Basic Concept of Corporate Governance
Monex Group believes that, as a basis for establishing a group-wide corporate governance structure, corporate governance rules should first be established and thoroughly implemented within each group company.
We also consider that monitoring management execution of the Group through promotion of information disclosure and a system for hearing broad-ranging and varied opinions leads to balanced business judgment, which is crucial for effective corporate governance.
Overview of Our Corporate Governance System
Business Execution
As of June 27, 2011, the Board of Directors comprises ten directors, of which three are external and independent directors and one is an external director. Five full-time directors (one of whom is the CEO) engage in business execution. A Steering Committee consisting of full-time directors meets every week as a consultative council to the CEO. In addition, the Board of Directors meeting is held more than once a month to ensure effective management control.
Audit and Oversight
- Internal Auditing
Internal audits are conducted by the Internal Audit Office, which reports to the Board of Directors, based on the annual internal auditing plan. The results of these audits are reported regularly to the Board. The aim of the internal audits is to evaluate the appropriateness and conformity with the law of the overall internal control systems and business processes of the Group's main companies, and to make ongoing improvements. Two persons are assigned to the Internal Audit Office. Internal auditing of Monex, Inc., the core company of the Monex Group, is conducted in cooperation with the company's internal audit department. - Auditor's Auditing
The principles regarding the auditor's audit, auditing plans, method of audit, and division of auditing work are decided through the deliberations of the Board of Statutory Auditors. Board meetings are attended by the auditors. Auditors also attend other important meetings, as necessary. As a general rule, the Board of Statutory Auditors requests reports on the operations of subsidiaries, and audits their businesses and asset status. - Accounting Audit
An auditing contract has been agreed with KPMG AZSA & Co. regarding auditing in accordance with the Company Law and with the Financial Instruments and Exchange Law.
Proactive Disclosure
The Company considers appropriate disclosure as extremely important not only for its relationship with the market but also for corporate governance, as a checking function against management and operation. In its Disclosure Policy, the Company promises to comply with the timely disclosure rule decided by the Tokyo Stock Exchange and to carry out transparent disclosure without arbitrariness, which strengthens surveillance effect from outside.
Measures to Establish a Corporate Culture of Strict Compliance
It is crucial that not only the management but that each individual working for a company in the Monex Group recognizes the importance of compliance and acts accordingly. Based on this perception, we disclose the Group's Corporate Ethics Compliance Policy and present briefings by the relevant departments on compliance-related issues at monthly corporate-wide meetings, as well as at various forums provided within our corporate network. We seek to establish a corporate culture that calls for strict compliance, with a commitment from both our Directors and our employees.
Continued Disclosure of the Recognition and Perception of the Management on the Current Status
From a corporate governance perspective, continued disclosure of how the management perceives and views the present state of business is important, as this provides an internal and external monitoring effect. The President and CEO of Monex Inc. offers his views in the company's daily e-mail magazine, "Monex Mail," as he has since the very first issue.
Advisory Board
In order to obtain balanced, multidisciplinary, objective opinions and advice from a broader perspective, we have established an Advisory Board, consisting of a group of specialists. A regular quarterly meeting is held to gather broad-ranging advice that will contribute to the business operations of our Group.
About Remuneration for Board Directors
The total amount of board directors' remuneration is within the limit resolved at the General Meeting of Shareholders (*) and the contents of the remuneration consists of a fixed portion and a performance-linked portion which fluctuates depending on the consolidated net income. The Company established Remuneration Committee consisting of external and independent board directors in order to discuss its substantial contents. External directors receive only a fixed amount of remuneration because of the importance of their having a position independent from business execution in their supervisory functions.
(*) Limit of the remuneration for board directors resolved at the Annual General Meeting of Shareholders held on June 24, 2006 is the total amount of fixed portion of 300 million yen per annum plus performance-linked portion within 3% of the consolidated net income of the previous fiscal year of the payment day.
Basic Policy regarding the Internal Control System
Based on the perception that the establishment and operation of an appropriate internal control system is an important management issue, the Group determines basic policies regarding the operation of the internal control system, while at the same time developing relevant internal regulations. Monex Inc. also determines basic policies for their internal control system in a similar manner.
To verify whether the internal control system is operating as intended, the Board of Directors and auditors conduct regular checks. In addition, the Group is able to obtain advice as necessary from Mr. Hideaki Kubori, attorney at law, Chairman of Hibiya Park Law Offices, who is our advisor on issues regarding the establishment and enforcement of internal discipline and the control system, as well as external risk management.
