Corporate Governance

PolicyBasic Stance on Corporate Governance

Our management philosophy is, “We seek to provide the best products and services that satisfy our customers, and we focus our passion on contributing to the realization of a society in which people live fulfilling lives.” With this in mind, we respect the interests of all our stakeholders, including CS Set users, and we are aware that establishing corporate governance is an important management issue for the long-term, ongoing improvement of our corporate value.
Based on this awareness, our directors, executive officers, and employees understand their roles and continuously work to improve their awareness of laws and regulations, social norms, and ethics (including M3 Group Code of Conduct and its sub-codes) while also developing and operating an appropriate management structure.

OrganizationCorporate Governance Framework

Outline

On March 25, 2020, the 26th Annual General Meeting of Shareholders approved a resolution to transition from being a company with an Audit and Supervisory Board to being a company with an Audit & Supervisory Committee.
The following is an explanation of our corporate governance structure.

Board of Directors

Our Board of Directors is made up of five directors (including one outside director) who do not also serve on the Audit & Supervisory Committee, and five directors (including three outside directors) who do also serve on the Audit & Supervisory Committee. The board makes decisions on Elan’s management policies, management strategies, business plans, the acquisition and disposal of important assets, important organizational matter, and personnel. In addition to regular monthly meetings, the board holds extraordinary meetings whenever important matters arise.
The board decides the duties of executive directors and appoints and decides the duties of executive officers. Executive officers are asked to attend board meetings as necessary to explain management decisions, and ensure the prompt execution of business by executive directors and executive officers.

Management Meeting

Our Management Meeting, made up of executive directors, executive officers, other individuals appointed by our president and the full-time Audit & Supervisory Committee member, acts as an advisory body to our president. At Management Meetings, held twice a month, important matters relating to the execution of business and matters to be discussed by the Board of Directors that require prior consultation are deliberated and executive directors and executive officers report on their duties.
Our president makes decisions, following deliberation by the Management Meeting, on important business execution matters delegated to the president by a resolution of the Board of Directors.

Audit & Supervisory Committee

The Audit & Supervisory Committee is made up of five directors who also serve as Audit & Supervisory Committee members (one full-time Audit & Supervisory Committee member, one part-time Audit & Supervisory Committee member, and three outside Audit & Supervisory Committee members) and meets once a month. The Audit & Supervisory Committee strives to ascertain directors’ compliance with laws and regulations and our Articles of Incorporation, and to ensure the effective implementation of operating audits and accounting audits.

Nomination & Compensation Committee

In addition to a Board of Directors, we have established a Nomination & Compensation Committee as an arbitrary advisory body to the Board of Directors, whose members are mostly independent outside directors, with the aim of further strengthening our corporate governance structure by enhancing the independence, objectivity, transparency and accountability of the functions of the Board of Directors. The committee deliberates matters relating to the nomination of candidates for director and executive officer positions, and compensation, etc. for directors and executive officers, and reports the outcome of deliberations to the Board of Directors. The committee is made up of members selected by a resolution of the Board of Directors. The majority of members are selected from among independent outside directors.

Special Committee

In order to protect minority shareholders, ELAN has established a policy of conducting transactions with the parent company group under the same terms as general transactions. Furthermore, any significant transactions or actions with the parent company group require the approval of the Board of Directors. When approving the transaction, the Board of Directors must consult with the special committee on the appropriateness of the transaction. The special committee is composed entirely of independent outside directors, and can also appoint outside experts.Elan’s corporate governance framework is shown in the chart below.