The Meiji Group's philosophy is to brighten customers' daily lives as a corporate group in the Food and Health fields. Our mission is to widen the world of “Tastiness and Enjoyment” and meet all expectations regarding “Health and Reassurance.” We do this with the goal of continuing to find innovative ways to meet our customers' needs, today and tomorrow. In this way, we aim to achieve sustainable growth and increase corporate value over the medium to long term. The basic approach to management of the Group is for operating companies to manage businesses autonomously while collaborating with each other under the holding company's control.
The main role of Meiji Holdings Co., Ltd., is to advance Groupwide management strategies, create an optimal operating structure, and oversee the business management of operating companies. Responsibility for operational execution is delegated to operating companies appropriately. Within the Group, oversight and execution of business management are separated. Accordingly, the Group has established and operates a corporate governance system including a Board of Directors. Meiji Holdings is a company with audit & supervisory board members. The Board of Directors' oversight and audit & supervisory board members' auditing heighten the objectivity and transparency of business management.
Meiji Holdings operates in line with all the principles of the Corporate Governance Code. We disclosed our actions for all the principles in line with the requirements stated in the code prior to its revision in June 2018.
Corporate Governance System
Functions and Roles of Respective Committees
- Board of Directors
- Members: 3 independent outside directors, 8 internal directors
- The composition of the Board of directors as a whole should have the knowledge, experience, and managerial competencies for decision-making. The Board of Directors will consist of directors with knowledge, experience, and abilities in areas vital to core operations and the management of operating companies including corporate development, accounting, finance, human resources, general affairs, and Investor Relations, as well as independent non-employees directors who is capable of providing objective supervision and advice from a wide perspective as a non-executive directors. The appointment of female director will enhance diversity in decision-making.
- The Board of Directors should be consist of managing directors to oversee core operations, executives to manage operating companies, and non-executive directors including two or more independent outside directors. Currently the number of Board of Directors would be around 10.
- Role: To develop and pursue Group strategy. To monitor the performance of the management and directors in the operating company. To achieve sustainable growth and increase corporate value over medium- to long-term by realizing our Group philosophy. To improve our profitability and capital efficiency.
- Scope of delegation to management teams: Vital matters outlined by law, the Articles of Incorporation, and the Rules of the Board of Directors. Vital matters include overall Group direction and major investment proposals. The execution of businesses and operations outlined by the Board of Directors should be delegated to management teams in accordance with the Group Company Management Regulations and Work Regulations. The Board of Directors will receive periodic reports and review them.
- Auditing Structure and Audit & Supervisory Board
||Ernst & Young ShinNihon LLC
|Audit department (internal auditing)
|Principal meetings auditors attend
||Board of Directors, Executive Committee, Audit Department
Liaison Meeting, Audit & Supervisory Board, and others
- Audit & Supervisory Board: In principle, one regularly scheduled meeting shall be held monthly in accordance with Audit & Supervisory Board Regulations.
- Audits by the Audit & Supervisory Board: The Audit & Supervisory Board will consist of four Board members, of which two must be outside Audit & Supervisory Board members.
- Internal audits: Conducted by dedicated staff from the Audit Department.
- Accounting audits: Designates Ernst & Young ShinNihon LLC.
- Efforts to enhance and improve the audit functions of audits by the Audit & Supervisory Board:
- Assign dedicated staff to assist with Audit & Supervisory Boards' tasks.
- Audit & Supervisory Board members are encouraged to attend important meetings such as Board of Directors' meetings and Executive Committee meetings.
- Provide periodic reports and distribute important documents to the Audit & Supervisory Board
- Audit & Supervisory Board Members: 2 outside audit & supervisory board members, 2 internal audit & supervisory board members
- Nomination Committee
- Members: 3 independent outside directors, 2 internal directors
- Role: Recommending candidates for the positions of director or executive officer to the Board of Directors
*For reasons for appointment of directors and auditors, refer to the notice of convocation.
- Compensation Committee
- Members: 3 independent outside directors, 2 internal directors
- Basic approach to structure: Compensation Committee should be comprised of independent outside directors and internal directors. At least half of members must be outside directors.
- Role: Evaluating the performances and considering the compensation of directors and executive officers
*Refer to “Director Compensation” for details.
- 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
Business Management System Features
The Company is strengthening its corporate governance structure through
the following initiatives.
- Appointment of two outside directors and two outside audit & supervisory board members,
all of whom are designated as independent directors
- Limitation of the term of service for directors to one year
- Introduction of an executive officer system to separate business execution
and audit functions and to accelerate management decisions
while clarifying management responsibility
- Appointment of one female director
||Company with audit & supervisory board
|Chairman of the Board of Directors
||President and representative director
||11 (including 3 independent outside directors)
|Audit & supervisory board members
||4 (including 2 outside audit & supervisory board members)
|Appointment of independent directors
||5 (Outside directors, outside audit & supervisory board members)
|Number of times the Board of Directors convened in fiscal 2017
|Number of times the Audit & Supervisory Board convened in fiscal 2017
- Evaluation of Board of Directors
- The Board of Directors will annually analyze and evaluate its own effectiveness/performance.
- The evaluation method is a self-evaluation by Board of Directors' members (directors and Audit & Supervisory Board members) using a survey sheet.
- The results are analyzed and assessed to improve the functions of the Board of Directors.
- The most recent evaluation analysis results indicate that the Meiji Holdings' Board of Directors is functioning effectively.
- Training for Directors, Audit & Supervisory Board Members, and Executive Officers
- Meiji Holdings provides directors, Audit & Supervisory Board members, and executive officers with opportunities as necessary to further their understanding of their expected roles and duties, and opportunities to acquire required knowledge.
- (Expected roles and duties)
Legal responsibility, corporate governance, compliance, risk management, etc.
- (Required knowledge)
Group operations, organizations, financial status, etc.
- Criteria for Independence
- Meiji Holdings requires that independent outside directors and outside Audit & Supervisory Board members not being applicable to any of the following.
- (1) An executive director of Meiji Holdings or its subsidiary.
- (2) An executive director of the Meiji Holdings parent company or a fellow subsidiary of the Meiji Holdings parent company.
- (3) A party(Note1) for whom Meiji Holdings is a major transaction partner or an executive director of said party, or a major transaction partner(Note2) for Meiji Holdings or an executive director of said party.
- (4) A consultant, accounting specialist, or legal specialist earning major monetary amounts or other assets from Meiji Holdings other than director’s compensation(Note3) (If the party earning said assets is a corporation, union, or other organization, this shall refer to persons associated with said organization).
- (5) A party who was applicable to (1) during the 10-year period prior to selection.
- (6) A party who was applicable to (2) through (4) during the 1-year period prior to selection.
- (7) A relative within second degree of kinship to a party (excluding non-executives) who is currently applicable to (1) through (4) or who was applicable during the 1-year period prior to selection.
- A “party for whom Meiji Holdings is a major transaction partner” shall refer to a party who received payments from Meiji Holdings equal to or exceeding 2% of said party's total annual consolidated net sales or 100 million yen, whichever is higher, during the most recent fiscal year.
- A “major transaction partner for Meiji Holdings” shall refer to a party who made payments to Meiji Holdings that were equal to or exceeded 2% of our total annual consolidated net sales during the most recent fiscal year.
- “A consultant, accounting specialist, or legal specialist earning major monetary amounts or other assets from Meiji Holdings other than director compensation” shall refer to a party who received monetary payments or assets other than director's compensation from Meiji Holdings of a value equal to or exceeding 2% of said party's consolidated net sales of 10 million yen, whichever is higher, during the most recent fiscal year.
- Multiple Positions as Independent Outside Director
- When an independent outside director will hold the position of director at multiple listed companies, the number of positions must not exceed the amount appropriate for ensuring the ability to secure the time and labor required to execute the roles and responsibilities as a director or Audit & Supervisory Board member of Meiji Holdings.
- Transactions between Related Parties
- When a director or Audit & Supervisory Board member of Meiji Holdings or a major operating company seeks to conduct a transaction with Meiji Holdings or a major operating company, said transaction shall require the approval of the Board of Directors.
- The transaction status of approved transactions must be reported to the Meiji Holdings Board of Directors.
Details of the Compensation of Directors
and Audit & Supervisory Board Members
|Directors(other than outside directors)
|Audit & Supervisory Board members (other than Audit & Supervisory Board members)
|Member of the Board (Outside)
|Audit & Supervisory Board Member (Outside)
Note 1. As per the resolution of the 1st Ordinary General Meeting of Shareholders held on June 29, 2010, the amount of remuneration for directors is capped at 1 billion yen per year (not including the employee portion of remuneration for directors who concurrently serve as employees).
Note 2. As per the resolution of the 1st Ordinary General Meeting of Shareholders held on June 29, 2010, the amount of remuneration for Audit & Supervisory Board members is capped at 300 million yen per year.
Note 3. We have introduced a transfer-restricted stock compensation plan for directors other than outside directors. As per the resolution of the 8th Ordinary General Meeting of Shareholders held on June 29, 2017, the amount of remuneration under this plan is capped at JPY 200 million per year.
Note 4. The amounts for monetary/stock remuneration indicates the amount appropriated (recorded in expenses).
- Director Candidates
- Internal director candidates: Requires vast experience and expert knowledge as well as management judgment skills and an excellent character. Elect executive directors for major operations and executives of operating companies.
- Independent outside director candidates: Requires an objective and multifaceted perspective on management, and satisfies our criteria for judging independence.
Elect persons with the character, knowledge, and skills required to fulfill the role of an outside director.
Nominated annually via a resolution by the Board of Directors following deliberation by the Nomination Committee.
- (Compensation Structure)
Compensation for directors other than outside directors comprises the following:
- 1) Base compensation
A fixed amount that reflects the director's status and responsibilities
- 2) Performance-linked compensation
An amount that varies according to the company and the director's performance in the preceding fiscal year, and thus provides an incentive over the short term.
- 3) Stock-based compensation
Compensation that is linked with the Company's stock performance, and thus provides an incentive over the medium-to-long term.
- Base compensation and performance-linked compensation are paid in cash. Stock-based compensation takes the form of transfer-restricted stocks.
The ratio between the fixed component (base compensation) and variable component (performance-linked compensation + stock-based compensation) of the total remuneration is approximately 60:40.
For outside directors, who are not involved in the execution of business, the Company pays fixed compensation only; no incentive remuneration is paid.
To ensure objectivity and transparency in the process for determining the above remuneration system and the levels of remuneration, the Board of Directors determines the amounts separately based on the recommendations of the Compensation Committee, which is composed of four members: three outside directors and one internal director.
The amount of compensation for Audit & Supervisory Board members is determined through negotiation with the members concerned, and the amount will be within the limit resolved by the General Meeting of Shareholders.
- Audit & Supervisor Board candidates
- Elect persons with excellent character, knowledge, expert skills and a strong sense of ethics. Candidates must be able to provide accurate advice and conduct audits concerning the legality and appropriateness of company operations from an objective and neutral perspective.
- Include at least one person with appropriate knowledge related to finance and accounting.
Nominated via a resolution by the Board of Directors following deliberation by the Nomination Committee and approval by the Audit & Supervisory Board.
- Executive Officer Candidates
Evaluate performance and experience to elect parties capable of conducting transparent, fair, timely, and decisive decision-making and conducting optimal Group management.
Nominated annually via a resolution by the Board of Directors following deliberation by the Nomination Committee.
- Succession plan for the CEO and other top executives
- The Nomination Committee recommends on appointments and dismissals of top executives. This committee comprises at least four members, and the majority are independent outside directors. The members have a say in the succession plan for the CEO and other top executives.
- We have celebrated 100th anniversary in 2016 and created the Meiji Group 2026 Vision, our Long-term Business Plan. With a view to achieving the group’s vision for 2026, we have established a set of standards (“Leadership Value”) for our executives. Leadership Value was reviewed by both the Nomination Committee and the Board of Directors before being resolved by the latter in January 2018.
- We regard Leadership Value as an important step forward in our CEO / top executive succession planning efforts.
Leadership Value describes the standards that our executives must uphold to lead the group toward achieving its vision. The main thing we expect of top executives is the ability to “instigate change and lead reform efforts.” To this end, Leadership Value outlines the following 10 competences across three themes:
- 1) Strategic planning and action: Imagination, decisiveness, ability to achieve breakthroughs, ability to channel creative energies
- 2) Organizational leadership skills: Ability to communicate and convince, ability to motivate, magnanimity for others’ mistakes, ability to develop others’ talents
- 3) Character: Ability to recognize and channel diverse talents, upstanding character
Based on our Leadership Value, we will promote the development of succession planning.
Interlocking Ownership of Listed Stocks
When exercising voting rights for retained listed stocks, Meiji Holdings makes affirmative decisions based on deference to the decisions of the board of directors of the company in question. However, this excludes cases where said vote could have a negative impact on the relationships or transactions of the Meiji Group, or cases where there is the clear potential for a mutual loss of profit by shareholders.
Internal Control System
We provide products and services to a large number of customers through
our food and pharmaceuticals business operations. In accordance with the Corporate Behavior Charter,
the Meiji Group has established an internal control system befitting the Group and the Group companies
that is based on mutual collaboration and multifaceted checking functions to ensure directors,
executive officers, and other employees comply with the Food Sanitation Act,
the Pharmaceutical and Medical Device Act, and other statutory laws and regulations
and the Articles of Incorporation, thereby ensuring fair and sound business activities firmly rooted
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 welldeveloped 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.
Risk Management System
The Company has established specific rules for risk management and constructed
an appropriate risk management system. 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.
In light of lessons learned from the Great East Japan Earthquake
in March 2011, the Group has established basic policies for business continuity plans as stated below.
Basic Policies for Business Continuity Plans
To ensure it can provide customers with the products and services they require,
even in disaster, the Meiji Group has set out business continuity plans based on the following policies.
- Ensure the safety of the lives of persons involved in the Group and their families
- Discharge the Group’s social responsibility
- Minimize damage to businesses arising from cessation of operations
Communicating with Shareholders
Meiji Holdings works proactively and voluntarily towards communicating with shareholders, and promotes constructive communication with shareholders. Related initiatives are detailed below.
- General communication with shareholders is managed by the PR & IR Department, which is managed by the director in charge of Public Relations & Investor Relations.
- To enhance communication, related departments (Investor Relations, Corporate Development, Financial & Accounting, General Affairs) share information at liaison meetings.
- In addition to one-on-one meetings, Meiji Holdings holds earnings conferences twice-yearly for institutional investors and securities analysts to announce the second quarter and the fiscal year results, as well as small meetings led by the Company President. We also provide information via our website for shareholders and investors. We publish our investment securities reports, earnings flash reports (Japanese/English), annual reports (English only), and earnings conference materials (Japanese/English) on this website. We also stream video of our earnings conferences and publish a Q&A summary to further communication.
- Comments and feedback gained through investor relations activities are summarized into reports. The director in charge of Public Relations & Investor Relations reports to the Executive Committee and the Board of Directors regularly.
- Due care is given to insider information during communication. Communication is conducted in accordance with the Rules Concerning the Prevention of Insider Trading, which outlines the handling of important information. We also establish a quiet period.