Corporate Information
Corporate Governance
INDEX
1. Basic Policy
We place a high priority on the creation of a highly transparent management system based on our belief that establishing an effective management structure and internal control system and improving corporate governance will lead to continuous improvement of corporate value. In addition, we strive to maintain and develop good relationships with all stakeholders (shareholders, customers, employees, society, and partner companies), and to proactively disclose information in a timely timely manner.
2. Corporate Governance System
- 1. Board of Directors
- Currently, considering the size, situation, and organizational fluidity of our company, the Board consists of three directors within the company and five directors outside the company, who were appointed as independent directors. We report to TSE about independent directors. The supervisory and managerial functions of the Board of Directors and executives respectively are clearly stipulated. We delegate the authority, including reviews of the board system and decision-making systems as appropriate, in order to hasten the implementation of processes.
- 2. Board of Auditors
- Our company appoints internal and external auditors to the Board of Auditors which currently consists of four members (including two full-time corporate auditors). Three are external auditors in accordance with rules stipulated by the Tokyo Stock Exchange and reports to the TSE. The Board of Auditors audits the directors' performance through Board meetings and inspecting important documents. In addition, the Board of Auditors regularly liaises with the Internal Audit Office, which conducts internal audits, and with the accounting auditor for accountancy.
- 3. Remuneration Advisory
Committee - The Remuneration Advisory Committee (consisting of five outside directors, including one chairperson, and two inside directors) report to the Board of Directors on director compensation.
- 4. Nominating
Advisory Committee - The Nominating Advisory Committee (consisting of five outside directors, including one chairperson, and two inside directors) reports to the Board of Directors on the election of directors.
- 5. Internal Audit Office
- The Internal Audit Office, which currently consists of eight members, conducts internal audits. The department audits the status of compliance with internal rules and manuals at stores and headquarters, the appropriateness and effectiveness of overall business activities and procedures, etc. Audit results are regularly reported to the representative directors and the Board of Directors.
- 6. Accounting Auditor
- Financial audits of our company are conducted by a team consisting of two certified public accountants with KPMG AZSA LLC, 11 assistant certified public accountants, and 15 other members. Thus an environment for fair auditing is established. The team of certified public accountants with KPMG AZSA LLC consists of Ms. Miho Kawabata and Mr. Yosuke Sato.
- 7. Advisory Board
- The Advisory Board, consisting of company executives as well as frontline employees, meets to discuss and make policy on the path MUJI should take based on its founding philosophy and sense of incongruity with society.
3. Directors and Corporate Auditors (As of November 23, 2022)
*Please scroll to the right to view| Name | Current position | Gender | Attendance at meetings of the Board of Directors (Fiscal year ended August 31, 2023) |
Overall corporate management |
Operations | Business entrepreneurship and social entrepreneurship |
Technology | International mindset |
Humanities and art |
Sustainability and diversity |
Administration and risk management |
Meetings and Committees | Board of Directors |
|||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nomination Advisory Committee |
Remuneration Advisory Committee |
Board of Auditors |
Concurrent positions | |||||||||||||
| Masaaki Kanai | Chairman & Representative Director |
|
16/16 （100％） |
◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ |
|
||||
| Nobuo Domae | President & Representative Director |
|
16/16 （100％） |
◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◎ | ◯ | ◯ |
|
|||
| Satoshi Shimizu | Executive Vice President & Director |
|
16/16 （100％） |
◯ | ◯ | ◯ | ◯ | ◯ | ◯ | |||||||
| Masayoshi Yagyu | Outside Director (Independent) |
|
16/16 （100％） |
◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◎ | ◯ |
|
||||
| Atsushi Yoshikawa | Outside Director (Independent) |
|
16/16 （100％） |
◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◎ |
|
|||
| Kumi Ito | Outside Director (Independent) |
|
13/13 | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ |
|
|||
| Yuriko Kato | Outside Director (Independent) |
|
13/13 | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ |
|
||||
| Mayuka Yamazaki | Outside Director (Independent) |
|
13/13 | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ |
|
|||||
| Kei Suzuki | Full-time Corporate Auditor |
|
16/16 | ◯ | ◯ | ◯ | ◯ | ◯ | ◎ | |||||||
| Kosuke Yamane | Full-time Outside Corporate Auditor (Independent) |
|
13/13 | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ | |||||
| Jun Arai | Outside Corporate Auditor (Independent) |
|
15/16 （94％） |
◯ | ◯ | ◯ | ◯ | ◯ | ◯ |
|
||||||
| Maoko Kikuchi | Outside Corporate Auditor (Independent) |
|
Newly Appointed | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ | ◯ |
|
|||||
◎ refers to the chairman of the meeting. 〇 refers to the members attendee.
Maoko Kikuchi was appointed at the 2023 General Shareholders Meeting.
For Kumi Ito, Yuriko Kato, and Mayuka Yamazaki, the number of meetings and attendance at meetings of the Board of is after their appointment as directors on November 23, 2022.
For Kosuke Yamane, the number of meetings and attendance at meetings of the Board of is after their appointment as auditor on November 23, 2022.
Ratio of Outside Directors to All Directors
Ratio of Female Directors to All Directors
| Competency | Prerequisite |
|---|---|
| Overall corporate management |
The Board of Directors needs to make decisions after engaging in frank discussions of medium- to long-term strategies. We have therefore selected diverse knowledge of corporate management that is not limited to a particular industry as a prerequisite. |
| Operations | Stores are central to our business, and effective operations and expansion are central to our competitiveness. We have therefore selected knowledge about operations in the retail, distribution and manufacturing industries as prerequisites. |
| Business entrepreneurship and social entrepreneurship |
We have selected knowledge about business entrepreneurship and social entrepreneurship as prerequisites for achieving our corporate purpose. |
| Technology | We aim to create services that make good use of technology as a tool and improve convenience for our stakeholders. We have therefore selected knowledge about digital and technology management as a prerequisite. |
| International mindset | Achieving our corporate purpose requires us to contribute to various countries and regions around the world through future store development and product manufacturing. We have therefore selected knowledge that includes experience in an international environment as a prerequisite. |
| Humanities and art | We have selected understanding of the culture and history of the countries and regions we serve and knowledge of art and design as prerequisites for achieving our corporate purpose. |
| Sustainability and diversity | We position achieving sustainability and diversity at the center of our business activities in order to achieve our corporate purpose. We have therefore selected an understanding of social issues such as sustainability and diversity and a strong desire to address those issues as prerequisites. |
| Administration and risk management | We have selected knowledge of personnel and labor affairs, finance, legal affairs and risk management as prerequisites for achieving our corporate purpose. |
4. Assessment of Effectiveness of the Board of Directors
The Board of Directors conducted an analysis and assessment of the Board's effectiveness based on the corporate governance policy set by the Company. The results of that assessment are summarized below.
Summary of Assessment Process
-
The Board of Directors set the following evaluation categories it believes are necessary for assessment of the Board's effectiveness and conducted a survey of and interviews with directors and corporate auditors.
Evaluation categories in the questionnaire:
- Composition of the Board of Directors
- Operation of the Board of Directors
- Enhancement of discussions at Board of Directors meetings
- System supporting the Board of Directors
- Enhancement of relationship with shareholders and other stakeholders
- Other comments
-
The Board secretariat summarized the results of its assessment of directors and corporate auditors using the above questionnaire format and interviews.
-
Based on these results, the Board held discussions on each issue.
Results of the Assessment
-
Summary of Scores
-
(Average score for each category)
Note:Assessment scores are set on a scale of 1 to 5, with "1" meaning improvement necessary, "3" meaning the minimum necessary level,and "5" meaning adequate.
- Composition of the Board of Directors (Average score: 4.4) (Previous assessment: 3.4)
- Operation of the Board of Directors (Average score: 3.4) (Previous assessment: 3.4)
- Enhancement of discussions in the Board of Directors (Average score: 3.6) (Previous assessment: 3.6)
- System supporting the Board of Directors (Average score: 3.7) (Previous assessment: 3.2)
- Enhancement of relationship with shareholders and other stakeholders (Average score: 3.8) (Previous assessment: 3.5)
5. Policy for Appointment and Dismissal of Directors
Policy for Appointment of Officers
In nominating directors, the Nomination Advisory Committee, of which independent outside directors make up the majority, discusses each candidate's qualifications, taking into consideration their previous experience, accomplishments, ability to execute tasks, and character, and reports its recommendations to the Board of Directors. In addition, when nominating outside director candidates, we select management professionals who have experience, accomplishments, and knowledge in their respective fields. The nomination is discussed by the Nomination Advisory Committee, taking into consideration the candidate's ability to provide opinions and judgments that will contribute to enhancement of the Company's medium- to long-term corporate value, and is then reported to the Board of Directors.
Number and Term of Directors
The Company's Articles of Incorporation stipulate that the number of directors shall be no more than 11. For the term of directors, a proposal to shorten the term from two years to one year was approved at the General Meeting of Shareholders held in November 2021, for the purpose of clarifying the management responsibilities of directors and creating a management structure that enables us to respond quickly to changes in the business environment.
Support and Training Policy for Outside Directors and Outside Corporate Auditors
Support System for Outside Directors and Outside Corporate Auditors
here is no specific person or division in charge of the support system for outside directors and
outside corporate auditors, but the Business
Management Division provides information, including distributing the agenda of Board of
Directors meetings in advance, and the Internal
Audit Office, which conducts internal audits, assists outside auditors in the execution of their
duties.
In the fiscal year ending August 31, 2023, we have begun holding executive sessions that involve
informal interviews with executive
officers in order to enhance information sharing with outside directors. In addition, we have
enhanced support for the smooth operation of
the Board of Directors by introducing a cloud-based Board management tool to improve the
security of confidential information and enhance
overall efficiency.
Training Policy
We encourage directors and corporate auditors to learn about matters such as the responsibilities, duties and legal risks of officers, and to work on self-improvement such as acquiring business knowledge of the operations they supervise. External training is also provided as necessary.
Independence Criteria for Independence Outside Directors
The Company has established "Independence Criteria" based on the independence criteria stipulated by financial instrument exchanges. The Company's five independent outside directors provide candid and active opinions at meetings of the Board of Directors as management experts with experience in corporate management, and supervise management from an independent standpoint.
<Independence Criteria>
-
A person who has executed business for the Company or its subsidiaries.
-
A person who has executed business for the Company's parent company.
-
A person who has executed business for the fellow company of the Company.
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A person who has executed business in a company whose main business partner is the company, or a person who has executed business in a company which is our major customer.
-
A consultant, accounting expert, or legal expert (limited to those who are corporations, partnerships, or other organizations) who receives significant remuneration or other assets from the Company in addition to remuneration as a director or corporate auditor.
-
The Company's major shareholders (if a principle shareholder is a legal entity, a person who executes business, etc. (meaning a person who has or had executed business for the Company)
-
A close relative if a person listed in 1. through 6. above (excluding immaterial persons)
-
A person who belongs or belonged to the Company's business partner (a person who executes business or a person who has executed business at any time within the past 10 years).
-
A person from the company, in which a person from the Company is in charge of as an outside director there.
-
A person who has received a donation from the Company (if donation recipient is a corporation, partnership, or other organization, a person who has belonged there or a person equivalent thereto).
6. Executive Remuneration System
Policy for Determining Executive Remuneration
To enhance corporate value, remuneration of the Company's directors consists of three types:
payment of base compensation, which is a fixed amount (according to the director's position)
within the total remuneration limits set by
the General Meeting of Shareholders; payment of performance-based bonuses as a short-term
incentive linked to the Company's performance; and
non-monetary compensation as a long-term incentive to continuously increase long-term corporate
value and shareholder value.
Remuneration of outside directors and corporate auditors consists solely of base compensation,
and there are no components that fluctuate with performance. In addition, no executive
retirement benefit system is available.
| Compensation Structure and Components |
Summary |
|---|---|
| Base compensation | The base compensation of the Company's directors is determined based on each director's position, and by the Board of Directors pursuant to the deliberations of the Remuneration Advisory Committee |
| Performance-based bonuses (Excluding outside directors and outside corporate auditors) |
The coefficient for determining bonuses is calculated (from the perspective of pursuing profit in core businesses) by modifying the base bonus using the ratio of actual to planned consolidated operating profit. It ranges from 0% to 200%. |
| Non-monetary compensation (Excluding outside directors and outside corporate auditors) |
Non-monetary compensation is in the form of grants of restricted shares that vest upon retirement. Base grants are determined in relation to achievements in areas such as ESG that have long-term significance, and vary from 30% to 100% according to director position. |
Determination Process
Chaired by an outside director, the Remuneration Advisory Committee determines director compensation. The committee deliberates on monetary and non-monetary compensation for each director individually, and is committed to transparency, validity and objectivity. Its reports are referred to in Board resolutions. The Remuneration Advisory Committee consists of seven members, of which five are outside directors. Having a majority of outside directors ensures thorough governance.
Ratio by Type of Compensation
The ratio of performance-linked compensation for directors of the Company increases the higher
the position.
The ratio of base compensation, performance-based bonuses, and non-monetary compensation, etc.,
is shown in the table below
assuming 100% of the target is achieved.
In addition, performance-based bonuses range from 0% to 200%, depending on the level of
achievement. The percentage of long-
term incentive (LTI) non-monetary compensation varies from 30% to 100% depending on the level of
target achievement.
7. About Cross-Shareholdings
About Cross-Shareholdings
Ryohin Keikaku's policy is to sell cross-shareholdings in principle, and the Board of Directors
receives reports on the reduction of cross-
shareholdings every year.
In exercising voting rights of shares held as cross-shareholdings, we vote appropriately after
judging the pros and cons of each
proposal. We comprehensively examine factors such as whether the proposal will contribute to
enhancement of the investee company's
corporate value, whether it will contribute to enhancement of the Ryohin Keikaku Group's
sustainable growth and medium- to long-term
corporate value, and whether it conforms to the purpose of holding the shares.
8. Constructive dialogue with shareholders
Constructive dialogue with shareholders
The Company discloses detailed information on its business performance on its website at the time of each quarterly earnings announcement. In addition, the Company holds quarterly financial results briefings (Japanese only), and the presentation materials for these briefings are also available on the Company's website. We respond to requests for interviews based on such information as much as possible to exchange information that contributes to the improvement of corporate value.
