As a company with an 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 an Audit & Supervisory Board. The Company enhances its corporate governance by developing its Board of Directors with nine members, including four outside directors, and the Audit & Supervisory Board consisting of four members, three of whom are elected from outside the Company, to monitor and supervise business execution. 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 complement the functions of the Board of Directors, The Company has set up the Advisory Committee to deliberate on the nomination, election/dismissal, and the remuneration of management team members. Audit & Supervisory Board members, together with the Audit & Supervisory Board Office, further strengthen cooperation with 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. The Company has introduced a corporate officer system to encourage rapid decision-making on business execution. The Company has also introduced an audit officer system to strengthen auditing functions.
The President and CEO (hereinafter, the “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 CEO.
Basic policy for corporate governance and disclosure based on the Principles of Japan’s Corporate Governance Code
The Group actively strives to enhance its corporate governance with the aim of ensuring the sustained growth of the Group and improved 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 making appropriate revisions, 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 makes decisions on the important matters stipulated in the Rules of the Board of Directors, such as the determination of management policies, management plans, and the corporate governance system. The Board delegates matters other than these important matters 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 in, and extensive knowledge of, corporate operations, corporate legal affairs, accounting, ESG, etc. from a global perspective. 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.
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, with the remaining member a full-time member from inside the Company. The Company held meetings of the Audit & Supervisory Board on eight occasions during fiscal 2021.
With an awareness of their fiduciary responsibilities to shareholders and with a view to continuous corporate growth and medium- and long-term improvement in corporate value, Audit & Supervisory Board members and the Audit & Supervisory Board carry out auditing activities for fulfilling their duties, including auditing of directors' execution of duties, auditing of the internal control system and assessment of the appropriateness of auditing conducted by the accounting auditor, in accordance with the Rules of the Audit & Supervisory Board, the Standards for Company Auditor Audit, and the Standards on Audit Concerning the Internal Control System .
3. Advisory Committee
The Company has established a voluntary Advisory Committee to strengthen the independence, objectivity, and accountability of the Board of Directors’ functions on the matters of the nomination, dismissal, and the remuneration of directors and corporate officers. The Committee consist of at least one representative director and three or more members, including one or more 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 five occasions during fiscal 2021.
4. Other bodies, etc.
The Management Advisory Meeting is held to confer important management matters. With all directors and Audit & Supervisory Board members in attendance, this meeting also seeks the opinions of related corporate officers, audit officers, executives, and external specialists on an as-needed basis. Convened by the CEO as he sees fit, the Management Advisory Meeting meets on a timely basis as appropriate.
In addition, the Company has introduced a corporate officer system for the purpose of the following:
- -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.
- -Engage in functional and efficient business operations by broadly 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.
The Company holds officers’ meetings with all directors, corporate officers, full-time Audit & Supervisory Board members (outside members are optional), audit officers, etc. participating in deliberations. The meetings are held every month, fitting in with scheduled Board of Directors meetings. At officers’ meetings, the matters to be discussed by the Board of Directors as stipulated in the Rules of the Board of Directors are reviewed and formulated, and the matters stipulated in the Rules of the Officers are reported.
Risk Management System Policy
Daifuku has established a Risk Management Committee for the purpose of timely and appropriate management of risks that affect the achievement of the Group's management goals.
The Risk Management Committee regularly conducts Groupwide risk assessments, including global subsidiaries, in normal times, identifies important risks of the Group, and decides response policies (countermeasures) for those risks. Afterward, the Committee checks the progress and promotes planned efforts.