Asteria’s business objective is not only to contribute to shareholders, customers, and employees, but also to consider the benefit to our society by maintaining and improving the company’s business value. In order to do so, the company strives to make its Corporate Governance System highly transparent and healthy while strengthening the Corporate Governance by appointing Outside Directors. The company also enforces compliance standards and policies for management and employees as a means of precluding fraud or deception.
b) The reason for adoption of the current Corporate Governance System
Asteria elected Audit & Supervisory Board Members and established an Audit & Supervisory Board. The company has three Audit & Supervisory Board Members including two outside members. In addition to regular monthly meetings, the members hold supplemental meetings as required. Outside members share information and exchange their views based on close coordination with the Standing Audit & Supervisory Board Member and Accounting Auditor. In addition, each member attends monthly Board of Directors meetings to provide objectives and exchange views as highly independent members. Thus, the company’s decision-making and business execution have been audited appropriately.
Since Asteria’s establishment, the company has appointed highly experienced and knowledgeable experts to serve as Outside Directors to strengthen the Corporate Governance Systems. Currently, two Directors out of five are Outside Directors, and these specialists enhance the effectiveness of Corporate Governance by actively engaging in high-level discussions and brainstorming with other Directors.
The company is relatively small; there are less than one hundred employees. Thus, the current Corporate Governance System is adequate to the company scale.
Diagram of the Corporate Governance System
System of Corporate Governance
c) Board of Directors and the Directors
Asteria’s Board of Directors consists of five Directors, including two Outside Directors. It is company policy that the Board shall have more than two Outside Directors, but less than half of the total number of Directors, to enhance the transparency and high-level of Corporate Governance. In addition to monthly Board of Directors meetings, supplemental meetings are held as required.
Asteria stipulates in its bylaws the following:
Maximum number of Director is eight.
Appointment of Directors — passes when 1/3 of eligible shareholders are in attendance for the shareholders meeting and, of those present, more than 1/2 have voted.
Dismissal of Directors — passes when more than 1/2 of eligible shareholders are in attendance for the shareholders meeting and, of those present, 2/3 have voted.
Outside Directors Attendance to the Board of Directors Meetings
Director Shuzo Saitoh
Eleven out of eleven Board of Directors meetings since appointed on June 21, 2014
Director Anis Uzzaman
Nine out of eleven Board of Directors meetings since appointed on June 21, 2014
Audit and Supervisory Board Member Yuji Inoue
Eleven out of eleven Board of Directors meetings and ten out of ten Audit & Supervisory Board meetings since appointed on June 21, 2014
Audit and Supervisory Board Member Akio Satoh
Twelve out of fourteen Board of Directors meetings and twelve out of thirteen Audit & Supervisory Board meetings in this fiscal year
Pursuant to 370 Corporate law in Japan, the Board of Directors has one Written Resolution.
Pursuant to 427-1 Corporate law, the company has entered into liability limitation agreements with each Outside Director and Outside Audit & Supervisory Board Member, which limited the amount of their liability under 423-1 Corporate law. The amount of limitation is the maximum amount as set forth by law.
d) Management Meeting
A Management Meeting consists of in-house Directors, Standing Audit & Supervisory Board Members, and Officers. Each department’s leaders attend the monthly Management Meetings for detailed reports as required.
Asteria’s Officers are appointed by the Board of Directors to accelerate decision-making during day-to-day business operations, and they are responsible for business execution.
Officers are responsible for reporting and enforcing matters to be resolved promptly at Management Meetings.
e) Audit & Supervisory Board
Asteria holds an Audit & Supervisory Board.
There are three Audit & Supervisory Board Members including two outside members.
The Audit & Supervisory Board shall hold a meeting at least once a month and shall hold supplemental meetings as required.
Each member attends the Board of Directors meetings for monitoring and oversight of business operations. Additionally, Standing members attend the Management meeting.
Board members attend accounting audits at the end of the fiscal year and the end of the quarter, together with Internal auditors, to receive accounting information and its explanation. They observe and oversee the internal control system.
f) Internal Audit
Regarding internal control effectiveness and business operations, the Internal Auditor belongs to both the Business Management Department and the President’s Office provides audit services continuously with the cooperation of each department. Furthermore, the Internal Auditor attempts to enhance internal control by collaborating with Audit & Supervisory Board Members and the Accounting Auditor.
For assurance of improvement, the result of an internal audit is reported to the CEO, and if any issue arises, it is addressed in each department.
An internal audit of the Business Management Department is performed by the President’s Office by the order of the President and CEO.
g) Internal Control Systems
Asteria has established company compliance provisions. It is the company’s standard policy that we comply with law and operate our business accordingly. The company also has a “Compliance hotline” operated by an external attorney to whom our employees can securely and directly provide any information about actions that are possibly against the law.
Each department is required to clarify where responsibility lies and to determine the limitation of responsibility by the company’s regulations for segregation of duties and regulations for official authority. Thus, instructions and commands are executed properly.
The Internal Auditor, who belongs to President’s office, audits each department and monitors whether the Internal Control System functions
h) Risk Management Systems
In addition to regular monthly Board of Directors meetings, monthly Management meetings are held by in-house Directors, in-house Audit and Supervisory Board Members, and Executive Officers. At this meeting, matters that may affect important business operations are shared and discussed for its handling.
Regarding any actions that may be against the law, the company consults external specialists before internal discussion.
i) Accounting Audit
Seimei Audit Corporation audits the company according to “Corporate Law” and “Financial Instruments and Exchange Law” in Japan.
2. Internal Audit and Audits for Audit & Supervisory Board members
3. Outside Directors and Outside Audits & Supervisory Board Members
a) Regarding the appointing Outside Directors and Outside Audit & Supervisory Board Members, the company refers to Corporate Law and the regulations of the Tokyo Stock Exchange, Inc. It is the company’s own decision that there should be no conflict of interest between General Shareholders and Outside Directors or Outside Audit & Supervisory Board Members in order to appoint Board members.
b) Outside Directors and Outside Audit & Supervisory Board Members’ function, role, and appointment
There are two Outside directors and two Outside Audit & Supervisory Board Members in the company.
Mr. Shuzo Saito, Outside Director, has a wealth of knowledge for overseas operations from his experience at Ricoh Group. The experience adds a value for the company’s important decision-making regarding overseas operations. He satisfies the requirement as an independent member, which is listed on Tokyo Stock Exchange, Inc.
Mr. Anis Uzzaman is General Partner & CEO of a venture capital in Silicon Valley. He has a wealth of knowledge and experience through investing in many IT enterprises and management services. We designated him as an Outside Director for Asteria expecting him to supervise our decision-making and business operations for our future overseas investments of new technologies.
Mr. Akio Sato, Outside Audit and Supervisor Board Member, has substantial knowledge and experience of law as an attorney. We designated him to leverage his knowledge and experience in offering advice and recommendations in Asteria’s business judgments and decision-making processes. He satisfies the requirement as an independent member, which is listed on Tokyo Stock Exchange, Inc.
Mr. Yuji Inoue served as executive management of Ricoh Company Inc. and Ricoh Group. He also served as a Standing Audit & Supervisory Board Member at Ricoh and has experience and knowledge through audits for Ricoh’s overseas subsidiaries and related companies. Based on his experience, we designated him as Outside Audit & Supervisory Board Member to leverage his knowledge of our worldwide business and decision-making. He satisfies the requirement as an independent member, which is listed on Tokyo Stock Exchange, Inc.
c) Supervision, audit, and internal audit by Outside Directors and Outside Audit & Supervisor Board Members, audit for Audit & Supervisory Board Members, collaboration with Accounting Auditor and Internal Auditor relations
d) Personal relations, capital ties, and business relations between the company and Outside Directors or Outside Audit & Supervisory Board members
As of the date of filing the securities report, there is no important conflict of interest between the company and two Outside Directors or two Outside Audit & Supervisory Board Members.
4. Remuneration of Directors and Audit & Supervisory Board Members
The remuneration of the Board Members is resolved at General Meeting of shareholders, and the current amount is within the amount resolved at the meeting. The remuneration of Directors is resolved at the Board of Directors meeting, and the remuneration of Audit & Supervisory Board Members is determined by their discussion.
The above amount is within annual remuneration, which was resolved at a General Shareholders Meeting. The remuneration of Directors was set at a Board of Directors meeting, and the remuneration of Audit & Supervisory Board Members was determined by their discussion. Regarding Director’s remuneration, 20 million yen or less was resolved separately as an annual stock option (includes 4 million yen for Outside Directors) at the fourteenth General Meeting of Shareholders on June 23, 2012.
The stock option expense for this fiscal year included in the above Directors’ remuneration is
5,040 yen for four Directors (including 1,008 yen for two Outside Directors).
As there is no Director to receive more than 1 million yen as annual remuneration, we do not disclose the individual amount.
There is no wage for a Director who doubles as an employee at Asteria.
5．Special condition for resolution at General Meeting of Shareholder
Pursuant to 309-2 Corporate Law in Japan, it is set forth in Asteria’s bylaws that a resolution is passed when 1/3 of eligible shareholders are in attendance to the shareholders meeting and, of those present, 2/3 have voted.
6. Purchase of Treasury Stock
Asteria, pursuant to 426- 2 Corporate Law in Japan, stipulates in its bylaws that the company is entitled to purchase Treasury Stock through the Market (Buy Back) as set forth in 16-1 Corporate law.
7. Resolution of Dividends from Surplus
Asteria stipulates in its bylaws, unless otherwise provided by law, that the company shall determine a dividend of surplus, set forth in 459-1 Corporate Law, by a resolution of the Board of Directors. This is to enable the company to more flexibly distribute profits to shareholders.
8. Interim Dividends
Asteria, to enable the company to more flexibly distribute profits to shareholders, stipulates by its bylaws that it shall deliver interim dividends to shareholders or registered pledgees of Shares who are recorded by the record date, September 30.
9. Exemption of Directors and Audit & Supervisory Board Member
Asteria, pursuant to 426- 1 Corporate Law in Japan, stipulates in its bylaws that it may, by a resolution of the Board of Directors, exempt a Director (including a former Director) and an Audit & Supervisory Board Member (including a former Audit &Supervisory Board Member) from being held liable for his/her actions by applicable laws and ordinances to enable the Director and Audit & Supervisory Board Member to perform their duties in a satisfactory manner.
Basic policy on Eliminating Anti-Social Forces and the system
1. Basic policy on eradicating Anti-Social Forces
Involvement with anti-social forces decreases the company’s value. It is necessary and important for total separation from anti-social forces from the viewpoint of fulfilling the company’s social responsibility.
Asteria has a policy to eliminate any and all relationships the company might have with anti-social forces and to resolutely oppose any unreasonable demands.
2. Systems for eradicating Anti-Social Forces
The Business Management Department is the unit in charge of responding to Anti-Social Forces. The department collaborates with the President’s Office and regularly makes contact with the attorney and related administrative agency for their advice and instruction.
For the prevention from involvement with Anti-Social Forces and their business, as a general rule, the company investigates customers, if there is any involvement with Anti-Social Forces, through a private investigation agency.