Corporate Governance

Management and business execution

Our company's Board of Directors is composed of 10 Members of the Board, including four external ones, and operates in accordance with the laws, regulations, articles of incorporation, in-house rules, and the Penta-Ocean Construction Corporate Governance Guidelines. In principle, a meeting of the Board of Directors is held twice a month, to make decisions on important management issues and supervise business operation. In addition, we adopted a system of executive officers, in order to clarify the responsibility for business execution.
Nomination of candidates for executive positions and proposals for executive compensation are made by the Board of Directors after consultation with the Nominating Committee, which is chaired by an outside Member of the Board. The Nominating Committee is composed of all external Members of the Board and a small number of other Members of the Board, not exceeding a majority. Executive compensation is composed of (1) base salary (fixed monetary compensation), (2) performance-based monetary compensation based on individual performance (individual performance-based compensation) and company performance (short-term incentives), and (3) performance-based stock compensation using a stock benefit trust (non-monetary). In light of their role, outside Members of the Board’s' compensation is based solely on their individually established base salary, and they are not eligible for performance-based compensation (whether monetary or non-monetary). Audit and Supervisory Board Members
We have the Audit and Supervisory Board serving, which is composed of four Audit and Supervisory Board Members including three external Audit and Supervisory Board Members. In addition to attending the Board of Directors' Meetings, the Audit and Supervisory Board Members also actively participate in important meetings in the Company (e.g. Executive Board Meetings, Group Management Meetings) and monitor the execution of duties of Members of the Board.
We believe that the above corporate governance system enables fair and transparent business administration.

Assessment of Effectiveness of the Board

Every June, all the directors in the Board of Directors conduct self-assessment to improve effectiveness of the Board of Directors based on the "Penta-Ocean Construction Corporate Governance Guidelines." Through the self-assessment of FY3/23 conducted in June 2023, we were able to ensure the effectiveness of our current Board of Directors. We will strive to further improve the Board's effectiveness by continuously making the necessary improvements for the issues identified through this assessment.

Internal control system

The Board of Directors has established the basic internal control policy and developed an internal control system, with the aim of ensuring thorough risk management, compliance with laws and regulations, and the appropriate and efficient operation of business activities. The internal audit department examines the implementation and operation of the overall internal control system, focusing on the continuous improvement and appropriate operation. The assessment results are evaluated by the Board of Directors in May of each year, to confirm whether the internal control system is implemented properly based on the basic internal control policy.

Purposes of establishment

Our group practices a management philosophy that focuses on sustainability. We believe that the "Construction of high-quality social infrastructure and buildings is the greatest contribution to society." We not only provide reliable safety and quality backed by technology but also earnestly address all sustainability issues from an ESG perspective. We strive to achieve sustainable growth and to further enhance our corporate value to grow into an even more attractive corporation in the eyes of our various stakeholders.
To achieve this, we have established the "Penta-Ocean Construction Corporate Governance Guidelines" and built a system that allows us to make quick and resolute decisions in response to changes in the business environment.

Structure of the Guidelines