Company Profile

Corporate Governance Guideline

This Guideline establishes the guiding principles for Toyo Construction Co., Ltd. (hereinafter, “the Company”) to achieve sustainable growth and enhance corporate value over the mid- to long-term through realization of its Management Philosophy, and thereby contribute to the common benefit of its stakeholders, including all shareholders.

1.Basic Concept of Corporate Governance

The basic management policy of the Company is “to aim at further enhancement of corporate value by strengthening the Company’s management fundamentals and taking on the challenge of new stages.” As part of this, the Company considers improvement of corporate governance to be one of the most critical issues for management, and is fully committed creating the optimum management system for responding flexibly to changes in the management environment. The Company believes that improving corporate governance and ensuring management efficiency and transparency will provide the foundation for enhancing corporate value and continuing to exist as a company which is trusted by its stakeholders, including shareholders, and by society as a whole.

2.Securing the Rights and Equal Treatment of Shareholders

1.General Meeting of Shareholders
In addition to early issuance notices of the convening of the general meeting of shareholders, the Company also endeavors to ensure sufficient time for study of issues to be put before shareholders’ meetings, for example, by posting agenda items on the Company’s website prior to sending notice, to enable shareholders to exercise their voting rights appropriately. When explaining business reports, financial statements, etc. at shareholders’ meeting, the Company endeavors to communicate this information to shareholders in a more easily understandable form by visualization of the relevant materials.
2.Securing Equal Treatment of Shareholders
The Company treats all shareholders equally, corresponding to their holdings, and discloses information in a timely and appropriate manner so as to avoid differences in the information available to shareholders.
3.Basic Strategy for Capital Measures
The Company considers shareholders’ return to be the most important issue for management, and is therefore committed to paying long-term and stable dividends, while also increasing internal reserves to provide for future capital investment or technology development, and. When presenting explanations, the Company also provides indicators related to capital efficiency in order to obtain shareholders’ understanding for management plans.
4.Policy on Cross-Shareholdings
The Company holds cross-held shares of other listed companies only in cases where it judges cross-shareholding strengthens business relationships and thereby contributes to the development of the Company. However, the Company conducts annual reviews of cross-held shares and when it deems that holding a stock has little significance, it sells those shares, considering the appropriate stock price and market trends.
In exercising voting rights related to cross-held shares, as a matter to be discussed at meetings of the Board of Directors, the Company exercises its voting rights in a way that strengthens its relationships with business partners, except under conditions in which shareholder value would be greatly damaged, or in cases in which serious concerns related to corporate governance have arisen.
5.Related Party Transactions
In case of competitive transactions and conflict-of-interest transactions between the Company and its directors, or in important matters in which losses in transactions with large shareholders are a concern, the approval of the Board of Directors is obtained so that the transaction concerned does not damage the common interests of shareholders or the interests of the Company.

3.Appropriate Cooperation with Stakeholders other than Shareholders

1.Management Philosophy and Code of Conduct
In order to be a trustworthy company, the Company practices “Work to service our customers and the social good” as its Management Philosophy. As a company engaged in construction, the Company strives to develop and improve construction technologies that are suited to the requirements of society with the aim of contributing to the construction of social infrastructures with higher quality and higher value. Top management recognizes that the realization of the Management Philosophy and Code of Conduct is the role of top management, exercises its leadership in line with these policies, ensures that all related persons in the Company are thoroughly familiar therewith, learns the views of stakeholders inside and outside the Company at all times, and establishes and maintains an effective internal system.
Click here for “Management Philosophy and Code of Conduct”
2.Sustainability Issues, Including Social and Environmental Matters
Together with consideration of protection and improvement of the global environment, the Company also implements environmental management, with promotion of measures and technology development that contribute to the creation and protection of a better environment as its basic policy. The Company obtains certification for an Environmental Management System utilizing ISO 14001, and continues positive and proactive activities contributing to environmental conservation and improvement.
3.Ensuring Diversity, Including Active Participation of Women
The Company steadily and continuously hires female employees, including engineering/technical staff, and makes efforts to enable continuing employment of women through improvement of the working environment and the childcare support system.
4.Whistleblowing
For early discovery and resolution of violations of corporate ethics and violations of laws and regulations, the Company establishes an internal reporting (“whistleblowing”) system, and implements an appropriate system to ensure that persons reporting improper actions do not suffer disadvantageous treatment.

4.Ensuring Appropriate Information Disclosure and Transparency

1.Policy on Information Disclosure
In addition to proper disclosure based on legal and regulatory requirements, the Company also establishes a Corporate Governance Guideline based on its Management Philosophy, Code of Conduct, Mid-Term Management Plan and the principles of the Corporate Governance Code, and posts the said Guideline on the Company’s website.
2.Information Disclosure and Provision of Information in English Language
The Company endeavors to provide information to investors in other countries by posting not only its summary statement of accounts, but also various types of releases, technologies owned by the Company, results of projects, and its Corporate Social Responsibility Report (CSR Report), on the Company’s English language website.

5.Effectiveness of Board of Directors

1.Composition of Board of Directors
The Company’s Articles of Incorporation specify that the Board of Directors, including outside directors, shall comprise no more than 15 persons. Meetings of the Board of Directors, consisting of all directors and auditors, are held one each month to discuss important matters related to the management of the Company. Matters are also deliberated and decided at Extraordinary Meetings of the Board as necessary, and in addition, audits of the execution of business by each director are also conducted.
2.Procedure for Nomination of Directors
All directors of the Company are subject to election by the general meeting of shareholders each year. Candidates for new directors are decided by the Board of Directors based on deliberations by the “Director Nomination/Compensation Committee,” which is an advisory body that includes outside directors.
3.Procedure for Nomination of Auditors
Among the auditors of the Company, at least one is a person having an appropriate knowledge of financial accounting. Candidates for new auditors are decided by the Board of Directors, based on deliberations by the “Director Nomination/Compensation Committee,” which is an advisory body that includes outside directors, and agreement of the Board of Auditors.
4.Independent Outside Directors
The Company uses independent outside directors to ensure the effectiveness of independent and objective audits of management. Candidates for outside directors are selected based on criteria for the independence of outside directors established by the Company.
5.Concurrent Service of Independent Outside Directors
In case an independent outside director or an independent external auditor serves concurrently at a listed company other than the Company, based on that person’s own fiduciary responsibilities, such positions should be limited to a reasonable range. Furthermore, the Company discloses the status of important concurrent positions of all directors and auditors in its business reports.
6.Procedure for Determining Compensation of Directors
The Company conducts annual reviews and decides the compensation of directors within the range of limit sums approved by the general meeting of shareholders, based on deliberations in the “Director Nomination/Compensation Committee,” which is an advisory body that includes outside directors.
7.Director and Auditor Training
New directors are given an appropriate explanation of the legal duties and responsibilities which they should observe as directors when assuming their position. In addition to receiving training from outside experts, manager seminars, or compliance training are conducted periodically in the Company.
When the Company invites an outside director or external auditor, an orientation concerning the Company’s management strategy, businesses, finances and other related matters is conducted by providing opportunities for individual explanations from the directors in charge.
Newly-appointed auditors should recognize the roles and responsibilities of auditors and obtain the legal knowledge, etc. necessary as auditors through participation in training seminars sponsored by the Japan Audit & Supervisory Board Members Association.
8.Agenda of Board Meetings
Regarding materials in connection with meetings of the Board of Directors of the Company, the Company endeavors to create an environment that enables free, open and constructive discussions in board meetings by such a measure to make it possible for directors to access those materials in advance from tablet terminals exclusively for use by directors before the day of the meeting. The schedule for holding board meetings and the standards for placing items on the agenda are also reviewed periodically, and the number of agenda items and frequency of meetings are set appropriately.
9.Information Gathering and Support Structure for Independent Directors
When necessary or when considered appropriate, the independent outside directors and auditors of the Company may request explanations or reports from other directors, executive officers or employees, or may request submission of materials, at any time.
Although the Company does not assign staff to support the work of auditors, in case an auditor or the Board of Auditors requests the assignment of support staff, such support staff are assigned. The support staff concerned follow the instructions of the auditor, and do not receive instructions from directors.
10.Evaluating Effectiveness of Board of Directors
All directors make a self-evaluation, etc. of the effectiveness of the Board of Directors each year, and the Board of Directors also analyzes and evaluates the effectiveness of the board as a whole based on the results thereof.

Click here for “Toyo Construction’s Criteria for Determining Independence of Outside Directors”

6.Dialogue with Shareholders

1.Policy for Constructive Dialogue with Shareholders
The Company provides opportunities to deepen the understanding of the Company, including holding two financial results briefings and site tours for investor and analysts each year. In addition, the director in charge of investor relations (IR) and persons in charge of IR proactively hold individual interviews with investors and small meetings to explain the status of progress of the Company’s management plan, or management strategy.
2.Person Responsible for Overseeing Dialogue with Shareholders
The Director and General Manager of the Business Administration Division oversees dialogues with shareholders. The Business Planning Department serves as the liaison for dialogues with institutional investors, and when necessary, responds in cooperation with the related departments.
3.Handling of Views Learned Through Dialogue
Views and concerns learned through dialogue are reported to meetings of the Board of Directors when necessary, and efforts are made to respond appropriately in cooperation with the related departments. In dialogues, adequate consideration is given to control of important information, for example, not providing important undisclosed facts (i.e., “insider information”) that would affect stock prices.

 

 

Established November 11, 2015