Our basic approach to 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 consisting of 11 members, including four outside directors, and the Audit & Supervisory Board consisting of five members, three of whom are elected from outside the Company. The Company believes that the management oversight/supervision system functions sufficiently through the close collaboration of the two Boards. In addition, the Company has introduced the corporate officer system to encourage rapid decision-making on business execution.
In April 2019, the Company established its Audit Division with the aim to enhance internal audits and the functions of internal control evaluation. The Audit Division shall facilitate improvements to the internal control system and its operation by examining and evaluating them from multiple points of view, including compliance with relevant legislation and internal regulations, risk management, ensuring the appropriateness and efficiency of management operations, and ensuring the reliability of financial reporting, independently from the business operation line.
Corporate Governance Report
Corporate Governance Framework
1. Board of Directors
Daifuku's Board of Directors consists of 11 directors. The directors’ term of office is one year. The Company holds regular monthly meetings of the Board of Directors, with extraordinary meetings convened as necessary.
The Board of Directors shall delegate matters other than the important matters stipulated in the Rules of the Board of Directors, such as the determination of management policies, management plans, and corporate governance system, to directors and corporate officers.
The four 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
The Company maintains an Audit and Supervisory Board made up of five Audit and Supervisory Board members, three of whom are elected from outside the Company.
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, election/dismissal, and the remuneration of directors and corporate officers. The Committee is comprised of three representative directors and four outside directors and meets at least three times a year. The Committee is chaired by one of the outside directors to ensure its transparency in the course of resolutions.
4. Other bodies, etc.
The Management Advisory Meeting is held to confer important management matters. With directors and Audit & Supervisory Board members 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 addition, the Company introduced the corporate officer system for the purpose of the following:
1) Accelerate management decision making through a reduction in the number of directors and the establishment of this consultative body, as well as further revitalizing the Board of Directors by promoting more rigorous deliberation;
2) Engage in functional and efficient management operations, recruiting younger employees knowledgeable in management to serve as corporate officers and execute operations based on authority bestowed upon them by the Board.
With the introduction of the corporate officer system, the Company holds officers’ meetings with all directors, corporate officers, and Audit & Supervisory Board members, etc. 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.
The Company also holds Japanese affiliate company meetings, and representatives of the companies report on business conditions and other information to the Company’s representative directors and full-time members of Audit & Supervisory Board. In addition, the Company holds a global affiliate management meeting (called as Daifuku Global Management Meeting) to share information and exchange opinions on business plans, with presidents from all over the world in attendance.
Risk Management System Policy
Daifuku implements cross-organizational risk management measures through the Human Resources and General Affairs Division, which is under the control of the Chief Risk Officer. Based on our Risk Management Rules, the Company formulates a risk management promotion framework that comprises heads of each division. Under its risk management rules, the divisions and global affiliates conduct risk assessments across the Group once a year. According to the level of criticality, related divisions take measures to mitigate and minimize risks.
The Company 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 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.