Corporate Governance

The DKK Group’s basic approach to corporate governance is to heighten the company’s social credibility and increase its corporate value by ensuring transparency and soundness in its management, and we are committed to implementing various measures in order to satisfy all stakeholders.

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Basic Approach to Corporate Governance

Our basic approach to corporate governance is to ensure transparency and soundness of management, thereby heightening the company’s social credibility and increasing its corporate value.

In order to accomplish this, we strive to satisfy all stakeholders by implementing various measures based on our key management policies, which are formulated annually. Additionally, to ensure transparency and soundness of management, we have adopted a corporate auditor system comprised of four corporate auditors, two of which are outside corporate auditors.

With regard to matters such as personnel affairs and remuneration of the executives who play a role in enhancing the company’s sustainable growth and public trust, Nomination and Remuneration committees, both composed of a majority of independent outside directors, have been newly established as voluntary advisory bodies to the Board of Directors to enhance objectivity and transparency in the decision-making process, and to further improve and strengthen management and governance systems.

In addition, we have also taken measures to ensure compliance with laws and regulations by preparing and disseminating internal rules and regulations which place the utmost importance on the thoroughness of corporate ethics. As part of these efforts, we have established the “Corporate Behavior Charter of the DKK Group” to ensure that Charter is known and understood throughout the Group. The Corporate Behavior Charter is a set of specific guidelines for corporate behavior to ensure compliance with laws and regulations, and details targeted corporate behavior and expected employee images, including the creation of a workplace environment rich in employee initiative and creativity.

In order to promote compliance more strongly, we have also established a Compliance Committee to prevent violations of laws and regulations, provide education and guidance for compliance, and ensure that all employees fully understand the importance of compliance, while at the same time providing correction, guidance, and oversight for any violations that may occur.

Regarding the Group’s risk management, each department assumes the risks associated with the nature of its operations and responds to any issues that may arise, such as economic fluctuations, product quality, and violations of laws and regulations.

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Corporate Governance System

We are working to create a system in which the functions of management oversight and the execution of business are fully exercised.

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Approach to the Knowledge, Experience, and Ability of the Board of Directors, and its Diversity and Size

DKK’s Board of Directors, in addition to having an overall balance of individuals from the technical, sales, and administrative divisions with the knowledge, experience, and ability to effectively fulfill their roles and responsibilities, has also appointed four independent outside directors: two with management experience, one lawyer, and one certified public accountant. In appointing directors, the Board is composed in a manner that balances diversity and appropriate size, with due consideration given to traits and attributes such as gender equality, nationality, and age, and has appointed one female director and one non-Japanese director.

Skill Items	Reason for Selection
Corporate Management / Management Strategy	In order to realize and promote our goal of becoming “a company that is pioneering the future”, management experience and achievements in various fields are essential, as are management experience and achievements in differing fields to create new businesses, further expand existing businesses, and strengthen our management base.
Marketing / Sales	As marketing and sales activities have a direct impact on sales and profits, a track record, experience, and knowledge of marketing and sales that reflect our business policies are essential.
Technology / Research and Development / DX	In order to strengthen the existing technological capabilities at which DKK excels, and to create new businesses, a track record of promoting various innovations is essential, as well as a solid base of knowledge and experience in the fields of technology, quality, and the environment.
Global	In order to formulate growth strategies and supervise the management of international business with the goal of expanding business, extensive knowledge and experience in overseas business management and in overseas living cultures and business environments are essential.
Law / Compliance / Risk Management	Establishing an appropriate governance structure is the foundation for sustainable enhancement of corporate value, and knowledge and experience in legal affairs, compliance, and risk management are essential to improving the effectiveness of management oversight by the Board of Directors.
Finance / Accounting	In order to achieve continual and sustainable growth and development in the medium to long term, reliable knowledge and experience in the fields of finance and accounting are essential with regard to building a strong financial base and formulating financial strategies that promote investment for growth (including M&As) aimed at sustainable improvement of corporate value and shareholder returns.
Personnel / Labor / Personnel Development	Reliable knowledge and experience in the field of human resource (human capital) development, including the promotion of diversity, are essential in developing personnel strategies that enable each and every employee to reach their full potential.
ESG / Sustainability	In order to realize “co-existence and co-prosperity with society” and fulfill our social responsibility duties, it is essential to have in-depth knowledge with regard to mid- and long-term sustainability, including our Environmental, Social, and Governance elements.

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Basic Policy of the Nomination Committee

The Nomination Committee, with reference to our Corporate Governance Code and our “Mid- to Long-Term Management Strategy” dated March 26, 2021, in order to realize DKK’s vision of becoming “a company that is pioneering the future” and to contribute to the sustainable improvement of corporate value over the medium to long term, shall deliberate on matters pertaining to the authority of the Board of Directors in accordance with the regulations of the Nomination Committee, and provide advice and recommendations to the Board with the purpose of strengthening the independence, objectivity, and accountability of its functions in nominating representative directors, directors, auditors, and operating officers.

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Basic Policy of the Remuneration Committee

DKK’s basic policy on remuneration, etc. of Directors, with reference to our “Mid- to Long-Term Management Strategy” dated March 26, 2021, in order to realize our vision of becoming “a company that is pioneering the future”, shall be to set appropriate standards based on job responsibilities when determining remuneration, etc. for Directors, in a manner that fully functions as an incentive to sustainably increase corporate value over the medium to long term, and that it shall be linked to shareholder profits in order to promote a shared awareness of profits with shareholders. Specifically, the remuneration, etc. of directors shall consist of base remuneration as fixed remuneration, bonuses (performance-linked remuneration, etc.) and stock-based remuneration (non-monetary remuneration, etc.). Outside directors, whose duties consist of management oversight functions, shall receive only the base remuneration in light of their duties.

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Compliance Committee