TBM ACTION

LIMEX

SUSTAINABILITY

Governance

TBM believes that it is vital to remain committed to our corporate philosophy and have business management that contributes to the value creation of all stakeholders, including shareholders. In order to achieve sustainable growth of the company, we aim to build and further strengthen our business operations that ensures fairness, transparency, and the highest standards of ethics and operating systems to make agile decisions in an ever-changing business environment.

Governance Structure

Governance Structure (as of December 31, 2020)

General Meeting of Shareholders

Board of Directors / Directors

The Board of Directors, primarily responsible for making decisions, comprises seven directors, including two outside directors (as of December 31, 2020). In accordance with the rules of the Board of Directors, the Board of Directors meetings are held monthly in principle, supplemented on an ad-hoc basis as necessary. It makes decisions on matters stipulated in laws and regulations and the Articles of Incorporation, basic management policies, medium-term management plans, annual business budgets, and substantial matters related to sales, offices, contracts, organizations, human resources, labor, property, etc. Auditors are required to attend the Board of Directors meetings to improve auditing functions and transparency.

By the Articles of Incorporation, the number of directors is limited upto sixteen (16) and the term of office is two years after being appointed. The appointment is made at a general meeting of shareholders by the majority of the voting rights of the shareholders who attended, whose voting rights collectively account for at least one-third of the total amount of voting rights of the shareholders.

Board of Corporate Auditors/Auditor

The Board of Corporate Auditors consists of three members: one full-time outside director and two part-time outside directors (as of December 31, 2020). In principle, the Board of Corporate Auditors meetings are held monthly, supplemented on an ad-hoc basis as necessary. In accordance with the rules of the Audit & Supervisory Board Members, auditors attend the Board of Directors meeting and when execution of duties by the Director violates or is suspected to violate laws or the Articles of Incorporation, a report will be made at the Board of Directors meeting. In addition, necessary measures such as interviews on the current status of work, reviewing the minutes of important meetings, requests for internal approval, and other important documents and investigation of accounting books and documents will be conducted at the headquarter and branch offices.

By the Articles of Incorporation, the Board of Corporate Auditors are limited upto four members and the term of office is four years. The appointment is made at a general meeting of shareholders by the majority of the voting rights of the shareholders who attended, whose voting rights collectively account for at least one-third of the total amount of voting rights of the shareholders.

Accounting Auditor

The accounting auditor conducts audits of the headquarters, factories, and other sites based on the Companies Act. In addition, the accounting auditor is appointed at the general meeting of shareholders based on the Articles of Incorporation and the term of office is one year.

Internal Control

In order to ensure the soundness and appropriateness of the duties of directors and employees, the “Basic Policy for Internal Controls” and the rules for compliance, risk management, duties and authority, etc., have been formulated, and the internal control system is maintained and integrated into the business operation.

Compliance

Approach to Compliance

Compliance is a material component of the basic business management policy. We encourage all officers and employees to comply with laws, ordinances, regulations, etc., act based on the highest standards of ethics. We strive to carry out management and operations faithfully and fairly.

Compliance Committee

We have established the Compliance Committee to promote compliance initiatives. The Committee takes preventive and corrective actions against any acts that violate the laws and regulations of officers and employees, as well as any actions directed, ordered, incited, coerced, permitted, approved, or implied.

When a compliance violation or the like is confirmed, it is reported to the CEO, and matters that are deemed to have a serious effect on business management are reported to the directors.

Internal Grievance Mechanism

We have established and manage an internal grievance mechanism called "Compliance Consultation Desk." The executives and employees who have the information related to violation or suspected violation of laws and regulations can directly report such information. An external auditor serves as the contact person for the Compliance Consultation Desk. In addition, we accept anonymous consultations to protect the privacy of whistleblowers and protect the benefit of whistleblowers.

Training

For executives and employees, we conduct training to raise awareness and interest in compliance and provide correct knowledge. In 2019, we held three compliance training sessions for all employees.

Risk Management

Risk Management Approach

Based on the "Basic Policy for Internal Controls", we have established and maintain a management system concerning the prevention of risks in our company. We aim to make our business plans and business operations progress by developing a function to prevent and respond to risks.

Risk Management Procedures

We will perform the risk assessment and response according to the following procedure.

  • Risk Identification
    We recognize, define, and identify the risks that may hinder our business plans and business operations. The identified risks are labelled based on the business process where they may occur.
  • Risk Classification
    We classify the risks based on its level (corporate-level or operational process level) and past exposure (the company has experienced it or not).
  • Risk Analysis
    We analyze the probability and the magnitude of the potential impact of the identified/classified risks.
  • Risk Evaluation
    We evaluate the materiality of the risks and necessity for countermeasures in accordance with the materiality.
  • Risk Response
    We select appropriate measures such as risk avoidance, mitigation, transfer, or acceptance based on the evaluation.

Risk Management and Response System

The CEO leads the risk management of the daily operation, supervised by the Board of Directors and supported by the head of the Administration Department. The Board of Directors, as an institution under the Corporate Law, reflects the risk evaluations in management decisions and directs business operations properly. A system called “Risk Response System” is developed for an immediate and proper response to the risks when they materialize. The Risk Response System is reviewed and updated as necessary.

When the risks are materialized, the prescribed departments and persons responsible are promptly and accurately notified in accordance with the Risk Response System. In response to the notice, the CEO activates the Risk Response System. In the case where the CEO is not available to instruct it immediately, the head of Administration Headquarters orders it on behalf of the CEO.