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Corporate Governance

Pigeon is committed to securing the trust of stakeholders including shareholders, customers, business partners, employees, and local communities and achieving sustained corporate growth. To this end, are constantly upgrading our corporate governance system aimed at achieving our business objectives.

Corporate Governance System

Pigeon’s top management team currently consists of 10 directors (including two outside directors) and four corporate auditors (including two outside ones). In order to respond promptly and appropriately to changes in the business environment, achieve sustainable growth, and establish a solid management foundation, we strive to ensure that management decisions are made rationally and efficiently. In 2000, we introduced an executive officer system to strengthen the business execution function. Furthermore, in April 2012 we introduced a commissioned operating officer system with the aim of ensuring reciprocal collaboration between the governance (management decision-making and oversight) function and the business execution function, as well as to clarify the business execution responsibility of directors.


The Board of Directors has the authority to oversee the execution of duties by directors and executive officers. Chaired by the Chairman, Director of the Board, the Board meets to make decisions concerning laws and regulations, the Articles of Incorporation, and matters stipulated in the rules of the Board of Directors (important business execution strategies, such as management targets and strategies). The Board of Directors is strengthening the control/oversight function of business execution by obtaining robust opinions from its outside directors, as well as from both inside and outside corporate auditors. The role of outside directors is to provide advice on the Company’s business strategies and increase the impartiality of decision-making and corporate governance.


The Management Committee, chaired by the President, Director of the Board, meets each week in principle to swiftly resolve problems from frontline perspectives. Corporate auditors also attend these meetings to express their opinions and otherwise enhance the management oversight function. Our four corporate auditors, including two from outside the Company, attend Board of Directors and other important meetings where they listen to directors, view important resolution documents, examine the current status of business and financial assets, and otherwise conduct meticulous supervision and oversight. The corporate auditors also meet regularly with the president to receive reports on important issues. With respect to information heard from within the Company, the president receives feedback from corporate auditors and exchanges opinions with them.


In addition, under Article 427, Paragraph 1 of the Companies Act, the Company has concluded contracts with outside directors and outside corporate auditors to limit their liability as stated under Article 423, Paragraph 1 of that act. Based on the contracts, the maximum amount of liability for damages caused by outside directors and outside corporate auditors is stipulated in Article 425, Paragraph 1 of the Companies Act.


To perform internal audits, the Company has established the Audit Office, staffed by six people. Based on annual plans, the Audit Office conducts regular internal audits of every department across the Pigeon Group, including domestic and overseas subsidiaries. The results of those audits are reported to the president, outside directors, and corporate auditors, and evaluations and continuous improvement proposals are carried out under the PDCA cycle. The Audit Office also conducts internal control audits related to financial reporting under Japan’s Financial Instruments and Exchange Act.


Corporate auditors, the Audit Office, and the accounting auditor collaborate with each other, meeting as necessary to exchange information and opinions, in addition to regular reporting sessions. The certified public accountants who audited the Company’s accounts for the fiscal year ended January 2017 were Ms. Mami Kato and Mr. Takeshi Tadokoro, both of whom are designated executive employees of PricewaterhouseCoopers Arata.

Board of Directors and Outside Directors

The Board of Directors is strengthening the control/oversight function of business execution by obtaining robust opinions from its outside directors, as well as from both inside and outside corporate auditors. Outside directors offer advice on the Company’s business strategies and otherwise fulfill a role in ensuring impartial decision-making and improving corporate governance. Seeking to further strengthen corporate governance and raise corporate value, Pigeon appointed an outside director at its General Meeting of Shareholders, held in April 2015, and one more outside director at its next meeting in April 2016. Both people are effectively performing their duties as outside directors. The first appointee, Mr. Takayuki Nitta, has valuable knowledge about business management based on a wealth of experience in business consulting and investment management companies, and he continues providing considerable advice on ways to promote shareholder-oriented management. The second appointee, Mr. Rehito Hatoyama, has a wealth of experience and high-level knowledge about overseas business strategies and managing the execution of those strategies, and he continues providing considerable advice on global business development.

Audit & Supervisory Board and Outside Corporate Auditors

According to audit policy and allotment of duties, Pigeon’s corporate auditors attend Board of Directors’ meetings and other important meetings, where they listen to directors, view important resolution documents, examine the current status of business and financial assets, and otherwise conduct meticulous supervision and oversight. To perform the management oversight function from an external perspective, the Audit & Supervisory Board has appointed two outside corporate auditors. Under the Companies Act, Audit & Supervisory Board members are given strong authority to audit and supervise the Company’s directors, including the right to attend Board of Directors’ meetings to voice their opinions and the authority to examine the Company’s business operations and financial status. Moreover, they are guaranteed terms of four years.

The outside auditors are Mr. Shigeru Nishiyama, a graduate school professor and certified public accountant, and Mr. Shuji Idesawa, who is an attorney. Because both auditors are highly impartial and have specialist knowledge, their role extends beyond compliance to include raising corporate value. In addition to Board of Directors’ meetings, the outside corporate auditors ask questions and provide opinions at face-to-face meetings with representative directors and other directors. Based on their independent viewpoints and impartial perspectives, they not only exercise their legally accepted authority to audit the legal appropriateness of business, but also fulfill a monitoring function by advising on the suitability of business decisions.

Corporate Governance Reports