How the Company has Addressed the Corporate Governance Code
All 73 principles of the Corporate Governance Code, comprised of General Principles, Principles, and Supplementary Principles, and including disclosures based on each principle, are listed in this report. Please refer to the following page for the content of the General Principles, Principles, and Supplementary Principles.
Japan's Corporate Governance Code (PDF) （Jump to Japan Exchange Group, Inc. Website）
Capcom's basic policy for Japan's Corporate Governance Code ( PDF: 360KB/46 pages )
(June 12, 2017)
Section 1: Securing the Rights and Equal Treatment of Shareholders
|General / Supplementary Principle||Compliance
|The Company’s Stance|
|General Principle 1||✓||(1) The Company treats its shareholders, including minority shareholders, holders of one or more share units, and holders of shares less than one share unit number, equally in accordance with the nature of their shareholding and the number of shares held.
Therefore, no restriction is imposed on the rights of holders of shares less than one share unit number by the articles of incorporation other than the restrictions prescribed by the Companies Act.
|(2) From the perspective of ensuring the equal and fair treatment of shareholders, the Company does not provide any shareholder perks or benefits to shareholders including novelties/small gifts at the ordinary general meeting of shareholders, which do not reflect number of shares held by each registered shareholders.|
|(3) To fulfill its accountability, the Company is promoting understanding and the sharing of perspectives through active dialogue/engagement with domestic and foreign institutional investors, other investors, shareholders, analysts and other relative parties.|
|(4) The Company strives to provide various information, including the latest news and the management strategies of the Company, promptly, fairly, and accurately through timely disclosure and the publication on the website and also in English in consideration of the shareholders and investors such as foreign institutional investors.|
Securing the Rights of Shareholders
|✓||(1) The Company has ensured that the shareholders can exercise their voting rights at the shareholders meeting in various manners such as (i) exercise by attending the shareholders meeting in person, (ii) exercise in writing, (iii) exercise via the Internet, (iv) exercise through the voting by the proxy in accordance with the power of attorney.|
|(2) The Company strives to ensure that the both shareholders' rights for personal interest and the rights for common interest are adequately secured.|
|Supplementary Principle 1.1.1||✓||A proposal for the renewal of takeover-defense measures at the ordinary general meeting of shareholders held in June 2014 was not approved with negative votes by approximate 52%. We analyzed that the proposal met the opposition mainly from foreign institutional investors. Through dialogue/engagement with domestic and foreign institutional investors, the Company revises the measures ensuring highe transparency, such as setting more strict terms in triggering countermeasures. As a result, more shareholders supported the proposal and the proposal was approved with approximate 75% "For" votes.
There has been no proposal with which a considerable number of "Against" votes have been cast at the ordinary general meeting of shareholders held in June 2016.
|Supplementary Principle 1.1.2||✓||(1) The Board of Directors of the Company has been delegated the power to decide the details of Share Repurchase program in accordance with Article 165(2) of the Companies Act of Japan to enable the Company to pursue prompt decision-making and more flexible execution of business.
In addition, the Company has been implementing measures, such as the evolvement of internal regulations as appropriate, to reduce the number of agenda discussed by the Board of Directors that are not required by laws and regulations or the articles of incorporation.
|(2) The Company works to ensure the transparency and fairness of the Board of Directors by having six external directors who have expertise in legal affairs or excellent insight.|
|(3) The Company focuses on efforts to ensure appropriate management decisions by strengthening the supervisory function and otherwise maintaining effective monitoring to secure reliable corporate governance.|
|Supplementary Principle 1.1.3||✓||(1) The Company takes appropriate measures to ensure that shareholders can exercise their diverse rights including rights for personal interest, such as the right to receive dividend, and rights for common interest, such as rights to vote at the shareholders meeting, smoothly in accordance with the class of shares and the number of shares held.|
|(2) The Company endeavors to make it sure that shareholders are treated equally and that no particular exercise of minority shareholder rights, is obstructed or delayed by means of, for example, proxy fight or submission of the shareholder proposals.|
Exercise of Shareholder Rights at General Shareholder Meetings
|✓||(1) The Company receives all questions and comments from the shareholders attended at a Q&A session, not on proposal by proposal basis.|
|(2) In the case where a shareholder on a wheelchair or a physically handicapped shareholder desires to be accompanied by a career to attend the shareholders meeting, the Company, as a general rule, permits such a career also to be present at the shareholders meeting to accompany the shareholder.|
|(3) In addition to choosing a convenient location for the venue in a hotel that is connected directly to a station, which is an intersection between a subway line and a private railway line, to facilitate the attendance of as many shareholders as possible.|
|Supplementary Principle 1.2.1||✓||The Company discloses information on the website to help shareholders navigate through the latest and historical information about the Company and make appropriate decisions at the shareholders meeting, including the notices of shareholders meeting, annual securities reports, financial summaries, integrated reports (annual reports), news summaries, etc., for the past several years.|
|Supplementary Principle 1.2.2||✓||(1) The Company held the latest ordinary general meeting of shareholders on June 9, 2017, which is among the earliest dates of such meetings held by companies in Japan whose fiscal year end in March.|
|(2) The Company endeavors to allow sufficient time for shareholders to review proposals by mailing the notice of convocation three weeks or earlier before the date of the ordinary general meetings of shareholders, which is set to avoid the concentration day on which the ordinary general meetings of shareholders of many other companies are expected to concentrate.|
|(3) The Company discloses the notice of convocation of ordinary general meetings of shareholders on the company's website and the Timely Disclosure Network provided by the Tokyo Stock Exchange one week before the official distribution date.|
|Supplementary Principle 1.2.3||✓||To encourage dialogue/engagement with shareholders, the Company holds the ordinary general meeting of shareholders about 10 days before the day on which shareholder meetings of many other companies are expected to fall.
For 2017, the Company held its ordinary general meeting of shareholders, on June 9, which is twenty(20) days before the concentration date.
|Supplementary Principle 1.2.4||✓||The Company has taken the following measures for the convenience of both domestic and foreign shareholders:|
|(1) The Company has participated in the ICJ(TSE) electronic voting platform for institutional shareholders and accommodated the exercise of voting rights via the Internet for retail shareholders in Japan.|
|(2) The Company distributes the notice of convocation three weeks before the date of the ordinary meeting of shareholders. The Company is also disclosing the Convocation, together with its English translation, on the website of the Company as well as the website of the Tokyo Stock Exchange, one week prior to the dispatch of the document.|
|Supplementary Principle 1.2.5||✓||(1) The record date to determine whose voting rights are exercisable at ordinary general meetings of shareholders of the Company is March 31st each year. If we have received a request of such an institutional investor indicating its intention to physically attend an ordinary general meeting of shareholders by the business day immediately preceding the date of the meeting and we have received confirmation that the institutional investor is the beneficial shareholder based on, for example, the consultation with the custodian registered or the materials submitted by the institutional investor, we permit such an investor to attend the meeting as an observer.|
|(2) If such an institutional investor suddenly shows up at the venue on the day of the meeting, we do not, as a rule, permit it to attend the meeting as it is impossible to confirm that it is the true beneficial shareholder on that day.|
Basic Strategy for Capital Policy
|✓||(1) In order to enhance its corporate value, the Company focuses its full efforts on the enhancement of ROE through the implementation of a balanced capital policy in consideration of the balance sheet, the income statement and cash-flow statement, to achieve growth and the repurchase of own shares and increase in dividend payout to enhance total shareholder return in addition to securing stable annual profits and cash generation.|
|(2) The Company acquired its own shares in the fiscal year ended March 2017 for the purpose of enabling the capital policy to be implemented in a flexible manner in response to changes in the business environment and improving its capital efficiency.|
|✓||(1) The Company holds shares of other companies for strategic purposes in an optimal manner based on a comprehensive comparison of the advantages and disadvantages of such shareholdings from the medium- to long-term perspective to evaluate whether they will contribute to future business relationships and sustainable growth of the corporate value of the Company, aiming to eliminate customary cross-shareholdings or personal factors based on human relationship, while also aiming to strengthen and deepening the relationship with companies with which we have a stable, ongoing business relationship.|
|(2) These shareholdings are evaluated in consideration of the financial position of the Company, the nature of transactions, transaction amount, etc., in addition to the evaluation of the stock price fluctuation risk and the economic rationality of the continued holding of these shares.|
|(3) The Company exercises the voting rights with respect to these shareholdings for each proposal after following the required internal due procedure, in comprehensive consideration of, among others, the financial performance of the investees and the occurrence of any significant scandal involving these investees.|
|✓||(1) Although the Company has decided to discontinue its takeover defense measures as of June 9, 2017, it continues to put in place a certain internal mechanism to prepare for any hostile takeover including the development of contingency plan of its own.|
|(2) If a hostile large-scale purchase of shares of the Company should be proposed, the Company would strive to collect information and secure time that are necessary for our shareholders to make an informed decision on such a proposal, while taking other necessary measures within the limit permitted by laws and regulations, including the Financial Instruments and Exchange Act and the Companies Act.|
|Supplementary Principle 1.5.1||✓||(1) The Company has developed a due procedure to explain the position of the board and make other appropriate responses in the case of a tender offer for the shares of the Company in order to help the shareholders promptly and appropriately decide whether to continue to hold the shares of the Company or respond to the tender offer.|
|(2) The Company shall submit a position statement to the tender offeror and ask the tender offeror about, among others, its purpose and management strategy.|
|(3) The Company shall announce whether it is for or against the tender offer, its view on the tender offer, the reason, etc.|
Capital Policy that May Harm Shareholder Interests
|✓||(1) The Company believes that financing to support capital investment and M&A activities is necessary to a certain extent in order to realize sustainable growth.|
|(2) The Company carefully examine measures such as third party allotments or public offerings which may cause dilution and may harm its existing shareholders. In any case that the Company may implement such measures, the Company decides the measure taking growth strategy and capital structure into full consideration.|
|(3) If conflicts of interest between the manage ment and shareholders are anticipated in the deliberation of such a policy by the Board of Directors, external directors are responsible for providing necessary opinions and advice from the independent and neutral perspective to secure trust of the shareholders.|
|(4) If the Company decides to undertake such a measure, it will make timely disclosure of the measure and publish the details of it on the website of the Company.|
Related Party Transactions
|✓||(1) Any transaction with related party for example, a major shareholder substantially controlled by a board member of the Company or his/her relatives which may cause conflict of interest is subject to the prior approval of the board and is also required to be reported after it is carried out.|
|(2) Such related party transactions are also subject to strict audits of directors who serve as members of the Audit and Supervisory Committee and the accounting auditor for their appropriateness and reasonability.|
|(3) The Company operates its management system strictly and fairly through the appropriate procedures outlined in the preceding paragraphs in order to prevent any disadvantages to the Company arising from related party transactions.|