Further Enhancement of ITOCHU’s Corporate Governance System
ITOCHU has carried out continuous reviews and reinforcement of the system and various initiatives, including the response to the introduction of the Corporate Governance Code in 2015, the transition to a Board of Directors with a monitoring-focused structure in 2017, and the improvement of the ratio of Outside Directors. As well as aiming to further enhance the effectiveness of the current corporate governance system, under which certain systems have been established, we also aim to further enhance and reinforce the governance system of not only the ITOCHU Corporation but of the entire Group. As a part of this, from June 2020 we have disclosed the significance of holding each of our six listed subsidiary companies, and have expanded the explanatory content to cover more substantive aspects from 2021.
In FYE 2022, to further enhance diversity in the Board of Directors and ensure the structure of the Board of Directors contributes to realizing business transformation by shifting to a market-oriented perspective, one of the basic policies of the new medium-term management plan, we appointed people with the knowledge of corporate management and revitalizing discussions by leveraging even more diversified and professional perspectives and opinions. Additionally, we have disclosed a skills matrix which shows the principle specialized area of experience for all corporate officers and areas in which they are expected to make a particular contribution. We have identified areas where inside and outside corporate officers have gained knowledge and experience and have a high level of insight. For Outside Directors and Audit & Supervisory Board Members, we have further identified the areas where the professional perspectives and high level of insight of each director and member can be utilized to the maximum extent.
Furthermore, to improve the linkage between management strategy and the corporate officer remuneration system, the evaluation of each director will be determined by including a response to climate change, ESG, and the SDGs from FYE 2021.
Structure of Board of Directors
In accordance with the criteria for the appointment of directors, the Company always maintains an Outside Directors’ ratio of at least one-third, and considers the appropriate structure of the Inside and Outside Directors as the occasion demands, taking into account the business environment and management strategy.
In FYE 2022, the ratio of Outside Directors decreased compared to the previous fiscal year, mainly due to the appointment of the Vice Chairman. However, we believe that the role and contribution of the Vice Chairman of the Board of Directors, who has experience as President & COO and operates at a fixed distance from the executive side, is significant and more meaningful for the management and governance of the Company. Furthermore, in FYE 2022 we continued to appoint two female Directors, maintaining a high level of female representation on the board.
Overview of Corporate Governance and Internal Control System
Enhance Corporate Value by Focusing on the Downstream
In my long experience as a merchant in the retail industry, I am conscious of the fact that further understanding of customer needs is directly connected to the expansion of businesses. I have always carried out my work with a focus on the downstream area, and my management team has always striven to put this into practice. As a merchant, I have empathized with how ITOCHU presents its businesses in simple terms and as the Guideline of Conduct, “I am One with Infinite Missions,” to its employees. In ITOCHU’s new medium-term management plan, we announced “Realizing business transformation by shifting to a market-oriented perspective” as one of the basic policies. We will make a major shift from our previous approach to promoting the creation of new growth opportunities and the evolution of the business model, starting from the downstream, namely, the final consumer. Going forward, I hope to use my experience to participate in ITOCHU’s management from a higher perspective as an Outside Director in the public eye, and contribute to Groupwide earnings growth and enhancement of corporate value together with the merchants of the ITOCHU Group, including ITOCHU’s management teams.
Mr. Ishizuka has extensive knowledge of corporate management and the retail industry that was earned through his experience as President and Chairman of Isetan Mitsukoshi Holdings Ltd. and as a Vice Chair of Nippon Keidanren (Japan Business Federation). He was appointed to the ITOCHU Board of Directors in June 2021 and is a member of the Governance and Remuneration Committee.