Basic Policy on Corporate Governance

The business mission of the Company is to create long-term and stable growth of corporate value. Therefore, we have built a governance system with an emphasis on sound management and efficiency. We employ a holding company structure to ensure that the performance of operating companies is supervised appropriately. We have flexibly designed committees and report lines in response to business expansion and changes in the environment so that controls related to labor and human rights, which are important for the human resources service industry, can be applied. In addition, we maintain management transparency and objectivity through the following structures, such as the Board of Directors and Audit and Supervisory Board.

We have disclosed our policy on human rights in Corporate Ethics for Society, Human Rights, and the Environment.
In addition, see Non-Financial Information for disclosure of information including information on governance.


Responding to Each Principle of the Corporate Governance Code

The Company implements policies on each principle of the Corporate Governance Code. For the latest update on each principle, please refer to our corporate governance report.


Directors / Board of Directors

The Company's Board of Directors consists of 10 directors (out of which five are external Directors). As a general rule, Ordinary Board meetings are held once a month, and Extraordinary Board Meetings are held as needed. In addition to deciding matters stipulated by law and important matters related to our business operations, the Board supervises the execution of duties by each Director. The Company has two Representative Directors. Since July 2021, we have stipulated the functions of both the CEO and COO and we employ a system of mutual checks by clarifying the different roles of each director.

Percentage of women serving as Director 10% (after September 2021 Ordinary General Meeting of Shareholders)
Percentage of foreign national Directors - (0) (after September 2021 Ordinary General Meeting of Shareholders)
Percentage of external Directors 50% (after September 2021 Ordinary General Meeting of Shareholders)
Percentage of independent Directors 50% (after September 2021 Ordinary General Meeting of Shareholders)
Number of meetings of Nominating Committee in FY ended in June 30, 2021: 3
Number of meetings of Remuneration Committee in FY ended in June 30, 2021: 4

Note: We have adopted the independence requirements of the Tokyo Stock Exchange for the Company's independent officers.


Audit & Supervisory Board Members / Board

The Company has an Audit & Supervisory Board. The Audit & Supervisory Board consists of four members (out of which four are external Audit & Supervisory Board members). As a general rule, Audit & Supervisory Board meetings are held once per month. Each member audits the performance of the Directors based on the audit policies, audit plans, and the division of duties decided at the Audit & Supervisory Board meetings. In addition, the Audit & Supervisory Board has established a dedicated regular meeting body by defining a report line for effective collaboration between the internal audit department of the holding company and the auditors of operating companies.

Percentage of independent officers 100% (after September 2021 Ordinary General Meeting of Shareholders)

Note: We have adopted the independence requirements of the Tokyo Stock Exchange for the Company's independent officers.


Nominating Committee / Remuneration Committee

Although the Company does not use a "company with committees" structure per the Companies Act, we have set up a Remuneration Committee and Nominating Committee to maintain management transparency and objectivity. Members of both committees are elected at Meetings of the Board of Directors. To ensure objectivity of the decision-making process, the majority of them are non-executive directors outside the company.
In addition, policies regarding the remuneration, etc., of members of the Board of Directors are discussed and decided at meetings of the Board of Directors. Based on these policies, the Remuneration Committee discusses each individual's compensation and its calculation method and reports to the Board of Directors. For the latest information, please refer to the "Disclosure of the policy for determining the amount of remuneration or its calculation method" in the corporate governance report.
The Nominating Committee selects candidates for Director to be elected at general shareholders' meetings based on the perspectives of the skill matrix, gender, and diversity, and reports to the Board of Directors.

Percentage of women serving as Director 14%
Percentage of external Directors 71%
Percentage of independent officers 71%

Note: We have adopted the independence requirements of the Tokyo Stock Exchange for the Company's independent officers.


Management Meetings

The Company's management meetings are set up to make important decisions on business matters within the scope stipulated by the Board of Directors while maintaining agility, transparency and objectivity. Consisting of Representative Directors and full-time directors, management meetings are held as appropriate to accelerate decision-making, with decisions made based on the majority of votes among those present at the meetings. In addition, regular meetings enable each Director to share information and exchange their views.


Corporate Governance Report

Please refer to the Corporate Governance Report.


Organization Chart

The Company also maintains other structures, such as the Compliance Meeting, which the holding company uses to monitor not only the performance of operating companies, but also their compliance status. It also operates the Investment Committee, which advises on investments such as M&A and performs continuous investment evaluation, the Internal Control Committee, and the Sustainability Committee. These various structures together form a solid management infrastructure.
The Company also promotes sustainability strategies, including risk management related to climate change, medium- to long-term risk management, and materiality setting and inventory.
We execute these strategies via the organization shown in the chart below.

Compliance

The members of the Company's Board of Directors and employees understand compliance to include observing not only laws and regulations but also corporate ethics and social norms. They are expected to act with rigorous professional ethics, a high level of insight, and self-discipline. We have established Corporate Ethics for Society, Human Rights, and the Environment as a guideline for our actions in this regard. In particular, human resources services, our main business, is regulated by the Labor Standards Act, the Temporary Staffing Services Law, and the Employment Security Act. We recognize that compliance efforts contribute to the proper maintenance of licenses, the safety and health of our employees, respect for human rights, and risk management. These in turn enable us to promote sustainable business operations.

We have disclosed our policy on human rights in Corporate Ethics for Society, Human Rights, and the Environment.
In addition, see Non-Financial Information for disclosure of information including information on compliance.


Compliance Meetings

各Each operating company holds a monthly compliance meeting to check and rectify any compliance issues regularly (or other checks of a similar purpose covering similar activities). At these meetings, the latest guidance status of the Labor Bureau and Labor Standards Inspection Office is shared. Issues that need to be addressed, reduction of working hours, and other issues related to labor laws and regulations are confirmed, instructions provided for, and promoted.

These meetings also monitor matters related to human rights, the environment, information management, misconduct, and internal reporting, etc., and if a serious incident arises, we quickly assess the situation and take countermeasures. The holding company monitors the effectiveness and control of these compliance meetings, etc., at each operating company and reports to the Company's Board of Directors on a monthly basis.

As for outsourcing companies and contractors, we created our own checklists adapted to each business type to ensure that laws and regulations regarding work directives and those ensuring safety and health are properly followed. Internal audits are conducted on these companies as appropriate.


Response to Revisions of Laws and Review of Proper Management Methods

The Group operates internationally. In order to comply with each country's laws, information about revisions and the responses to and results of inspections by public institutions are always shared between operating companies as appropriate. The holding company coordinates relationships between operating companies so that no information is accidentally omitted. We also have built a system to ensure that we can constantly obtain new information and the best legal advice by setting up advisory contracts with several legal companies according to the type of law and characteristics of each business.


Training

Training is important to ensure compliance is maintained. The Group carries out the following activities according to the organizational scale and nature of business of operating companies.


Avoiding Any Involvement with Organized Criminal Groups

In accordance with the Anti-Organized Crime Law, the Group has stipulations in place that prevent the acceptance of inappropriate requests from organized criminal groups or the use of the services of such groups. We are members of the Association for Prevention of Special Violence under the Metropolitan Police Department and the Jurisdiction Police Special Violence Prevention Measures Council. We collect information by attending lectures organized by the above associations and conduct trainings to put in place a system to eliminate association with organized crime groups.


Insider Trading Prevention

The Group has established rules and segregated duties to prevent insider trading. We also conduct training to prevent the buying and selling of shares, etc., based on knowledge of undisclosed material facts and the transmission of information related to undisclosed material facts to third parties. In addition, we have rules regarding the buying and selling of treasury stock by key employees. These rules stipulate the period during which trading is not possible and the related notification methods.


Other Training

We continuously conduct training programs on laws and regulations, including prohibitions on harassment, bribery, and corrupt transactions, as well as on labor and human rights.


Whistleblower System

For the purpose of preventing illegal business activities and the early detection and response to fraudulent activities, the Group has a whistleblower system that is accessible by all employees at all times.

For internal reporting, besides an internal contact point without any hindrance on the type of report for misconduct, human rights, harassment, leaks, complaints, and other reports where there is no conflict of interest for whistleblowers, employees also have access to external legal contacts. Proper management of the reporting systems enables early detection and prevention of legal and rule violations. We also have rules in place to ensure the protection of whistleblowers so they suffer no adverse consequences and a system to ensure confidentiality.