The Company considers the realization of a transparent and fair corporate governance system as the most important issue in corporate management. As the fundamental framework for the corporate governance of the Company, we have formulated the “Basic Policy for Pioneer Group Corporate Governance” for the purpose of achieving sustainable growth and increased corporate value over the mid- to long-term through the realization of effective corporate governance.
Based on this basic policy, the Board of Directors not only elects multiple outside directors and outside audit & supervisory board members, all showing an independence, but enhances the effectiveness of the board itself and other bodies that comprise corporate governance of the Company, through such measures as conducting a self-evaluation of each director on the operation of the Board of Directors, enriching the information provided to outside directors, and strengthening to cooperate between outside directors and outside audit & supervisory board members. Furthermore, by continuously and periodically reviewing and revising this basic policy, Pioneer will creatively develop corporate governance.
Pioneer has adopted an Audit & Supervisory Board system of corporate governance. Under this system, the Company has established the Board of Directors as a decision-making body for matters of the highest importance, such as management policies, and as a supervisory body. The representative director is responsible for business execution, while the Audit & Supervisory Board is responsible for auditing. In addition, to strengthen the oversight function of the Board of Directors, Pioneer has elected several independent outside directors, who have no significant transactional relationships with the Pioneer Group, and has established the Nominating Committee, Compensation Committee and Special Committee, each chaired by an outside director, as advisory committees for the Board of Directors.
In order to further clarify their responsibilities and respond promptly to changes in the business environment, Pioneer has set the term of office of directors to one year and each director conducts self-evaluation regarding the operation of the Board of Directors every year. Based on the results of the self-evaluations by each director, the effectiveness of the Board of Directors is considered and the operation of the Board of Directors is reviewed, further strengthening the supervisory function of the Board of Directors.
The Audit & Supervisory Board, half or more of which consists of independent outside audit & supervisory board members, audits the directors’ performance of their duties and monitors audits by the Independent Auditor. In addition, to safeguard the effectiveness of audits performed by the audit & supervisory board members, the Audit & Supervisory Board meets regularly with the representative director, and ensures opportunities for audit & supervisory board members to periodically receive explanations and reports from the Audit Division, which is responsible for internal audits, and the Independent Auditor.
Furthermore, the supervising and monitoring functions of outside directors and outside audit & supervisory board members over the management are strengthened by offering opportunities for regular cooperation between them, enhancing the information on business execution provided to outside directors, and holding communication meetings between outside directors and the Audit & Supervisory Board.
In fiscal 2018, the Board of Directors held 11 meetings, while the Audit & Supervisory Board held 15 meetings.
Pioneer has established a Nominating Committee, a Compensation Committee, and a Special Committee, each chaired by an outside director, as voluntary advisory committees designed to heighten management transparency and strengthen the oversight function of the Board of Directors. The respective outside directors who chair these committees report on the results of their deliberations at each committee and make related recommendations to the Board of Directors, and the Board of Directors gives full consideration to these reports and recommendations in the course of its related decision-making.
To expedite business execution and clarify the responsibilities for each business, the Board of Directors has elected executive officers, and established a Group Executive Committee under the supervision of the Board of Directors. The Group Executive Committee is a body charged primarily with decision-making or reporting to the Board of Directors regarding important issues that emerge in the course of business promotion or pertain to overall Group management strategy. In this capacity, the committee serves to enhance both the speed and effectiveness of business execution by the directors, as well as to strengthen the decision-making and oversight functions of the board itself.
In fiscal 2018, the Group Executive Committee held 19 meetings and deliberated approximately 40 issues.
In order for the Company to remain trusted and respected by society as a good corporate citizen, the “Pioneer Group Charter for Corporate Operations” is foremost in importance among the “Rules of the Pioneer Group.” These rules also include the “Pioneer Group Code of Conduct,” which stipulates specific decision-making and behavioral standards for Group directors, officers, and employees in the performance of their business duties, and the “Rules of the Pioneer Group,” a collection of rules outlining the scope of authority and responsibilities for each Group company, and other rules related to compliance.
Internal audits are implemented by the Audit Division to audit the status of the Group’s entire management and operations, and confirm compliance with laws and internal regulations. The Audit Division also works with the internal audit staff at Group companies and the Audit & Supervisory Board to enhance the internal audit function with regard to internal control systems, risk management, and areas related to corporate ethics, quality control, and environmental protection.
The Company has established a Business Ethics Committee, chaired by an outside director, to ensure legal compliance as well as thorough observance of the “Pioneer Group Charter for Corporate Operations” and the “Pioneer Group Code of Conduct.” The committee met twice in fiscal 2018.
In addition, the “Business Ethics Hotline” has been established as an internal reporting system, to quickly detect and appropriately address behavior that is in violation of the “Pioneer Group Code of Conduct.” The hotline is set up outside the Company to ensure the anonymity of persons making reports and to clarify the details of those reports. The details of reports received by the hotline are simultaneously referred to the Business Ethics Committee and audit & supervisory board members, making it possible to respond to that information in good faith and resolutely.
The Company has established an Internal Control Committee, chaired by a representative director, to identify possible risks associated with business activities and to prevent such risks from occurring. The committee met twice in fiscal 2018.
This policy has been formulated for the purpose of achieving sustainable growth and increased corporate value over the mid- to long-term through the realization of effective corporate governance in the Pioneer Group.