Corporate Governance
JBS believes that effectively functioning corporate governance is essential for the continuous enhancement of corporate value, and we strive to strengthen and enhance corporate governance. We believe that we can achieve long-term growth by building good relationships with shareholders and other stakeholders and by conducting business activities that meet the needs of society.
Main Activities of the Board of Directors
JBS is a company with an Audit & Supervisory Board, and while authority and responsibility for business execution concentrates on the Board of Directors, which is the highest decision-making body for management, by having the Audit & Supervisory Board, which consists of unitary auditors, take on the function of auditing the execution of duties by directors, we aim to realize appropriate decision-making and business execution, as well as establish a system in which mutual supervision works as an organization.JBS’s Board of Directors consists of seven Directors including four outside Directors and the President & CEO serves as chairperson. The Board of Directors makes resolutions on legal matters, makes decisions on important management matters, and oversees the execution of business, among other things. In principle, the Board of Directors holds a monthly regular meeting and extraordinary Board of Directors meetings as needed. By having all Audit & Supervisory Board members attend these meetings, we monitor the situation of business execution by the Directors. Moreover, we have established a Steering Committee consisting of the President & CEO, employees cum Directors, and Executive Officers in order to make appropriate and flexible decisions on the execution of duties. The President & CEO serves as chairperson of this committee. The Steering Committee deliberates on the management policy and plan, among other important matters related to the execution of duties.
While JBS has created individual policies related to sustainability, such as an environmental policy and human rights policy, we have not formulated a basic policy on sustainability. Going forward, from the viewpoint of improving the Company’s medium- to long-term corporate value, the Board of Directors intends to formulate a basic policy on sustainability. Additionally, the Board of Directors effectively oversees the allocation of human capital, intellectual property, and other management resources as well as the implementation of a business portfolio strategy through the formulation of a medium-term management plan and reviews thereof. From a medium- to long-term perspective and aiming to collaborate based on business alliances, etc., JBS may cross-hold shares of other listed companies. However, JBS does not currently own any cross-held shares. If JBS should cross-hold shares, the Board of Directors shall verify the propriety thereof, comprehensively considering the appropriateness of the objective, benefits, and risks accompanying the cross-holding.
With regard to transactions with related parties, pursuant to the rules of the Board of Directors, if applicable, the Board of Directors shall vote on the transaction excluding the Director in question as a person of special interest. Additionally, the Company has established rules for transactions with related parties, compiled a list of related parties, and reports on prior approvals and results of such transactions at the Board of Directors. JBS has also established a system to manage transactions between related parties by regularly cross-checking the list of related parties with business partners and conducting questionnaires with related parties to check for transactions between related parties.
The Board of Directors takes the following policy and procedures in nominating Director and Audit & Supervisory Board member candidates.
Nomination Policy for Directors and Audit & Supervisory Board Members
- Meets legal conditions set forth in the Companies Act
- Is not affiliated with anti-social forces
- Has an excellent personality and insight who can fulfill their duties as a supervisor for management
(as an auditor in the case of an Audit & Supervisory Board member)
Nomination Policy for Outside Directors and Outside Audit & Supervisory Board Members
JBS nominates those who have, in addition to the requirements of the Nomination Policy for Directors and Audit & Supervisory Board Members, a track record in holding leadership positions in the fields of management, law, accounting, government, consulting, education, etc., and possess expert knowledge.
Procedures for Removing Directors and Audit & Supervisory Board Members
The Board of Directors selects candidates, who are approved or dismissed at the General Meeting of Shareholders. Candidates for Audit & Supervisory Board members gain the consent of the Audit & Supervisory Board in advance.
JBS lists the reasons for the appointment or dismissal of individual candidates for Directors and Audit & Supervisory Board Members on the convocation notice.
Effectiveness Assessment of the Board of Directors
Initiatives for Improving the Effectiveness of the Board of Directors
For improving the functions of the Board of Directors and, consequently, the Company’s medium- to long-term corporate value, JBS analyses and assesses the effectiveness of the Board of Directors.
The Directors and Audit & Supervisory Board members (totaling ten people) completed a self-assessment questionnaire on 1. the composition of the Board of Directors, 2. operation of the Board of Directors, 3. responsibility toward the business strategy and stakeholders, 4. risk management, internal control, compliance, and crisis management systems, and 5. assessment and compensation of the management team, with the assessment period being the fiscal year ending September 2022. The Board of Directors tabulated the responses and conducted an assessment analysis. Based on the analysis results, the Board of Directors held constructive discussions on the issues that should be addressed going forward.
Overview of the Effectiveness Assessment Results
It was found that uninhibited and vigorous debates took place at the Board of Directors with sufficient participation from Directors in decision-making, and multifaceted considerations took place on management issues. Additionally, no phenomena were found to inhibit or damage the effectiveness of the Board of Directors and it was deemed that the effectiveness of the Board of Directors was secure. On the other hand, further enhancement of strategic discussions toward improving corporate value and promotion of dialogue with stakeholders, among other things, were raised as items to be addressed in the future.
Going forward, considering that an even higher level of governance will be demanded as JBS grows as a listed company, the Company will continue to consider and implement the necessary measures to improve the effectiveness of the Board of Directors.
