Message fromthe President

Contents

Sustainabillity

FeatureEnvironment

SocialGovernanceCorporate Governance

Policy and Concept

SystemTokyo Tatemono strives to build optimal corporate governance,

Tokyo Tatemono has selected a Company With Audit andaiming to enhance efficiency while ensuring the soundness andSupervisory Board format as our corporate managementtransparency of management to increase corporate value.

system. We have also established a board of directors andIn addition, we actively and appropriately disclose informationan Audit and Supervisory Board. Our executive officer system

for shareholders and other stakeholders to understand theclarifies the separation of functions between managementcompany's business activities accurately. The code of conduct

and business execution. This system strengthens managementin our corporate philosophy espouses a spirit of complianceand supervisory functions and business execution functions atwith the law. In this light, we have established a system forTokyo Tatemono. Further, we appoint external directors andcompliance as we strive to improve compliance awareness andexternal Audit and Supervisory Board members who help us

prevent the occurrence of illegal activities and misconduct.

operate under stronger management supervision and ensuretransparency. We believe that we have established a structurethat enables managers and directors to fully exercise theirmonitoring and supervisory functions.

Corporate Governance Report

Tokyo Tatemono has established a Group Management

www.tatemono.com/english/ir/library/governance.html

Meeting to facilitate efficient and sound group management.
◦ Directors (Board of Directors)
Tokyo Tatemono has 12 directors, four of whom areoutside directors. As a general rule, Tokyo Tatemono holds
regular board of director meetings once a month and otherextraordinary meetings as deemed necessary. In thesemeetings, our directors make decisions about importantmatters related to business execution and monitor theexecution of our business activities by directors.
Audit and Supervisory Board members attend board
meetings and offer opinions as necessary. (Numbers are as ofJanuary 2020)▶ Corporate Governance Structure

General Meeting of Shareholders
Appoint/Dismiss
Nomination and Remuneration Advisory Committee
AdviseAppoint/Dismiss

Financial Statement Auditor

ReportReportCoordinate

Board of Directors (Directors)
Appoint/Dismiss

AuditDismiss

Financial
Statement AuditAudit and Supervisory Board (Corporate Auditors)

President and Chief Executive Officer
Group Management Meeting

Appoint/Dismiss

Coordinate

Internal Control Committee

Sustainability Committee
Internal Audit Division

Headquarters/Divisions

Audit

Group Companies

Tokyo TatemonoTokyo Tatemono Group67

Contents

Message fromthe President

Sustainabillity

Feature◯Audit and Supervisory Board Members (Audit andEnvironment

SocialGovernance◯ Nomination and Remuneration Advisory Committee

Supervisory Board)

The company has established this committee to selectThe Audit and Supervisory Board consists of four members (twocandidates for directors and recommend remuneration levels

full-time members), two of whom are external members of thefor the same (excluding external directors), serving as an

Audit and Supervisory Board.

advisory body for the board of directors. Committee members
are appointed from among directors; however, more than◯ Executive Officers

half of the seven members are external directors who provide

Tokyo Tatemono has adopted an executive officer system toexpertise and advice to ensure objectivity and transparency inenergize our board of directors and speed up decision-making

the procedures.

through the separation of management functions and businessexecution functions.

◯ Sustainability Committee
To encourage ESG management across the group, we have◯ Group Management Meeting

established a council that reports directly to the president

The Group Management Meeting consists of executive officers

and CEO. This council works with divisions to set ESG-relatedwith specific responsibilities. This meeting is held to discuss

goals, monitor progress, and evaluate achievements to support

matters important to group management.

ongoing sustainability policies.

Full-time Audit and Supervisory Board members attend
board meetings to assess the status of deliberations and offer
opinions as necessary.
◯ Internal Control Committee
The Internal Control Committee discusses and monitors
internal control risks (compliance risks and internal managementrisks). If necessary, the committee reports risks to the boardof directors, the Audit and Supervisory Board, and others asnecessary.
→ Risk Management P.70

▶ Corporate Governance Indicators and Results

ItemUnit2015

2016

2017

2018

2019

Number of Board Meetings

Meetings

1313121315

Number of Directors

Persons

99111212

Number of Executive Officers on Board

Persons

66778

Number of Non-Executive Officers on Board(Excluding Independent External Directors)

Persons

00110

Number of Independent External Directors

Persons

Average Board Meeting Attendance
Average Tenure of Directors(Including Independent External Directors)

333

44

94.6％

100％

100％

100％

99

6.7 (March)

5.3 (March)

5.0 (March)

5.8 (March)

3.8 (March)％Years◯ Data Collection Period: January to December of each year. Unless otherwise specified, figures are as of December each year.
◯ Data Collection Scope: Tokyo Tatemono

68Message fromthe President

Contents

Sustainabillity

FeatureEnvironment

SocialGovernanceSupport System for External Directors and Membersof the Audit and Supervisory Board

Policy on Remuneration and Remuneration
Calculation

Tokyo Tatemono provides explanations and information as

Fixed remuneration for directors is capped at ¥35 million

necessary through the Planning Division to support external

per month (¥420 million per year) *1. Performance-based

directors and members of the Audit and Supervisory Board.

compensation (excluding external directors) is capped at

The Planning Division serves as a secretariat for the board of

1% of consolidated recurring income and 2% of net income

directors.

attributable to owners of parent for the year prior to the fiscal

At the request of the Audit and Supervisory Board, we assign

year in question*2.

personnel to serve as audit staff to encourage the smooth

In March 2018, we introduced a stock remuneration system

execution of audit procedures.

via stock benefit trust. The goal of this system is to create a

Full-time members of the Audit and Supervisory Board

clear link between director compensation and the value of ourattend important corporate meetings, including board

corporate stock and to encourage awareness of contributions

meetings and Group Management Meetings. These members

to increasing corporate value over the medium and long term.

also receive reports from our financial statement auditors,

With the introduction of this system, directors receive

directors, and employees of various departments ascompensation in three ways: fixed remuneration,necessary, facilitating a structure for exchanging opinions withperformance-linked remuneration, and stock-based

these parties at any time.

remuneration. Stock remuneration (excluding external directors)
consists of a maximum 40,000 points per fiscal year (equivalentEvaluation of the Effectiveness of the Board ofDirectors

to 40,000 shares).
Remuneration for members of the Audit and Supervisory
Board consists of basic remuneration according to status as
full- or part-time. The amount of remuneration is capped at ¥8Once yearly, Tokyo Tatemono conducts a survey on thecomposition, agenda items, and operation of the board

million per month (¥96 million per year).

of directors. All directors and members of the Audit and*1 Based
on a resolution of the 190th Ordinary General Meeting of
Shareholders held on March 28, 2008*2 B ased on a resolution of the 195th Ordinary General Meeting of
Shareholders held on March 28, 2013

Supervisory Board respond to this survey, the results of which
are discussed at a meeting of the board of directors.
The survey of board effectiveness for fiscal 2019 wasconducted in February 2020. As a result of our investigations,
we confirmed that the Tokyo Tatemono board of directors
operates with sufficient effectiveness.

▶ Items Evaluated to Determine Board of Director Effectiveness

Area

Description

Composition

Ratio, number, and diversity of external directors

Content

Number, content, and financial amount of proposals

Operations

Number of meetings, length of meeting, format of pre-meeting explanations, explanatory
materials, explanation time, deliberation time, content of matters reported

Other

Support system, training format▶ Remuneration of Directors and Members of the Audit and Supervisory Board (Fiscal Year Ended December 2019)

Executive Class

Total Amount by Type of Remuneration

Number of
Eligible
Individuals

Fixed Remuneration(Million Yen)

Performance-Linked
Remuneration(Million Yen)

Total
Remuneration(Million Yen)

Stock-BasedRemuneration(Million Yen)

Internal Directors10258

183

33475

Members of the Audit and Supervisory
Board (Excluding External Members)

352ーー52

9400

ーー

400

22351

183

33569

External Members
Total69