Basic Policy on Corporate Governance
The management philosophy of the Company is expressed in its Basic Principle, Vision, Mission and Values:
We are focused on creating new value for our society to continue to a brighter world where all individuals can live life to the fullest.
Follow Your Heart
Opportunities for Life.
Faster, simpler and closer to you.
Wow the World
Bet on Passion
Prioritize Social Value
Guided by Recruit Group Management Philosophy, the Board of Directors prioritizes corporate governance policies and practices that are designed to achieve long-term growth, increased corporate and shareholder value, and benefits for all of our stakeholders. Our stakeholders include employees, individual users and business clients, as well as our shareholders, business partners, non-profit organizations (NPOs) and non-governmental organizations (NGOs), national and other governments, and local communities.
In order to further enhance corporate value in the future, the Company believes it is important to prosper together with all stakeholders through all corporate activities with a sound governance foundation. Therefore, the Company has redefined its commitment to sustainability as well as setting ESG targets, and defines corporate governance as one of our material foundations for our corporate activities, and prioritizes related initiatives.
Corporate Governance Overview
The Company's corporate governance structure is a "Company with an Audit & Supervisory Board" as defined under the Companies Act of Japan. In this structure, Audit & Supervisory Board members appointed by shareholders conduct audits of the execution of the duties by Directors as an independent body from the Board of Directors. This is the foundation for the Company's efforts to ensure and improve transparency, soundness, and efficiency of management.
Under this structure, the Company has appointed multiple outside Directors of the Board and outside Audit & Supervisory Board members who are highly independent. The Company also has voluntarily established committees to serve as advisory bodies to the Board of Directors, including the Nomination, Compensation, Compliance, Risk Management, and Sustainability Committees. To enhance independence, the Nomination and Compensation Committees are all chaired by Independent Directors of the Board and have a majority of outside members.
Annually, the Board of Directors analyzes and assesses its own effectiveness, confirms whether deliberations are conducted properly from the perspective of various stakeholders, and carries out initiatives for improvement.
Furthermore, the Company has appointed Corporate Executive Officers, and established the Business Strategy Meeting to serve as an advisory body to the CEO in order to enhance the Company's decision-making process and execution. The Business Strategy Meeting discusses important matters for the Company and the CEO approves the execution of such matters.
The Company has organized management units called Strategic Business Units ("SBU"). Each SBU has established a managing company, or SBU Headquarters, which manages the subsidiaries of each SBU.
After deciding basic management policies and important matters, and clarifying the scope of responsibilities, the Board of Directors delegates certain decision-making authority to the Business Strategy Meeting, SBU Headquarters, and other relevant bodies.
Through this arrangement, the Company aims to ensure that our corporate governance mechanisms are functioning sufficiently, both in terms of timely decision-making and effective internal control.
Corporate Governance Structure
The following are the SBU Headquarters:
- HR Technology SBU : RGF OHR USA, Inc.
- Media & Solutions SBU : Recruit Co., Ltd.
- Staffing SBU : RGF Staffing B.V.
Important decisions for the SBUs are made by the Board of Directors of each SBU Headquarters. The majority of the Board of Directors of each SBU Headquarters comprises non-Executive Directors of the Board who are appointed by the Holding Company. President/CEO of SBU Headquarters concurrently serve as Corporate Executive Officers of the Holding Company.
Board of Directors
Role of the Board of Directors
The Board of Directors seeks to increase enterprise and shareholder value in the mid- to long-term. The responsibilities of the Board of Directors include:
- Setting basic management policies to achieve the Company's strategic objectives
- Conducting oversight of operations and management
- Making decisions that could have a major impact on the Company
- Resolving matters required to be resolved by the Board of Directors as stipulated in relevant laws and regulations
Board of Directors meetings are held once a month in principle. The Board of Directors makes decisions on matters which significantly impact the Company's corporate governance and/or the Company's consolidated financial performance, such as investments above a certain threshold and key personnel matters. The Board of Directors delegates authority over other business matters to the Business Strategy Meeting and other decision-making bodies according to their appropriate level of responsibilities.
Criteria for determining organizational decision-making authority are set forth in the rules on decision-making authority. These rules are reviewed annually by the Board of Directors and revised as necessary.
When proposing to shareholders that certain matters for resolution at the Annual Meeting of Shareholders be delegated to the Board of Directors, a Board of Directors meeting attended by two Independent Director of the Board and two outside Audit & Supervisory Board members considers whether the Board of Directors is adequately constituted to fulfill its corporate governance roles and responsibilities, and whether such delegation is desirable from the perspectives of agile decision-making and expertise in business judgment.
Composition of the Board of Directors
The Board of Directors is composed of six Directors, including two Independent Directors.
As a result of its growth, the Company today operates across many business sectors and geographic locations, engages with a broad universe of individual users and business clients, and employs people from diverse backgrounds. The Company recognizes that the Board of Directors should reflect this diversity to ensure that it sustains the high-quality discussions that drive innovation and the long-term success of the Company.
As for the size of the Board of Directors, the Company believes that the Board of Directors should have an appropriate number of members in order to foster high-quality discussions. Under the Company's Articles of Incorporation, the Board of Directors may have a maximum of eleven Directors.
In addition, beginning April 1, 2021, we have changed to a structure in which different persons serve as the Chairperson of the Board of Directors and the CEO. We believe that checks and balances will be more effective and this will contribute to the strengthening of governance by separating the roles of the Chairperson of the Board of Directors and the CEO.
Approach to Selecting Directors of the Board
The approach to selecting candidates for the Board of Directors is to choose qualified personnel from a pool of diverse candidates who can fulfill the duties and responsibilities of the position by considering their skills, leadership and professional experience, personal background, judgment, personality, and insight, without discrimination based on attributes of gender, age, nationality or ethnicity. Current Directors who are considered for renomination are evaluated on these criteria as well as their performance on the Board and number of terms of office.
In order to further improve the quality of management decision-making, the Company is working to increase the diversity of the Board of Directors. The Company has specifically set a target for gender, and aims to propose candidates for election to its Annual Meeting of Shareholders, to achieve an approximately 50% ratio of women out of the total number of Directors of the Board and Audit & Supervisory Board members by FY2030. As of June 18, 2021, two of the ten members of the Board of Directors including Audit & Supervisory Board members are women.
The Company has a policy that at least one third of the Directors of the Board are Independent Directors who maintain appropriate separation from management execution. As of June 18, 2021, there are six Directors of the Board, of which two are reported as Independent Directors to the Tokyo Stock Exchange. Outside Directors are selected based on the above criteria as well as their management experience at corporations operating globally and/or that are publicly listed.
The Company expects Independent Directors to play the following roles in addition to supervising the management of the Company:
- To provide the Company with advice based on their management experience in corporations operating globally and/or that are publicly listed, which are necessary for the Company to further enhance its enterprise value and shareholder value in the mid- to long-term period.
- To play a leading role in matters related to selection and dismissal, evaluation and compensation of Directors of the Board and Corporate Executive Officers as a chair and/or member of the Nomination and Compensation Committees.
- To oversee decision-making in cases where any potential conflict of interest exists between Directors and the Company. The Board of Directors acts as the decision-making body for matters that may cause conflicts of interest by ensuring the decision is delivered under the presence of Independent Directors as well as outside Audit & Supervisory Board members.
In order to ensure that Independent Directors fulfill the above roles, the Company takes the following measures:
- To share and discuss the topics discussed during the Compliance Committee and Risk Management Committee with the Board of Directors for the purpose of creating an environment that allows Directors and Corporate Executive Officers to take appropriate risks when making decisions.
- To share and discuss the topics discussed during the Sustainability Committee as well as the voice of our shareholders with the Board of Directors for the purpose of ensuring the discussions at the Board appropriately reflect the diverse perspectives of our stakeholders.
In addition to the above mentioned Independent Directors, the Board appoints one non-Executive Director who does not execute business operations, but who has in-depth knowledge of and experience in the Internet industry.
Audit & Supervisory Board
Role of the Audit & Supervisory Board
The Audit & Supervisory Board is responsible for the following:
- Supervising the activities and performance of each Director of the Board as well as the Board of Directors as a whole and auditing the maintenance and operational status of internal control policies, procedures, and processes, based on the audit plan.
- Evaluating the appropriateness and performance of the Independent Auditor.
All members of the Audit & Supervisory Board attend the Board of Directors meetings as part of their oversight responsibilities. In addition, one or more standing Audit & Supervisory Board members must attend the Business Strategy Meeting to enhance the oversight function.
The Audit & Supervisory Board generally meets once a month and holds extraordinary meetings as needed.
Composition of the Audit & Supervisory Board
The Audit & Supervisory Board comprises four members, including two outside members. One substitute Audit & Supervisory Board member has been elected, in order to avoid any potential non-compliance with the statutory requirement that more than half of the members of the Audit & Supervisory Board be outside members.
Approach to Selecting Audit & Supervisory Board Members
The approach to selecting candidates for the Audit & Supervisory Board is to select qualified persons with suitable experience and capabilities and with the necessary knowledge in the areas of finance, accounting, and legal affairs, to fulfill the duties and responsibilities as an Audit & Supervisory Board member. The Company has two standing Audit & Supervisory Board members who deeply understand the business of the Company, and two outside Audit & Supervisory Board members, one with expertise in legal affairs and one with expertise in finance and accounting.
All the Audit & Supervisory Board members make efforts to continuously expand their knowledge in order to fulfill their audit function in areas such as finance, accounting, and legal affairs through appropriate training courses funded by the Company. For example, the Audit & Supervisory Board members seek to deepen their understanding of the latest accounting standards and important matters for auditing by taking relevant training and seminars offered by the Japan Audit & Supervisory Board Members Association or by outside audit and assurance firms.
Nomination and Compensation Committees
The Nomination and Compensation Committees advise the Board of Directors. Each committee has a majority of outside members and is chaired by an outside Director in order to enhance the transparency and objectivity of the decision-making process.
These committees review and consider the nomination, evaluation, and compensation of Directors and Corporate Executive Officers in each fiscal year. Final decisions are made by resolution of the Board of Directors.
The roles of each committee are as follows:
The Committee deliberates and reports to the Board of Directors on the following:
- Nomination, succession and dismissal of the CEO
- Appropriateness of the process for nominating and dismissing candidates for Directors of the Board and Corporate Executive Officers.
Succession planning for the CEO considers the role's desired skills and qualifications, the Company's strategic outlook and the Board's desired governance structure. The appointment of the CEO is approved by the Board of Directors based on the recommendation of the Nomination Committee.
Development plans for successor candidates are formulated based on the expected succession timing of the existing CEO and the Committee monitors the progress of these plans.
If the Company should face poor business performance and it is determined that this is the result of inadequate performance of the CEO, upon deliberation, the Nomination Committee may report its findings and recommend their dismissal to the Board of Directors.
Regarding the nomination of Directors of the Board and Corporate Executive Officers, discussions are held on the best management structure, taking into account the mid-to long-term governance policy and the timing of planned CEO succession. The Committee deliberates on the adequacy of the entire process above including selection of the candidates and resolutions by the Board of Directors.
Directors or Corporate Executive Officers can be dismissed in cases where it is recognized that they have significantly harmed the enterprise value of the Company due to violation of laws and regulations or other similarly significant reasons. In such cases, the Nomination Committee reviews the individual's conduct and makes a recommendation to the Board of Directors.
The Compensation Committee deliberates on policies relating to the determination of compensation for Directors and Corporate Executive officers, evaluation procedures, compensation structure, the individual evaluation of Directors of the Board and Corporate Executive Officers, as well as individual compensation amounts. Beginning on April 1, 2021, the Evaluation Committee and the Compensation Committee have been combined into one committee called the Compensation Committee.
In the latest fiscal year the two main topics deliberated and approved by the Evaluation Committee and Compensation Committee were as follows:
- The level and elements of executive compensation
- The Directors' individual performance evaluation and compensation
Business Strategy Meeting and Other Voluntary Committees
An advisory body to the Board of Directors chaired by the President, CEO and Representative Director of the Board. The Committee deliberates on compliance themes and measures of the Company. The Committee decides and evaluates action plans based on the information collected from the Holding Company's administrative departments and subsidiaries. The Compliance Committee's deliberations and decisions are reported to the Board of Directors for promoting a compliance mindset.
Risk Management Committee
An advisory body to the Board of Directors chaired by the Managing Corporate Executive Officer and Director of the Board in charge of the Risk Management Division. The Committee deliberates on key risk themes and measures of the Company. The Committee monitors the status of risk management at each SBU as well as identifies and determines the risks deserving of particular attention, which are reported to the Board of Directors.
An advisory body to the Board of Directors. Chaired by the Managing Corporate Executive Officer and Director of the Board in charge of sustainability. The Committee deliberates on the Company's sustainability strategy and monitors its progress. The Committee's participants include the CEO, the Chairperson, Corporate Executive Officers who are in charge of each SBU, and internal and outside experts.
The Committee addresses the sustainability agenda of the Company, aiming to prosper together with all stakeholders. Based on the Committee's deliberation, the Board of Directors then resolves the direction and action plans that promote the Company's sustainability activities, and monitors the progress.
Business Strategy Meeting
An advisory body to the CEO and chaired by the CEO, the meeting attendees deliberate on matters mainly relating to investments and personnel for which authority has been delegated by the Board of Directors. The meeting consists of Executive Directors of the Board, Corporate Executive Officers in charge of corporate functions and standing Audit & Supervisory Board members.
Talent Development Committee
An advisory body to the Business Strategy Meeting with participation by Corporate Executive Officers of the Company, the Committee deliberates on matters concerning the fostering of key talent, including the planning and monitoring of their career development and professional growth.
An advisory body to the Board of Directors and Business Strategy Meeting, the Committee deliberates on the recommended disciplinary action for the Company's personnel including its employees.
Composition of the Board and Committees as of June 18, 2021
|Advisory Body to the Board of Directors||Other Advisory Body|
|Position||Name and surname||Board of Directors||Audit and Supervisory Board||Nomination Committee||Compensation Committee||Compliance Committee||Risk Management Committee||Sustainability Committee||Business Strategy Meeting|
|Chairperson and Representative Director of the Board||Masumi Minegishi|
|Representative Director of the Board, President and CEO||Hisayuki Idekoba|
|Internal Directors of the Board||Ayano Senaha|
|Independent Directors of the Board||Naoki Izumiya|
|Standing Audit & Supervisory Board Members||Yukiko Nagashima||*1|
|Independent Audit & Supervisory Board Members||Yoichiro Ogawa||*1|
|Corporate Executive Officers||Yoshihiro Kitamura|
|Internal Member||Kazuo Tase|
|Outside Experts||Aron Cramer|
＝Chair ＝Member ＝Observer
*1 Audit & Supervisory Board members are required to attend the Board of Directors meetings to audit the execution of duties of Directors of the Board under the Companies Act of Japan.
Attendance for FY2020
|Advisory Body to the Board of Directors|
|Position||Name and surname||Board of Directors||Audit and Supervisory Board||Nomination Committee||Evaluation Committee||Compensation Committee||Compliance Committee||Risk Management committee||Sustainability Committee|
|Representative Director of the Board, President and CEO||Masumi Minegishi||13/13||2/2||4/4||4/4||2/2||2/2||2/2|
|Internal Directors of the Board||Hisayuki Idekoba||13/13||2/2||2/2||2/2|
|Independent Directors of the Board||Naoki Izumiya||13/13||2/2||4/4||4/4|
|Standing Audit & Supervisory Board Members||Yukiko Nagashima||13/13||15/15||2/2||2/2|
|Independent Audit & Supervisory Board Members||Yoichiro Ogawa||9/9*2||11/11*2||1/1*2|
|Corporate Executive Officers||Yoshihiro Kitamura||2/2|
|Internal Member||Kazuo Tase||2/2|
|Outside Experts||Yves Serra||2/2|
*1 A total of nine meetings of the Board of Directors, one Nomination Committee and three Evaluation and Compensation Committees were held since the person was appointed as Director of the Board at the Annual Meeting of Shareholders held on June 30, 2020. The person attended two Nomination Committees and four Evaluation and Compensation Committees in total including the attendance as a Corporate Executive Officer before being appointed as Director of the Board.
*2 A total of nine meetings of the Board of Directors, eleven Audit & Supervisory Board meetings, one Nomination Committee, as well as three Evaluation and Compensation Committees were held since the person was appointed as Audit & Supervisory Board member at the Annual Meeting of Shareholders held on June 30, 2020.
Analysis and Evaluation of the Effectiveness of the Board of Directors
A self-evaluation based on the following matters was conducted for Board of Directors meetings held in FY2020.
- Evaluation Scope: The Board of Directors' meetings held from April 2020 to March 2021 (13 meetings in total)
- Evaluation Subjects: Directors of the Board and Audit & Supervisory Board members (10 people in total)
- Evaluation Period: Conducted from March to May 2021
- Process: Each Director and each Audit & Supervisory Board member completed a questionnaire, which consisted of questions including the appropriateness of the roles and responsibilities of the Board of Directors, the appropriateness of the organizational structure of the Board of Directors, the appropriateness of the composition of the Board of Directors, the appropriateness of the qualities and knowledge of Directors, the effectiveness of deliberations by the Board of Directors, the effectiveness of checks and balances, and oversight functions performed by and between the Directors of the Board who also serve as Corporate Executive Officers, and the appropriateness of deliberations from the perspective of shareholders and stakeholders other than shareholders, as well as open-ended questions. Individual interviews were then conducted, as necessary.
Results of analysis and evaluation
It was determined that the Board of Directors meetings played an appropriate role and the Board exercised its responsibilities appropriately, both in the supervision of, and decision-making over, execution.
- The Board of Directors meetings sufficiently discussed management strategy and risk management policy for improving mid-to long-term enterprise value based on the Recruit Group Management Philosophy and deliberation of individual items was consistent with the above strategy.
- The Board of Directors has an appropriate organizational structure, composition, quality and knowledge for deliberation.
- Agendas submitted to the Board of Directors meetings were appropriate, and open and constructive discussions were held, with perspectives of a wide range of stakeholders considered.
- The Board of Directors steadily implemented measures which were confirmed in the previous fiscal year's effectiveness evaluation process.
The Board of Directors confirmed the following matters to further improve the effectiveness of the Board and to constantly increase the enterprise value:
- The Board of Directors will engage in ongoing discussions over the business portfolio strategy and related risk management, and endeavor to further enhance the corporate governance structure.
- The Board of Directors will engage in making a positive impact on society and the global environment through our corporate activities, and thereby prospering together with all stakeholders, which is key to achieving sustainable growth.
Policy for correspondence to Corporate Governance Code
On June 11, 2021, Tokyo Stock Exchange (TSE) announced the revision of the Corporate Governance Code, and the contents of this page comply with the code before the revision. Based on this premise, the Company complies with all of the Principles and Supplementary Principles stipulated in the Corporate Governance Code of Japan before the revision.
For more information, please refer to the Corporate Governance Report
In this Corporate Governance Report, moreover, in addition to items for which mandatory disclosure is indicated in the Corporate Governance Code, the Board of Directors has stipulated the policy that other principles and supplementary principles relevant to the Company are to be disclosed to the extent possible.