Basic Approach to Corporate Governance

SHINDEN HIGHTEX believes that strengthening and enhancing its corporate governance is a key management priority.
Its basic approach to corporate governance is to increase transparency and ensure strict compliance by improving its management structure, accelerating decision making, clarifying responsibilities, and improving internal control systems with the goal of responding quickly and flexibly to changes in the business environment, sustainably increasing the corporate value of the SHINDEN HIGHTEX Group as a whole and developing and embodying its corporate philosophy. SHINDEN HIGHTEX believes that fulfilling its responsibilities to society, its shareholders, and other stakeholders is a key management priority. By clarifying the Group's functions for supervising, executing and auditing business, it is working to strengthen the managemnet monitoring function with a view toward the achievement of its management goals.

Corporate Governance System Chart

Outline of Corporate Governance System

The SHINDEN HIGHTEX Group is implementing the following measures to improve and strengthen its corporate governance. Directors are responsible for the execution of business in the areas of the matters entrusted to them based on established decision-making rules such as Organizational Regulations and Regulations on Authority and Responsibilities. The Board of Directors makes decisions on important matters. The following is an explanation of internal organizations that are important in SHINDEN HIGHTEX's decision-making processes and corporate governance.

1. Board of Directors

The Board of Directors has the authority to pass resolutions on matters defined in the basic policy on management, laws and articles of incorporation and important matters on business management, and to manage and supervise the directors' execution of business operations. The Board of Directors consists of 11 directors, and two of them are outside directors. The board meets monthly and whenever necessary. The board receives reports from SHINDEN HIGHTEX's internal departments regarding the challenges they are facing and the status of their execution of business, incorporates information about rapidly changing environmental conditions into its decision-making processes, and precisely and quickly makes decisions.

2. Board of Corporate Auditors

The Board of Corporate Auditors defines its audit policy and the roles of individual auditors. The corporate auditors, which are independent from the directors, attend important meetings such as meetings of the Board of Corporate Auditors in accordance with the audit policy and role sharing established by the Board of Corporate Auditors. Additionally, the Board of Corporate Auditors reviews important documents regarding decisions and takes other actions to audit the directors' execution of business. The Board of Corporate Auditors consists of three corporate auditors, and two of them are outside auditors. In principle, the Board of Corporate Auditors meets monthly and whenever necessary. The corporate auditors attend Board of Directors meetings and other important meetings to express their opinions, receive information from the accounting auditor and the Internal Audit Department and audit regular operations and the status of assets. In this way, the corporate auditors understand and monitor the directors' execution of business.

3. CSR Committee

The CSR Committee is directly controlled by the president, and its goal is to establish risk management and compliance structures within the Company and ensure business is conducted fairly. Chaired by the president, the members of the CSR Committee are chosen by the chairperson, and the committee meets once a year and whenever necessary. The CSR Committee formulates basic compliance policy, handles whistleblowing reports, provides employees and officers with risk management and compliance training and does other tasks relating to risk management and compliance.

4. Internal Audit Department

The Internal Audit Department consists of two people and functions as an independent internal audit department directly controlled by the president. It conducts internal audits of the operations of the SHINDEN HIGHTEX Group as a whole. Based on the annual audit plan, the Internal Audit Department ensures that SHINDEN HIGHTEX's departments execute their business operations properly and effectively in accordance with laws and internal rules. Audit results are directly reported to the president. Whenever necessary, the Internal Audit Department provides instructions regarding improvements to audited departments reviews the improvements. Additionally, members of the Internal Audit Department attend meetings of the Board of Corporate Auditors, create reports on the results of audits and cooperate with the accounting auditor's audits to ensure that internal auditing is effective and three-way auditing functions organically.