Corporate Governance

• Basic Views
• Governance Structure
• Overview of the Corporate Governance System
• Cross-Shareholdings

Basic Views

Since its foundation, the management philosophy at Kyoritsu Maintenance has been that “the spirit of the company is to put customers first,” with the management policy of “contributing to the progress of society as a whole through food and housing.” The Company believes that enhancing corporate governance is essential for ongoing expansion and for the maximization of shareholder value over the long term. It is taking steps to speed up management decision-making, to strengthen supervision of management, to emphasize and fulfill accountability, and to disclose information promptly and appropriately, among other matters, and it recognizes that ensuring the transparency and soundness of management is an important issue.

Governance Structure

The Company has established a General Meeting of Shareholders, a Board of Directors, and an Audit and Supervisory Committee as organizations based on the Companies Act, and has appointed an Accounting Auditor in accordance with said Act. In addition to these organizations, it has established a Nominating Committee, a Remuneration Committee, a Group Management Information-Sharing Meeting, an Executive Committee, a Compliance Committee, and a Sustainability Promotion Committee.

Overview of the Corporate Governance System

Board of Directors and Committee Overview

Board of Directors

The Board of Directors meets regularly once a month for a total of 12 times per year based on the Board of Directors Rules and also holds extraordinary board meetings as necessary to report, deliberate, and make decisions on matters stipulated by laws and regulations as well as the Articles of Incorporation.

Main considerations for FY 2025

• Matters related to the general meeting of shareholders
• Matters concerning financial settlement and interim dividends
• Matters concerning important capital investments and the conclusion of building lease agreements
• Matters relating to organization, personnel affairs, and other business operations

Audit and Supervisory Committee

The Audit and Supervisory Committee meets at least once a month based on the Audit and Supervisory Committee Rules and also holds ad hoc meetings as necessary to audit the performance of duties by the Board of Directors, create audit reports, and perform other duties stipulated by laws and regulations and the Articles of Incorporation based on the Audit and Supervisory Committee Auditing Standards.

Nominating Committee

The Nominating Committee has been established to strengthen the fairness, transparency, and objectivity of procedures related to the nomination of Directors and to enhance corporate governance at the Company. Specifically, the committee conducts interviews with candidates for Directors and deliberates the appropriateness of the selection reasons and capabilities of individual candidates in light of the Company’s director appointment policy. The committee also deliberates on matters such as succession plans and skills matrix of the Board of Directors.

Remuneration Committee

The Remuneration Committee has been established to strengthen the fairness, transparency, and objectivity of procedures related to director compensation and to enhance corporate governance at the Company. Specifically, the committee deliberates on individual director compensation, including basic compensation, director bonuses, and non-monetary compensation (stock compensation) related to restricted stock.

Initiatives to Strengthen Corporate Governance

1989	Established the company motto
2007	Established the Compliance Committee The Company established a Compliance Committee under the Board of Directors and seeks to strengthen its framework centered on the Compliance Committee Secretariat.
2015	Transitioned to a company with an Audit and Supervisory Committee Introduced Outside Directors As resolved at the 36th Ordinary General Meeting of Shareholders held on June 25, 2015, the Company transitioned from a company with an Audit and Supervisory Board to a company with an Audit and Supervisory Committee. This transition aims to enhance the effectiveness of auditing and supervision by having Audit and Supervisory Committee Members with voting rights at Board of Directors meetings handle audits. Additionally, the Company liaises with internal control departments and its accounting audit firm to ensure more effective audit operations.
2019	Introduced female Directors The composition of the Board of Directors prioritizes a balance of knowledge, experience, and capability regardless of gender, career history, or age, and advances initiatives aimed at achieving gender equality.
2020	Raised the ratio of Outside Directors on the Board of Directors to at least one-third To strengthen corporate governance, the Company increased the number of Outside Directors, ensuring that Outside Directors account for at least one-third of the Board of Directors. By appointing Outside Directors with a focus on independence and expertise, the Company seeks to enhance management transparency and objectivity and to improve sustainable corporate value.
2022	Established the Sustainability Promotion Committee To strengthen its sustainability promotion framework, the Company established the Sustainability Promotion Committee, chaired by the President, and promotes activities in collaboration with the ESG Promotion Office, business divisions, and Group companies. The Committee advances initiatives related to environmental response, contribution to local communities, and promotion of diversity.
	Established the Nominating Committee and the Remuneration Committee, with a majority of independent Outside Directors The Company established a Nominating Committee and a Remuneration Committee mainly composed of Outside Directors. These committees submit recommendations to the Board of Directors based on deliberations following Board consultations, deliberate and decide on matters delegated by the Board, and report on the execution of their duties, thereby ensuring fairness, transparency, and objectivity in procedures related to director appointments and remuneration and further enhancing corporate governance.
	Introduced a restricted share-based remuneration system The Company introduced a restricted share-based remuneration system to enable Directors (excluding Audit and Supervisory Committee Members and Outside Directors) to share both benefits and risks of stock price fluctuations with shareholders, thereby strengthening incentives to enhance corporate value.
2024	Formulated a Basic Policy on the Company President Succession Plan To ensure continuity in top management and clarify the development and selection process of candidates in preparation for a change in President, the Company formulated a policy following deliberations by the Nominating Committee, primarily composed of Outside Directors, and formal approval by the Board of Directors.

Cross-Shareholdings

Policy on cross-shareholdings

The Company holds shares of some of its clients as cross-shareholdings with the objective of strengthening business relationships.

The Corporate Planning Division and departments that supervise transactions make judgments on whether to hold the shares of such companies based on their current and future levels of profitability, etc., and from the perspective of whether strengthening relationships with the companies will help maintain and increase the corporate value of the Company.

Verification of cross-shareholdings

For shares of clients held by the Company, once a year the Corporate Planning Division validates the status of the shareholding with the departments that supervise transactions by considering the economic rationale, which includes the original objective of holding the shares, the status of the business relationship such as transaction amounts and the nature of the business, and the cost of capital.

The Company seeks to reduce shareholdings that are found, as a result of this process, to no longer match the original objective for holding shares by selling them or taking other steps.

The details of this verification are reported to the Board of Directors every year.

Moreover, for shares of clients held by the Company as of March 31, 2025, as a result of verifying the objective and reasonability of the holdings, the Company has decided to maintain holdings of all 12 listed stocks.

Related link

Corporate Governance Report［PDF：90KB］