KAMEDA SEIKA Corporate Governance Policy

[Chapter I. General Provisions]

1. Purpose of Establishment and Positioning of Policy

  • The KAMEDA SEIKA Corporate Governance Policy (hereinafter referred to as “the Policy”) has been established for the purpose of providing guidelines for the management team and employees to work as one to act proactively for the realization of effective corporate governance with the aim of sustained enhancement of corporate value of the corporate group (hereinafter referred to as “the Group”) composed of KAMEDA SEIKA CO., LTD. (hereinafter referred to as “the Company”) and its affiliates.
  • The Company will publicize the Policy internally and externally.

2. Basic Views on Corporate Governance

(Principle 3.1)

  • Corporate governance in the Company is a mechanism for timely and appropriately ensuring the transparency, fairness, planning, and speed of management, and enabling business operations and supervision to be organically linked for the realization of the ideal corporate management (aiming to achieve sustained development of the business and enhancement of corporate value by building good relations with all relevant parties surrounding the Company and meeting the needs of society) that the Company has aspired since it was founded based on its corporate philosophy.

3. Corporate Philosophy

(General Principle 2, Principle 2.1, Principle 3.1, General Principle 4)

  • ・Founding Philosophy
    During the food shortages in Japan immediately after World War Ⅱ, our founder felt that, “Men can find pleasure in diversions, but there is no enjoyment for women and children. I want to give them something that can bring enjoyment and delight to their lives.” With no prior experience, he began making clear, sticky mizuame, a thick malt syrup made from rice starch. This became our founding philosophy, and KAMEDA SEIKA was born.
  • ・Mission Statement
    • Seika-Tendo-Rikki
      As a manufacturer and seller of rice crackers and snacks, we will explore the path to find our identity by seeking to grow through refining management and operations widely, including manufacturing technology, product development, and market development. Our identity refers to the Company itself and each individual employee making up the Company. We will work together to improve our social and economic standing.
  • ・Management Philosophy
    • – Respond to the needs of all those involved with the Company
    • – Ensure the Company’s to flourish forever
  • ・Basic Management Policy
    • – Conduct management democratically
    • – Refrain from using the Company for personal gain
    • – Be dedicated to planned management

4. Procedures for Establishment, Revision, and Abolition

  • The establishment, revision, or abolition of the Policy is subject to a resolution of the Board of Directors.

[Chapter II. Stakeholders]

5. Relationship with Stakeholders

(General Principle 2)

  • The most important stakeholders for the Company are its customers (consumers), and the continuity of meeting the expectations of customers(consumers) is its greatest mission, while also building long-term relationships of trust with all stakeholders such as employees, shareholders, business partners, and local communities.

6. Relationship with Employees

(General Principle 2. Principle 2.2, Principle 2.4)

  • The Company aims to achieve sustained corporate growth and contribute to the enhancement of a richer and more enjoyable life for its employees by supporting the self-realization of employees, promoting diversity, and encouraging a variety of values and views along with diverse individuality and skills.
  • The Company will establish a code of conduct to provide specific guidelines for the behavior of Directors, Audit & Supervisory Board Members, and employees; regulate itself; and ensure ethical and legal compliance for the enhancement of corporate value.

7. Relationship with Shareholders

(Supplementary Principle 1.1.3, Principle 1.3, Supplementary Principle 4.1.2, General Principle 5, Principle 5.1, Supplementary Principle 5.1.1, Supplementary Principle 5.1.2, Supplementary Principle 5.1.3)

  • The Company will strive to achieve sustained growth and to realize enhancement of medium- to long-term corporate value.
  • The Company will build long-term relationships of trust through periodic dialogue with shareholders and investors.
  • The Company will establish systems and policies for initiatives to promote constructive dialogue with shareholders and investors.
  • The Company will formulate a basic strategy for capital policy and establish criteria such as consolidated return on equity (ROE) and dividend payout ratio as indicators related to capital policy.

[Chapter III. Disclosure]

8. Timely and Appropriate Disclosure

(Supplementary Principle 1.2.1, General Principle 3, Principle 3.1, General Principle 5)

  • The Company will accurately provide a wide range of financial and non-financial information as necessary, beyond the disclosures required by law.
  • The Company will establish a “Disclosure Policy” as a guideline for the provision of information.

[Chapter IV. Corporate Governance System]

9. Organizational Structure

(Principle 4.4, Principle 4.10)

  • The Company elects to be a company with an Audit & Supervisory Board.

10. Internal Audit Department

(Supplementary Principle 4.13.3)

  • The Company will establish an Internal Audit Department under direct control of the Representative Director, President and COO.
  • The Internal Audit Department will coordinate with Directors, Audit & Supervisory Board Members, and Accounting Auditors as required.

11. Board of Directors

(1) Responsibilities and Roles of the Board of Directors (General Principle 4, Principle 4.1)

  • The Company will position the Board of Directors as a body for promoting sustained corporate growth and enhancement of medium- to long-term corporate value.
  • The Company will conduct constructive discussion on management strategy in meetings of the Board of Directors. Furthermore, i t will confirm consistency with management strategy when conducting specific business operations.

(2) Composition (General Principle 4, Supplementary Principle 4.3.1, Principle 4.4, Principle 4.6, Principle 4.8, Principle 4.11, Supplementary Principle 4.11.1)

  • The Company’s Board of Directors will be made up of Directors and Audit & Supervisory Board Members with diverse values including gender and nationality.
  • The Company’s basic stance is for a majority of Directors to be Independent Outside Directors.
  • The Company’s basic stance is for a majority of Audit & Supervisory Board Members to be Independent Outside Audit & Supervisory Board Members.
  • Outside Directors are, in principle, primarily made up of people with experience in corporate management in the food industry, etc.
  • In principle, people with knowledge and experience related to food manufacturing in addition to financial and accounting knowledge will be appointed as Inside Audit & Supervisory Board Members. In principle, people with knowledge related to topics such as finance, accounting, and law, and people with corporate management experience will be appointed as Outside Audit & Supervisory Board Members.

(3) Chairman of the Board of Directors (Principle 4.12)

  • The Chairman of the Board of Directors will endeavor to foster a tone to ensure the Board of Directors is a setting for free, open, and constructive discussion; discussion based on the corporate philosophy; and discussion and exchange of opinions propelling growth.

(4) Optional Advisory Committees (Supplementary Principle 4.10.1)

  • The Company will not establish optional advisory committees because a majority of the Company’s Directors are Independent Outside Directors, providing a mechanism for proposals from within the Company to be able to be rejected in the Board of Directors, and discussion can be ensured to be transparent and fair.

(5) Establishing Management Plans (General Principle 4, Supplementary Principle 4.1.2, Principle 5.2)

  • With planned management as the basis, the Company will have a timely and accurate understanding of the cost of its capital and set targets related to earning power, capital efficiency, etc. when establishing medium- to long-term management plans.

(6) Evaluation of the Effectiveness of the Board of Directors (Supplementary Principle 4.11.3)

  • The Company will evaluate the effectiveness of the Board of Directors once per year in the Board of Directors.
  • The Company will disclose an overview of the results of analysis and evaluation in the Board of Directors.

12. Audit & Supervisory Board

(1) Responsibilities and Roles of the Audit & Supervisory Board (Principle 4.4)

  • The Audit & Supervisory Board will ensure the soundness of the business with the aim of sustained enhancement of corporate value, and act in the common interest of shareholders.
  • The Company will endeavor to establish an environment in which Audit & Supervisory Board Members have a broad reach, and, in principle, support all initiatives requested by Audit & Supervisory Board Members such as access to all information and attendance at important meetings.

(2) Coordination with Independent Outside Directors (Supplementary Principle 4.4.1)

  • The roles required of Outside Directors differ from those of Audit & Supervisory Board Members and the Audit & Supervisory Board, and they are expected to act from their respective independent positions. Therefore, opportunities for active coordination between Audit & Supervisory Board Members, the Audit & Supervisory Board, and Independent Outside Directors will not be established because their independence may be weakened, such as through forming a kind of common awareness, making it difficult to state opposing opinions if coordination is strengthened too much.
  • The Company will ensure there is adequate coordination, by providing the same degree of content of important meetings, etc. to Outside Directors and Outside Audit & Supervisory Board Members, giving due consideration so that there are no discrepancies in the amount of information provided to each individual.

(3) Coordination with Accounting Auditor and Internal Audit Department (Supplementary Principle 3.2.2)

  • The Audit & Supervisory Board will coordinate with the Accounting Auditor and the Internal Audit Department, and ensure there is a system enabling adequate and appropriate auditing to be performed.

13. Accounting Auditor

(Principle 3.2, Supplementary Principle 3.2.2)

  • The Company will respond appropriately to ensure that proper audits are performed by the Accounting Auditor.

14. Management Team

(General Principle 4, Principle 4.10)

  • The Company will implement an Executive Officer system.
  • The Company’s management team will be made up of Executive Directors and Executive Officers

15. Successor Development Plan

(Supplementary Principle 4.1.3)

  • The Company will establish a successor development plan.
  • The successor development plan will include evaluation of business operations and designated training, as well as assessments such as 360-degree evaluations and personal interviews with Outside Directors.

16. Appointment and Dismissal Criteria for CEO, COO, Directors, Audit & Supervisory Board Members, and Executive Officers

(Principle 3.1, Supplementary Principle 4.3.1, Supplementary Principle 4.3.2, Supplementary Principle 4.3.3)

(1) CEO and COO Appointment and Dismissal Criteria

  • The Company will establish criteria for the appointment and dismissal of the CEO and the COO as follows.
    (CEO and COO Appointment Criteria)
    [Ability]
    • Must understand and be able to implement the Company’s corporate philosophy
    • Must have the ability to ascertain medium- to long-term trends in global society, and to devise and execute medium- to long-term plans accordingly
    [Leadership]
    • Must be able to communicate sincerely with officers and employees
    • Must be able to lead by example
    [Human qualities]
    • Must have personal appeal, fortitude, depth, and generosity
    • Must correctly understand own capabilities, and have a stance of supplementing own shortcomings by coordinating with others

    (CEO and COO Dismissal Criteria)
    The Board of Directors will discuss and determine the dismissal of the CEO or the COO in the following cases.
    • If the CEO or COO is deemed not to be functioning adequately
    • If serious concerns arise in corporate governance, such as a social scandal
    • If the Company’s performance deteriorates significantly
    • If eligibility under the above appointment criteria is lost
    • The Company will appoint the CEO and the COO in the Board of Directors composed of a majority of Independent Outside Directors by referring to the content considered in the successor development plan and the CEO and COO appointment criteria.
    The actual appointment is determined in the Board of Directors by considering the opinions of management executives and outside officers, and assessments such as 360-degree evaluations.

(2) Executive Officer Appointment and Dismissal Criteria, Director and Audit & Supervisory Board Member Candidate Nomination Criteria

  • The Company will establish criteria for the appointment and dismissal of Executive Officers, and criteria for the nomination of Directors and Audit & Supervisory Board Member Candidates.
  • The actual nomination of Inside Director Candidates is determined in the Board of Directors by considering the opinions of management executives and outside officers, and assessments such as 360-degree evaluations, and then submitted to the General Shareholders’ Meeting.

17. Advisory Board

(Principle 4.10)

  • The Company will establish an Advisory Board as an advisory body to the Representative Directors.
  • The Advisory Board comprises outside experts other than Outside Directors, Inside Directors, and designated Executive Officers.

18. Officer Remuneration

(Principle 3.1, Principle 4.2, Supplementary Principle 4.2.1)

  • The Company’s officer remuneration comprises base remuneration and bonuses.
  • The total amount of officer remuneration is approved by resolution of the General Shareholders’ Meeting in light of levels in the industry and in other companies of the same size as the Company. Furthermore, distributions to each officer shall be determined by the Board of Directors within the total amount.
  • Bonuses shall be bonuses linked to the Company’s performance in the current fiscal year. Remuneration linked to medium- to long-term performance and share-based remuneration have not been established, but will be considered as necessary in the future.
  • The amounts of remuneration of Outside Directors and Audit & Supervisory Board Members (Inside and Outside) are fixed respectively, and they are not paid bonuses.

19. Independent Outside Directors and Independent Outside Audit & Supervisory Board Members

(Principle 4.7, Principle 4.9)

  • The Company will establish criteria for determining independence when appointing Independent Outside Directors and Independent Outside Audit & Supervisory Board Members.
  • In principle, the Company will appoint all Outside Directors and Outside Audit & Supervisory Board Members who meet the criteria for determining independence established by the Company for Independent Outside Directors and Independent Outside Audit & Supervisory Board Members respectively.

(1) Coordination among Independent Outside Directors (Supplementary Principle 4.8.1)

  • The Company will not establish “meetings consisting solely of Independent Outside directors” for the following reasons.
  • “Meetings consisting solely of Independent Outside directors” are thought to be effective for rectifying an environment where few directors are outside directors and it is difficult for their opinions to be reflected, but the Company has appointed Outside Directors in the majority of Directors, creating an environment where it is easy for Outside Directors to make comments and ensure they are reflected in the matters being discussed.
  • Outside Directors are required to individually exercise their own outstanding expertise, but the establishment of “meetings consisting solely of Independent Outside directors” may result in a weakening of their independence, such as through forming a kind of common awareness, making it difficult to state opposing opinions.
  • An effort will be made to ensure there is an adequate shared awareness by providing Outside Directors the same quantity and content such as minutes and reports of the Company’s important meetings, giving due consideration so that there are no discrepancies in the amount of information provided to each individual.

(2) Lead Independent Outside Director (Supplementary Principle 4.8.2)

  • The Company will not appoint a “Lead Independent Outside Director” for the following reasons.
  • Appointing a “Lead Independent Outside Director” may foster a sense of seniority among Independent Outside Directors and an awareness of being dependent on the Lead Independent Outside Director.
  • The unification of opinions of Outside Directors is not necessarily required because Outside Directors are required to individually exercise their own outstanding expertise.

20. Maximum Number of Concurrently Held Positions

(Supplementary Principle 4.11.2)

  • The Company will establish the maximum reasonable number of concurrently held positions for Directors and Audit & Supervisory Board Members in listed companies at four companies including the Company in consideration of ensuring there is sufficient time related to the Company’s management.
  • If the number of concurrently held positions in listed companies exceeds four companies, a resolution of the Board of Directors will be made on each such occasion.

21. Support System

(Principle 4.13, Supplementary Principle 4.13.3)

  • The Company will establish a Board of Directors Administrative Office to ensure smooth operation of the Board of Directors and active deliberation. The Board of Directors Administrative Office will serve as the contact point for Outside Directors.
  • The Company will appoint an assistant for the Audit & Supervisory Board Members.

22. Officer Training

(Principle 4.14, Supplementary Principle 4.14.1, Supplementary Principle 4.14.2)

  • The Company will conduct training for Directors and Audit & Supervisory Board Members as required, and disclose the method of such officer training.

KAMEDA SEIKA CO., LTD.
Established: December 19, 2018
Revised: June 21, 2019

[Attachment 1] List of Corresponding Sections of the Corporate Governance Code