Based on our corporate mission, we seek long-term and stable growth for our business. To achieve this, we must make transparent, fair, and timely decisions with an understanding of the standpoints of all stakeholders important to the Group, including users, clients, shareholders, employees, business partners, nonprofit and nongovernmental organizations, and local communities.
We believe that governance is a vital system to that end, as well as an indispensable component for continually enhancing our corporate value as an attractive company.
Corporate Governance Overview
Ensuring transparency, appropriateness, and effectiveness of management for the sustainable increase of enterprise value.
|Organization Form||Company with an Audit & Supervisory Board|
|Chairman of the Board of Directors||Masumi Minegishi|
|Number of Board Directors||Five members including two external members|
|Number of Audit & Supervisory Board Members||Four members including two external members|
|Fiscal Year 2016 Board of Directors Meetings|
|・Number of meetings||17|
|・Board Director average attendance||100%|
|・Audit & Supervisory Board Member average attendance||100%|
|Fiscal Year 2016 Audit & Supervisory Board Meetings|
|・Number of meetings||17|
|・Audit & Supervisory Board Member average attendance||100%|
|Election of Independent Officers||Two External Board Directors, one External Audit & Supervisory Board Member|
|Executive Remuneration System||1. Fixed remuneration
2. Short-term incentive plan: cash remuneration based on individual assessments for each fiscal year
3. Long-term incentive plan: stock remuneration based on attainment of the consolidated performance targets for each fiscal year
|Accounting Auditor||Ernst & Young ShinNihon LLC|
Previous Steps to Strengthen Corporate Governance
Steps to strengthen corporate governance include the introduction of the Corporate Executive Officer system and the Strategic Business Unit (SBU) system. We aim to continuously strengthen our systems in response to changes in the business environment.
|2000||Introduction of the Corporate Executive Officer system||· Separation of management and execution|
|2006||Introduction of the in-house company structure system||· Rapid response to environmental change
· Development of business managers
· Acceleration of business development
|2012||Transition to holding company structure and new Group setup||· Recruit Holdings: to focus on overseas development and R&D
· Operating companies to build competitive advantages and focus on achieving stable growth
|2016||Introduction of SBU structure||· Maximize value at the SBU level|
Board of directors
The Board of Directors, the group's highest decision-making body, provides monitoring and oversight functions on the business management of each group company. Recruit's Board of Directors consists of five directors, including two external ones. Through external representation on the Board, Recruit aims to strengthen its oversight of business execution and improve the transparency of its management.
As part of efforts to strengthen the management oversight function, Recruit has voluntarily installed six committees under the direct control of the Board of Directors. In regard to the nomination, evaluation, and remuneration of directors, Recruit has created the Nomination Committee, the Evaluation Committee, and the Remuneration Committee. By reporting the details of committee deliberations to the Board of Directors, Recruit is working to improve transparency. The majority of the members of the three committees are external officers, and the committees are also chaired by external officers.
Audit and supervisory board
The Audit and Supervisory Board, consisting of four corporate auditors, monitors and oversees the directors. Two of the four corporate auditors are external. The corporate auditors participate in important meetings, such as the Board of Directors and the Business Strategy Meeting, in order to audit the status of directors' business operations and the current status of internal control systems. In addition, a third-party audit firm is responsible for performing accounting audits and assessing the appropriateness and legality of accounting and internal controls in accounting from an objective standpoint.
Advisory body to the President, CEO, and Representative Director
In addition, Recruit has installed three voluntary committees under the direct control of the Business Strategy Meeting, an advisory body to the President, CEO, and Representative Director. Launched in November 2003, the Management Advisory Committee, consisting of outside experts and some of Recruit's directors and executive officers, actively exchanges opinions on key management issues.
Management Advisory Committee Members (as of April 2017)
- Mr. Atsushi Egawa, President and Country Managing Director, Accenture Japan Ltd
- Mr. Kohzoh Takaoka, President and CEO, Nestlé Japan Ltd.
- Mr. Kenichiro Yoshida, Board Director, Executive Deputy President and Chief Financial Officer, Representative Corporate Executive Officer, Sony Corporation
Recruit has also installed the Ethics Committee as a forum to carry out preliminary deliberation of disciplinary actions of Recruit's executives and employees.
|Major activities during the current fiscal year|
|Shigeo Ohyagi, Board Director||Participated in all 17 Meetings of the Board of Directors held during the current fiscal year. With his experience as Representative Director and President as well as Chairman of the Board of TEIJIN LIMITED, he makes statements from a practical perspective as an External Board Director, based on his deep insight cultivated through management of the global manufacturing company.|
|Yasushi Shingai, Board Director||Participated in all 17 Meetings of the Board of Directors held during the current fiscal year. With his experience as Executive Deputy President, Representative Director, Assistant to CEO of JAPAN TOBACCO INC., he makes statements from a practical perspective as an External Board Director, based on his deep insight cultivated through the acquisition of foreign corporations, etc.|
|Hiroki Inoue, Audit & Supervisory Board Member||Participated in all 17 Meetings of the Audit & Supervisory Board during the current fiscal year. He makes statements from a neutral and objective perspective as an External Audit & Supervisory Board Member, based on his deep insight into corporate legal affairs cultivated through experience as a lawyer.|
Evaluation of the Effectiveness of the Board of Directors
Self-evaluations were conducted in the following manner with respect to the meetings of the Board of Directors held during fiscal year 2016.
[Details of the self-evaluation]
● Persons evaluated: Board Directors and Audit & Supervisory BoardMembers of Recruit (10 persons in total)
● Evaluation period: From end of March 2017 to mid-April 2017
● Summary: Individual interviews were conducted, as necessary, based on the preliminary aggregate results of replies to a questionnaire survey that consists of items such as the appropriateness of the roles and responsibilities of the Board of Directors; the appropriateness of the organizational structure and composition of the Board of Directors; the appropriateness of the qualities and knowledge of Board Directors; the effectiveness of deliberations by the Board of Directors; the effectiveness of checks and balances and oversight functions performed by and between Board Directors who are also Corporate Executive Officers; and the appropriateness of deliberations from the perspective of shareholders and other stakeholders, as well as open-ended questions.
[Results of analysis and evaluation]
● The organization structure and composition of the Board of Directors as well as the qualities and knowledge of Board Directors are adequate inconducting deliberations.
● The level of agenda standards of the Board of Directors is adequate, and the Board proactively and continually carries out initiatives for prior distribution of materials and improvement of sharing methods.
● The Board of Directors conducts candid deliberations. Based on the above, the Company's Board of Directors is deemed to be adequately fulfilling its roles and responsibilities both in terms of decisionmaking and supervision over business execution.
[Issues to be addressed]
In the course of the analysis and evaluation, constructive opinions were voiced that efforts should be made to enhance the effectiveness of the Board of Directors by further raising the precision of the agenda and the points of issue for improving enterprise value in the mid- to long-term. Going forward, the Company will endeavor to enhance the deliberations of the Board of Directors and its effectiveness.
To create a governance system emphasizing compliance, the Company appoints External Board Directors on its board and has adopted the "company with an Audit & Supervisory Board" form of organization (as defined in Japan's Companies Act), in which Audit & Supervisory Board Members oversee the activities of Board Directors and the Board of Directors. At the same time, we appoint External Board Directors and External Audit & Supervisory Board Members in the interest of accountability to shareholders and other stakeholders, the provision of management advice, and the maintenance of checks on the execution of business activities. We strengthen the management oversight function by establishing committees such as the Nomination, Evaluation and Remuneration Committees directly under the Board of Directors.
To achieve rapid decision-making, Corporate Executive Officers, who are also Board Directors, are appointed and vested with decision-making authority for certain important matters of business execution. In view of the contributions of External Board Directors and the performance of the Audit & Supervisory Board, our present corporate governance system is judged to be functioning properly.
Officer remuneration policy
The Company has established the Evaluation Committee and the Remuneration Committee chaired by an External Board Director as advisory bodies to the Board of Directors for the purpose of enhancing objectivity and transparency of remunerations for executives. In terms of the amount of officer remuneration, remuneration for Board Directors is determined by the Board of Directors taking into account the reports by the Evaluation Committee and the Remuneration Committee, while remuneration for Audit & Supervisory Board Members is determined on the basis of consultation among the Audit & Supervisory Board Members, within remuneration ranges approved by the General Meeting of Shareholders.
External Board Directors are selected based on the independence criteria prescribed by the Tokyo Stock Exchange, as well as individual insight and capabilities in fulfilling duties and responsibilities as an External Board Director, regardless of gender, age and nationality.
In addition, the Company appoints external compensation consultants with a view to introducing objective viewpoints from outside the Company and expertise on officer remuneration systems. With their support, the Company reviews its remuneration standard and remuneration systems in light of external data, economic environment, industry trends and business conditions, among others.
For the fiscal year ended March 31, 2017, remunerations for Board Directors and Audit & Supervisory Board Members were as follows.
|Executive position||Number of grantees||Total remuneration
|Allowance for retirement benefits, etc.
|Board Directors (Excluding External Board Directors)||4||826 million||250 million||129 million||445 million||2 million|
|Audit & Supervisory Board Members (Excluding External Audit & Supervisory Board Members)||3||68 million||66 million||2 million|
|External Officers||5||53 million||53 million|
(Note 1) A resolution setting the upper limit on remuneration for Board Directors at 50 million yen per month was passed at the 31st Ordinary General Meeting of Shareholders held in June 1991.
(Note 2) A resolution setting the upper limit on remuneration for members of the Audit & Supervisory Board at 10 million yen per month was passed at the 57th Ordinary General Meeting of Shareholders held in June 2017.
For the fiscal year ended March 31, 2017, individual remunerations for officers (limited to officers whose total remunerations on a consolidated basis is 100 million yen or more) were as follows.
|Name||Executive position||Type of company||Total remuneration
|Allowance for retirement benefits, etc.|
|Masumi Minegishi||Representative Director||The Company||302 million||85 million||41 million||175 million||0 million|
|Shogo Ikeuchi||Board Director||The Company||168 million||55 million||27 million||85 million||0 million|
|Shigeru Kusahara||Board Director||The Company||186 million||55 million||31 million||100 million||0 million|
|Keiichi Sagawa||Board Director||The Company||168 million||55 million||27 million||85 million||0 million|
Policy on strategic shareholdings
In principle, the Company will purchase the shares of business partners when there is judged to be a business purpose in doing so. Decisions on whether to make such share purchases are made based on an overall assessment of the amount to be invested and the benefits to the Group of strengthening the business relationship.
Voting rights for policy shareholdings are appropriately exercised based on detailed analysis of matters to be voted upon and an assessment of what would be in the best interests of shareholder value. Affirmative votes will not be cast when doing so would clearly result in damage to shareholder interests. If a vote is cast against the matter to be voted upon, a report to such effect is given at the Board of Directors.