The establishment of an effective corporate governance and internal control system is essential for sustainable growth and long-term improvements in corporate value, and accordingly the Company works to strengthen such structures.
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Corporate Governance Report > [PDF] (770KB)
Corporate Governance
Basic Stance
A mechanism of corporate governance that enables management to make prompt and sound management decisions under appropriate and effective supervision is indispensable to the BIPROGY Group’s continuous growth and increase in medium-to-long-term corporate value. The Company shall create, maintain, and ceaselessly improve this mechanism.
Furthermore, BIPROGY believes that a company’s raison d’etre lies in its ability to contribute to society. Based on this belief, the Company stipulates as part of its corporate philosophy, “Listen sincerely to our stakeholders to improve our corporate value” in order to create relationships of trust with all stakeholders, and shall proceed with its business activities in accordance with this principle.
Furthermore, BIPROGY believes that a company’s raison d’etre lies in its ability to contribute to society. Based on this belief, the Company stipulates as part of its corporate philosophy, “Listen sincerely to our stakeholders to improve our corporate value” in order to create relationships of trust with all stakeholders, and shall proceed with its business activities in accordance with this principle.
Corporate Governance Structure
BIPROGY has determined that an audit system that includes supervision by the Board of Directors that includes outside directors and auditing by outside auditors is effective for monitoring management, and thus has adopted an Audit & Supervisory Board structure.
Given the decision-making speed required in light of the changing market environment, the Company aims to make decisions that combine a broader perspective with objectivity and transparency as well as to ensure the effectiveness of supervisory functions related to the execution of duties. It will accomplish this by utilizing internal directors who are well-versed in the state of the Company and its industry and appointing persons with extensive business experience and expertise as outside directors.
Given the decision-making speed required in light of the changing market environment, the Company aims to make decisions that combine a broader perspective with objectivity and transparency as well as to ensure the effectiveness of supervisory functions related to the execution of duties. It will accomplish this by utilizing internal directors who are well-versed in the state of the Company and its industry and appointing persons with extensive business experience and expertise as outside directors.
Corporate Governance Structure (As of June 29, 2022)
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Nomination and Remuneration CommitteeAn advisory committee to the Board of Directors that deliberates and reports on matters pertaining to personnel and remuneration of our executives. Two of the three committee members are independent outside directors, and one of them serves as chairperson. The attendance of the independent outside director and the agreement of all members, including the independent outside director, are required when making resolutions.
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Executive CouncilThe Executive Council is a decision-making body for deciding important matters of business execution. Members include corporate officers who concurrently serve as directors, and meetings are held weekly, in principle.
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Various Other CommitteesDeliberate on Individual Management Issues Related to Directors’ Execution of Duties from a Practical Point of View
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R&D/Investment CommitteeDeliberates on the advisability of plans for businesses, products and services based on the Group’s priority areas, and decides whether to invest in such plans. Also evaluates actual results versus forecasts for such plans and requests a review as necessary.
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Project Review CommitteeDetermines the business risks and appropriate countermeasures for important development and service businesses, and decides whether to implement such countermeasures. Also evaluates actual results versus forecasts for such projects and requests a review as necessary.
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Information System Investment CommitteeDeliberates on the advisability of cost, effectiveness, applied technologies and other matters for the Group’s own system development and operation and decides whether to invest in such systems. Also evaluates actual results versus forecasts for such plans and requests a review as necessary.
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Sustainability CommitteeFormulates measures and policies on achieving group SDGs, determines the appropriateness of overall business activities from an ESG perspective, comprehensively determines action promotion and evaluations, and requests a review as necessary.
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Environmental Contribution CommitteeManages and monitors investigations of environmental contribution-related policies as well as the design and implementation of mechanisms to promote environmental contributions.
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Social CommitteeConsiders policies on social fields, designs mechanisms to promote a response to challenges in "social" area and supervises the status of implementation, as well as instructs to correct the issues of concern, etc.
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Compliance CommitteeOversees compliance programs such as Group compliance education and internal reporting.
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Risk Management Committee/Business Continuity ProjectHandles various risks that exert a material impact on Group management and ensures business continuity.
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Information Security CommitteeFormulates strategies for overall Group security and personal information protection, and considers and promotes various measures based on those strategies.
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Life Science Research Ethics CommitteeExamines the validity of research on people within the Company reviewed by an independent organization from an ethical and scientific perspective, and requests a review as necessary.
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Size and Diversity of the Board of Directors and the Audit & Supervisory Board
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The Company maintains an appropriate number of members that can effectively and efficiently exercise the functions of the Board of Directors.
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The Company has appointed eight directors with diverse and extensive careers and knowledge, including 4 independent outside directors (two of whom are women), accounting for half of the board.
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The Audit & Supervisory Board is composed of a majority of independent outside auditors, including two female outside auditors, one of whom is a lawyer.
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The attendance rate of outside directors at Board of Directors meetings was 100%(in FY2021).
The attendance rate of outside Audit & Supervisory Board members at Board of Directors and Audit & Supervisory Board meetings was 100% (in FY2021).
(the Board of Directors met 11 times and the Audit & Supervisory Board met 15 times in FY2021).
| Total Memberes | Outside Members (Women) |
Percentage of Board of Directors or Audit & Supervisory Board | ||
|---|---|---|---|---|
| Independent Officers | ||||
| Board of Directors | 8 | 4*(2) | 4 | 50.0% |
| Audit & Supervisory Board | 5 | 3*(2) | 3 | 60.0% |
| Total | 13 | 7(4) | 7 | 53.8% |
*BIPROGY has five directors and four Audit & Supervisory Board members from outside the Company. From FY2017, one director and one Audit & Supervisory Board member who serve concurrently as officers of a principal shareholder are no longer designated as outside officers, although they meet the legal requirements for outside officers, due to not meeting the Company’s independent criteria.
Evaluation of Effectiveness of the Board of Directors
To continuously improve corporate value, BIPROGY considers it important for the Board of Directors to enhance governance by fully deploying its functions. Every year since FY2016, the Company has analyzed and evaluated the effectiveness of the Board of Directors in the previous fiscal year and worked to improve its functionality.
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Evaluation Results (summary)With regard to the evaluation items, all received positive evaluations generally. Also, we confirmed that lively discussions were held from a variety of viewpoints and that improvements have been made year by year through the effectiveness evaluation. On the other hand, the following items were needed to be further considered.
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To improve the effectiveness of monitoring by the Board of Directors, it is necessary to provide more information in advance and conduct appropriate follow-ups in order to help the board of directors to deepen discussions on the themes related to the essence of management.
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It is necessary to deliberate further on the global strategies for the Group and human resource strategies.
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Since a majority of the Nomination and Remuneration Committee has come to comprise independent outside directors, it is necessary to speed up the provision of information to outside directors who are members of the Committee and enhance the content of such information for more lively discussions. At the same time, it is necessary to report in more detail on their discussions to the board of directors in order to further improve transparency of the committee.
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Actions taken in the Fiscal Year 2021 and evaluation results of them
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Endeavor to enhance provision of information on trends in the industry, market, technology and innovation, and provide information about agenda for the board meetings more speedily, in order to help outside directors and auditors deepen their understandings of the Group.
A certain amount of progress has been made, and we will continue to work to further enhance and speed up the provision of information. We will explain sufficiently mainly on situations in industry and market trends to the outside directors and auditors, and enable them to understand issues faced by the Company and deepen discussions at the board of directors. -
Enable lively and active discussions on themes related to the essence of management of the Company such as growth strategies, sustainability, and culture reforms stipulated in the Vision 2030 and the Management Policy (2021-2023), in light of maximizing the monitoring function of the board.
It can be evaluated that there was a considerable amount of active discussion, including discussions outside the Board of Directors depending upon themes.
There are some themes that require further discussion, such as spreading the Vision internally, and the board will continue to deepen the discussion. -
In order to strengthen the independence of the Nomination and Remuneration Committee, a majority of the members shall be independent outside directors.
We have two outside directors and an internal director as members for the Committee. The majority of the Committee consists of outside directors, and the chairperson of the Committee is an outside director.
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Actions for the Fiscal Year 2022We will implement the actions below in the fiscal year 2022 in order to strengthen further the governance system of the Company on the basis of the evaluation results above.
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In order to continue to deepen discussions on themes related to the essence of business management, such as human resource strategy and sustainability, we will enhance the effectiveness of monitoring by the Board of Directors by providing more information in advance and conducting appropriate follow-ups.
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Discuss global strategies for the Group and effectively monitor the progress of plans.
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Since a majority of the Nomination and Remuneration Committee has come to comprise independent outside directors, the Company will make efforts to provide more substantial information earlier to the outside directors who are members of the Committee for more lively discussions. In addition, it is necessary to further improve transparency of the committee by reporting in more detail on their discussions to the board of directors.
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Succession Plan
The Company regards a succession plan for its senior management including the CEO as another priority item for ensuring transparent candidate selection and planned development of management. To ensure the transparency of the selection process, the Nomination and Remuneration Committee, which includes an independent outside director, deliberates and reports to the Board of Directors.
In this plan, integrity is the basis of the seven core competencies listed in the table below that have been set as important qualifications required of CEOs including foresight and insight. The Committee believes that the degree to which each requirement is displayed may vary depending on the business environment (periods of change or continuity/ growth). The seven core competencies consist of the following three categories on the basis of integrity.
In this plan, integrity is the basis of the seven core competencies listed in the table below that have been set as important qualifications required of CEOs including foresight and insight. The Committee believes that the degree to which each requirement is displayed may vary depending on the business environment (periods of change or continuity/ growth). The seven core competencies consist of the following three categories on the basis of integrity.
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Our Ability to Create New ValueForesight refers to the ability to foresee the future of our Group, promote a vision with great aspirations and make a commitment to the future. Insight refers to the ability to understand global trends and changes, identify Japanese and worldwide economic swings, and perceive essential value in everything. Determination refers to the ability to decide on a direction with unwavering conviction despite unpredictable conditions and with an awareness of the risks involved.
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Our Ability to ImproveInnovation refers to the power to improve, leaving precedent and custom behind to ambitiously carve out a new path undeterred by difficulties. Passion refers to the ability to gain the cooperation, trust and encouragement from those around you while passionately engaging in all endeavors and communicating extensively. This also refers to such attributes as a high sensitivity toward information and receiving capabilities, as well as the ability to convey objectives in the direction of realizing dreams, goals to be achieved, and solving problems.
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Staying PowerExecution refers to the ability to steadfastly stay the course to achieve results by setting lofty goals companies should strive for and displaying leadership. Diversity & Inclusion refers to the ability to interact with wide array of people whether inside or outside the Company, recognizing the values of people with various standpoints without stereotyping and pigeonholing them. This also refers to the ability to build proactive relationships based on an understanding of ideas from various corporate and cultural perspectives.
Furthermore, In FY2018, the Company launched the Management Leader Program for managers to enhance the pool of candidates for senior management, including the CEO. The program includes sessions with experts from inside and outside the Company, evaluations with reference to the seven competencies, and challenging assignments.
Remuneration of Directors and Audit & Supervisory Board Members
Remuneration for executive directors consists of: (a) fixed remuneration(monthly remuneration), (b) bonus linked to a short-term performance, and (c) restricted stock remuneration linked to medium- to long-term performance. The ratio of (a):(b):(c) is set at 4:4:2.
The above ratio assumes that 100% of the short-term performance profit target is achieved in the final year of the evaluation period for (c) stock remuneration and 100% of each condition of stock remuneration is achieved.
Non-executive directors, such as outside directors, are paid a fixed monthly salary only, without taking business performance into account.
The Company has established the Nomination and Remuneration Committee as an advisory committee to the Board of Directors. The Committee is composed of three directors including two independent outside directors.
The Nomination and Remuneration Committee is delegated to decide contents of remunerations for each director in order to reflect objective and fair opinions outside of the Company.
The above ratio assumes that 100% of the short-term performance profit target is achieved in the final year of the evaluation period for (c) stock remuneration and 100% of each condition of stock remuneration is achieved.
Non-executive directors, such as outside directors, are paid a fixed monthly salary only, without taking business performance into account.
The Company has established the Nomination and Remuneration Committee as an advisory committee to the Board of Directors. The Committee is composed of three directors including two independent outside directors.
The Nomination and Remuneration Committee is delegated to decide contents of remunerations for each director in order to reflect objective and fair opinions outside of the Company.
Director Remuneration
Total Remuneration in FY2021 for Directors and Audit & Supervisory Board Members with Subtotals for Each Type of Remuneration and Numbers of Recipients
| Classification | Total Remuneration Paid (Millions of yen) |
Remuneration Paid by Type(Millions of yen) | Recipients | ||
|---|---|---|---|---|---|
| (a)Fixed Remuneration | (b)Bonuses | (c)Restricted Stock Remuneration |
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| Directors (Excluding outside directors) |
330 | 180 | 126(*)1 | 24(*)1 | 6 |
| Audit & Supervisory Board members (Excluding outside Audit & Supervisory Board members) |
34 | 34 | - (*)2 | - (*)2 | 2 |
| Outside directors and outside Audit & Supervisory Board members | 71 | 71 | - (*)2 | - (*)2 | 9 |
*1. One non-executive director is not eligible to receive bonuses and stock renumeration.
*2. Outside directors and Audit & Supervisory Board members are not eligible to receive bonuses and stock renumeration.
Note1. Figures shown in millions of yen have been rounded down to the nearest million.
Note2.The amount of restricted stock remuneration listed above is the amount recorded as an expense in the current consolidated fiscal year out of the cost related to restricted stock remuneration.
Note3.The amount of remuneration shown above includes the amount paid to one directors and two Audit & Supervisory Board members who retired at the conclusion of the 77th Ordinary General Meeting of Shareholders held on June 25, 2021.
*2. Outside directors and Audit & Supervisory Board members are not eligible to receive bonuses and stock renumeration.
Note1. Figures shown in millions of yen have been rounded down to the nearest million.
Note2.The amount of restricted stock remuneration listed above is the amount recorded as an expense in the current consolidated fiscal year out of the cost related to restricted stock remuneration.
Note3.The amount of remuneration shown above includes the amount paid to one directors and two Audit & Supervisory Board members who retired at the conclusion of the 77th Ordinary General Meeting of Shareholders held on June 25, 2021.
Initiatives to Enhance Corporate Governance
In order to express its basic stance, the BIPROGY Group ceaselessly improves on initiatives for enhancing corporate governance as a mechanism for implementing transparent, fair, prompt, and decisive decision making.
Internal Control System
Our Group has strived to establish, operate, and continuously improve its internal control system as follows in order to achieve the aims of internal control: improving the effectiveness and efficiency of business, ensuring the reliability of financial reports, compliance with laws and regulations on business activities, and preservation of Company assets.
Improving the Effectiveness and Efficiency of Business
The Group has established a mid-term management plan and specific management targets, and it strives to develop systems that will improve operational effectiveness and efficiency.
Ensuring the Reliability of Financial Reports
The Company's management and employees have conducted themselves in compliance with the basic policy for appropriate financial reporting established by the Group set forth for ensuring the reliability of financial reporting.
Compliance with Laws and Regulations on Business Activities
In recognition of compliance as one of the most critical issues to the execution of business operation, the Group has established the Charter of Corporate Behavior, the Group Compliance Basic Regulations, and the Group Code of Conduct, based on which all of the Group's employees act ethically in compliance with laws and regulations, social norms, and in-house regulations.
Preservation of company Assets (Risk Management)
The Group is faced with various kinds of risk in connection with its operating business activities. The Company has developed a common risk classification system for the Group to share and centralize the management of risks throughout the entire Group. Furthermore, it has developed preventive measures and countermeasures against the occurrence of risk events in order to safeguard its assets.
Accordingly, the Company has established a Risk Management Committee and Business Continuity Project chaired by the chief risk management officer (CRMO) to unify, lead, and manage risk management across the entire Group.
Accordingly, the Company has established a Risk Management Committee and Business Continuity Project chaired by the chief risk management officer (CRMO) to unify, lead, and manage risk management across the entire Group.
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