Corporate Governance

Basic Policy

The Company has developed the “Pigeon Way,” as described below, comprising its Purpose, Values, Action Principles and Vision, under its Corporate Philosophy of “Love” and its Credo of “Only love can beget love,” as the basis of its spirit and actions to be shared by all Pigeon Group employees, both in Japan and abroad.

The “Pigeon Way” is more than a mere slogan. The Company believes that having all employees become strongly aware of the “Pigeon Way” and putting it into action will inevitably improve corporate value, and that its corporate value encompasses both social and economic value. We are aiming to achieve the goal of improving social value mainly by becoming an indispensable part of society, while delivering joy and happiness to our target customers, by providing solutions and new value. The Company established the following six (6) priority materialities (Key Issues) to be addressed in terms of Sustainable Development Goals (SDGs) and Environmental, Social, and Governance (ESG): 1) enhancement of business competitiveness and R&D capabilities; 2) sustainable reduction of environmental impact; 3) enhancement of stakeholder support capability; 4) improvement of the quality of human resources; 5) creation of comfortable working environment; and 6) development of a solid management base, all of which will be incorporated into our business strategies. Meanwhile, we are aiming to achieve the goal of improving economic value mainly by increasing free cash flow consistently, efficiently, and strategically, as we move into the future.

Based on this approach, the Company defines corporate governance as “the system that pays due respect to the views of our employees, customers, business partners, shareholders and local communities, and that ensures transparent and fair as well as prompt and bold decision-making” and the purpose of corporate governance as the means to achieving “the Company’s sustained growth and the improvement of corporate value in the medium- to long-term.

The Company will continue to further strengthen this system in accordance with the above definition and make efforts to continuously enhance its corporate governance in pursuit of further improving its corporate value.

Pigeon Way

Corporate Philosophy Love
Credo Only love can beget love
Purpose We want to make the world more baby-friendly by furthering our commitment to understanding and addressing babies’ unique needs
Values - Integrity
- Communication, Consent, Trust
- Passion
Action Principles - Agility
- Keep sight of consumers
- Global collaboration among competent individuals
- Leadership and logical working style
- Willingness to change
Vision To be the baby product manufacturer most trusted by the world’s babies and families, i.e. “Global Number One”

Corporate Governance Organization Chart

  • Corporate Governance

Corporate Governance Report

Directors and Management Officers

We are organized as a company with an Audit & Supervisory Board. The Audit & Supervisory Board members’ auditing to ensure strict adherence to the law forms the cornerstone of our compliance management. Our Articles of Incorporation stipulate that we may have no more than 13 directors; as of the date of submission of the Securities Report, the Board of Directors consists of 12 directors (nine men and three women; 11 Japanese and one non-Japanese), five of whom are outside directors. The Audit & Supervisory Board consists of four members (three men and one woman, all Japanese), including two outside Audit & Supervisory Board members. In addition to the Board of Directors and Audit & Supervisory Board, we hold Management Committee meetings, chaired by the president, as well as an internal auditing system. Together these bodies comprise our corporate governance system.
We make great efforts to ensure rational and efficient management decision-making, so that it can respond rapidly and appropriately to changes in the business environment, ensure sustainable growth and establish a robust management base. To strengthen business execution functions, in 2000 we introduced a managing officer system. This move was followed in April 2012 by the introduction of a commissioned managing officer system, to enable reciprocal coordination between the governance (management decision-making and oversight) function and the business-execution function and to clarify the business execution responsibilities of directors. The Board of Directors, chaired and convened by the chairman of the Board, is authorized to oversee the directors’ and managing officers’ execution of their duties. This body decides items stipulated under laws and regulations, the Articles of Incorporation and the rules of the Board of Directors (important matters of business execution strategy such as business targets and strategy).
We strengthen its oversight of business execution by encouraging the vigorous expression of views by outside directors and both internal and outside Audit & Supervisory Board members. The role of the outside directors is to advise uson its management strategy, improve the appropriateness of its decision-making and enhance corporate governance. In principle, the Management Committee, of which the president and CEO is the chair, meets every week, to ensure early resolution of issues from the perspective of the shop floor. To ensure the adequacy of oversight functions, the Audit & Supervisory Board members attend the Management Committee meetings and offer their opinions. In accordance with policies on auditing and allotment of duties, the four Audit & Supervisory Board members, which include two outside Audit & Supervisory Board members, attend important meetings such as meetings of the Board of Directors, listen to the directors, review important resolution documents and the like, survey the status of operations and assets, and otherwise carry out strict auditing and oversight. In addition, the Audit & Supervisory Board members meet regularly with the president and CEO, to receive reports on issues of importance to Pigeon and engage in frank exchanges of views.

List of Directors and Management Officers

Board of Directors, Audit & Supervisory Board Members and Managing Officers

◎: Chair 〇: Participant in attendance

NameBoard of DirectorsAudit & Supervisory Board MembersRemuneration
Committee
Nominated
Committees
Directors Yoichi Nakata        
Shigeru Yamashita    
Norimasa Kitazawa    
Eiji Akamatsu        
Tadashi Itakura        
Yasunori Kurachi        
Kevin Vyse-Peacock        
Takayuki Nitta Outside1  
Rehito Hatoyama Outside1  
Erika Okada Outside1  
Chiaki Hayashi Outside1      
Eriko Yamaguchi Outside1      
Auditors Kazuhisa Amari      
Tsutomu Matsunaga      
Koichi Otsu Outside1    
Atsuko Taishido Outside2    

1: Independent directors based on the regulations of the Tokyo Stock Exchange

2: Independent directors who satisfy the requirements for an independent director based on the regulations of the Tokyo Stock Exchange

Board of Directors/Audit & Supervisory Committee Meetings in FY ended Dec. 2019

 Board of DirectorsAudit &
Supervisory Board
Remuneration
Committee
Nominated 
Committees
Times held 8 9 4 2
Attendance 99.0% 97.2% 100.0% 100.0%

Executive Remuneration System

Remuneration for directors (excluding independent outside directors) consists of basic remuneration (based on the position held), bonuses (a short-term incentive), and share-based remuneration (a medium-to-long-term incentive). The retirement benefit system for directors was abolished at the conclusion of the 62nd Ordinary General Meeting of Shareholders held on April 25, 2019.
Basic remuneration amounts are determined by each director’s position, which is based on responsibilities, and bonuses vary (0–150%) according to the level of achievement of the Group’s consolidated performance targets (net sales, operating income, and PVA). Share-based remuneration consists of two components: performance-linked (60%) and non-performance-linked (40%). In principle, the performance-linked portion varies (0–150%) according to the level of achievement of performance targets and nonfinancial indicators stated in the Medium-Term Business Plan.
To increase the independence, objectivity, and transparency of the executive remuneration system, the Company established a Remuneration Committee to serve as an advisory body to the Board of Directors. More than half of the Committee’s members are independent outside directors, and one of these outside directors serves as chairman. The Remuneration Committee meets at least four times a year to discuss basic executive remuneration policy and the details of the executive remuneration system, and the Committee also provides advice and recommendations to the Board of Directors.
Based on the Company’s business environment, as well as surveys and analyses produced by external databases of other companies in the same industry (manufacturing) and major companies of similar size, the total remuneration amount for directors is set at a maximum of ¥800 million per year for full-time directors and a maximum of ¥100 million for outside directors, in accordance with the basic executive remuneration policy. (These figures do not include the employee salary portion for those directors who serve concurrently as employees). Directors can also receive a performance-linked stock-based bonus, with total remuneration set at a maximum of ¥600 million over three business periods. (However, a maximum of ¥200 million was set for the fiscal period ended December 2019.) In order to further strengthen their independence from management, outside directors and Audit & Supervisory Board members receive only basic remuneration and are not eligible for the retirement allowance system.

Executive Nomination Policy

To increase the independence, objectivity, and transparency of the processes of selecting and dismissing directors and deciding nominees, the Company established a Nomination Committee in 2019 to serve as an advisory body to the Board of Directors. More than half of the Committee’s members are independent outside directors, and one of these outside directors serves as chairman. In addition to human-resource requirements, the executive nomination policy tasks the Committee with determining criteria for executive selection and dismissal, succession plans, terms of office, and the like. The aim of the executive nomination policy is to attract “human resources who can continue enhancing human power and increasing corporate value (sum of social value and economic value) based on the values of the Pigeon Way” as envisioned by our CEO.

Internal Controls

We have established a basic policy on the construction of its internal control systems, based on the Companies Act and its enforcement regulations. The purpose of this basic policy is to ensure the sound and efficient operation of our organizations. Based on this policy, we maintain and operate an internal control system governing the entire group.
To perform internal audits, the Company has established an Audit Office. Based on annual plans, the Audit Office conducts regular internal audits of every department across our entire group, including domestic and overseas subsidiaries. The results of these audits are reported to the directors and Audit & Supervisory Board members, and evaluations and continuous improvements 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 (J-SOX).