Corporate GovernanceGroup Philosophy

Group Vision

We at J. Front Retailing Group aim at:（1）Providing high quality products and services thatmeet the changes of the times and satisfying customers
beyond their expectations; and（2）Developing the Group by making a broad contribution
to society as an honest and reliable company.

We will establish a status as a leading Japanese retail company both interms of quality and quantity with the department store business as ourcore.
（1）We will gain the highest popularity from customers in Japan byoﬀering sales services and products that exceed their expectations.
（2）We will achieve the Group s operating margin of more than 5% early.

Corporate Go ve rn a n c e
Basic Concepts

Corporate Bodies and Internal Control Systems

As the core of the uniﬁed governance of the Group, J. Front Retailing

J. Front Retailing has the Board of Corporate Auditors. Its

positions the strengthening of corporate governance as one of thecorporate bodies include Shareholders Meeting, the Board of

most important business challenges to ensure the transparency,

Directors, the Board of Corporate Auditors and independent

soundness and compliance of the management of the whole Groupauditors as stipulated in the Corporate Law. In addition, theand thoroughly fulﬁll its accountability to its stakeholders (includingCompany adopts a corporate oﬃcer system as a body tocustomers, shareholders, employees, suppliers and communities).

perform operations. It also has a Compliance Committee as
an advisory body to the Board of Directors and adopts aTo this end, we created two headquarters and two policy

whistle-blowing system to solve compliance issues.

departments in the company organization to clarify roles,
responsibilities and authorities, thereby improving supervisory

Meetings of the Board of Directors and Outside Directors

function and the internal control systems of the whole J. Front
Retailing Group. In addition, a corporate oﬃcer system is in place toThe Board of Directors as a management decision-making body consists ofseparate between decision-making and execution of thenine Directors (including two outside directors) and generally meets once amanagement, which enables more speedy decision-making andmonth under the chairmanship of President and CEO and with theimplementation.

attendance of Corporate Auditor to discuss and resolve the matters

The term for Directors and Corporate Oﬃcers is one year and theyrequired by laws or prescribed by the articles of incorporation as well as

are remunerated based on their individual annual performance tothe matters stipulated in the rules and regulations of the Board of Directors.

clarify their responsibilities for the enhancement of management andDuring ﬁscal 2008, the Board of Directors had 17 meetings to discussand resolve the mid- to long-term management plan, the integration ofbusiness results.

department store business into one company, thereorganization of businesses of the Group, theCorporate governance organizationand internal control system

acquisition of ﬁxed asset by a subsidiary Daimaru,

Shareholders Meeting
Compliance Committee

Board of Directors

Board of Corporate
Auditors

ＣＥＯCorporate Auditors
Corporate Oﬃcer
CSR Promotion
DivisionInternal Audit DivisionCorporate Oﬃcer
Planning Office forOpening Ginza Storethe winding-up of Imabari Daimaru and the closureof Yokohama Matsuzakaya department store, as
well as approve budgets and settlements.
J. Front Retailing has invited Tsuyoshi
Takayama and Isao Takeuchi as highly
independent outside directors who can judge
independently from the top management andappropriately determine the decisions andsupervisory actions made by the Board of Directors.

Corporate Oﬃcer
Management Planning
Headquarters

Corporate Oﬃcer
Department Stores
Coordination DivisionCorporate Oﬃcer
Aﬃliates Coordination
Division

Corporate Oﬃcer
Administration
Headquarters

They are both in an objective position independent
from the management team performing operations.
We expect Takayama as an executive of abusiness entity and Takeuchi as an executive of aﬁnancial institution and a business entity to reﬂect

Department store
business

32

Supermarket business

Wholesale business

Other affiliatedbusinesses

their rich experience, achievements and insights inthe management of J. Front Retailing.

Audit Function

Monitoring of Implementation

In order to support the soundness of its management structure, J. Front

Persons in charge in each business place provide on-site guidance

Retailing has ﬁve Corporate Auditors (including three outside auditors) toand inspection to check the steady implementation of compliancedetermine its audit policy and approach, while having a system thatpolicies and rules. In case an accident should happen, it will beenables their views concerning important audit matters to be reﬂected inreported immediately to the Compliance Committee and remedial

the Board of Directors. The Company also has Internal Audit Division (30actions will be taken under the leadership of the Committee.

members) reporting directly to CEO to audit according to the annual audit
plan whether each department carries out its operations appropriately andPractice of Compliance under Company Regulations and Operation Manuals

eﬃciently in accordance with laws, the articles of incorporation andJ. Front Retailing develops company regulations and various

internal regulations and duly report to the Board of Directors and theoperation manuals to ensure the implementation of theBoard of Corporate Auditors. Internal Audit Division, the Board ofcorporate code of conduct and the corporate behavior charter

Corporate Auditors and independent auditors cooperate with each other byon the job, while setting its own strict standards on quality

exchanging information and views and discussing as needed.

control and the protection and management of personal
information to thoroughly carry out daily compliance activities.

Internal Control Systems
J. Front Retailing develops systems in line with the Basic Policy to●Build Internal Control Systems.

In 2009, marking the ﬁrst year inSanitary supervisors are placed in the food departments of all

Food Quality Control

which an internal control reporting system is adopted, the Company

Daimaru stores to ensure the high level of quality expected ofestablished the Rules and Regulations for Internal Control overdepartment stores. For customers security and safety, they

Financial Reporting to clarify roles and authorities concerning theirperiodically inspect the conditions of quality control in cooperation

improvement and operation. Accordingly, internal control administration

with Consumer Product End-Use Research Institute based on thefunction and independent assessment function were transferred to CSR

Food Sanitation Law and Daimaru s Quality Control Regulations

Promotion Division and Internal Audit Division respectively.

and rules for running. All Matsuzakaya stores also address thestrengthening of food quality control and sanitary supervisors wereRisk Management

newly placed in Nagoya and Ueno stores in March 2008.

With its general manager and policy manager as responsible supervisors,each division deﬁnes check items for its speciﬁc business risks and● Protection of Personal Information

analyzes and manages these risks and reports the management status on

In order to ensure the protection of personal information, J. Fronta regular basis.

Retailing Group established the basic principles and the code ofIn respect to particularly signiﬁcant business risk factors thus identiﬁed,

conduct and continuously provides employee training and checks

we discuss and determine a policy to deal with them in a strategy meetingthe management status in all companies of the Group. JFR

and other meetings of the Group and concerned divisions implement it toInformation Center Co., Ltd. and JFR Card Co., Ltd., which handle

prevent such risks from arising. In case of emergencies including great

all the customer information data of Daimaru, and Matsuzakaya Co.,

earthquakes, ﬁres and accidents, the Emergency Headquarters headed

Ltd. and Sakae Printing Co., Ltd. acquired the Privacy Markby CEO are responsible for managing a crisis.

certiﬁcation to protect the personal information of customers.

Preparation of the Compliance Manual of JFR Group● Customer Consultation Service

In January 2009, JFR Group prepared a compliance manual to deﬁne

Daimaru has Consultation Corners for Consumers in its storesits structure and principles and code of conduct to implementand consultants certiﬁed as advisory specialists for consumers

compliance management.

aﬀairs oﬀer consultation for customers. Customer complaints about

The manual provides that the basic framework of the complianceproducts are sent online to Consumer Product End-Use Researchsystem of the Group is a binary structure consisting of all companies

Institute for scientiﬁc quality inspection. Consultants informand divisions voluntary compliance with laws and corporate ethics incustomers of the results. These test results are also provided toconducting business and training, supervision and strict audit bystores and manufacturers to prevent recurrence and improve quality.

compliance divisions, operational audit divisions and others.

It alsoMatsuzakaya has a Consultation Corner for Consumers insets compliance principles and code of conduct with four perspectives

Nagoya store and customer consultation service staﬀ is always

to be followed by all oﬃcers and employees of JFR Group.

stationed in all stores to oﬀer consultation for customers. When

The Group ensures thorough compliance activities on a daily basis

receiving inquiries about quality, like Daimaru, they work withby posting compliance self-check lists in each company, which

Consumer Product End-Use Research Institute to conduct tests andenable employees to check their own everyday behavior.

ensure that the results are reported to customers.
33