Governance

Corporate Governance

Basic Views on Corporate Governance

Our mission is to strive to create new value with honesty and sincerity, and aim to be a visual communications group that provides the world with surprise and excitement. We recognize that corporate governance is one of the important tasks of group management to achieve this, and implement various measures to improve management transparency, ensure compliance, and pursue swift decision-making.
In order to implement these views on corporate governance properly, we have established the Basic Policy for the Development of Internal Control Systems, which sets forth our basic views on internal controls and our policy on implementing them.
We also revised and disclosed the Corporate Governance Guidelines on November 30, 2021. These guidelines express the basic position of the IMAGICA GROUP on corporate management and corporate governance.

Overview of the Current Corporate Governance Structure

1. Board of Directors

Board of Directors consists of eight directors who make decisions regarding management and supervise the performance of duties. They are Fumio Nagase, Chairman of the Board & Representative Director; Nobuo Fuse, President & Representative Director; Masakazu Morita and Shunjiro Nagase, directors; Atsuko Murakami, outside director; Osamu Chiba, Takehito Yamakawa and Hiromi Nakazawa, outside directors and Audit & Supervisory Committee members.

2. Audit & Supervisory Committee

Audit & Supervisory Committee consists of three members: Osamu Chiba, outside director, as a chairman of the Committee and Takehito Yamakawa and Hiromi Nakazawa, outside directors. The Committee strives to strengthen the functions of auditing and supervising the performance of duties by the executive directors and to enhance the corporate governance system.

3. Executive Officer System

The Company separates the functions of management supervision and operational execution to facilitate swift decision-making and respond appropriately to the external environment, and has adopted an executive officer system. The company has appointed nine executive officers as follows.

Title
Full Name
In Charge Of
President & CEO
Nobuo Fuse
Group CEO
Senior Managing Executive Officer
Masakazu Morita
Group CFO and Production Technology Services business, game related business
Executive Officer
Shunjiro Nagase
Content Creation business, strategy and global business
Executive Officer
Toshiaki Okuno
Content Creation business, animation
Executive Officer
Masashi Nakamura
Production Technology Service business, entertainment media
Executive Officer
Akira Shimura
Production Technology Services business, TV and commercial post-production services
Executive Officer
Atsushi Shinohara
Production Technology Services business, talent business
Executive Officer
Takashi Takimizu
Imaging Systems & Solutions business and group technology development
Executive Officer
Masaharu Yoshizawa
Live entertainment business

Group Management Committee has been set up as a decision-making body for business execution. It is held once a month or any time if necessary. The Committee consists of nine members, including Nobuo Fuse, President & CEO, as a chairman of the Committee and other executive officers. According to Group Management Committee Regulations, the Committee identify important business issues for the group and discuss them, including medium to long-term issues which should be deliberated at Board of Directors such as corporate strategies and any urgent issues.

4. Personnel Advisory Committee

Personnel Advisory Committee discusses and deliberates appointment and dismissal of directors (including outside directors), successor plan, individual director compensation, and policy for compensation of directors and executive officers, and reports them to Board of Directors. The Committee consists of four members: Fumio Nagase, Chairman of the Board and Representative Director, as a chairman of the Committee, Atsuko Murakami, outside director and Osamu Chiba and Takehito Yamakawa, outside directors and Audit & Supervisory Committee members.

Basic Views on Establishment of an Internal Control System and Status of Establishment

  • The Company has established a basic policy on the establishment of systems to ensure the proper conduct of business (hereafter, “internal controls”), based on the Companies Act and the Ordinance for Enforcement of the Companies Act.
  • The objectives targeted in establishing a system of internal controls are compliance with laws and regulations, management of risk of loss, and appropriate and efficient business operation. The company has taken various steps to meet these objectives, including establishment of rules, organization and structure, formulation of implementation plans, and monitoring activities.
  • We also take appropriate steps to ensure the reliability of the internal control system with respect to financial reporting, based on the Financial Instruments & Exchange Act.
  • Board of Directors determines the Basic Policy for the Development of Internal Control Systems, and oversees and monitors the internal control system for the company.
  • As CEO, President & Representative Director is responsible for managing the internal control system based on the basic policy determined by Board of Directors.
  • Corporate Management Department is the department responsible for ensuring that the internal control system functions more effectively, and works to establish the internal control system from a company-wide, cross-organizational perspective.
  • The Company continually evaluates the status of the internal control system based on this basic policy and take steps to improve it if necessary. The Company also revises this policy on an ongoing basis to response to changes in the management environment, and works to establish a more effective internal control system.

We have established the following structure and elements based on the views noted above:

1) System to Ensure Directors and Employees Comply with Laws & Regulations and the Articles of Incorporation in Performing Duties

The Company’s Board of Directors establishes rules on corporate ethics and other rules concerning the compliance system as standards to ensure the compliance of directors and employees with laws and regulations and social norms. General Affairs Division oversees compliance initiatives across the Company to ensure strict compliance, plays the main role in training and education, and has also established a whistleblowing and consultation hotline as a means of providing information directly to employees about actions and events they have questions about in regard to compliance.
The Company is resolutely opposed to antisocial forces that threaten social order and sound conduct of the Company and takes systematic steps to oppose them.

2) Retention & Management of Information Concerning the Performance of Duties by Directors

Information concerning the performance of duties by directors is recorded in writing or on electronic media (hereafter, “documentation”) and retained. Directors may view such documentation at any time.

3) Rules on Management of Risk of Loss and Other Systems

We have established internal rules on risk management to address various risks inherent to business activities, and have built a risk management structure that is overseen by General Affairs Division. When a serious event occurs, a crisis response headquarters is established with President and Representative Director as the head, and rapid action is taken to prevent expansion of the damage.

4) System to Ensure that Directors Perform their Duties Efficiently

Board of Directors specifies company-wide goals shared with directors and employees, and uses the following management and operating systems to increase the efficiency of directors in performing their duties.

  1. Formulates internal rules on responsibilities and authority and on decision-making.
  2. Uses an executive officer system
  3. Formulates the Mid-Term Business Strategy, establishes performance goals and a budget based on the Mid-Term Business Strategy, and implements IT-based performance management
  4. Reviews performance at Board of Directors meetings and other meetings, and implements measures to improve performance regularly.

5) System to Ensure Proper Operation of the Corporate Group Consisting of IMAGICA and its Group Companies

As a holding company, IMAGICA GROUP allocates the necessary management resources from the perspective of what is optimal for the group as a whole. We also ensure appropriate operation of group companies as described below while respecting the autonomy of each company, in accordance with Group Company Management Regulaion.

  1. We require group companies to discuss or report on important management matters to the Company and receive regular reports on business plans and other matters from each group company.
  2. We manage risks for the group as a whole by working with each group company to respond to various risks related to the corporate activities of the group.
  3. We formulate a Mid-Term Business Strategy, set a budget and performance goals for each group company, and use IT to manage performance, based on that strategy. This ensures that the directors of each group company perform their duties efficiently.
  4. The Company has established a compliance whistleblowing and consultation hotline for the entire group. We ensure effective compliance in the group by making sure that everyone is aware of this.
  5. Internal Auditing Office performs internal audits in a timely manner.

6) System to Ensure Reliability of Financial Reports

To ensure reliable financial statements, the group has established internal controls for financial statements. We evaluate these internal controls on a continuous basis as we implement them to make sure that they are functioning effectively, and implement improvements as necessary.

7) System to Ensure Independence of Employees from Directors (Excluding Directors Who are Audit & Supervisory Committee Members) When Audit & Supervisory Committee Appoints the Employees to Assist Them

Audit & Supervisory Committee Office was established to assist Audit & Supervisory Committee in performing its duties. Staff members are assigned to assist Audit & Supervisory Committee members and decisions on the personnel evaluations for and transfer of these staff members require the consent of Audit & Supervisory Committee.

8) System for Group Directors (Excluding Directors Who are Audit & Supervisory Committee Members) and Employees to Report to Audit & Supervisory Committee and System for Others to Report to Audit & Supervisory Committee

A system has been established for group directors (excluding directors who are also Audit & Supervisory Committee members) and employees to promptly report to Audit & Supervisory Committee on legally mandated matters, and also on important management matters, other matters that could have a serious adverse impact on the Company and the corporate group, the status of internal control implementation, and the status of reporting via the compliance whistleblowing and consultation hotline. Directors (excluding directors who are also Audit & Supervisory Committee members) and employees must report promptly to Audit & Supervisory Committee when asked to do so by Audit & Supervisory Committee.
The Company also prohibits retaliation against a director or an employee who has reported to Audit & Supervisory Committee, and makes sure that everyone in the company is aware of this.

9) System to Ensure Efficient Audits by Audit & Supervisory Committee

Audit & Supervisory Committee strives to maintain mutual communication and exchange information with the accounting auditors, Internal Auditing Office, and the auditors of each group company.
When Audit & Supervisory Committee requests an advance or reimbursement for performing committee duties, the company pays these invoiced expenses except when such expenses are deemed unnecessary for the performance of Audit & Supervisory Committee duties.

Reason for Appointment of Outside Directors and Attendance to Board of Directors in FY2022

Full NameAtsuko Murakami
Independent Officer
TitleDirector
Attendance to Board of Directors in FY202212/12(100%)
Reason for appointment
The Company has nominated Ms. Murakami as an outside director as she possesses abundant experience as a financial manager in a Japanese company engaged in global business and possesses a high level of financial insight, and thus is expected to perform a supervisory function with respect to important decisions, etc. from an objective standpoint that is independent of executive officers.
The Company has also determined that, as the reasons set forth in the criteria for independence in "Matters Concerning the Independence of Independent Directors" do not apply, there is no risk of conflict of interest with general shareholders, and accordingly has designated individual as an independent officer.
Full NameOsamu Chiba
Independent Officer
TitleDirector and Audit & Supervisory Committee member
Attendance to Board of Directors in FY202212/12(100%)
Reason for appointment
The Company has nominated Mr. Chiba as an outside director who is an Audit & Supervisory Committee member as he possesses abundant knowledge and experience gained as a lawyer and as legal counsel and an outside corporate auditor at multiple companies, and thus is expected to contribute to strengthening of effectiveness of decision-making functions and supervisory functions of Board of Directors from a standpoint that is independent of management.
The Company has also determined that, as the reasons set forth in the criteria for independence in "Matters Concerning the Independence of Independent Directors" do not apply, there is no risk of conflict of interest with general shareholders, and accordingly has designated individual as an independent officer.
Full NameTaketo Yamakawa
Independent Officer
TitleDirector and Audit & Supervisory Committee member
Attendance to Board of Directors in FY202212/12(100%)
Reason for appointment
The Company has nominated Mr. Yamakawa as an outside director who is an Audit & Supervisory Committee member as he possesses abundant experience and deep insights in management of global companies and is expected to contribute to strengthening of corporate governance.
The Company has also determined that, as the reasons set forth in the criteria for independence in "Matters Concerning the Independence of Independent Directors" do not apply, there is no risk of conflict of interest with general shareholders, and accordingly has designated individual as an independent officer.
Full NameHiromi Nakazawa
Independent Officer
TitleDirector and Audit & Supervisory Committee member
Attendance to Board of Directors in FY2022-/- (-%)
Reason for appointment
The Company has nominated Ms. Nakazawa an outside director who is an Audit & Supervisory Committee member as she possesses expert knowledge in finance, accounting, and auditing as a Certified Public Accountant and experience in business operations gained as an executive officer and as a corporate auditor and audit & supervisory committee member at a large company, and thus is equipped with a high level of insight in terms of corporate management and is expected to contribute to strengthening of the Company's governance.
The Company has also determined that, as the reasons set forth in the criteria for independence in "Matters Concerning the Independence of Independent Directors" do not apply, there is no risk of conflict of interest with general shareholders, and accordingly has designated individual as an independent officer.

Officer Compensation

The Rules on Officer Compensation contain the criteria for calculating the compensation paid to directors and executive officers. These rules specify that compensation shall consist of base compensation, a variable bonus, and restricted stock compensation. Compensation is determined according to these rules and is calculated according to the following standards.

  • Base compensation: Determined according to the compensation table for each officer position. It is calculated by designating President’s compensation as 1 and multiplying that by a coefficient to calculate the compensation of each officer position.
  • Variable bonus: The standard is 33% of the base compensation. The percentage of the variable bonus is determined from the level of consolidated operating margin before goodwill and other amortization (5% is standard) and KPI points for the previous fiscal year, and is calculated by multiplying the base compensation by this percentage. The minimum/maximum range is 0% to 72%.
  • Stock compensation: The standard is 33% of the base compensation. This varies according to margin of consolidated net income (loss) before income tax for the previous fiscal year. The minimum/maximum range is 1000 shares to 33%.

The results of the calculations performed according to the criteria noted above are discussed by Personnel Advisory Committee, which consists of Chairman of the Board & Representative Director and three outside directors. The Committee then reports its recommendations to Board of Directors and receives approval.