Corporate Governance

PILOT Corporation and the PILOT Group believe that it is our social responsibility as a corporation to contribute to the development of a sustainable society by seeking to increase our corporate value through business activities.
To achieve sustainable growth and increase our corporate value, we will improve the objectivity and transparency of management and strive to strengthen and improve our corporate governance system to be more effective, from the perspectives of our shareholders, customers, employees, and the local community.

Basic Approach

The PILOT Group aspires to support writing around the world while supporting people, society and culture in areas other than writing through the practice of our five guiding principles which encompass our founding spirit and serve as our principles of conduct, based on our Purpose, “Our Creations Inspire Creativity.” We are determined to develop, strengthen, and enhance our system for corporate governance so that it is more effective. In this system, we will incorporate feedback from our shareholders, customers, employees and people in local communities around the world into our management while improving its objectivity and transparency, passing down the traditions and skills we have accumulated and responding to the changing times and environment. To further strengthen these initiatives, we have chosen to adopt an organizational structure under which we are a company with an audit and supervisory committee.

Corporate Governance Report

Corporate Governance Structure

The PILOT Group has established a system of audits and supervision by the Audit and Supervisory Committee and has developed a governance structure with more objectivity and transparency through a Board of Directors that has management oversight. The Audit and Supervisory Committee is diverse; there are Outside Directors. As well, this committee audits and supervises the Board of Directors. Executive Directors and Executive Officers make quick, responsible decisions and execute their duties under the authority delegated to them by the Board of Directors, with supervision and execution separated from each other. PILOT has adopted the Company with Audit and Supervisory Committee system as its institutional design. To achieve effective corporate governance for shareholders and other stakeholders, the Company has established and maintains the following internal organizations.

Board of Directors

The Board of Directors, consisting of ten (10) members (of which three (3) of whom are Audit and Supervisory Committee Members) including five (5) independent Outside Directors, deliberates on and decides important issues related to the Company's management, and supervises overall management including business execution, in accordance with the Rules of the Board of Directors. The Chairman of the Board of Directors is Fumio Fujisaki, Representative Director and President.
Delegating authority to Directors within the scope of laws and regulations enables the Board of Directors to clarify the roles of supervision and business execution, expedite the decision-making processes required for business execution, and focus on discussing important issues such as basic management policies and strategies.

Audit and Supervisory Committee

The Audit and Supervisory Committee consists of three members, including two (2) independent Outside Directors, one (1) of whom is a full-time Audit and Supervisory Committee Member. The Audit and Supervisory Committee has established a system to ensure independence and effectiveness guided by the Rules of the Audit and Supervisory Committee and related internal rules, and receives audit reports from the Accounting Auditor. The Audit and Supervisory Committee also audits and supervises decision-making by the Board of Directors and the execution of duties by Directors through organizational audits in cooperation with the Internal Audit Department, by attending meetings of the Board of Directors and other important meetings, by investigating the state of operations and assets, and by exercising authority over the selection and dismissal of the Financial Auditor, as well as audit fees. The Audit and Supervisory Committee is chaired by full-time Audit and Supervisory Committee Member Yoshihiro Saimura.

Nomination and Remuneration Advisory Committee

The Nomination and Remuneration Advisory Committee, the majority of whose members are independent Outside Directors, has been established as an advisory body to the Board of Directors. The Committee ensures accountability by strengthening the independence and objectivity of the Board of Directors over the nomination and remuneration of senior management (Executive Officers) and Directors. The Nomination and Remuneration Advisory Committee is chaired by an independent Outside Director, ensuring its complete independence.
As of the date of submission, the names of the Committee members are as follows: Representative Director and President Fumio Fujisaki, Outside Director Misuzu Shibata, and Outside Director (Audit and Supervisory Committee Member) Toshizo Kamiyama.
The Committee deliberates on matters referred to it by the Board of Directors, such as the selection of director candidates and their remuneration, and submits its recommendations to the Board.

Risk Management Committee

The Company has established a Risk Management Committee, with the aim of appropriately and centrally managing risks relating to the Group's business operations, by identifying uncertainties that may affect the Group's performance and business continuity as risks. The Committee is chaired by Fumio Fujisaki, Representative Director and President. The members of the Committee consist of Directors who also serve as Executive Officers and Executive Officers who are responsible for business execution. Full-time Audit and Supervisory Committee Member also participates as an observer. The Risk Management Committee oversees risk management for the Group, ensures the stable development of its businesses by supervising and directing responses to risks that are judged to be important from an ideal Group-wide perspective, and works to continuously improve the Group's corporate value.

Accounting Auditors

The Company has appointed ARK LLC as the Financial Accounting Auditor for auditing its accounts.

Business execution system

• Executive Officer System

  The Company has adopted an Executive Officer System to clearly separate management oversight from business execution and to ensure swift, efficient execution of business.

• Executive Management Committee

  The Company has established an Executive Management Committee as a deliberative body for making decisions on important issues for business execution. Consisting of Directors who concurrently serve as Executive Officers and Executive Officers in charge of business execution, the Committee's deliberations contribute to more efficient and rapid decision-making.

• Internal Audits

  The Audit Department was established to conduct internal audits and to evaluate the effectiveness of internal control over financial reporting of the entire PILOT Group.

• General Managers' Meetings

  General managers' meetings, attended by Directors who concurrently serve as Executive Officers, Executive Officers, and the General Managers of each division, help to coordinate and communicate opinions on necessary issues concerning overall management and to share awareness of the current state and other issues.

Corporate governance structure

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Reasons for Adoption of Current Corporate Governance System

The Company has adopted the Company with Audit and Supervisory Committee system as its institutional design. The reasons for this are as follows.

• To enable the Board of Directors to supervise business execution from an objective perspective, with the Directors who concurrently serve as Executive Officers (Executive Directors) and other Executive Officers making quick and responsible decisions, thereby improving the effectiveness of corporate governance through a clear division of roles.
• To enable the creation of a management base that enables sustainable growth and value creation, by incorporating stakeholder feedback into management.

The Company’s Board of Directors has appointed a diverse group of independent Outside Directors, and has established a governance system that increases objectivity and transparency.
In addition, we have established the Nomination and Remuneration Advisory Committee as a voluntary advisory body to the Board of Directors, which makes recommendations to the Board of Directors.
Please refer to the documents below regarding the corporate governance of our group.