Basic Approach

PILOT Corporation and the PILOT Group believe that it is our social responsibility as a corporation to contribute to the development of a sustainable society by seeking to increase our corporate value through business activities.
To achieve sustainable growth and increase our corporate value, we will improve the objectivity and transparency of management and strive to strengthen and improve our corporate governance system to be more effective, from the perspectives of our shareholders, customers, employees, and the local community.

Basic Policy and System

• Basic Corporate Governance Policy
• Corporate Governance Report
• Corporate Governance Structure

Basic Corporate Governance Policy

Based on our Purpose, “Our Creations Inspire Creativity,” the PILOT Group intends to support writing around the world, while supporting people, society, and culture in areas other than writing through the practice of our five guiding principles, which encompass our founding spirit and serve as our principles of conduct. We are determined to improve the objectivity and transparency of our management, pass down the traditions and skills we have gathered, and respond to the changing times and the environment, while developing a more effective corporate governance system. Our new corporate governance system—while being strengthened and improved—incorporates, in our management, feedback from our shareholders, customers, employees, and people in local communities around the world. To further strengthen these initiatives, we transitioned to a company with an audit & supervisory committee based on a resolution of the Annual General Meeting of Shareholders held on March 30, 2022.

Corporate Governance Report

PILOT submitted a corporate governance report to the Tokyo Stock Exchange.

Corporate Governance Structure

PILOT is a company with an audit & supervisory committee. We set up and maintain the following systems in order to achieve effective corporate governance for shareholders and other stakeholders.

1. Board of Directors

The Board of Directors, consisting of 14 members including five independent outside Directors, deliberates on and decides important issues related to the Company’s management as well as supervises overall management including business execution, guided by the Rules of the Board of Directors. By delegating authority to Directors within the scope of laws and regulations, the Board of Directors clarifies the roles for supervision and business execution and accelerates decision-making. This structure enables the Board of Directors to focus more on discussions of highly important issues such as basic management policies and strategies.

2. Audit & Supervisory Committee

The Audit & Supervisory Committee consists of five members, including three independent outside Directors, two of whom are full-time Audit & Supervisory Committee members. The Audit & Supervisory Committee has established a system to ensure independence and effectiveness guided by the Rules of the Audit & Supervisory Committee and related internal rules and receives audit reports from the Financial Auditor. The Audit & Supervisory Committee also audits and supervises decision-making by the Board of Directors and the execution of duties by Directors through organizational audits in cooperation with the Internal Audit Division, by attending meetings of the Board of Directors and other important meetings, by investigating the state of operations and assets, and by exercising authority over the selection and dismissal of the Financial Auditor as well as audit fees.

3. Nomination and Renumeration Advisory Committee

The Nomination and Renumeration Advisory Committee, the majority of whose members are independent outside Directors, has been established as an advisory body to the Board of Directors, The Committee ensures accountability by strengthening the independence and objectivity of the Board of Directors over the nomination and remuneration of senior management and Directors. The Committee is chaired by an independent outside Director, ensuring its complete independence.

4. Financial Auditor

PILOT has appointed ARK LLC as the Financial Auditor for auditing the accounts.

5. Business Execution Structure

• Executive Officer System
  PILOT has adopted an executive officer system to clearly separate management oversight from business execution and to ensure efficient, swift business execution.
• Executive Management Committee
  PILOT has established an executive management committee as a deliberative body for making decisions on important issues for business execution. Consisting of Directors who concurrently serve as Executive Officers and Executive Officers in charge of business execution, the Committee’s, deliberations contribute to more efficient and rapid decision-making.
• Internal Audits
  The Internal Control Office was established as an internal organization that receives directions and orders from the Representative Director in order to evaluate the effectiveness of internal controls on financial reporting for the entire PILOT Group.
  The Business Audit Department was set up as an internal organization that receives directions and orders from the Audit & Supervisory Committee for conducting internal audits of the entire PILOT Group.
• General Managers’ Meetings
  General managers’ meetings, attended by Directors who concurrently serve as Executive Officers, Executive Officers, and the General Managers of each division, help to coordinate and communicate opinions on issues concerning overall management and to share awareness of the current state and other subjects.

Reason for Adopting This Structure

The PILOT Group has established a system of audits and supervision by the Audit & Supervisory Committee and has developed a governance structure with more objectivity and transparency through a Board of Directors that has management oversight. The Audit & Supervisory Committee is diverse; there are outside Directors. As well, this committee audits and supervises the Board of Directors. Executive Directors and Executive Officers make quick, responsible decisions and execute their duties under the authority delegated to them by the Board of Directors, with supervision and execution separated from each other. In addition, a Nomination and Remuneration Advisory Committee has been established as a voluntary advisory body to the Board of Directors and reports to the Board of Directors.