Governance

Basic Policy

The Shimamura Group believes that the fundamental credibility of our business comes from dealing fairly and equitably with various stakeholders.
Further enhancement of credibility and trust is necessary for sustained business growth and improvement in corporate value over the medium- to long-term.
Therefore, the Shimamura Group will strengthen our governance system, enhance dialogue with shareholders and investors, and implement thorough risk management.

Implementation items

Continued efforts
Corporate governance
Corporate governance Report /
Corporate governance system
Criteria for Nominating Officers /
Skills to Expect from the Board of Directors /
Status of Outside Officers /
Officer Remuneration /
Evaluating the Effectiveness of the Board of Directors /
Cross-Shareholding
Enhance dialogue with shareholders and investors
Enhancing financial results briefings and disclosure materials /
IR coverage and dialogue at small meetings /
Disclosure of Medium-Term Management Plan /
IR policy enactment and disclosure
Compliance
Compliance regulations /
Whistleblowing system
Internal control
Internal control system / Internal audit /
Audit by auditors
Risk management
Strengthen information security /
Respond to risks during disasters and emergencies
New initiative
Corporate Governance
  • Establish management plan formulation committee
  • Establish nomiration & remuneration committee
  • Introduce a performance-based stock compensation system
Enhance dialogue with shareholders and investors
  • Enhancing disclosure materials
  • Expand corporate website
  • Expand IR event
Compliance
  • Revised compliance regulations
  • Disclosure of whistleblower system
Internal control
  • Disclosure of the internal control system

1 Corporate governance

Basic concept

The Shimamura Group believes that the basics of our business come from dealing fairly and equitably with various stakeholders such as employees, customers, business partners, shareholders, and society.
We recognize that further strengthening the confidence and trust from stakeholders surrounding our business is necessary for business continuity and growth. Furthermore, for that purpose, we recognize the importance of enhancing corporate governance.
Moreover, in order to further increase management efficiency and profitability by developing and expanding the unique business model that we have built in the retail industry, we believe that directors who possess highly-specialized business and operational knowledge should decide on financial and business policies at the Shimamura Group while complying with laws, regulations and the Articles of Incorporation, heighten corporate value and contribute to the common interests of all stakeholders.

2 Enhance dialogue with shareholders and investors

Enhance dialogue with shareholders and investors
From FY2020, in addition to the second quarter and year-end financial results briefings that had been held thus far, the Shimamura Group began holding financial results briefings in the form of conference calls for the first quarter and third quarter. We also began disclosing materials (with comments) for the financial results briefings on our IR website. In FY2021, we will overhaul our corporate website to enhance disclosure information. We will also strive to enhance financial results disclosure materials, such as disclosure of Q&As at financial results briefings and expanded availability of English-language materials.
IR coverage and dialogue at small meetings
IR coverage is handled by the Planning Section, which is responsible for IR, corporate planning, and public relations. In order to improve fairness and accuracy of our monthly disclosure, we changed our disclosure method in 2019 from individual telephone support to a conference call format (for sell-side analysts) which allows information to be sent to multiple people at the same time. Additionally, our President will serve as speaker for small meetings that are held periodically. Other officers will also attend as necessary to support the meetings. In the future, we will work to expand IR events such as tours of facilities.
Disclosure of Medium-Term Management Plan

We disclose the Medium-Term Management Plan for FY2021 to FY2023.

See Medium-Term Management Plan

IR policy enactment and disclosure

We appropriately provide capital market participants (e.g., shareholders, investors and analysts) and all other stakeholders with information on results, management policies and other areas associated with investment decisions with fairness, accuracy and continuity.

3 Compliance

Compliance Regulations

Basic approach
The Shimamura Group continues to engage in sincere corporate management to build long-term universal relationships of trust and confidence with various stakeholders including employees, customers, business partners, shareholders and society. The employees of the Shimamura Group comply with laws/regulations, internal rules and other regulations and then take responsible actions in accordance with social norms in line with this philosophy.
Scope of application
Employees and officers (directors, auditors and executive officers)
Organization and structure
    • Manager
    • Each department head is responsible for confirming the status of compliance with laws/regulations, internal rules and other regulations as the compliance manager of the operations over which they have responsibility.
    • The Legal Section is responsible for preventive legal activities for the prevention and mitigation of legal disputes, and strategic legal activities to perform legal work involving important decision-making in corporate management.
    • Executive officers in charge of the General Administration Department and the Human Resources Department are responsible for overall compliance management.
  • Internal audit
    The Audit Section conducts internal audit on the status of compliance with the internal rules to ensure the appropriateness of business operations.
  • Whistleblowing system
    We have set up a point of contact to accept inquiries and reports for organizational or personal violations of laws/regulations and Work Regulations.
  1. Responsible product procurement and sales

    The Shimamura Group thoroughly manage safety and comply with law and regulations on products, sales floors, advertising and other activities for our customers.

    See details of initiatives for customers

  2. Respect for human rights

    The Shimamura Group respects all human rights and does not tolerate discrimination, harassment or other forms of human rights violations.
    To achieve that, we prevent human rights violations from occurring in advance. In the event a human rights violation does occur, we fulfill our responsibility to respect human rights as a company by taking the appropriate measures to correct that.
    Moreover, we work with business partners to promote respect for human rights throughout our supply chain.

    See details of initiatives for human rights

  3. Corruption prevention

    The Shimamura Group does not engage in bribery, forgery, falsification or concealment of records, evidence or testimonies, and other unethical acts.

    • We do not make any demands unrelated to product transactions to our business partners.
    • We maintain sound and normal relationships with the government and authorities, and do not engage in bribes, illegal political contributions or other such acts.
    • Employees do not take actions which harm the interests of the company for the benefits of themselves or a third party. They do not use the assets, information and other properties of the company for purposes other than business purposes.

    Shimamura transaction standards (Excerpt) PDF

  4. Ensuring tax transparency

    The Shimamura Group complies with laws and regulations applicable to the countries where we conduct our business activities. We appropriately file and pay taxes.

    • We disclose management figures and our tax payment situation in a timely and appropriate manner in accordance with the laws and regulations applicable to the countries where we conduct our business activities.
    • We appropriately communicate with the tax authorities and strive to build and maintain good relationships with them.
    • We comply with the laws and regulations of each country, tax treaties and international taxation rules in international transactions.
    • We do not avoid tax (not use tax havens).
  5. Appropriate information disclosure

    he Shimamura Group appropriately provides capital market participants (e.g., shareholders, investors and analysts) and all other stakeholders with information on results, management policies and other areas associated with investment decisions with fairness, accuracy and continuity.

  6. Responsible information management

    The Shimamura Group thoroughly protects personal and confidential information. We strictly manage them to avoid leaks.
    Moreover, we do not use the information assets we possess for any purpose other than legitimate purposes.

  7. Prohibition of transactions with antisocial forces

    When receiving unjust demands from antisocial forces, the Shimamura Group resolutely confronts such demands without resorting to easy solutions via payoffs.
    We do not conduct any business with antisocial forces, or corporations and organizations thought to be related to antisocial forces.

  8. Protection of intellectual property

    The Shimamura Group respects intellectual property rights and strives not to infringe the rights of other companies by conducting prior checks.

  9. Social contribution

    The Shimamura Group will strive for harmony with the local community and the international community, build friendly relationships with stakeholders, and actively contribute to the realization of a prosperous and comfortable society.

    See details of initiatives for society

  10. Environmental conservation

    The Shimamura Group complies with laws and regulations relating to environmental conservation and conducts environmentally-friendly business activities.
    We strive to prevent environmental pollution and to reduce our environmental burden by appropriately controlling the amount of energy and natural resources we use and treating waste, exhaust gas and wastewater.
    In addition, we recognize the importance of biodiversity and strive to conserve it.

    See details of initiatives for environment

Whistleblowing system
We have formulated the Regulations to Protect Whistleblowers. These regulations establish mechanisms for proper handling of inquiries and reports from employees (all employees: full-time employees, regular employees (part-timers), part-time employees and temporary employees) in regards to organizational (the Shimamura Group) or personal (employee) violations of laws, regulations, or Work Regulations.
  • Structure
  • Person in charge
    The executive officer in charge of the Human Resources Department oversee the whistleblowing system.
    The Legal Section is responsible for solving problems in inquiries and reports as the department serving as a point of contact to accept inquiries and reports.
  • Roles of the Board of Directors and the Group Management Committee
    The executive officer in charge of the Human Resources Department reports all the reported content, the method of dealing with issues and the results to the Board of Directors. In addition, he/she presents a disciplinary action plan to the Awards and Disciplinary Action Committee. Then, the Management Committee or the Board of Directors makes a determination according to the content.
  • Protection of a person who makes a report
    We do not dismiss or otherwise disadvantageously treat those who have made reports or inquiries due to their reports or inquiries. In addition, we take appropriate action so that the working environment of those who make reports or inquiries will not worsen.
  • Method of informing employees
    We describe the whistleblowing system in a manual that can be viewed by all employees. In addition, we explain it in new employee education for full-time employees, regular employees (part-timers), and part-time employees, and post reporting acceptance slips and materials (e.g., a point of contact for reporting, how to make a report and the response after report).
  • Number of whistleblowing cases

    (cases)

    Fiscal Year 2017 2018 2019 2020 2021
    In-House Contacts (Legal Section, Human Resources Department) 11 15 10 7 9
    Outside Contact (lawyer) 10 9 10 4 6
    Total 21 24 20 11 15

4 Internal control

Basic approach
We have established the Internal Control Regulations. The purpose is to be a sincere and faithful company to our stakeholders as well as to maintain an organizational structure that develops systems to achieve the four purposes stipulated in the Financial Instruments and Exchange Act and continuously makes improvements.
  1. (1) We will enhance the effectiveness and efficiency of business operations to achieve the purposes of business activities.
  2. (2) We ensure reliability in financial reporting.
  3. (3) We promote compliance with laws/regulations and other norms relating to business activities.
  4. (4) We acquire, use and dispose of assets under appropriate procedures and approval.
Internal control system
  • The Board of Directors determines and supervises basic internal control policies.
  • President develops, operates and evaluates internal control based on the basic policy determined by the Board of Directors and makes reports on the results.
  • Auditors monitor and verify the development and operational status of internal control from an independent standpoint.
  • The Audit Section takes responsibility for the ongoing confirmation of the effectiveness of the development and operational status of internal control, and makes reports to the President. Together with this, it promotes improvements in response to instructions from the President.
  • The Heads of the Accounting Department, the Human Resources Department, the General Administration Department, the Systems Department and the Planning Section, which are the internal control-related departments, develop and operate the related documents necessary to evaluate internal control in their own departments.
  • All employees in each department comply with the internal control established by the company while executing their own operations.
Internal audit
We have established an independent Audit Section (four full-time members) under the direct control of the President. It periodically conducts on-site audits of all stores and Head Office departments in regards to the situation concerning compliance with international rules, business activities in general and the validity of procedures. Moreover, the Head of the Audit Section reports the results of those audits to the President, the Board of Directors and the Board of Auditors.
Audit by auditors
Auditors enhance the effectiveness of audits by attending meetings of the Board of Directors, meetings of the Management Committee and other important meetings to grasp important decision-making processes and the status of business execution. In addition, auditors conduct audits of the status of business execution by directors and executive officers. The Board of Auditors then verifies that.

5 Risk management

Basic approach
The risks that significantly affect corporate activities are diversifying. These include natural disasters, the spread of infectious diseases and information security threats accompanying the evolution of IT.
The Shimamura Group recognizes that risk management is an important foundation that supports management. Recognizing that, we have established the Internal Control Regulations and the responsible departments are striving to reduce and prevent risks.
In addition, the Board of Directors and the Management Committee deliberate on and report risks as needed. The President then promptly appoints a responsible executive officer to take the appropriate response to new risks.
Strengthen information security

The Shimamura Group recognizes that the protection and management of information assets are an important issue in risk management. Recognizing that, we have enacted the Information Security Regulations and Personal Information Protection Regulations and are working to strengthen information security.
Under these regulations, the Information Security Committee (Systems Department, General Administration Department, Planning Section and Audit Section) confirms the information security compliance situation, investigates and corrects problems, and provides education and information in order to minimize the impact from risks. The Information Security Committee is chaired by the executive officer responsible for the Systems Department.

Respond to risks during disasters and emergencies
  • BCP (Business Continuity Plan) development
    The Shimamura Group recognizes that the Business Continuity are an important issue in risk management. Recognizing that, we have enacted BCP and are committed to responding to risks during disasters and emergencies.
    In the event of a disaster, the President will announce the establishment of a Disaster Response Headquarters and appoint a Chief in charge of response by the Headquarters. Furthermore, if a disaster occurs, we will respond promptly based on the following items, and will support the disaster area and victims.
    First, we will place top priority on protecting life.
    Second, we will confirm and respond to the situation of damage to employees' homes, etc.
    Third, we will protect the Company's assets and aim to quickly resume operations.
    Fourth, we will create an environment for employees to quickly return to work.
    Emergency responses to natural disasters, fires, customer injuries and illnesses, etc., during store operations are stipulated in the store operations manual. We educate and train our employees to place the highest priority on human life and safety.
  • Systematization of safety confirmation
    We have systematized the confirmation for employee safety during emergencies. This enables head office employees to use smartphones to confirm their safety, and store employees to use the intranet to confirm their safety and report on business conditions.