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Fundamental Approach
The corporate philosophy of Japan Exchange Group, Inc. (JPX) is described below. JPX seeks to fulfill its social mission by serving as vital public infrastructure in the form of Japan’s central financial instruments market.
- We contribute to the realization of an affluent society by promoting continuous development of the market through ensuring our public nature and credibility, constructing the foundation of the market which is highly convenient, efficient and transparent, and providing creative and attractive services.
- Our efforts bring rewards in the form of profits resulting from the increased support and confidence from investors and other market users.
In order to conduct management in line with its corporate philosophy, JPX is aware of the importance of having its stakeholders understand its corporate philosophy and corporate activities. Therefore, JPX established the basic views on corporate governance from four perspectives: (1) corporate philosophy and social mission, (2) market operations, (3) enhanced corporate value, and (4) effective corporate governance to help stakeholders understand JPX’s business and raise confidence in JPX. JPX develops its corporate governance system in accordance with these basic views.
[Basic Views on Corporate Governance]
<Corporate philosophy and social mission>
JPX operates markets that are a public asset and fulfills its social mission by pursuing the sustainable development of its markets.
<Market operations>
JPX operates the markets with the view that garnering support for and fostering confidence in the markets it establishes is in the common interest of all investors and market users, and maintaining and enhancing the support and confidence will build the foundations for sustainable development of its markets.
<Enhanced corporate value>
In order for JPX to pursue sustainable development of its markets, it must continue to accommodate the diverse needs of shareholders and other stakeholders, thereby enhancing corporate value over the medium to long term.
<Effective corporate governance>
JPX strives to constantly improve its corporate governance system to further facilitate effective and proper systems, so as to support the sustainable development of its markets.
Based on the basic views on corporate governance described above, in light of the intent of the individual principles of Japan’s Corporate Governance Code, JPX is committed to properly developing its corporate governance system such as by developing a highly effective system of checks achieved through tension and harmony between the management and independent outside directors while striving to facilitate the smooth sharing of information and coordination between them.
JPX Corporate Governance Chart
Board of Directors
JPX adopts a company with committees system in order to clarify the authority and responsibilities involved in management oversight and business execution. Specifically, three committees consisting mainly of outside directors - a nomination committee, an audit committee, and a compensation committee - are established, executives responsible for executing business activities are assigned, and the management oversight and business execution functions are separated.
The board of directors are responsible for management oversight and consists of not more than 15 members (12 members as of November 20, 2015) to allow for substantial discussions. Also, 8 of these 12 directors are appointed from outside the company in order to increase the transparency and accountability of management, and enhance oversight of business execution.
Of the 8 outside directors, there are 3 from listed companies, a legal professional, a certified public accountant, an academics, a former government official and 2 former government officials. Each board member has deep insight into his or her specific field of expertise, making this an enhanced system that allows JPX to actively incorporate a variety of external perspectives into company management.
In addition to making decisions on the fundamental management policy and important issues affecting management, the board of directors also oversees executives' administration of business activities in accordance with these decisions.
Nomination Committee
The nomination committee is comprised of 4 directors, 3 of whom are outside directors. This committee decides on proposals to be submitted at the general shareholders meeting regarding the election and removal of directors.
Audit Committee
The audit committee is comprised of 4 directors, 3 of whom are outside directors - a certified public accountant. In addition to regular meetings, the audit committee also holds extraordinary meetings when necessary.
Based on the auditing plan and the distribution of duties determined at the audit committee meeting, efficient audits are conducted by monitoring and verifying the internal control system and its operational situation while maintaining close collaboration with accounting auditors, the internal auditing office, auditors of subsidiaries, and other relevant parties.
Compensation Committee
The compensation committee is comprised of 3 directors, 2 of whom are outside directors. This committee determines the compensation of each individual director and executive.
Internal Auditing Office
<>Internal control systems are established within each division to prevent violations of statutory laws and regulations, as well as JPX's articles of incorporation and other internal rules and regulations. Additionally, to reinforce the systems, we established an internal auditing office under the direct control of executive officer CEO and executive officer COO. The internal auditing office performs internal audits of each division and reports the audit results directly to executive officer CEO and executive officer COO.
