Corporate Governance

Basic Policy on Corporate Governance

The Group aims to enhance the adequacy and effectiveness of management and optimize its corporate value by engaging in “speedy management,” which purports to revitalize the management of organization and enable prompt decision-making. The Group positions the Three Responsibilities (for our customers, for our employees and their families, and for society) of a corporate citizen as the pillars of its business activities. These responsibilities form the basis of the Group philosophy “Through food, we aim to be a good corporate citizen, connecting and collaborating with people to create smiles in their lives.”
To properly respond to the dramatic changes taking place in the management environment, the Group has been striving through corporate management based on its philosophy to improve its transparency and its role in society, while ensuring accountability and developing a corporate governance system to ensure thorough compliance.

The Company made Ichibanya Co., Ltd. a consolidated subsidiary in December 2015. Ichibanya Co., Ltd. is a listed company, and the Company undertakes the operation of that company’s internal control system with due respect.

Corporate Governance Report

Corporate Governance Report

Corporate Governance System

System for execution of operations

As a Company with an Audit & Supervisory Committee, the Company monitors, supervises, and audits the execution of duties by Directors and the legality and validity of resolutions by the Board of Directors via the Audit & Supervisory Committee and five Directors who are Audit & Supervisory Committee Members (of whom four are Outside Directors).

The Board of Directors consists of twelve Directors (of whom four are Outside Directors), makes decisions on the execution of important operations of the Group, and monitors and supervises the execution of operations by other Directors and Group companies.

As voluntary advisory bodies to the Board of Directors, the Company has also established the Nomination Advisory Committee and the Compensation Advisory Committee, to ensure objectivity and transparency in the election and dismissal of Directors and in the decision process for compensation. Independent Outside Directors account for a majority of the members of each of these committees, which are chaired by an Independent Outside Director.

The Audit & Supervisory Committee has the authority to give instructions to the Auditing Division, which is responsible for conducting audits of operations and implementing internal controls in respect of financial reporting, and works closely with them to confirm how the audits are conducted and how the internal control system is evaluated and regularly exchanges opinion and conducts investigation and issues specific instructions. The committee also audits the execution of duties by Directors in an organized way in cooperation with the Accounting Auditor, and, upon necessity, corporate attorneys.

Accounting audit is performed by Deloitte Touche Tohmatsu LLC. We have an audit agreement with this firm to perform audits under the Companies Act and those under the Financial Instruments and Exchange Act.

Board of Directors

Compensation Advisory Committee

Nomination Advisory Committee

Diagram of corporate governance system (as of July 2024)

The number of each meeting and attendance rate of Directors (results of FY2024)

For new Directors, the number of meetings and attendance rate after being appointed are listed.

Election/dismissal of management executives and policy and procedures for nomination of candidates for Directors

With regard to the election of management executives and the nomination of candidates for Directors, suitable personnel according to the election criteria provided below shall be proposed to the Board of Directors upon deliberations by the Nomination Advisory Committee, resolved as the candidates, and then brought to the General Meeting of Shareholders for discussions.

Personnel who are to serve as Directors in the future receive practical OJT mainly through gaining experience as directors of business companies as well as OFF-JT mainly through executive development programs and internal training, as part of the Company’s efforts to nurture successors. If the Board of Directors determines that a management executive is not consistent with the election criteria, dismissal will be resolved by the Board of Directors and presented to the Shareholders’ Meeting for discussion.

Skills Matrix

The skills of the Board of Directors are identified as skills that should provide the functions necessary for corporate management as the House Foods Group. In addition, the Board of Directors is to be composed of persons of diverse expertise and various experiences, regardless of age or gender, and is to be of a size that ensures flexible decision-making and mutual supervision.

Name			Position	Expertise and experience required for a Director in supervision and execution
				Corporate Management	Personnel affairs and Diversity	Finance and Accounting	Legal affairs, Compliance and Risk	Public relations, investor relations	Sustainability	R&D and intellectual property	Global Business	Digital Technology and DX	Quality Assurance	Production and Procurement	Sales, Marketing and Advertisement	Management of other companies
1	Hiroshi Urakami		Representative Director & President	●			●								●	●
2	Yoshiyuki Osawa		Representative Director & Senior Managing Director	●	●	●	●	●							●
3	Kotaro Kawasaki		Senior Managing Director	●				●	●						●	●
4	Yoshiyuki Miyaoku		Director	●						●	●	●	●	●	●	●
5	Tatsumi Yamaguchi		Director	●						●	●		●		●	●
6	Atsushi Sakuma		Director	●				●	●	●		●	●		●
7	Yuichi Okamoto		Director	●										●	●
8	Tsuneo Kubota		Director (Audit & Supervisory Committee member; full time)				●			●
9	Atsuko Okajima		Director (Audit & Supervisory Committee member; outside)		●		●
10	Fukuichi Sekine		Director (Audit & Supervisory Committee member; outside)	●	●		●							●		●
11	Yasuyuki Kawasaki		Director (Audit & Supervisory Committee member; outside)	●	●	●	●				●					●
12	Miwa Yamada		Director (Audit & Supervisory Committee member; outside)		●		●		●		●

Executives

Evaluations of the effectiveness of the Board of Directors

The Company holds regular meetings of the Board of Directors every month except August, as well as meetings to approve financial results, and extraordinary meetings as necessary to make prompt decisions regarding the execution of important business. Outside directors receive explanations from the Secretariat in advance on important matters and resolutions that are scheduled to be discussed by the Board of Directors. This leads to the active expression of opinions at Board meetings. Under our performance evaluation system, we conduct self-evaluations and multifaceted evaluations for each Director (excluding Directors who are Audit & Supervisory Committee Members).
The Company has also been conducting evaluations of the effectiveness of the Board of Directors and analyzing and evaluating results since FY2022. Going forward, we will continue to establish a cycle of periodic effectiveness evaluations and work to remedy issues and reinforce our strengths based on the evaluation results.

1. Status of responses to issues based on analysis and evaluation of the results of the evaluation of the effectiveness of the Board of Directors conducted in FY2022.
   1）Energizing deliberations on matters to be resolved by the Board of Directors
   The Board of Directors is working to operate in a way that makes its discussions more active by sharing details of discussions at Management Committee with Outside Directors and reviewing the proceedings so that explanations are focused on the main points.
   2）Review of the operation of regular report agenda
   We reviewed the explanatory materials used for agenda items reporting on the status of business operations, to enable Directors to more accurately grasp business issues.
   3）Revision of the criteria for submission to the Board of Directors
   We revised some of the criteria for submission to the Board of Directors, for the purpose of delegating authority to the Management Committee.
2. Method for evaluating the effectiveness of the Board of Directors in FY2023
   1）Eligible respondents: all 12 Directors (of whom four are Outside Directors)
   2）Response period: December 2023 to January 2024
   3）Implementation method: survey questionnaire format (4-level rating scale + open evaluation)
   4）Major evaluation items:

   ①The status of deliberations on matters to be resolved by the Board of Directors

   ②The implementation status of matters to be reported to the Board of Directors

   ③The status of the Board of Directors’ functions and operations

   ④The status of collaborations between the Audit & Supervisory Committee, Nomination Advisory Committee and Compensation Advisory Committee

3. Overview of the results of the evaluation of the effectiveness of the Board of Directors in FY2023
   It was found that the functions and operations of the Board of Directors remain adequate, and the Board’s effectiveness, including its cooperation with the Audit & Supervisory Committee, Nomination Advisory Committee and Compensation Advisory Committee. In addition, the content of improvement initiatives implemented based on the results of the previous year was evaluated highly, and improvements from the previous year’s score were seen on nine of the questions common to the previous year.
   At the same time, it was found that there is still room for improvement in the operation of the Board of Directors, and we are continuing to consider improvement initiatives.
   As described above, the Company strives to further improve the effectiveness of its Board of Directors and further enhance corporate governance through a cycle of strengthening the operation of the Board of Directors in line with the issues identified and implementing improvements. We believe that the effectiveness of the Board of Directors is being ensured in this way.

Executives’ Compensation

Basic design

As our basic policy, the compensation system and the amounts of compensation, etc. for Directors (excluding Directors who are Audit & Supervisory Committee Members) are based on the following points: “it gives motivation for the enhancement of corporate value and sustainable growth, and for achieving the Medium-Term Business Plan in order to realize the Group’s Philosophy,” “it is commensurate with the role and responsibilities of the position held, in light of the size of the company and its social responsibilities,” and “objectivity and transparency are ensured in the decision process of compensation.” They are determined by the Board of Directors after deliberations of the Compensation Advisory Committee.

The compensation system and the amounts of compensation, etc. for the Directors who are Audit & Supervisory Committee Members are deliberated by the Compensation Advisory Committee at the request of the Audit & Supervisory Committee, and after the deliberation results are reported to the Audit & Supervisory Committee, determined by consultation among the Directors who are Audit & Supervisory Committee Members.

Composition of compensation for Directors (excluding Directors who are Audit & Supervisory Committee Members)

Approach toward keeping the parent company and its subsidiary listed

The Company has Ichibanya Co., Ltd. (hereinafter "Ichibanya") as a listed subsidiary.
The business of Ichibanya and each of the Group's businesses compliment each other, having strong linkages in the value chain, and the Company pursues maximum synergies on a groupwide basis whilst also exercising supervision as the parent company, including dispatching directors of the Company as part-time directors of Ichibanya, ensuring that the business results of Ichibanya are routinely reported at the Company's Management Committee meetings and Board of Directors meetings, and making the approval or disapproval of proposals to be put before Ichibanya's General Meeting of Shareholders a matter for resolution by the Company's Management Committee. At the same time, the Company respects the independent decisions made by Ichibanya's management on the execution of day-to-day operations given that Ichibanya's business model is very different from that of the Group's core business. Further, Ichibanya is a company with an Audit & Supervisory Committee and makes decisions on important transactions with the Group based on the views of the Audit & Supervisory Committee, thus preventing any unfair disadvantage to other shareholders (besides the Company).

The Company and the subsidiary whose business models are different strengthen collaboration and promote cooperation themes together while respecting each other’s uniqueness, thereby enabling three parties including franchise owners who are engaged in the management of stores to enjoy benefits together. In this way, the Company believes that it will contribute to bringing benefits also to other shareholders of the subsidiary. Therefore, the Company’s policy is to keep both itself and the subsidiary listed while ensuring the effectiveness of the corporate governance system of the subsidiary.

Basic Policy on Internal Control System

The Group sees the internal control system as a framework for enhancement of the corporate governance structure and realization and achievement of its corporate philosophy and management targets and the Group implements initiatives intended to lead to improvement in corporate value and sustainable development through the establishment and accurate and effective operation of the internal control structure.

Governance data is available in the link below.