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Corporate Governance

Basic concept

The SATO Group lives up to its corporate values and considers transparency the key to increasing business efficiency and maintaining sound management.
We aim to achieve an effective corporate governance structure, working with auditors and a professional services firm to facilitate management oversight, while appointing executive officers to expedite/streamline decisions and corporate operations, and promoting our unique corporate governance initiatives that are described below.

SATO’s corporate governance

1. Corporate culture that respects change, trust and sincerity

Our initiatives are deeply rooted in principles passed down from our founder Yo Sato and second president Tokuo Fujita that guide us to “contribute to the society in the spirit of Ceaseless Creativity” and “see things as they are, and do the right thing right away.” Today, these ideas are encapsulated in SATO Values that we exercise to win trust from society and better our company value.
The ideas also form the basis of our corporate governance structure that flexibly meet changes in society, the growth stage of our business, and the strategies we take.

2. General Meeting of Shareholders: To communicate more with our shareholders
We believe the general shareholders’ meeting is the most important event for us to have direct dialogues with shareholders and extend our mutual understanding. We schedule the meeting avoiding days on which many other companies hold theirs, and try to conduct the meeting in a way that encourages participants to voice their comments.

3. Board of Directors

1) Diversity and expertise arouse active discussions
  • A majority of our directors are external
    Aiming to establish sustainable growth and medium- to long-term improvement of our corporate value, we appoint independent external directors with diverse perspectives, extensive experiences and professional expertise. Of the current* 11 directors that comprise the Board, six are external and independent, of which two are women.
    * As of July 1st, 2017

    The four members of the Audit Board (including two external, of which one is a woman) hold meetings regularly to discuss important matters, and they also attend Board of Directors meetings. These practices help us act toward resolving matters related to corporate governance.

2)Unique means of maintaining effectiveness of Board
  • Directors chair the Board in rotation
    Since 2006, our Board has run on the rule that all external and internal directors without an executive role chair the meeting in rotation. Every participant to the meetings joins open and free discussions to maintain transparency and fairness in management. And as everyone experiences the chairperson’s role, members are more conscious of keeping discussions focused on the essential subject.
  • No seating arrangements
    Members are free to sit anywhere they like, so as to prevent internal and external directors from forming any physical “groups.” This fosters open and free discussions and contributes to securing transparency and fairness in our management.
  • Evaluations on the effectiveness of the Board
    To evaluate the roles and functionality of the Board, we conducted a survey and had a discussion with all the directors and auditors in May 2017. In the survey, all members answered that the system of chairing in rotation works effectively and enables free and open discussions. Other comments included requests for executive officers to report their executive actions more often, and materials for the meetings to be shared to members earlier to allow the discussions to run more productively. We will analyze the feedback and implement improvements in our action plans.

4. Teiho: Allowing employees to participate in management
Introduced in 1976, Teiho is SATO’s very own reporting system that lets all employees be involved in running the company. The daily report, written within a set word count, can be about information employees come across on site, or new ideas that better the company.
Teiho helps top management stay at the forefront of situations inside and outside the company to facilitate quick decision-makings and actions, while allowing employees to see from the business owner’s perspective and to participate in management.
And as everyone regardless of rank or years of service participates, it fosters open and active communication within the company, and serves as an effective means of corporate governance as well.

5. Nominating Advisory Committee and Compensation Advisory Committee
Each Advisory Committee is composed of three external directors and one representative director/president, while the chair is selected from the external directors.
In the Advisory Committees, decisions are made only by the external directors. The Nominating Advisory Committee deliberates and advises on appointment policies of and candidates for directors, and the Compensation Advisory Committee on the directors’ remuneration system, its standards and amount.

6. Executive Committee
The Executive Committee is the highest decision-making body in terms of business execution, making decisions on management and its policies. This committee consists of executive directors, group company presidents, and executives nominated by the president of SATO Holdings to maintain transparency in making important executive decisions.

7. Disciplinary & Anti-harassment Committee, Health & Safety Committee, Risk Management Committee
The Disciplinary & Anti-harassment Committee takes initiative to maintain order in the company. It strictly examines compliance breaches of employees and clarifies their responsibilities to promote and reinforce compliance to rules.
The Health & Safety Committee aims to enhance health and safety measures throughout SATO Group, and sets clear and basic rules to prevent accidents at work. It promotes safety, health and welfare, while creating a better environment for our workplaces.
The Risk Management Committee identifies risks of the Group and draws up measures that prepare the company for potential incidents. In the event of an emergency, the Committee serves as the crisis management headquarters to assume control of the overall Group by planning detailed schedules and actions for recovery/restoration.

8. Audit and Group Compliance Departments
The Audit Department conducts financial audits, operational audits and compliance evaluation. The Group Compliance Department works with the administrative departments of the Group to set up and administer the operational rules and provide support for improvements from the perspective of group-wide optimization.
By separating the operation department from the auditing department, we establish a fair and optimized environment for us to run corporate governance.

Corporate Governance Report

The latest corporate governance report can be found here.