Fullcast Holdings

Apr 25, 2022

FULLCAST : Corporate Governance Report 04/22 04/22 Message : *Required fields This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. Basic Views Our Group considers the basic principles and aims of corporate governance to ensure transparent management for all concerned interested parties including shareholders as well as to improve the efficiency of management in order to realize the "sustained improvement of corporate value." As of March 28, 2022, Fullcast Holdings Co., Ltd. is a company with a Board of Directors, which is comprised of 7 Directors, including 4 Directors (excluding those who are Audit & Supervisory Committee Members) and 3 Directors who are Audit & Supervisory Committee Members, and also a company with an Audit & Supervisory Committee, which is comprised of 3 Directors who are Audit & Supervisory Committee Members. To achieve the aforementioned basic principles and goals of corporate governance, it is our policy for the composition of the Board of Directors to consist of at least one-third Outside Directors and to report all Outside Directors as Independent Directors as stipulated by the Tokyo Stock Exchange. We have chosen Outside Directors to serve as 3 of our 7 Directors, and in so doing we aim to strengthen the supervisory function of overall enforcement from an external perspective. Regarding Directors who are Audit & Supervisory Committee Members, by appointing all 3 as Outside Auditors (one of them being a fulltime Audit & Supervisory Committee Member), we perform effective and appropriate oversight of business execution by Directors, and have put in place a system that ensures objectivity and neutrality. We believe that these systems allow our corporate governance to function properly. [Reason for Non-Compliance with the Principles of the Corporate Governance Code] This information is provided based on the Corporate Governance Code after its revision in June 2021 (including the principles for the Prime Market which will apply from April 4, 2022.) Supplementary Principle 1-2-2 [Early Sending of Convocation Notices and Publication on Website before Sending] The Company recognizes that shareholders must be given sufficient time to review the proposals for the General Meeting of Shareholders, but at the present the Company is unable to send the convocation notice at an earlier date. The Company will review a schedule that makes it possible to send out the convocation notice earlier in the future, including completing the settlement of accounts and audits at an earlier point in time. Starting from the 24th General Meeting of Shareholders (for the fiscal year ended December 31, 2016), the Company has begun disclosing the convocation notice on its website and the website of the Tokyo Stock Exchange 7 days prior to sending it. [Disclosures Based on the Principle of the Corporate Governance Code] Principle 1-4 [Cross-Shareholdings] Our Group acquires and holds cross-shareholdings of publicly listed stocks when it is determined to contribute to the improved medium to long-term corporate value of our Group from the perspective of maintaining and strengthening cooperative business relations and maintaining and strengthening stable, long-term transactional relationships between our Group and its business partners, restricted to alliance relationships, transactional relationships or other business relationships. The Company plans to sell and reduce shares of subsidiaries and associates and investment securities for which these business synergies are not expected to materialize. In addition, every year the Company has examined the medium- to long-term economic rationality and future outlook of main cross-shareholdings taking into account risks and returns, and reported the findings to the Board of Directors as necessary. However, beginning from the fiscal year ended December 2018, the Board of Directors has examined whether these holdings are needed or not. For the fiscal year ended December 2021, the Board of Directors scrutinized in detail whether it is appropriate for our Group to retain cross-shareholdings (5 stocks) and examined whether these holdings are needed or not. As a result of this examination, it was determined that continuing to hold these cross-shareholdings is appropriate at the current point in time. With regard to exercising the voting rights of cross-shareholdings, our Group determines whether it approves or disapproves of a proposal and exercises its voting rights after comprehensively determining, based on individual scrutiny, whether the proposal contributes to the enhancement of the corporate value of the Company and our Group and whether there is a possibility the proposal will damage shareholder value, for each individual proposal, taking into account the purpose of each individual holdings and referencing the criteria for exercising voting rights of the voting advisory company. Principles 1-7 [Related Party Transactions] Matters stipulated in laws and regulations, and the scope of major shareholders and subsidiaries considered as stakeholders, the Company's Regulations on the Board of Directors stipulate that competitive transactions with the subsidiary of a Director and transactions involving a conflict of interest between a Director or major shareholder andsubsidiary must be approved by the Board of Directors, and the Board of Directors must be reported to with regard to when an approved transaction is executed and on a semiannual basis for transactions with blanket approval are executed. In addition, the results of a survey on the existence of related party transactions are reported to the Board of Directors every year and disclosed appropriately pursuant to laws and regulations. The development of these procedures and supervision of the Board of Directors ensures system is in place that does not damage the interests of the Company or its shareholders and that prevents such concerns from arising. Supplementary Principle 2-4-1 [Ensuring Diversity in Promotion to Core Human Resources] Our Group will promote diversity not tied to attributes such as gender, nationality, age, and work history, not only in core human resources, but also among its regular employees, temporary employees, and jobseekers via dispatching or placement through our Group. As of December 31, 2021, the ratio of female employees, including regular and temporary employees working for our Group, was 64.6%, and we will maintain a minimum ratio of 50.0%. The ratio of female managers at our Group was 15.3% as of December 31, 2021. We have set a goal of raising the ratio to 15.0% by December 31, 2025, and have strived to enhance recruitment, personnel systems, and training programs. We will make efforts to maintain and increase this level going forward. As we do not anticipate any differences in the promotion of foreign nationals and midcareer hires to management positions in terms of nationality or recruitment period, we have not set or disclosed goals for promotion to management positions at the current time. For our Group to achieve sustained enhancement of corporate value, it is essential for new graduates and midcareer hires to become competitive quickly after joining, and we have a full menu of training programs with a focus on practical training for employees up to their third year. In addition to increasing the precision and opportunities offered under our menu of training programs, we will consider gradually expanding the menu for each level of upper management and establishing training programs aimed at increasing awareness of sustainability among officers and employees. Principle 2-6 [Roles of Corporate Pension Funds as Asset Owners] The Company does not have a corporate pension fund as of the date this report was updated. Principle 3-1 [Full Disclosure] 1. The Company's future vision (management philosophy, etc. ), management strategy and management plan Our Group considers the "sustained improvement of corporate value" to be one of its most important management issues. Our Group will endeavor to maximize corporate value by striking a balance between profitability and growth. At the same time, our management will endeavor maintain a solid financial standing and implement strategies that focus upon capital efficiency. Also, we maintain a goal of realizing a debt-to-equity ratio target of no more than 1.0 time to maintain appropriate debt levels that will enable us to make investments necessary to secure growth, while at the same time maintaining financial soundness. The Fullcast Group also seeks to achieve an ROE of over 20% as a target indicator of "improvement of corporate value." In addition, we maintain a policy of enhancing returns of profits to shareholders with a target of achieving total return ratio of 50%. Our Group has established "Medium-Term Management Plan 2024." Based on "Medium-Term Management Plan 2024," we will work toward achieving the target of a "new record high consolidated operating profit of 10 billion yen in the final year of the plan." An outline of "Medium-Term Management Plan 2024" is presented below. a) Applicable period b) Corporate philosophy Target: "Aiming to achieve record-high profits in the final year of the medium-term management plan." c) Numerical Targets d) Main Management Indicators (KPI) Indicators for achieving "sustained improvement of corporate value" : ROE of 20% or higher Indicators related to shareholder returns : Total return ratio of 50% Indicators supporting "basic capital policy" : D/E ratio upper limit 1.0 e) Summary of Business Strategy ■ Short-Term Operational Support Business ・Integrate online and real-life using DX to further improve the service level provided to both staff and clients alike resulting in business growth ■ New Businesses and M&A ・Expand businesses established under the previous Medium-Term Management Plan ・Actively invest in M&A to take our business portfolio to the next stage of growth ■ Sales Support Business 2. Basic philosophy and policy concerning corporate governance Our Group considers the basic principles and aims of corporate governance to ensure transparent management for all concerned interested parties including shareholders as well as to improve the efficiency of management in order to realize the "sustained improvement of corporate value." The Company is now working to strengthen corporate governance following the basic policy outlined below. (1) Secure shareholders' rights and equality The Company will provide necessary information in a timely and accurate manner and respond appropriately following laws and regulations in order to effectively secure the rights of shareholders. In addition, in light of the composition of shareholders, the Company will consider improvements in the environment so that foreign shareholders and minority shareholders can exercise their rights appropriately. (2) Appropriate cooperation with stakeholders other than shareholders The Company strives to engage in appropriate cooperation with all stakeholders by implementing management that places top priority on compliance, given the awareness that the Company's staffing services have a highly social and public nature. (3) Ensure appropriate information disclosures and transparency The Company will disclose not only financial information, but also non-financial information, in an appropriate and proactive manner, with emphasis placed on fairness, equality, and speed. The Company will also ensure the transparency of this information. (4) Duties of the Board of Directors, etc. The Company will strive to make the decision making of management more efficient and streamlined by clearly demarcating the Board of Directors, the Audit & Supervisory Committee, and the roles and duties of the Audit & Supervisory Committee (5) Constructive engagement with shareholders The Company will engage with shareholders with the General Manager of the Finance and IR Department in charge and the President, Representative Director and CEO supervising, in order to contribute the sustained improvement of corporate value. These roles will be supplemented by the dedicated department in charge of investor relations. This structure will ensure constructive engagement takes place with shareholders. 3. Policy and procedures for determining the remuneration of executive management and Directors (excluding those who are Audit & Supervisory Committee Members) by the Board of Directors The relevant policy and procedures are provided in "II. Business Management Organizations and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management > 1. Organizational Composition and Operation > [Director Compensation] > Disclosure of Policy on Determining compensation amounts and calculation method" of this report. This is an excerpt of the original content. To continue reading it, access the original document here . Attachments