Basic Thoughts on Corporate Governance

In order to continuously enhance the corporate value of Monex Group, it is important for Monex Group, Inc. and its group companies to realize a viable corporate governance system. In accordance with this view, in order to check execution by management, and to establish a structure that enables balanced management judgments, Monex Group has made efforts so that it can hear various objective opinions, such as having multiple outside directors and actively promoting disclosure of corporate information.
Monex Group adopted a structure called "company with committees" (presently, "company with three committees") in June 2013 and reinforces the corporate governance structure by going further on separation of operation and monitoring.

Approach to Corporate Governance

In order to continuously enhance the corporate value of Monex Group, it is important for Monex Group, Inc. and its group companies to realize a viable corporate governance system. In accordance with this view, in order to check execution by management, and to establish a structure that enables balanced management judgments, Monex Group has made efforts so that it can hear various objective opinions, such as having multiple outside directors and actively promoting disclosure of corporate information.Monex Group adopted a structure called "company with committees (presently, "company with three committees") in June 2013 and reinforces the corporate governance structure by going further on separation of operation and monitoring.

 

Initiatives to Strengthen Corporate Governance

Since its founding, Monex, Inc. has employed multiple outside directors and built a management system that makes good use of outside eyes and voices. As our business expanded through M&A and we began to face new issues and risks, we appointed outside directors with the knowledge, experience, and specialization to rein in management decisions and supervise business execution. Monex has also been a leader in institutional design, shortening the term of directorships to one year in 2009 and shifting to a company with committees in 2013. Currently more than half of Monex’s Board of Directors is composed of outside and independent directors, who also head the Nominating, Audit, and Compensation committees. In addition, we continue to implement initiatives to improve the effectiveness of governance, such as appointing a lead independent director in 2015 who makes sure that the opinions of the outside directors are brought to the attention of management.

Changes in Corporate Governance (since the company’s founding)

Transition to a Company with Committees

On June 22, 2013, the Company transitioned to a "company with committees." Through this transition, not only will the separation of executive and supervisory functions become clearer, but by establishing the three Nominating, Audit and Compensation committees, each of which must be comprised of a majority of outside directors, we aim to ensure the transparency and fairness of management and to further enhance the effectiveness of corporate governance. Furthermore, under the provisions of the Companies Act, given that a considerable transfer of authority from the Board of Directors to executive officers is permitted in a company with committees, it should now be possible to respond quickly to any changes in the business environment.

 

Board of Directors

The Board of Directors is comprised of nine directors (including six outside directors). In addition to making decisions with respect to matters prescribed by laws and regulations, basic management policies and important management matters, the Board of Directors also supervises the performance of duties by executive officers. Outside directors, in particular, exercise a supervisory function from a position of independence, giving even more strength and effectiveness to corporate governance.

 

Nominating, Audit and Compensation Committees

  • The Nominating Committee is comprised of six directors (including five outside directors). It determines the content of proposals submitted at General Meetings of Shareholders regarding the selection of candidates for directorship.
  • The Audit Committee is comprised of three directors (including two outside directors). In addition to auditing the performance of duties by directors and executive officers, it also cooperates with the Accounting Auditor in proposing audit policies and plans.
  • The Compensation Committee is comprised of three directors (including two outside directors). It makes decisions on the individual remuneration and so forth received by directors and executive officers. 
Corporate Governance System

 

Proactive Disclosure

The Company regards disclosure as extremely important, not only for building relationships with stakeholders and the market, but also for corporate governance, as an internal and external checking function for substantive management and business execution.

 

Disclosure of Business Results

The Company attaches great importance to the detailed disclosure of business results, and so proactive disclosure is being promoted at our subsidiaries, such as the disclosure of the number of total accounts, active accounts in total accounts and transaction-related matters at Monex, Inc., and the monthly disclosure of DARTs (daily average revenue trades) and client assets at TradeStation Group, Inc.

Ongoing Disclosure and Declaration of the Management Perception and Views on the Present State of Business

Within the Company, Monex Group, Inc. shares the perception and views of management on the present state of business on an active and ongoing basis, by holding meetings for all Group employees and by issuing internal circulars on the Q&A session held during the external briefing following disclosure of quarterly financial results. The perceptions and opinions of the Representative Director, President and CEO of Monex, Inc. are also posted in every Monex Mail (an email magazine published every business day) without fail ever since the first issue was distributed in August 1999.

Communication with Shareholders and Investors

  • IInvigoration of General Shareholders Meetings
    The Company holds the Annual General Meeting of Shareholders on a Saturday to facilitate attendance by individual shareholders.
    In addition, the convocation notice for a General Meeting of Shareholders is mailed out and posted on our website three weeks prior to the event to encourage investors to exercise their voting rights. We have also adopted an electronic voting website to allow shareholders to vote via the Internet or mobile phone, and we have adopted an electronic voting platform for institutional investors which is operated by ICJ, Inc., a joint venture formed between the Tokyo Stock Exchange, Inc. and other companies. In 2009, we also began disclosing the results of voting to the public.

  • Proactive IR Activities
    On the day of announcing our quarterly financial results, or on the next business day, we hold a meeting to explain those results to individual investors. Telephone conferences for institutional investors are conducted in Japanese and English on the day of the announcement. In addition, we also visit Europe and the United States twice or so a year to hold successive meetings directly with overseas institutional investors. At all of these meetings, the Company's Representative Executive Officer and CEO delivers the briefing and answers questions directly. We also actively participate in conferences convened by securities companies, and work to create a wide range of opportunities to explain our business strategies. 

Basic Approach to Internal Control Systems

Recognizing that the appropriate establishment and operation of an internal control system is an important management issue, the group's Board of Directors has formulated the basic principles for organizing an internal control system, as well as related internal regulations.
For verifying whether the internal control system is operating as designed and producing results, in addition to the examinations by the Board of Directors, the group has a system in place that allows it to call for advice from Hideaki Kubori (Representative of Hibiya Park Law Office), who has been appointed as an advisor on the establishment and strengthening of the group's overall internal disciplinary control system and external risk response.

Officers

Basic policy of corporate governance.