Governance system

Governance system diagram

Board of directors

Board of Directors is made up of eight members: three internal Member of the Board and five Member of the Board(Outside Director) (three of whom are Independent Outside Director). In principle, extraordinary Board of Directors are held once a month, and as necessary, to decide on matters stipulated by laws and regulations or the Articles of Incorporation, management policies, and other important management matters, and to Supervise the execution of duties by Member of the Board.

*For the independence standards of the Company's Member of the Board(Outside Director) and Outside Audit and Supervisory Board Member, please see "2.1. [Independent Outside Director] Other Matters Related to Independent Outside Director" in the Corporate Governance Report.

Corporate Governance Report (670KB) (Updated December 2023)

Main themes for discussion in 2022

Evaluation of the effectiveness of board of directors

The Company conducts evaluations of the effectiveness of Board of Directors with the aim of further increasing the effectiveness of Board of Directors.

Implementation overview

Effectiveness evaluation results for fiscal year 2022

According to the survey results, the effectiveness of Board of Directors was generally at a certain level, but as a result of initiatives focused on issues identified in the previous year's evaluation, there were several areas where improvements were seen. On the other hand, points that should be improved in the future were also pointed out, and we are recognizing these as issues to be initiatives to improve effectiveness in fiscal 2023.

Key points for improving future effectiveness evaluations

We will continue to promote initiatives in FY2022 and, based on the discussions at Board of Directors, further promote the following initiatives to improve the effectiveness of Board of Directors and further strengthen corporate governance.

Audit & supervisory committee

Audit & Supervisory Committee is made up of four members: two Audit and Supervisory Board Member (one of whom is Audit and Supervisory Board Member(Standing)) and two Outside Audit and Supervisory Board Member (Independent Outside Director).The Audit & Supervisory Committee meets once a month in principle and as needed. We are holding an event. Furthermore, the Company's Audit & Supervisory Committee includes at least one person who has considerable knowledge of finance and accounting.
Each corporate Audit and Supervisory Board Member audits the legality and appropriateness of business execution and reports to the Board Audit & Supervisory Committee in accordance with the audit policy, audit plan, and division of audit duties established by Board of Directors. We also hold liaison meetings to strengthen collaboration with Member of the Board(Outside Director) and share information on management status, governance status, etc.

*For the independence standards of the Company's Member of the Board(Outside Director) and Outside Audit and Supervisory Board Member, please see "2.1. [Independent Outside Director] Other Matters Related to Independent Outside Director" in the Corporate Governance Report.

Corporate Governance Report (528KB) (Updated July 2023)

Priority audit items

• Verifying the responsibilities of Member of the Board and the effectiveness of Board of Directors
• Strengthening internal control system verification
• Verification of internal culture reform initiatives
• Verification of the governance status of Group companies

Internal audit

The Internal Audit Department checks and provides guidance mainly through operational audits. The Audit Department audits the overall internal control of executive departments in accordance with the audit plan approved by the Board of Directors, and periodically reports the status of audit implementation to the management.

Nominating advisory committee / Compensation advisory committee

J-OIL MILLS in order to increase the independence and objectivity of the functions of Board of Directors and to strengthen accountability, the Company has established "Nominating Advisory Committee" and "Compensation Advisory Committee" with Member of the Board(Outside Director) as chairpersons.
The independence of the committee is ensured by having the chairman and a majority of the committee members be independent Member of the Board(Outside Director).

Nominated Consult committee

• Composition: 3 Member of the Board(Outside Director) and 1 internal Member of the Board
• Functions/Role: Deliberates on the nomination, appointment and dismissal of Member of the Board and Executive Officer, and Report to Board of Directors.
• Activity status: Held a total of 7 times from July 2022 to June 2023, mainly to discuss proposals for appointment and dismissal of Member of the Board and Executive Officer, 2022 committee activity plan, president succession plan, president suitability evaluation, and human resource development, held discussions on skill matrices for Member of the Board, etc.

Compensation Advisory Committee

• Composition: 3 Member of the Board(Outside Director), 1 internal Member of the Board, and 1 internal Audit and Supervisory Board Member
• Functions/Role: Deliberates on the need to revise executive remuneration system and evaluation system for Member of the Board and Executive Officer, and the appropriateness of compensation, and Report to Board of Directors.
• Activity status: A total of 7 meetings were held between July 2022 and June 2023, mainly to discuss compensation systems (short-term and long-term incentives), 2022 committee activity plans, etc.

Composition and attendance status of board of directors, audit & supervisory committee, and each committee

Composition and attendance status for 2022

●…Chairman or chairperson, 〇…Committee or member
*1 Nominating Advisory Committee will be held a total of 7 times from July 2022 to June 2023. The attendance counts for Tsuyoshi Kameoka and Tatsuya Sato refer to committee meetings held after they became committee members on June 27, 2022.
*2 Compensation Advisory Committee met a total of 7 times from July 2022 to June 2023. The attendance counts for Tsuyoshi Kameoka and Tatsuya Sato refer to committee meetings held after they became committee members on June 27, 2022.
*3 Appointed Member of the Board or Member of the Board(Outside Director) on June 27, 2022
*4 Appointed Member of the Board(Outside Director) on June 27, 2023

Executive committee / Other committees

Consult body to Executive Committee

1. Risk Management Committee
   To comprehensively and promptly respond to latent risks that may affect management, crises such as compliance violations (actualized risks), and crises (serious crises), and to prevent them and reduce their impact. We have established a "Risk Management Committee" chaired by the Representative Director Member of the Board Representative Executive Officer, President and CEO. The Compliance Subcommittee, whose mission is to raise employee awareness and address compliance violations, and the Risk Management Subcommittee, whose mission is to anticipate and prevent risks and respond to crises, have been established under the Committee's supervision.
2. Sustainability Committee
   This committee formulates sustainability measures including climate change, conducts activities and manages progress, and reports to Executive Committee and Board of Directors once a quarter. We have positioned climate change measures throughout the supply chain as a top priority, and are working on issues solutions by sharing issues information on environmental impact reduction and sustainability across the entire company, from procurement to production, logistics, and sales. In February 2022, we merged Environmental Subcommittee and Sustainable Procurement Subcommittee, which were subordinate organizations of Sustainability Committee, into Sustainable Procurement and Environment Subcommittee to better align with our business model and strengthen our promotion system, considering initiatives to be particularly important for the environment in the procurement of raw materials.
   Please see below for details of the Sustainability Promotion Structure.
   Sustainability Promotion Structure
3. Investment and Financing Committee
   Regarding important investment and loan projects for the Company and Group Investment and Financing Committee, which is an Consult body to Executive Committee, examines the business feasibility, risk/return evaluation, and appropriateness of the plan for each investment and loan project. The results of the review are reported to Executive Committee.

Other committees

1. Information Disclosure Committee
   As an organization responsible for strengthening strategic information dissemination and making company-wide information disclosure decisions, we promote timely, appropriate, and fair information disclosure.
2. Branding Committee
   We are working to spread the brand both internally and externally through the formulation of brand strategies aimed at improving the brand power of Communication brand JOYL, and the formulation and implementation of brand reinforcement measures.
3. Marketing Committee
   It was established in October 2020 with the aim of instilling the company's customer-oriented culture, marketing orientation and thinking, and improving marketing capabilities such as marketing skills.
   We have mainly been working to identify product development issues and review the development process, but from October 2021, we have been focusing on developing marketing human resources.