This document is translated for reference purposes only from an original document submitted to the Tokyo Stock Exchange in Japanese. The original shall prevail in the event of any discrepancy between this translation and the Japanese original.
CORPORATE GOVERNANCE REPORT
Last update: March 3, 2023
Akio Sugihara, President & Representative Director
Inquiries: Legal & Compliance Department
Securities code: 2440
The status of Gurunavi, Inc.’s corporate governance is as follows.
- Basic views on Corporate Governance, Capital Structure, Corporate Profile, and Other Basic Information
1. Basic Views
Under the principle of prioritizing shareholders’ interests, Gurunavi, Inc. (hereinafter, “Gurunavi” or the “Company”) maintains a keen awareness of the management responsibility of directors and upholds basic policies to enhance its corporate governance in order to prevent irregularities, clarify decision-making processes, and ensure the logical implementation of operations.
[Reasons for Non-compliance with the Principles of the Corporate Governance Code] Supplementary Principle 2-4 – 1
Gurunavi established a diversity promotion department in 2015 in order to promote human resource development and establish internal environments that ensures diversity, and is working to create a corporate climate that allows diverse human resources, including women, persons with disabilities, and non-Japanese, to maximize the abilities they possess and to create environments in which they can play an active role.
Currently, Gurunavi has not set any measurable targets, as Gurunavi recognizes that the promotion of women, mid-career recruits, and non-Japanese employees in managerial positions has progressed to a certain extent. The status of ensuring diversity in the promotion of core workforce is as follows.
Regarding the promotion of women to core workforce, the ratio for women in managerial positions is 21% as of March 31, 2022. Gurunavi will continue to further support the advancement of women by expanding training and support tailored to career stages and life events, and programs to develop candidates for managerial positions.
Regarding promotion for mid-career recruits, these recruits account for the majority of total employees, and the company is actively advancing promotions of these recruits as they represent Gurunavi’s core workforce, and many such human resources have been appointed to important positions such as executive officers, etc.
In addition, regarding non-Japanese employees, recruitment standards are the same as those for Japanese candidates, and they are actively working in important managerial positions according to their abilities.
Gurunavi will continue to foster a culture in which diverse human resources, not limited to women, can play an active role and create high value through the development of a flexible work environment that is not restricted by location or time.
Please refer to the following webpage for further information on our diversity promotion activities.
https://corporate.gnavi.co.jp/profile/sustainability/diversity/(Japanese version only)
At present, a medium-term business plan has not been formulated. However, Gurunavi has formulated a medium-term business policy (March 2021 period – March 2023 period) under 3-1. Full Disclosure> hereunder, which has been posted on the Company’s website.
Furthermore, regarding a medium-term business plan, once conditions reach a stage wherein the impact of Covid-19 on the business environment can be forecast, Gurunavi will formulate and disclose a new medium-term business plan or other specific targets in lieu of such plan.
Supplementary Principle 4-2 – 2
Basic policies related to sustainability, investments in human capital/intellectual property, allocation of management resources beginning with these, and business portfolio related strategies, will be managed and supervised appropriately under a newly formulated medium business plan that includes these matters, as previously stated under Supplementary Principle 4-1- 2.
5-2. Establishing and Disclosing Business Strategy and Business Plan>
At present, Gurunavi has not formulated a medium-term business plan. However, once conditions reach a stage wherein the impact of Covid-19 on the business environment can be forecast, the Company will formulate and disclose a new medium-term business plan. In the formulation of said plan, specific numerical targets will be indicated wherever possible, with capital cost taken into consideration, and explanations will be included in relation to future business strategy and specific measures.
Furthermore, Gurunavi has formulated a medium-term business policy (March 2021 period – March 2023 period) under 3-1. Full Disclosure> hereunder, which has been posted on the Company’s website.
Supplementary Principle 5-2 – 1
The Company will also proceed with the formulation of business portfolio related basic policies, which will be included in the aforementioned medium-term business plan and disclosed accordingly.
[Disclosure Based on the Principles of the Corporate Governance Code] 1-4. Cross Shareholdings>
The Gurunavi and its subsidiaries (hereinafter, “Gurunavi group”) makes investment decisions based on comprehensive considerations covering necessity for business activities, such as business alliances, and maintaining and strengthening business relations, etc. the advantages to be gained by the group through investment in such cross shareholdings, and risks associated with investment amounts and holdings, etc.
In addition, the department in charge will carefully examine suitability of cross-shareholdings retention, taking into consideration factors such as contribution to the company’s growth and business development, etc. and return on investment, and continued retention will be examined by the Board of Directors. Furthermore, where the suitability/rationality of retention is not considered appropriate, cross-shareholdings shall be suitably disposed.
Voting rights for cross shareholdings are exercised appropriately following careful examination of proposal content, by the department in charge of strategic investment, in order to determine whether the proposal will contribute to an increase in our shareholder value. Regardless of whether a proposal is put forward by the issuing company or by its shareholders, affirmative decisions will not be made in relation to proposals that impair our shareholder value.
1-7. Related Party Transactions>
Gurunavi holds that directors engagement in competing transactions, conflict of interest transactions, or other transactions equivalent thereto, are subject to approval by the Board of Directors in accordance with laws and its Regulations of the Board of Directors. In addition, transaction results are disclosed in a timely and appropriate manner in accordance with applicable laws.
In addition, regarding transactions with major shareholders, companies in which the Chairman & Director of the Company serves as a director and companies in which a director of the Company executes the operations, the department in charge of compliance & risk management conducts careful examinations of terms and conditions of transactions, such as transaction price, and reasons for engaging in such transactions, etc. and the results and details of the transactions are regularly reported to an examination committee that includes an outside member of the Audit & Supervisory Board as a member.
Regarding related party transactions other than the above, the Company will appropriately disclose important facts in accordance with applicable laws.
2-6. Roles of Corporate Pension Funds as Asset owners>
Gurunavi has not adopted a corporate pension plan, and consequently does not qualify as a corporate pension asset owner.
3-1. Full Disclosure>
(1) Company objectives (e.g., business principles), business strategies, and business plans
Our social purpose is “Food: Satisfying People and Creating Connections.” This reflects our desire to continue to provide new value to the world and contribute to the realization of a better society by exploring all the possibility of food and connecting people, things and events all over the world through food, based on the spirit “Protecting and nurturing Japanese food culture” which has been with us since our founding.
We have positioned the three years from FY2020 to FY2022 as the foundation construction period for long-term improvement of corporate value. During this period, we will address the following two issues particularly in the field of restaurant sales promotion support services which is our core business: 1) Thoroughly create restaurant search and reservation services from the consumer’s perspective, and improve the customer referral capability to restaurants. 2) Review sales measures and methods such as membership plans. Through these efforts, we will regain trustworthiness of both our customers, consumers and restaurants. In addition, we will improve our policy implementation capabilities by renewing our internal system and strengthening human resource strategy, and aim to steadily generate profits by continuously improving profitability. We aim to support the entire management of restaurants not just sales promotion, and also work on examining and providing new value.
The above content was posted on our website as a medium-term business policy.
(2) Basic views and guidelines on corporate governance
Under the principle of prioritizing shareholders’ interests, Gurunavi maintains a keen awareness of the management responsibility of directors, and upholds basic policies to enhance our corporate governance in order to prevent irregularities, clarify decision-making processes, and ensure the logical implementation of operations.
The Board of Directors is comprised of seven directors, including one representative director and five outside directors. In principle, it holds monthly meetings to make important management decisions and supervise the execution of duties by directors.
As a voluntary advisory body to the Board of Directors, Gurunavi has established the Governance Committee, which is chaired by an outside director/Audit & Supervisory Board Member (hereinafter, the “A&SBM”) and the majority members are outside directors/A&SBMs.
The Audit & Supervisory Board is comprised of four A&SBMs, of which three are outside A&SBMs. In principle, it holds monthly meetings. Each A&SBM attends important meetings including board meetings and audits the execution of duties by directors.
Furthermore, three of the five outside directors and three outside A&SBMs mentioned above have been designated as independent directors/A&SBMs under the provisions of the Tokyo Stock Exchange (hereinafter, the “TSE”), and notification of such appointment has been submitted to the TSE.
In addition, we have reinforced our governance structures by introducing an executive officer system to separate oversight functions by the Board of Directors and business execution functions undertaken by executive officers. Moreover, in accordance with the basic policies determined by the resolution of the Board of Directors, the Executive Committee has been set up to deliberate on important issues related to management and exercise general controls over business execution and is comprised of the President & Representative Director and executive officers. The meetings of the Executive Committee
are held regularly with the attendance of full-time A&SBM.
(3) Basic policies and procedures regarding remuneration for directors
Basic policies and procedures related to remuneration for directors are given under [Director Remuneration] in “II Status of Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management – 1. Matters related to Organizational Composition and Operation, etc.” in this document.
- Basic policies and procedures regarding the appointment/dismissal of senior management and the nomination of director and A&SBM candidates
In the appointment/dismissal of senior management and the selection of director and A&SBM candidates, Gurunavi considers ability, experience, character and opinion, etc. to reach a comprehensive judgment on whether the individual possesses a full understanding of Gurunavi’s corporate philosophy and the ability to put said philosophy into practice.
In view of roles such as management oversight and oversight functions, the selection of outside directors/A&SBMs involves the comprehensive consideration of attributes such as company management experience and specialist expertise, etc.
In addition, as the core business of Gurunavi is food, a woman’s perspective is important, and the appointment of female senior management is also progressing.
In the event that a member of senior management commits an act of misconduct, undertakes actions that harm the company’s reputation, or is deemed unsuitable for a senior management position, said individual shall be dismissed by resolution of the Board of Directors.
Furthermore, in the appointment/dismissal of senior management and the selection of director candidates shall be conducted after deliberation by the Governance Committee.
- Explanation regarding the appointment/dismissal and nomination of individual directors and A&SBMs
Reasons for the nomination of individual director and A&SBM candidates are given in reference document, “Notice of Convocation of the General Meeting of Shareholders.” In addition, reasons for the appointment of outside director/A&SBM are given under “[Directors] Relationship with the Company (2)” and “[A&SBMs] Relationship with the Company (2)” in “II Status of Business Management Organization and Other Corporate Governance Systems regarding Decision- making, Execution of Business, and Oversight in Management – 1. Matters related to Organizational Composition and Operation, etc.” in this document.
Supplementary Principle 3-1 – 3
(1) Approach to Sustainability
Please refer to Gurunavi’s webpage for information on its sustainability initiatives.
https://corporate.gnavi.co.jp/en/profile/sustainability/(Scheduled to appear on July 5, 2022)
For example, soaring fuel and foodstuff costs could have an adverse impact on restaurant operations, which in turn could have an impact on our business performance. Gurunavi is therefore taking steps to disclose the impact of climate change-related risks and opportunities on its business activities and earnings, based on the framework of the TCFD (Task Force on Climate-related Financial Disclosures).
(2) Investment in Human Capital and Intellectual Property
Gurunavi promotes restaurant management reform using the two forces of “IT and humans,” and undertakes an approach towards “evolution into a company that supports restaurant management,” which supports the building of sustainable management models. Consequently, Gurunavi actively promotes the securing and development of human resources to support the promotion of these measures, as well as investment in systems to enable the construction of IT solutions such as digital platforms for the food service industry (Gurunavi PRO), and through the value provided by this fusion of “IT and humans,” the Company guides businesses towards solutions for the diverse issues that restaurants should tackle, with the aim of working alongside the restaurants to achieve reconstruction and regrowth after the Covid-19 crisis.
4-1. Roles and Responsibilities of the Board (1)> Supplementary Principle 4-1 – 1
The Board of Directors undertakes decisions on matters to be determined under applicable laws and the Articles of Incorporation of the Company, in accordance with the “Regulations of the Board of Directors.” In addition, “Executive Committee Rules” have been formulated by resolution of the Board of Directors, and the Executive Committee, which is an optional decision-making agency established in accordance with said rules, undertakes deliberations, resolutions and establishment of direction in relation to execution plans for important individual business matters and other important business execution related matters, in accordance with criteria provided under said rules, and of the agenda items discussed by the Executive Committee, items deemed necessary are submitted for further deliberation by the Board of Directors.
In addition, Gurunavi has set forth the responsibilities and authority assigned to each position in relation to the execution of company business under the “Rules on Official Authority,” which also set forth authority of final decision for matters that occur in the course of the company’s business.
4-8. Effective Use of Independent Outside Directors>
Gurunavi has appointed three independent outside directors in order to reinforce the oversight functions of the Board of Directors through advice and oversight from objective and neutral perspectives.
4-9. Independence Standards and Qualification for Independent Outside Directors>
In accordance with the independence criteria set by the TSE, Gurunavi has established the following independence standards for outside d directors/A&SBMs. If an outside director or A&SBM does not fall under any of the following items, such outside director or A&SBM is considered to be independent from Gurunavi and there is no risk of a conflict of interest with general shareholders.
- A person who executes the business of Gurunavi (“executive１“). Or a director of a subsidiary of Gurunavi who is not executive.
- Parties whose major suppliers are Gurunavi２or their executive
- Ｍajor clients of Gurunavi３or their executive.
- Consultants, accounting experts, or legal experts who receive a large amount４of money or other assets from Gurunavi, other than remuneration for directors/A&SBMs (if the person receiving such assets is a corporation, partnership, or other organization, a person who belongs to such organization).
- A major shareholder ５ of Gurunavi. If such major shareholder is a corporation, it means an executive or used to be an executive of such corporation.
- A Person from other companies in a relationship of mutual appointment of an outside director or A&SBM６.
- A person to whom or from whom Gurunavi has donated a large amount of money or other property.
- Those who have fallen under any of the above clauses 1 through 7 in the past 3 years.
- A person whose close relatives７fall under any of the above clauses 1 through 8. However, with the exception of paragraph 4, only important persons８are eligible..
＊１“Executive” means an executive director, executive officer or other similar person who is currently affiliated with a company (the same shall apply hereinafter).
＊２“Parties whose major suppliers are Gurunavi” is defined as a party to which Gurunavi has made payments in excess of 2% of the other party’s consolidated sales.
＊３“Major clients of Gurunavi” are those who have made payments to us in excess of 2% of our consolidated sales or have provided loans to us in excess of 2% of our consolidated total assets.
＊４“Large amount” is defined as an amount of money or other property provided by the Gurunavi in excess of ¥10 million per year in the case of an individual, or in excess of 2% of the consolidated sales or gross income of the relevant organization in the case of a corporation, partnership, etc. in any of the past three fiscal years (the same applies hereinafter).
＊５“Major shareholder ” means a person who directly or indirectly holds 10% or more of the total voting rights.
＊６“Mutual appointment of an outside director or A&SBM”means that an executive of Gurunavi is an