Corporate Governance

Investor Relations

Striving for Sound and Transparent Corporate Management

The Daiseki Eco. Solution Group establishes a corporate governance framework in pursuit of more sound, transparent corporate management. As a company traded on the Prime Market, we strive to maintain our existing governance foundations while strengthening them through the addition of new compliance and risk management measures. Through these governance strengthening endeavors, we hope to further improve the value of the Group while achieving continual growth.

Basic Approach to Corporate Governance

In relation to Daiseki Eco. Solution management operations, we place top priority on the realization of a management framework that is sound, highly transparent, and capable of rapid and precise adaptation to changes in our operating environments. To these ends, we develop management systems and mechanisms intended to maximize corporate value based on law-abiding, appropriate management practices and principles while taking consideration of operating-environment changes. Through the adoption of an audit committee framework and the inclusion of outside directors (both men and women) as auditors therein, we ensure transparency and independence for the Board of Directors. Furthermore, we have agreed upon and established a Basic Internal Controls Policy for the Board of Directors, and established the systems and mechanisms necessary to guarantee appropriate operations.

Executive Director System and Ratio of Outside Directors on the Board

In FY 2022, we introduced a new executive director system intended to realize greater independence in managerial decision-making and supervisory functions, and established a governance framework that aims to provide greater flexibility and initiative in the execution of duties. In conjunction with these changes, we also organized the Board of Directors to include an outside-director majority in its composition and fulfill the requirements of the Japanese Corporate Governance Code Supplementary Principle 4.8.3,* all of which has greatly strengthened supervisory functions.

* Corporate Governance Code Supplementary Principle 4.8.3: Companies that have a controlling shareholder should either appoint at least one-third of their directors (the majority of directors if listed on the Prime Market) as independent directors who are independent of the controlling shareholder or establish a special committee composed of independent persons including independent director(s) to deliberate and review material transactions or actions that conflict with the interests of the controlling shareholder and minority shareholders.

Corporate Governance Framework

Publicly Listed Company With a Controlling Shareholder

Daiseki Co., Ltd. is a controlling shareholder of Daiseki Eco. Solution Co., Ltd. entitled to 54.0 percent of voting rights (as of February 28, 2022). When carrying out important transactions with this controlling shareholder, the Daiseki Eco. Solution Board of Directors requests, to a sufficient degree, objective-standpoint opinions and advice from outside directors regarding corporate management and other issues based on said outside directors' experience and knowledge, after which the Board pursues deliberations and discussions and then takes action in a manner that does no harm to the interests of minority shareholders. All of this is done for the purpose of continuing to strengthen the corporate value of Daiseki Eco. Solution while also ensuring fair and rational decisions.

Policy on Determining Director Remuneration

In pursuit of greater transparency and subjectivity in processes utilized for director appointments, dismissals and remuneration system decisions, we utilize the Board of Directors as a consultative body comprising a majority of outside directors. A Nomination and Compensation Committee has been established and is chaired by an outside director, and this committee maintains transparency while carrying out fair and suitable appointments of directors and making director remuneration decisions. In accordance with the Management Policy, Daiseki Eco. Solution's director remuneration system is designed to motivate directors to produce continual results that are increasingly satisfactory over both the medium and long terms. Remuneration standards are set with the goals of successfully hiring and maintaining promising human resources who can contribute to company growth and development.