Corporate Governance


To maximize our corporate and shareholder values, we recognize the importance of establishing a fair and sound corporate management system and a managerial structure that enables quick and accurate decision making to accommodate an ever-changing business environment, and the execution of legitimate and appropriate business operations. To that end, we are working to improve and enhance our approach to corporate governance.

Corporate Governance Structure

Board of Directors

The Board of Directors meetings are held regularly on a monthly basis, in principle, and whenever necessary to discuss and decide important agenda items and the execution of important business concerning the Group’s management policies and strategies. It also supervises the management from an independent and objective standpoint.

Members of the Board of Directors and their attendance at its meetings

The Board of Directors meeting currently consists of eight directors and four corporate auditors present. Seven of the meeting attendants (three independent directors and four corporate auditors), who constitute the majority, are in a position to supervise or audit management from an independent standpoint. In addition, the Board of Directors is chaired by the president (during the last fiscal year). Because we are in a period of business transformation, with many agenda items related to important business execution, we believe that the smooth operation of the Board of Directors is enabled by having the president, who is familiar with the status of business execution and the internal situation, host the meetings as the chair. In addition, sessions for exchanges of views between directors, which are hosted by independent directors, are held to increase the effectiveness of the Board of Directors.
Members of the Board of Directors and their attendance at its meetings are as shown in Table 1.

Major matters considered by the Board of Directors

The Board of Directors vote on important matters related to business execution, including management policies, business plans, and sustainability-related issues, in addition to agenda for the general meeting of shareholders and legal matters for resolution. Progress in important matters of business execution is also reported. Matters to be reported include those requested at sessions for exchanges of views between independent directors and corporate auditors and among independent officers, leading to a lively exchange of opinions.

Board of Corporate Auditors

In the last fiscal year, meetings of the Board of Corporate Auditors were convened 9 times.

Members of the Board of Corporate Auditors and their attendance at its meetings

The Board of Corporate Auditors consists of four members (including three independent corporate auditors). Each auditor has considerable knowledge in accounting, tax affairs, or legal affairs.

Major matters considered by the Board of Corporate Auditors

They include audit policies, the legality of business reports and annexed detailed statements, the appropriateness of the execution of duties by directors, the internal control system and its status of operation, and the reasonableness of the methods and results of audits conducted by the accounting auditor.

◎: Chairperson, 〇: Member, △: Attendant


1. The above information about the positions applies to the period from April 1, 2022 to March 31, 2023.

2. Mr. Takuma Ino resigned at the close of the 88th Ordinary General Meeting of Shareholders of the Company that was held on June 24, 2022.

3. Ms. Aiko Oue was appointed as a corporate auditor at the 88th Ordinary General Meeting of Shareholders of the Company that was held on June 24, 2022.

4. The Nominating Committee meetings include interviews (two times) by outside officers who are members with candidates for president.

Sessions for exchange of views between officers

We hold the following sessions for exchanging views for the purpose of strengthening corporate governance. At each session, attendants have unrestricted, constructive discussion and exchange of views, including the presentation of problems. The content is utilized for the discussion and operation of the Board of Directors, supervision of management, business execution, and other purposes.

Status of activities of the Nominating Committee

The committee is chaired by the lead independent director and its members are three independent directors, two directors, and the standing independent corporate auditor.
To ensure the fair, transparent selection and appointment, etc. of officers (directors and corporate auditors), the committee drafts agendas on appointment or dismissal of directors and corporate auditors that the Board of Directors submit to the general meeting of shareholders, as well as agenda items on the appointment or dismissal of the president for the Board of Directors meetings. In the process of appointing the president, the committee has the authority to select a succession plan and candidates and interview the candidates.

During the last fiscal year, the committee met five times.

  • Discussion of specific criteria for the selection of CEO candidates
  • Interviews with CEO candidates
  • Selection of CEO candidates
  • Selection of candidates for directors and corporate auditors to be submitted to the 89th Ordinary General Meeting of Shareholders and submission of the candidates to the Board of Directors and the Board of Corporate Auditors

The status of attendance of each member is as shown in Table 1.

Status of activities of the Remuneration Committee

The committee is chaired by the lead independent director and its members are three independent directors and two directors. The standing independent corporate auditor also attends its meetings as an observer.
This committee has the authority to determine the director remuneration system, criteria, and policies and content of remuneration of individual directors, within the amount limits set by resolution by the general meeting of shareholders and within the scope specified in internal regulations on remuneration, so as to ensure fair, transparent decisions on directors’ remuneration, their treatment, and other areas.

In the last fiscal year, this committee met once.

  • Review of business performance of the overall company and each division in the last fiscal year
  • Evaluation of individuals based on the above for performance-linked remuneration for the fiscal year
  • Review of the progress of the medium-term business plan and evaluation of individuals for medium- to long-term performance-linked remuneration, which are made based on the above

The total amount of remuneration of directors was submitted for discussion at the Board of Directors meeting held on June 24, 2022 and received approval. Regarding the amount of remuneration of each director (and each executive officer), it was resolved that the Board of Directors would leave the decision to the committee within the total amount and the scope set forth in the internal regulations on remuneration of directors, etc. In response, the committee determined the amount.
The status of attendance of each member is as shown in Table 1.

Evaluation of effectiveness of the Board of Directors

To increase the effectiveness of the Board of Directors, we evaluate the effectiveness based on the results of questionnaires of directors and corporate auditors. We also leverage the results of surveys in the operation of the Board of Directors.

Overview of results of the effectiveness evaluation of the Board of Directors

1. Last fiscal year (FY2022)

  1. Composition
    The Board of Directors has a well-balanced composition, with internal and external officers with diverse experience and insights, including female and non-Japanese members. Its size is appropriate for having sufficient communications and lively discussions. Meanwhile, a future task is to develop candidate human resources for appointing directors with expertise in strategies to strengthen R&D and other areas as well as female internal directors.
  2. Status of operation
    To help the Board of Directors conduct meaningful discussions, materials are distributed to its members before a meeting is held, thus having them understand the background, purpose, and content of each agenda. In addition, where necessary, explanations are given by the secretariat to the Board of Directors or others. The set frequency of meetings is also appropriate, and meetings are also held as necessary. On the other hand, while improvements have been made in the early presentation of materials, there is room for improvement in the earlier provision of materials and prior explanations about important matters. In addition, in the case of an important matter, holding repeated deliberations, such as holding an extraordinary meeting of the Board of Directors without waiting for a regular meeting, will further vitalize the operations of the Board of Directors.
  3. Status of deliberations
    In the last fiscal year, the duration of each meeting of the Board of Directors was extended. This has resulted in unrestricted, constructive discussion and exchanges of views made more actively than ever, further increasing the effectiveness. Moving forward, more active discussion and enhancement of the system for reporting specific measures and their progress need to be achieved by increasing the effectiveness of prior explanations of important agenda items, among other means.

2. Future initiatives

In light of the results of evaluation for the last fiscal year, the following initiatives will be taken in an attempt to enhance deliberations by the Board of Directors and further increase its effectiveness.

  • Enhancing deliberations of management strategies and important matters and follow-up reporting
  • Enhancing reporting and activating discussion about sustainability
  • Presenting materials earlier, ensuring the early provision of materials about important matters, and improving prior explanations about such matters

Overview of director remuneration system

The remuneration of directors and corporate auditors is paid in such a way that the amount will not exceed the limit on remuneration, a resolution on which was passed at the general meeting of shareholders.
Regarding the remuneration of directors, the remuneration system, criteria, and policies and content of remuneration of individual directors are determined by the Remuneration Committee so as to ensure fair, transparent decisions on directors’ remuneration, their treatment, and other aspects.
The remuneration of internal directors consists of the basic remuneration, performance-linked remuneration for each fiscal year, and medium- to long-term performance-linked remuneration.
The system, criteria, and policies for the remuneration of corporate auditors and the contents of remuneration of individual corporate auditors are determined by the Board of Corporate Auditors.

Corporate Governance Guidelines

The Foster Group has established Corporate Governance Guidelines that express our basic way of thinking and framework with regard to corporate governance.

Corporate Governance Guidelines(PDF:168KB)

Foster Group Corporate Action Guidelines

The Foster Group has established Corporate Action Guideline that express our actions with public decency in compliance with laws and regulations inside and outside of Japan, international rules, and their spirit and intent as well as corporate ethics.

Foster Group Corporate Action Guidelines(PDF:17KB)



The Group emphasizes compliance (with laws, regulations and corporate ethics) as a core element of its CSR philosophy and promotes a compliance program—setting internal rules and building a structure for management—to all Group companies.

Compliance Structure

The Foster Group places emphasis on the internal whistleblowing system to promote compliance. Such system is under operation through the “Compliance Hotline” and “Harassment Helpline” that connects whistleblowers to external corporate lawyers available for 24 hours by email. Internally, the highly independent internal audit office and HR representative act as a window to early detect violations of compliance. The whistleblowing hotline is extensively available to employees and officers of the entire Group as well as to their families and the employees of business associates. We also hold briefings on the Compliance Hotline and Harassment Helpline for employees, to ensure that they are fully informed of the internal whistleblowing system.
For the protection of whistle-blowers, internal regulations, including internal reporting regulations, are established and disseminated to ensure that they are treated fairly or not involved in any trouble as a result of their actions. Further, partly reflecting the revision of the Whistleblower Protection Act, our internal reporting regulations clearly state that the obligation to maintain the confidentiality of information that enables the whistleblower to be identified shall be ensured, and that any violation of the prohibition of searching for the whistleblower and prohibition of retaliation against and disadvantageous treatment of the whistleblower may result in disciplinary action.

Organization of the Compliance Committee
(The same applies to the Risk and Crisis Management Committee)

Compliance Committee

The Compliance Committee leads compliance programs with the president serving as chief executive. This committee was set up in accordance with “the Foster Group Code of Conduct for Staff.”
In fiscal 2022, we conducted a compliance test and a questionnaire on overall compliance matters, including the “Foster Group Code of Conduct for Staff”. We also gave all employees online compliance training related to contracts, the Subcontract Act, insider trading, secret management, and export management and took other measures in our efforts to raise their awareness of compliance.

Risk Management


The Foster Group is focused on predicting risks and taking preventive measures so that such risks will not materialize. They also focus on minimizing damage to the Company should a risk develop and materialize, resulting in the occurrence of danger. Specifically, we are working to make the risk control matrix (RCM) framework more sophisticated and to reinforce our structure for managing and sharing information under the basic operating policy of "being prepared for forward-looking risk and crisis management."

Risk Management Structure

As the foundations for the Foster Group's risk management structure, we have established the “Rules on Risk and Crisis Management” and the Risk and Crisis Management Committee with the president as the chairman to identify risks using a checklist, analyze such risks and promote preventive measures on a Group-wide basis.
In the event of any incidents or accidents, we set up a task force, mainly consisting of the Risk and Crisis Management Committee members, and take other prompt measures to minimize damage, restore the original state as early as possible and prevent any recurrences.

Risk and Crisis Management Committee

The Committee identifies and evaluates risks based on the result of risk reexamination conducted by respective department each year. From among risks, the Committee selects important risk items that it needs to control. Specific measures which have been taken to address such risk items are monitored through regular meetings of the Committee, which are held every three months. The risk evaluation result is also referenced during the business policy planning. The Committee reports the status of its operation, risks faced by the Group, and measures that have been taken to tackle those risks to the Board of Directors as appropriate. The Board of Directors fulfills its function of supervising risk management, such as by giving advice and instructions based on specialized knowledge of outside officers. Our important risk items that were monitored in fiscal 2022 included suppliers’ business continuity management, response to the logistics disruption, validation and global expansion of the BCP structure, management of the fire protection framework of the overall Group, and management of countermeasures under the information security management system.
The Risk and Crisis Management Committee held weekly meetings, in addition to its regular meetings, because the future of the economy remained uncertain due to factors including the spread of the highly infectious COVID-19 variant, lockdowns in Vietnam and China, and the rising tensions in Ukraine. At the weekly meetings of the Committee, departments and sites collected and shared customer information, supplier information, and other information, identified top risks from among various materialized risks, and clarified the responsible department and action policy for each of such risks, thus handling them in an appropriate, timely, flexible manner.

Business Continuity Plan (BCP)


The Foster Group is taking steps to prevent and avoid various business risks and crises as risk/crisis control and to minimize the damage to the Company and avoid inconvenience to customers should a risk occur or be embodied, with the highest priority given to preventing the recurrence of risks/crises.

Activity Promotion Structure

The Foster Group promotes business continuity through the function recovery activities undertaken by each function department of headquarters and through collaboration with the task forces at each site in accordance with the decisions made by the Risk and Crisis Management Committee consisting of its senior management.

Main Activities and Measures

Operation of the emergency-contact system (Safety Confirmation System)

We have introduced a safety confirmation system using mobile phones to be prepared for emergencies, such as the predicted inland earthquake in Kanto area, and other disasters. This system is aimed at keeping headquarters functional by allowing it to issue an emergency notice to confirm the safety of its employees and their families and ensure a prompt initial response. In addition, in October 2022, we conducted response training in consideration of the work-from-home system during the COVID-19 pandemic, so as to get ready to operate remote disaster headquarters in the event of a disaster. Further, in December 2022, we conducted a questionnaire to be ready to serve people having difficulty returning home and reviewed what items are in the stockpile and how many of them are in stock.

Disaster-prevention activities

We received a letter of gratitude from the Akishima Fire Department in recognition of our victory in a competition for the training of in-house firefighting teams, as well as our daily disaster prevention activities and regional disaster prevention activities. Further, our headquarters are registered as Pipo-kun-no Ie (an emergency shelter where children can seek help). In future, we will continue to work to be a company that is needed in the community. In December 2022, we conducted a joint global disaster drill involving headquarters, assuming a fire at an overseas manufacturing site (a plant in China). We made improvements based on problems found through this training, as part of our efforts to enhance our business continuity plan globally to continue deliveries to customers.

The victory plaque we won in a competition for the training of in-house firefighting teams

A sign put up at the entrance saying
“Pipo-kun-no Ie”

Tackling COVID-19 Coronavirus

At overseas manufacturing sites, the number of COVID-19 infections decreased, and governments are easing restrictions. In these circumstances, we attach importance to the continuation of deliveries to customers and continue to take basic measures, including managing health, washing hands, and wearing masks. In 2022, we promoted vaccinations and gave COVID-19 tests as part of our comprehensive infection control measures. We will maintain a safe, secure production system.

Pest control measures

We regularly take measures to prevent the occurrence of pests at overseas manufacturing sites. We thus prevent damages from pests including red imported fire ants, which have gone on the rampage in the past.

A pest control measure being taken (China)

Disaster Drills at Overseas Sites

We appoint a person in charge of BCP for each overseas site and implement disaster drills once a year to improve our employees’ awareness of disaster prevention.

Rescue of affected people (Myanmar and Vietnam)

Our Stance on Tax Matters

Basic Stance

The Foster Group works to maintain and improve tax compliance and perform proper filing and payment of taxes in accordance with the local tax-related laws and international rules based on its business and sustainable development strategies.


The Foster Group has established the global tax department within the Finance and Accounting Department of the Global Corporate Support Division at headquarters, so as to manage and monitor tax risks. Critical issues are reported to the top management including Board of Directors for their directions.

Transactions with Related Parties Outside Japan

The Foster Group determines prices based on the arm’s length principle.

Relationship with Tax Authorities

The Foster Group provides information and otherwise responds to tax authorities in good faith. In addition, the Group has requested bilateral advance pricing arrangement (BAPA) to ensure the predictability of the application of transfer pricing taxation.

Ensuring Transparency and Responding to Pillar Two

The Foster Group prepares and discloses its financial statements in compliance with the Financial Instruments and Exchange Act and related laws. It also discloses tax information in the financial statements based on the related laws and regulations.
The Group responds appropriately to income taxes concerning the global minimum corporate tax rate, which was established based on Pillar Two in the BEPS 2.0 project that has been discussed by the OECD and G20.

Information Security


Foster Electric Co., Ltd. and its subsidiaries (“the Group”) recognize the importance of securing the trust of customers, suppliers, shareholders, employees and other stakeholders based on its corporate creed of “Sincerity”. Appropriate management of information assets is an important part of the management agenda.
To appropriately protect and handle the information assets possessed by the Group, we define the information security policies as follows:

  • - Information security management system
  • - Development of internal regulations regarding information security
  • - Implementation of information security measures
  • - Provision of information security education
  • - Implementation of continuous improvement activities

■ Information Security Policies:

Activity Promotion Structure

For protection and appropriate management of all information assets possessed by the Group, it has established the Information Security Committee, whose members include the president serving as a chief executive and management, to maintain the system for understanding the management status of information security and prompt implementation of required security measures according to the risk analysis results.

Main Activities and Measures

The Group takes appropriate measures as organizational, human, physical and technical safety management initiatives against security threats, which change daily, to prevent unauthorized access, damage, leakage, falsification and other accidents involving information assets.