Earth Corporation

Corporate Governance

Basic approach

Earth Corporation strives to earn the trust of stakeholders as a company that offers value, based on its corporate philosophy: “We act to live in harmony with the Earth.” Specifically, in an effort to create and revitalize markets by providing products and services that offer value for customers, we make management decisions quickly, supervise and direct the execution of operations, ensure thorough compliance, and disclose information appropriately, at the appropriate times.

Initiatives for improving the effectiveness of the Board of Directors

To respond with agility to changes in the management environment and to ensure rapid decision-making and clarity in management roles and responsibilities, the number of Directors is kept to ten or less (currently nine), and the term of each director lasts for one year. The company has also introduced an Executive Director system. Furthermore, to ensure diversity in the supervision and direction structure, both non-Japanese and female members have been appointed as outside directors. The effectiveness of the Board of Directors is evaluated once each year by directors and auditors, and as part of these evaluations, efforts are made to identify and resolve issues in order to further improve effectiveness. An outline of these evaluations is provided on the company’s website.
Through these initiatives, we strive to enhance corporate governance. The company has created Corporate Governance Guidelines, the contents of which are available on the company’s website.

Corporate Governance Guidelines(PDF:149KB)

Overview of the Corporate Governance Structure

In addition to making rapid and appropriate management decisions at Management Meeting comprising the Board of Directors, in-house directors, and director generals, the company strives to strengthen the supervision and direction structure, for example by having outside directors and auditors offer appropriate advice and opinions from a third-party perspective at meetings of the Board of Directors and other important meetings. The company has also adopted an executive officer structure to clarify management roles and responsibilities and increase the speed with which plans are executed.
The company has appointed two independent outside directors. These directors have extensive experience and a broad range of knowledge from their respective independent perspectives, and contribute to increasing corporate value in the medium to long term by providing appropriate advice (e.g., with regard to management strategies), directing management through important decision-making processes at meetings of the Board of Directors, and monitoring potential conflicts of interest based on objective judgments.
The current structure was adopted to fully guarantee the effectiveness of corporate governance, taking into account a variety of factors, including detailed conditions in relation to accounting and the execution of operations, through close collaborations among the Audit & Supervisory Board, the Audit Office (an internal auditing division), and accounting auditors.

Corporate governance structure

Strengthen frameworks to ensure appropriate operations

Earth Corporation has put in place a structure to ensure appropriate operations within the Earth Group based on the Companies Act and the Ordinance for Enforcement of the Companies Act. Basic policies in this regard are available on the company’s website.
An Internal Control Promotion Committee has been established to accommodate the requirements of the internal control report system (the Japanese version of the Sarbanes Oxley Act (“J-SOX”) in compliance with the Financial Instruments and Exchange Act.
The Internal Control Promotion Committee selects the operational processes and scope to be evaluated, and analyzes these processes to identify key points in the context of controls that could have a serious impact on the reliability of financial reporting. The Committee then evaluates the effectiveness of internal controls by evaluating the structures and status of operations related to these key points.
In 2021, as a result of these evaluations, the company reached a judgment that internal controls related to the company’s financial reporting are effective, and an internal control report was submitted to the Prime Minister along with a securities report in March 2022.
In the maintenance of the internal control system, improvements are continually made in response to the enactment an amendment of relevant laws and regulations.

Risk Management,Compliance

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