Corporate Governance
The Hakuhodo DY Group (the “Group”) strives to contribute to the creation of an abundant future for sei-katsu-sha, the growth of the economy, and the development of society in order to achieve sustainable growth and the continual increase of its corporate value. The Group is continually strengthening and enhancing its corporate governance as one key management issue necessary for achieving these goals.
Corporate Governance Guidelines
The Corporate Governance Guidelines set out the views of Hakuhodo DY Holdings Inc. (the “Company”), the holding company of the Group, regarding its corporate governance as well as an overview thereof. The contents of these Guidelines have been determined by a resolution of the Company’s Board of Directors and will be examined and updated by the Board once a year. Please click here to view the latest Corporate Governance Guidelines.
Corporate Governance Report
Please click here to view the Corporate Governance Report, which the Company submits to the Tokyo Stock Exchange.
Basic Policy
In order to achieve sustainable growth and the continual increase of its corporate value, the Group strives to contribute to the creation of an abundant future for sei-katsu-sha, the growth of the economy, and the development of society as one of the world’s preeminent corporate groups that leads advances in marketing and innovation generation through the power of creativity. By doing so, the Group fulfills the trust and expectations of its various stakeholders.
For that purpose, the Company recognizes that one of its key management issues is enhancing the management and administration of the Group as a whole so that it realizes an environment that promotes independence and solidarity among the diverse operating companies under it and the solidarity of each company produces value greater than the sum of its parts. We will therefore endeavor to improve the Group’s management and administration and to strengthen and enhance the corporate governance of the Group.
As for the listed companies within the Group, we aim to respect their independence while also promoting collaboration as a Group.
Corporate Governance Framework
The following chart shows the corporate governance framework of the Hakuhodo DY Group.
Board of Directors
Roles and Responsibilities of the Board of Directors
The Board of Directors, mindful of fiduciary and accountability responsibilities to shareholders and in accordance with the fundamental principles of the Group, provides overall guidance for the management of the entire Group with the aim of contributing to the creation of an abundant future for sei-katsu-sha, the growth of the economy, and the development of society. In doing so, the Board strives to appropriately assess the Company’s performance, makes decisions on the execution of significant business, exercises effective oversight over directors and corporate officers, ensures accurate and proper information disclosure, and oversees the establishment and operation of internal controls and risk management systems.
Director Nomination Policies and Skills Matrix
Please refer to the following page for details.
Director and Audit & Supervisory Board Member Skills Matrix
Attendance of the Board of Directors
In principle, the Board of Directors meets at least once a month, and extraordinary meetings are held as necessary.
The Board met 22 times during FY2023. Director attendance is shown below.
| Position | Name | Attendance |
|---|---|---|
| Director & Chairman | Hirokazu Toda | 22/22 (100%) |
| Representative Director & President | Masayuki Mizushima | 22/22 (100%) |
| Director & Executive Vice President | Hirotake Yajima | 21/22 (95%) |
| Representative Director & Senior Executive Corporate Officer | Masanori Nishioka | 22/22 (100%) |
| Director & Senior Executive Corporate Officer | Akihiko Ebana | 22/22 (100%) |
| Director & Senior Corporate Officer | Motohiro Ando | 22/22 (100%) |
| Outside Director | Noboru Matsuda | 22/22 (100%) |
| Outside Director | Nobumichi Hattori | 22/22 (100%) |
| Outside Director | Toru Yamashita | 22/22 (100%) |
| Outside Director | Ikuko Arimatsu | 22/22 (100%) |
Specific Board of Directors’ agenda items for FY2022 are as described below.
| Agenda Items | Key Contents |
|---|---|
| Items to be resolved | General Meetings of Shareholders, evaluations of the effectiveness of the Board of Directors, director-related personnel matters and compensation, shareholder returns (dividends, buyback of shares), management strategies, quarterly Group budgets and financial results, and important matters such as investments, M&A, the establishment of operating companies, various other management themes, etc. |
| Items to be reported | Results of voting rights exercised at the General Meeting of Shareholders, status of shareholder composition, submission of annual securities reports and internal control reports, details of deliberations by the Remuneration Committee and the Nomination Committee, monitoring of cross-shareholdings, status of fund management, evaluation of internal control over financial reporting, audit plan by the Audit & Supervisory Board, audit fees for the independent auditing firm, quarterly Group performance, and other matters |
| Items to be discussed | Self-evaluation of the Board of Directorsʼ effectiveness, Group budgeting policy, etc. |
Advisory Bodies to the Board of Directors and Meetings to Assist the Board of Directors in Decision-Making
The Company has established the following committees as advisory bodies to the Board of Directors and to assist the Board in its decision-making.
| Conference Body | Purpose and Activities | Constituent Members (as of June 1, 2024) |
|---|---|---|
| Remuneration Committee | An advisory body to the Board of Directors. It deliberates on compensation of the Company’s directors and corporate officers, which is then approved by a resolution of the Board of Directors. The transparency and reasonableness of the process for determining the compensation are thereby ensured. | Chair of Remuneration Committee: Noboru Matsuda Independent outside director Members: Nobumichi Hattori Independent outside director, Toru Yamashita Independent outside director, Ikuko Arimatsu Independent outside director, Hirokazu Toda Director, Masayuki Mizushima Director, Masanori Nishioka Director |
| Nomination Committee | An advisory body to the Board of Directors. It deliberates on appointment and dismissal of the Company’s directors and corporate officers, which are then approved by a resolution of the Board of Directors. The transparency and reasonableness of the process for determining the appointment and dismissal are thereby ensured. | Chair of Nomination Committee: Noboru Matsuda Independent outside director Members: Nobumichi Hattori Independent outside director, Toru Yamashita Independent outside director, Ikuko Arimatsu Independent outside director, Hirokazu Toda Director, Masayuki Mizushima Director, Masanori Nishioka Director |
| Executive Committee | This committee, which was established to assist the Board of Directors in decision-making, mainly deliberates in advance on important management matters such as bud-gets, medium-term plans, and organi-zational, investment, and loan matters. | Chair of Executive Committee: Masayuki Mizushima Representative Director & President Members: Hirokazu Toda Director & Chairman, Hirotake Yajima Director & Executive Vice President, Masanori Nishioka Representative Director & Senior Executive Corporate Officer, Akihiko Ebana Director & Senior Executive Corporate Officer, Motohiro Ando Director & Senior Corporate Officer, and others designated by the chairperson |
| Group Executive Committee | This committee, which was established to assist the Board of Directors in decision-making, mainly deliberates in advance on important management matters such as bud-gets, medium-term plans, and organi-zational, investment, and loan matters that relate to the entire Group. | Chair of Group Executive Committee: Masayuki Mizushima Representative Director & President Members: Hirokazu Toda Director & Chairman, Hirotake Yajima Director & Executive Vice President, Masanori Nishioka Representative Director & Senior Executive Corporate Officer, Akihiko Ebana Director & Senior Executive Corporate Officer, Motohiro Ando Director & Senior Corporate Officer, and others designated by the chairperson |
| Integrated Committee | This committee was established to regularly monitor and manage the progress of the Group’s overall profit plans and management strategies. The committee mainly reports on the consolidated performance of the Group and the performance of each operating company, as well as exchanging opinions on priority strategic areas. | Chair of Integrated Committee: Masayuki Mizushima Representative Director & President Members: Hirokazu Toda Director & Chairman, Hirotake Yajima Director & Executive Vice President, Masanori Nishioka Representative Director & Senior Executive Corporate Officer, Akihiko Ebana Director & Senior Executive Corporate Officer, Motohiro Ando Director & Senior Corporate Officer, representatives of Group companies designated by the chairperson, and others designated by the chairperson |
| Hakuhodo DY Group Sustainability Committee | This committee was established to consider and formulate fundamental policies, themes, and action plans regarding sustainability, such as the environment, human rights, DE&I, and the supply chain, in line with the Group’s values. The committee reports to the Board of Directors on the evaluation and status of sustainability-related issues, as well as managing goals. The committee also makes comprehensive decisions on various topics, such as formulating business strategies, taking risks and opportunities into account. | Chair of Hakuhodo DY Group Sustainability Committee: Masayuki Mizushima Representative Director & President Members: Hirokazu Toda Director & Chairman, Hirotake Yajima Director & Executive Vice President, Masanori Nishioka Representative Director & Senior Executive Corporate Officer, Akihiko Ebana Director & Senior Executive Corporate Officer, and Motohiro Ando Director & Senior Corporate Officer |
Evaluations of the Board of Directors’ Effectiveness
To further enhance corporate governance by ascertaining the characteristics, strengths, and challenges of the Board of Directors, we conduct effectiveness evaluations of the Board using an external organization.
Survey Themes and Results in FY2023
① A “questionnaire related to the Board of Directors evaluation” was submitted to all directors and auditors in February 2024.
② Responses were compiled from an objective standpoint by an external organization. Based on the results of this organization’s compilation and analysis, the Board of Directors analyzed and assessed the information in May 2024.
〈Survey Themes〉
① The role and function of the Board of Directors
② The composition and size of the Board of Directors
③ The operation of the Board of Directors
④ Liaison with audit functions
⑤ Provision of opportunities for outside directors
⑥ Relationship with shareholders and investors
⑦ Summary
〈Survey Results〉
The Board was determined to have two strengths. First, the composition, operation, and deliberations of the Board of Directors are generally appropriate, and necessary and sufficient discussions are conducted, including sharing the ideal form of the board of directors of a holding company and conducting appropriate monitoring. Second, the Board of Directors as a whole, including outside officers, has diverse skills, expertise, and diverse backgrounds, and the system is designed to ensure appropriate decision-making through active discussion.
Major Areas Requiring Improvements Identified in the FY2023 Survey and Planned Improvement Measures
Based on the results of the fiscal 2023 evaluation survey and analysis, three areas requiring improvement (indicated in the table below) were identified. The Company plans to implement improvement measures in these areas.
| Major Areas Requiring Improvement | Major Improvement Measures (Planned) |
|---|---|
| Enhancing further discussions on medium- to long-term issues at Board of Directors meetings | Regarding medium- to long-term issues, we will thoroughly examine the need for deliberation and the key points to be deliberated. Based on this analysis, we will create an agenda plan for future meetings and report it to the Board of Directors. We will incorporate the opinions of directors and auditors and subsequently operate according to the agenda plan. |
| Creating opportunities for outside directors to learn more about the realities of the business | We will consider and implement opportunities to help our outside directors to become more familiar with actual business operations through participation in the activities of operating companies. |
| Clarifying discussion points and appropriate explanations on resolution items | To clarify discussion points, we will consider improving the structure and presentation of the materials presented by referring to good examples of how agenda items and reports are handled at Board meetings. |
In addition, the Company recognizes that providing appropriate information to the Board of Directors regarding succession plans and ensuring a more diverse Board of Directors are issues that must be addressed over the medium term to further enhance the effectiveness of the Board of Directors. Based on the results of evaluation, the Company’s Board of Directors will continue its efforts to further improve its effectiveness.
Conducting Training for Outside Officers
To promote understanding of the Group’s businesses and issues among outside directors and outside Audit & Supervisory Board members, we implement various initiatives such as providing themed training videos, offering opportunities to participate in seminars conducted by the Group companies for internal and external stakeholders, and conducting training on the marketing services provided by the Group. Going forward, we will continue to explore and implement measures that enrich discussions of the Board of Directors and enhance its supervisory function.
Remuneration Committee and Nomination Committee
Establishment of the Remuneration and Nomination Committees
The Company has established the Remuneration Committee and the Nomination Committee as advisory bodies to the Board of Directors. The Committees deliberate on compensation/appointment and dismissal of the Company’s directors and corporate officers, which are then approved by a resolution of the Board of Directors. The transparency and reasonableness of the process for determining the compensation/appointment and dismissal are thereby ensured.
The Board of Directors receives reports from the outside director who chairs the Remuneration Committee and Nomination Committee regarding discussions that took place at meetings of each committee during the respective fiscal year.
Director Attendance at the Remuneration and Nomination Committees
The status of attendance at meetings of these committees is indicated below.
| Role | Name | Position | Attendance | |
|---|---|---|---|---|
| Remuneration Committee | Nomination Committee | |||
| Chair | Noboru Matsuda | Independent outside director | 3/3 (100%) | 1/1 (100%) |
| Member | Nobumichi Hattori | Independent outside director | 3/3 (100%) | 1/1 (100%) |
| Member | Toru Yamashita | Independent outside director | 3/3 (100%) | 1/1 (100%) |
| Member | Ikuko Arimatsu | Independent outside director | 3/3 (100%) | 1/1 (100%) |
| Member | Hirokazu Toda | Director | 3/3 (100%) | 1/1 (100%) |
| Member | Masayuki Mizushima | Director | 3/3 (100%) | 1/1 (100%) |
| Member | Masanori Nishioka | Director | 3/3 (100%) | 1/1 (100%) |
Activities of the Remuneration Committee
Activities by the Remuneration Committee as part of the process of deciding director remuneration for fiscal 2023 included the following.
| Number of Meetings | 3 |
|---|---|
| Major Discussion Topics | • Verification of the appropriateness of annual and total remuneration levels for the Company’s officers • Annual bonus framework (total amount) • Individuals’ annual remuneration amounts, annual bonus amounts, and stock-based compensation • Selection of the committee chairperson, etc. |
Activities of the Nomination Committee
Activities by the Nomination Committee as part of the process of nominating directors in fiscal 2023 included the following.
| Number of Meetings | 1 |
|---|---|
| Major Discussion Topics | • Appointment and dismissal of directors and corporate officers and changes in their responsibilities • Selection of the committee chairperson, etc. |
Audit & Supervisory Board
Establishment of the Audit & Supervisory Board
The Audit & Supervisory Board, which consists of five members, three of whom are outside Audit & Supervisory Board members, meets once a month, in principle, and whenever necessary. The Audit & Supervisory Board members audit the performance of director duties from the perspective of a holding company of the Group by attending the Board of Directors’ and other important meetings, exchanging opinions with directors and key personnel, and receiving reports on the status of performance of the Group’s advertising and integrated media companies.
Activities of the Audit & Supervisory Board (Fiscal 2023)
The Audit & Supervisory Board meets at least once a month, in principle, and additional meetings are arranged as necessary. In fiscal 2023, the Audit & Supervisory Board met 26 times, and the number of items raised with the Board was 81. The attendance of individual Audit & Supervisory Board members at meetings is detailed below.
| Position | Name | Attendance |
|---|---|---|
| Full-time Audit & Supervisory Board member | Osamu Nishimura | 26/26 (100%) |
| Full-time Audit & Supervisory Board member | Tomoyuki Imaizumi | 26/26 (100%) |
| Outside Audit & Supervisory Board member | Kazuhiko Tomoda | 26/26 (100%) |
| Outside Audit & Supervisory Board member | Shin Kikuchi | 26/26 (100%) |
| Outside Audit & Supervisory Board member | Kimitoshi Yabuki | 16/18 (88.9%) |
- Note: The status of attendance at Audit & Supervisory Board meetings by outside Audit & Supervisory Board member Kimitoshi Yabuki reflects meetings held after he was appointed in June 2023.
Specific Agenda Items
Specific Audit & Supervisory Board agenda items in fiscal 2023 are described below.
| Items to be resolved | • Selection of the Audit & Supervisory Board chairperson • Selection of full-time Audit & Supervisory Board members, selection of specific auditors • Determination of audit plans (audit policy, priority audit items, assignment of duties, etc.) • Consent on proposals for the appointment of Audit & Supervisory Board members • Determination of the content of proposals for the appointment, dismissal, or non-reappointment of accounting auditors • Investigation and confirmation of proposals, etc., at the General Meeting of Shareholders • Consent regarding remuneration, etc., of the accounting auditors • Determination of Audit & Supervisory Board members’ remuneration, etc. • Preparation and submission of the audit report, etc. |
|---|---|
| Items to be reported | • Report on the performance of duties by full-time Audit & Supervisory Board members • Receipt and summary report of financial statements, supplementary schedules, and consolidated financial statements • Quarterly non-consolidated and consolidated financial statements and summary report on financial results • Opinion report on the selection and dismissal of accounting auditors • Report on the audit plan of accounting auditors and the Auditing Division of Hakuhodo DY Holdings • Quarterly review by accounting auditors • Report on audit results (independent accounting) • Report on audit results (FIEA compliance) • Report on the status of development and operation of the internal control system for financial reporting and the evaluation report • Report on the activities of the Group Compliance Committee, etc. |
| Items to be discussed | • Appointment and dismissal of accounting auditors • Deliberations of Audit & Supervisory Board audit reports • Deliberations on interviews with representative directors and directors, etc. |
Meetings of Outside Directors and Outside Audit & Supervisory Board Members
Regular meetings of independent outside directors and outside Audit & Supervisory Board members are held to allow these officers to exchange information and build shared understanding based on their independent and objective standpoints. Full-time Audit & Supervisory Board members also attend these meetings as observers. The meeting for fiscal 2023 was held on June 8, 2023.