T&D Holdings, Inc. (the “Company”) has been enhancing its corporate governance on the basic approach of creating efficient and transparent management systems to facilitate flexible and cohesive group operations.
The Company values the purport of the Japan’s Corporate Governance Code (the “Code”), which applies to listed companies, and has accepted all the principles of the Code while establishing the Basic Policy on Corporate Governance as an initiative in response to the major principles.
Basic Approach
The Company aims to achieve sustained growth and improvement of corporate value over the medium- to long-term by continuing to strengthen corporate governance, as described below.
- The Company shall respect the rights of shareholders and strive to develop a conducive environment for shareholders to appropriately exercise those rights. Efforts shall also be made to ensure the effective equality of all shareholders.
- The Company shall strive to foster a sound corporate culture and work environment by appropriately collaborating with a variety of stakeholders, including customers, shareholders, employees, insurance agents, business partners and local communities.
- The Company shall strive to increase the transparency of management through appropriate and timely disclosure of corporate information, including financial information and non-financial information regarding management strategies, management priorities and other matters.
- The Company shall strive to ensure the effectiveness of the Board of Directors’ oversight function over the execution of business as the holding company responsible for the business execution management function of each T&D Life Group (the “Group”) company.
- The Company shall engage in constructive dialogue with stakeholders in order to contribute to the sustainable growth and the enhancement of corporate value over the medium and long term.
Promoting Group Management
The Company, as a holding company, fulfills the roles of deciding on the Group’s strategy, appropriately allocating the Group’s business resources and formulating capital strategies. Along with this, the Company shall strive to establish a Group business management system through such means as rigorously enforcing Group-wide risk-return management by accurately grasping the business risks borne by its five directly owned subsidiaries, centered on affiliates Taiyo Life Insurance Company, Daido Life Insurance Company, T&D Financial Life Insurance Company, as well as T&D Asset Management and Pet & Family Small-amount Short-term Insurance.
The directly owned subsidiaries, with their own unique business strategies, aim to expand the Group’s corporate value by maximizing their uniqueness and specialization through determining marketing strategies and operating businesses in line with their strengths.
In this way, the Group is promoting group management by clarifying the respective roles and responsibilities of the Company and its directly owned subsidiaries.
Corporate Governance System
The Company shall make decisions on important business matters and oversee the execution of business through its Board of Directors. The Company is a “Company with Board of Auditors.” Accordingly, the Company shall audit the performance of directors’ duties through its Audit & Supervisory Board and audit & supervisory board members, which are independent of the Board of Directors.
In addition, the Company has introduced an executive officer system for the purpose of bolstering its business execution capabilities. By sharply delineating responsibilities for oversight and execution, the Company shall strengthen the governance function of the Board of Directors.
Furthermore, the Company shall establish a Nomination and Compensation Committee as an advisory body to the Board of Directors for the purpose of discussing the fairness and appropriateness of the appointment and compensation of directors and audit & supervisory board members, among other related issues, as well as for ensuring the transparency of management and enhancing accountability.
| (1) Shareholders’ Meeting | The Shareholders’ Meeting is the highest decision-making entity of the Company. At the meeting, reports are made on the Group’s business and consolidated/ non-consolidated financial statements, and resolutions are made on important issues, which are stipulated in laws and ordinances and the Articles of Incorporation, such as the appropriation of retained earnings and election of officers. The Ordinary General Meeting of Shareholders is held once a year. |
|---|---|
| (2) Board of Directors | The Board of Directors makes resolutions on important issues related to the business execution of the Company, and oversees the performance of directors and executive officers. |
| (3) Audit & Supervisory Board Members and the Audit & Supervisory Board | The Audit & Supervisory Board members audit the performance of duties by directors, and give proposals, advice, and suggestions to directors and the Board of Directors to ensure the sound management of the Company. The Audit & Supervisory Board reports on important issues regarding audits performed by each Audit & Supervisory Board member, which are then deliberated and resolved. |
| (4) Executive Committee | The Executive Committee consists of the president, vice president and executive officers. The Executive Committee discusses important issues such as strategies related to the business management of the Group. |
| (5) Group Management Committee | The Group Management Committee consists of members including the president of the Company and the presidents of the three life insurance companies. The Group Management Committee discusses important issues such as the Group’s cross-sectional strategies. |
| (6) Committees | Committees discuss the strategies and matters of the Company or those common to the Group. |
Roles of the Board of Directors
The Board of Directors shall make decisions on important business matters and oversee the execution of business in accordance with laws and ordinances, the Articles of Incorporation, and the Company’s relevant rules.
The Company’s Board of Directors has entrusted all authority related to the execution of business, other than matters stipulated in the preceding paragraph, to the representative director and president. Furthermore, the representative director and president delegates authority related to the execution of business to executive officers in charge of business operations for the purpose of separating oversight functions and business execution functions. This framework is designed to facilitate decision-making for business execution matters.
Composition of the Board of Directors and Directors
The number of directors shall be no more than 12 as stipulated by the Articles of Incorporation. The Board of Directors shall be made up of individuals representing a balance of knowledge, experience and skills, and having diverse backgrounds as befitting the expansive range of business domains in the life insurance business.
Moreover, the Company shall appoint two or more directors who concurrently serve at the Company and its directly owned subsidiaries, including the presidents of the three life insurance companies. This shall be done from the standpoint of facilitating adequate communication and rapid decision-making within the Group, along with bolstering Group-wide governance.
Furthermore, the Company shall appoint two or more outside directors to appropriately reflect the opinions of individuals with extensive experience and knowledge in their capacity as outside corporate managers, legal experts and so forth in the Group’s management policies and development of internal controls and other systems as well as in the oversight of the execution of business.
Effectiveness Evaluation of the Board of Directors
To ensure the effectiveness of the Board of Directors, the Company conducts an annual performance review of the Board of Directors as a whole based on the self-evaluations of individual directors. The performance review examines whether the Board of Directors is functioning appropriately and producing results, and how the Board of Directors is contributing to increasing the Company’s corporate value over the medium- to long-term.
Looking at the effectiveness of the Board of Directors as a whole in fiscal 2016, the Company conducted an analysis and evaluation of its Board of Directors based primarily on self-evaluations of individual directors and Audit & Supervisory Board members, as well as interviews with these individuals.
The main items of the self-evaluation questionnaire are as follows.
(1) Function of the Board of Directors
(2) Composition of the Board of Directors
(3) Operation of the Board of Directors
(4) Provision of information to Outside Directors/Auditors
(5) Trainings
(6) Overall assessment
The Company considers that the Board of Directors of the Company as a whole is generally performing its roles and responsibilities effectively.
Matters that were recognized as issues to be addressed (methods of deliberation, explanation and preparation of materials, etc.) in the fiscal 2015 assessment have generally been improved.
Regarding the development of a framework for activating the Board of Directors, the Company continues to recognize the necessity for improvement. For example, the Company will strive to review methods for deliberation/preparation of materials at the Board of Directors, as well as improvement of executive training. In addition, the Company will promote diversification in the composition of the Board of Directors.
Based on the assessment of effectiveness and other information, the Company is working to further improve the supervisory functions and decision-making processes of the Board of Directors.
Risk Management
In light of the important social role played by its life insurance business, the Group considers the accurate assessment and control of risk to be one of the top management priorities for ensuring sound and appropriate management. Under the supervision of the Company, each Group company carries out appropriate risk management based on the principle of self-responsibility.
Furthermore, the Group conducts integrated risk management through such means as utilizing risk management indicators based on economic value, which values assets and liabilities on a mark-to-market basis.
Basic Policy on Risk Management and the Risk Management System
The Group has established a Group Risk Management Policy that sets forth the basic concepts for managing risk within the Group. Based on this policy, the Group companies, including the three life insurance companies, have developed their risk management systems which include their affiliates.
The Company has established the Group Risk Management Committee as a subordinate body of the Executive Committee to supervise the risks within the Group. The Group Risk Management Committee grasps and manages the condition of each Group company’s various risks by receiving reports based on unified risk management indicators regularly or on an as-needed basis from the Group companies including the three life insurance companies. Meetings of the Group Risk Management Committee are held once a month in principle.
In addition, the Company reports the risk condition of each Group company to the Board of Directors and on an as-needed basis, provides guidance and advice to the Group companies including the three life insurance companies. This not only ensures that each of the companies conducts thorough risk management but also strengthens Group-wide risk management.
Compliance
Basic Compliance Policies
The Group has formulated the T&D Life Group CSR Charter, the T&D Life Group Compliance Code of Conduct, and the T&D Life Group Basic Policy for Strengthening the Compliance Structure. The Group ensures that corporate officers and employees are conversant with these basic compliance policies and standards to promote rigorous Group-wide compliance efforts.
Compliance Promotion System
The Company is responsible for comprehensively promoting compliance throughout the Group, taking into account the business scale and special characteristics of the three insurance companies and other Group companies.
The compliance promotion system centers on the Group Compliance Committee, a subordinate body of the Board of Directors. The committee is responsible for monitoring and improving compliance activities throughout the Group. Chaired by the president and comprising all directors and executive officers with responsibility for business execution, the committee deliberates on various compliance-related issues, and ensures that measures in line with those decisions are thoroughly implemented. Meetings of the Group Compliance Committee are held once a quarter in principle.
The unit responsible for comprehensively implementing compliance promotion activities is the Risk Management Department, which works with the compliance departments of each of the life insurance companies, while conducting periodic monitoring and providing guidance and assistance. Compliance promotion systems at the three life insurance companies are centered on the compliance committees and departments of each company.
Compliance Implementation
By implementing measures based on the basic policies and paying due consideration to the business scale and special characteristics of each Group company, the Group strives to ensure employee consciousness of compliance issues. For example, each Group company has established a Compliance Program to serve as a plan for ensuring strict compliance performance among all directors and employees. Moreover, the Group has created Compliance Guidelines to provide concrete explanations of how to thoroughly implement compliance regulations in the course of business operations.
Internal Reporting System
Within the T&D Life Group, the life insurance companies and other Group companies previously operated their own internal reporting systems. In April 2005, however, the T&D Life Group Helpline was established for use by all corporate officers and employees in the Group. Ahead of the Whistleblower Protection Act of April 2006, this system means that rules applied to the T&D Life Group Helpline include the stipulation that whistleblowers will not suffer any disadvantageous treatment as a result of using the system to submit information relating to suspected compliance violations, and that rules have been made about paying attention to handling information. As a result, compliance-related reports can also be submitted anonymously by phone or online through an external independent company to help preserve anonymity, thereby enhancing the effectiveness of the system. The T&D Life Group is committed to promoting greater compliance through the use of this internal reporting system.
Initiatives to Protect Personal Information
In complying with the Act on the Protection of Personal Information, the Company manages critical information security for personal data in particular, and monitors mechanisms for securely handling information across the T&D Life Group. As specific Group measures to protect personal information, the Company has put organizations and managers in charge of advancing the protection of personal information at the three life insurance companies, updated rules and manuals for protecting personal information, created and published the Privacy Policy for Personal Information Protection, and implemented training for employees about the protection of personal information.
Accountability
The Company works to disclose information in line with the basic concept of striving to increase the transparency of management by appropriately disclosing corporate information, including appropriate financial information and non-financial information regarding management strategies, management priorities and other matters.
In specific terms, the Company strives to provide easy-to-understand disclosure based on its core disclosure principles of timeliness, fairness and accuracy in order to maintain and reinforce trust among all of its stakeholders, including customers, shareholders, employees, insurance agents, business partners, and local communities, and to increase the level of transparency in its corporate governance.
In releasing information, the Company strives to disclose information to as many people as possible using various media.
Furthermore, the Company is actively engaged in IR activities based on its IR policy, while ensuring that briefings are provided by members of senior management, in principle.
Basic Policy for Responding to Antisocial Forces
In its Group Compliance Code of Conduct, the T&D Life Group defines its policy toward antisocial forces as to “reject and stringently respond to any antisocial forces which threaten the order and safety of the civil society.” In accordance with this policy, the Group responds to antisocial forces in the following manner, and has announced this on the Company’s website.
1. Response as an Organization
When antisocial forces make unreasonable demands, the Company responds as a unified organization, rather than delegating this responsibility to the related personnel or divisions. Further, the Company takes steps to ensure the safety of the corporate officers and employees responsible for dealing with such unreasonable demands.
2. Cooperation with External Expert Organizations
The Company maintains close contact with external organizations, such as the police, the National Center for the Removal of Criminal Organizations, and lawyers, to protect itself against unreasonable demands from antisocial forces.
3. Ban Any Relations Including Transactions
The Company bans any relations including transactions with antisocial forces. In addition, the Company does not cooperate with unreasonable demands from antisocial forces. The same applies to loans and other transactions conducted in alliance with other companies, such as credit sales firms.
4. Legal Responses, Both Civil and Criminal in the Event of an Emergency
When necessary, the Company will take legal action in response to unreasonable demands from antisocial forces, including bringing civil and criminal charges against these forces.
5. Prohibition of Engagement in Secret Transactions and Provision of Funds
Even in the event which unreasonable demands of antisocial forces are in response to misdeeds in the Company’s business operations or by its corporate officers or employees, the Company will not engage in secret transactions with these forces to conceal the fact. Further, the Company will never provide funds to antisocial forces.
Status of Development for Eliminating Antisocial Forces
1. Establishment of a Supervising Department
The Company has established a supervising department and is cooperating with relevant departments to establish a system for eliminating antisocial forces.
2. Cooperation with External Expert Organizations
The Company has established links between the legal counsel and local police.
3. Collection and Management of Information Relating to Antisocial Forces
The Company strives to collect information related to antisocial forces through affiliated organizations and so forth.
4. Preparation of a Response Manual
The Company has provided antisocial forces response regulations and detailed rules, and established a guideline for responding to antisocial forces.
5. Conducting Training Activities
The Company has established a training plan for its compliance programs and conducts regular annual training on how to ban any relations with antisocial forces.
