Governance
Standard Policy
We are fully aware of our social responsibilities. Transparency of corporate activities through legal compliances is one of our most important management topics. As a listed company, we recognize that increasing and maximizing of our corporate value is a fundamental goal of corporate governance. Based on this recognition, we strive to build a corporate governance structure that allows us to conduct "fair and transparent management" and "prompt and accurate management and executive decisions" to efficiently and continuously grow our shareholders value. To achieve such goal, we will continue to strengthen the corporate governance through improvement and maintenance of not only management structure but organization and systems, etc.
System
Corporate Governance Structure
We are strengthening our governance structure to promote management efficiency and to maximize our corporate value. We believe that it is important to have the governance structure that enables board of directors to make swift and accurate decisions as well as to supervise the execution of operation appropriately. We have adopted the following governance structure as we think this enables substantive discussion at the board, and assures sufficient transparency and legality with monitoring and supervising by members of an Audit and Supervisory Committee.
- ● Of the nine board of directors, three are three independent outside board members including a female.
- ● In order to increase the transparency of the process surrounding appointment and compensation of the board members, set up a discretionary nomination and compensation committee.
- ● Set up an outside hotline for whistleblower.
- ● Set up a sustainability committee to strengthen the activities surrounding sustainability.
Board of Directors
The Company's Board of Directors is chaired by Jun Kawai, Representative Director and President, and consists of 9 directors (The Company's Articles of Incorporation stipulate that the Company shall have no more than 9 Directors (excluding Directors who are Audit and Supervisory Committee Members) and no more than 5 Directors who are Audit and Supervisory Committee Members.), 4 of whom are members of the Audit and Supervisory Committee (including three outside directors).
The Board of Directors, as the highest decision-making body for business execution, meets once a month in principle to ensure prompt and accurate management and execution decisions. The Board deliberates and makes decisions on legal and other important management matters.
Audit and Supervisory Committee
Our Audit & Supervisory Committee consists of 4 directors who are Audit & Supervisory Committee members, 3 of whom are outside directors who are Audit & Supervisory Committee members. In order to achieve "fair and transparent management," the Audit and Supervisory Committee receives reports on important matters related to audits and other matters, holds discussions and makes resolutions in order to fulfill the supervisory and checks-and-balances functions of management and business execution.
Attendance at Meetings of the Board of Directors and Audit and Supervisory Committee (Fiscal 2023)
| Title | Name | Board of Directors Meeting | Audit and Supervisory Commitee | ||
|---|---|---|---|---|---|
| Number of times held |
Attendance Rate(%) |
Number of times held |
Attendance Rate(%) |
||
| Representative Director and Chairman |
Hitoshi Gotoh | 13 | 100 | — | — |
| Representative Director and President |
Jun Kawai | 13 | 100 | — | — |
| Managing Director | Akira Shimamura | 13 | 100 | — | — |
| Director | Genta Ohuchi | 13 | 100 | — | — |
| Director | Hitoshi Ohno | 9 | 100 | — | — |
| Director (Audit and Supervisory Commitee Member) |
Hirofumi Morimoto | 13 | 100 | 13 | 100 |
| Outside Director (Audit and Supervisory Committee Member) |
Kazuomi Matsuoka | 13 | 100 | 13 | 100 |
| Outside Director (Audit and Supervisory Committee Member) |
Miyuki Otsuka | 13 | 100 | 13 | 100 |
| Outside Director (Audit and Supervisory Committee Member) |
Noriyuki Katayama | 13 | 100 | 13 | 100 |
Evaluating the Effectiveness of the Board of Directors
We conduct a questionnaire once a year to all directors (including directors serving as members of the Audit and Supervisory Committee) to understand the composition of the Board of Directors, the management method, the skills required as a director, and our awareness of issues. The directors exchange opinions based on the results of the questionnaire. In evaluating the effectiveness of the Board of Directors for the fiscal year ending February 2024, the Board of Directors analyzed and evaluated the effectiveness of the Board of Directors based on the above results. As a result, we confirmed that the Board of Directors is sufficiently deliberated and made decisions, including the operation of the Board of Directors (partial implementation of prior explanations on the content of deliberations and security of the appropriate amount and content of ancillary materials) and the system and awareness of issues, and that the effectiveness of the Board of Directors is ensured.
At the same time, the Board of Directors expressed the view that the Company should focus more and more on human equity issues, such as labor shortages in the workplace and the development of successors in various positions. In light of these, the Company will continue to strengthen the functions of the Board of Directors in order to achieve sustainable growth and increase corporate value over the medium to long term.
Appointment of Directors and Remuneration for Directors
Election of Directors
We have a voluntary Nomination and Remuneration Committee with a majority of outside directors as an advisory body to the Board of Directors regarding director Nomination and Remuneration. Our policy is to go through the Nomination and Remuneration Committee's report when nominating candidates for directors (including directors who are Audit and Supervisory Committee members).
The Nomination and Remuneration Committee discusses and reports to the Board of Directors from an objective and fair standpoint, considering each candidate's role as a director, his/her experience, knowledge, and ability to fulfill his/her duties, as well as our size. The appointment of candidates for Directors who are members of the Audit and Supervisory Committee shall be subject to the consent of the Audit Committee.
Skills Matrix Table for Our Board of Directors Candidates
| Title | Name | Key Skills and Expertise | ||||
|---|---|---|---|---|---|---|
| Corporate Management |
Marketing and Store Development |
Finance and Accounting |
Legal and Compliance |
Global | ||
| Representative Director and Chairman |
Hitoshi Gotoh | ● | ● | ● | ||
| Representative Director and President |
Jun Kawai | ● | ● | ● | ● | |
| Managing Director | Akira Shimamura | ● | ● | ● | ||
| Director | Genta Ohuchi | ● | ● | |||
| Director | Hitoshi Ohno | ● | ● | ● | ||
| Director (Audit and Supervisory Committee Member) |
Yusuke Ishii | ● | ● | ● | ||
| Outside Director (Audit and Supervisory Committee Member) |
Kazuomi Matsuoka | ● | ● | ● | ||
| Outside Director (Audit and Supervisory Committee Member) |
Miyuki Otsuka | ● | ● | ● | ||
| Outside Director (Audit and Supervisory Committee Member) |
Noriyuki Katayama | ● | ● | ● | ||
（Note）The above is an indication of areas of particular expertise and experience, and does not represent all the skills and expertise possessed by the subject.
Policy on Determination of remuneration for Directors
The following is a summary of the policy for determining remuneration, etc. for directors.
(1) Remuneration for directors consists of fixed base remuneration and performance-linked remuneration in which the amount paid varies depending on performance. The contents of remuneration shall consist of monetary remuneration and non-monetary stock remuneration.
(2) The basic remuneration portion of monetary remuneration shall be determined by taking into consideration the size of roles and the scope of responsibilities of each position.
(3) The performance-linked portion of the monetary remuneration is determined according to the degree to which each director has achieved the performance targets for each fiscal year in terms of Adjusted EBITDA (excluding the impact of the application of IFRS 16) and quantitative targets determined for each director in consideration of his or her duties. In the event of an excess, it is determined within the range of base salary plus 10%; in the event of a failure to achieve it, it is determined within the range of base salary minus 10%.
(4) Monetary remuneration for directors shall be granted monthly.
(5) Non-monetary Remuneration shall be restricted stock whose transfer restrictions will be lifted after a certain period of time specified by the Board of Directors, and shall be granted once in principle (excluding outside directors) after the appointment of directors for the purpose of providing incentives for the sustainable improvement of corporate value. The amount of transfer restricted shares to be granted shall be determined separately from monetary remuneration in consideration of the size of the roles and scope of responsibilities of each director, in principle, based on the fact that the shares shall be granted only once after assumption of office as a director.
(6) Decisions on the details of individual remuneration, etc. for directors shall be delegated collectively to the Representative Director and President within the scope of this policy.
The Board of Directors confirms that the method of determining the content of remuneration, etc. and the content of remuneration, itself determined for individual directors in the current fiscal year are consistent with the said decision policy. In determining the content of remuneration, the Company also confirms that the voluntary Nomination and Remuneration Committee, which is composed of representative directors and outside directors, respects reports summarizing the roles and responsibilities of each director and the evaluation of the Group's overall strategy formulation and contribution to controls, and believes that these reports are in line with this decision-making policy.
Compliance
Compliance System
The Create Restaurants Group has adopted the Code of Conduct as its basic compliance policy. We conduct thorough compliance education to deepen understanding of compliance risks through training for employees, including officers and employees. Based on our awareness of being a member of the Group, we have established a system that enables us to engage in business with a high level of ethical standards.
We have established a Compliance Committee, which regularly shares information with officers (including officers of each operating company) and discusses compliance measures as necessary.
In addition, the Company has established a Compliance Consultation Desk and an Internal Reporting Desk for legal counselors as consultation desks for employees, and has continuously worked to ensure that the system functions effectively. Through these and other measures, the Company is working to curb compliance risks.
Code of Conduct for the Create Restaurants Group
(Compliance Rules)
(1) In order to provide our customers with safe and sincere meals, we will strictly adhere to the basics of the restaurant industry, including hygiene management and personal health management.
- 1) We will strive to acquire hygiene knowledge and maintain businesses based on hygiene manuals.
- 2) We will actively undergo specified health checkups and microbial tests, and constantly pay attention to our own health management. In addition, we do not forget to check our daily hygiene management. We always report any defects that we discover.
- 3) We will try to keep clean appearance and clothes.
(2) As a member of a company that contributes to society, we will respect civility and act responsibly as members of society. In addition, we will take a firm stance against antisocial forces and will not provide any benefits to them.
- 1) We will always be aware that we are representative of the company, comply with the law, and act fairly and fairly.
- 2) We will take the initiative to greet people, pay attention to language and manners, and act in a moderate manner.
- 3) We will communicate with our business partners, comply with contracts and promises, respond sincerely and sincerely, and endeavor to maintain a lasting relationship of trust.
- 4) In the event that an inappropriate demand is received from antisocial forces, we will not solve the problem easily by money or other means.
(3) We do not act contrary to the interests of the company. In addition, we will make a clear distinction between public and private matters.
- 1) We will make a clear distinction between public and private matters, will not improperly use company assets or equipment, and will not use company property or expenses for personal purposes.
- 2) We will not engage in any other occupation without the approval of the Company.
- 3) We will not engage in personal activities unrelated to our work in the workplace, such as politics or religion.
(4) We will make gifts, entertainment, etc. without violating laws and regulations, and within the scope of social conventions.
- 1) We place the highest priority on fair business activities based on social ethics, and do not provide entertainment, gifts, benefits, or other advantages to business partners, government agencies, or other parties with whom we have a business relationship.
- 2) We do not accept payments of money or goods, entertainment, or gifts from suppliers. Provided, however, that in the event of unavoidable gifts or offers, approval shall be obtained from the superior.
(5) We shall comply with laws, regulations, systems, internal rules, etc. in the performance of our duties.
- 1) We will proactively acquire and comply with related laws and regulations necessary for our business, and will ensure that there is no omission in obtaining licenses and licenses, submitting notifications, and preparing administrative documents.
- 2) We will not engage in transactions with our business partners in a manner that will cause any loss of fairness, or that may cause misunderstandings by others.
(6) We respect each other's human rights and do not engage in discrimination or harassment.
- 1) We will create a bright and open workplace where each individual can exercise his or her own initiative, respect each other, communicate well, and work lively.
- 2) We will not discriminate unfairly on the basis of race, color, nationality, gender, age, origin, religion, beliefs, mental or physical disability, or illness.
- 3) We will not hurt their character by saying or doing anything with sexual connotations that they do not want.
- 4) We will not engage in sexual advances that are contingent on or result in a benefit or detriment to the other person.
(7) We will appropriately manage the Company's information, as well as handle information obtained from outside the Company and the intellectual property rights of third parties.
- 1) Confidential information of the Company shall be strictly controlled and shall not be leaked or used for any purpose other than company.
- 2) In the event it is necessary to disclose the Company's confidential information to outsiders for business purposes, the Company shall take precautions to prevent such disclosure, such as by concluding a confidentiality agreement in advance.
- 3) We will not leak or use confidential company information, even after retirement.
- 4) If a contact department has been designated to handle inquiries from outside the company, we will not respond to such inquiries on our own initiative, but will connect them to that department.
- 5) We will not commit any acts that constitute infringement of intellectual property rights of other companies or other persons, such as unauthorized copying of computer software.
(8) We will conduct our activities in an environmentally friendly manner.
- 1) We will take a proactive approach to environmental protection in order to maintain our leading position in all regions.
- 2) We will comply with environmental laws, regulations, ordinances, and other requirements, and strive to protect the environment.
- 3) We will make efficient use of resources and energy, and strive to reduce, effectively utilize, and recycle waste.
(9) Any act in violation of these rules, whether discovered or committed inadvertently by oneself, shall be promptly reported to or discussed with one's superior, the Compliance Officer, the relevant internal department, or the Compliance Office.
- 1) Each executive and employee shall cooperate as necessary so that the Company can confirm the facts and respond appropriately, including measures to prevent a recurrence.
- 2) Upon receiving a report or consultation, the superior, Compliance Officer, relevant internal departments and the Compliance Committee Secretariat shall not reveal the name, etc. of the reporter without their consent, and shall ensure that the reporter will not suffer any disadvantages as a result of their report or consultation.
- 3) Reporting and consultation can be done by either verbal, telephone, letter, or e-mail.
