For a Higher Level of Corporate Governance

We make continuous efforts to enhance our corporate governance system, aiming for the sustainable growth of the TOWA Group and the medium- and long-term improvement of our corporate value.
In addition, to strengthen the system, we became a company with an audit and supervisory committee after the General Shareholders Meeting held in June 2016.
Under this new system, we will strengthen the supervisory function of the Board of Directors and ensure its prompt decision-making and execution of operations, thereby improving the efficiency of our business management.

We are striving to further strengthen and practice our corporate governance, based on the following fundamentals:

1. Ensuring that the actions of the TOWA Group are legal and socially responsible
2. Ensuring and maintaining the transparency and objectivity of our business management
3. Building an organization and system that is able to respond rapidly to changes in the environment
4. Ensuring fair business administration with importance attached to shareholders, by protecting the rights of our shareholders and being open and candid with them, for example
5. Creating corporate value and employment by building strong relationships with our stakeholders

Our main approaches are as follows.

Strengthen the function of the Board of Directors

We have adopted the Audit and Supervisory Committee to strengthen the function of the Board of Directors and to exert corporate governance more effectively, as well as to enhance the effectiveness of management by making decision and execution more rapidly.

Also, four Directors are Outside Directors (Male 2, Female 2) and the ratio of Independent Outside Directors in the Board of Directors is more than one-third.

Directors and Executive Officers

Nomination and Compensation Committee (non-obligatory organization)

We have established the Nomination and Compensation Committee as an advisory board of the Board of Directors. The purpose is to enhance the fairness, transparency and disinterestedness of the decision process in directors’ nomination, promotion or demotion and their rewards. The committee consists of seven members: four independent outside directors, one chairman and chief executive officer and one director, president and one director (Administration Division Manager). Chairman is independent outside director.

Reduction of shares for investment held for any purpose other than pure investment

We may hold other companies’ shares as one of our strategies such as business alliance, funding and expanding transaction to achieve our continuous growth and middle / long term growth. We asses such shares periodically to see if the risk or benefit of holding share are commensurate with the cost of capital. Based on the assessment, the Board of Directors will decide whether we should continue holding the shares or not. The number of shares, that have little significance, will be sold in consideration of market trends or important conditions.

In the fiscal year ending March 2025, we sold one stock. In addition, since June 2015, when the Corporate Governance Code was introduced, we have sold seven stocks. The Company will continue to consider selling or otherwise disposing of stocks, that have little significance. The balance of Cross-Shareholdings, converted to market value as of the end of March 2025, amounted to 7.2% of consolidated net assets at the end of March 2025.

Voting rights are exercised appropriately based on a comprehensive assessment of whether they contribute to improving the middle to long-term corporate value of the investee company and the impact on the Company.

>【Corporate Governance Report】650KB