At Roland, the corporate governance refers to our engagement in building up and proceeding with the effective structure in which the Roland Group will increase the corporate value sustainably and autonomously to contribute to the benefit of all the stakeholders involved in our business, such as shareholders, customers, business partners and employees, and will realize the sustainable environment and society.
Corporate Governance System
We have selected the type of “company with Audit & Supervisory Board” and therefore our proper and appropriate business execution is guaranteed by the supervision by directors and by the auditing by Audit & Supervisory Board Members who have a wide range of authority of inspection. We have also established the Nomination & Remuneration Committee to complement the Board of Directors so as to secure transparency and fairness in important personnel matters.
The system mentioned above consists of a number of outside members who have deep knowledge and background and it supervises and audits the appropriateness of business execution and, in addition, supports appropriate risk taking by the executives by building appropriate systems of incentives and remuneration to reward their courageous decision-making and business execution.
The effective operation has been realized in which, if by any chance there should be the situation where the corporate value is substantially damaged, prompt measures can be taken including the replacement of the top management.
Schematic depiction of our corporate governance system
Board of Directors
At the Board of Directors, CEO of the Company assumes the post of the chairperson and, as it consists of seven directors (including five outside directors) as of March 2025, the diversity and appropriate scale are both satisfied. Board of Directors meeting is held in principle once a month and, when necessary, extraordinary meetings or written resolution are held or proposed. The term of the office of directors is set at one year so as to clarify the managerial responsibility and to enable them to promptly take necessary actions to meet the changes in managerial environment.
Function and role the Board of Directors assumes
We have positioned the role of our Board of Directors as “to indicate the direction at large, such as the corporate strategies, and to supervise the management's execution of business from the independent and detached viewpoint,” and have defined the objectives as mentioned below.
(Direction at large)
- Managerial philosophy, visions, business portfolios, business strategies
(Objects to be supervised)
- Appropriate execution by the top management (to prevent them from running out of control, doing self-protection or engaging in unlawful acts)
- Formulation of the long-term, future-oriented vision for our continued growth along with its continuity and consistency.
- The executive's formulation of the draft for reorganization of business portfolios and formulation of medium-term business plan along with their progress.
- Grasp of the risk that may obstruct the achievement of the medium-term business plan and the status of management of such risk.
- Improvement and operation of internal control by the executives.
- Status of practicing the “corporate management to meet the social demand,” not solely the compliance with laws.
- Transactions with conflict of interest between the Company and the management or controlling shareholders, etc.
- Operation of the Nomination & Remuneration Committee.
(Judgment and decision on business execution)
- Matters to be resolved by the Board of Directors Meeting as provided for by the Companies Act.
- Matters to be resolved by the Board of Directors Meeting as provided for by the internal authorization matrix.
- Construction of the remuneration system for directors and executive officers.
Members of Board of Directors
Skill matrix of Directors
Audit & Supervisory Board
Audit & Supervisory Board consists of 3 Audit & Supervisory Board Members (including 3 outside members) as of March 2025 and is held once a month, and extraordinary meetings are held as necessary.
Function and role of Audit & Supervisory Board
- Formulation of the audit plan and the audit reports.
- Discussion on the bills for the Board of Directors Meeting, etc.
- Grasp of the process of important decision-makings and the status of business execution through participating in the Board of Directors Meetings and other important meetings.
- Auditing of lawfulness and appropriateness of the directors' execution of business through implementation of visiting audit for subsidiaries, etc.
- Securing of the Roland Group's soundness for the Group's sustainable increase in corporate value, through audit and supervision in general.
Members of Audit & Supervisory Board
Skill matrix of Audit & Supervisory Board Members
Board of Executive Officers
The Board of Executive Officers, which consists of all executive officers, decides on matters to be submitted to the Board of Directors and important matters in business execution, and shares important information.
Members of Board of Executive Officers
Nomination & Remuneration Committee
Aiming at securing transparency and fairness of the nomination and determination of remuneration of directors, Audit & Supervisory Board Members, CEO and Executive Officers (entrustment type), we have the optional Nomination & Remuneration Committee that consists of members whose majority is accounted for by Independent Directors.
The Nomination & Remuneration Committee consists of three Independent Directors as of the end of March 2025. And full-time/independent Audit & Supervisory Board Member participates in it as an observer.
Members of the Nomination & Remuneration Committee
Function and role of the Nomination & Remuneration Committee
[Nomination of each board member]
The Nomination & Remuneration Committee makes proposals to the Board of Directors about the bill for the shareholders' general meetings concerning appointment/dismissal of Directors and Audit & Supervisory Board Members, as well as the bill for the Board of Directors about appointment/dismissal of CEO and Executive Officers (entrustment type).
* Executive Officers (entrustment type) conclude entrustment agreements with the Company.
[Determination of each board members' remuneration]
The remuneration system for Directors and Executive Officers (entrustment type) is determined by the Board of Directors and the remuneration of individual Directors is decided by the Board of Directors after the Nomination & Remuneration Committee approves a draft submitted by the CEO.
The remuneration of individual Executive officers (entrustment type) is determined by the CEO, who reports this to the Nomination & Remuneration Committee, which supervises the appropriateness and fairness of the remuneration.
- System for the remuneration -
Remuneration for Directors (excluding Outside Directors) and Executive officers (entrustment type) are made into the system so that it will be at the level where it functions as a sound incentive for our Group's sustainable growth. The rate of fixed remuneration (monthly pecuniary remuneration), bonus and stock-based remuneration which are linked to the consolidated business performance is fixed at about five to three to two. The bonus is pecuniary remuneration which links to the consolidated operating profit and the targeted results in the scope of the business each director is in charge of, and the stock-based remuneration is linked to the consolidated ROIC set as a target in the medium-term business plan and is granted in the form of granting of the Company stocks.
As to the remuneration for Outside Directors, the rate of fixed remuneration (monthly pecuniary remuneration) and fixed-type stock-based remuneration is set at about eight to two: In this way the stability of the remuneration is secured so that the Outside Directors appropriately perform their function of supervising the management.
Remuneration for Audit & Supervisory Board Members is determined by the discussion among Audit & Supervisory Board Members and is only the fixed remuneration (monthly pecuniary remuneration).
For Overseas Executives, fixed remuneration (monthly monetary remuneration), bonus and stock-based remuneration which are linked to the consolidated business performance are determined individually by the Board of Directors for each eligible person, taking into account the results of market research in each country by an external professional body and in light of the medium- to long-term remuneration policy agreed by the Board of Directors.
[Pictures of the Executive of remuneration structure]
Executive directors and executive officers (entrustment type)
fixed remuneration
50%
bonus
30%
stock-based
remuneration
20%
Outside directors
fixed remuneration
80%
stock-based
remuneration
20%
Audit & Supervisory Board Members
[Supervision of succession planning]
The objectivity, fairness and appropriateness of the plan for the successors which the CEO proposes are examined, and screening of candidates, the process of formulation/implementation of the development program, assessment/narrowing down/replacement etc. are checked at proper steps.
(For reference) Roles concerning the nomination and remuneration
Effectiveness Assessment of the Board of Directors
We at Roland analyze and evaluate effectiveness of the Board of Directors every year aiming at raising it.
Effectiveness assessment of the Board of Directors in the fiscal year 2024.
1. Method of assessing
- Information (such as bills submitted to the Board of Directors, time the Board of Directors took for discussion, etc.) concerning the effectiveness assessment are distributed to all of the Directors and Audit & Supervisory Board Members.
- The “Table of effectiveness assessment” is distributed to those mentioned above, and the responses are obtained.
- The assessment was made from the four viewpoints of: “Operation of the Board of Directors”, “Scale and composition of the Board of Directors”, “Provision of information to Outside Directors and Audit & Supervisory Board Members” and “Roles of the Board of Directors”.
- In addition to quantitative assessments, we analyzed “satisfactory points” and “points that need improvement”.
- The Board of Directors discussed the issues of itself and shared the future direction of improvement.
2. Summary of the result of assessment
The summary of the result of assessment is as follows.
- The Board of Directors consists of Outside Directors who are a person with experience in corporate management, a person with experience in CTO, an overseas investor, and lawyer as well as executive directors who are CEO, CIO, and CPO, and its majority are Outside Directors. As a result, discussions are actively held from a variety of perspectives, and the composition is desirable for governance.
- Outside Directors and Audit & Supervisory Board Members had opportunities to attend internal meetings, such as the Management meeting and the Risk Management and Compliance Committee in addition to Board of Directors meeting, and Audit & Supervisory Board Members actively conducted visiting audits. As a result, they obtained information on management planning and the business environment as appropriate, and made comments based on their understanding of the workplace and the actual situation.
- The continuous implementation of advance briefings of board meetings for external directors and auditors has facilitated prior understanding of the agenda and has contributed significantly to fostering efficient and effective discussions at board meetings.
We also plan to review the following issues in order to strengthen governance and implement effective BOD operations.
- Diversity and composition (numbers of outside directors and inside directors) of Board of Directors
- Ideal state, role and responsibilities of the Board of Directors
- Securing sufficient time and improving materials in order to facilitate thorough discussions on medium-to long-term management strategies and governance system
- Provision of necessary and sufficient information for supervision of execution.
Internal Control System
The compliance system, risk management system and Group company management system, which form the core of our Group's internal control system, are as mentioned below.
Compliance System
- “Roland Group Compliance Guidelines” which play the role of fundamental principle has been made thoroughly known to everyone in the Group.
- “Risk Management / Compliance Committee” promotes the construction of the compliance system of the entire Group.
- Globally assigned persons in charge to promote compliance.
- In addition to the Japanese domestic whistle-blowing system that accepts reports on any unlawful acts of our directors, Audit & Supervisory Board Members and executive officers or employees by employees, etc., we have established a global whistle-blowing system that allows employees, etc. of subsidiaries to make reports on any unlawful acts of subsidiary management. In both cases, we have established two contact points: (1) an external lawyer, and (2) our Audit & Supervisory Board Members, so that the whistleblower can choose at their discretion. In this way, we are trying to ensure the psychological peace-of-mind associated with whistle-blowing. In addition to reports by current employees, etc., reports by retirees are also accepted.
Risk Management System
- Principles for managing various types of risk surrounding our business and the system are stipulated in the “Fundamental Regulations for Risk Management.”
- The Risk Management and Compliance Committee establishes a response policy with assessing the possibility and impact of risks surrounding the Group. And major risks are regularly reviewed by the Board of Directors meeting.
- Regarding any risk that has already surfaced, on which the entire Group has made a report, the Board of Executive Officers Meeting verifies the countermeasures and make the measures for prevention of recurrence thoroughly known to everyone.
- In case of emergency, the CEO will assume the post of the chief executive of the risk management system and implement countermeasures based on the Business Continuity Plan.
Control over the Subsidiary's Acts
- The scope of authority is specified by stipulating the items which the Company should be involved from among the subsidiaries' acts in the “Rules for the Affiliates Administration.”
- The above-mentioned items include matters requiring approval regarding which the Company makes decision about the subsidiary's execution of business, and the matters to be reported on regarding which the Company should grasp the occurring matters such as the results of the subsidiary's execution of business and the pertaining risk. Control to be implemented should be in accordance with the magnitude of influence and importance.
Dialogs with Shareholders or Investors and the Feedback
As we consider it is important to build up long-lasting relationships of confidence with shareholders and investors through regular communication with them, we are implementing our IR activities.
With regard to our internal system, related divisions cooperate in these activities by collecting necessary information from each other and accumulate it. Directors, Executive Officers, etc. in charge will be holding dialogs with them as required according to the theme or contents and, the opinions obtained through dialog will be reported to the Board of Directors Meeting or Executive Managers, to be reflected in the measures taken to raise the corporate value.
We have established our internal rules for compliance with the “fair disclosure rule” in dialogs, to disclose information to investors in a fair manner. To manage the insider information, we have established rules concerning handling of nonpublic material facts, which we always apply strictly.
As ways of holding dialogs other than individual interviewing, we hold the explanatory meeting on our financial results quarterly for institutional investors and securities analysts, in which we explain about the outline of the business results and the outlook for the future and, in addition, we hold small meetings, etc. We also hold company briefings for individual investors in order to make the attractiveness of the Company widely known to individual investors. And we comprehensively explain our company’s uniqueness and management strategies, etc. “About Roland (for individual investors)” of our website, and we try to enhance the communication for our shareholders, etc.
Corporate Governance Reports
This report describes our views on corporate governance and our systems, following the rules of the Tokyo Stock Exchange and the Corporate Governance Code.