Fundamental Philosophy

Tomoku Co., Ltd. recognizes that collaboration with all stakeholders, including shareholders, is indispensable for sustainable growth and the creation of corporate value over the medium- to long-term. To put this collaboration with all stakeholders into practice, we have established the “Tomoku Group Management Philosophy” and the “Tomoku Group Code of Conduct”. We strive to foster a corporate culture that respects the rights and positions of all stakeholders under the leadership of the Board of Directors and management.

In addition, under our philosophy of “Caring for the environment and society, supporting business and daily life through packaging, and delivering products safely,” we also engage in environmental conservation activities aligned with our business activities to help pass on a livable planet to future generations.

Based on this concept, we will continue to enhance corporate governance, the framework for transparent, fair, prompt, and decisive decision-making, and strive to further increase corporate value.

Corporate Governance Report (Japanese version only.)

Corporate Governance System

• In line with the direction set forth in the Group Management Philosophy and other policies, the Board of Directors makes important management decisions, including decisions on significant business execution, and supervises the execution of duties by directors and executive officers.
• We introduced the Executive Officer System in June 2000 to separate management oversight from business execution.
• We have adopted the Audit & Supervisory Board system. The Audit & Supervisory Board audits the execution of duties by directors and works to establish a corporate governance structure that earns the trust of stakeholders.
• We have established Nomination and Compensation Advisory Committees chaired by an independent Outside Director to ensure the appropriateness and transparency of the nomination of directors and other officers and the level of executive compensation.

Board of Directors

• The Board of Directors makes decisions on matters stipulated in laws and regulations and the Articles of Incorporation, as well as other important matters concerning the Company and its Group Companies.
• The Board of Directors formulates the Group’s management strategies and Medium-Term Management Plan, makes important decisions, and supervises business execution. To ensure management transparency and soundness, it is composed of directors with diverse perspectives and advanced expertise, including highly independent Outside Directors.
• The Board of Directors develops an environment that supports appropriate risk-taking and prompt, decisive business execution. It also verifies the validity and effectiveness of decision-making by business execution divisions, assesses risks, and evaluates medium- to long-term performance and potential risks relating to business execution, and appropriately reflects these evaluations in compensation and personnel matters.
• The Board of Directors currently consists of nine directors, including Outside Directors. Four Audit & Supervisory Board members, including Outside Audit & Supervisory Board Members, also attend its meetings.

For more details, please refer to “Directors.”

Audit & Supervisory Board

• The Audit & Supervisory Board audits the directors’ decision-making processes and the status of business execution in accordance with laws and regulations and the Articles of Incorporation.
• Audit & Supervisory Board Members and Outside Directors attend important internal meetings, where they provide advice and express opinions from an independent perspective on business execution divisions. They also exchange views with business execution divisions, the internal audit department, Audit & Supervisory Board Members of Group companies, and the Accounting Auditor.

Advisory Committees of the Board of Directors

• We have established the Nomination Advisory Committee and the Compensation Advisory Committee.
• The Nomination Advisory Committee makes recommendations to the Board of Directors from an objective standpoint regarding the appropriateness of candidates for director and matters such as the appointment of executive officers.
• The Compensation Advisory Committee makes recommendations to the Board of Directors from an objective standpoint on the executive compensation system, including the policy for determining compensation and the appropriateness of compensation levels.

Outside Directors and Audit & Supervisory Board Members

• To ensure the substantive independence of Outside Directors and Audit & Supervisory Board Members, we have established our own independence criteria and appoint them in consideration of not only a high degree of independence but also extensive experience, advanced expertise, and broad insight.
• We receive advice and opinions from Outside Directors and Audit & Supervisory Board Members on a wide range of matters, not limited to agenda items of the Board of Directors, but also including management policies and overall management, from diverse perspectives grounded in the shareholder viewpoint, with the aim of achieving the Company’s sustainable growth and enhancing corporate value.

Executive Compensation

• Executive compensation consists of base compensation and executive bonuses linked to performance. The retirement benefit system for officers has been abolished.
• The basic policy on directors’ compensation is to provide base compensation and performance-linked executive bonuses paid based on performance for each fiscal year so that the compensation functions as an incentive for sustainable growth, while ensuring that it is paid at an appropriate level as consideration for each director’s execution of duties.
• Individual fixed compensation for directors is calculated in accordance with guidelines that set standards based on each director’s position and responsibilities, and is approved by the Board of Directors based on a recommendation from the Compensation Advisory Committee.
• Individual performance-linked monetary compensation for directors, in the form of executive bonuses, is calculated on an individual basis based on ordinary profit in accordance with the criteria for calculating executive bonuses, and is approved by the Board of Directors based on a recommendation from the Compensation Advisory Committee.

For more details, please refer to “Executive Compensation.”

Policy on Constructive Dialogue with Shareholders

• We strive to ensure the substantive equality of shareholders and to develop an environment in which the shareholders’ rights are secured so that they can be exercised appropriately, including the smooth exercise of voting rights. We also disclose, in a timely and appropriate manner, information on the business, operations, and performance of the Company, including its subsidiaries, that may have a significant impact on investment decisions.
• To promote dialogue with shareholders, we have established an IR Department under the supervision of a director. Working in coordination with relevant departments, the IR Department provides shareholders with accurate and unbiased information to support constructive dialogue, including at the General Meeting of Shareholders, earnings announcements, and financial results briefings.
• We respond to requests for individual meetings from shareholders, including institutional investors, and engage in dialogue on management strategies, business performance, business conditions, and shareholder returns from a long-term perspective aimed at enhancing corporate value.
• We have established the Regulations on the Management of Internal Information. In dialogue with shareholders, we ensure fair disclosure, refrain from selective disclosure to specific persons, and enforce strict management of insider information through centralized information management.