Corporate Governance

Based on OUR PHILOSOPHY (TIS INTEC Group Philosophy) and Group Vision, we have formulated basic corporate governance policies aimed at improving the Group’s corporate value over the medium and long terms. We are working constantly to enhance corporate governance.

Basic Policy

TIS will constantly strive to achieve the highest level of corporate governance and will work to maintain and further enhance its approaches to corporate governance.
Management believes that the key to good corporate governance is to ensure transparency and fairness in decision-making processes, make full and effective use of management resources, and raise the integrity of management practices through swift and accurate assessment of situations, from the viewpoint of promoting sustainable corporate growth and boosting medium- and long-term corporate value. Accordingly, management at the Company is committed to upholding good corporate governance in line with the following basic principles.

  1. To respect the rights of shareholders and to ensure equality.
  2. To consider the interests of stakeholders, including shareholders, and work with stakeholders in an appropriate manner to achieve stated goals.
  3. To disclose corporate information appropriately and ensure transparency.
  4. To engage in constructive dialogue with shareholders based on a medium- to long-term investment perspective.

Compliance with the Corporate Governance Code

TIS complies with all principles of the Corporate Governance Code.
The status of the Company’s responses to each principle of the Corporate Governance Code is described in the Corporate Governance Report.

Corporate Governance Structure

Form of Organization Company with audit & supervisory board
Chairman of the Board Chairman and President
Number of Directors 9, including 3 external directors
Director's Term of Office 1 year
Number of Audit & Supervisory Board Member 5, including 3 external audit & supervisory board members
Term of Office for Audit & Supervisory Board Members 4 years
Number of Independent Directors 6, including 3 external directors and 3 external audit & supervisory board members

Organizational Chart

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Reason for Selection of Current Corporate Governance Organization

TIS is a Company with an Audit & Supervisory Board, a model chosen for its double-check function through which the Board of Directors oversees the execution of business activities and the the Audit & Supervisory Board audits activities to ensure operations are legal and appropriate. In addition, the Company aims to strengthen the supervisory function of the Board of Directors by appointing outside directors with industry- and corporate management-related experience and insight and drawing on advice and recommendations from an independent standpoint to ensure the validity and appropriateness of decision-making by the Board of Directors.

Directors and Board of Directors

As stipulated in its Articles of Incorporation, the Company's Board of Directors will comprise at least three and no more than 15 directors, and to strengthen the supervisory functions of the Board of Directors, a policy has been established that two or more of the directors must be independent external directors. At present, three independent external directors have been appointed.
For swift and dynamic decision-making by the Board of Directors, the Board of Directors convenes in principle once monthly and also meets on an ad hoc basis whenever necessary.
TIS holds an information meeting once a year to present management direction as well as meetings ahead of Board of Directors' meetings—in principle, twice a month—to give external directors and outside members of the Audit & Supervisory Board sufficient background information to participate in discussions. In addition, the Company organizes study sessions with experts—in-house and external—and arranges visits to local Group facilities and offices. TIS also creates opportunities four times a year when external directors can exchange opinions with the president and sets up meetings twice a year that involve only external directors and outside members of the Audit & Supervisory Board. This facilitates smooth but vigorous discussion by the Board of Directors.

Nomination Committee and Compensation Committee

The Nomination Committee and the Compensation Committee were established as advisory bodies to the Board of Directors to ensure objectivity and transparency in decision-making processes pursuant to appointment of directors and associated compensation and to strengthen the corporate governance structure.
The president and representative director chairs the committee, with the majority of members, including the committee chair, being independent outside directors.

Management Committee

The Company has established the Management Committee to deliberate and report on important matters affecting business execution at the Company and the Group as a whole.

Executive Officer System

The Company has adopted an executive officer system to accelerate management decision-making and supervisory functions of the Board of Directors. Directors delegate business execution to Executive Officers, and these Executive Officers provide specific direction, orders, and supervision to each business unit head.

Audit & Supervisory Board Members and Audit & Supervisory Board

The Audit & Supervisory Board comprises five auditors (of which three are external auditors). Each auditor will perform audits of directors' business execution in accordance with the audit & supervisory policies established by the Audit & Supervisory Board. In addition, the Company works closely with its financial auditors, exchanging information and sharing opinions on a regular basis in addition to receiving the annual financial audit plan and reporting on results of financial audits from Ernst & Young ShinNihon LLC, with which the Company has entered and auditing contract. Furthermore, the Audit & Supervisory Board receives the audit reports of the auditing department and exchanges opinions on a regular basis.

Viewpoint regarding Composition of Board of Directors

The Board of Directors shall be composed of no more than 15 directors, at least two of whom shall be independent external directors. The Board of Directors recognizes its fiduciary responsibility toward shareholders, supervises management strategy, management plans and other important decision-making and business execution of the Company, as prescribed by laws and regulations, the Articles of Incorporation and Company regulations, and bears a responsibility to ensure sustainable growth and enhance medium- to long-term corporate value. In the case of directors that constitute the Board of Directors, after engaging in discussion at meetings of the Board of Directors, the Company shall nominate persons who have extensive experience, strong insights and a high level of specialization that is appropriate for these obligations based on the election criteria prescribed by the Company.

Summary of Results of Analysis and Evaluation of Effectiveness of Entire Board of Directors

Since fiscal 2016, ended March 31, 2016, the Company has evaluated the effectiveness of the Board of Directors each fiscal year. This process reveals issues and points for improvement and leads to initiatives that will raise the effectiveness of the Board of Directors to a higher level. For the fiscal 2019 evaluation, all directors and members of the Audit & Supervisory Board were given a questionnaire to be submitted anonymously. The questionnaire asked them to conduct a comprehensive self-evaluation and self-analysis of the composition and operation of the Board of Directors, and then the Board of Directors pursued discussions based on the results. The method and results of the evaluation, as well as future issues brought to light through this process and measures to address such issues are described below.

1. Method of evaluation

TIS distributed a questionnaire regarding the effectiveness of the Board of Directors to all directors and members of the Audit & Supervisory Board and obtained responses. The Company’s Board of Directors then used these responses to analyze and evaluate the effectiveness of the Board of Directors.
Note that TIS conducted this effectiveness evaluation based on advice and verification by an external attorney.

2. Results of analysis and evaluation of effectiveness of the Board of Directors

The Company’s Board of Directors concluded that a certain degree of effectiveness had been ensured to appropriately supervise the approval of important management matters and business execution, such as the execution status of business activities and investments at the Company and Group companies, through deliberation based on Company regulations. In addition, the Board of Directors concluded that the level of effectiveness continues to trend upward, reflecting improvement measures based on the results of the effectiveness evaluation conducted in the previous fiscal year.
However, management acknowledged the importance of strengthening governance at each Group company through the Board of Directors and for more active opinion exchange on important themes at meetings of the Board of Directors to ensure greater effectiveness in running such meetings.

3. Future issues and associated responses, based on analysis and evaluation

In light of the analysis and evaluation previously mentioned, TIS will focus particular efforts on the following issues.

  1. 1) Strengthen governance of the Group and respond to issues with sense of speed
    Through the Board of Directors, the status of governance within the Group is always known and responses to issues are executed with a sense of speed.
  2. 2) Promote more active opinion exchange on key themes at meetings of the Board of Directors
    The Board of Directors exchanges opinions on shareholder composition, overseas business strategies and other issues of importance to the Group. Going forward, the Board of Directors will pursue a more robust approach to the exchange of opinions on key themes, such as business strategy, human resources strategy and investment strategy with market trends and the state of competition in mind. Opinions with potential will be reflected in management practices with a sense of speed.

Policy and Procedures for Election, dismissal, and Nomination of Directors, etc.

In nominating candidates for directors, audit & supervisory board members and executive officers, the Board of Directors will nominate persons with abundant experience, a high level of insight and advanced specialization based on the following election criteria that make them suitable as directors or audit & supervisory board members in order to realize effective corporate governance and contribute to the sustainable growth of the Company as well as the enhancement of its medium- to long-term corporate value while also considering aspects of diversity such as gender and internationality.
If a situation arises where a management executive should be dismissed, the Board of Directors shall determine a dismissal proposal. However, the dismissal of a director shall be conducted in accordance with the Companies Act and other relevant provisions.

Reason for Election of Directors and Audit & Supervisory Board Members

  • Directors
Toru Kuwano After assuming the office of President and Representative Director of the Group company, Mr. Kuwano was appointed as a Director of the Company in June 2013. Since June 2016, he has assumed the office of President and Representative Director of the Company.
He has a wealth of experience and knowledge about the Company's and its Group's business, as well as in business administration.
He was appointed as a Director since he is highly expected to continue to promote the Medium-term Management Plan(from 2018 to 2020) and fulfill the duties of significant decision-making for the Group as well as the administration and oversight of business management.
Masahiko Adachi Mr. Adachi has been in the office of Representative Director since June 2018 following the office of Division Manager of the corporate department and the financial system department of a financial institution and the Company's Group company.
Based on these experiences, he was appointed as a Director since he is highly expected to continue to promote group governance as set out in the Medium-term Management Plan of the Group (from 2018 to 2020), centered on the corporate function, and fulfill the duties of significant decision-making for the Group and oversight of business management.
Yasushi Okamoto Mr. Okamoto has been serving as Senior Managing Executive Officer and Division Manager of the planning and development department of industrial systems since July 2016, and has been in the office of Director since June 2018, after having been engaged in corporate business in the corporate planning department of the Company for many years.
Based on these experiences, he was appointed as a Director since he is highly expected to continue to promote the Medium-term Management Plan (from 2018 to 2020), and fulfill the duties of significant decision-making for the Group and oversight of business management.
Josaku Yanai Mr. Yanai was mainly engaged in corporate section in the corporate planning department of the Company and its Group company for many years. He assumed the office of Executive Officer and Division Manager of corporate planning division of the Company in April 2011. Since June 2016, he has been serving as a Director of the Company.
He has a wealth of experience and knowledge about the business of the Company's and its Group, as well as in business administration. Based on these experiences, he was appointed as a Director since he is highly expected to continue to promote the Medium-Term Management Plan (from 2018 to 2020) , and fulfill the duties of significant decision-making for the Group and the administration and oversight of business management as a Director.
Takayuki Kitaoka Mr. Kitaoka was engaged in business related to IT infrastructure of INTEC Inc., the Company's major subsidiary, and served in management administration of the Group companies at the Company for three years since April 2012. Furthermore, he has assumed the office of President and Representative Director of INTEC Inc. since April 2018 and the office of Director of the Company since June 2018.
He was appointed as a Director since he is highly expected to continue to promote the duties of INTEC Inc. assigned by the Medium-term Management Plan (from Fiscal 2018 to Fiscal 2020) and to fulfill the duties of significant decision-making for the Group and the administration and oversight of business management, based on the above experiences and from the viewpoint of Group management.
Akira Shinkai Mr. Shinkai was engaged in business of new service planning and marketing and has assumed the office of Director and Executive Vice President of INTEC Inc., the Company's major subsidiary, since April 2018, and the office of Director of the Company since June 2018.
Based on these experiences, he was appointed as a Director since he is highly expected to continue to promote the Medium-term Management Plan (from 2018 to 2020), and fulfill the duties of significant decision-making for the Group and the administration and oversight of business management.
Koichi Sano Mr. Koichi Sano worked mainly in the finance and accounting departments, and served as Executive Vice-President and Representative Director of Mitsui Chemicals, Inc., and has a wide range of experience and a wealth of expertise in corporate management. He was appointed as an External Director since his advice and suggestions from an independent perspective by utilizing these experiences and expertise in the Company's business will ensure that the decisions to be made by the Company's Board of Directors will be reasonable and appropriate, and he is highly expected to be a person who will contribute to the enforcement of the corporate governance of the Company.
Fumio Tsuchiya Mr. Tsuchiya previously worked in an important position in overseas offices and the Corporate Planning Department of Japan Airlines Co., Ltd. After having assumed the office of Director of Japan Airlines in June 2004, he served as Managing Director and was thereafter appointed as President & CEO of JALCard, Inc. in June 2007, which is a group company of Japan Airlines. He has a wide range of experience and a wealth of expertise in corporate management.
He was appointed as an External Director since his advice and suggestions from an independent perspective by utilizing these experiences and expertise in the Company's business will ensure that the decisions to be made by the Company's Board of Directors will be reasonable and appropriate, and he is highly expected to be a person who will contribute to the enforcement of the corporate governance of the Company.
Naoko Mizukoshi Ms. Mizukoshi is a qualified lawyer and has a wealth of professional knowledge of, and experiences in, intellectual property, ICT and international transactions.
Her advice and suggestions from an independent perspective will ensure that the decisions to be made by the Company's Board of Directors will be reasonable and appropriate by utilizing these experiences and expertise in the Company's business, and she is highly expected to be a person who will contribute to the enforcement of the corporate governance of the Company. She has not participated in corporate management but has expertise on corporate legal works. Therefore, she was appointed as an External Director since she could discharge duly the duties of External Director.
  • Audit & Supervisory Board Members
Katsuhiko Ishii Mr. Ishii worked for a financial institution and served as General Manager of the Corporate Department of a Group company. He also served as an advisor at the same Group company. Based on these experiences, he was appointed as an Audit & Supervisory Board Member as he can be expected to oversee the execution of duties of the Company's Directors in a fair and appropriate manner.
Tatsufumi Matsuoka Mr. Matsuoka has a wealth of expertise in finance and accounting as well as corporate management based on experience accumulated through his service at financial institutions and management of companies over many years.
He was appointed as an Audit & Supervisory Board Member, as he is expected to discharge audit and supervisory duties regarding the execution of duties of the Company's directors in a fair and appropriate manner.
Taigi Ito Mr. Ito is a licensed Certified Public Accountant. His expertise and knowledge in the field of finance and accounting and professional experience are beneficial to the Company in enforcing its audit system. Although he was not directly involved in corporate management, he was appointed as an External Audit & Supervisory Board Member as he was considered to be well qualified to appropriately perform the duties of Audit & Supervisory Board Members given the above credentials.
Muneaki Ueda Mr. Ueda has a wealth of experience and wide-ranging insight as a corporate executive. He was appointed as an External Audit & Supervisory Board Member in expectation of obtaining his overall management advisory and management oversight on execution of duties from an external perspective.
Sadahei Funakoshi Mr. Funakoshi has a wealth of experience and knowledge in corporate management, with his experience in the management of investment and loan, credit and administrative departments of Mitsubishi Corporation, as well as his service as an auditor at IT companies. He was appointed as an External Audit & Supervisory Board Member in expectation of obtaining his overall management advisory and management oversight on execution of duties from an external perspective.

Profiles of our corporate officers are available here .

Training Policy for Directors and Auditors

For directors and auditors, including external directors and external auditors, the Company will provide and arrange training opportunities that are appropriate for individual directors and auditors and support the cost of such training. The objective of such training is to provide an opportunity to acquire necessary knowledge regarding the Group's businesses, financial affairs and organization and to understand the duties and responsibilities required of directors and auditors when assuming office, as well as to continuously update these attributes during the term of office.

External Directors and External Auditors

The Company has three external directors and three external auditors. The determination of the independence of external directors and external auditors is prescribed by the requirements of the Companies Act as well as judgement criteria to ensure the independence of external directors and external auditors (referred to as "external officers" hereafter) as described below, with reference to the rules and regulations of the Tokyo Stock Exchange.

For reference: Criteria Concerning Independence of External Officers (revised December 21, 2016)

The determination of the independence of external directors and external auditors is prescribed by the requirements of the Companies Act as well as judgement criteria to ensure the independence of external directors and external auditors (referred to as "external officers" hereafter) as described below, with reference to the rules and regulations of the Tokyo Stock Exchange.

  1. External directors (including candidates) are defined by Article 2, Paragraph 15 of the Companies Act (Requirements of External Directors) and have never served as an executive director, manager or other employee of the TIS INTEC Group (Note 1) even in the past.
  2. External auditors (including candidates) are defined by Article 2, Paragraph 16 of the Companies Act (Requirements of External Company Auditors) and have never served as a director, manager or other employee of the TIS INTEC Group even in the past.
  3. In the current fiscal year and during the past three fiscal years, none of each of the following items shall apply to external officers.
    1. A counterparty which has transactions principally with the Company (Note 2) or a person who executes that counterparty's business
    2. A counterparty which has transactions principally with the TIS INTEC Group (Note 3) or a person who executes that counterparty's business
    3. A consultant, accounting professional or legal professional who has received a large amount of money or other assets (Note 4) other than remuneration of officers from the Company. In addition, when these are received by an organization such as a corporation or partnership, this includes persons who belong to the applicable organization.
    4. A major shareholder of the Company (Note 5). In addition, when the major shareholder is a corporation, this includes a person who executes the business of the corporation.
    5. A person other than those in (Ⅰ), (Ⅱ) and (Ⅲ) above who executes the business of a counterparty of the Company (Note 6)
    6. A person who was formerly a member of a counterparty which is in a situation of cross-assumption of offices of external officers
    7. A counterparty or former member of the counterparty that receives donations from the Company
  4. External officers must not be a relative within the second degree of a person who falls under each of the following items.
    1. A person mentioned in (Ⅰ) to (Ⅲ) of the previous clause
    2. A person who executes the business of a subsidiary of the Company
    3. A non-executive director of a subsidiary of the Company (limited to external auditors)
    4. A person who fell under (Ⅱ) or (Ⅲ) above or a person who executes the business of the Company (including a non-executive director in the case of an external auditor) recently (in the current business year and during the past four business years)
  5. In addition to the above, there exist no circumstances in which duties imposed on an independent external officer are reasonably deemed not to be achieved.
  • Note 1: The "TIS INTEC Group" means the Company and its subsidiaries.
  • Note 2: A "counterparty which has transactions principally with the Company" means a counterparty which provides products or services to the Company and whose payments from the Company constitute at least 2% of the sales of such counterpart in one fiscal year. The main bank (MUFG Bank, Ltd.) and the lead managing underwriters (Nomura Securities Co., Ltd., Mitsubishi UFJ Morgan Stanley Securities Co, Ltd., and SMBC Nikko Securities Inc.) of the Company shall also each be a "counterpart which has transactions principally with the Company," regardless of the transaction amount.
  • Note 3: A "counterparty which has transactions principally with the TIS INTEC Group" means a counterparty with sales exceeding 2% of the total consolidated sales of the TIS INTEC Group.
  • Note 4: "A large amount of money or other assets" means the total value exceeds 10 million yen per fiscal year. This shall apply also to a consultant, accounting professional or legal professional that enters a consulting agreement or similar arrangement and periodically pays an amount of money or other assets, regardless of the amount.
  • Note 5: A "major shareholder" means a person or company, and the like, that directly or indirectly holds 10% or more of total voting rights. However, the Company's leading shareholders (the top 10 approximately) shall be treated as "major shareholders."
  • Note 6: A "counterparty which has transactions with the Company" means the case when transactions with the Company per fiscal year constitute at least 2% of non-consolidated sales of the Company.

Primary Activities of External Directors and External Auditors (Year ended March 31, 2019)

Status Name Primary Activities
Director Koichi Sano Mr. Sano attended all 17 meetings of the Board of Directors held in fiscal 2019 He provided comments as necessary in discussions of matters for resolution, based on his experience in corporate management and the insights thus gained.
Director Fumio Tsuchiya Mr. Tsuchiya attended all 17 meetings of the Board of Directors held in fiscal 2019 He provided comments as necessary in discussions of matters for resolution, based on his experience in corporate management and the insights thus gained.
Director Naoko Mizukoshi Ms. Mizukoshi attended all 12 meetings of the Board of Directors held after his appointment on June 26, 2018. He provided comments as necessary in discussions of matters for resolution, from the specialized perspective of a Lawyer.
Auditor Taigi Ito Mr. Ito attended 16 of 17 meetings of the Board of Directors and 11 of 12 meetings of the Audit & Supervisory Board held in fiscal 2019. He provided comments as necessary in discussions of matters for resolution, from the specialized perspective of a Certified Public Accountant.
Auditor Muneaki Ueda Mr. Ueda attended 16 of 17 meetings of the Board of Directors and 11 of 12 meetings of the Audit & Supervisory Board held in fiscal 2019. He provided comments as necessary in discussions of matters for resolution, based on his experience and insights into corporate management.
Auditor Sadahei Funakoshi Mr. Funakoshi attended all 17 meetings of the Board of Directors and all 12 meetings of the Audit & Supervisory Board held in fiscal 2019. He provided comments as necessary in discussions of matters for resolution, based on his experience and insights into corporate management.

 

Summary of Content of Liability Agreements

In accordance with Article 427, Paragraph 1 of the Companies Act, each of Audit & Supervisory Board enters into an agreement with the Company that limits legal responsibility for liability compensation as set forth under Article 423, Paragraph 1 of the same law.
The limit of liability compensation, based on these agreements, is an amount provided for in Article 425, Paragraph 1, of the same law.

Outline of Policy on Officers' Remuneration

The basic policy on officers’ compensation is to provide greater incentive to improve business results through a system of compensation linked to measures of Company performance, and such amounts are determined through a decision by the Board of Directors, based on discussion and suggestions by the Compensation Committee.
Compensation to Company directors consists of a basic component, a performance-linked component and performance-linked stock incentive. Basic compensation is paid according to the size of the role and scope of responsibilities of each position. Performance-linked compensation is determined by the degree to which measures of corporate performance have been achieved, on the basis of the management plan for each fiscal year, and shall fall within a performance evaluation coefficient of between 0% - 30% of basic compensation for each position.
For the performance-linked stock incentive, the Board of Directors established share delivery rules when the performance-linked stock incentive plan was introduced. Points are granted to directors on a scale within 0% - 15% of base compensation set for each position according to the level of achievement made toward reaching performance targets stated in the management plan as provided for in the rules. The number of shares delivered will correspond to the number of points accumulated.
Compensation paid to external directors is limited to basic compensation only, with no performance-linked component.
Compensation for Audit & Supervisory Board members is decided through discussion by corporate auditors. From the perspective of maintaining a high degree of independence, compensation is not linked to business performance and consists solely of basic compensation.
Furthermore, to reflect medium- to long-term business performance, directors (excluding outside directors) are asked to contribute at least a certain portion of their basic compensation toward the purchase of treasury stock through the Company’s share ownership plan for directors and officers, and they are expected to retain such stock in full for the duration of their time in office so that the acquired stock shares value with all shareholders.
Note that TIS introduced this performance-linked stock compensation system in fiscal 2019 for directors, executive officers and executive fellows (excluding external directors, non-executive directors and residents outside Japan) with the objective being to make eligible directors more aware of their contribution to enhanced business performance and improved corporate value over the medium to long term and to align their interests with those of shareholders.

Remuneration for Directors and Audit & Supervisory Board Members (Year ended March 31, 2019)

  Recipients
(Persons)
Remuneration
(Millions of yen)
Remuneration by type
Basic remuneration Performance-linked remuneration Performance-linked
Stock compensation
Directors
(External Directors)
10
(4)
275
(27)
203
(27)
46
(-)
26
(-)
Audit & Supervisory Board Members
(External Auditors)
6
(3)
68
(25)
68
(25)
-
(-)
-
(-)
Total
(External Directors and External Auditors)
16
(7)
344
(53)
271
(53)
46
(-)
26
(-)

Notes

  1. For the fiscal year ended March 31, 2019, compensation for directors does not include the employee portion for directors who serve concurrently as employees. The Company has not introduced a retirement benefit system for directors, and does not pay any directors’ bonuses.
  2. As of March 31, 2019, the Company has nine directors, including three external directors. The discrepancy between this number and the number of directors listed as recipients above is attributable the inclusion of three directors, one being an external director, who retired at the conclusion of the 10th Annual General Meeting of Shareholders on June 26, 2018, and the inclusion of two directors who serve without compensation.
  3. As of March 31, 2019, the Company’s Audit & Supervisory Board comprises five members, three of whom are external. The discrepancy between this number and the number of directors listed as recipients above is attributable the inclusion of one member who retired at the conclusion of the 10th Annual General Meeting of Shareholders on June 26, 2018.
  4. Limits on compensation (basic compensation and performance-linked compensation) for directors and members of the Audit & Supervisory Board were approved at the First Annual General Meeting of Shareholders on June 25, 2009, with the limit on compensation for directors set at ¥400 million per year (of which, external directors receive no more than ¥50 million) and that for members of the Audit & Supervisory Board set at ¥85 million.
  5. The performance-linked stock incentive is booked as an expense for six directors (excluding external directors and non-full-time directors) in the current business year.Note that this performance-linked stock incentive was approved by shareholders at the 10th Annual General Meeting of Shareholders on June 26, 2018, wherein the upper limit on the number shares is 61,300 per business year, to be delivered through a trust into which the Company contributes up to ¥500 million in each specified period (three business years) for eligible directors (excluding external directors, non-full-time directors), executive officers and executive fellows.

Constructive Dialogue with Shareholders

TIS will actively engage in constructive dialogue with shareholders based on the IR Policy in order to contribute to the Company's sustainable growth and the enhancement of its medium- to long-term corporate value. In addition, the Company will strive to develop a system to promote constructive dialogue with shareholders.
The director of the IR Department will supervise dialogue with shareholders, consider response methods with the President and Representative Director, executive officers in charge, and the IR Department and respond appropriately.
The IR Department will share information and exchange opinions in a timely manner based on respective specialist standpoints with relevant departments and support dialogue with shareholders through organic collaboration.
In relation to shareholders, TIS will strive to enhance means of dialogue such as individual interviews as well as responses by telephone and the holding of business results briefings and small meetings, etc. Furthermore, in addition to actively conducting information disclosure, which will be the premise for dialogue, the Company will strive to expand the contents of the Integrated Report, which will be positioned as an effective tool for dialogue.
TIS will share opinions, etc. put forward in constructive dialogue with capital market participants such as shareholders, investors and securities analysts within the Company through reports, etc. to the Board of Directors, and use them in reviewing the Company's management strategy, and for other purposes.
In the case of dialogue with shareholders, TIS will pay sufficient attention to the fairness of information disclosure and manage internal information appropriately in accordance with the Rules for Prevention of Insider Trading
TIS will conduct a substantial shareholder survey twice a year, in principle, and as necessary and endeavor to gain an understanding of the shareholder structure.

Strategically Held Shares

1. Policy and viewpoint regarding reduction of strategically held shares

TIS and other companies under the Group umbrella hold shares in other companies only when management believes this is necessary for such purposes as establishing long-term, stable relationships with customers and promoting business that will contribute to sustainable growth and higher medium- to long-term corporate value of the Company and the Group.
Each year, the Board of Directors reviews the relevance of cross-shareholdings. It is corporate policy for any cross-shareholding that the Board of Directors deems to be of diminished significance for cross-shareholding to be sold at the earliest possible opportunity.
To determine relevance, TIS uses business-related revenue if the issuing company is a customer of a Group company or annual transaction amount if the issuing company is a strategic partner to calculate a percentage on a balance sheet basis, and management will consider selling any issue with a ratio that falls below a benchmark set by the Company.
For cross-shareholdings with diminished significance, as identified through the aforementioned method, TIS moves to reduce cross-shareholdings in accordance with basic policy.

2. Policy on exercising voting rights relating to strategically held shares

TIS appropriately exercises voting rights for the listed shares in its possession after comprehensively determining whether such action will contribute to sustainable corporate growth and higher medium- to long-term corporate value of the TIS INTEC Group and investee company.

3. Relationships with strategic shareholders

If strategic shareholders of TIS indicate an intention regarding the sale, etc. of TIS shares, we will respond appropriately without preventing such a sale. Moreover, we will not conduct transactions that lack economic rationality with strategic shareholders.

Takeover Defense Measures

TIS has not introduced takeover defense measures.

Update : July 8, 2019, 16:39

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