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Corporate Governance

Corporate Governance

DFF Inc., 三越伊勢丹HD 総務部総務法務DIV, 三越伊勢丹HD 総務部広報株式DIV, 三越伊勢丹HD 総務部コンプライアンスDIV, 三越伊勢丹HD 秘書室, 三越伊勢丹HD 監査役室, 三越伊勢丹HD 人事部人事企画DIV, 三越伊勢丹HD 人事部人事DIV, 三越伊勢丹HD 人事部労務DIV, 三越伊勢丹ヒューマン・ソリューションズ 人財開発事業部

Basic Views on Corporate Governance

We pursue initiatives in corporate governance with the aim of contributing to the sustainable growth of the Isetan Mitsukoshi Group and improving its corporate value over the medium to long terms.

In the Isetan Mitsukoshi Group, we take steps to build excellent relationships with customers, employees, shareholders, business partners, and local communities as our stakeholders. At the same time, we promote corporate governance reforms by establishing and reinforcing our legal framework, which includes the general meeting of shareholders, the Board of Directors, the Audit & Supervisory Board, and accounting auditors. To ensure that we fulfill our social responsibilities, we also work to increase the transparency of our corporate activities and ensure thorough compliance in our management, while taking measures to create and deliver value in various forms for all stakeholders associated with the Group. With the aim of becoming a corporate group that is trusted by all its diverse stakeholders, we take a range of ongoing measures including speeding up management decision-making, strengthening the administrative supervision function, and enhancing internal control systems.

DFF Inc., 三越伊勢丹HD 総務部広報株式DIV

Corporate Governance System

Administrative Supervision Structure

Administrative Supervision Structure

Board of Directors

Roles and responsibilities of the Board of Directors

To achieve the sustainable growth of the Group, improve its corporate value over the medium to long term, and fulfill our fiduciary responsibility to shareholders, we are striving to develop an environment that will permit the Board of Directors to fulfill its roles and responsibilities in a highly effective manner. As a measure for achieving these goals, we promote the separation of the supervision and business execution functions and strengthen the decision-making and supervisory functions to be fulfilled by the Board of Directors, while having adopted the Company with Board of Auditors as the institutional design.
Under this environment, in addition to resolutions necessary for procedures and reporting, the Companys Board of the Directors actively arranges opportunities where important managerial issues are discussed from a wide perspective. Those discussions are utilized for preparing the mid- to long-term management plan and the progress of the plan is reported to the Board of Directors in a timely manner so that it is reflected in plan revisions and establishment of the next management plan. Thus, the Company makes efforts to establish the management PDCA cycle with the Board of Directors as the starting point.

Structure of the Board of Directors

To ensure that our Board of Directors fulfills its roles and responsibilities in a highly effective manner, we make sure that it consists of diverse members and have established a system that enables it to fulfill its administrative oversight function. With regard to outside directors, we have been placing emphasis on their diversity since the establishment of the company in 2008, and we invite people with a range of experience and from industries in different areas of specialty to take up the positions. This reflects our intention to have them oversee and advise on the appropriateness of decisions made by the management, in addition to supervising business execution.

Structure of the Board of Directors

A total of nine directors, including four outside directors (two men and two woman) and five directors (five men)
They include three independent outside directors who meet our independence standards.
We disclose our policy on the structure of the Board of Directors, the important concurrent positions held by the directors and Audit Supervisory Board members, and the record of their attendance at meetings of the Board of Directors and the Audit Supervisory Board by describing them in the notice of convocation of the General Shareholders Meeting.

Nomination and Remuneration Committee

We have voluntarily established the Nomination and Remuneration Committee as an advisory body to the Board of Directors. This committee deliberates overall matters related to nomination, including the nomination of candidates for the President and CEO, his/her successor, officers, and presidents of affiliates, as well as overall matters related to remuneration, including the officer remuneration system, bonuses of directors and executive officers, and the framework for the remuneration of directors and Audit Supervisory Board members. The committee reports its findings made in the deliberations to the Board of Directors.
The Nomination and Remuneration Committee meets at least ten times a year and makes a significant contribution to enhancing governance functions as a key element of corporate governance.

Structure of the Nomination and Remuneration Committee

A total of five members including the President and CEO and outside directors (three independent outside directors and one outside director)
We have this committee chaired by an outside director, thereby ensuring sufficient transparency and fairness.

Audit Supervisory Board

As members of an independent body that has a mandate from its shareholders, the Audit Supervisory Board members oversee the directors in the performance of their duties, thereby helping achieve the sustainable growth of the Group and the creation of corporate value over the medium to long term and establish a sound corporate governance system that meets the expectations of society. In addition, they regularly exchange opinions with the representative directors and accounting auditors, and share information on internal audit results and other matters with the Internal Audit Division, within a system intended to ensure effective audits.
The outside Audit Supervisory Board members express frank opinions, recognizing that they are expected to express opinions on audits objectively from an independent, neutral perspective. Full-time Audit Supervisory Board members strive to improve the audit environment and collect internal information proactively and monitor and examine the status of the establishment and operation of the internal control system on a daily basis, based on the characteristics of their positions as full-time members. In addition, the Audit Supervisory Board meets regularly with outside directors and creates other opportunities to exchange opinions with other non-executive officers concerning issues to be addressed by the company, the risks surrounding it, important audit issues, and other matters. They thus strive to exchange information and share recognition with other non-executive officers and deepen relationships of trust with them.
Board by describing them in the notice of convocation of the General Shareholders Meeting.

Structure of the Audit Supervisory Board

A total of five members, including three outside members and two full-time members
They include two independent outside members who meet our independence standards.

Policy and procedures on the nomination of candidates for directors and Audit Supervisory Board members

In nominating candidates for directors and Audit Supervisory Board members, we consider the breadth of knowledge, ethical standards, and depth of experience of potential candidates, in addition to their eligibility in light of laws and regulations.

DFF Inc., 三越伊勢丹HD 総務部総務法務DIV, 三越伊勢丹HD 総務部広報株式DIV, 三越伊勢丹HD 総務部コンプライアンスDIV, 三越伊勢丹HD 秘書室, 三越伊勢丹HD 監査役室, 三越伊勢丹HD 人事部人事企画DIV, 三越伊勢丹HD 人事部人事DIV, 三越伊勢丹HD 人事部労務DIV, 三越伊勢丹ヒューマン・ソリューションズ 人財開発事業部

Information on officers

Directors Ken Akamatsu
Toshihiko Sugie
Toru Takeuchi
Takaaki Muto
Hidehiko Igura
Outside Directors Michiko Kuboyama(Independent Officer)
Masami Iijima(Independent Officer)
Miwako Doi(Independent Officer)
Takashi Oyamada
Audit Supervisory Board Members Yoshio Takino
Toshinori Shirai
Outside Directors Koichi Miyata
Hirotaka Fujiwara(Independent Officer)
Takeo Hirata(Independent Officer)
Policy on appointment and dismissal of representative directors as senior management executives and executive officers who serve concurrently as directors

We define the upper age limits of incumbent officers and their maximum terms of office on a position-by-position basis in accordance with our Rules on Upper Age Limits of Incumbent Officers. We use these limits as the prior conditions for the nomination of officers so that they will be replaced appropriately.
Based on this, we have made it a requirement that nominations of officers, including the appointment and dismissal of the CEO, should be deliberated by the Nomination and Remuneration Committee to ensure the transparency and fairness of the process. Specifically, we take the following initiatives.

Appointment and dismissal of CEO

We position the judgments regarding the appointment of the CEO and whether to allow the CEO to remain in office as the most important agenda items of the Nomination and Remuneration Committee and focus our efforts on them

CEO succession planning

We are proactive in creating opportunities for outside directors to monitor candidates after the Nomination and Remuneration Committee report, and we share the following details on a regular basis.
We have also systematically introduced training programs. These include the Business Leader Program, which is given to selected managers, and the Business Executive Program, which is given to people who have been appointed as executive officers. We invest sufficient time and resources to develop candidates for the next CEO.

Appointment of outside officers

We consider the breadth of knowledge, ethical standards, and depth of experience of potential candidates, in addition to their eligibility in light of laws and regulations.

Outside directors

We appoint human resources from different fields and industries to manage the company in a balanced manner by absorbing a wide range of opinions provided from objective, specialist perspectives. We mainly invite people with sufficient practical experience in the business world because we expect outside directors to oversee and advise on the appropriateness of decisions made by the management, in addition to supervising business execution.

Outside Audit Supervisory Board members

We appoint human resources from different fields and industries to ensure supervision from a neutral, objective perspective. In particular, we expect outside Audit Supervisory Board members to check the appropriateness of the decision-making process by the management and the contents of the decisions from legal and accounting perspectives. We therefore invite people with a wealth of knowledge and experience in each field.

Independence standards

We have established our own Independence Standards of Outside Officers of Isetan Mitsukoshi Holdings as the judgment criteria for the independence of outside directors and outside Audit Supervisory Board members who will be appointed as independent officers. We appoint five outside officers (three outside directors and two outside Audit Supervisory Board members) who fall under none of the following categories as independent officers.

  • A person from the Group who executes its business
  • A person for whom the Group is a major business partner, or an executive director, executive, or manager thereof
  • A major business partner of the Group, or an executive director, executive, manager or other employee thereof
  • A person who executes business at a financial institution that has trading relations with the Group
  • A consultant or accounting or legal expert who has received financial or other economic benefits from the Group exceeding a certain sum, other than remuneration of directors or Audit Supervisory Board members
  • A shareholder or an executive officer thereof who holds at least 5% of the total issued shares of the company
  • Any person who has fallen under categories 1 to 5 above in the last three years
  • Spouses or relatives within the second degree of kinship of anybody falling under categories 1 to 5 above

A major business partner in 2 and 3 above means any business partner for whom the annual transaction amount with the company, on a consolidated basis, exceeds 1% of the total annual transaction amount of either party over the preceding three years, even if this occurs on only one occasion, and a certain sum in 5 above means a sum of at least 10 million yen in any of the preceding three fiscal years.

Policies and procedures with regard to Board of Directors` decisions concerning remuneration of senior management executives and Directors 

(1) Policy regarding the remuneration, etc. of executives

The Company has established the following four basic principles regarding executive remuneration (excluding Outside Directors and Audit & Supervisory Board Members).

(1) Promotion of common interests between shareholders and executives
(2) Expansion of incentive effects to improve financial results and shareholder value
(3) Provision of remuneration at a level by no means inferior to competing companies (upon achieving goals)
(4) Ensuring objectivity and transparency in methods of evaluation and remuneration decision

These basic principles have been formulated as “Director Remuneration Principles” in the “Director Remuneration Guidelines” established by the resolution of the Board of Directors of the Company.

(2) Matters concerning the process for determining executive remuneration

Under the above Director Remuneration Principles, the objectivity and transparency of the entire process of determining executive remuneration are ensured through the effective deliberation at the Nomination and Remuneration Committee, an advisory body to the Board of Directors comprising five committee members, four of whom are Outside Directors, and chaired by an Outside Director.

(3) Types of remuneration, etc. of executives and the method by which they are determined

Under the Director remuneration system of the Company, executive remuneration is composed of three elements: monthly “basic remuneration” along with “bonuses” and “remuneration-type stock options” which are paid or granted annually. For Directors concurrently serving as executive officers, including the President & CEO, bonuses that are paid as a form of performance-linked remuneration shall account for 25% of the total annual remuneration for each individual, with the aim of clarifying their responsibilities for business execution.
Meanwhile, stock options shall also account for 25% of the total annual remuneration for each individual, with a view toward promoting shareholdings by executives and their common interests with the shareholders. (Bonuses shall not be paid to the Chairman, Outside Directors or Audit & Supervisory Board Members, while stock options shall not be granted to Outside Directors or Audit & Supervisory Board Members.)

<Bonuses>
For Directors (excluding those who are not concurrently serving as executive officers), performance-linked bonus as described hereunder has been introduced as a strong motivation towards the achievement of goals based on the remuneration principles.

Base amount of bonus = Basic remuneration x 6 (months)
Amount of bonus to be paid = Base amount of bonus x [1] Payout ratio (degree of achievement against the corporate performance goal) x [3] Allocation ratio (weight) + Base amount of bonus x [2] Payout ratio (personal qualitative evaluation) x [3] Allocation ratio (weight)

[1] Payout ratio (degree of achievement against the corporate performance goal)
Since the Company’s foundation in FY2008, the Group has adopted consolidated operating income as its indicator to strongly motivate executives to achieve annual goals, with a view toward quickly establishing a sound operational base for the Group and launching its management on a growth track into the future.
Specifically, the payout ratio shall be 1.00 (100%) upon the full achievement of the operating income goal, and designed to vary within the range between 0.00 (0%) at minimum and 2.00 (200%) at maximum, in proportion to the degree of achievement. The amounts of consolidated operating income corresponding to such minimum and maximum factors shall be determined for each fiscal year, based on the absolute standards of the targeted amount, with a view toward providing clear and effective incentives.

[2] Payout ratio (personal qualitative evaluation)
The payout ratio of qualitative evaluation shall be subject to a seven-grade evaluation (between 0.00 (0%) at minimum and 2.00 (200%) at maximum) by the President and CEO at the end of each fiscal year, based on the assessment of the degree of achievement of the qualitative goals established through the interview with the President and CEO at the beginning of each fiscal year.

[3] Allocation ratio (weight)
The allocation ratio (weight) between the degree of achievement against the corporate performance goal and the personal qualitative evaluation shall also be determined for each fiscal year following a review of its positioning.

< Remuneration-type Stock Options>
Stock options shall be granted to Directors (excluding Outside Directors) as follows, based on the remuneration-type stock options scheme involving an exercise price set at one yen, with a view toward promoting shareholdings by executives and enhancing awareness towards improving shareholder value over the long-term.
Maximum number of stock options to be granted (each stock option being equivalent to 100 shares of the Company) = Basic remuneration x 6 (months) / Reference price of a share of the Company (*)

* Reference share price = “Average price of share over the three months up to the month prior to the resolution on issuance” or “the price of a share on the day four days prior to the date of the resolution on issuance (if no closing price is quoted on such day, the closing price of the immediately preceding business day)” at the Tokyo Stock Exchange, whichever is higher.

Business Execution Structure

We employ an executive officer system to ensure prompt business execution. General managers of divisions that are important for achieving the management goals of the Group are appointed as executive officers, and a significant portion of the authority has been transferred to them by clarifying their executive responsibilities.

Chief Officer System

In the current fiscal year, we introduced the Chief Officer System to powerfully promote the Medium-Term Management Plan and improve our earnings strength as quickly as possible. We have clarified the administrative operations of the chief officers to strengthen their cross-divisional coordination functions

We have the following chief officers.
CEO : Chief Executive Officer
CMO : Chief Merchandsing Officer
CFO : Chief Financial Officer
CAO : Chief Administrative Officer

Chief Officer Committee

The Chief Officer Committee is convened by the President and CEO and meets once a week, in principle. It is a body for resolving and deliberating on matters of importance related to the Group’s business execution that are equivalent to the agenda items of the Board of Directors in a timely and flexible manner.

DFF Inc., 三越伊勢丹HD 総務部総務法務DIV, 三越伊勢丹HD 総務部広報株式DIV, 三越伊勢丹HD 総務部コンプライアンスDIV, 三越伊勢丹HD 秘書室, 三越伊勢丹HD 監査役室, 三越伊勢丹HD 人事部人事企画DIV, 三越伊勢丹HD 人事部人事DIV, 三越伊勢丹HD 人事部労務DIV, 三越伊勢丹ヒューマン・ソリューションズ 人財開発事業部

Basic Policy for Internal Control Systems at Isetan Mitsukoshi Holdings Ltd.

 Basic Approaches to the Internal Control System and the Progress of System Development Updated
Isetan Mitsukoshi Holdings Ltd. (hereinafter the “Company”) develops the system below (hereinafter the “Internal Control System” to ensure the compliance of its business operations as part of its attempts to conduct healthy and transparent group management and maximize corporate value.

1.Compliance Systems

“Systems to ensure that business duties as executed by Directors and employees of the Company are in compliance with laws, regulations, and the Articles of Incorporation” (Article 362, Paragraph 4, Item 6 of the Companies Act and Article 100, Paragraph 1, Item 4 of the Companies Act Enforcement Regulations)

(1)
The Board of Directors shall regularly convene once per month in accordance with the “Regulations of the Board of Directors,” where they shall attempt to come to mutual understandings between one another and mutually supervise the execution of other members’ duties, preventing actions are not in compliance with laws, regulations, and the Articles of Incorporation.
(2)
The Group General Affairs Department shall establish sections and individuals with jurisdiction over compliance-related matters, maintaining and improving systems for compliance with internal control and laws and regulations.
(3)
In order to increase the legal compliance, efficiency, and legitimacy of the Board of Director’s decision-making, there shall be multiple Outside Directors among Directors.
(4)
An independent, specialized Internal Audit Division shall be created. Internal audits will be in accordance with the “Regulations of Internal Audits” and be implemented as each division works with the Internal Audit Division to audit the legal compliance and legitimacy of business affairs.
(5)
In the case that the Company or the Group commits an act of wrongdoing, the Company shall confirm the nature of the situation in a timely manner and form the “Isetan Mitsukoshi Group Hotline” as a point of contact for internal reports from employees for self-betterment.

2.Risk Management Systems

“Regulations and other systems involving management of risks of loss to the Company” (Article 100, Paragraph 1, Item 2 of the Companies Act Enforcement Regulations)

(1)
Risks shall be prevented from occurring by identifying, evaluating, and analyzing risks that may occur in the course of business operations and using this information to select risks that require prioritized response.
(2)
In the case that a risk does occur, company-wide internal management systems that allow for rapid response shall be organized through methods such as the establishment of a countermeasures headquarters and the managing of information.
(3)
Relevant regulations shall be established with regards to risk recognition, evaluation, and response and be made well-known and thoroughly understood.
(4)
Audits by the Internal Audit Division will attempt to detect risks facing the Company at an early stage and settle them.
(5)
Involvement with anti-social forces shall be eliminated and any unjust demands shall be rejected to prevent related damages.

3.Internal Control Systems Regarding Financial Reporting

“Systems to ensure the appropriateness of financial reporting” (Article 24-4-4 of the Financial Instruments and Exchange Act)

(1)
Company-wide policies and procedures shall be indicated to ensure appropriate financial reporting and conduct that are adequately built and operated.
(2)
Appropriate evaluation and response shall be taken regarding the risk of misstatements made on items of importance in financial reports, and systems shall be adequately built and operated to reduce such risk.
(3)
The Company shall build and operate methods to identify, understand, and process truthful and impartial information that is then communicated to the appropriate parties in a timely manner.
(4)
A financial reporting-related monitoring system shall be built and appropriately operated.
(5)
A system shall be built to report internal control issues (deficiencies) understood through the course of monitoring in a timely and appropriate manner.
(6)
Adequate support shall be given to information technologies relating to internal controls involved in financial reporting.

4.Information Storage Management Systems

“Systems regarding the storage and management of information relating to the execution of business duties of Directors at the Company” (Article 100, Paragraph 1, Item 1 of the Companies Act Enforcement Regulations)

(1)
The following documents related to the execution of business duties by Directors shall be recorded, stored, and managed together with related materials for a prescribed period according to the “Document Retention Policies”:
  • (i) Minutes of the general meeting of shareholders
  • (ii) Minutes of the meetings of the Board of Directors
  • (iii) Minutes of the meetings of the Chief Officer Committee
  • (iv) Financial statements
  • (v) Copies of documents submitted to government administrative offices, other public agencies, and markets for financial instruments
  • (vi) Other documents as determined by the Board of Directors
(2)
Protection and management systems and other methodologies shall be used to create regulations such as the “Information Retention Policies” for management information, trade secrets, and personal information of customers, etc. that should be kept confidential according to laws and regulations including the Companies Act and the Financial Instruments and Exchange Act, and the compliance of related Directors and employees shall result in its safe storage.

5.Systems for the Efficient Execution of Duties

“Systems to ensure the efficient performance of Directors’ professional duties at the Company” (Article 100, Paragraph 1, Item 3 of the Companies Act Enforcement Regulations)

(1)
The segregation of duties among Directors shall be determined and reviewed as appropriate.
(2)
The Board of Directors shall meet regularly on a monthly basis as well as when needed, ensuring a system under which matters of importance can be resolved without delay. Additionally, important matters that conform to the matters to be decided at the Board of Directors meetings shall be deliberated at the Chief Officers Committee, and decided by the Representative Director and President.
(3)
The Company shall adopt an executive officer system to streamline the business execution through clarification of the executive duties of executive officers.
(4)
The Company shall adopt a chief officer system, whereby the Chief Officer assigned by the Representative Director and President to be in charge of important areas of operation shall promote control of the entire Group.
(5)
The Company shall define details of duties, responsibilities and procedures in “Regulations of Duties and Authority”, “Regulations of the Conduct of the Business”, and “Regulations of Decision Making Process for the Group” for execution of duties that are based on the decisions by the Board of Directors.

6.Group Company Management Systems

“Systems to ensure the compliance of the business conducted by the Company and the corporate groups consisting of their parent companies and subsidiaries” (Article 100, Paragraph 1, Item 5 of the Companies Act Enforcement Regulations) The Company shall develop a system to ensure the compliance of the business conducted by each company in the Group, as described below.

1
“Systems relating to reports by the Company on items relating to the execution of business duties by the Directors of the Company’s subsidiaries” (Article 100, Paragraph 1, Item 5-i of the Companies Act Enforcement Regulations) With regards to business management, in addition to the introduction of integrated accounting systems and efforts toward uniform management through the widening of target scope, approval and reporting systems shall be managed and monitored as necessary. Additionally, the “Regulations on Group Company Management” shall be used as a base for reporting by Group companies to the Company regarding matters of importance and for establishing rules regarding discussion in pursuit of improved risk management and efficiency across the entire Group.
2
“Regulations regarding the management or risk of loss to subsidiaries of the Company and other systems” (Article 100, Paragraph 1, Item 5-ii of the Companies Act Enforcement Regulations)
(1)
Regarding risk management for the Group, needed items shall be established in the “Basic Regulations on Risk Management,” and a specialized independent division as a division responsible for matters related to risk management shall be created within the Group General Affairs Department. The said division shall work with companies in the Group as it conducts risk management.
(2)
In order to realize comprehensive risk management across the entire Group, a Compliance and Risk Management Promotion Committee shall be created consisting of the Company’s Representative Director and President as the chairman as well as members selected by said chairman.
3
“Systems to ensure the efficient execution of business duties by Directors, etc. of subsidiaries of the Company” (Article 100, Paragraph 1, Item 5-iii of the Companies Act Enforcement Regulations)
(1)
The Company shall optimize its business operations by respecting the independence of the Group companies while also managing their managerial affairs and providing advice and guidance, as well as by dispatching Directors and Audit & Supervisory Board Members as necessary to understand the state of their management.
(2)
The Group companies shall receive a decision by the Representative Director and President at the Company’s Chief Officer Committee or a resolution of approval by its Board of Directors for important items whose management is deemed to have major effects.
4
“Systems to ensure the compliance of the execution of duties of Directors and employees of subsidiaries of the Company with laws, regulations, and Articles of Incorporation” (Article 100, Paragraph 1, Item 5-iv of the Companies Act Enforcement Regulations)
(1)
The Internal Audit Division shall conduct internal audits of Company Group companies, auditing the legal compliance, appropriateness, etc. of executed business duties.
(2)
A compliance guidebook and other documents shall be created and thoroughly disseminated throughout the Group while training regarding appropriateness and legal compliances is held to foster an awareness of compliance.
(3)
An “Isetan Mitsukoshi Group Hotline” shall be established as a point of contact for internal reports regarding the Group as a whole, and corrective measures and future prevention measures shall be undertaken from a compliance standpoint with regards to these reports from employees, etc.

7.Items Relating to Audit Staff

“Items relating to applicable employees in the case that Audit & Supervisory Board Members of a company with Audit & Supervisory Board Members request the placement of employees to assist with their duties, items relating to these employees’ independence from Directors, and items relating to the ensured efficacy of Audit & Supervisory Board Members’ instructions to these employees” (Article 100, Paragraph 3, Items 1-3 of the Companies Act Enforcement Regulations)

(1)
Audit staff may be placed to assist Audit & Supervisory Board Members with their duties upon discussions with Audit & Supervisory Board Members. Audit & Supervisory Board Members may give instructions to audit staff regarding items necessary to auditing duties.
(2)
Audit staff shall be independent from executive operational systems, be attached to Audit & Supervisory Board Members, and carry out their duties as instructed by Audit & Supervisory Board Members. Personnel changes, evaluation, discipline, and other such treatment pertaining to audit staff shall require the consent of Audit & Supervisory Board Members.

8.Systems Relating to Reports to Audit & Supervisory Board Members

1
“Systems for reports to Audit & Supervisory Board Members of a company with Audit & Supervisory Board Members by Directors and employees of a company with Audit & Supervisory Board Members as well as systems relating to other reports to those Audit & Supervisory Board Members” (Article 100, Paragraph 3, Item 4-i of the Companies Act Enforcement Regulations)
“Systems for reporting to Audit & Supervisory Board Members of a company with Audit & Supervisory Board Members when individuals at subsidiaries of a company with Audit & Supervisory Board Members receive reports from Directors, Audit & Supervisory Board Members, and/or employees” (Article 100, Paragraph 3, Item 4-ii of the Companies Act Enforcement Regulations)
(1)
The Company shall establish the “Corporate Audit Standards” regarding items that should be reported by Directors and employees to Audit & Supervisory Board Members, and important items relating to the Company’s business or those that will affect the Company’s performance shall be reported by Directors and employees to Audit & Supervisory Board Members without delay. Additionally, Audit & Supervisory Board Members may request reports from Directors and employees as necessary even when the previous conditions do not apply.
(2)
Directors, Audit & Supervisory Board Members, or employees of a subsidiary, or individuals who have received reports therefrom may report to Audit & Supervisory Board Members of the Company on important matters that may affect the business or performance of such subsidiary.
(3)
The Internal Audit Division shall report Group-wide internal auditing plans and the findings of audits to Audit & Supervisory Board Members, and work together with Audit & Supervisory Board Members to share information, etc.
(4)
The Company shall work in cooperation with the Audit & Supervisory Board to ensure that adequate reporting system is in place for matters concerning violations of laws and regulations and other compliance related issues through maintenance of appropriate operations of internal hotline system, the Isetan Mitsukoshi Group Hotline.
2
“Systems to ensure that individuals who give applicable reports under item a. are not subject to unfavorable treatment because of such reporting” (Article 100, Paragraph 3, Item 5 of the Companies Act Enforcement Regulations)
It shall be forbidden to treat individuals who give reports to Audit & Supervisory Board Members in an unfavorable manner because of the applicable reports.

9.Policy for Processing Auditing Fees

“Items relating to the advance payment of fees resulting from the execution of duties of Audit & Supervisory Board Members in a company with Audit & Supervisory Board Members, fees resulting from the execution of applicable duties including repayment procedures, and policies involved in the processing of obligations” (Article 100, Paragraph 3, Item 6 of the Companies Act Enforcement Regulations)
When Audit & Supervisory Board Members bill for prepayment of fees, etc. for the execution of their duties based on Article 388 of the Companies Act, fees and obligations related to those billings must be processed unless it is deemed that they are not necessary for the execution of those Audit & Supervisory Board Members' duties.

10.Systems Relating to the Ensured Efficacy of Audit & Supervisory Board Member Audits

“Other systems to ensure the efficient operation of Audit & Supervisory Board Members’ audits” (Article 100, Paragraph 3, Item 7 of the Revised Enforcement Regulations)

(1)
The “Corporate Audit Standards” shall be used as a basis for Audit & Supervisory Board Members to regularly hold meetings to exchange opinions with the Representative Director and accounting auditors.
(2)
In addition to the Board of Directors, Audit & Supervisory Board Members may attend important meetings after discussion with Directors in order to understand the decision-making process for important matters as well as the state of executed duties.
DFF Inc., 三越伊勢丹HD 総務部総務法務DIV, 三越伊勢丹HD 総務部広報株式DIV, 三越伊勢丹HD 総務部コンプライアンスDIV, 三越伊勢丹HD 秘書室, 三越伊勢丹HD 監査役室, 三越伊勢丹HD 人事部人事企画DIV, 三越伊勢丹HD 人事部人事DIV, 三越伊勢丹HD 人事部労務DIV, 三越伊勢丹ヒューマン・ソリューションズ 人財開発事業部

Corporate Govrernance

DFF Inc., 三越伊勢丹HD 総務部総務法務DIV, 三越伊勢丹HD 総務部広報株式DIV, 三越伊勢丹HD 総務部コンプライアンスDIV, 三越伊勢丹HD 秘書室, 三越伊勢丹HD 監査役室, 三越伊勢丹HD 人事部人事企画DIV, 三越伊勢丹HD 人事部人事DIV, 三越伊勢丹HD 人事部労務DIV, 三越伊勢丹ヒューマン・ソリューションズ 人財開発事業部