Corporate Governance
Our Approach to Corporate Governance
SmartHR respects the positions of all stakeholders of the SmartHR Group, including its shareholders, customers, employees, and local communities. By making transparent, fair, prompt, and resolute decisions, we aim to respond to changes in the business environment and enhance our long-term corporate value.
Specifically, we will build internal systems that enable rational decision-making processes and efficient business execution. We will also strengthen our corporate governance via the effective oversight of outside directors, Risk Management Committee, the establishment and operation of internal control systems, and the reinforcement of compliance frameworks.
Corporate Governance Structure
We have adopted the organizational structure of a Company with an Audit and Supervisory Committee. Our corporate governance framework is structured as follows:
Board of Directors
Overview of the Board of Directors
The Board of Directors is responsible for making decisions on the company's management policies, strategies, business plans, major asset transactions, high-priority organizational and personnel matters, and supervising the execution of duties by the representative director.
To ensure objectivity and diversity of views in terms of supervision and decision-making, 6 out of our 11 directors are outside directors. When nominating candidates for the Board, we consider their achievements, experience, knowledge, and character, both within our company and elsewhere. The Board selects suitable candidates and proposes them at the General Meeting of Shareholders.
The Board meets monthly, with additional meetings held as needed. As per our Articles of Incorporation, the number of directors who are not Audit and Supervisory Committee members is capped at 10. Their election requires approval at the General Meeting of Shareholders, attended by shareholders with at least one-third of voting rights, and passed by a majority vote. Cumulative voting is not used.
For more information about our non-Audit and Supervisory Committee members, see the "Executive Team" section.
Established Regulations
We have established Board of Directors Regulations to clarify operational matters, aiming to ensure the legality and transparency of the Board's proceedings.
Promoting Gender Diversity
We recognize that increasing diversity on the Board enhances the quality of management decision-making. In line with this, we are actively promoting the appointment of female directors. As of March 31, 2026, women represent 33% of our Board, and we remain committed to further increasing diversity.
Deliberations on Conflicts of Interest
We understand the risks associated with directors potentially benefiting themselves or third parties in transactions that conflict with the company's interests. To manage this, any such transactions are resolved by the Board in accordance with the Companies Act. During these deliberations, external directors provide objective oversight, ensuring transparent operations in cases involving conflicts of interest.
Deliberations on Transactions with Related Parties
To ensure sound corporate governance, our company requires directors to report in advance to the Board of Directors before engaging in any competitive transactions or transactions that may involve conflicts of interest. This requirement is strictly enforced from the time of their appointment. The Board of Directors deliberates on and makes resolutions regarding such transactions. Additionally, for other related party transactions, we conduct a prior legal review in accordance with the Related Party Transaction Management Regulations to assess business necessity and ensure the appropriateness of transaction terms. These transactions are also reported to the Board of Directors on a regular basis.
Audit and Supervisory Committee
Overview of the Audit and Supervisory Committee
The Audit and Supervisory Committee conducts comprehensive audits across all business activities, evaluating the appropriateness of policies, plans, and procedures, the effectiveness of business execution, and compliance with laws and regulations. This includes reviewing important approval documents and investigating subsidiaries. The committee receives regular reports on audit plans, methods, and outcomes from both accounting auditors and the internal audit department and provides feedback to directors.
The committee consists of three part-time outside directors and meets monthly, with additional meetings held as necessary.
Under the Articles of Incorporation, the committee may have up to five directors. Directors are elected by resolution of the General Meeting of Shareholders, which requires the attendance of shareholders representing at least one-third of the voting rights and approval by a majority vote.
For more information about our Audit and Supervisory Committee members, see the "Executive Team" section.
Established Regulations
We have established the Audit and Supervisory Committee Regulations to clarify operational matters, aiming to ensure the legality and transparency of its proceedings.
General Meeting of Shareholders
Principle of One Share, One Vote
We adhere to the provision in the Companies Act of Japan that requires shareholders to be treated equally in proportion to the content and number of shares they hold (the principle of one share, one vote). This principle is applied at the General Meeting of Shareholders and in other relevant contexts.
Anti-Corruption Measures
Approach to Anti-Corruption Measures
The Group has established an Anti-Corruption Policy. To ensure its thorough understanding, we have systems in place that allow all employees to access and review this policy.
Whistleblowing System
In line with our Anti-Corruption Policy, we have set up an internal reporting hotline that officers and employees can use to report any violations. This hotline ensures confidentiality and anonymity.
External Whistleblowing System
As part of our commitment to compliance, the SmartHR Group has established an external whistleblowing system for business partners and other external stakeholders.
If you become aware of any actual or suspected compliance violation by an officer or employee of the SmartHR Group, please report it using the dedicated form below.
Reports may be submitted anonymously. However, if we are unable to contact you for additional information, this may limit our ability to investigate the matter fully, take appropriate corrective action, or provide feedback on the outcome.
Investigations and the protection of whistleblowers will be handled in accordance with our Internal Whistleblowing Regulations.
Scope of Reporting
Actual or suspected violations of laws, regulations, internal policies, or other compliance-related misconduct by officers or employees of the SmartHR Group.
External Whistleblowing Desk
Dedicated FormOpens external site in a new window or tab.
*If you left the company within the past 12 months, please use the existing internal whistleblowing system.
Data Related to Anti-Corruption Measures
Total Amount of Political Contributions
Policy
As stipulated in our Anti-Corruption Policy, our Group prohibits donations to political parties or candidates unless approved by our Legal and Governance Division.
Disclosure for the Most Recent Fiscal Years
The total amount of political contributions for the recent fiscal years is as follows:
| Data Item | FY 2024 | FY 2025 |
|---|---|---|
| Total Political Contributions | 0 yen | 0 yen |
Disciplinary Actions and Dismissals Due to Anti-Corruption Policy Violations
Disclosure for the Most Recent Fiscal Years
The number of employee disciplinary actions and dismissals due to violations of the Anti-Corruption Policy is as follows:
| Data Item | FY 2024 | FY 2025 |
|---|---|---|
| Disciplinary Actions | 0 cases | 0 cases |
| Dismissals | 0 cases | 0 cases |
Costs Related to Fines, Penalties, and Settlements Due to Corruption
Disclosure for the Most Recent Fiscal Years
The costs incurred for fines, penalties, and settlements related to corruption are as follows:
| Data Item | FY 2024 | FY 2025 |
|---|---|---|
| Fines | 0 cases | 0 cases |
| Penalties | 0 cases | 0 cases |
| Settlements | 0 yen | 0 yen |
