Correspondence to Corporate Governance Code
Principle 1: Ensuring the rights and equality of shareholders
MonotaRO (hereinafter “The Company”) will endeavor to create an environment for swift and active disclosure of information and smooth exercise of voting rights so that the rights of shareholders, including voting rights at the general meeting of shareholders, can be substantially secured.
(1) The Company recognizes that the general meeting of shareholders is a place for constructive dialogue with shareholders. We will strive to set the date and place so that more shareholders can attend the General Meeting of Shareholders, and send the convocation notice 3 weeks before the General Meeting of Shareholders and post it on our website. We are striving to create an environment in which shareholders can easily exercise their voting rights by mailing voting rights exercise forms and preparing methods for exercising voting rights via the Internet.
(2) The Company recognizes that returning profits to shareholders is one of the most important management policies, strives to improve profitability and strengthen the financial position, and steadily and continuously distribute results in line with the growth of consolidated business results. The profits achieved will be used to return profits to our shareholders, but the profits are also retained internally and applied to measures for proactively developing business in response to changes in the environment.
(3) The Company's Board of Directors appropriately monitors the existence and details of transactions between the Company and its major shareholders, and the Audit Committee regularly audits the transactions as matters for audit. In addition, in order to prevent acts that harm the common interests of the Company and shareholders, competitions and conflicts of interest transactions between the Company and directors and executive officers are clearly stated in the regulations of the Board of Directors as matters approved by the Board of Directors. .
Principle 2: Appropriate collaboration with stakeholders other than shareholders
Posting "To Innovate Business Procurement Network" as the Company’s mission and practicing the following Principles foster the corporate culture and climate that respects the rights and positions of stakeholders and sound business ethics. Regarding the mission and philosophies, an environment where employees can check the mission and philosophies is prepared with something that can be carried by the employees.
(1) Respect for others
・ Treat people with respect.
・ Accept mistakes of one’s own and others’.
・ Listen to voices around.
・ Capture changes of environment, technology, and customers.
・ Challenge the status quo and seek improvement.
・ Share own ideas and autonomously act to realize the ideas.
(4) Time as resource
・ Appreciate time of customers, of other stakeholders, and of ourselves.
・ Start with speedy by assessing risks with an appropriate sense of urgency.
(5) Goal and Processes
・ Perform with understanding of the goal and overall business processes.
・ Derive significant results through conducting small hypothesis tests.
(6) MonotaRO Spirit
・ Find creative solution without compromising budget and resources.
・ Comply with laws, social norms, and ethics.
Regarding the aspect of compliance listed in 6 above, for preventions, early detections, and resolution of acts that may conflict with laws or regulations, issues are properly handled by establishing an internal whistle-blowing contact point that allows anonymous reporting and by cooperating with the Audit Committee, which consists of law firm and independent outside directors.
Principle 3: Ensure appropriate information disclosure and transparency
Information is properly disclosed in accordance with laws and regulations so that all stakeholders can understand information properly for the Company to achieve healthy development. In addition, information that may affect investment decisions, even if the disclosures are not required by laws, is proactively and continuously disclosed.
(1) Non-financial information The following items are disclosed in consideration of maintaining accuracies, clearness for users to understand, and usefulness.
・ Management mission and strategy
・ Basic approach to corporate governance and basic policy
・ Content and decision procedures of compensations for directors and executive officers
・ Policies and procedures regarding nomination of director candidates and appointment of executive officers
(2) Financial information
Financial information audited properly by an external accounting auditor with independence and expertise is disclosed. Audit Committee is responsible for monitoring the duties of the external accounting auditor and for determining the content of the proposal for appointment and dismissal.
Principle 4: Responsibilities of the Board of Directors
The Board of Directors of the Company monitors and supervises the execution of duties by executive officers from an independent and objective standpoint and promotes fiduciary duty and accountability to shareholders in order to promote sustainable growth and improvement of corporate value over the mid to long term. In addition, Audit Committee, which consists of independent outside directors, audits the execution of duties by each executive officer and director and cooperates with the accounting auditor to make the audit system more effective.
(1) Roles and responsibilities of the board of directors
The Board of Directors, providing strategic direction for the Company, welcomes proposals from the management team consisting of the President & Representative Executive Officer, other executive officers, and department heads based upon the team's sound entrepreneurial spirit and considers the proposals from the independent standpoint in multifaceted manners for ensuring accountability. When proposals are implemented, the board of directors supports and effectively monitors the management team.
(2) Contents of member of the board of directors
The number of members of the Board of Directors is 10 or less and the majority consists of independent outside Directors for better discussions. In addition, we invite directors with a high level of expertise and experience from a wide range of occupations as directors in an effort to secure the system which allows the members to discuss through diverse and insightful perspectives.
(3) Clear separation of business execution and supervision
The Company has selected the company with a nomination committee, etc. in order to
separate business execution from supervision and ensure management transparency. Executive officers carry out organizational operations based on the authority entrusted by the Board of Directors, and the Board of Directors oversees the execution of business by Executive Officers.
(4) Roles and responsibilities of Audit Committee From the perspective of fiduciary duty to shareholders, the most important role of the Audit Committee is to perform check functions at the appropriate time when the management makes management decisions that may damage the corporate value.
(5) Member of Audit Committee
The Audit Committee consists of independent outside directors. Audit Committee members include persons who can respond to the requests from shareholders with a strong will and with specialized knowledge and experience of financial accounting, law, etc. Members are appointed by a resolution of the Board of Directors.
(6) Audit conducted by Audit Committee
The execution of duties by executive officers and directors is audited from the viewpoint of legality and appropriateness. Internal Audit Office is established in the Company to assist the Audit Committee and, and through the system that exercises the auditing function even in the cases not submitted to the Board of Directors through the auditing procedures of reporting from Internal Audit Office and of hearings conducted by members of the committee.
Principle 5: Dialogue with shareholders
It is important to engage in constructive dialogue with the shareholders on a regular basis in order to achieve sustainable growth and increase corporate value over the mid to long term. For this reason, IR system where the central roles are taken by the Executive Officer and IR/PR Group in charge of IR. In order to deepen understanding of the company, while managing insider information, We will proactively engage in dialogues with shareholders and investors. In addition, the Company has a system in place for department in charge of IR to report the opinions and concerns of shareholders and investors, which are understood through dialogue with them, to the management team in a timely manner.