Corporate Governance
At Okura Industrial Group, we explore an effective corporate governance style that suits us and update the style as needed in response to ever-changing demands from society.
We aim for corporate growth through business, keeping in mind our coexistence with society, so that we may continue to be a company that is trusted by society. Under Okura Industrial’s management philosophy of “Respect the Individual”, “Contributing to the Society”, and “Customers First”, we will achieve sustained growth and an increase in medium- and long-term corporate value by conducting business operations focusing on ESG in the changing social environment. To this end, we will implement sound management practices as we hold dialogues with all our stakeholders.
Corporate governance system
Meeting Bodies and Committees
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Board of Directors
The Board of Directors formulates important corporate strategies and supervises the execution of those strategies, aiming for sustained growth and an increase in medium- and long-term corporate value. The Board also builds internal control and risk management systems. Six Inside Directors and five Outside Directors comprise the Board of Directors. The members are chosen to ensure that the Board possesses well-balanced experience, insight, and skills, while maintaining diversity as a whole. Outside Directors account for one-third or more of all members to ensure transparency and effectiveness of the Board of Directors.
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Nomination and Remuneration Committee
The Nomination and Remuneration Committee has been established as a body with which the Board of Directors consults. The purpose of the Committee is to strengthen the fairness, transparency, and objectivity of processes relating to the nomination, remuneration, etc. of Directors and Operating Officers, and to further enhance the governance system. The Committee is composed of the Representative Director, President and Chief Operating Officer and four Independent Outside Directors selected by the Board of Directors. It is chaired by an Independent Outside Director.
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Audit and Supervisory Committee
By auditing and supervising the business execution of Directors, the Audit and Supervisory Committee helps achieve a sound and sustained corporate growth and an increase in medium- and long-term corporate value. The Committee consists of six members including five Outside Directors. Four Outside Directors meet the criteria for independence set by Tokyo Stock Exchange, Inc.
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Board Meeting
The Board Meeting has been established for the purpose of ensuring the efficiency and soundness of business execution and management. It deliberates and decides on important management matters, apart from those that are submitted to meetings of the Board of Directors. It also undertakes a preliminary deliberation on important matters that require submission to the Board of Directors. The Board Meeting is composed of 11 Operating Officers and holds ordinary meetings once every month, in principle.
Number of meetings of each meeting body and committee held each year
| 2021 | 2022 | 2023 | |
|---|---|---|---|
| Board of Directors | 14times | 14times | 14times |
| Nomination and Remuneration Committee | - | 3times | 3times |
| Audit and Supervisory Committee | 13times | 13times | 12times |
| Board Meeting | 22times | 22times | 22times |
Remuneration for Directors
Remuneration for Okura Industrial’s Directors (excluding Directors serving as Audit and Supervisory Committee Members and Outside Directors) consists of basic remuneration, performance-linked compensation, and stock compensation. The ratio between the three types of compensation is roughly 8:1:1. Basic remuneration is monetary compensation set in accordance with the position level. A fixed amount is paid every month. Performance-linked compensation is monetary compensation linked to performance. By linking remuneration for eligible Directors with corporate performance and the degree of contribution, we intend to increase motivation for better performance. Restricted stock compensation is shares with transfer restrictions allotted based on the amount specific to the position level. By having eligible Directors share the risks and benefits of share price fluctuations with shareholders, we aim to grow and increase corporate value in the medium- and long-term.
Directors and Outside Directors serving as Audit and Supervisory Committee Members are paid fixed remuneration only and are not eligible for the stock compensation plan. The remuneration system is designed in this way to ensure that their remuneration is not directly affected by corporate performance, thereby securing their independence from the Company’s management. In addition, the appropriateness of the remuneration system and the amount of remuneration for each Director is discussed by the Nomination and Remuneration Committee.
Compliance
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Compliance promotion system
Okura Industrial’s founding spirit of “Protect employees and serve society” still lives on at the root of our compliance management, which is the improvement of our workplace environment and our fair and honest management. To Okura Industrial Group, compliance means not only complying with laws and regulations but also responding to expectations and requests from society. We strive to advance compliance in line with the trend of the times, so that we can continue to be a company that is trusted by society.
We have established the Compliance Committee, chaired by the Representative Director, President and Chief Operating Officer and composed of Directors, as a body responsible for promoting compliance. The Compliance Committee meets twice each year, in principle, and engages in activities such as deciding on important matters and recommending improvements to address violations. The Compliance Action Committee, composed of members from each business division, has been established under the Compliance Committee. It undertakes various tasks and works to spread compliance measures at workplaces based on the directions of the Compliance Committee. -
The Okura Industrial Standards of Ethical Conduct and Compliance Program Regulations
We have established the Okura Industrial Standards of Ethical Conduct as standards of behavior to be shared by our Officers, employees, and all stakeholders, and the Compliance Program Regulations as rules to govern our compliance system and activities. Based on these written regulations, an administration office centered on the legal division formulates compliance promotion policies and measures and engages in raising awareness and fostering a culture of compliance.
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Compliance training
In addition to implementing compliance training for all employees every year, we also provide it as part of the introductory training for new employees. With the adoption of e-learning, we provide effective training using video and audio content. The 2023 training focused on the topic of human rights, providing an opportunity for employees to think about issues such as harassment and LGBT.
Compliance Awareness Survey
We regularly hold a compliance awareness survey to ascertain the results of our compliance activities and any potential risks. We conduct a corporate ethics and compliance risk assessment based on the results of the survey, enabling the more effective formulation of measures and activities.
< Survey results (extract) >
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Whistleblowing Disclosure
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Whistleblowing system
The Okura Industrial Group has introduced an whistleblowing system to prevent illegal acts and misconduct, as well as to enhance its self-purification function as an organization. Whistleblower hotlines have been established both inside and outside the Group, and the contact details of the hotlines have been publicized through posters, the distribution of cards, internal newsletters, and other forums. The hotlines accept reports 24 hours a day, 365 days a year. The whistleblowing system can be used not only by the Group’s employees and Officers but also by their family members, business partners, and all other stakeholders. Whistleblowers are able to select to report using their real names or anonymously, as they wish. Based on the Compliance Program Regulations, report details are kept confidential and the interests of whistleblowers are protected.
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Whistleblowing disclosure response systems
All whistleblowing disclosures are reported to the whistleblowing desk established in the legal division. After an initial investigation, the whistleblowing desk undertakes an investigation based on the directions of the officer responsible for compliance (including the Compliance Committee if the matter is considered especially important, such as cases where it will have a serious impact on the business of Okura Industrial Group, based on Article 3, Paragraph 4 of the Whistleblowing Regulations). The investigation process is reported as appropriate to the officer responsible for compliance and the Compliance Committee. If it is deemed that a compliance violation has occurred, corrective measures such as guidance and disciplinary action are taken against the violator. Whistleblowers who wish can receive feedback from the Company about the results of the investigation on and measures taken against the reported facts.
Flowchart
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Intellectual Property
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Basic approach
At Okura Industrial Group, we view the intellectual property gained as a result of our research and development as the source of our business competitiveness. In addition to proactively securing the intellectual property that supports our business, we strive to appropriately maintain and manage the intellectual property we acquire, aiming to contribute to enhancing our business development and business results and promote creative activities.
We comply with laws and regulations related to intellectual property and, as part of the design review undertaken when we develop products or change design, we complete a clearance search (infringement search) where we check that there is no infringement of other companies’ intellectual property rights, so that our customers can use our products with a sense of security. We have measures in place to avoid and prevent any infringement of other companies’ intellectual property rights. -
Intellectual property strategy
Okura Industrial Group aims to implement an intellectual property strategy integrated with Group-wide management and business strategies. To this end, we are working together with the Research & Development Center, utilizing the management design sheet framework to plan our vision for the future of research and development in focus fields from a long-term perspective. We are implementing activities to formulate the intellectual property strategy needed to move towards this future vision. Through these activities, we aim to support business portfolio transformation from the standpoint of intellectual property, securing our competitive advantages and increasing corporate value.
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Intellectual property education and human resources development
At Okura Industrial Group, we also conduct in-house education every year, in accordance with the type of work and positions, to help employees understand intellectual property rights and leverage such rights. Employees who engage in product development receive education on patent searches and workshop-style education on preparing invention proposals to enable them to propose the results of research and development as inventions. Employees who engage in naming or may use the copyrighted work of others receive e-learning on copyright and trademark rights. We have also introduced a searcher system to ensure we secure strategic intellectual property and establish intellectual property strategy. We will focus on developing human resources with specialized patent search skills and human resources able to perform Patent Landscape analysis.
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The Shikoku Local Commendation for Invention in 2023
In the Shikoku Local Commendation for Invention in 2023 held by the Japan Institute of Invention and Innovation, prizes were awarded to Section Manager Takeshi Tachibana of the General Affairs and Human Resources Department, Corporate Center, Tatsuaki Shioiri of the Technical Support Department, the New Materials Division, Professor Haruo Oba of the Department of Engineering and Design, Kagawa University, Clinic Associate Professor Noriko Nishiyama of the Faculty of Medicine, Kagawa University and Professor Hideki Kobara of the Faculty of Medicine, Kagawa University, who created the design for “Head Covering Material for Medical Examination or Treatment (Design No. JP1700260S)”.
This design concerns a droplet infection prevention film for the Endo barrier™ virus infection prevention system for endoscopy, which we developed in collaboration with Kagawa University.
Endo barrier™ uses the droplet infection prevention film and a specialized frame to form a semi-hermetic space and negative pressure, enabling users to minimize the spread of droplets. Such systems normally require sterilization after use by each patient, but the structure of Endo barrier™, with a side sealing component on the film, makes it possible to maintain the hygiene of the specialized frame without the need for sterilization between each patient.
Moreover, the universal design of the unit enables anybody to easily understand how to use it, with pictograms indicating the insertion points for medical devices. This has led to an excellent reception from healthcare workers and its adoption by many hospitals in Kagawa.
Endo barrier™ virus infection prevention system for endoscopy
Takeshi Tachibana (right)
Section Manager, General Affairs and Human
Resources Department, Corporate Center
Tatsuaki Shioiri (left) Technical Support Department, New Materials
Division
Risk Management
Okura Industrial Group offers a variety of products and services to society. We thus bear quality, environmental, safety, and other types of risks. Functions in the head office share roles in analyzing each type of risk and strive to prevent and respond to them. Furthermore, our head office functions and major plants are in Kagawa. This makes it important to prepare for the Nankai Trough Mega Earthquake, which is expected to happen in the near future. Our BCP initiatives include decentralization of manufacturing sites, preparation of relevant regulations, and implementation of emergency drills. One of these initiatives was the relocation of Okura Precut System Co., Ltd. from Showa-cho, Marugame City to Harashimo Industrial Park in Takase-cho, Mitoyo City, aimed at avoiding the risk of damage due to flooding or other disasters.
Information Security
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Information security initiatives
Okura Industrial Group is introducing IoT equipment to achieve goals such as promoting DX, on-site environmental measurement, and the visualization of product quality. While this increases convenience, it also leads to a constant increase in information security risk. The Group perceives information security risk as a matter that has a serious impact on business. We are engaged in information security management in accordance with the international standard ISO/IEC 27001, for which a Group company Okura Information System has been certified, and in light of recent trends in cyber-risks and relevant guidelines in Japan and overseas, to prevent issues such as business disruption due to system failure and the leakage of our confidential corporate data or information provided by our business partners and customers.
We also strive to increase security, not only for office information systems but also for control systems at plants, to maintain a stable and safe production system.Acquisition of ISO/IEC 27001 certification
(Okura Information System)
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Information security management system
At Okura Industrial Group, Okura Industrial’s information system division, which is responsible for formulating measures relating to information security, promotes initiatives under the guidance of the Directors of Okura Industrial.
This division established the Information System Operational Review Committee, which aims to maintain and improve information security, and the Information System Committee, which aims to share information with each business site and collect opinions, and acts as the administrative office for each committee.
More specifically, the Information System Operational Review Committee is composed of representatives from operational departments of each business division and center. In addition to information security, it deliberates on important ICT projects.
The Information System Committee is composed of members commissioned by each business site and Group company, as well as appointees from Okura Information System. The Information System Committee members support maintenance and improvement operations for information security through cooperation with heads and managers of each business site, the information system administrators responsible for the operation and maintenance of each system, and Okura Information System.Information security management system
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Human aspect
We have established an information security policy and provide e-learning to the subject person to ensure that our employees understand information security and handle information appropriately. In addition, we provide education designed to raise security consciousness, such as information security training for employees at the time of hire, as well as education on handling company-owned cell phones, training on protecting against targeted email attacks, and also share cases of latest malware attacks on the internal bulletin board to raise awareness. We also endeavor to increase the risk sensitivity of employees through measures such as ID management and regular password changes for key information systems and cloud-based systems, administration of the hardware used, and application checks of company-owned computers and cell phones.
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Technical aspect
To prevent issues such as the leakage of confidential corporate data and personal information at Group companies and business disruption due to cyber attacks, we have implemented measures including malware countermeasures, the construction of firewalls, Internet communication checks, system access controls, the collection and monitoring of various logbook data, the diagnosis of vulnerabilities in our information system and measures to address these vulnerabilities.
We also strive to strengthen the security of the production site control systems that form the backbone of our corporate activities in the manufacturing industry. We respond and implement countermeasures based on the constantly changing status of cyber risks, to maintain the stability and safety of our production system. -
Physical aspect
We have established security zones based on the level of administrative confidentiality. We prevent unauthorized access from inside and outside the Group through measures such as access controls for highly confidential security zones.
In addition, we have implemented robust security countermeasures for our major key information systems and network devices to mitigate the risk of business interruption.
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Skills Matrix
Okura Industrial Group has formulated Okura Industrial Group Corporate Governance Policy, which stipulates the roles and composition of the Board of Directors and the policy for nominating candidates for Directors.
The Board of Directors appoints Directors with a wealth of experience and exceptional expertise in the areas of “corporate management”, “business strategy and marketing”, “technology, production and development”, “finance and accounting”, “general affairs and public relations, human resources and labor affairs, legal affairs and intellectual property”, and “sustainability” in order to make important management decisions and to conduct proper management oversight. Directors and Outside Directors serving as Audit and Supervisory Committee Members are paid fixed remuneration only and are not eligible for the stock compensation plan. The remuneration system is designed in this way to ensure that their remuneration is not directly affected by corporate performance, thereby securing their independence from the Company’s management.
| Category | Name | Gender | Position and Responsibilities in the Company, Qualifications | Areas of Expectation for the Director | ||||||
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| Position | Responsibilities, Qualifications |
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| Corporate Management | Business Strategy and Marketing |
Technology, Production and Development |
Finance and Accounting |
General Affairs and Public Relations, Human Resources and Labor Affairs, Legal Affairs and Intellectual Property |
Sustainability | |||||
| Inside Directors | Susumu Kanda |
Male | Representative Director, Chairperson |
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| Eiji Fukuda |
Male | Representative Director, President and Chief Operating Officer, Nomination and Remuneration Committee Member |
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| Yoshitomo Tanaka |
Male | Director, Executive Operating Officer |
Supervision of Corporate Center; and Chairperson of Sustainability Committee | 〇 | 〇 | 〇 | ||||
| Tomoo Ueta |
Male | Director, Senior Operating Officer | Division President, New Materials Division | 〇 | 〇 | 〇 | 〇 | |||
| Seizo Kagawa |
Male | Director, Senior Operating Officer | Supervision of Plastic Film Division; and Supervision of Building Materials Division | 〇 | 〇 | 〇 | 〇 | |||
| Seiji Nagao |
Male | Director, Full-time Audit and Supervisory Committee Member | 〇 | 〇 | 〇 | |||||
| Outside Directors | Takashi Kitada |
Male | Independent Outside Director, Chairperson of Audit and Supervisory Committee, Chairperson of Nomination and Remuneration Committee | Certified Public Accountant | 〇 | 〇 | ||||
| Toshio Baba |
Male | Independent Outside Director, Audit and Supervisory Committee Member, Nomination and Remuneration Committee Member | Attorney | 〇 | 〇 | |||||
| Nae Iijima |
Female | Independent Outside Director, Audit and Supervisory Committee Member, Nomination and Remuneration Committee Member | Attorney | 〇 | 〇 | |||||
| Yoichi Watanabe |
Male | Independent Outside Director, Audit and Supervisory Committee Member, Nomination and Remuneration Committee Member | Certified Public Tax Accountant | 〇 | 〇 | |||||
| Shin Saito |
Male | Outside Director, Audit and Supervisory Committee Member | Deputy General Manager, Corporate Planning Office, Sumitomo Chemical Company, Limited | 〇 | 〇 | |||||
*The above table does not indicate all of the knowledge and experiences each Director possesses, but each Director is listed in terms of areas of particular expectation from the Company.
Effectiveness Evaluation of the Board of Directors
Every year, a third-party organization conducts a survey of the Directors, analyzes the results, and discusses the issues identified for the Directors at Board of Directors meetings to ensure that Okura Industrial maintains the effectiveness of its functions.
Self assessment and analysis were conducted as follows under the guidance of the outside organization.
All of the Directors, who compose the ordinary meetings of the Board of Directors, were surveyed in September 2023. To ensure anonymity, the Directors submitted their answers directly to the outside organization. Having received the outside organization’s report on the overall results of the survey, the Board analyzed, discussed, and assessed the results at the regular Board of Directors meeting held in December 2023.
The survey results showed that the Directors consider the Company’s Board of Directors appropriate in terms of composition, roles, and operation, mostly giving positive ratings to the Board’s function of monitoring the Company’s sustainability performance and other operations, as well as to Outside Directors’ performance and other points. Accordingly, we consider that the effectiveness of the Board of Directors as a whole is ensured.
Improvement was apparent regarding more detailed feedback to the Board regarding communications with shareholders and investors, which was identified as an issue in the 2022 survey, with feedback on the status of dialogue provided to the Board each time a dialogue was held. Regarding officer training, which was also identified as an issue, this training was held in December 2023, as planned.
Meanwhile, the Directors shared issues that need to be addressed for the Board to further improve its functions and have more active discussions.
Based on these effectiveness evaluation results, the Company’s Board of Directors will continue to engage in continuous improvement to further revitalize and enhance the work of the Board.
History of the Governance System
Implemented in: |
Initiatives |
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February 2004 |
Formulated Okura Industrial Basic Management Conception 2004 |
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April 2006 |
Established Internal Audit Office |
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April 2008 |
Established Compliance Committee |
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April 2009 |
Introduced an operating officer system |
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March 2015 |
Elected an Outside Director |
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March 2016 |
Transitioned to a company with an Audit and Supervisory Committee |
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August 2016 |
Formulated Okura Industrial Group Corporate Governance Policy |
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December 2016 |
Opened Okura Industrial Group Corporate Ethics Hotline |
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January 2019 |
Established CSR Committee |
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March 2020 |
Introduced a restricted stock remuneration plan |
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April 2021 |
Established Sustainability Committee (changed name from CSR Committee and enhanced the sustainability promotion system) |
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March 2022 |
Increased the number of Outside Directors from 4 to 5 |
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April 2022 |
Established a voluntary Nomination and Remuneration Committee |
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March 2024 |
Decreased the number of Directors (excluding Directors serving as Audit and Supervisory Committee Members) from 6 to 5 |