Monex Group, Inc. believes that it is important to create a highly effective corporate governance system to continuously enhance corporate value of the Company and its group companies. Based on this, Monex Group strives to listen to objective and diverse opinions through the ongoing appointment of outside and independent directors since its establishment in 2004 and the active promotion of information disclosure to create a system that enables balanced management decision-making while effectively monitoring management execution. In June 2013, Monex Group adopted a structure called company with committees (currently, company with committees, such as the Nominating Committee and others) to reinforce corporate governance by further separating management and oversight. In addition, since April 2015, we have selected a lead independent director from among the outside directors.
Monex Group’s business principle is to design innovative ways of managing money and realizing individual self-fulfillment for an ever-changing future. Our ultimate goal is to optimize each person’s lifetime balance sheet. In this context, Monex Group believes that highly effective corporate governance of the Company and its group companies is important for the sustainable enhancement of corporate value and therefore, has established and will maintain a system to ensure the effectiveness of checks and balances of management execution and the transparency of management decisions. In addition, the Company will strive to improve and reinforce this system to ensure that it remains effective in light of changes in the business environment and social demands.
Since its founding as Monex, Inc., Monex Group has employed outside directors and built a management system that benefits from the perspectives and opinions of those outside the company. To accommodate the expansion of operations through M&A and changes in issues and risks, the Company appoints outside directors with the knowledge, experience, and expertise to monitor and oversee management decisions and business execution. In terms of institutional design, Monex Group was one of the first companies to shorten the term for directors to one year in 2009 and shift to a company with committees in 2013. Currently, outside directors make up more than half of the board of directors and all three heads of the Nominating, Audit and Compensation Committees are outside directors. Furthermore, Monex Group continues to implement initiatives to improve the effectiveness of governance, such as by appointing a lead independent director in 2015 to bring together the opinions of outside directors and to create a structure capable of making frank and critical recommendations to the executive management team.
On June 22, 2013, Monex Group transitioned to a company with committees. With the revision of the Companies Act, Monex Group became a company with committees, including the Nominating Committee and others, on May 1, 2015. This new structure further clarifies the separation of execution and oversight functions. In addition, through the establishment of the three Nominating, Audit and Compensation Committees, each of which must be comprised of outside directors as a majority, it also ensures transparency and fairness of management to further enhance the effectiveness of corporate governance. Furthermore, given that provisions of the Companies Act permit a considerable transfer of authority from the Board of Directors to executive officers in a company with committees, it is now possible to respond more quickly to changes in the business environment. Because this structure is designed to ensure highly effective supervision and monitoring capabilities of the Board of Directors, the Company has defined the credentials necessary for board members and based on candidate nomination requirements, strives to achieve an appropriate rotation of board members.
Board of Directors
The Board of Directors is comprised of 11 directors (including six outside directors). In addition to making decisions on 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. In particular, outside directors exercise a supervisory function from a position of independence that further enhances the strength and effectiveness of corporate governance.
Nominating, Audit and Compensation Committees
- The Nominating Committee is comprised of five directors (including four outside directors). It determines the content of resolutions submitted at the General Meeting of Shareholders regarding the selection of director candidates.
- The Audit Committee is comprised of three directors (including three outside directors). In addition to auditing the performance of duties by directors and executive officers, it also works with the accounting auditor in proposing audit policies and plans.
- The Compensation Committee is comprised of four directors (including three outside directors). It makes decisions on individual remuneration of and other matters relating to directors and executive officers.
Diversity of the Board of Directors
To ensure the effective functioning of our structure as a company with committees, such as the Nominating Committee and others, it is important to maintain and improve the effectiveness of Board of Director meetings. To do this, we believe diversity in terms of qualifications, affiliation, region of origin, gender and other qualities of the directors who make up the Board of Directors is imperative. Regarding gender diversity, the ratio of female board members on the Board of Directors is three out of 11 members, or approximately 27 percent. In terms of age diversity, the Company has appointed directors from a wide range of age groups, from their 30s and 40s to their 80s. Ever since our founding, the Company has promoted diversity, equity, and inclusion (DEI) as core values and has composed the Board of Directors based on the conviction that these values make management innovation and appropriate risk response possible.To ensure the effective functioning of our structure as a company with committees, such as the Nominating Committee and others, it is important to maintain and improve the effectiveness of Board of Director meetings. To do this, we believe diversity in terms of qualifications, affiliation, region of origin, gender and other qualities of the directors who make up the Board of Directors is imperative. Regarding gender diversity, the ratio of female board members on the Board of Directors is three out of 11 members, or approximately 27 percent. In terms of age diversity, the Company has appointed directors from a wide range of age groups, from their 30s and 40s to their 80s. Ever since our founding, the Company has promoted diversity, equity, and inclusion (DEI) as core values and has composed the Board of Directors based on the conviction that these values make management innovation and appropriate risk response possible.
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 monitoring function for management and business execution.
The Company strives to provide appropriate disclosure of business results by actively disclosing our subsidiary Monex, Inc.’s monthly execution prices, TradeStation’s DARTs (acronym for daily average revenue trades to indicate number of revenue-producing contracts and transactions), and Coincheck’s monthly trading prices for each exchange and sales office.
Monex Group 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 internally circulating the content of Q&A sessions held during external briefings following the announcement of quarterly financial results. In addition, the chairman of Monex, Inc. has been posting his perceptions and opinions in Monex Mail, an online mail magazine issued every business day, for every issue without fail since the first issue was distributed in August 1999.
- General Shareholder Meetings
The Company holds its Annual General Meeting of Shareholders on a Saturday to facilitate attendance by individual shareholders. In addition, the convocation notice for the General Meeting of Shareholders is mailed out and posted on the Company 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 an electronic voting platform for institutional investors that is operated by ICJ, Inc., a joint venture formed between the Tokyo Stock Exchange, Inc., and other companies. In 2009, we also began disclosing voting results to the public.
- Proactive IR Activities
On the day of or the next business day of the announcement of our quarterly business results, we hold presentations to explain those results to individual investors. For institutional investors, we hold presentations in Japanese and telephone conferences in English on the day of the quarterly financial results announcement. In addition, we visit Europe and the United States approximately twice a year. At these meetings, the representative executive officer and CEO as well as the executive officer and COO/CFO deliver the briefings and answer questions directly. We also actively participate in conferences organized by securities companies and work to create a wide range of opportunities to explain our business strategies.
Recognizing that the appropriate establishment and operation of an internal control system is an important management issue, the Company has formulated basic principles for the internal control system of the Board of Directors and related internal regulations.
To verify that the internal control system is operating as designed and producing results, in addition to examinations by the Board of Directors and the Board of Auditors, the Company has created a system that allows us to consult Hideaki Kubori (representative of Hibiya Park Law Office), our advisor for establishing and strengthening the Group’s overall internal control system and external risk response.
Basic policy of corporate governance.