Marvelous INC.

Fundamental concept of corporate governance

With the management philosophy of the "'Amazement' and 'Emotion' to the world with New Entertainment," the Group aims to be a company that earns the appreciation and trust of all stakeholders including shareholders, customers, business partners, and local communities.

Governance frameworks

The Company is a company with the Board of Directors and the Board of Corporate Auditors.
The board of directors consists of eight directors including two external directors and comprises three corporate auditors including two external corporate auditors. Important decisions concerning the management of the Company are made at regular monthly meetings of the board of directors and at extraordinary meetings convened when necessary.
The execution of operations is subject to approval based on decision criteria defined in Operating Authority Regulations, with deliberations held at weekly management conference. Depending on the subject matter, the representative director, the executive officers in charge, and the operating division managers pass decisions, reflecting the importance assigned to speedy decision-making.

Corporate auditors are present at important meetings, including board of directors' meetings. They audit from a neutral perspective the execution of duties by the directors, receive reports from the accounting auditor and from directors, review important documents, and in such other ways perform a full range of management supervisory functions.

Compensation paid to all directors of the Company (excluding outside directors) consists of monthly compensation, performance-linked bonuses and performance-linked stock remuneration. The total amount of the performance-linked bonuses and the performance-linked stock remuneration are determined based on consolidated operating income attributable to the Company for then-current fiscal year. The incentive are deliberated in the board of directors and determined.

Corporate governance chart

Support framework for external directors (external corporate auditors)

As a support framework assisting in the duties of external directors and external corporate auditors, the Company maintains an officer for the Internal Audit Department who facilitates needed communication and coordination. Moreover, depending on necessity, the Corporate Planning Department and the Internal Audit Department in cooperation with the standing statutory auditor provide support in ways such as communicating in advance information concerning the content of meeting agenda points, aggregating necessary information and providing materials, and by holding individual information meetings.

Officer remuneration

Remunerations of directors and corporate auditors are respectively disclosed in total amounts.
Remunerations paid by the Company to directors and corporate auditors in the fiscal year to March 2017 are shown below.
Nine directors: 148,999 thousand yen
Four auditors: 14,459 thousand yen
Total for all 13 officers: 163,459 thousand yen

The above includes one director retired from office at the end of the 19th Annual General Meeting of Shareholders held on June 22, 2016 and one auditor resigned on September 9, 2016. 

Information about external directors

Names and reasons for appointment of the two external directors of the Company are as follows.

External directorsReasons for appointmentAttendance to the Board of Directors meetings
(FY2016; Number of attendance/ Number of meetings held)
The appointment is based on the expectation that the appointee will provide counsel based on his wide ranging experience and insight in matters of corporate management. 15/16
The appointee has gained wide ranging insight in matters of general corporate management and has outstanding expert knowledge in the area of information technology. It is expected that the appointee will apply this experience and knowledge toward strengthening the corporate governance of the Company. It is also expected that the appointee, as an external director with the right to vote at meetings of the board of directors, will fulfill from an independent standpoint of neutrality and impartiality the function of ensuring the adequacy and appropriateness of decision making at meetings of the board of directors. Moreover, with regard to transactions between the Company and principal business-partner companies at which the appointee has held posts, given the absence of an influence on the decision making of such principal business-partner companies and the absence of any particular stakeholder relationship between the Company and the individual designated independent director, it has been judged that potential for conflict of interest with general shareholders does not exist. 11/13

Stock Options

Aiming to achieve growth in financial results and gains in the enterprise value of the Company over the medium and long-term, in order to further strengthen employee motivation, morale, and group cohesion, the Company will issue stock options for purchase by employees and corporate officers.

Basic concept and action status in the elimination of anti-social forces

The Company has established a Corporate Code of Conduct and issued internal and external declarations to ban any relations with anti-social forces. Moreover, standards for the elimination of anti-social forces have been established and internal frameworks for operational practice have been put into place such as education and training sessions, and contacts for advice, guidance, and support for dealing with attempts at extortion.

Specifically, in order to prevent transactions with anti-social forces, credit checks are conducted before the initiation of trading with new counterparties. Follow-up surveys are conducted every two years. Moreover, protective reinforcement measures have been introduced, including the introduction of agreement provisions designed to eliminate anti-social forces. Furthermore, the Company is a member of the Tokyo Metropolitan Police Department's Special Anti-Violence Countermeasures Federation and cooperates by gathering information and through such other activities.