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 a Board of Directors consisting of nine members, including four outside directors, and the Audit & Supervisory Board consisting of four members, three of whom are elected from outside the Company. More than a third of the members of the Board of Directors are independent outside directors. The composition indicates that the Company considers diversity. To supplement the functions of the Board of Directors, the Company has an Advisory Committee, which deliberates on the nomination, election and dismissal, and remuneration of the management team members. The Audit & Supervisory Board members strengthen cooperation with the Audit & Supervisory Board Office, Audit Division and accounting auditors and deepen and make more efficient the auditing service.
To encourage rapid decision-making on business execution, the Company has introduced the corporate officer system. The Company has also introduced the audit officer system to strengthen auditing functions.
The President & CEO directs each Global Business and the Corporate Functions and identifies and addresses issues common to the entire Group through the committees under the direct control of the President.
Corporate Governance Report
Corporate Governance Framework
1. Directors and the Board of Directors
Daifuku's Board of Directors consists of nine directors. The directors’ term of office is one year. The Company holds regular monthly meetings of the Board of Directors to make decisions on fundamental management issues, 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 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.
The independent outside directors include a woman and two persons who have experience engaging in corporate management. The detailed composition of the Board of Directors and a skill matrix are disclosed in convocation notices and security reports.
2. Audit & Supervisory Board members and the Audit & Supervisory Board
The Company maintains an Audit & Supervisory Board made up of four Audit & 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 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, Audit & Supervisory Board members, corporate officers, and audit officers. The Committee is comprised of one representative director 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 purposes of the following:
1) 1) Accelerate 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 by promoting employees with knowledge of business operations to serve as corporate officers and execute business based on the 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. 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.
In addition, once a year the Company holds the Daifuku Global Management Meeting, attended by senior executives of all non-Japan subsidiaries, to share business plans and exchange views.
Risk Management System Policy
Daifuku implements cross-organizational risk management measures through the Human Resources and General Affairs Division. Based on our Risk Management Rules, the Company formulates a risk management promotion framework that comprises heads of each Global Business and conducts risk assessments across the Group every 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, 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.