Fundamental Policy

Fundamental Perspective on Corporate Governance

Based on a shareholder-focused fundamental policy, SHIFT aims to increase earnings and enhance corporate value as a sustainable company. To do so, we have put in place a management administration structure and strive to increase management efficiency and speed. At the same time, we are aware of our corporate responsibilities to society, and we aim to contribute to society through our business activities. We endeavor to generate profits through harmonious relationships among all stakeholders, including shareholders, business partners, and employees. Taking these factors into consideration, though our management administration structure we strive to ensure transparency and objectivity in our business activities, put in place a structure to supervise the execution of business, and disclose information in a timely and appropriate manner.

Corporate Governance Structure

1. Organizational Structure and Organizational Management

Our organizational form is a company with an Audit & Supervisory Committee. The Board of Directors is chaired by the President, and the Audit & Supervisory Committee is chaired by a director who is a full-time member of the Audit & Supervisory Committee.

• Directors who are not Audit & Supervisory Committee members
• Number of directors who are not Audit & Supervisory Committee members stipulated in the Articles of Incorporation12
• Tenure of office of directors who are not Audit & Supervisory Committee members as
  stipulated in the Articles of Incorporation1 year
• Number of directors who are not Audit & Supervisory Committee members 7
• Appointment of Independent Outside DirectorsYes

• Directors who are Audit & Supervisory Committee members
• Tenure of office of directors who are Audit & Supervisory Committee members 2 years
• Number of directors who are Audit & Supervisory Committee members stipulated in the Articles of Incorporation5
• Number of directors who are Audit & Supervisory Committee members 3
• Appointment of Independent Outside Directors who are Audit & Supervisory Committee membersYes
• Number of Independent Outside Directors who are Audit & Supervisory Committee members 3
• Number of Independent Outside Directors who are Audit & Supervisory Committee members designated as independent executives3

• Independent Executives
• Number of independent executives6

2. Business Execution, Auditing and Supervision, Nomination, and Compensation Determination Functions

Based on Japan’s Companies Act, SHIFT has in place Board of Directors, Audit & Supervisory Committee and accounting auditor. The Board of Directors has ten members (six of whom are Independent Outside Directors). The Audit & Supervisory Committee has three members (all three of whom are independent outside directors).

The Board of Directors meets once each month, in principal, and flexibly otherwise as necessary. As the company’s highest decision-making body, the Board of Directors decides matters stipulated by law and the Articles of Incorporation, as well as important policy-related matters, and status of business execution on this basis.
The Management Council, which is attended by full-time directors, that includes at least one director who is an Audit & Supervisory Committee memeber, meets once each month, in principle, to ensure sufficient deliberation on matters of management importance and to make decisions quickly. Based on the strategies and polices determined by the Board of Directors, the Management Council deliberates the state of progress of business execution and makes decisions.
In addition, the company has established the Nominating & Compensation Committee as a voluntary institution from the perspective of management soundness and corporate governance. Members of this committee include one director who is not Audit & Supervisory Committee member, three directors who are Audit & Supervisory Committee members, and one senior executive officer. The Nominating & Compensation Committee, which serves as an advisory body to the Board of Directors, provides reports and advice on matters related to the appointment and dismissal of directors and directors’ compensation.

3. Reasons for Selecting the Current Corporate Governance Structure

SHIFT is a company with an Audit & Supervisory Committee. Members of this committee supervise the soundness of corporate management and the execution of duties by the directors, creating a sound management structure. Furthermore, by appointing highly independent Independent Outside Directors, the company has selected the current corporate governance system, which achieves a high degree of management transparency.

Corporate Governance Structure