Corporate Governance

Structure of Corporate GovernanceIR Information

Organization Form

Company with Audit & Supervisory Board Members

Directors

Chairperson of the Board President
Number of Directors 6
Election of External Directors Yes
Number of External Directors 2
Number of Independent Directors 2

Audit & Supervisory Board Members

Establishment of Audit & Supervisory Board Established
Maximum Number of Audit & Supervisory Board Members Stipulated in Articles of Incorporation 4
Number of Audit & Supervisory Board Members 3
Cooperation among Audit & Supervisory Board Members, Accounting Auditors and Internal Audit Departments
MarketEnterprise has the Internal Audit Department that is under the direct supervision of the President. This department performs on-site audits of all business sites every six months to confirm the effectiveness of internal controls and status of business operations. Results of these audits are submitted to the President and, as needed, to the Board of Directors. For items requiring improvements, departments submit reports to the President concerning progress with improvements in accordance with the audit documents and instructions for improvements. Afterward, the personnel in charge of internal audits checks the status of items requiring improvements by determining progress made and verifying the effectiveness of corrective measures.
There is only one member of the Internal Audit Department. In accordance with the Internal Audit Rules, there is a framework for providing additional assistance, such as by temporarily appointing employees other than this individual to perform audits, as needed.

Audit & Supervisory Board Members perform audits for the purpose of determining the status of business activities, the effectiveness of internal controls, and any issues and risks. These audits include examinations of management documents, discussions with directors and business site managers, and other forms of communication with personnel. Audit & Supervisory Board Members also perform on-site audits of all business sites every six months. Audit & Supervisory Board Members and internal auditors exchange information about their activities and audit results as needed, thereby establishing a framework for the seamless functioning of internal controls throughout the MarketEnterprise.

For accounting audits, MarketEnterprise has an auditing contract with KPMG AZSA & Co. For the current fiscal year, certified public accountants Takahiro Akiyama and Kei Maeda were the designated and engagement partners for this audit, five other certified public accounts assisted, and four others participated in the audit.

The personnel in charge of internal audits, Audit & Supervisory Board Members and the accounting auditor perform auditors independently. In addition, for the effectiveness and efficiency of audits, these three parties periodically exchange opinions for the purpose of further improving the effectiveness of their audits.
Appointment of External Audit & Supervisory Board Members Appointed
Number of External Audit & Supervisory Board Members 3
Number of Independent Audit & Supervisory Board Members 3

External Directors

Name

Position

Designation as Independent Director

Supplementary Explanation of the Relationship

Kohei Terada From other companies

-
Hitoshi Tanii From other companies

-
Reasons of Appointment

Name

Reasons of Appointment

Kohei Terada Mr. Terada has extensive experiences and knowledge as a corporate manager. MarketEnterprise believes that he has performed appropriately as an External Director by providing advice to management and supervising business execution since July 2014. In addition, since Mr. Terada has a position independent from management and retains neutral and fair perspective, MarketEnterprise believes that there is no concern of Mr. Terada having a conflict of interest with general shareholders and has accordingly designated him an Independent Director.
Hitoshi Tanii Mr. Tanii has extensive experiences and knowledge as a corporate manager. MarketEnterprise believes that he has performed appropriately as an External Director by providing advice to management and supervising business execution since September 2016. In addition, since Mr. Tanii has a position independent from management and retains neutral and fair perspective, MarketEnterprise believes that there is no concern of Mr. Tanii having a conflict of interest with general shareholders and has accordingly designated him an Independent Director.
Main activities

Name

Main activities contents

Kohei Terada He attended 12 of the 13 Board of Directors meetings held in 2017. At the meeting, he supervises and makes recommendations on overall management from a broad perspective based on his wealth of experience and knowledge as the founder and representative director of a Former Listed Company listed on the TSE.
Hitoshi Tanii He attended all 2017 board meetings. At this meeting, he oversees and makes recommendations on overall management from a broad perspective based on his wealth of experience and knowledge as the founder and representative director of the former JASDAQ listed company.

External Audit & Supervisory Board Member

Name

Position

Designation as Independent Audit & Supervisory Board Member

Supplementary Explanation of the Relationship

Masaki Yamazaki From other companies

-
Eisuke Ito Certified Public Accountant

MarketEnterprise had an advisory contract concerning accounting matters with Mr. Ito before he was appointed as an Audit & Supervisory Board Member. The contract period was short and the transaction amount was insignificant. This contract was cancelled when he was appointed as an Audit & Supervisory Board Member.
Tetsuya Oi Attorney

-
Reasons of Appointment

Name

Reasons of Appointment

Masaki Yamazaki Mr. Yamazaki maintains independence from the management who execute business operations and there is no concern of having a conflict of interest with general shareholders. MarketEnterprise believes that he will utilize knowledge gained through his experience as an auditor at Mitsubishi Agricultural Machinery Co., Ltd. for the supervision of management.
Eisuke Ito Currently, Mr. Ito maintains independence from management who executes business operations and there is no concern of having a conflict of interest with general shareholders. MarketEnterprise believes that he will utilize his knowledge as a certified public accountant for supervision of management.
Tetsuya Oi Mr. Oi maintains independence from management who executes business operations and there is no concern of having a conflict of interest with general shareholders. MarketEnterprise believes that he will utilize his knowledge as an attorney for supervision of management.

Supporting System for External Directors and/or Audit & Supervisory Board Members

To provide support to External Directors and External Audit & Supervisory Board Members, the Administration Department handles communications involving the Board of Directors and provides these individuals with preliminary explanations of proposals to be submitted at meetings. In addition, these individuals receive documents and assistance for gathering information and other activities as needed.

Directors’ Remuneration

Policy on the amount of compensation for executives and the determination of and the calculation method
Within the limit of the total compensation decided at the meeting of shareholders, Remuneration for directors is decided by the Board of Directors, and compensation for audit & supervisory board memberscorporate is decided after discussions by Audit & Supervisory Board meeting.
Directors’ Remuneration

Type

Total compensation(thousand yen)

Number of Directors or Audit & Supervisory Board Member

Directors
(Except external directors)
72,000
4
Audit & Supervisory Board Members
(Except external members)

-

-

External Directors and Audit & Supervisory Board Member
14,400
5
MarketEnterprise does not disclose remuneration of individual Directors since there is no Director who receives total remuneration at least 100 million yen. The remuneration of Directors and Audit & Supervisory Board Members are disclosed at total amount respectively.

Cross-shareholdings

Not applicable.

Other Matters Concerning Corporate Governance System

MarketEnterprise positions extensive disclosure activities as an integral part of corporate governance.

MarketEnterprise quickly collects and provides information that should be disclosed from the perspective of improving management transparency, fairness and continuity for shareholders, investors and others. In addition, there are measures for the disclosure of information in compliance with the Financial Instruments and Exchange Act, the Timely Disclosure Rules of securities exchanges, and other requirements. MarketEnterprise also actively discloses other information that is believed to be useful for giving people a better understanding of its policies, goals and activities in a timely manner.
Information acquired by MarketEnterprise is under the supervision of the person responsible for timely disclosure (the Director and General Manager of the Administration Department). Information that should be disclosed based on the prescribed examination and process, is then made public in a timely manner.

Furthermore, there are periodic classes for employees concerning the prevention of insider trading to raise awareness and knowledge about this subject.
Organization chart for corporate governance
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