Corporate Governance Structure

Basic Concept

Happinet believes that maximizing corporate value and ensuring sound management are the most important issues facing management. To achieve these objectives, we are working to establish a system to increase the transparency of management and to enable us to respond quickly and appropriately to changes in the business environment.
　In addition, we strive to actively disclose information to meet the expectations of shareholders and earn their trust. Moreover, we seek to build strong relationships with customers, employees, and society and consistently increase shareholder value over the long term.

Governance Structure

As shown in the diagram below, Happinet has built a corporate governance structure with the outstanding features outlined below.

• The pillars of the Happinet Group’s corporate governance are the determination of management policies and decisions with regard to business execution by the Board of Directors, and audit functions based on the Audit & Supervisory Board system. In addition, we have introduced an executive officer system, separating management and execution to strengthen the system of supervision and improve the speed of management.
• We have adopted an Audit & Supervisory Board system based on the idea that it has the potential to further strengthen corporate governance, both by enhancing the operation of the executive officer system and by improving the system of outside directors and Audit & Supervisory Board members.
• We have established an Executive Personnel Committee, whose members consist of a majority of independent outside directors, as a voluntary advisory committee.
• We have also set up a mechanism to obtain advice from legal counsel on an as-needed basis.

Internal Controls

In order to strengthen its internal control system, the Happinet Group has established a Basic Internal Control Policy. The Basic Internal Control Policy establishes systems for ensuring the appropriateness of the Happinet Group’s operations. It specifies policy on matters such as a system for ensuring that the execution of duties by directors, Audit & Supervisory Board members, and employees is in conformance with relevant laws and regulations, and the Articles of Incorporation; and a system for the preservation and management of information concerning directors and Audit & Supervisory Board members’ execution of their duties. Further, the Happinet Group aims every day to strengthen its internal control system led by the Internal Audit Office, by for example conducting evaluations of our compliance with the internal control report system stipulated in the Financial Instruments and Exchange Act, and through the development and operation of internal controls.
　In order that the Basic Internal Control Policy may be applied effectively, information on the status of its implementation is reported to the Board of Directors in a timely manner and is evaluated and monitored by the Board.