Corporate Governance

Under existing Japanese legislation, the “company with company auditors” system is considered most effective for Japan MDM, taking into account such factors as its size and growth stage. Japan MDM’s current corporate governance system is designed to realize the following “Basic View on Corporate Governance.”

1. Supervision
(1) Board of Directors

The Board of Directors of Japan MDM recognizes that it has the authority to establish and resolve, in accordance with the spirit of the Companies Act, the basic policy on company management, business plans, and other important matters provided for in laws and ordinances, the articles of incorporation, and the rules on the Board of Directors, as well as to supervise the decision-making of the Executive Board and the execution of duties by directors. In this light, the Board of Directors aims to encourage the free expression of opinions and discussions among directors. The Board of Directors consists of ten directors: six executive directors; two non-executive director; and two outside directors. Two independent outside directors have been appointed. One has certification in public accounting and has corporate management experience with a listed company. The other is an attorney with extensive knowledge on corporate legal affairs, compliance, and internal control.

(2) Nomination and Remuneration Advisory Committee

Japan MDM has established the Nomination and Remuneration Advisory Committee, an advisory committee to the Board of Directors to examine nomination and remuneration-related matters that are particularly important. The Committee is aimed at enhancing the independence and objectivity of the functions of the Board of Directors and its accountability concerning the nomination and remuneration of senior management, directors, and others. The Nomination and Remuneration Advisory Committee evaluates the performance of directors, as well as supervises matters pertaining to decision-making regarding the appointment and dismissal of directors as well as the management of the company’s affairs through important decision-making at the Board of Directors. The Nomination and Remuneration Advisory Committee consists of three members: President; and two outside directors.

(3) Compliance Committee

Japan MDM has established the Compliance Committee with the objective of clarifying the compliance system and fostering a corporate culture that places priority on compliance. The members of the Compliance Committee are approved by directors, the full-time statutory auditor, and the Board of Directors. It consists of nine members: one chief compliance officer; and eight compliance officers.

2. Business Execution
(1) Executive Board

The objective of the Executive Board is to facilitate the smooth management of the company by passing the necessary resolutions on important matters concerning ordinary company management affairs, in accordance with the basic policy on company management and business plans, etc. decided by the Board of Directors, excluding items prescribed as matters to be resolved by the Board of Directors in laws and ordinances, the articles of incorporation, and the rules on the Board of Directors. The Executive Board consists of seven members: President; and six executive directors. The non-executive director and auditors may attend the meetings of the Executive Board and state their opinions.

(2) Management Council

The purpose of the Management Council is to provide a venue for Japan MDM’s officers and other employees to participate broadly in the business affairs of the company, gathering opinions and holding discussions on important matters regarding company management and using these findings to contribute to the efficient operation of the Board of Directors and the Executive Board. The Management Council consists of eight members: President; five executive directors; and two individuals designated by the President. The non-executive director and auditors may attend the meetings of the Management Council and state their opinions.

3. Audit
(1) Board of Corporate Auditors

As an independent body entrusted by stockholders, the Board of Corporate Auditors is responsible for establishing good corporate governance that earns social trust by fulfilling roles and responsibilities, such as auditing the execution of the duties of directors and exercising authority pertaining to the appointment and dismissal of the outside accounting auditor and audit fee. The Board of Corporate Auditors consists of three auditors: one full-time statutory auditor; and two outside statutory auditors. Two independent outside statutory auditors have been appointed. One has insight as a certified public accountant, and the other has expertise and experience in the medial industry.

(2) Internal Audit Office

The objective of the Internal Audit Office is to evaluate whether the company’s business and affairs are being conducted properly or not, reflect its findings in the management of the company, and contribute to streamlining and increasing its efficiency. The Internal Audit Office (two full-time members) directly under the control of the President conducts internal audits of Japan MDM’s offices nationwide and its subsidiary, Ortho Development Corporation, and reports to the President, the Board of Directors, and the Board of Corporate Auditors.

(3) Accounting Auditor

Japan MDM’s accounting auditor for fiscal 2018 is YUSEI Audit & Co. There are two executive members, and four certified public accountants and ten other individuals support the executive members. YUSEI Audit & Co. has been Japan MDM’s accounting auditor since its appointment at the 35th ordinary general meeting of stockholders held on August 24, 2007. There are no executive members who have audited Japan MDM’s accounts for more than seven consecutive years. Note that YUSEI Audit & Co., which has provided audit certification for Japan MDM to date, changed its name to Grant Thornton Taiyo LLC on July 2, 2018 following a merger with Grant Thornton Taiyo LLC.