed upon them by the Board.
With the introduction of the corporate officer system, Daifuku holds officers’ meetings with all directors, corporate officers, and full-time Audit & Supervisory Board members, etc. attending and participating in deliberations. The meetings are held every month, fitting in with scheduled Board of Directors meetings. Corporate officers participate in meetings of the Board of Directors and the Management Advisory Meeting, depending on the matters to be discussed.
Daifuku also holds Japanese affiliate company meetings about once every three months, and representatives of the companies report on business conditions and other information to its representative directors and Audit & Supervisory Board members. In addition, Daifuku holds annual global affiliate management meetings to share information on business plans, with presidents from all over the world in attendance.
Risk Management System Policy
To develop an appropriate risk management system to respond to anticipated risks that have a significant impact on the Daifuku Group’s business activities, the senior managing director acts as Chief Risk Officer (CRO), supervising the Corporate Affairs Operations, which develop and execute countermeasures.
Daifuku has taken steps to address significant risks, such as earthquakes, wind, floods, lightning, fire, and new strains of influenza. In addition, to enhance companywide business continuity management (BCM), the Company also documented the risk management system it has built. By also establishing an organization composed of managers of respective business operations, to facilitate risk management, the Company seeks to reduce and minimize management risk and build a more practicable system for emergencies.
During the fiscal year ended March 31, 2015, Daifuku implemented a role-play training that simulated a scenario of a large earthquake at the Shiga Works. Moving forward, by sharing and implementing risk countermeasures across the Daifuku Group, the Company will strive to establish companywide BCM to garner further recognition by stakeholders and third parties.