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Basic Views and Features
Achieving higher levels of sound and transparent corporate management
Basic Views
Our targets for 2030 is to make Kao a company with a global presence, valuable to society. In order to become an essential company in a sustainable world, we are significantly shifting our direction to ESG (environmental, social, and governance) management. While aiming to become a high-profit global company, we are also working toward raising the level of social contribution by capturing changes in business environments surrounding us and changes in stakeholders' values. In order to gain trust from society, which is indispensable for these corporate activities and business activities, we are constantly strengthening our corporate governance in both systems and operations. We position our corporate governance as one of our most important management issues and our basic stance on measures related to corporate governance is to set up and operate a management structure and an internal control system, timely implement necessary measures and achieve accountability so that we can swiftly respond to changes, realize efficient management that is sound, fair, and highly transparent, and continuously enhance corporate value. We have been actively engaging in activities to listen to stakeholders' voices and based on input from stakeholders and social trends, we conduct reviews of our corporate governance and implement necessary measures and improvements in an appropriate manner.
Features of Kao's Corporate Governance
| Integrity | We practice corporate governance that places our corporate philosophy, the Kao Way, at the core of our business management, and with a consistent focus on walking the right path (Integrity), which is one of values of the Kao Way. Employees work together based on mutual respect and fairness, bring an attitude of sincerity and diligence, and conduct themselves lawfully and ethically, and by so doing we are able to maintain the support and trust of all stakeholders and engage in sound and honest business activities. |
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| Innovation | We have pursued creation of the most optimal structure to respond to changes in the business environment as well as social demands. At the 116th Annual General Meeting of Shareholders in March 2022, we revised our structure and its operations to further raise the level of our governance, including the appointment of nine directors, including one non-Japanese director and two female directors, in order to ensure the further diversity of the Board of Directors and further strengthening Kao's ESG management, supervision and decision-making from a global perspective. |
| ESG Vision | We have established our ESG Vision in order to become a company that is essential to a sustainable world, and we position the creation of effective corporate governance as a prerequisite and a driver to vigorously advance the realization of this vision. |
| Use of outside executives | We have put in place a system of governance able to maintain a high degree of objectivity, including making 7 of the 14 members of the Board of Directors/Audit & Supervisory Board Members independent and outside members and having an Outside Director serve as Chairman of the Board of Directors, to ensure that the Board of Directors is able to appropriately perform management oversight. Outside Directors and Outside Audit & Supervisory Board Members are designated with priority placed on their independence as well as their expertise and high-level insight. They oversee and audit planning and execution of business strategy and the like from their diverse viewpoints, facilitating effective and judicious decision-making. |
| Strengthening internal control | The Internal Control Committee leads discussions on compliance, risk and crisis management, and related topics across the Kao Group to improve the effectiveness and efficiency of our business processes, ensure the credibility of our financial reporting, comply with laws and regulations in our business activities, and preserve our assets, and we are strengthening internal control throughout the Kao Group. |
The Path toward Strengthened Governance
We have also practiced Innovation, which is one of Values of the Kao Way, in the area of corporate governance from an early stage. We have pursued creation of the most optimal structure to respond to changes in the business environment as well as social demands, and will continue to take steps to reform our governance.
Standards for Independence of Outside Directors/Audit & Supervisory Board Members
Kao has established the "Standards for Independence of Outside Directors/Audit & Supervisory Board Members of Kao Corporation" to clarify the standards for independence of an outside director/Audit & Supervisory Board Member.
Kao Group Tax Policy
The Kao Group has implemented a "Tax Policy" aiming to improve its tax governance framework, reflecting the group's tax code of conduct and its consistent standards for approaching tax matters throughout the group.
The publication of this strategy statement is regarded as satisfying the duty under Paragraph 16(2), Schedule 19, Finance Act 2016 in UK.
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