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Corporate Governance

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Basic Views on
Corporate Governance

SHO-BOND positions corporate governance as one of the highest management priorities.

Our corporate philosophy is “with a sense of mission of ‘inheriting and passing on social infrastructure to the next generation in good condition’ we will contribute to the realization of a safe and affluent society by utilizing our advanced technological development capability as a leading company in the structure maintenance business.” Based on this policy, we will fulfill our social responsibility through our social infrastructure maintenance business to increase our level of trust with our shareholders and all other stakeholders. In addition, we will aim for a highly sound and transparent management for sustainable growth and the medium to long-term growth of our corporate value.

Overview of Corporate Governance System

Organizational Structure and Business Execution System

SHO-BOND is a company with an Audit and Supervisory Committee. This system is used to strengthen the supervisory function of the Board of Directors and strengthen corporate governance. SHO-BOND aims to accomplish this by using the Audit and Supervisory Committee with Outside Directors accounting for the majority of members and giving the directors who are also members of this committee the right to vote on resolutions at the Board of Directors. In addition, SHO-BOND has established the Nomination and Remuneration Advisory Committee as a voluntary advisory body in order to strengthen the independence, objectivity and accountability of the Board of Directors.

The Executive Committee meets twice every month as a rule to assist decision-making by the President and Representative Director, and discusses and reaches decisions about important matters involving management. The Risk Management Committee and other internal committees are established as an advisory body for the President and Representative Director. Important matters are discussed at these committees, and submitted and reported to the Executive Committee.

Board of Directors

The Board of Directors has nine members including four directors who are members of the Audit and Supervisory Committee. The directors discuss and reach decisions about important matters involving management as prescribed by laws and regulations and the rules for the Board of Directors. As a rule, the board meets once every month and meets at other times as needed in order to reach decisions quickly.

Audit and Supervisory Committee

The Audit and Supervisory Committee has four members who are directors. Three of the members are Outside Directors. As a rule, the committee meets once every month and meets at other times as needed. The Audit and Supervisory Committee, as an independent body, audits and supervise the performance of directors who are not members of the Audit and Supervisory Committee. The committee also prepares audit reports and reaches decisions about matters prescribed based on laws and regulations, the Articles of Incorporation, and Audit and Supervisory Committee audit standards. The Audit and Supervisory Committee works with the accounting auditor and the Audit Office to perform audits efficiently.

Nomination and Remuneration Advisory Committee

The Nomination and Remuneration Advisory Committee has four members; three Outside Directors and the President and Representative Director. This committee is actively involved in formation and execution of the succession plan for the President, has adequate discussions about matters on directors’ nomination and remuneration and gives opinions and advice to the Board of Directors.

Executive Committee

The President and Representative Director presides over the Executive Committee as a body to assist decision-making in management by the President and Representative Director. This committee consists of directors who are not members of the Audit and Supervisory Committee and senior executives, including the executives of SHO-BOND subsidiaries, nominated by the President. As a rule, the committee meets twice every month and meets at other times as needed in order to reach decisions quickly.

Internal Committees

Major committees related to business operations include the Risk Management Committee, Internal Control Committee and the Asset Management Committee. Important management issues are continuously discussed by theme at these committees, and submitted and reported to the Executive Committee as needed.

Basic Views On
Eliminating Anti-Social Forces

SHO-BOND resolutely opposes anti-social forces and blocks and eliminates any relationship whatsoever with these forces. SHO-BOND regards any relationship with anti-social forces as a serious risk and, in the risk management rules, provides “refusing any improper request and not pay even one yen” as a principle for dealing with an improper request. The risk management rules also prescribes that problems must be settled through procedures for trial, mediation or arbitration or by using alternative dispute resolution (ADR) with the approval of the Risk Management Committee, or by entrusting negotiations to an attorney or another expert. The use of any other third parties for this purpose is strictly prohibited. There are constant activities to prevent losses and damages, such as by collecting information about anti-social forces, that utilize communications with local police and businesses.

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