1. Basic Views on Corporate Governance

MTI’s key management priorities include the establishment of a sound and highly transparent management structure, and the creation of systems to support timely, appropriate decision-making in response to a changing business environment. One of the measures introduced with the aim of achieving these goals was the adoption of a oneyear term of office for directors. This has added a sense of urgency to the management environment, since directors are required to earn the confidence of shareholders every year. We are also working to strengthen and consolidate our compliance systems.

 In accordance with our IR policy, we provide timely and accurate disclosure of information including financial results and other key management data. We also emphasize two-way communication with all stakeholders to enhance management transparency and build relationships of trust with market participants.

2. Corporate Governance System
Corporate Governance Structure

 

(1) The tasks of the Board of Directors, which consists of four (4) internal directors (four (4) male internal directors)and three external directors(two male outside directors and one female outside director), are to make important management decisions and supervise directors in the performance of their duties. In addition to its regular monthly meetings, the Board also convenes extraordinary meetings as required.Outside directors, who have an independent position without any interest in the Company, have the duty of strengthening the supervisory function of the Board of Directors and raising the degree of neutrality and objectivity in management.There are four corporate auditors, including one standing auditor. All four (three male outside statutory auditors and one female outside statutory auditor)are currently external auditors. Their task is to strengthen the supervisory functions of management through activities including attendance at Board meetings and other important management meetings.

(2) A decision for an amount of compensation for directors is to be done by the directors’ meeting after deliberation by the compensation committee to increase transparency and objectivity.

Name Reason for appointment
Outside director
Zhou Muzhi
Mr. Zhou has a broad knowledge of economics and has independence without any interest in the Company. We have appointed him as an independent officer based on our judgment that he is an appropriate person able to sufficiently fulfill the role of deciding the management policies and supervising the execution of operations of the Company.
Outside director
Hikaru Yamamoto
Ms. Yamamoto has a broad knowledge of marketing and consumer behavior and has independence without any interest in the Company. We have appointed her as an independent officer based on our judgment that she is an appropriate person able to sufficiently fulfill the role of deciding the management policies and supervising the execution of operations of the Company.
Outside director
Ryosuke Tsuchiya
Mr. Tsuchiya has a broad knowledge of medical, a wealth experience in organization management of medical institutions, and independence without any interest in the Company. We have appointed his as an independent officer based on our judgment that he is an appropriate person able to sufficiently fulfill the role of deciding the management policies and supervising the execution of operations of the Company.
Outside statutory auditor
Minoru Takei
Mr. Takei has considerable knowledge of finance and accounting and has a rich experience of business manager. We have appointed him as an independent officer because we have judged that he is an appropriate person from the perspective of supervising whether the execution of duties of the directors of the Company is appropriate from an independent standpoint.
Outside statutory auditor
Yoshinobu Nakamura
Mr. Nakamura has a wealth of practical experience in corporate legal affairs and considerable knowledge of legal affairs as an attorney. We have appointed him as an independent officer because we have judged that he is an appropriate person from the perspective of supervising whether the execution of duties of the directors of the Company is appropriate from an independent standpoint.
Outside statutory auditor
Kazuhiko Sakishima
Mr. Sakishima has a wealth of experience and extensive knowledge as a business manager. We have appointed him as an independent officer because we have judged that he is an appropriate person from the perspective of supervising whether the execution of duties of the directors of the Company is appropriate from an independent standpoint.
Outside statutory auditor
Kazuko Ohya
Ms. Ohya has a wealth of experience and extensive knowledge as a director and a statutory auditor, etc. of other companies. We have appointed her as an independent officer because we have judged that she is an appropriate person from the perspective of supervising whether the execution of duties of the directors of the Company is appropriate from an independent standpoint.

(3) To improve management efficiency and speed up decision-making, the Management Committee, consisting mainly of directors and operating officers, meets two or three times a month to discuss important operational matters. Decisions by the President and CEO are guided by these deliberations.

(4) The Internal Audit Department, which is under the direct jurisdiction of the President and CEO, formulates an internal audit plan each fiscal year and implements internal audits upon obtaining approval for the plan from the President and CEO. The Internal Audit Department is required to report the audit results to the President and CEO and to the Board of Directors and the Board of Statutory Auditors. Audited divisions are also notified of areas for improvement and the status of improvement is also verified.

(5) MTI has appointed Ernst & Young ShinNihon LLC as its independent auditor. The independent auditor helps to ensure a high standard of transparency and accuracy in the Company’s accounts by conducting regular audits and providing advice and verification on accounting matters. We have also retained outside experts on taxation and legal matters to provide advice as required.

(6) Status of major activities of outside officers in the fiscal year ended September 30, 2018

Name Meeting of the Board of Directors
(16 meetings were held)
Meeting of the Board of Statutory Auditors
(15 meetings were held)
Number attended Attendance rate Number attended Attendance rate
Masaya Onagi 15 93.8%
Zhou Muzhi 16 100.0%
Hikaru Yamamoto 16 100.0%
Minoru Takei 13 100.0% 13 100.0%
Yoshinobu Nakamura 16 100.0% 16 100.0%
Kazuhiko Sakishima 16 100.0% 16 100.0%
Kazuko Ohya 14 87.5% 14 87.5%

(Note)1. For statutory auditor Mr. Minoru Takei, it describes his situation after inauguration as of December 23, 2017.

(Note)2. It describes the status excluding the number of Board of Directors with resolutions in writing.

3. Compensation, etc. for Directors and Statutory Auditors

Compensation for directors and statutory auditors and audit fees, etc. for the audit corporation in the fiscal year ended September 30, 2018 are as follows.

Amounts of remuneration for directors and statutory auditors

(Unit: Thousands of yen)

Position Number of persons Basic compensation Stock options Bonuses Amount
Directors Directors(eight (8) persons) 115,936 19,918 39,878 175,732
(of whom external director; three (3)) 26,730 26,730
Statutory auditors Statutory auditors
(four (4) persons)
40,650 40,650
(of whom external statutory auditors; five (5)) 40,650 40,650
Total 156,586 19,918 39,878 216,382
Amount of remuneration for the accounting auditor

Compensation paid to certified public accountants, etc. who conducted audits 38,500 thousands of yen

Basic Policies for Internal Control System