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Corporate Governance

Management

Basic Policy

To ensure sound, transparent, and law-abiding corporate management, and for the company's continued growth and development, we strive to continuously build and enhance our management system by focusing on management, business execution, internal control and risk management.


Corporate Governance Structure

⋅Management and business execution
Our company's Board of Directors is composed of 9 directors, including three external ones, and operates in accordance with the laws, regulations, articles of incorporation, in-house rules, and 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) (non-monetary) performance-based compensation in the form of company shares via the Board Benefits Trust (BBT). In light of their role, outside directors' compensation is based solely on their individually established base salary, and they are not eligible for performance-based compensation (whether monetary or non-monetary).
We have established the Board of Auditors, which is composed of four auditors including three external auditors. In addition to attending the Board of Directors' Meetings, the auditors 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 such a corporate governance system enables fair, transparent business administration.

⋅Internal control system
Our company has established a basic internal control policy and developed an internal control system, overseen by the Board of Directors, with the aim of ensuring thorough risk management, compliance with laws and regulations, and the appropriate and efficient performance of business activities. In-house inspection department examines the facilitation and operation of the overall internal control system, especially focusing on the continuance improvement and adequate operation. Their examination results are evaluated by the Board of Directors annually, to confirm whether the internal control system is operated properly based on the basic internal control policy.

⋅Assessment of effectiveness of the Board
Every term, the Board of Directors conducts a self-assessment of its effectiveness to improve performance, with each board member providing an evaluation in accordance with Penta-Ocean Construction Corporate Governance Guidelines.
Through the self-assessment of FY 3/21 conducted in June 2021, we were able to confirm the effectiveness of our current Board of Directors. We will strive to further improve the Board's effectiveness by continuously making the necessary considerations and improvements of issues identified through this assessment.


Establishment of Corporate Governance Guidelines

Our company has established the "Penta-Ocean Construction Corporate Governance Guidelines," as its basic stance for corporate governance and management guidelines. Following the revision of Corporate Governance Code in June 2018, we expanded and revised the guidelines on June 25, 2019.

  1. Purposes of establishment

    Penta-Ocean Construction makes CSR-oriented management a priority in its corporate philosophy. Pursuant to our corporate creed that "our greatest contribution to society is the construction of high-quality infrastructure," we have set high goals to offer high-quality workmanship backed by advanced technologies developed with high regard to safety and ecological considerations. We strive to achieve sustainable growth and to further enhance our corporate values in order to grow into an even more attractive corporation in the eyes of our various stakeholders.
    To achieve this goal, we have decided to place a greater emphasis on enhancing corporate governance, and have established the Penta-Ocean Construction Corporate Governance Guidelines. In accordance with these guidelines, we will strive to expedite our decision-making process and ensure management transparency while responding appropriately to changing business conditions.

  2. Structure of the Guidelines
    • Ensuring shareholders' rights and equality
    • Proper cooperation with stakeholders other than shareholders
    • Appropriate information disclosure and transparency
    • Duties of the Board of Directors
    • Dialogue with shareholders


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