Corporate Governance

Our Basic Approach to Corporate Governance

The Onward Group believes that responding promptly to changes in its business environment and ensuring a level of corporate governance that enhances the health, fairness, transparency, and compliance of its management and operations are among its most important responsibilities and central to increasing corporate and shareholder value.

In its basic management policy, the Onward Group has defined its business domain as "a world of fashion that gives refreshment and beauty to people's lives." By offering fashion as an integral part of consumer culture, the Group creates new lifestyles and values that contribute to the enrichment of life for all people. Moreover, the Company believes that, in order to exercise this policy and accomplish its objectives, it is vital for it to build and maintain strong networks and relationships with customers and all other stakeholders it connects with in its corporate activities.

Corporate Governance Structure

Corporate Governance Structure

Directors and the Board of Directors

In order to further clarify the management responsibilities of directors, to increase opportunities to gain the confidence of shareholders, and to put in place an optimal and flexible management framework that is capable of responding to changes in the business environment in a timely manner, the Company has set the term of directors at one year. In addition, three of the seven members of the Board of Directors (six men and one woman) are appointed from outside the Company and selected on the basis of their high level of independence. This initiative is aimed at reinforcing the supervisory function of the Board.
In fiscal 2020, the Board of Directors met 11 times, and two separate meetings were held in the form of document correspondence.

Audit & Supervisory Board Members and the Audit & Supervisory Board

The Company has adopted an Audit & Supervisory Board structure, under which the Company has appointed four Audit & Supervisory Board members (three men and one woman), two of whom are outside Audit & Supervisory Board members. Staff has also been assigned to assist Audit & Supervisory Board members in carrying out their duties and to strengthen their supervisory function. Each member audits and monitors the performance of directors. Responsibilities include reviewing the documentation of important decisions and attending important meetings, such as Board of Directors' meetings, Group financial account settlement meetings, and budget committee meetings, in accordance with audit policies and the roles established by the Audit & Supervisory Board. In addition, the Internal Control Office and business departments conduct periodic monitoring in an effort to establish an effective and lawful corporate structure.

The Audit & Supervisory Board meets with the representative directors and the accounting auditor on a regular basis to share and exchange information and opinions. This initiative is also designed to ensure a structure is in place that is capable of conducting audits in an effective and lawful manner. Moreover, the Audit & Supervisory Board receives reports from each member in accordance with audit policies and the roles. Deliberations are undertaken and resolutions are made based on this information as required. In fiscal 2020, the Audit & Supervisory Board met 15 times.

Nomination and Compensation Committee

The Nomination and Compensation Committee was established as an advisory body to the Board of Directors on February 26, 2021, for the purpose of contributing to strengthening the oversight function of the Board of Directors and enhancing the Company's corporate governance structure, by ensuring the transparency and objectivity of evaluation and decision-making processes related to director nomination and compensation. The Nomination and Compensation Committee functions as both a nominating committee and a compensation committee.

Onward Group Compliance Committee

The Board of Directors has established the Onward Group Compliance Committee as an organization for overseeing the Company's compliance structure.

Together with the Compliance Division, the Onward Group Compliance Committee conducts effective training and awarenessraising activities, takes steps to spread understanding of the Compliance Manual, enhances the Company's compliance structure to ensure functionality, and performs compliance-related checks.

Business Execution Structure

The Onward Group has adopted a holding company structure that allows the Company's Board of Directors to engage in strategic decision-making and supervise operating companies. At the same time, the Group has separated the supervisory and execution functions in order to clarify the responsibilities and authority of each operating company and to facilitate accelerated strategic decisionmaking. When matters that require urgent attention arise, the Board of Directors convenes as necessary. In this manner, the Onward Group has a system in place that ensures a swift and appropriate response to rapid changes in the business environment.
Moreover, the Group has introduced an executive officer system (six male executive officers but no female representation at this time) with the aim of clarifying management decision-making and business execution functions. In order to facilitate flexible decisionmaking on a Groupwide basis, the Onward Group Strategy Meeting, which primarily comprises directors and operating officers from Group companies, is in place to review the management strategies and important management matters of operating companies and confirm the status of operations.
The Onward Group also has advisory contracts with a number of attorneys to receive legal advice.