The overriding goal of the Wacoal Group’s corporate governance is to continuously improve corporate value by ensuring that management is highly transparent, equitable and objective with respect to all stakeholders, including customers, business partners, local communities, NPOs, and shareholders and investors.
Management Philosophy and Corporate Governance
The Wacoal Group’s management philosophy is based on mutual trust. This is a value that the Wacoal Group aims to carefully preserve in its relationships with all stakeholders with in the Group. To that end, the Group will steadily build and strengthen governance systems pursuant to laws and statutory regulations, while working to ensure that every individual in the Group, from the management team through to employees, is aware of the social significance of the Wacoal Group and adheres to good ethical conduct. We believe that properly functioning corporate governance based on mutual trust is indispensable in order to achieve sustained growth and further increase enterprise value.
Regarding our progress in developing corporate governance systems, in 2002 the Company introduced a corporate officer system to clarify responsibility for operational implementation, speed up decision making and strengthen the monitoring functions of the Board of Directors. In 2003 Wacoal established the Disclosure Committee in order to ensure the accuracy of the financial and other information made available to the public. Further, in 2005 we elected outside directors to ensure that management decisions are balanced and not made solely by directors. Meanwhile, in October 2005 we changed to a holding company system in order to realize a more effective management system that enables strategic decision making and optimal resource development for Group companies overall, while clarifying responsibility and authority and allowing flexible operations at operating subsidies.
Corporate Governance System
The Group employs an auditor system of governance, with operational implementation and oversight undertaken by the Board of Directors and the Board of Corporate Auditors. Comprising eight directors, three of whom are outside directors, and five corporate auditors, three of whom are outside corporate auditors, the Board of Directors decides such issues as important management policies and strategies and items stipulated by statutory laws and regulations or the Group’s articles of incorporation. Furthermore, the Group files notifications with the Tokyo Stock Exchange for all of the abovementioned outside directors and outside corporate auditors as “independent directors or auditors.”
Five corporate auditors, three of whom are outside corporate auditors, sit on the Board of Corporate Auditors, which supervises and audits business management. Also, the Group has established the Office of Corporate Auditors, which audits and monitors the appropriateness and efficiency of the operational processes of Group companies.
Also, the Group has established the Group Management Meeting, which comprises directors and corporate auditors. The meeting considers Group management strategy and other important management issues and conducts prior deliberation of matters for consideration by the Board of Directors. The Executive Compensation Advisory Committee, which includes outside directors as its members, develops proposals for the appointment, promotion and compensation of executives and contributes to the realization of highly transparent and equitable business management.
Disclosure Policy
The Group has established the Disclosure Committee in order to ensure the accuracy of financial and other information issued by the Group. This committee checks the propriety of the Group’s internal controls and disclosures based on Section 302 of the U.S. Sarbanes-Oxley Act with respect to 20-F annual reports filed with the U.S. Securities and Exchange Commission and other financial reports submitted by the representative director and directors responsible for financial matters. In addition, the committee checks the accuracy of disclosed information. The representative director and the directors responsible for financial matters prepare written oaths based on the reports that the committee has verified.
Risk Management System
- •With the director responsible for risk management as its chairperson, the Risk Management Committee manages overall risks related to the Wacoal Group and develops and strengthens risk management systems.
- •Based on the approval of the Board of Directors, the Risk Management Committee establishes risk management regulations that form the basis of the risk management system. Guided by these regulations, the Risk Management Committee clarifies responsibility for the respective risk categories and builds systems for comprehensive risk management of the entire Wacoal Group.
- •The Risk Management Committee periodically reports to the Board of Directors on the operational status of the risk management systems of Wacoal Holdings Corp. and the entire Wacoal Group.
- •Regarding risk management as an important management issue, the Group has a Crisis Management Manual in place, to ensure the development and implementation of consistent and comprehensive risk management systems, as well as to prevent or minimize risk in ordinary times and ensure a quick initial response and well-coordinated cooperation in times of emergency.
Performance of Duties by Directors
- •In order to improve the quality of decisions taken by directors, the Group’s directors include independent outside directors.
- •Directors establish medium-term management plans, which directors and employees share and that apply laterally to the entire Group. Further, in accordance with these plans, directors issue instructions to each division regarding the establishment of medium-term and short-term policies and business results targets.
- •The business results of each Group company are analyzed on a monthly basis and reported to the Board of Directors. Also, directors check the business results and the progress of measures at meetings of the Quarterly Business Results Review Committee held four times a year. If targets have not been met, directors examine improvement measures and revise the targets if needed.
Group Management Systems of the Wacoal Group
- •The Group has established regulations and a basic policy for the management of Group companies. The Group also stipulates items that the Board of Directors must decide and items that must be reported to Wacoal Holdings Corp.
- •Transactions between Group companies must be equitable and pursuant to laws and regulations, accounting principles and tax systems.
- •The Office of Corporate Auditors conducts internal audits of Group companies, which include audits of the status of the establishment and operation of compliance systems and risk management systems. Further, the Office of Corporate Auditors reports the results of these audits to the Board of Directors and the divisions with jurisdiction over the respective Group companies. At the same time, the Office of Corporate Auditors ensures Group companies conduct operations appropriately by providing them with directions and advice on the establishment of systems.
Management Control System for managerial decision-making, execution and supervision (As of June 29,2011)
