We rapidly respond to the diversified needs of customers in a market that changes from day to day to provide the quality that earns the trust of customers for true satisfaction.
April 1, 2017
Awa Paper & Technological Company, Inc.
Yasuhiro Miki, President
We surrounded by the natural environment of mountains and rivers, has carried on the tradition of Japanese Awa paper and supplied special and functional paper to the world. We thank the regional environment and work on maintenance and improvement of the global environment across the organization toward the harmonious coexistence of nature and culture.
April 1, 2017
Awa Paper & Technological Company, Inc.
Yasuhiro Miki, President
Corporate Governance Policy
Chapter 1 Introduction
Art.1 This policy embodies the corporate governance approaches of Awa Paper & Technological Company, Inc., (hereafter, the Company) aiming for the sustainable growth and the improvement of the corporate value of the Company and the fulfillment of its social responsibilities.
(Basic Ideas for Corporate Governance)
Art.2 The Company establishes its Corporate Governance System based on this policy aiming at rewarding the trust of stakeholders including suppliers & clients, stockholders, local communities and employees and realizing mid- to long-term increase of the corporate value through clear, fair, prompt and decisive decision-making which energizes the corporate management.
Chapter 2 Maintenance of Rights & Equality of Stockholders
(Policies for Maintenance of Rights & Equality of Stockholders)
Art.3 The Company shall strive to maintain reasonable environment for the protection of the rights and equality of stockholders. The company shall also strive to maintain suitable environment for constructive dialogues with stockholders in addition to the Annual Stockholders Meetings for sustainable growth and mid- to long-term increase of the corporate value.
Art.4 The Company truly recognizes that Stockholders Meetings are the highest decision-making body and important opportunities for constructive dialogues with its stockholders. The Company shall strive to maintain appropriate environment for the reflection of the stockholders’ will on the Company’s management with good understanding of stockholders’ attributes.
2．The company shall strive to send out the Notice of Annual Meeting of Stockholders as early as possible so that voting rights of stockholders may be exercised with sufficient time for consideration. Additionally, the Company shall release the notice on its Website before the mailing.
3．The Company schedules the date of Stockholders Meetings striving to avoid any inconvenience of stockholders such as peak days of other companies’ meetings so that many stockholders may participate in the annual meetings and have constructive dialogues with the Company.
4．The Company shall have a preliminary meeting with trust banks if institutional investors (individuals and parties who own the Company’s stocks through trust banks or the like) wish to exercise their stockholder’s rights in the Stockholders Meetings.
(Maintenance of Rights & Equality of Stockholders)
Art.5 The Board of Directors (hereafter, the Board) shall conduct analysis in the case that negative votes to an item of the agenda exceed 10% in the Stockholders Meetings and shall reflect the results in the communication with stockholders.
2．The Company treats its stockholders equally according to the amount of their holdings and releases information appropriately avoiding information disparity among the stockholders.
(Basic Policies of Capital Management)
Art.6 The Company shall introduce Capital-to-Asset Ratio and ROA (Return of Assets) which simply measure capital efficiency and profitability as the most important indices and use other related indices including Total Capital Turnover and Ordinary Profit Ratio in the mid-term management plan, which means that the Company aims at management which leads to the increase of capital efficiency and profitability. As to the return to stockholders, the Company shall basically decide the appropriation of surplus taking into consideration its operating results, payout ratio and other factors comprehensively as maintaining internal retention for future business development and reinforcement of the management.
Art.7 The Company shall have cross shareholdings to increase the corporate value through the good and continuous relationships with the companies to be invested.
2．Policies for cross shareholdings shall be as follows:
The Company, as expecting returns such as dividends, shall hold the minimum numbers of stocks which are considered necessary for the purpose of maintaining and reinforcing business relationships with the companies of the investments from the mid- to long-term viewpoint. For the main cases of cross shareholdings, the Board shall examine the validity every year.
3．Standards for the exercise of stockholder’s rights are as follows:
The Company carefully examines each item and the situation of the invested company and shall exercise the rights only when the increase of the stock value is likely.
Art.8 The Company has no anti-M&A measures basically. If a takeover bit is launched to its stocks, the Company shall strive to convey the will of the Board to its stockholders enough and properly and take appropriate measures. However, if the bid seems to harm the interest of the stakeholders, the Company shall consider introducing such measures and release the policies as necessary.
(Transactions between Related Parties)
Art.9 To maintain the transparency of transactions between related parties including subsidiaries and main stockholders, those transactions shall be subject to the resolutions of the Board meeting. The transactions shall be examined carefully, hearing opinions from Outside Directors.
2．In the case that the Company attempts competitive transactions or transactions of conflict of interest with its Directors, such restricted transactions shall be subject to the approval of the Board. Additionally, if the transactions are exercised, the Company shall disclose the details properly according to the related laws and regulations.
Chapter 3 Appropriate Cooperation with Stakeholders other than Stockholders
(Policies for other Stakeholders)
Art.10 The Company shall strive to build excellent business relationships not only with its stockholders but also with other stakeholders including suppliers & clients, local communities and employees for the sustainable growth and mid- to long-term increase of the corporate value.
(Company Ethical Standards)
Art.11 The Company has set its main policy as “Union of Moral and Economy.” Also its management philosophy has been made based on the main policy, which defines missions, objectives and direction of the Company’s operations. Company Ethical Standards have also been introduced as the guidelines for the Company, officers and employees so that all of them may work together following the main policy and the philosophy.
(Measures for Issues on Sustainability)
Art.12 The Company’s management philosophy says that “We’ll make contribution to the society through the development & production of products friendly to the environment.” The Company has also instituted “Environmental Policy.” Based on the philosophy and the policy, the Company shall strive to realize co-existence of the nature and civilizations and the preservation and improvement of the environment of the Earth. The Company and all the members shall work on the issues of sustainability appropriately by means of above.
(Maintenance of Diverse Human Resources)
Art.13 The Company shall strive to build a women-friendly working environment through the expansion of child and elderly care supports and the introduction of other supportive systems aiming for excellent work-life balance of employees. Additionally, the Company actively recruits capable people regardless of their nationalities aiming for the sustainable growth of the Company.
Art.14 The Company shall install an office independent from its management, which deals with internal whistleblowing. Additionally, the Company shall institute internal regulations to keep the confidentiality of whistleblowers and prohibit disadvantageous treatments to them.
Chapter 4 Appropriate Disclosure and Maintenance of Transparency
Art.15 The Company shall disclose information appropriately following Companies Act, Financial Instruments and Exchange Act and the regulations of Tokyo Stock Exchange Inc. The Company shall also strive to disclose other information even if it is not required by such regulations.
Chapter 5 Missions and Responsibilities of the Board of Directors
(Missions and Responsibilities of the Board of Directors)
Art.16 The Board of the Company bears responsibilities by the trust from stockholders for efficient and effective corporate governance which leads to sustainable growth and maximization of the corporate value from the mid- to long-term viewpoint. To fulfill the responsibilities, the Board makes important decisions to the management and supervises operations based on the related laws & regulations, the Articles of the Company and other internal regulations.
2．For the responsibilities above, the Board shall maintain the fairness and transparency of the operations by exercising supervisory function over the whole management. The Board shall also make the best decisions for the Company through the appointment of the Representative Director and other Directors, general assessment over the management, assessment of significant risks and the countermeasures and the resolutions for the launch of important operations.
3．The Board shall establish basic policies for internal control and strive to build a system and reasonable environment for the compliance, fair financial reporting and risk management.
(Missions of Independent Outside Directors)
Art.17 As to the main missions of the Independent Outside Directors, they advise and supervise the operations and matters of conflict of interest from the independent position, and also, reflect the opinions of stakeholders in the Board meetings.
2．To fulfill the responsibilities for the missions above, the Independent Outside Directors verify and evaluate the Company’s operating results and the missions carried by the management regularly.
3．The Independent Outside Directors shall hold regular meetings with the Company’s President for the exchange of opinions as to the operations. The Outside Directors shall also actively participate in the personnel affairs of the Board by providing comments on the remunerations, appointments and dismissals of Directors from the independent viewpoint with their broad experience and knowledge.
(Qualifications and Appointment Procedures of Directors)
Art.18 The Company requires excellent personalities, insight and capability, broad experience and high ethical standards of its Directors for the development of global operations.
2．The President shall make a list of nominees of Directors based on the “Internal Regulations for Appointment of Directors” of the Company receiving opinions from the Independent Outside Directors from the independent viewpoint. The list shall be submitted to the Board for a resolution.
3． All the directors are subject to appointment in the annual meeting of the stockholders every year. For the appointment, brief histories of each nominee and reasons for the nomination shall be printed on the materials.
4．Based on this article, the nominees may have an interview by the Independent Outside Directors.
(Concurrent Post of Directors)
Art.19: In the case that a Director wishes to concurrently host a post in another company, the extent shall be limited to the level that the Director may maintain the time for duties at the Company. If the concurrent post belongs to another listed company, the Company shall be deliberate. The Company shall disclose information of important cases every year.
(Setting of Agenda for the Board of Directors Meetings)
Art.20 Agenda and the reference materials shall be provided for all Directors including Outside Directors well before the Board meetings for sufficient preparation. Highly confidential items are not subject to this article.
(Remunerations of Directors)
Art.21 The remunerations of Directors (excluding Independent Outside Directors) shall be decided with a ceiling set in the shareholders meeting considering standard levels of other companies of similar size in the same industry, according to the role and responsibilities of each Director. The amount shall be motivational for Directors to strive to improve the operation results and corporate value. Each remuneration shall be decided by the meeting of the President and the Independent Outside Directors.
(Assessment of Effectiveness of the Board of Directors)
Art.22 The Board shall appoint the President as a person in charge to conduct an analysis and assessment of the efficiency of the Board meetings and the effectiveness of its resolutions every year in order to maintain the efficiency and effectiveness of the Board. The analysis and assessment are conducted involving the Independent Outside Directors and Auditors and the outline of the results shall be disclosed.
(Supervision of Succession Planning)
Art.23 The President conducts succession planning as necessary. The plan is examined by the Board members including the Independent Outside Directors with explanations from the President.
(Qualifications & Appointment of Auditors)
Art.24 The Company requires excellent personalities, insight and capability, broad experience and high ethical standards of its Auditors for the development of global operations. At least one of the Auditors shall possess appropriate expertise in finance and accounting.
2．The candidates of Auditors shall be nominated from the list that the President prepares according to the advice from the Independent Outside Directors with broad experience and knowledge. The nomination is subject to the resolution of the Board with prior consent of the Board of Auditors. Brief histories of the candidates and reasons for the nomination shall be printed in the materials of the stockholder’s meeting.
3．The tenure of Auditors shall end at the closure of the last annual meeting of stockholders within 4 business years after the appointment.
(Concurrent Post of Auditors)
Art.25 In the case that an Auditor wishes to concurrently host a post in another company, the extent shall be limited to the level that the Auditor may maintain the time for duties at the Company. If the concurrent post belongs to another listed company, the Company shall be deliberate. The Company shall disclose information of important cases every year.
(Seminars for Directors & Auditors)
Art.26 Directors and Auditors shall devote themselves to collecting information and knowledge of financial positions, compliance with laws & regulations, corporate governance and other important matters of the Company for the fulfillment of their responsibilities and roles. The Company provides free seminars and trainings as necessary for the Directors and Auditors.
(Access to Internal Information from Independent Outside Directors & Auditors)
Act. 27 Independent Outside Directors and Auditors have rights to demand explanations, reports and reference materials from other Directors and the staff at any time they need.
Chapter 6 Dialogues with Stockholders
(Policies of IR Activities)
Art.28 The Company’s IR activities are conducted by its Corporate Administration Department in charge. The department discloses information of management strategies and financial & operational situations timely and appropriately and encourages the dialogues between the Company and stockholders. The Company aims at obtaining trust and fair evaluation from its stockholders and other investors through the proper understanding to its management strategies. Valuable comments and requests obtained by IR activities shall be reflected in the management conferences and the Board meetings for the enhancement of the corporate value.
(Communications with Stockholders)
Art.29 The Director or the General Director of the Corporate Administration Department shall take charge of general communication with stockholders.
2．The Director in charge manages departments related to IR activities including the Corporate Administration Department and the General Affairs Department and facilitates the cooperation among departments. The Director shall demand support from other departments such as the Research &Development Department and other external experts as necessary.
3．The Director in charge shall strive to encourage the communication between stockholders and the Company in various ways such as information sessions in addition to the annual meetings of stockholders.
4．The Director in charge shall report the opinions from stockholders in the management conference, the Board meetings and other appropriate occasions.
5．The Director in charge shall pay much attention to insider information when communicating with stockholders.
Enacted on November 17, 2015
Standards for Appointment & Independence of Outside Directors
This standards provide the policies for the appointment and independence of the Outside Directors and Auditors (hereafter, Outside Officers) aiming at the improvement of transparency of the corporate governance.
Art.2 (Outside Directors)
Outside Directors shall be appointed among candidates satisfying requirements below:
(1) Excellent personalities, experience and knowledge and high ethical standards necessary for the development of global operations.
(2) Broad knowledge and experience, achievements in the previous field, bringing a new viewpoint into the Board.
(3) Not falling under the Causes of Disqualification of Directors stipulated by the Article 331, Paragraph 1 of the Companies Act.
(4) Satisfying requirements stipulated in the Article 2, Item 15 of the Companies Act.
Art.3 (Outside Auditors)
Outside Auditors shall be appointed among candidates satisfying requirements below:
(1) Excellent personalities, insight and performance in operations, broad experience and high ethical standards necessary for the development of global operations.
(2) The insight, performance and experience mentioned above are not limited to those of corporate management. It includes achievements in specialized fields such as laws and accounting.
(3) Not falling under the Causes of Disqualification of Auditors stipulated in each item of the Article 331, paragraph 1 of the Companies Act, which also applies to the Article 335.
(4) Satisfying requirements stipulated in the Article 2, item 16 of the Companies Act.
Art.4 (Independence of Outside Officers)
(1) Outside Officers of the Company who don’t fall under any of the standards below shall possess independence:
① Large stockholders of the Company (holding 10% or more of the total voting rights at the end of the last business year) or the executive persons for them
② Main suppliers of the Company or the executive persons for them
③ Main clients of the Company or the executive persons for them
④ Persons involved in the audit of the Company or the Company’s consolidated subsidiaries as an accounting auditor or the staff
⑤ Lawyers, judicial scriveners, patent attorneys, certified public accountants & tax accountants, consultants and the others who receive more than 10 million JPY a year by cash or articles from the Company (If a group such as a corporation or a union receives rewards, this item applies only if the rewards account for more than 2% of the group’s annual earnings.
⑥ Main lenders to the Company (lenders listed in the last business report) or persons in executive positions with them.
⑦ Persons who receive contributions more than 10 million JPY a year by cash or articles from the Company (If a group such as a corporation or a union receives rewards, this item applies only if the rewards account for more than 2% of the group’s annual earnings.)
⑧ Persons who have fallen under any of the items above in the past 3 years.
⑨ Relatives within the second degree of the persons listed ①-⑧ above.
⑩ Relatives within the second degree of the directors, trustees, managers, employees and accounting advisors of the Company (if the person belongs to a corporation, including the employees)
⑪ Relatives within the second degree of the persons listed in item ⑩ in the past 3 years.
⑫ Persons belonged to enterprises to which AWA PAPER Group dispatches directors or auditors.
⑬ In addition to the items above, persons who has certain reasons which may impair the independence as Outside Directors such as the possibility of the conflict of interest between the Company.
(2) Outside Directors who has been confirmed independence by this article shall report the loss of the independence immediately.
(3) “Main clients” indicates parties which account for more than 2% of the annual consolidated sales of the Company in the last business year (As to “Main suppliers”, payments from the Company accounts for more than 2% of the annual consolidated sales of them)
Basic principle of risk management
Awa Paper & Technological Company group positions risk management as the most important task for businesses and handles the different risks in business activities accurately in order to fulfill its social responsibilities.
- We try to predict and prevent risks.
- We try to minimize the damage as much as possible in the event of a risk.
- We give the highest priority to humanitarian and societal aspects.
Basic Policies of Internal Control
Awa Paper & Technological Company, Inc. (hereafter, the Company) has established “Basic Policies of Internal Control” by the resolution of the Board of Directors (hereafter, the Board) as follows.
All the Officers and Employees of the Company declare the compliance with the policies below and its management philosophy.
Basic policy on compliance
- We position the observation of laws, regulations, societal norms, and corporate ethics as the most important task for businesses and improve the compliance structure continuously.
- We firmly confront antisocial forces and parties that threaten the order and safety of civil society.
Protection Policies for General & Specific Personal Information
Awa Paper & Technological Company, Inc. (hereafter, the Company) regards the appropriate treatments of General & Specific Personal Information in corporate activities as part of its social responsibilities. The Company shall comply with related laws and regulations and shall strive for the protection of such information following the internal policies stipulated below.
The term "General Personal Information" used in this statement shall mean information about a living individual which can identify the specific individual as stipulated in “Act on the Protection of Personal Information.”
The term “Specific Personal Information” used in this statement shall mean personal information which includes a personal number as stipulated in “ Act on the Use of Numbers to Identify a Specific Individual in the Administrative Procedure.”