Corporate Governance

Basic policy

PARCO constantly works to strengthen its corporate governance,recognizing that to enhance its corporate value it is essential for it to protect the rights and earnings of shareholders, build smooth relationships with stakeholders other than shareholders, preserve transparency in management and establish an effective management oversight structure. PARCO has adopted the “Company with Committees” system in order to make a clear distinction between supervision and execution in management, build a highly transparent corporate governance structure, and establish a means of quick decision making and business execution.

The roles of the Board of Directors and committees

Board of Directors

The Board of Directors is responsible for deciding fundamental policies regarding management, and for the supervision of directors and executive officers. It convenes once a month, with additional irregular meetings held as necessary.

Committees

Each committee acts in its capacity to conduct management supervision and reports to the Board of Directors. A Committees Secretariat has been established to support the activities of each committee by providing dedicated staff.

Nominating Committee

The Nominating Committee determines the content of proposals to be submitted at the General Meeting of Shareholders regarding the appointment or dismissal of directors, as well as nominates candidates for representative director for the Board of Directors and executive officers, and recommends their removal.

Audit Committee

The Audit Committee monitors the execution of business by directors and executive officers, and determines the content of proposals to be submitted at the General Meeting of Shareholders regarding the selection or dismissal of the financial auditor.

Compensation Committee

The Compensation Committee determines the compensation of individual directors and executive officers.

Executive Officers and the Management Committee

Executive officers execute specific operations based on the fundamental policies decided by the Board of Directors.

CSR Committee

A CSR Committee has been established to strengthen internal controls in addition to promoting the corporate social responsibility (CSR) activities of the PARCO Group. The CSR Committee makes the PARCO Group's policies for the CSR activities and its action plans, supports external publicity, promotes internal information sharing, and cooperates with external companies and organizations.
The committee is active across the organization, holding discussions with PARCO executive officers and collaborating with group companies and PARCO internal departments.

CSR

Diversity Committee

PARCO has set up a Diversity Committee to promote diversity throughout the PARCO Group. The committee, which is chaired by the company president, works to create a corporate culture that is inclusive of a variety of values, skills and cultures. The committee is active across the organization, holding discussions with PARCO Group company presidents and PARCO executive officers and collaborating with group companies and PARCO internal departments.

Internal control

PARCO has stipulated a basic internal control policy and developed various regulations concerning business operations.

Internal control structure for financial reports

In order to ensure the reliability of financial reports, in coordination with the corporate auditor, the Group Auditor Office has developed an internal control structure for financial reports. Compliance with this system is continually evaluated.

Risk management structure

The Risk Management Committee leads efforts to identify the risks inherent in our business activities, evaluate these risks, consider countermeasures, and conduct internal education activities on these risks. In addition, efforts have been made to develop a company-wide management structure to allow for prompt response when risks manifest themselves through steps such as the establishment of a Countermeasures Headquarters for emergencies and an information management system.

Compliance structure

PARCO has implemented an internal awareness program that includes formulation of the Basic Principles of Compliance, and a Code of Conduct, which all employees are expected to adhere to and follow, and distribution of the PARCO Employee Handbook incorporating management principles, ten action guidelines designed to ensure application of these principles, as well as compliance guidelines. Also, in consideration of compliance and risk management, we have set up an internal reporting system to protect the persons providing information from any negative consequences that might arise from disclosure.

Internal controls

The Group Auditor Office serves under a full-time executive officer as the company’s internal auditing department. It audits the status of legal compliance, operational streamlining and risk management of all business aspects of PARCO and the PARCO Group, based on the auditing plan. It also exchanges information with the Audit Committee and auditors of group subsidiaries as necessary, and conducts effective audits.

External Directors

The majority of PARCO directors are external directors, and these external directors work to improve the effectiveness of internal controls through steps such as supervision of the execution of duties by executive officers through attendance at Board of Directors and other committees.

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