Governance Report

Corporate Governance

The LINTEC Group regards the basics of corporate governance to be the practice of thoroughgoing compliance, maximum management transparency, awareness of corporate ethics, rapid decision-making, and efficient administration of business operations. The LINTEC Group aims to increase its corporate value and common benefit to shareholders by continually improving its corporate governance.

Corporate Governance System

For organizational design★1, LINTEC has chosen to be a company with an audit and supervisory committee★2, and appoints directors as Audit and Supervisory Committee members to enhance the function of supervising the Board of Directors, with the aims of stepping up corporate governance and improving management further.
The company has 12 directors, three of whom are members of the Audit and Supervisory Committee. Also, LINTEC has five outside directors (three men and two women), including four independent outside directors (two men and two women). Of these four, two directors (one man and one woman) serve as Audit and Supervisory Committee members. With the adoption of the executive officer system, LINTEC separates the function of directors in charge of making decisions on important management issues from that of executive officers in charge of business operations.
In addition, the Nomination and Compensation Committee (comprising all independent outside directors and all representative directors as well as external experts, with a majority of members being independent outside directors; chaired by an independent outside director) has been established as an advisory body for the Board of Directors. The committee checks the validity of remuneration and personnel affairs of corporate officers, as well as makes general recommendations on corporate governance.
Furthermore, LINTEC has established a sustainability promotion system. Under the Sustainability Committee, which is chaired by a representative director and includes all outside directors among its members, committees on ESG, SDGs, risk management, and so on and their subcommittees are established. Each comprises staff members from a wide range of departments who carry out activities from a company-wide perspective to achieve growth together with society.
Of the 12 directors, two are in their 70s, seven are in their 60s, and the other three are in their 50s.

  • ★1Organizational design: Determining the structure of organizations (e.g., shareholder meeting, board of directors) in charge of decision-making or operation of a joint-stock company
  • ★2A company with an audit and supervisory committee: A stock company where its audit and supervisory committee, comprising more than three directors (with outside directors as a majority) as committee members, audits and supervises how directors administer business operations

Corporate Governance System

Corporate Governance System

As of April 1, 2023

Compliance with the Corporate Governance Code

LINTEC complies with the Corporate Governance Code. Thus far, referencing the code, the company has taken various measures, such as the implementation of PDCA cycles through evaluating the effectiveness of the Board of Directors, and the establishment of the Nomination and Compensation Committee. LINTEC will continue to comply with and implement the Corporate Governance Code. In light of social circumstances and the progress of its initiatives, top management and outside directors of LINTEC also hold discussions on areas of deficiency to continue the company’s improvement efforts.

  • Corporate Governance Code: A compilation of key principles set out by the Financial Services Agency and Tokyo Stock Exchange in the form of a code that listed companies in Japan are expected to comply with as a means of enhancing corporate governance.

Actions taken to enhance corporate governance

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FY Major actions
2004
  • Appointed an outside director, first in the company
2006
  • Established the Audit Office
  • Reformed the executive compensation system (abolished retirement benefits and introduced stock options)
  • Established the Remuneration Assessment Advisory Meeting (to check the validity of remuneration of corporate officers)
2008
  • Established CSR Management Office
  • Increased the number of outside directors from one to two
2011
  • Adopted the executive officer system; decreased the number of directors significantly from 18 to 10
2015
  • Shifted to a company with an audit and supervisory committee (from a company with a board of auditors)
  • Set the number of board members at 16 (including four directors serving as Audit and Supervisory Committee members and four outside directors)
  • Complied with principles of the Corporate Governance Code
2018
  • Reformed the executive compensation system (for the long-term incentive plan, replaced stock options with restricted stocks in order to encourage director’s holding of treasury stocks)
  • Abolished the buyout countermeasure (anti-takeover measure)
  • Established the Corporate Governance Committee, comprising two independent outside directors and a representative director and chaired by an independent outside director, as an advisory body for the Board of Directors to check the validity of remuneration and personnel affairs of corporate officers (Remuneration Assessment Advisory Meeting was dissolved as a result)
2021
  • Increased the number of outside directors from four to five
  • Increased the proportion of independent outside directors to one-third (four out of 12)
  • Enhanced the constitution and function of the Corporate Governance Committee to mandate that it: be comprised of all independent outside directors and all representative directors, with the remainder of members being external experts; have independent outside directors in the majority; and be chaired by an independent outside director. Its function is to check the validity of nomination and remuneration of corporate officers and make general recommendations on corporate governance
  • Corporate Governance Committee renamed Nomination and Compensation Committee

Corporate Officers

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Remuneration of Corporate Officers

1. Total remuneration by corporate officer type, remuneration type, and number of officers included

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Corporate officer type Total remuneration
(Millions of yen)
Total remuneration by type
(Millions of yen)
Number of people receiving remuneration
Basic remuneration Bonuses Restricted stocks
Directors
(excluding Audit & Supervisory Committee members and outside directors)
289 206 54 28 6
Directors
(Audit & Supervisory Committee members)
(excluding outside directors)
21 21 - - 1
Outside officers 44 44 - - 5

As of March 31, 2023

2. Policy regarding decisions on amounts of director remuneration

  1. Director remuneration (excluding outside directors and Audit & Supervisory Committee members)

    Remuneration of directors (excluding outside directors and Audit & Supervisory Committee members) consists of three types: basic remuneration, bonuses, and restricted stock.
    Bonuses are offered as short-term incentives and paid in amounts adjusted based on consolidated business results. Restricted stock is offered as long-term incentives, looking to increase director’s motivation for raised share prices and corporate value.
    The amounts of remuneration are decided by the Board of Directors in accordance with the Company’s internal rules on director remuneration, within totals approved at the General Meeting of Shareholders. With the aim of improving objectivity and transparency, the Nomination and Compensation Committee has been formed as an advisory body to the Board of Directors to provide advice and recommendations.

  2. Outside director remuneration (excluding Audit & Supervisory Committee members)

    The amounts of remuneration are decided by the Board of Directors in accordance with the Company’s internal rules on director remuneration, within totals approved at the General Meeting of Shareholders.

  3. Director remuneration (Audit & Supervisory Committee members)

    The amounts of remuneration are discussed and decided by the Audit & Supervisory Committee in accordance with the Company’s internal rules on director remuneration, within totals approved at the General Meeting of Shareholders.