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Corporate Governance

Fundamental Policy

Reflecting the Meiji Group’s System of Principles, the Meiji Group ensures highly transparent management for its customers, society, shareholders and investors, suppliers, employees, and all other stakeholders as well as for matters relating to the global environment through prompt, effective decision making and the timely disclosure of appropriate corporate information. Through this proactive stance, the Meiji Group aims to grow corporate value continuously.

Operational Structure (As of June 27, 2014)

In the Meiji Group, the holding company Meiji Holdings Co., Ltd., controls two operating companies. A company with audit & supervisory board members, Meiji Holdings has a two-tier checking system comprising auditing and the Board of Directors’ oversight of operational implementation.

The Board of Directors arrives at appropriate operational decisions based on extensive knowledge and expertise. Also, the Board of Directors utilizes the operational auditing conducted by audit & supervisory board members to ensure its business management is highly transparent, objective, and appropriate. In the Company’s view, the above-mentioned structure is the most rational manner in which to realize effective corporate governance. In addition, the Company has enhanced its governance system by appointing two outside directors and two outside audit & supervisory board members who are independent and have accumulated diverse professional experience and expertise during their careers. Further, one of the two outside directors the Company has appointed is a woman.

Moreover, the Company is strengthening its corporate governance structure through the following initiatives.
1) Appointment of two outside directors and two outside audit & supervisory board members, all of whom are designated as independent directors
2) Limitation of the term of service for directors to one year
3) Establishment of a streamlined Board of Directors comprising ten members to expedite business management decision making
4) Introduction of an executive officer system to separate implementation and oversight functions and clarify operational responsibility

Corporate Governance System
Organizational StructureCompany with audit & supervisory board members
Chairman of the Board of DirectorsPresident and representative director
Directors10 (including 2 outside directors)
Audit & Supervisory Board Members4 (including 2 outside audit & supervisory board members)
Appointment of independent directors 2 outside directors, 2 outside audit & supervisory board members
Number of times the Board of Directors convened in fiscal 2013 14
Number of times the Audit & Supervisory Board convened in fiscal 2013 15

Attendance of outside directors and outside auditors at meetings of the Board of Directors and Board of Corporate Auditors (fiscal 2013)

 Board of DirectorsAudit & Supervisory Board
Outside directors100%
Outside auditorsApproximately 96% 100%

Reasons for Appointment of Outside Directors

Hidetoshi Yajima
The Company has appointed Mr. Yajima as an outside director because extensive experience and expertise accumulated during his career enables him to provide a wide range of advice on the Company’s business management.

Yoko Sanuki
The Company has appointed Ms. Sanuki as an outside director because extensive experience as an attorney and a high degree of expertise in corporate law enables her to provide advanced, expert advice on the Company’s business management.

Reasons for Appointment of Outside Audit & Supervisory Board Members

Kenichi Yamaguchi
The Company has appointed Mr. Yamaguchi as an outside audit & supervisory board member because he has accumulated extensive experience and expertise during his career as an attorney.

Hajime Watanabe
The Company has appointed Mr. Watanabe as an outside audit & supervisory board member because he has accumulated extensive experience and a high degree of expertise in corporate international transactions law during his career as an attorney.

Functions and Roles of Respective Committees

Executive Committee (convenes twice a month in principle)
Members:Directors and executive officers
Role: Advisory body to the president and representative director
Function: Deliberating general important matters concerning operational implementation

Nomination Committee
Members: 2 outside directors, 2 internal directors
Role: Recommending candidates for the positions of director or executive officer to the Board of Directors

Compensation Committee
Members: 2 outside directors, 2 internal directors
Role: Evaluating the performances and considering the compensation of directors and executive officers

Auditing Structure

Independent auditorErnst & Young ShinNihon LLC
Audit department (internal auditing)Audit department
Principal meetings auditors attendBoard of Directors, Executive Committee, Audit Department Liasion Meeting, Audit & Supervisory Board, and others

Compensation of Directors and Auditors

Method of Determination

Directors: Calculated based on the Company’s business results and the individual’s performance, in light of peer compensation levels as shown by the data of external research companies, and maintained within the total amount approved by a resolution of the General Meeting of Shareholders. After consulting with the Compensation Committee, the Board of Directors approves the calculated amounts of compensation.

Audit & Supervisory Board Members: Determined based on mutual consultation with audit & supervisory board members and maintained within the total amount approved by a resolution of the General Meeting of Shareholders.

Details of the Compensation of Directors and Auditors (fiscal 2013)

Internal Control System and Risk Management System

The Meiji Group provides products and services to a large number of customers through its food and pharmaceuticals business operations. In accordance with the Corporate Behavior Charter adopted in April 2009, the Meiji Group has established an internal control system befitting the Group that is based on mutual collaboration and multifaceted checking functions to ensure fair and sound business activities firmly rooted in compliance.

Regarding risk management, the Company has established specific rules for risk management and constructed an appropriate risk management system. Further, for the whole Group, the Company systemically conducts precise risk management. In addition, it has established systems to minimize damage in the event of an emergency.

Compliance

Regarding “compliance as the cornerstone of its operations,” the Meiji Group abides by statutory laws and regulations, international agreements, social norms, and the regulations of respective Group companies. The Group advances concerted initiatives aimed at inculcating and entrenching compliance awareness to ensure that employees carry out their duties equitably and honestly and based on a well-developed awareness of compliance and high ethical standards. Such efforts include improving and expanding educational and training programs, disseminating information through
an in-house intranet, and making hotlines available.

Disclosure Policy

Include Basic Principles of Disclosure on the “Investor Relations” section of the Company’s website
http://www.meiji.com/investor/indicator/disclosure/
Post disclosure information, other important information, and documents of financial results briefings, in principle, in both Japanese and English on the “Investor Relations” section of the Company’s website as quickly as possible

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