Corporate Governance

Basic Approach

Central Glass strives to improve corporate value and to enhance profitability furthermore, by continuously ensuring transparency and fairness of the management as well as establishing an efficient and rational organization, which is capable of quickly adjusting itself to the changes of business environments.

Our company complies with all the principles of the Corporate Governance Code.

Efforts to Enhance Corporate Governance

Corporate Governance System

Structure Diagram

Basic System

With the Board of Directors and the Board of Corporate Auditors as the foundation of corporate governance, we have introduced an executive officer system to streamline the Board of Directors by separating the decision-making and business execution oversight functions related to important management matters, as well as business execution functions, and to improve management efficiency and speed.
In addition, in order to enhance the auditing and supervisory functions, outside directors and outside corporate auditors, who are independent without a risk of conflict of interest with general shareholders, play a role in ensuring the fairness of decisions made by the Board of Directors and eliminating arbitrary judgments.

Overview of the System (as of June 27, 2024)

*(Number of women)

Board of Directors

Central Glass's Articles of Incorporation stipulate that there shall be no more than 10 Directors, and the Board of Directors consists of 8 Directors (including 3 Outside Directors). As a rule, the Board of Directors meets once a month, or when necessary, to deliberate and resolve legal and important managerial issues in line with the Company regulations covering the Board of Directors, and supervises the execution of business by Executive Officers including the Representative Director, President & CEO.

Management Committee

The Management Committee is composed of Directors, Officers and Auditors as defined in the Management Committee Regulations. The Management Committee meets once a week, as a rule, in line with the regulations governing its activities to deliberate and resolve important issues affecting the execution of business and to deliberate proposals to be put forward to the Board of Directors.

Board of Corporate Auditors

The Board of Corporate Auditors consists of 5 persons (including 3 Outside Auditors). As a rule, the Board of Corporate Auditors meets once a month, or whenever necessary, to deliberate and resolve important auditing issues. Corporate Auditors also share information and frequently exchange opinion each other. In addition, in order to deepen mutual understanding between the Representative Director, President & CEO and Corporate Auditors, they regularly exchange opinions on important auditing issues.
In accordance with the auditing standards established by the Board of Corporate Auditors, Corporate Auditors attend Board of Corporate Auditors meetings and other important meetings to audit the execution of duties by Directors, Officers and Auditors, and to audit the status of business execution at each business unit and subsidiary of Central Glass.

Nomination and Remuneration Committee

Central Glass has established the Nomination and Remuneration Committee as a voluntary advisory body to the Board of Directors. It has been established to further enhance our Corporate Governance system by strengthening the independence, objectivity and accountability of the Board of Directors' functions with respect to the nomination and remuneration of Directors and Corporate Auditors. This Committee, in consultation with the Board of Corporate Auditors, deliberates and reports to the Board of Directors on the selection and dismissal of Executive Officers, the selection of candidates for Directors and Corporate Auditors, the dismissal of Directors and Corporate Auditors, compensation, important issues to be addressed leading to the training and selection of the Chief Executive Officer's successor, the composition of the Directors, Officers and Auditors, and the qualifications and conditions required of Directors, Officers and Auditors.
The Board of Directors receives the Committee's report, deliberates and resolves on its recommendations. In particular, it deliberates and resolves on the appointment of Directors, Officers and Auditors, and the selection of candidates for Directors and Board of Corporate Auditors, based on the Committee's report, which takes into consideration gender and other diversity and the suitability of their skills.
The Committee consists of at least three members, a majority of whom are independent outside directors and at least one of whom is a Representative Director, President & CEO. The chairperson is appointed from among the members who are outside directors by a resolution of the Committee.

Diversity of Executives (Skill Matrix)

It is our belief that the Board of Directors should consist of persons who are acquainted with various issues in business management, and excellent in personality, knowledge and executive ability, being able to fulfill duties of managers in a balanced fashion. The combinations of skills, etc. possessed by Directors and Corporate Auditors are as follows.

Cross-Shareholdings

Policy on the Reduction of Cross-Shareholdings

Our Company conducts an examination into the appropriateness of the purpose of cross-shareholdings listed shares as well as whether benefits and risks resulting from holding them worth the capital cost according to individual issues. We also consider selling of shares that do not contribute to the medium- to long-term improvident of our Company’s enterprise value, promoting the reduction of cross-shareholdings. However, comprehensively considering non-financial aspects such as management strategies and measures against risks from the perspective of the maintenance and strengthening of partnerships, transactional relationships and business relationship, we plan to hold listed shares that will contribute to the medium- to long-term improvement of our Company’s enterprise value.
Based on the above policy, the Board of Directors conducts an examination on cross-shareholdings listed shares, and will continue to conduct a review regularly.

Trends in cross-shareholdings (number of issues and book value at the end of the period)

Compliance

Basic Approach

The Central Glass Group considers the establishment and promotion of a compliance system essential to fulfilling its corporate social responsibility.
We will continue to conduct ourselves with integrity based on the Central Glass Group’s Code of Conduct.

Central Glass Group's Code of Conduct

• Take responsibility for one's own actions, and engage in honest corporate activities.
• Place our highest priority on the quality and safety of our products, and continue to meet our customers' needs.
• Refine one's awareness, and constantly pursue original ideas and technologies.
• Achieve the establishment of a society in which all people can live in comfort and good health, and protect the global environment.
• Create products that satisfy customers all over the world by learning about different cultures and customs.
• Respect the diversity of every individual, and never cease to embrace the challenges of the future.

Group Structure

The Central Glass Group has established the Compliance Promotion Committee as an organization that studies and deliberates on matters related to compliance for its promotion. Issues reported through the whistleblowing system and other matters related to compliance awareness and system development are reported to the Board of Directors after deliberation by this committee.
The Central Glass Group has also established the Environment and Safety Promotion Committee, the Anti-Monopoly Law Observance Committee, the Group Quality Compliance Committee, the Security Trade Control Committee, the Financial Reporting Risk Assessment Committee, and the Sustainability Committee to address compliance issues. These committees conduct discussions and activities related to their specific areas of expertise and report their findings to the Board of Directors.

Please refer to the Structure Diagram of the Corporate Governance

Whistleblowing System

The Central Glass Group has established an internal whistleblowing system for the early detection and resolution of compliance problems involving the Group and its employees. The contact points for whistleblowing are the Compliance Promotion Committee Secretariat (Legal Department) and outside attorneys. Reports may be provided by email or telephone. In addition, the Central Glass Group has established dedicated in-house consultation desks for different types of problems, such as a Harassment Consultation Desk for various types of harassment issues.
Furthermore, rules have been established to prohibit any disadvantageous treatment of whistleblowers or individuals seeking advice on harassment, fostering an atmosphere where employees feel comfortable reporting issues or consulting with others.

Reporting Process

Compliance Initiatives

Compliance Manual

The Compliance Manual outlines the rules for ensuring compliance by officers and employees of the Central Glass Group based on the Central Glass Group’s Code of Conduct. It explains the relevant laws and norms by relationship, including customers, suppliers, communities, and society. Employees can refer to it whenever necessary.
The Compliance Manual includes sections on Compliance with Anti-Monopoly Law and Gifts and Entertainment (Including Overseas) to ensure transparency in our relationships with customers and suppliers. In addition, the Anti-Monopoly Law Observance Committee has been working to ensure familiarity with legal compliance with regard to observing the Anti-Monopoly Law.
The Compliance Manual also includes information on the whistleblower hotline and informs employees about the whistleblower system.

Compliance Education

We conduct annual e-learning training for all employees, including those of group companies, to ensure that they are aware of the importance of compliance. In addition, we are working to raise compliance awareness in level-specific training, which includes time for dialogue with officers to deepen understanding of compliance.
We also provide training by outside lecturers on various matters, such as compliance with Anti-Monopoly Law and security trade control, as appropriate.
For example, regarding preventing bribery, the Group has established and enforces anti-bribery and other rules to prevent bribery proactively, alongside providing the necessary education.