Corporate governance

Basic concept of corporate governance

So that we can grow sustainably with society, we are committed to improving our internal control based on our corporate mission. We are aiming to be a group trusted by society through our continuous contribution to it while meeting the expectations of our stakeholders such as customers, local communities, shareholders and investors.
To realize this objective, we are engaged in improving the following aspects of corporate governance.

  1. The Board of Directors and the Board of Auditors are arranged and independent directors are designated to reinforce the organization for supervising our business with the purpose of creating corporate management with excellent reliability and transparency.
  2. Promotion of compliance and reinforcement of internal control are realized to establish an organization that can sustainably enhance our corporate value.
  3. We disclose information in fair, objective and appropriate manner at an appropriate timing. Further, we communicate proactively with our stakeholders.

Report on Corporate Governance

As a basic policy of METAWATER Group based on the rules of the Corporate Governance Code (hereafter CG Code) stipulated by Tokyo Stock Exchange on June 1, 2015, the Group established the Basic Policy on Corporate Governance (hereafter CG Basic Policy) on November 27, 2015, and disclosed the Policy on the corporate website.

The CG Basic Policy (revised on November 29, 2018)

Approaches to improve corporate governance

1.Framework of directors

The majority of the Board of Directors members are outside directors now (5 out of 9 directors are outside directors)

We have five outside directors of nine directors to ensure management transparency and soundness.

One-third of the Board of Directors are independent directors (outside directors) (3 out of 9 directors are independent directors)

METAWATER Group stipulates criteria for the independence of outside directors in the Basic Policy on Corporate Governance. The number of outside directors satisfying the criteria is three, and these directors were designated as independent directors together with two outside auditors in the report to the Tokyo Stock Exchange.

2.Response to Corporate Governance Code

METAWATER was listed on the First Section of the Tokyo Stock Exchange Market in December 2014. As the CG Code was established in June 1, 2015, the group implemented the measures stated on the right. We are committed to moving forward with corporate governance also in future.

*Only (Supplementary Rule 4-2-1) is the Explain Item in the "Report on Corporate Governance" (hereafter "CG report") submitted on November 29, 2018. The reason for non-implementation (Supplementary Rule 4-2-1) (from CG Report) The current remuneration for standing directors is comprised of fixed remuneration based on their post and a bonus linked with the company's performance in the applicable business year. We will continue reviewing the percentage of remuneration linked with mid-term or long-term performance and the appropriate setting of percentage for cash and the company's own stock as remuneration.

A scene from the 45th ordinary general meeting of shareholders
November 1, 2015 Established Basic Policy on Corporate Governance
June 1, 2016
  • Added one independent director (outside director)
    *in compliance with CG Code (Rule 4-8)
  • Disclosed evaluation on effectiveness of the Board of Directors
    *in compliance with CG Code (Rule 4-11-3)
June 1, 2017
  • One independent director (outside director) was added
  • Held a meeting by independent outside director
    *in compliance with CG Code (Supplementary Rules 4-8-1 and 4-8-2)
November 11, 2018
  • Established Nomination and Compensation Advisory Committee

Corporate governance organization

METAWATER opts for an arrangement of a Board of Auditors as an organization design based on the Companies Act. The Board of Directors makes important decisions related to management and supervises business execution. At the same time, auditors and the Board of Auditors independent from the Board of Directors audit the status of directors'execution of their duties and the like. Further, METAWATER has introduced the Executive Officers System to accelerate management-related decision-making, reinforce functions to monitor business execution and clarity responsibility.
Further, CSR Committee is established as an organization to determine the important activities, systems, organizations, and the like of the Group to ensure compliance with regulatory requirements and corporate ethics. The position and role of each function are mentioned below.

Board of Directors Meeting

The Board of Directors Meeting, held on a monthly basis and also as needed, has a function to supervise management and decision-making. The Board of Directors is comprised of nine members including five outside directors. The status of business execution by directors including the representative director is monitored by auditors, where three auditors attend the Board of Directors Meeting basically and express their opinions whenever necessary.

Board of Auditors Meeting

The Board of Auditors Meeting, held on a monthly basis and also as needed, has a function to monitor management. The Board of Auditors is comprised of three members including two outside auditors. Auditors are designated from people with expertise and experience in our business as well as in legal and financial affairs. The Board of Auditors determines the audit policy, scope of work for each auditor, and specific action plan and schedule, and it monitors the status of business execution by directors.

Management Meeting

With the participation of standing directors and executive directors, the Management Meeting is held twice a month basically. In the Management Meeting, discussion and reporting are implemented on important management-related matters stipulated in our official competence rules. The status of business execution by top management personnel including the representative director is monitored by the standing auditors who attend the Management Meeting. Further, they express their opinions whenever necessary.

Executive Officers System

The Executive Officers System has been introduced to ccelerate decisionmaking related to management, reinforce the function to supervise business execution and clarify accountability. The executive officers are comprised of fourteen members including four directors and executive officers. Their term of office is one year and their appointment, reappointment and dismissal are determined at the Board of Directors Meeting.

Nomination and Compensation Advisory Committee

The Nomination and Compensation Advisory Committee has been established under the Board of Directors to strengthen independence, objectivity, and accountability of the functions of the Board of Directors related to appointment and dismissal, as well as determination of the compensation of directors, auditors, and executive officers. The Nomination and Compensation Advisory Committee consists of six members, including the President, three independent outside directors and two independent outside auditors, and is chaired by an independent director.

CSR Committee Meeting

The CSR Meeting is held three times a year. It functions to promote compliance and reinforcement of internal control. It has eight subordinate working groups. The CSR Committee Meeting is comprised of fourteen members including one chairperson and thirteen committee members. The activities of the CSR Committee Meeting are reported to the Management Meeting as needed.