Governance

Corporate Governance Structure

As a company with a Nominating Committee, etc., we strive to realize a system that enables prompt business operations and highly transparent management by thorough separation of management supervision and execution.

Corporate Governance Structure
Corporate Governance Structure

Basic Policy for Internal Control Systems

1. Systems to ensure that the execution of duties by the Company's executive officers and employees shall comply with laws and regulations and the Articles of Incorporation

  • (1) The Company has adopted the structure of a company with a Nominating Committee, etc., as its corporate governance structure, and the Board of Directors and the Audit Committee shall audit the legality and appropriateness of the execution of duties by the executive officers.
  • (2) The three committees shall consist of a majority outside directors to ensure transparency in the execution of duties by executive officers and employees.
  • (3) In order to establish compliance systems, the Company shall provide education and enlightenment via the Compliance Committee to foster a corporate culture that is trusted by society.
  • (4) The Office for Internal Audit shall periodically conduct internal audits independently of executive departments, report any problems to the President and Executive Officer (hereinafter “the President”) and Audit Committee, and take countermeasures.
  • (5) The Company shall promptly recognize and take action against any improper, illegal, or unethical acts by the organization or individuals through the whistle-blowing system, and shall prevent any prejudicial treatment of whistle-blowers.
  • (6) The Company shall have no relationship with antisocial forces or groups, reject any unreasonable demands from antisocial forces or groups, and take a firm stand against such forces or groups.

2. Systems for the storage and management of information related to the execution of duties by the Company’s Executive Officers

  • (1) Documents and electromagnetic records that record information related to the execution of duties by Executive Officers, such as minutes of Management Council meetings, decision-making documents, and minutes of various meetings, shall be stored and managed in accordance with laws, regulations, and internal rules.
  • (2) The storage and management of information related to the execution of duties by Executive Officers shall be subject to audit by the Audit Committee.

3. Regulations and other systems for managing the risk of loss to the Company

  • (1) The Board of Directors, Management Council, and other important meetings shall be held regularly to monitor and manage the progress of the Group's business and risks in a timely manner.
  • (2) The Office for Internal Audit shall collect and analyze risk information, report the results to the President and the Audit Committee, and discuss future policies.
  • (3) In preparation for unforeseen circumstances that may seriously affect the Company's management, the Company shall establish the "Toyoko Inn Group Emergency Response Regulations" and establish a system to respond appropriately and promptly.
  • (4) The Company shall establish the “Regulations for Information Management” concerning the protection of personal information and information security management, and thoroughly protect and manage such information.

4. A system to ensure that the Company's executive officers effectively execute their duties

  • (1) The Board of Directors shall, in principle, meet once a month to deliberate and decide important matters stipulated by laws, regulations, the Articles of Incorporation, and the "Rules of the Board of Directors" and to supervise the execution of duties by the executive officers.
  • (2) The Company shall establish a Management Council consisting of the Company's executive officers and the directors and employees of subsidiaries as an advisory body to the President on important management matters.
  • (3) In principle, the Management Council shall meet at least once a month to discuss matters delegated by the Board of Directors and matters to be submitted to the Board of Directors, in accordance with the "Rules of the Management Council”.
  • (4) At the Management Council and other important meetings, the status of business activities shall be checked and opinions shall be exchanged, and information shall be shared.
  • (5) The segregation of duties and authority of executive officers and employees shall be clarified in the “Regulations for Segregations of Duties", "Regulations for Administrative Authority," and other internal regulations to ensure that duties are performed appropriately and efficiently.

5. A system to ensure the appropriateness of business activities of the corporate Group consisting of the Company and its subsidiaries

  • (1) While respecting the autonomy of management of subsidiaries, the Company shall receive business reports regularly and discuss important matters at the Management Council and other meetings to ensure the appropriateness of business activities.
  • (2) The Company's executive officers and employees shall supervise the management and operations of subsidiaries by assuming posts as directors and auditors of the subsidiaries.
  • (3) The Office for Internal Audit, which reports directly to the President, shall also audit the execution of duties at subsidiaries.
  • (4) The Company shall receive reports on management plans prepared by subsidiaries and ensure that the functions and assets held by the Company are efficiently utilized.
  • (5) Transactions with subsidiaries shall be conducted properly in accordance with a basic contract and other agreements.

6. Matters concerning employees to assist the Audit Committee in its duties and ensuring the effectiveness of instructions to such employees

  • Office for Internal Audit employees shall assist the Audit Committee in its duties when necessary, and in such cases, shall comply with the Audit Committee's instructions and orders.

7. Matters concerning the independence of employees assisting the Audit Committee in the performance of its duties from executive officers

  • If dedicated employees are assigned to assist the Audit Committee in the performance of its duties, the employment, transfer, evaluation, and disciplinary action of such employees shall be performed only after obtaining the consent of the Audit Committee.

8. A system for directors, executive officers and employees of the Company and its subsidiaries to report to the Audit Committee and other matters concerning reports to the Audit Committee

  • (1) When a director, executive officer or employee of the Company or a subsidiary discovers any matter that may have a material impact on the Company's business activities or performance, or cause significant damage to the Company, they shall immediately report such matter to the Audit Committee.
  • (2) Notwithstanding the foregoing, the Audit Committee may request such reports from directors, executive officers and employees of the Company and its subsidiaries as necessary.

9. Matters concerning the procedures for prepayment or reimbursement of expenses incurred in the performance of the Audit Committee's duties and other matters concerning the policy for processing expenses or liabilities incurred in the performance of such duties

  • For expenses necessary for the performance of the Audit Committee's duties, the Company shall promptly comply with requests for reimbursement as soon as they are made, and ensure that the activities of the Audit Committee are carried out without restriction.

10. A system to ensure that other audits by the Audit Committee are conducted effectively

  • (1) Audit Committee members shall attend meetings of the board of directors and other important meetings to provide objective and impartial opinions regarding general management or individual matters.
  • (2) The Audit Committee shall coordinate with relevant departments, as necessary, through the Office for Internal Audit, as appropriate.
  • (3) The Audit Committee shall receive reports and explanations on the accounting audit from the Financial Auditors and exchange opinions, as necessary.
  • (4) The Audit Committee shall cooperate with legal counsel when deemed necessary in the performance of its duties.