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Corporate Governance

 
  

Basic Policies

The basic policies of Space Value Holdings are to be a unique company indispensable to the society; in line with our Management Philosophy and Vision, we strive to gain sustainable growth by taking actions that are both sincere and responsible toward all stakeholders—our customers, shareholders, investors, business partners, and our employees.
SVH Group’s Corporate Conduct Charter sets forth the following action guidelines aimed at supporting our Group companies for the purpose of earning the trust and satisfaction of our customers: to ensure quality and safety and provide valuable products and services; to respond promptly and accurately to drastic changes in the market and continue to enhance corporate values at all times by developing and providing products and services that are both helpful and safe for the society and its citizens; to earn the trust of the society as an open company by proactive and fair disclosure of corporate information through dialogue with our stakeholders; and to contribute to the society and its citizens in a broad manner as a trustworthy corporate citizen by deepening interaction with local communities and by participating in local communal activities.
For the purpose of SVH Group achieving sustainable growth and expansion toward the future, we are fully aware that we must not only comply with respective laws and regulations but also act in good faith with a broader understanding of social norms in light of common sense and business ethics. In June 2019, we have established our Basic Compliance Policies along with CEO’s official announcement of Compliance Declaration.
We acknowledge the importance of corporate governance enhancement for the purpose of fulfilling responsibilities to relevant stakeholders and to sustaining business activities. We believe that execution of rational and flexible management processes will keep driving corporate values through improving management transparency and securing fairness. We strive to disclose corporate information in a timely and appropriate manner in addition to placing importance on having good communication with all stakeholders, and to build relationship of mutual trust.

Corporate Governance Framework
Corporate Governance Framework



Governance Framework Outline

SVH is a company with the Audit and Supervisory Committee.
The Board of Directors comprises 11 Directors including 3 Directors serving as Audit and Supervisory Committee Members. The Board of Directors determines basic management policies and makes decisions on other critical business matters, and also supervises Company’s business execution of important operations including those of its subsidiaries.
The Audit and Supervisory Committee comprises 3 members including 2 Outside Directors. The Audit and Supervisory Committee fulfills its monitoring functions over management body from an objective and neutral viewpoint by attending important meetings and by conducting inspections on important documents.
The Management Advisory Committee comprises 2 Independent Outside Directors and 1 Inside Director. It serves as an advisory body to the Board of Directors; it conducts reviews on a continual basis on matters related to corporate governance such as the nomination and appointment/dismissal process of Directors, remuneration decision process, effectiveness evaluation of the Board of Directors, and guidance and training of Directors and management executives.

Roles and Composition of Board and Committee

Composition Chairman Primary Role
Board of Directors 11 Directors
(including 4 Outside Directors)
CEO ・Decision-making on basic management policies and on strategies for other important matters
・Supervision of business execution of important operations including subsidiaries
Audit & Supervisory Committee 3 Directors serving as Audit & Supervisory Committee Members
(including 2 Outside Directors)
Full-Time Audit Committee Member ・Monitoring management process from an objective and neutral viewpoint
Management Advisory Committee 3 Directors
(including 2 Outside Directors)
Outside Director ・Deliberates on remuneration/appointment/dismissal of Directors and gives counsels to the Board of Directors
・Conducts effectiveness evaluation of the Board of Directors
・Establishes development plans for Directors and their candidates


The status of meetings held in FY 2020 is as follows.
(April 2019 to March 2020)

Board of Directors Board of Company Auditors* Management Advisory Committee
Number of Meetings 18 times 9 times 7 times
Attendance rate of Directors in charge 100% 100% 100%
  • * We have migrated to a “Company with Audit and Supervisory Committee” company upon the approval at the 2nd Ordinary General Meeting of Shareholders held on June 30, 2020. As we were “Company with Board of Company Auditors” for the year ending March 2020, the term “Board of Company Auditors” is used accordingly.
  • * In addition to the number of meetings of the Board of Directors described above, there were 8 written resolutions deemed to have been adopted by the Board of Directors, pursuant to the provisions of Article 370 of the Companies Act and Article 25 of our Articles of Incorporation.


Policies and Procedures for Director Nomination and Remuneration

In nominating Directors, the Management Advisory Committee (of which Independent Outside Directors are major members) examines policies and procedures concerning nomination, appointment and dismissal of Directors as an advisory body; and based on the counsels given by the Committee, a proposal for appointment/dismissal is to be submitted to the General Meeting of Shareholders by a resolution of the Board of Directors pursuant to the regulations (prescribed by the Board) concerning the procedures for appointment and dismissal of Directors. With regard to the appointment and dismissal of Directors who serve as Audit and Supervisory Committee Members, a proposal shall be submitted to the General Meeting of Shareholders with the consent of the Audit and Supervisory Committee. In addition, the appointment, dismissal and nomination process of respective Directors are explained in notices of “Notice of Convocation of General Meeting of Shareholders.”
In determining the remuneration for Directors, the Management Advisory Committee (of which Independent Outside Directors are major members) examines policies and procedures concerning the remuneration of Directors as an advisory body; and based on the counsels given by the Committee, a resolution for remuneration is to be adopted by the Board of Directors pursuant to the directors’ remuneration regulations (prescribed by the Board).
Our policy is to ensure that remuneration for Directors is to be at a level that enables the acquisition and retention of excellent human resources; and to encourage more stable processes in the management by setting the fixed monthly remuneration according to the roles and functions they are expected to assume, while at the same time motivating aggressive drive in the management and seeking to align interests with investors by provision of bonuses tied to corporate performance and individual evaluations and of stock compensation tied to such corporate performance.

Process for Director Appointment and Remuneration
Process for Director Appointment and Remuneration



Remuneration for Directors

Remuneration for Directors during the year ending March 2020 is as follows:
Remuneration of Directors and Company Auditors * (April 1, 2019 - March 31, 2020)

Category Number of Persons Amount of Remuneration
(Unit = 1,000,000 yen)
Maximum Amount of Remuneration
(Unit = 1,000,000 yen)
Director
(Outside Directors Included)
11
(4)
137
(12)
300
(20)
Company Auditor *
(Outside Auditors Included)
3
(2)
17
(7)
22
Total
(Outside Officers Included)
14
(6)
155
(20)
322
(20)
  • * We have migrated to a “Company with Audit and Supervisory Committee” company upon the approval at the 2nd Ordinary General Meeting of Shareholders held on June 30, 2020. As we were “Company with Board of Company Auditors” for the year ending March 2020, the term “Board of Company Auditor” is used accordingly.
  • 1. The table above includes 1 Director who resigned on April 18, 2019 and 2 retired Outside Directors due to the expiration of their terms of office by the conclusion of the 1st Ordinary General Meeting of Shareholders held on June 27, 2019.
  • 2. The amount of remuneration for Directors does not include remuneration for employees paid to Directors also working as employees.
  • 3. At the 1st Ordinary General Meeting of Shareholders held on June 27, 2019, a resolution was adopted that the maximum amount of remuneration for Directors shall be 300,000,000 yen per year or less (200,000,000 yen or less for each Outside Director. Remuneration for employees not included).
    Additionally, in the same Meeting, we have introduced a stock compensation system for Directors
    (excluding Outside Directors) under the name of “Board Benefit Trust” which is set apart from the maximum amount of remuneration for Directors described above.
  • 4. At the 1st Ordinary General Meeting of Shareholders held on June 27, 2019, it was decided that the maximum amount of remuneration for Company Auditors shall be 220,000,000 yen per year or less.
  • 5. The remuneration described above includes the following:
    ・20,000,000 yen, a carried-over allowance reserve for Directors’ bonuses for the current business year (for 6 Directors (excluding Outside Directors).
    ・20,000,000 yen, a carried-over allowance reserve for Directors’ stock benefits for the current business year (for 5 Directors (excluding Outside Directors).


Performance-based Stock Compensation System

Our stock compensation is a system in which the Company stocks and monies equivalent to the market value of such Company’s stocks (hereinafter, “Company Stock”) are paid to Directors as consideration for their services through a Trust entity in accordance with the Regulations for Officers Stock-based Payment set forth by the Company. Under this system, we plan to acquire stocks through such Trust entity using funds prepared by the Company in advance through the stock exchange or through a process of Company’s treasury stock disposal.
The System is divided into two types of benefits: benefits during the term of office and benefits after the term of office. The benefits during the term of office are given to each business year, based on the Regulations for Officers Stock-based Payment, as a number of points determined by his or her position, degree of achievement of performance, and other factors being taken into consideration.
As for the case of benefits after the term of office, such benefits are given as a number of points, based on the Regulations for Officers Stock-based Payment, determined by his or her position being taken into consideration.
As for the case of benefits during the term of office, a Director receives benefits from the Trust entity for the number of the Company stocks corresponding to the number of confirmed points given during the term of office when, in principle, he or she carries out the prescribed procedures to apply as a beneficiary under the condition that the beneficiary requirements are met on a certain day after the elapse of 3 consecutive business years starting from the business year to which the point given date belongs (deemed the first business year).
As for the case of benefits after the term of office, a Director receives benefits from the Trust entity for the number of the Company stocks corresponding to the number of confirmed points given after the term of office when he or she carries out the prescribed procedures to apply as a beneficiary under the condition that the beneficiary requirements are met.
The purpose of this system is to clarify the linkage between the remuneration of Directors and SVH Group performance/stock value, and to encourage Directors to share not only the benefits of rising stock prices but also the risks of falling stock prices with Company’s shareholders; thereby raising Directors’ awareness of contributing to improving medium- and long-term business performance and to enhancing corporate values.

Maximum Point
(per 1 Business Year)
Timing of Point Provision Vesting Period
Benefits during Term of Office 30,000 points For each business year during the term of office as Director 3 years
Benefits after Term of Office 30,000 points For each business year during the term of office as Director At the time of retirement
  • *1 point can be converted to Company’s 1 common stock
  • *The maximum number of stocks to be acquired, during the period starting from the business year ending on March 31, 2020 to the business year ending on March 31, 2022, shall be 131,600 stocks.


Outside Directors Information

We have 4 Outside Directors (including Directors who serve as Audit and Supervisory Committee Members), and 36% of all Directors are Outside Directors; all Outside Officers who qualify as Independent Officers are designated as Independent Officers.
The Management Advisory Committee examines independence standards and personnel requirements for Independent Outside Directors, and based on the counsels given by the Committee, the Board of Directors establishes detailed regulations concerning the procedures for the appointment and dismissal of Directors. The criteria for the appointment of Independent Outside Directors are as follows: Outside Directors who are not Audit and Supervisory Committee Members shall have the personality and insight to utilize their knowledge and expertise in their specialized fields to make appropriate decisions from the viewpoint of whether or not such decisions contribute to the common interests of shareholders, not disproportionately to the interests of specific stakeholders; Directors who serve as Audit and Supervisory Committee Members shall have abundant experience and deep insight, who can appropriately supervise the execution of duties of Directors in light of their backgrounds, and be capable of contributing to ensure the fairness in the management process; and persons who can be expected to contribute to the enhancement of Company’s medium- to long-term corporate values through constructive discussions within the Board of Directors; all on the premise of independence criteria set forth by the Tokyo Stock Exchange being satisfied therein.