As a company with Audit & Supervisory Board, the Daifuku Group is flexibly promoting the introduction and expansion of systems that enhance management transparency, monitoring and supervision functions.
We strive to improve our effectiveness by continuously implementing the PDCA (plan-do-check-act) cycle, establishing the Daifuku Group's Basic Policy for Corporate Governance and the Disclosure Based on the Principles of Japan’s Corporate Governance Code.
Corporate governance structure
Daifuku is a company with Audit & Supervisory Board. Daifuku enhances its corporate governance by its Board of Directors 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 (44%) of the members of the Board of Directors are independent outside directors. The composition indicates that the Company considers diversity.
In addition, to complement the functions of the Board of Directors, Daifuku has set up the Advisory Committee to deliberate on the nomination, election/dismissal, and remuneration of management team members. The Audit & Supervisory Board members and the Audit & Supervisory Board Office, which assists the duties of the Audit & Supervisory Board members, further strengthen cooperation between the Audit Division and the accounting auditor to deepen and streamline audit work.
Under the direct control of the Board of Directors, the Audit Division audits the appropriateness of the development and operation of internal control systems within the Group. We have introduced a corporate officer system to encourage rapid decision-making on business execution.In addition, Daifuku has adopted an audit officer system to strengthen the audit function.
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.
Basic policy for corporate governance and disclosure based on the Principles of Japan’s Corporate Governance Code
The Daifuku Group strives to enhance its corporate governance with the aim of ensuring the sustainable growth of the Group and creating its medium- to long-term corporate value. As the guidepost for activities, we have established the Daifuku Group's Basic Policy for Corporate Governance and the Disclosure Based on the Principles of Japan’s Corporate Governance Code and will continue to enhance the effectiveness of corporate governance while modifying the guidelines, as necessary.
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, 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 convening notices, Daifuku Report, and securities reports (in Japanese).
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. The Company held meetings of the Audit & Supervisory Board on six occasions during fiscal 2020.
Audit & Supervisory Board members and the Audit & Supervisory Board shall fulfill their duties by stipulating 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, 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. The Committee held meetings on six occasions during fiscal 2020. During fiscal 2021, the Committee has been held twice (including once on officers’ remuneration) to date, and it referred them twice, on May 11 and June 22, to the Board of Directors for final approval.
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 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. 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. (In fiscal 2020, the meeting was held online due to the impact of COVID-19 pandemic.)
Risk Management System Policy
Under the direction of the CEO, we plan and promote company-wide risk management measures. Based on the Risk Management Rules, we formulate a risk management promotion framework that comprises heads of each Global Business and conduct risk assessments on a regular basis (generally once a year) across the Group to appropriately understand the risks that affect the Group's business. For each risk, according to the level of criticality, related divisions take measures to mitigate and minimize risks. The Sustainability Promotion Department centrally manages and reports high-priority risks to the Board of Directors.