Policies and Regulations

Basic Approach to Corporate Governance

We will continue working to strengthen corporate governance, based on our understanding of the importance of raising management transparency and fairness, achieving sustainable growth and development and fulfilling our social responsibilities. Specifically, we aim to strengthen corporate governance, by reinforcing the internal control system, increasing management transparency, and promoting the reinforcement of management oversight functions. By conducting honest management that emphasizes corporate ethics through these measures, we aim to increase our corporate value.

Governance

Corporate Governance Structure

We have introduced a corporate officer system to develop a more robust group management control system and ensure corporate governance in accordance with changes in the environment surrounding our business. 
This clarifies the supervisory and executive responsibilities in each business of our Group and enables directors to focus on supervision, thereby bolstering the management’s supervisory function and encouraging the delegation of the task of business execution to corporate officers, which leads to further expeditious decisions being made. 
The directors and corporate auditors check the management of our company from their respective perspectives. The directors carry out deliberations in accordance with the basic policies of management while ensuring that there are no breaches of laws and the Articles of Incorporation. Furthermore, to promote timely and appropriate decision-making, our company has established the Executive Committee, chaired by the CEO, as an organization to decide or report on important matters concerning the execution of duties delegated by the Board of Directors (excluding matters to be resolved by the Board of Directors under the Rules of Administrative Authority). Furthermore, our company has established an optional Nomination/Remuneration Committee as an advisory body to the Board of Directors. The majority of its members are made up of independent external executive directors.

Corporate Governance Overview of the Basic System (As of June 27, 2024)

* Actual results for FY2023

Corporate Governance Structure (As of June 27, 2024)

Corporate governance system  Company with Board of
Corporate Auditors
Management system  Officer System
Executive directors Number of executive directors 12*1
Term of executive directors defined in Articles of Incorporation  1 year
Chair of the Board of Directors Executive director stipulated in
advance by the Board of
Directors*2
Board of Corporate Auditors
members
Board of Corporate Auditors established Yes
Number of Board of Corporate Auditors
members
4*3
External directors and external
Board of Corporate Auditors
members
Number of external directors (independent directors) 5 (5)
Number of external Board of Corporate
Auditors members (independent members)
3 (3)

*1 The maximum number of directors defined in the Articles of Incorporation is 15.
*2 Representative Director Toshio Kagami was appointed.
*3 The maximum number of Board of Corporate Auditors members defined in the Articles of Incorporation is 6.

Directors and Board of Directors

To enhance the transparency of the Board of Directors and further strengthen management structure, the Board of Directors comprises 12 directors, including 5 external executive directors, making up over 40% of the board, and discusses and makes decisions on important items.
Board of Directors meetings are attended by both standing and part-time corporate auditors, who offer opinions. The directors and corporate auditors, who have different duties, monitor management from their own unique perspectives.

Main Discussion Items at Board of Directors Meetings (FY2023)

  • Matters related to the General Meeting of Shareholders (determination of proposals for voting)
  • Matters related to quarterly and annual operating results, and financial reports and forecasts for the next period
  • Matters related to the personnel affairs of executive directors and corporate officers (director candidates and responsibilities of directors and corporate officers)    
  • Matters related to the effectiveness of the Board of Directors
  • Matters related to examination of cross-shareholdings
  • Report on the operating status of our Group’s internal reporting system and risk management system
  • Report on the progress regarding our Group’s ESG Materiality
  • Matters related to the revision of the remuneration system for executive directors and corporate officers
  • Matters related to the revamping of “Buzz Lightyear’s Astro Blasters” at Tokyo Disneyland

Corporate Officers and the Executive Committee

According to changes around the business environment, our Group has introduced the Corporate Officer System to accelerate decision-making by promoting the delegation of authority to corporate officers. 
 The Board of Directors delegates authority to the Executive Committee, which is chaired by the CEO and comprises Standing Board of Corporate Auditors members and corporate officers. The Committee discusses, decides on, and reports on important items pertaining to business execution (excluding items requiring a Board of Directors resolution). Furthermore, standing corporate auditors can also attend and offer opinions.

Corporate Auditors and the Board of Corporate Auditors

The Board of Corporate Auditors comprises four corporate auditors, of whom three are external corporate auditors. Based on the Auditing Policies and the Auditing Plans, the Board of Corporate Auditors members listen to reports from executive directors, officers, and employees, while reporting on the status of deliberation at important meetings, audit results, and other matters, engaging in mutual discussions The two Standing Board of Corporate Auditors members attend and express their views at meetings of the Board of Directors, the Executive Committee, and other committees to monitor the process of important decision-making and execution of duties.
Furthermore, to assist the corporate auditors in their duties, employees who are independent from directors and the business execution divisions are assigned as staff, and the effectiveness of corporate auditing is also enhanced through cooperation between the corporate auditors, independent accounting auditors, and the Internal Auditing Department.

Nomination / Remuneration Committee

A voluntary Nomination / Remuneration Committee, which is chaired by the Chair of the Board of Directors and includes a majority of independent external executive directors, has been established as an advisory body to the Board of Directors. The goal is to enhance the independence and objectivity of the functions of the Board of Directors related to executive director nomination, remuneration, and other such matters. The committee deliberates on the validity of the nominations and remuneration of executive directors and Board of Corporate Auditors members (including draft proposals on these for the General Meeting of Shareholders), as well as succession plans, and then reports to the Board of Directors. Decisions on individual remuneration amounts for executive directors are entrusted to the committee by the Board of Directors.

Activities Undertaken by Nomination / Remuneration Committee

During FY2023, meetings of the Nomination / Remuneration Committee were held three times, with the following members in attendance: Toshio Kagami, Committee Chair, Representative Director, and Chair of the Board of Directors; Yumiko Takano, Representative Director, Chairperson and CEO; Tsutomu Hanada, Executive Director (External); Yuzaburo Mogi, Executive Director (External); and Misao Kikuchi, Executive Director (External). The committee deliberated the following matters, among others.

  • Draft proposal for the General Meeting of Shareholders on the election of executive directors and Board of Corporate Auditors members
  • Draft proposal on the election of representative directors and senior executive directors
  • Revision of the remuneration system for executive directors and revision of the upper limit of remuneration amount for Board of Corporate Auditors members
  • Establishment of the basic policy on the nomination and remuneration for Board of Corporate Auditors members

Furthermore, the committee resolved the amount of remuneration provided to individual executive directors, as tasked by the Board of Directors, and also reported on matters concerning the CEO/COO succession plans.

Audit Department and Internal Audits

We have in place an Internal Auditing Department to ensure compliance with laws and internal rules as well as efficient business execution. From an objective standpoint, the Department examines, assesses, and advises on whether Company operations are being conducted appropriately and efficiently in compliance with management policies and plans as well as internal regulations for the purpose of promoting management efficiency and contributing to enhanced profitability. The results of internal audits are reported to the President of the Company, as well as at the Board of Directors meeting and Board of Corporate Auditors meeting to enhance coordination among parties concerned. Furthermore, depending on the audit subject, the Department reports the audit results to the Risk Management Committee and Compliance Committee, among others, and directly raises issues and proposes improvement measures to the audit subject with the aim of enhancing internal control on an ongoing basis.

Independent Accounting Auditors and Independent Accounting Audit

To ensure accurate accounting, we receive audits from KPMG AZSA LLC. Our designated unlimited liability and engagement partners from KPMG AZSA LLC are certified public accountants Noriaki Habuto and Ryoma Dodo. Additionally, a total of 24 accountants and assistants engage in other accounting and auditing activities (As of July 1, 2024).

Utilizing External Executive Directors and External Corporate Auditors

OLC maintains an oversight system through the appointment of external officers to strengthen supervisory functions. The external executive directors give advice and make suggestions to the Board of Directors as necessary to ensure the validity and appropriateness of the decisions made by the Board of Directors. They also offer prudent advice based on their wealth of experience, wide-ranging insights, and outside perspectives, further enhancing management’s ability to maintain fairness. 
The external Board of Corporate Auditors members consistently cooperate with Standing Board of Corporate Auditors members to share information required to oversee and supervise corporate management. In addition, they receive reports on the results of the independent accounting auditor’s year-end reviews and audits of the Company’s financial statements for the first to third quarters. They also exchange opinions regarding the Company’s operations as necessary while remaining well versed in a variety of Company-related information. Furthermore, the external corporate auditors cooperate with the Internal Auditing Department, a department conducting internal audit, in conducting audits by checking the internal audit plans in advance, and directly receiving the report on the internal audit results at the Board of Corporate Auditors meetings on a regular basis or at any time.

Analysis and Evaluation of the Effectiveness of the Board of Directors

Every fiscal year, OLC’s Board of Directors analyzes and evaluates the effectiveness of the Board of Directors as a whole, using the results of the evaluation sheets distributed to and collected from each executive director and Board of Corporate Auditors member as part of evaluation material. In FY2022, the evaluation sheets were revised with support from an external organization. The results of the evaluation for the Board of Directors by each executive director and Board of Corporate Auditors member have indicated that the operation method, details of discussions, and efforts made by each member are generally appropriate and sufficient. Having deliberated on the effectiveness of the Board, the Board of Directors have concluded that it is being run appropriately and that its effectiveness has been ensured.

Major Activities of the External Executive Directors and External Corporate Auditors (FY2023)

Major activities and outline of duties performed pertaining to the expected roles of external directors Board of Corporate Auditors meetings
Executive directors
(External)
Tsutomu Hanada Mr. Hanada utilizes his abundant experience, expertise, and broad insights in providing advice and recommendations at the Board of Directors meetings, to ensure the validity and appropriateness of decision-making by the Board of Directors. In addition, he plays important roles in ensuring transparency and fairness of management of OLC and strengthening corporate governance, through activities such as attending the Nomination / Remuneration Committee, and exchanging opinions with representative directors and external directors. -
Yuzaburo Mogi Mr. Mogi utilizes his abundant experience, expertise, and broad insights in providing advice and recommendations from multifaceted perspectives at the Board of Directors meetings to ensure the validity and appropriateness of decision-making by the Board of Directors. In addition, he plays important roles in ensuring transparency and fairness of management of OLC and strengthening corporate governance, through activities such as attending the Nomination / Remuneration Committee, and exchanging opinions with representative directors and external directors. -
Kunio Tajiri Mr. Tajiri utilizes his abundant experience, expertise, and broad insights in providing advice and recommendations from multiple perspectives at the Board of Directors meetings to ensure the validity and appropriateness of decision-making by the Board of Directors. In addition, he plays important roles in ensuring transparency and fairness of management of OLC and strengthening corporate governance, through activities such as exchanging opinions with representative directors and external directors. -
Misao Kikuchi Ms. Kikuchi utilizes her abundant experience, expertise, and broad insights in providing advice and recommendations from the perspective of diversity at the Board of Directors meetings to ensure the validity and appropriateness of decision-making by the Board of Directors. In addition, she plays important roles in ensuring transparency and fairness of management of OLC and strengthening corporate governance, through activities such as attending the Nomination / Remuneration Committee, and exchanging opinions with representative directors and external directors. -
Corporate
Auditors
(External)
Kosei Yonekawa
(Standing)
Mr. Yonekawa utilizes his abundant experience, expertise, and broad insights in addressing the Board of Directors, to ensure the legality and validity of decision-making by the Board of Directors. Mr. Yonekawa also actively addresses the Board of Corporate Auditors upon examination of the opinions offered by Corporate Auditors and the basis for those opinions. As a standing corporate auditor, Mr. Yonekawa attends important meetings and interviews directors, corporate officers, and all division heads regarding the status of execution of duties, then reports to the Board of Corporate Auditors. In addition, he plays important roles in ensuring transparency and fairness and strengthening corporate governance, through activities such as exchanging opinions with representative directors and external directors. 14/14
Tatsuo Kainaka Mr. Kainaka provides advice and recommendations at the Board of Directors meetings from the perspective of his experience as a lawyer to ensure the validity and suitability of decision-making by the Board of Directors. Mr. Kainaka also actively addresses the Board of Corporate Auditors upon examination of the opinions offered by Corporate Auditors and the basis for those opinions. In addition, he plays important roles in ensuring transparency and fairness and strengthening corporate governance, through activities such as exchanging opinions with representative directors and external directors. 14/14
Norio Saigusa Mr. Saigusa utilizes his abundant experience, expertise, and broad insights in addressing the Board of Directors, to ensure the legality and validity of decision-making by the Board of Directors. Mr. Saigusa also actively addresses the Board of Corporate Auditors upon examination of the opinions offered by Corporate Auditors and the basis for those opinions. In addition, he plays important roles in ensuring transparency and fairness and strengthening corporate governance, through activities such as exchanging opinions with representative directors and external directors. 14/14

Policy Concerning Decisions on Amounts of Remuneration Paid to Executive Directors

The Company’s Board of Directors decides on the policy regarding decisions on the content of remuneration for individual executive directors and Board of Corporate Auditors members (hereinafter, the “Decision Policy”), after consulting with the Nomination / Remuneration Committee on its draft policy. Decisions on remuneration for executive directors are entrusted to the Nomination / Remuneration Committee by the Board of Directors. Remuneration shall be decided within the limits determined by resolution at the General Meeting of Shareholders, after assessing the degree of achievement of management targets, the degree of achievement of targets for individual directors, and the contributions of individual directors to the Company, so that such remuneration serves as a sound incentive to drive sustainable growth. Said remuneration shall be paid periodically in cash and stock. However, external executive directors are paid remuneration in cash only. 

The remuneration of Board of Corporate Auditors members is paid on a monthly basis in the form of cash in a fixed amount in principle in view of their roles and independence, in consideration of their position to pursue their duties regardless of the corporate operating results. 

The Board of Directors has determined that the decisions regarding the content of individual directors’ remuneration are in line with the Decision Policy, because the Nomination / Remuneration Committee made the decision after considering the content from multiple perspectives, including consistency with the Decision Policy.
The remuneration of individual Board of Corporate Auditors members is determined through discussion by the members within the limit resolved at the General Meeting of Shareholders, after the validity of the levels, among other elements, has been affirmed by the Nomination / Remuneration Committee.

Remuneration Paid to Directors and Corporate Auditors

The upper limit for cash remuneration was set at ¥80 million (not including the employee portion) per month, as approved at the 39th General Meeting of Shareholders held on June 29, 1999. In addition, the upper limit for stock remuneration (external executive directors are ineligible) was set at ¥100 million or 10,000 shares per year, as approved at the 58th General Meeting of Shareholders held on June 28, 2018. (However, due to a stock split conducted on April 1, 2023, the upper limit is currently 50,000 shares per year.)

The upper limit for corporate auditor remuneration was set at ¥8 million yen per month approved at the 45th General Meeting of Shareholders held on June 29, 2005.

Total Amount of Remuneration, Etc., Total Amount of Remuneration, Etc., by Type, and Number of Recipients for Each Office Category (FY2023)

Officer Category Total amount of remuneration (Millions of yen) Total amount of remuneration by type
(Millions of yen)
Number of
recipients
Cash remuneration Share-based remuneration
Fixed remuneration Performance-linked remuneration Retirement
bonus
Directors
(Of which, external executive directors)
432
(54)
408
(54)
-
(-)
-
(-)
23
(-)
11
(4)
Corporate auditors
(Of which, external corporate auditors)
88
(53)
88
(53)
-
(-)
-
(-)
-
(-)
4
(3)
Total
(Of which, external officers)
520
(107)
496
(107)
-
(-)
23
(-)
15
(7)

Notes: 1. Employee wages are not paid to directors serving concurrently as employees.
Notes: 2. The Company has abolished executive bonuses. The amounts paid to directors do not include executive bonuses.
Notes: 3. The Company allocates restricted shares as share-based compensation with the purpose of providing directors with an incentive to sustainably increase the Company’s corporate value and to promote further shared value between directors and shareholders. In principle, the restricted shares may not be transferred or pledged, or disposed of in any other way for a period of three years from the date of allocation.
Notes: 4. In order to strengthen the independence and objectivity of the Board of Directors, the amount of remuneration for each director is determined at the discretion of the “Nomination/Remuneration Committee” (consisting of Toshio Kagami, Representative Director, Chairperson of the Board of Directors; Yumiko Takano, Representative Director, Chairperson and CEO; Tsutomu Hanada, External Executive Director; Yuzaburo Mogi, External Executive Director; and Misao Kikuchi, External Executive Director).

 

[Reference]
Since FY2024, the following revisions have been made regarding remuneration for executive directors.
・Adoption of performance-linked remuneration system
・Elimination of limit set on the stock compensation with transfer restrictions and termination of the allocation of new stock with transfer restrictions.
・Adoption of stock provision trust (BBT-RS) program
・Revision of remuneration amount for Board of Corporate Auditors members

Cross-shareholdings

The Company believes in the need for long-term and amicable relationships with companies related to its business to drive sustainable growth and advances in the core Theme Park Segment. We maintain cross-shareholdings only in companies deemed to contribute to the deepening of mutual ties and enhancement of our corporate value. We will reduce such cross-shareholdings when said objectives cannot be met over the medium to long term.
Every year at the Board of Directors meeting, we carefully examine individual cross-shareholdings in terms of the appropriateness of the purpose for retention, the benefit associated with the holding (asset value, dividends, transactions, etc.), and whether or not the risk is commensurate with the capital cost, to determine the viability of the cross-shareholding.
When exercising voting rights on listed shares held, the Company shall make judgments on each agenda item from the following perspectives.

  1. Will the holding enhance the corporate value of the investment target over the medium to long term and lead to greater shareholder returns?
  2. Is there a risk that the holding will significantly damage share prices due to a major violation of laws or regulations, antisocial acts, scandals, or other inappropriate activities committed by the investment target?
  3. Has there been significant and prolonged stagnation in performance by the investment target?
  4. Is there a possibility that the holding will harm the common interests of shareholders?

Expertise and Experience (Skill Matrix) of Executive Directors

Name/Position

Nomination /

Remuneration Committee

Expertise and experience (skill matrix)

Corporate Management

Top Management

Finance/

Accounting

Legal/Compliance/

Risk Management

Human Resources/

Labor

Marketing/

Sales

IT/

Digital

ESG

Theme Park Segment

Toshio Kagami

Representative Director, Chairperson of the Board of Directors

Yumiko Takano

Representative Director, Chairperson and CEO

Kenji Yoshida

Representative Director, President and COO

Yuichi Katayama

Executive Director

Wataru Takahashi

Executive Director

Yuichi Kaneki

Executive Director

Rika Kanbara

Executive Director

Tsutomu Hanada

Executive Director

(External, independent)

Yuzaburo Mogi

Executive Director

(External, independent)

Kunio Tajiri

Executive Director

(External, independent)

Misao Kikuchi

Executive Director

(External, independent)

The Company regards the expertise and experience in the following areas to be the basic skills required by executive directors to conduct corporate management with the aim of achieving sustainable growth and increasing corporate value over the medium- to long-term: Corporate management / top management, finance/accounting, legal/compliance/risk management, human resources/labor, marketing/sales, IT/digital, ESG, and Theme Park Segment (business), which is of particular importance in view of our business characteristics. The above skill matrix shows the expertise and experience of individual executive director.

Strategy

Risks and Opportunities

[Risk]

  • Decreased growth opportunities and social trust due to lack of appropriate decision-making function
     

Ensure that all laws and regulations and the Corporate Governance Code are complied with, and establish management systems that allow flexible responses to changes and facilitate growth.

Metrics and Targets

Metrics and Targets for Fairness in Corporate Management

KPI

KGI

2024 Medium-term Plan

FY2026

2030

  • External directors’ rate of attendance at Board of Directors meetings: 100%
  • Evaluation of the effectiveness of the Board of Directors: Ensure appropriate evaluation and make improvements
  • Corporate Governance Code: Fully complied with
  • External directors’ rate of attendance at Board of Directors meetings: More than 80%
  • Evaluation of the effectiveness of the Board of Directors: Ensure appropriate evaluation and make improvements
  • Corporate Governance Code: Fully complied with

Ensure that all laws and regulations and the Corporate Governance Code are complied with, and the management systems in place allow flexible response to changes and facilitate growth.

FY2023 Progress on Fairness in Corporate Management

The attendance status of directors and corporate auditors with regard to Board of Directors meetings held during FY2023 was as follows.

Name and title Attendance status
Toshio Kagami Representative Director 12/12
Yumiko Takano Representative Director 12/12
Kenji Yoshida Representative Director 12/12
Yuichi Katayama Executive Director 11/12
Wataru Takahashi Executive Director 12/12
Yuichi Kaneki Executive Director 12/12
Rika Kanbara Executive Director 11/12
Tsutomu Hanada Executive Director (External) 12/12
Yuzaburo Mogi Executive Director (External) 11/12
Kunio Tajiri Executive Director (External) 11/12
Misao Kikuchi Executive Director (External) 11/12
Shigeru Suzuki Standing Board of Corporate Auditors members 12/12
Kosei Yonekawa Standing Board of Corporate Auditors members (External) 12/12
Tatsuo Kainaka Board of Corporate Auditors members (External) 12/12
Norio Saigusa Board of Corporate Auditors members (External) 12/12

*In addition to the above number of Board of Directors meetings held, there was one resolution in writing, which was deemed to constitute a Board of Directors meeting based on the provisions of the Companies Act and the Articles of Incorporation.


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