Note: The following document is an English translation of the Japanese-language original.
Introduction: General Provisions
Article 1 Business Philosophy
1. Group Business Philosophy
As a dynamic and creative corporate organization, Asahi Broadcasting Group continues to evolve while adapting to changing social conditions and contributes to the development of society.
2. ABC’s Principle
- With a peaceful and free mind, we strive to work for the good of the development of the local community and culture.
- With an open-minded heart and a willingness to improve, we take responsibility and dignity in a serious manner and will do our very most to gain the trust of the society.
- We will always do our best to promptly and fairly deliver accurate news and give appropriate comments to the public.
- Through our programs, we strive to bring a delightful and peaceful atmosphere to the audiences while increase their ability to think and judge as well.
- By using creative advertisement than exaggerated advertisements, we ensure the success of the industry.
3. ABCʼs 10-year Vision
A. "The No. 1 broadcaster in the Kansai Region with eyes on the world"
As a leading corporation based in the Kansai region, we aim to diffuse comprehensive culture and information to the rest of the world.
B. "An all-around family entertainer"
We aim to bring people, communities and families together with fun-filled, enjoyable and reliable programming.
C. "Open↑ Fun ABC!"
We aim to be a company well-loved by employees and where information is openly shared.
Article 2 Business Plan
In principle, Asahi Broadcasting Group Holdings Corporation (“the Company”) formulates a new medium-term business plan every three years.
Under the “Asahi Broadcasting Group Medium-term Business Plan, 2018-2020,” we have established a “Group Growth Vision” targeting consolidated net sales of \100 billion and an ordinary income margin of 8.0% by strongly evolving into a comprehensive content business group even as the conventional business model of the broadcasting industry changes significantly.
As strategic objectives for the three-year period beginning FY2018, we have highlighted the five areas described below.
1. Definitely achieve our target of “consolidated sales of 89 billion yen and ordinary income of 6 billion yen” in FY2020
2. Invest in growth areas (investment ceiling of 20 billion yen) to achieve the Group’s Growth Vision
3. Pursue a dividend payout ratio of 30% or higher
4. Strive to improve ROE
5. Target an overseas business sales ratio to consolidated sales of 3% or more
Article 3 Basic Approach to Corporate Governance
(1) The Group, as a corporate group with broadcasting business as its core, firmly recognizes the highly public nature of broadcasting and its own social responsibilities, strictly complies with the Broadcast Act and other relevant regulations, and contributes to the development of society and culture guided by the Group Business Philosophy.
(2) The Group builds good relationships with a diverse range of stakeholders, including shareholders, viewers, listeners, advertisers, business partners, employees and local communities, and strives for both sustainable growth and improved corporate value to meet their expectations. This is prefaced on maintaining a management base capable of sustaining under all circumstances information dissemination through broadcasting that preserves and develops the daily lives of residents, as a media organization with a mandate to utilize the broadcasting spectrum, a public asset, in an effective manner.
(3) As an institutional design for corporate governance, the Company has chosen an Audit & Supervisory Committee-based framework. The Company has devised a structure whereby the role of the Board of Directors is to promote sustainable corporate growth and the increase of corporate value, while independent outside directors and Audit & Supervisory Committee conduct monitoring and audits essential to highly effective management.
(4) The Company has made the following commitments to ensure robust corporate governance:
1. Ensure the rights and equality of shareholders
2. Encourage active information disclosure and dialogue with shareholders and investors
3. Promote social contributions and diversity
4. Strengthen the functions of directors, etc.
5. Establish and effectively operate an internal control system
(5) To enact the aforementioned commitments, the Company, via the Board of Directors, has defined the “Corporate Governance Policy” (this policy), and updates the content of the policy as necessary.
Chapter 1 Ensure the Rights and Equality of Shareholders
Article 4 Capital Policy
1. Capital efficiency indicators
Amid tremendous changes in the core broadcasting industry environment, the Company deemed that reliance solely on its traditional business model would prove challenging for promoting sustainable corporate growth and increasing corporate value over the medium- to long-term. For this reason, the Company is currently reforming its earnings structure, including moves to expand its broadcasting-related business and operations outside of Japan and setting growth investment ceiling, so as to achieve the Group Growth Vision. Consequently, the Company is not yet at a stage allowing for the disclosure of numerical targets regarding capital efficiency indicators even as it aims to improve those figures. We continue to actively examine options that will enable the disclosure of a capital policy that includes definitive numerical data taking into account the progress of growth investments.
2. Profit distribution policy
The Company positions the return of profits to shareholders as one of its most important management issues. Regarding profit distribution, in addition to considering suitable investments for future growth, the Company, in light of its position and responsibilities as a certified broadcasting holding company, takes steps to enhance and maintain its financial position, holds the consolidated payout ratio at 30% or higher, and aims for stable and continuous payment of dividends.
3. Policy for increasing funds, etc.
In the event of enactment by the Company of an increase in funds, MBO or other actions resulting in a large-scale change in capital composition, the Company, via the Board of Directors, will adequately examine the necessity and rationale of such actions, deciding only after proper procedures are conducted and ample explanation is given to shareholders. Doing so ensures no impairment of the interests of existing shareholders, and that the action will contribute to improvement of corporate value.
Article 5 General Meeting of Shareholders
In addition to provisions stipulated by laws and regulations, the Company enacts the steps below to promote constructive dialogue with shareholders and ensure the proper exercise of shareholder rights at the General Meeting of Shareholders, its highest-level decision-making body.
(1) The date of the Ordinary General Meeting of Shareholders is set to facilitate attendance by the largest number of shareholders.
(2) The General Meeting of Shareholders is held at a suitable venue considering factors such as the composition and number of shareholders.
(3) The meeting notification is sent out as early as possible from the date stipulated by laws and regulations, with the notification posted on the Companyʼs website before being sent out by mail.
(4) Efforts are made to include additional information not required by laws and regulations in the meeting notification.
(5) Reference materials attached to the meeting notification are available in English.
(6) Voting rights can be exercised electronically online.
(7) When proposing to shareholders that certain powers of the General Meeting of Shareholders be delegated to the Board of Directors, consideration should be given from the standpoint of agile decision-making and expertise in business judgment.
(8) When the Board of Directors recognizes that a considerable number of votes have been cast against a proposal at the General Meeting of Shareholders, it should analyze the reasons behind opposing votes and why many shareholders opposed. In particular, the Board of Directors explores response measures if votes in opposition to an agenda item exceed 30 percent.
(9) For cases in which institutional investors and similar entities that hold shares under the name of trust banks (shintaku ginko), etc. express an interest to attend the General Meeting of Shareholders, their presence at the meeting as observers will be permitted following completion of the requisite documentation. Furthermore, should these institutional investors and similar entities wish to exercise voting rights themselves at the General Meeting of Shareholders, the Company will work with the trust banks, etc. on this matter.
Article 6 Ensure the Equality of Shareholders
1. Basic policy
The Company takes substantive action to ensure the equality of its registered shareholders, with attention given to ensuring that shareholder rights are properly exercised and that its common interests with shareholders are not impaired.
2. Policy regarding tender offer bids
The Company will not adopt any so-called anti-takeover measures.
In the event that the Companyʼs shares are part of a tender offer bid, the Company will request that the bidder explain its intent and reasons for the proposed purchase so that the shareholders may properly decide whether or not to proceed. In parallel, the Company will take proper steps in order not to frustrate shareholder rights to sell their shares in response to the tender offer.
3. Policy on safeguarding the rights of minority shareholders
The Company has clerical procedures in place for the occurrence of various circumstances, including requests from shareholders to view copies of legal documents and shareholder-proposed agenda items, injunctions against illegal activities, and the emergence of shareholder lawsuits, and gives adequate consideration to the special rights that are recognized for enabling minority shareholders to properly exercise their rights.
Article 7 Policy Regarding Transactions Between Related Parties
Regarding transactions posing potential conflicts of interests for the Companyʼs directors, the Company periodically researches transaction information pertaining to the directors themselves and, in accordance with Japanʼs Companies Act, receives approval from the Board of Directors to conduct such transactions and reports the results to the Board.
With regard to all transactions, including transactions between related parties, the Company, in accordance with internal regulations, conducts such transactions following the requisite research and decisions depending on the scale and importance of the transaction. The content of such transactions is periodically audited by the Internal Audit Office.
Article 8 Ownership of Shares in Other Companies
1. Policy on ownership of shares of other companies
The Company does not deny the possibility of acquiring and holding indefinitely the shares of another company in relation to transactions in a particular business, or in cases in which such is deemed essential in order to build, maintain or strengthen cooperative relationships necessary for regional or broadcast development.
In cases involving the new acquisition of shares for purposes other than purely investment, following thorough examination of the purpose, intent, risks, effects and other aspects of the acquisition by the Investment & Financing, etc. Evaluation Committee, an advisory body to the Board of Executive Directors comprised of executive managing directors, approval is sought from either the Board of Directors or the Board of Executive Directors depending on the acquisition price.
For shares continuously held by the Company, the Investment & Financing, etc. Evaluation Committee considers each year factors such as the management status of the relevant company and the degree of relationship to the Company, examines the relevance and rationale for continued ownership, and reports its findings to the Board of Directors.
Reasons behind the ownership of individual publicly listed shares are stated in the Companyʼs securities report.
2. Policy on the exercise of voting rights
Regarding voting rights for shares held by the Company in invested companies, together with a detailed examination of the management status of the relevant company, the Company exercises such rights following a comprehensive investigation of each proposed agenda item to determine whether it will damage corporate value or the interests of the Company and other shareholders. In exercising voting rights, the Company, in accordance with internal regulations, seeks either the approval of the Board of Executive Directors or a decision for the relevant director in charge depending on the level of investment, etc.
Chapter 2 Encourage Active Information Disclosure and Dialogue with Shareholders and Investors
Article 9 Information Disclosure and Public Release
In terms of information disclosure and public release, the Company has defined an “IR and Information Disclosure Policy ” found on its corporate website (https://corp.asahi.co.jp/en) . A summary of the policy is described below.
1. Basic Policy on Information Disclosure and Public Release
To ensure shareholder equality on an ongoing basis and to deepen understanding of the Company among all stakeholders, the Company carries out timely and proper disclosure required by relevant laws and regulations. At the same time, it also proactively announces matters beyond disclosure required by law. In terms of content, the Company strives to deliver high-value-added, accessibly expressed content tailored to the attributes and concerns of the intended recipient.
2. Content of Information Disclosure and Public Release
The Company strives to disclose and release to the public the content described below to produce high-value-added information.
(1) Financial information
(2) Business information
(3) Information regarding management strategy (including medium-term business plans)
(4) Information regarding corporate governance
(5) Information on CSR and related topics
3. Decisions Regarding Information Disclosure and Public Release
The content, timing and method of information disclosure and public release are decided by the director responsible for information disclosure, both in accordance with relevant laws and regulations and after examination and confirmation with the Investor Relations Committee.
4. Method of Information Disclosure and Public Release
In addition to disclosure methods based on relevant laws and regulations, the Company strives to release information via its website, printed materials and other means, utilizing written information as well as videos, images and other tools.
The Company posts on its corporate website financial reports, corporate overviews and its corporate governance policy in English. As the percentage of non-Japanese shareholders increases, we will strive to expand our disclosure and public release of information in English going forward.
Article 10 Dialogue with Shareholders and Investors
Regarding the structure and initiatives for encouraging constructive dialogue with shareholders and investors, the Company has defined an “IR and Information Disclosure Policy” that is available on its corporate website (https://corp.asahi.co.jp/en) . A summary of the policy is described below.
1. Basic Policy on IR Activities
The Company recognizes all of its many stakeholders, including shareholders and investors, the Group’s viewers, listeners, advertisers, business partners, employees and local communities as supporters of the Group and ABC fans. Along with its current status and operating results, the Company conveys information on its management policies and growth strategies in a fair, accurate and accessible manner and strives to deepen understanding of the Group through robust communication with its diverse base of stakeholders.
The Company encourages active dialogue with shareholders and investors who are focused on corporate value from a long-term perspective.
2. Structure for Investor Relations Activities
The Company has developed the following system to encourage constructive dialogue with shareholders and investors, and to pursue proactive investor relations (IR) activities.
(1) Established a director responsible for IR.
(2) Established full-time IR duty personnel under the General Affairs Department of the General Affairs Division.
(3) Established an Investor Relations Committee to promote coordination between divisions and to examine disclosure and public release of IR activities and information.
(4) As a basic rule, directors are responsible for face-to-face discussions with shareholders and investors, with the decision made rationally based on shareholder and investor attributes and interests.
3. Method for Dialogue with Shareholders and Investors
The Company utilizes the following methods to conduct dialogue with shareholders and investors.
(1) Face-to-face individual meetings notably with principal shareholders and institutional investors
(2) Earnings briefings held for institutional investors and analysts (twice annually in Tokyo)
(3) Participation in company briefings and other events for individual investors (as needed mainly in Osaka and Tokyo)
(4) Sponsoring of shareholder social meetings (once annually in Osaka and Tokyo, from fiscal 2016)
(5) Various information posted to the corporate website
(6) Twice-annual publication of shareholder correspondence (business report)
4. In-house Feedback
Opinions and proposals from shareholders and investors collected from face-to-face meetings, briefings and other venues are recorded and preserved, then reported as needed to representative directors, the Investor Relations Committee, the Board of Executive Directors and others, where they are reflected in future management planning and IR activity policies.
5. Management of Important Facts and Information
In accordance with insider trading regulations and fair disclosure rules, the Company appropriately controls important facts and information during discussions with shareholders and investors as stated below.
(1) In accordance with internal regulations, we verify the existence of as-yet undisclosed but material facts and avoid discussing such matters with shareholders and investors.
(2) A “silent period” is observed three weeks prior to the announcement of financial results each quarter, during which we refrain from answering or commenting on inquiries pertaining to financial results.
(3) The Company will promptly release the information conveyed at its earnings briefings, etc. on its corporate website.
Important facts contained therein will be released at the same time as at the briefing.
6. Ascertaining Actual Shareholders
As necessary, the Company strives to properly ascertain the identity and trends surrounding its actual shareholders domestically and internationally.
Chapter 3 Promote Social Contributions and Diversity
Article 11 Social Contribution
1. CSR Policy
The Group, in light of its highly public nature, and in order to meet its social responsibilities as a regionally embedded corporate group, and has defined the “Asahi Broadcasting Group CSR Policy” regarding initiatives for social contribution activities that is available on its corporate website (https://corp.asahi.co.jp/en). A summary of that policy is described below.
(1) We provide broadcast programming and businesses that contribute to the preservation and advancement of the lives of citizens.
(2) We contribute to the revitalization of the region through locally embedded activities.
(3) We are concerned for the global environment and nature, and actively pursue awareness-raising activities in these areas.
(4) We tirelessly support children, who are our future.
(5) We encourage greater understanding of the broadcasting business to be a corporate group fully open and transparent to society.
2. CSR Report
Each fiscal year, the Company posts its achievements in social contribution activities on its corporate website.
Article 12 Promoting Diversity
At the Group, we have dubbed efforts to promote diversity, including promoting greater career opportunities for women, as “Making the Asahi Broadcasting Group More ‘Colorful’,” and have continued to take initiatives led by the Personnel Affairs Divisionʼs Diversity Promotion Department, established in June 2014.
The Group believes that fostering a corporate culture where everyone can reach their fullest potential will lead naturally to an environment where women can play an even more active part. With this in mind, we are creating a working environment where each person is respected and acknowledged irrespective of sex, age, nationality, religious preference, life stage, disability or sexual orientation, striving for a company where the diverse capabilities of every member of the ABC family can shine through.
For the aforementioned initiatives, the Company has defined a “Policy for Initiatives Making the Asahi Broadcasting Group More ‘Colorful’, ” found on its corporate website (https://corp.asahi.co.jp/en ).
Chapter 4 Strengthen the Functions of Directors, etc.
Article 13 Selection of Directors
1. Policy for selection of directors (composition)
Guided by the policy described below, the Company has configured its Board of Directors as its main business is the highly public, socially responsible broadcasting business.
(1) The number of directors is capped at 20 to allow for effective deliberation.
(2) The Board of Directors consists of diverse executive managing directors with the necessary experience, knowledge and skills to oversee the Companyʼs divisions and the business of its subsidiaries, together with diverse outside directors possessing a wealth of corporate management experience and insight.
(3) Of the Companyʼs directors, at least one-third are outside directors, several of whom are independent outside directors.
2. Criteria for selection of directors (qualifications)
Criteria for the nomination of candidates for director are stipulated in the Companyʼs basic regulations governing directors, formulated by resolution of the Board of Directors. These regulations are summarized below.
(1) Candidates with knowledge and experience that will enable them to soundly and properly manage or monitor the Group’s operations centered around broadcast business.
(2) Candidates with staunch ethical values that will enable them to faithfully execute their duties.
(3) Candidates possessing practical knowledge and mature decision-making capabilities.
(4) Candidates who can contribute to constructive deliberation at meetings of the Board of Directors.
(5) Candidates who do not meet any of the conditions for disqualification defined by Article 331 Paragraph 1 of Japanʼs Companies Act.
(6) Candidates meeting any other internally defined conditions.
3. Appointment procedures for director candidates
For the appointment of directors, the representative director, with reference to the Companyʼs policy for selection of directors and their qualifications, proposes candidates after close consideration of their professional background, insight, achievements, evaluations and other factors, as well as the overall composition of the Board of Directors. These proposed candidates are approved by resolution of the Board of Directors.
Article 14 Appointment of Audit & Supervisory Committee Members
1. Policy for appointment of Audit & Supervisory Committee members (composition)
Guided by the policy described below, the composition of the Companyʼs Audit & Supervisory Committee is designed for conducting effective audits.
(1) The total membership of the Committee is capped at five.
(2) Pursuant to Article 335 Paragraph 3 of Japanʼs Companies Act, more than half of the Audit & Supervisory Committee members are outside directors.
(3) Several of the Audit & Supervisory Committee members for appointment have insightful knowledge of finance and accounting.
(4) The Audit & Supervisory Committee consists of standing Audit & Supervisory Committee members with excellent data-gathering skills who are well versed in the Companyʼs operational execution, along with solidly independent outside Audit & Supervisory Committee members.
2. Appointment of Audit & Supervisory Committee Members (qualifications)
Criteria for the nomination of candidates for Audit & Supervisory Committee members are stipulated in the Companyʼs basic regulations governing directors, formulated by resolution of the Board of Directors with the consent of the Audit & Supervisory Committee. These regulations are summarized below.
(1) Candidates with the knowledge and experience necessary to properly audit the execution of duties performed by the Companyʼs directors and employees.
(2) Candidates with staunch ethical values that will enable them to faithfully execute their duties.
(3) Candidates possessing practical knowledge and mature decision-making capabilities.
(4) Candidates who can contribute to constructive deliberation at meetings of the Board of Directors and Audit & Supervisory Committee.
(5) Candidates who do not meet any of the conditions for disqualification defined by Article 331 Paragraph 1 and Article 331 Paragraph 3 of Japanʼs Companies Act.
(6) Candidates meeting any other internally defined conditions.
3. Appointment procedures for candidates for Audit & Supervisory Committee members
For the appointment of candidates for members of the Audit & Supervisory Committee, the representative director, with reference to the Companyʼs policy for appointment of Audit & Supervisory Committee members and their qualifications, proposes candidates after careful consideration of their professional background, insight, achievements and other factors, as well as the overall composition of the Audit & Supervisory Committee. These proposed candidates are approved by resolution of the Board of Directors, with the consent of the Audit & Supervisory Committee.
Article 15 Responsibilities of Directors
The responsibilities of directors are stipulated in the Companyʼs basic regulations governing directors, formulated by resolution of the Board of Directors. These regulations are summarized below.
(1) Directors must execute their duties in strict compliance with Japanʼs Companies Act and other relevant laws, the Companyʼs Articles of Incorporation, resolutions of the General Meeting of Shareholders and internal regulations, and are obligated to exercise their duties with caution befitting conscientious managers.
(2) Directors recognize their responsibility to act on behalf of shareholders. With ongoing improvement in the Groupʼs corporate value as the top priority, directors, in accordance with the Group’s management policies, and the Group’s medium-term business plans, must ensure proper cooperative efforts with stakeholders on an ongoing basis, and faithfully execute their duties while contemplating the public nature of the business as a certified broadcasting holding company and optimal profit for the entire the Group.
(3) Directors, as members of the Board of Directors, are aware of their responsibility to monitor and supervise, through deliberations of the Board of Directors, operational execution by the representative director and other directors, and strive to carry out this responsibility.
(4) Executive managing directors not only sit on the Board of Directors and other bodies, but in the operations they oversee are charged with timely and rational decision-making, along with working to manage and monitor those under their direct authority.
(5) Executive managing directors strive to develop and effectively operate a system of internal controls to ensure thorough compliance among employees and maintain corporate governance at the Company and its subsidiaries.
(6) Regarding management-related policies and improvements, the outside directors, based on their own individual experience and insight, offer advice for enhancing medium- to long-term corporate value of the Group.
(7) The independent outside directors supervise management by monitoring the appointment and dismissal of management team members and other important decision-making by the Board of Directors. In addition to monitoring conflicts of interest between the Company, its management team and controlling shareholders, the independent outside directors appropriately reflect at meetings of the Board of Directors the opinions of minority shareholders and other stakeholders from their position of independence from both the management team and controlling shareholders.
(8) Audit & Supervisory Committee members, recognizing their highly independent position for acting on the behalf of shareholders, are each aware of their responsibility to audit business execution by directors, including representative directors, from the standpoint of legal conformity and propriety, and strive to carry out their responsibilities.
Article 16 Independence Standards
The Company has defined Standards Concerning Independence of Outside Directors, and elects candidates who match these criteria. “Independence Standards for Outside Directors” is available on the Companyʼs website (https://corp.asahi.co.jp/en) , as well as in the Companyʼs “Corporate Governance Report” and “Securities Report”.
Article 17 Disclosure of Reasons for Selection of Director Candidates
The Company posts the reasons for its selection of individual candidates for director in the reference materials accompanying its notification of the Ordinary General Meeting of Shareholders. Reasons for the appointment of individual outside directors are also included in the Corporate Governance Report.
Article 18 Policy Regarding Concurrent Positions
1. Policy on concurrent positions
In the event that the Companyʼs directors serve concurrently as officers at other publicly listed companies, such concurrent positions are limited to a scope that does not conflict with attendance at meetings of the Companyʼs Board of Directors nor hamper the ability of outside officers to carry out their responsibilities.
2. Disclosure of concurrent status
The status of concurrent positions held by directors is disclosed in business reports and securities reports, and is disclosed in reference materials for officer candidates.
Article 19 Grooming and Appointment of Chief Executive Officer Successors
Highly public operations and a strong sense of social responsibility are highly prized characteristics in the Groupʼs mainstay broadcasting business; creativity, meanwhile, is critical to business development. Along with consideration of these business traits, the highest-ranking member of management is groomed and appointed from among the Groupʼs directors with business execution experience to enable the Board of Directors to properly evaluate the character of such individuals. When making appointments, the Board of Directors makes its decisions after examining reasons for the appointment, including consideration of the Companyʼs Business Philosophy and business plans.
Article 20 Evaluation of Executive Managing Director Performance
Evaluating the performance of executive managing directors is a vital responsibility of the Companyʼs Board of Directors. In evaluating each directorʼs record of achievements, the Board of Directors entrusts this task to the representative director; the representative director then performs an evaluation based on quantitative and qualitative achievements in light of the medium-term business plan, and proposes to the Board of Directors candidates for executive managing director for the upcoming business term.
Article 21 Remuneration Policy
1. Policy on remuneration for directors
The Company has defined a basic remuneration package for directors designed to fulfill its mandate from shareholders to retain outstanding human resources who match the criteria for appointment as Company directors. Furthermore, the Company adds a certain level of remuneration linked to short-, medium- and longterm business performance, from the standpoint of providing incentives to improve results. The underlying premise of this remuneration is to avoid creating situations in which the integrity or ethical values of directors could be compromised by undue pressure to achieve targeted operating results.
2. Procedures for deciding remuneration for directors
The Company has defined systems and standards of remuneration tailored to the occupational responsibilities of each director, pursuant to internal regulations formulated by resolution of the Board of Directors.
The amount of remuneration for directors (excluding directors who are Audit & Supervisory Committee members) is determined by resolution of the Board of Directors within the maximum amount approved by resolution of the 91st Ordinary General Meeting of Shareholders held on June 21, 2018 (￥500 million per year, of which remuneration for outside directors is no more than ￥50 million). Within the Board, by resolution, the decision is left to the discretion of the representative director, who decides the specific amount of remuneration for each director in line with the aforementioned internal regulations, and after close consideration of recent business results and other factors.
3. Remuneration for executive managing directors
Annual remuneration for executive managing directors is comprised of several components basic remuneration, performance allowance, job rank allowance and representative allowance with each defined based on specific calculation criteria. Bonuses for executive managing directors are paid once annually in accordance with the operating results for the previous fiscal year, subject to the condition that Group consolidated ordinary income is recorded.
4. Medium- to long-term incentive remuneration
To promote sharing of interests with the shareholders and create a medium- to long-term incentive with respect to the share price, the Company grants to executive managing directors restricted stock within a maximum amount of ￥80 million per year as monetary remuneration claims, in addition to the maximum amount of ￥500 million per year, by resolution of the Board of Directors; these shares cannot be sold during the directors' tenure.
5. Remuneration for outside directors
Remuneration for outside directors, taking into account their independence from business execution, has defined remuneration systems and criteria that exclude elements pegged to fluctuations in business performance.
6. Remuneration for Audit & Supervisory Committee members
The Company, through “Rules Regarding Remuneration for Audit & Supervisory Committee Members,” formulated from deliberations by the Audit & Supervisory Committee, has defined a decision-making policy with respect to remuneration for Audit & Supervisory Committee members.
Remuneration for Audit & Supervisory Committee members consists solely of annual remuneration. To attain fairness in the amount of remuneration for each Audit & Supervisory Committee member and ensure that auditing functions effectively, the amount of remuneration is determined through discussion of the Audit & Supervisory Committee within the maximum amount approved by resolution of the 91st Ordinary General Meeting of Shareholders held on June 21, 2018 (￥110 million per year, of which remuneration for outside Audit & Supervisory Committee members is no more than ￥30 million per year).
7. Retirement benefit payment system for officers
At the Ordinary General Meeting of Shareholders held on June 29, 2005, the Company passed a resolution to abolish its retirement benefit payment system for officers. For directors with significant duties and Audit & Supervisory Board members active as of the same meeting, retirement benefit payments are paid upon retirement to eligible members of each group for the period from the beginning of each of their tenures to the conclusion of the meeting.
Article 22 Authority of the Board of Directors and Efficient Business Execution
1. Purpose of the Board of Directors
The Board of Directors performs important decision-making regarding business execution at the Company, in accordance with areas stipulated by law, the Articles of Incorporation and regulations governing the Board of Directors. The Board is also charged with monitoring business execution carried out by directors.
2. Matters for resolution by the Board of Directors
The Company defines matters for resolution by the Board of Directors based on laws and regulations and the Articles of Incorporation and, by resolution of the Board of Directors, delegates to the Board of Executive Directors important decisions on execution of business, including the disposition and acceptance of material property and borrowing in a significant amount. Decisions on execution of business delegated to the Board of Executive Directors are promptly reported to the Board of Directors.
The items below are matters typically for resolution by the General Meeting of Shareholders that can now be resolved by the Board of Directors.
(1) Acquisition of own shares
(2) Interim dividends
(3) Partial exemption of responsibilities of directors
3. Board of Executive Directors
Twice a month, the Company holds meetings of the Board of Executive Directors. Consisting of directors responsible for business execution, this body decides on business execution not subject to resolutions by the Board of Directors and promotes the sharing of information. The Standing Audit & Supervisory Committee members also attend meetings of the Board of Executive Directors.
In principle, matters that come before the Board of Directors are deliberated first by the Board of Executive Directors.
The General Affairs Divisionʼs General Affairs Department, which serves as the secretariat for the Board of Directors, is also responsible for coordination and preparation of agenda items and materials for the Board of Executive Directors, conducting centralized assistance services.
4. Occupational authority of executive managing directors
The Companyʼs executive managing directors conduct appropriate and efficient business execution in accordance with rules governing occupational authority and assigned duties for officers decided by the Board of Directors.
Article 23 Business Plan Formulation, Realization and Verification
As a rule the Board of Directors, in line with the Group Business Philosophy, formulates the Group’s medium-term business plan once every three years and strives to achieve plan targets, with an eye to realizing the Group’s sustainable growth and improvement in medium- to long-term corporate value. Progress status of the medium-term business plan is constantly verified. In the event that targets are not reached, causes for this are analyzed and responses investigated, with findings reflected in plans for the upcoming business term.
Article 24 Evaluating Board of Directors Effectiveness
In addition to monitoring conducted by the Audit & Supervisory Committee to determine the overall effectiveness of the Board of Directors, all Directors undergo an annual self-assessment of Board effectiveness for the previous fiscal year by completing questionnaire surveys and taking part in interviews. In addition, opinions raised by Directors are summarized and the necessary improvements required to improve the overall effectiveness of the Board of Directors compiled, and an outline of these is disclosed together with the results of the self-assessment.
Article 25 Operation of the Board of Directors
1. Policy on operation of the Board of Directors
The Company has defined matters pertaining to the operation of the Board of Directors, guided by regulations governing the Board of Directors formulated by resolution of the Board. A summary of these matters is described below.
(1) The Board of Directors is comprised of all directors.
(2) In principle, ordinary meetings of the Board of Directors are held once monthly.
(3) A representative director specified in advance by the Board of Directors convenes meetings of the Board.
(4) The chair of the Board of Directors is a representative director specified in advance by the Board of Directors.
(5) The order of alternates for convener and chair are decided in advance.
(6) Notification of meetings of the Board of Directors shall include the date and time, venue and agenda items, and is sent to directors.
2. Secretariat of the Board of Directors
The General Affairs Department of the General Affairs Division serves as the secretariat for the Companyʼs Board of Directors. The department enacts the points described below in an effort to energize the deliberations of the Board of Directors.
(1) Directors are contacted in advance regarding annual schedules and planned agenda items.
(2) With the exception of emergencies, notifications of meetings of the Board of Directors are sent one week in advance.
(3) Materials prepared early are sent to directors in advance of the meeting.
(4) Outside of materials for the meeting of the Board of Directors, the department, when required, provides directors with information and materials pertaining to company operations and other topics in a timely manner.
Article 26 Training for Directors
1. Policy on training
In parallel with reconfirmation of knowledge and awareness among directors in areas such as management topics, the business environment, the law and corporate governance and others, the Company holds training seminars, both periodically and as needed, to which external experts are invited in order to understand new trends.
Additionally, along with supporting participation in external seminars and other opportunities, each director is provided, as needed, with information they will find useful as managers.
2. Training for newly appointed standing officers
For newly appointed standing directors, the Company provides opportunities to learn from predecessors, and conducts training sessions on fundamental knowledge considered essential as managers.
3. Explanations for newly appointed outside officers
For newly appointed outside directors, the Company combines observational visits to program production sites and other locations with explanations of topics such as its corporate history, operations, business policies, business plans and corporate governance.
4. Reporting to the Board of Directors
The Company regularly reports to the Board of Directors on the implementation status of training programs for directors.
Article 27 Support Structure for Directors
1. Point of contact for outside directors
The manager of the General Affairs Division’s Secretarial Department serves as the point of contact for outside directors. When outside directors request the provision of information or materials, the Secretarial Department coordinates with the General Affairs Department (the secretariat of the Board of Directors) to facilitate a response.
2. Burden of expenses
When provisional expenses arise from issues such as the hiring of attorneys, certified public accountants and other external advisors by the Companyʼs directors, the Company bears the burden of such expenses, excluding cases in which such expenses were acknowledged as unnecessary to the relevant directorʼs duties.
Article 28 Support Structure for Audit & Supervisory Committee
The Company has the following system in place to assist Audit & Supervisory Committee in their duties.
(1) The Company has established an Audit & Supervisory Committee Office to assist the duties of Audit & Supervisory Committee, and has formulated the “Regulations for Employees Assisting the Duties of Audit & Supervisory Committee” to ensure the independence and efficacy of the office.
(2) The Audit & Supervisory Committee Office consists of several individuals, including a dedicated office director, with ample consideration given to experience, knowledge and capabilities in the selection of employees.
(3) Employees attached to the Audit & Supervisory Committee Office follow the directives and orders of the Audit & Supervisory Committee.
(4) Transfers, performance reviews, and commendations or sanctions of dedicated employees attached to the Audit & Supervisory Committee Office occur with prior approval of the Audit & Supervisory Committee.
(5) The Companyʼs directors and employees are careful to avoid placing any undue constraints on the employees of the Audit & Supervisory Committee Office that might hinder their independence.
Article 29 System for Reporting to Audit & Supervisory Committee
The Company has the following system in place for properly reporting to Audit & Supervisory Committee.
(1) The general manager of the Companyʼs Compliance Division reports immediately to the Companyʼs Audit & Supervisory Committee upon receipt of reports of matters that could materially impact the operations or financial position of the Company and its subsidiaries, or reports of matters that could constitute compliance violations.
(2) When requested by the Audit & Supervisory Committee to provide reports on matters pertaining business execution, the directors and employees of the Company and its subsidiaries respond promptly to fulfill this reporting request.
(3) The Companyʼs Internal Audit Office and the Audit & Supervisory Board members of subsidiaries meet periodically, and as needed, with the Companyʼs Audit & Supervisory Committee to report on the status of internal audits, compliance, risk management and other relevant areas of the Company and its subsidiaries.
(4) The Company has formulated “Regulations Regarding Reporting to Audit & Supervisory Committee”; the Company strictly prohibits the taking of any negative actions against directors and employees of the Company and its subsidiaries who report to the Audit & Supervisory Committee as a consequence of their decision to report, and disseminates awareness of this policy throughout the Group.
Article 30 Ensuring the Effectiveness of Audits by Audit & Supervisory Committee
The Company has the following system in place to safeguard the effectiveness of audits by Audit & Supervisory Committee.
(1) The Companyʼs Standing Audit & Supervisory Committee members attend meetings of the Companyʼs Board of Directors, meetings of the Board of Executive Directors, and other important meetings, and are able to access minutes, circulars for approval and other documents related to business execution from important meetings.
(2) Each year, the Company develops a set budget to cover expenses that arise from the execution of duties by Audit & Supervisory Committee.
(3) The Company bears the cost of covering temporary expenses that arise in the performance of audits by the Companyʼs Audit & Supervisory Committee, including for the hiring of attorneys, certified public accountants and other external advisors, except in cases deemed unnecessary for the execution of the duties of the Audit & Supervisory Committee.
Article 31 Evaluation and Selection Criteria for External Accounting Auditors
The Audit & Supervisory Committee drafts criteria for the evaluation and selection of external accounting auditors; these criteria provide the basis for evaluating the independence, specialization and other aspects of the external accounting auditor.
Article 32 Audits by External Accounting Auditors
The Company enacts the following points with regard to audits by external accounting auditors.
(1) Adequate audit time is preserved to enable suitable audits.
(2) The accounting auditor regularly exchanges opinions with the representative director and directors responsible for accounting.
(3) When the external accounting auditor discovers or indicates any irregularities, defects or problems, in accordance with the Companyʼs Crisis Management Flow Chart, the Compliance Division researches and ascertains the event, providing necessary information to the relevant departments and reporting to directors in charge of those departments; if necessary, the Group Risk Management Countermeasures Committee is convened to develop a response.
Article 33 Coordination Among Outside Directors, Audit & Supervisory Committee, External Accounting Auditors and Internal Audit Divisions
The Company promotes coordination among the external accounting auditors and outside directors, Audit & Supervisory Committee and internal audit divisions primarily through interim and year-end audit reports.
Chapter 5 Establish and Effectively Operate an Internal Control System
Article 34 Compliance
The Company has the following system in place regarding compliance by its own directors and employees and those of its subsidiaries.
(1) The Group has formulated the “Asahi Broadcasting Group Compliance Charter” and the “Asahi Broadcasting Group Compliance Code of Conduct” to conduct compliance management based on strict legal and regulatory compliance and social consciousness.
(2) The Company has formulated the “Asahi Broadcasting Group Compliance Regulations” and established the Compliance Division under the director responsible for compliance, enacting a necessary framework for enabling directors and employees of the Company and its subsidiaries to act in line with legal and regulatory compliance and in a socially ethical manner.
(3) The Company has established an internal reporting desk within the Compliance Division, offering consultations to and receiving reports from the directors, employees and other relevant individuals of the Company and its subsidiaries regarding possible compliance violations.
(4) The Company has formulated rules regarding compliance reporting desks based on Japanʼs Whistleblower Protection Act, defining the investigation of and responses to reported information, while safeguarding confidentiality and prohibiting any mistreatment of those who come forward to report.
(5) The Companyʼs Compliance Division periodically reports to the representative director and Board of Directors on the operational status of systems pertaining to internal reporting.
(6) The Company and its subsidiaries have formulated “Regulations for Rejection of Antisocial Forces,” prohibits the provision of any profit or accommodation to antisocial forces, and is steadfastly committed to resisting any pressure from such forces.
Article 35 Internal Audits
The Company has the following system in place with regard to internal audits.
(1) The Company has established an Internal Audit Office under the direct authority of the Representative Director and President.
(2) The Company has formulated “Internal Audit Regulations” defining the basic parameters regarding audits, including audit criteria and standards; audits examine the operational status of business execution, compliance systems, risk management and the internal control systems of the Company and its subsidiaries, and are conducted to confirm that overall operations are being conducted appropriately in light of laws, regulations and the Articles of Incorporation.
(3) The Companyʼs Internal Audit Office confirms that its code of conduct, as an expression of the Companyʼs corporate culture and climate, is respected in letter and spirit, and whether it is being implemented.
(4) The Companyʼs Internal Audit Office prepares internal audit reports, which it reports to the Representative Director and President. The Representative Director and President makes improvements and takes other necessary measures based on the internal audit reports, and reports actions taken to the Board of Directors.
(5) The Companyʼs Internal Audit Office, as appropriate, reports to and coordinates with the Audit & Supervisory Committee on plans, outcomes and other areas regarding internal audits.
Article 36 Document Management
The Company has formulated “Document Management Regulations,” and conducts the appropriate preservation and management of documents pertaining to business execution by directors, including the minutes of the Board of Directors.
Article 37 Risk Management System
The Company has the following system in place to support the risk taking of its management team.
(1) The Company’s Compliance Division has formulated a risk management chart and “Risk Management Manual” for the Company and its subsidiaries, as part of appropriate risk management efforts. The Compliance Division has also formulated a “Crisis Management Flow Chart” to respond appropriately when risks emerge.
(2) To respond to risks related to television programming, broadcasting accidents and other risks, the Group has established under Asahi Television Broadcasting Corporation’s Board of Executive Directors a Broadcasting Problems Countermeasures Committee, Broadcast Programming Examination Committee and Broadcasting Accidents Countermeasures Committee along with a Group Risk Management Countermeasures Committee at the Company to address risks facing the Group as a whole.
(3) The Group has formulated a “Business Continuity Plan” and “Disaster Readiness Manual,” and strives to maintain broadcasting functions during times of disaster.
(4) The Company has established a Legal Department under the Compliance Division, devising a system that enables confirmation of legal risks accompanying business execution, while receiving advice from attorneys.
Article 38 Group Company Management
The Company has the following system in place to properly solicit reports from Group companies.
(1) The Company has formulated “Asahi Broadcasting Group Management and Administration Regulations” and defined rules concerning the sharing and reporting of information and business operations within the Group; in parallel, under “Group Companies Management and Administration Regulations” formulated by subsidiaries, subsidiaries are obligated to report operating results, financial position and other important information to the Company.
(2) The Company holds regular briefings with Group companies, and strives to share important information regarding management.
November 27, 2015 Resolution of the Board of Directors (Establishment)
June 23, 2016 Resolution of the Board of Directors (Revision)
March 30, 2018 Resolution of the Board of Directors (Revision)
June 21, 2018 Resolution of the Board of Directors (Revision)