Basic Approach and Structure
Basic Approach
The MEC Group believes that to maximize stakeholder return, continuous initiatives toward reinforcing corporate governance, thereby enhancing corporate value, are crucial. Specifically, we will promote initiatives for fair and transparent management, speedy and accurate information disclosure, and thorough accountability, and are acting in accordance with the concept of the Corporate Governance Code.
Under the policy of promoting diversity in management, we actively invite and appoint outside officers and women. We are also working on establishing rules to provide strict decision-making criteria in case management lacks independence.
Moreover, aiming to gain value from diversity, the Group has a policy to encourage the activities of diverse competent personnel. We will continue to support promotion of diverse personnel to executive or management positions and enhance various systems to enable all those who take childcare leave to return to work.
Corporate Governance Report (As of March 24, 2025)
Conceptual diagram of corporate governance
Organizational Composition and Operation
- Organization Form
- Company with audit and supervisory committee
- Chairperson of the Board
- President
- Number of Directors
- 7 (The number specified under the articles of incorporation : 12), including 4 Outside Directors
- Appointment of independent officers
- 4 Outside Directors
Board of directors
The Company has given a structure to the Board of Directors while comprehensively taking into account factors such as the environment surrounding the Company and its business characteristics, so that the Board members can conduct proper and flexible decision-making and supervision. In addition, the Board of Directors is composed of members having a variety of knowledge and experience, regardless of their gender or whether they are from inside or outside the Company. Independent outside directors constitute a majority of the Board of Directors.
By holding the Board of Directors meeting every month, the Company makes decisions as the MEC Group, determines management policies and business executions, and oversees the carrying out of duties by Directors and Operating Officers. The Company has also established an operating officer system to put in place a structure in which Operating Officers can focus on carrying out business. In these ways, we are working to accelerate the decision-making of the Board of Directors.
Nomination Compensation Advisory Committee
Provides advice and recommendations to the Board of Directors and Audit Committee regarding the appointment, dismissal, and remuneration of Directors (excluding Directors who are Audit Committee members), Directors and Executive Officers who are Audit Committee members, etc. The purpose of the committee is to ensure that Directors, Executive Officers, etc., who are members of the Board of Directors or the Audit Committee are appointed, dismissed, and remunerated appropriately.
The majority of the members are independent outside members.
The Audit and Supervisory Committee
The Audit & Supervisory Committee audits the carrying out of duties by Directors and prepares audit reports, determines the content of proposals regarding the appointment, dismissal, and non-reappointment of accounting auditors, determines the opinions of the Audit & Supervisory Committee regarding the appointment, dismissal, or resignation of Directors (excluding Directors who are Audit & Supervisory Committee members), and determines the opinion of the Audit & Supervisory Committee regarding the audits and supervision of the status of operation of corporate governance and the remuneration, etc., of Directors.
Composition of members and attributes of the chairperson
| Total number of committee members (persons) | Full-time committee members (persons) | Inside Directors (persons) | Outside Directors (persons) | Head of Committee (Chairperson) | |
|---|---|---|---|---|---|
| Audit and Supervisory Committee | 3 | 1 | 0 | 4 | Outside Director |
ESG Committee
The purpose of this committee is to formulate and propose management strategies (ESG management strategies) to promote corporate governance reform (G), the fulfillment of social responsibilities (S), and environmental conservation (E) in an integrated and coordinated manner. Based on these proposals, the Company will expand and diversify its management strategies, creating corporate value over the medium to long term through rich relationships with employees, customers, society, and the natural environment. The majority of the members are independent outside members.
J-SOX Committee
The purpose of this committee is to establish basic matters concerning the operation of J-SOX internal controls in the Group and contribute to ensuring appropriate information disclosure and transparency in financial reporting in accordance with the Financial Instruments and Exchange Act of Japan, where the exchange on which the Company lists its shares is located.
Compliance Committee
In accordance with the spirit of the MEC Group’s Charter of Corporate Behavior and Corporate Code of Conduct, we have established a system for ensuring compliance within the Company and handling related matters, aiming to fulfill our social responsibility as a company by appropriately conducting business.
Risk Management Committee
The purpose of this committee is to appropriately implement risk management in the Group, establishing a basic policy regarding the development of a management system to prevent the occurrence of any risks that hinder the execution of business within the Group, and how to respond to any risks that do arise.
The Evaluation of the Effectiveness of the Board of Directors
Each year, the Company conducts an evaluation questionnaire for all Directors to further ensure the effectiveness of the Board of Directors and improve its functionality, reports the results of the questionnaire to the Board of Directors, and addresses points for improvement for the next fiscal year.
In FY2024, the analysis and evaluation concluded that “in general, the Board of Directors is appropriately and effectively fulfilling its roles and responsibilities”. On the other hand, the Nomination and Compensation Advisory Committee’s deliberations and the Board of Directors’ involvement and oversight are insufficient with regard to the formulation and operation of succession plans for senior management, and we recognize that there is room for improvement with regard to training for newly appointed Directors and post-appointment training for Directors and in terms of the provision of opportunities and information to Outside Directors to have them understand the Company.
We will continue to make more improvements to further ensure the effectiveness of the Board of Directors and improve its functions.
Board Skills Matrix
| Name | Corporate Management | R&D / Manufacturing / Technology | Financial / Accounting | Legal / Compliance |
Sales / Marketing |
Global | Sustainability / ESG |
Human Resources / Labor Management / Human Resource Development |
|---|---|---|---|---|---|---|---|---|
| Kazuo Maeda | ● | ● | ● | |||||
| Sadamitsu Sumitomo | ● | ● | ● | ● | ||||
| Tetsuya Taniguchi | ● | ● | ● | ● | ||||
| Lucinda Lohman-Oota | ● | ● | ● | ● | ||||
| Mitsutoshi Takao | ● | ● | ● | ● | ||||
| Kaoru Hashimoto | ● | ● | ● | |||||
| Eiji Miyashita | ● | ● | ● | ● | ● |
Criteria for Independence and Qualification of Independent Outside Directors
The Company has established strict criteria for use if Outside Directors have no independence from the Company. If a person applies to any of the below, we determine that they do not have independence.
- Has work experience in an organization that is our major shareholder which holds 5% or more of the voting rights, or is a major shareholder.
- Has work experience in the Company's main bank or major lender.
- Has work experience in our major trading partner or an organization that we position as our major trading partner.
- Has work experience in our audit corporation, law firm, or main securities firm.
- There have been cases where compensation in the form of consulting fees, attorneys' fees and tax accountant remuneration has been paid by the Company in addition to executive compensation.
- The corresponding period for 1 to 5 is within the past 5 years from the present time.
- Person who is next of kin to a person listed in 1 to 6 above.
- Person who is a close relative of someone who executes business, non-executive person who does not execute business, or employee at the Company or its subsidiaries or affiliates.
When selecting candidates for such independent Outside Directors, it is determined in cooperation with other directors whether the candidate has the required knowledge, experience and ability to contribute to frank, lively and constructive studies which he or she can be expected to make as a member of the Board of Directors. This is done in the Nomination and Compensation Advisory Committee in the course of reviewing the structure or organizational design of bodies like the Board of Directors, and the result is reported to the Board of Directors.
| Name | Member of Audit and Supervisory Committee | Designation as Independent Officer | Supplementary Explanation of the Relationship | Reasons for Appointment |
|---|---|---|---|---|
| Lucinda Lohman-Oota | ● | InScribe Language Consulting, where Ms. Lucinda Loman-Oota serves as the representative director, has business transactions with our company, including the commissioning of contract drafting. However, the transaction amount is minimal, and we have determined that it does not pose a risk of affecting her independence. | Ms. Lucinda Lohman-Oota has an attorney's license of the United States (she does not have an attorney's license of Japan), and has experience of working closely with a wide variety of clients from small companies to large multinational corporations, as well as international arbitration and internal auditing, with knowledge of corporate governance and compliance. She is nominated as a candidate for the position of Independent Outside Director in the expectation that she will utilize her experience and insight to provide advice about the overall management of the Company’s Group from an independent standpoint. In addition, since the criteria that are determined by the Company for judging the absence of independence do not apply to him, he is judged to be an independent Outside Director. | |
| Mitsutoshi Takao | ● | ● | ― | As an independent outside director who is an Audit and Supervisory Committee Member, audits and supervises the execution of duties of the Company from an objective perspective based on his abundant experience as a corporate manager and extensive expertise in finance and accounting, and, as Chairman of the Audit and Supervisory Committee, leads the operation of the Committee. Furthermore, he uses his extensive knowledge of corporate governance to provide appropriate advice for the continuous improvement of the Company's governance. He is nominated as a candidate to continue in the position of Independent Outside Director who is a member of the Audit and Supervisory Committee in the expectation that he will continue to provide appropriate advice, auditing, supervision, etc. regarding the Company's management, business execution, and sustainable improvement of governance. In addition, since the criteria that are determined by the Company for judging the absence of independence do not apply to him, he is judged to be an independent Outside Director. |
| Kaoru Hashimoto | ● | ● | ― | As an independent outside director who is a member of the Company's Audit and Supervisory Committee, she has utilized her extensive experience and advanced and specialized knowledge cultivated as an attorney and certified public accountant to provide appropriate advice, auditing. We hope that she will continue to advise, audit, and supervise the Company's business execution from a legal and accounting perspective, drawing on her experience and highly specialized knowledge that she has cultivated as a lawyer and certified public accountant. She has been appointed as an independent Outside Director who is a member of the Audit and Supervisory Committee. In addition, since the criteria that are determined by the Company for judging the absence of independence do not apply to her, she is judged to be an independent Outside Director. |
| Eiji Miyashita | ● | ● | ― | He has abundant experience in corporate management at other companies and a deep knowledge of finance and accounting. In addition, he has served as a corporate auditor at several companies and has broad insight into corporate auditing. He is nominated as a candidate for the position of Independent Outside Director who is a member of the Audit Committee in the expectation that he will utilize his experience and insight to advise, audit, and supervise the overall management of the Company’s Group from an independent and objective standpoint. In addition, since the criteria that are determined by the Company for judging the absence of independence do not apply to him, he is judged to be an independent Outside Director. |
Corporate Governance Report, Sustainability Report
For more information on our governance, please see our Corporate Governance Report and Sustainability Report.