Glory Ltd. TSE:6457

Glory : Corporate Governance Report

Published

Source: MarketScreener

Corporate Governance Report

Updated: June 24, 2025

GLORY LTD.

Akihiro Harada President & Representative Director Contact: Legal Department

+81-79-297-3131

Securities Code: 6457 https://corporate.glory-global.com/

The corporate governance of GLORY LTD. (the "Company") is described below.

  1. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information
    1. Basic Views

      Based on our Corporate Philosophy, which embodies our determination to grow as a sustainable enterprise by contributing to a prosperous society through our commitment to product development, the Company and its subsidiaries (the "Subsidiaries") (the Company and the Subsidiaries, collectively the "Group") aim to improve the corporate value by striving to exist in harmony with society and promoting sound and efficient corporate management that is trusted and supported by all stakeholders. To this end, we strive to improve corporate governance thus further improve our corporate value, through enhanced supervisory and executive functions of management, expedited, transparent, and objective decision-making, and enhanced compliance management.

Reasons for Non- compliance with the Principles of the Corporate Governance Code

The Company implements each principle of the Corporate Governance Code.

Disclosure Based on the Principles of the Corporate Governance Code

Updated

The contents of disclosure based on each principle of the Corporate Governance Code are as follows.

Principle 1.4: Cross-Shareholding*

The Company's policy is to hold shares of listed companies as cross-shareholdings only if, based on a broad consideration of factors such as business strategies and transaction status of such companies, we judge that maintaining and enhancing the relationship with such companies would increase the corporate value of the Group. To ensure the economic rationale of such holdings, the Company pays attention to the soundness of the management of such companies and considers the market value of shares as well as the dividends and other returns of such companies.

The Board of Directors (the "Board") annually reviews the purposes and rationale of each cross-shareholding, and discuss whether to continue or discontinue such holdings, based on the economic rationale and business outlook as well as risks and returns over the mid- to long-term. Additionally, such holding is reconsidered if found to be unsuitable.

In FY2024, the Company continued its shareholdings based on the Board's examination of the stock name, purpose and rationale thereof including the business synergy with the investee companies, the balance of risks and returns against the capital cost, while some of the shares were sold due to reasons such as deviations from the original purpose and decreased significance of such holdings.

The Company will exercise its voting rights on cross-held shares based on broad consideration of factors including the condition of each investee company and on the criteria such as whether or not such exercise is deemed to improve the corporate value of the Company and the investee company.

*Cross-shareholdings: There are cases where listed companies hold the shares of other listed companies for reasons other than pure investment purposes, for example, to strengthen business relationships. Cross-shareholdings here include mutual and unilateral shareholdings.

Principle 1.7: Related Party Transactions

Approvals of the Board are obtained in advance to ensure transactions with related parties, such as the Company's directors (individually a "Director" and collectively the "Directors") or major shareholders, do not harm the Group or the common interests of its shareholders, unless the terms of the transactions are equivalent to those of other general transactions.

Aside from the foregoing, the Company's Regulations of the Board of Directors stipulates that resolution of the Board is required before a Director conducts any competitive transactions, self-dealing transactions, or other transactions that involve a conflict of interest with the Company.

Transactions with related parties are disclosed in accordance with the Companies Act, the Financial Instruments and Exchange Act, and other applicable laws and regulations.

Meanwhile, the Audit & Supervisory Committee requires Directors to submit confirmation letters concerning their engagement in competitive transactions, self-dealing transactions, any other transactions that involve a conflict of interest with the Company, and transactions with shareholders under unusual terms of transactions, and reports the details thereof to the Board.

Supplementary Principle 2.4.1: Ensuring Diversity in the Core Human Resources

The Group considers diverse human resources who create new value and business as one of the keys for further growth of the Group. We actively and consistently recruit diverse personnel regardless of age, gender, nationality, and career backgrounds and promote their appointment to management positions.

In addition, the Group aims to develop its employees' skills based on the belief that the growth of employees will lead to the growth of the Company and, in turn, will contribute to the sustainable improvement of our corporate value.

  • For details: https://www.glory.co.jp/csr/society/human_resources/

Principle 2.6: Roles of Corporate Pension Funds as Asset Owners

The Company manages its corporate pension plan through the GLORY Group Corporate Pension Fund and a contract-type pension plan. Recognizing that cases where the management of pension fund reserves may affect its financial condition besides the stable asset formation of beneficiaries, the Company has assigned personnel trained and suited for the management of the pension fund reserves. In addition, the Company has established a system to ensure sound management of pension assets by incorporating the opinions of outside professionals where deemed necessary, through the committees regarding the corporate pension plan. Further, the status of the management of the pension fund reserves is reported to the Board on a regular basis.

Principle 3.1: Full Disclosure

  1. Corporate philosophy, Corporate Management Strategy and Management Plan

    The Company's corporate philosophy and values are available on its website. The Company's long-term visions and mid-term management plans are disclosed upon formulation on the Company's website and through the Tokyo Stock Exchange (the "TSE") and other media.

    • Corporate Philosophy and Our Values https://corporate.glory-global.com/groupinfo/philosophy/

    • Long-Term Vision and the Medium-Term Management Plan https://corporate.glory-global.com/ir/management/plan/

  2. Basic Views and Policy on Corporate Governance

    The Company's Corporate Governance Guidelines sets forth its basic views and policy concerning corporate governance of the Group.

    • Corporate Governance Guidelines

      https://corporate.glory-global.com/groupinfo/governance/

  3. Policy and Procedures for Determining Remuneration of Directors and Other Officers

    See the section (of) "Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods" under "II. 1. Directors' Remuneration" herein.

  4. Policy and Procedures for Appointing, Dismissing and Nominating Directors and Other Officers

    For the appointment of senior management from among Directors or nomination of candidates for Directors, the Company examines individuals based on such criteria as their extensive experiences in and out of Japan, depth of insight, ability and expertise for the expected roles, personalities, and other factors required to develop the corporate governance system and to contribute to the steady increase corporate value of the Group. Candidates for executive Directors are appointed from among individuals with extensive knowledge of the Group's domestic and overseas businesses or corporate operations. Candidates for Outside Directors are appointed from among individuals who have expertise in the areas of corporate management, law, finance, and accounting and are qualified to provide recommendations and advice on the management from broad perspectives.

    Candidates for Directors who are Audit & Supervisory Committee Members are appointed from among individuals who have experience, abilities, and necessary knowledge of finance, accounting, and legal matters required for audits and supervisions for the businesses that the Group is engaged in Japan and overseas. Specifically, the Audit & Supervisory Committee will include at least one individual who has sufficient knowledge of finance and accounting, and candidates for Outside Directors who are Audit & Supervisory Committee Members are appointed from among individuals who have a high level of independence from the Company as well as broad experience and extensive knowledge in the areas of law, finance, accounting, and corporate management.

    To ensure transparency and objectivity in the appointment of Directors and executives, the Company has established, as an optional advisory committee to the Board, the Nomination Advisory Committee, of which the majority of members are independent Outside Directors. Candidates for Directors who are not Audit & Supervisory Committee Members are determined by the Board (with the consent of the Audit & Supervisory Committee in the case of Directors who are Audit & Supervisory Committee Members), taking into consideration the advice from the Nomination Advisory Committee.

    In the event that any member of the senior management is deemed to no longer meet the criteria above, the Board determines, upon deliberation by the Nomination Advisory Committee, his or her dismissal from the position.

  5. Explanation regarding Appointment, Dismissal or Nomination of Directors

    The Company states reasons for appointing each candidate for Director in the convocation notices of its general meetings of shareholders. Further, in the case that the Board has determined to dismiss any member of the senior management from his or her position, the Company promptly discloses such information in accordance with the timely disclosure rules etc. set forth by the TSE.

    • Notice of Ordinary General Meeting of Shareholders https://corporate.glory-global.com/ir/meeting/

Supplementary Principle 3.1.3: Initiatives on Sustainability

Under the corporate philosophy of Building a more secure world through global collaboration and commitment to excellence, we intend to resolve social issues using the core technologies we have developed, and the advanced technologies designed to create new value, in our efforts to develop a sustainable society and improve our corporate value.

Derived from the corporate philosophy, the Group has formulated the sustainability policy: Contribute to the sustainable growth of society and promote measures to improve corporate value, and promotes initiatives with KPIs for the material sustainability issues identified in the areas of Environment, Society, Governance, and New Value Creation. The Sustainability Committee, chaired by the President, has been established directly under the Board, which regularly supervises the Committee and its activities including policy formulation, KPI setting, and implementation of initiatives.

In the area of Environment, we have identified Reduction of greenhouse gas emissions as our top priority issue to be resolved to achieve carbon neutrality by 2050 (i.e., net zero in Scope 1 and 2). To achieve carbon neutrality by 2050 (i.e., net zero in Scope 1 and 2), we promote initiatives to achieve the targets set according to a global standard of the SBT (Science Based Targets) and continue our information disclosure based on the TCFD (Task Force on Climate Related Financial Information Disclosure) recommendations.

The material issue identified in the area of Society is Respecting human rights. We strive to enhance our initiatives and corporate management in accordance with the Glory Group Human Rights Policy.

Human Capital

Securing and developing human resources that contribute to our business strategy and Promoting a pleasant work environment are the material sustainability issues identified in the area of Society. It is incorporated into our 2026 Medium-Term Management Plan as the HR strategy: Develop human capital as the source of competitive advantage. Here, we aim to create new value through "next-generation" business proposals and transform our solutions designed to address society's needs into an engine of our growth. Our initiatives are intended to build foundation for human capital development. To support the growth of individuals and the Group, we strive to develop DX specialists who lead the next generation of business, and to promote initiatives to develop a comfortable work environment for all through Health and Productivity Management etc.

Intellectual Property (IP)

The material issues identified in the area of New Value Creation are (i) Offering solutions and products that address society's needs, and (ii) Promoting R&D and innovation. IP investment is an essential element in our 2026 Medium-Term Management Plan "GLORY TRANSFORMATION 2026 - Shape the future with GLORY

-", which is driven under the basic policies of "Develop new revenue streams" and "Increase profitability of core business". As an engine for growth, we work to enhance our brand value through inventions and acquisition of IP rights, while promoting the use of IP rights in business strategies and implementing risk avoidance measures such as IP searches to avoid disputes.

  • Glory's Sustainability: https://www.glory.co.jp/csr/

  • Human Capital

    https://corporate.glory-global.com/csr/society/ (Sustainability - Society) https://www.glory.co.jp/ir/financial/security_report/ (Securities Report - Japanese only) https://corporate.glory-global.com/ir/financial/annual/ (Integrated Report)

  • Intellectual Property: https://corporate.glory-global.com/csr/development/

    Supplementary Principle 4.1.1: Scope and Content of Matters Delegated to the Management

    The Regulations of the Board of Directors stipulates the matters to be resolved by the Board, including matters concerning general meetings of shareholders and financial results, the Board and its Directors, company shares, management policies, important assets and borrowings, organizations and personnel affairs, the Group management, matters stipulated by laws and regulations and the Articles of Incorporation, and other important matters concerning the Group. The Board delegates certain decisions regarding executions of important operations to Directors.

    Certain business execution authorities with regard to matters out of scope of resolution as stipulated in the Regulations of the Board of Directors are delegated by the Board to Representative Directors, executive officers, or general managers of relevant departments as defined in the "Rules on Approval Authority".

    Principle 4.9: Independence Standards and Qualifications for Independent Outside Directors

    The Company requires each of the Company's independent Outside Directors to satisfy the Standards for Independent Outside Directors described in this report under "II. 1. Independent Directors", in addition to their compliance with the independence criteria set forth by the TSE.

    Supplementary Principle 4.10.1: Approach, Authority, and Roles, etc. regarding Independence of the Composition of the Nomination Committee and the Compensation Committee

    See "2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration Decisions (Overview of Current Corporate Governance System)" of "II. Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management" in this report.

    Supplementary Principle 4.11.1: Balance, Diversity and Scale of the Board of Directors

    The Company acknowledges the importance of ensuring the balance and diversity of knowledge, experience, and ability of the Board as a whole. The Company therefore ensure that the Board consists of (a) executive Directors who have extensive knowledge of the Group's businesses or corporate operations in and out of Japan and (b) Outside Directors who have expertise in areas such as corporate management, law, finance and accounting and are able to provide the management with valuable recommendations and advice from broad perspectives.

    As to the number of Directors, the Board consists of no more than ten (10) Directors who are not Audit & Supervisory Committee Members and no more than five (5) Directors who are Audit & Supervisory Committee Members to expedite the decision-making process and promote active deliberations. To ensure appropriate supervision of the Company's management, one-third or more of the Directors is independent Outside Directors who have credentials to contribute to the Company's sustainable growth and enhancement of its corporate value over the medium to long term.

    Skills required for the members of the Board are described in the Notice of the 79th Ordinary General Meeting of Shareholders.

  • Notice of Ordinary General Meeting of Shareholders https://corporate.glory-global.com/ir/meeting/

    Supplementary Principle 4.11.2: Directors' Concurrent Positions

    The Company discloses the status of Directors concurrently serving as officers at other listed companies through the convocation notices of the general meetings of shareholders, annual securities reports, corporate governance reports, or similar publications.

  • Notice of Ordinary General Meeting of Shareholders https://corporate.glory-global.com/ir/meeting/

    Supplementary Principle 4.11.3: Summary of Board Effectiveness Evaluation Results

    To strengthen the Board's functions, the Company conducts board effectiveness evaluations involving Directors' self-evaluations and analysis by the Board itself. Summary of the evaluation results is available on the Company's website.

  • Summary of the Board Effectiveness Evaluation Results https://corporate.glory-global.com/groupinfo/governance/evaluation/

Supplementary Principle 4.14.2: Policy for Training of Directors

The Company's basic policy is to provide Directors with necessary training regularly and as required for them to fulfill their expected roles and responsibilities.

Directors participate in in-house training and/or seminars organized by the TSE and other external organizations to acquire, update, and refine their knowledge and expertise. In addition, the Company provides Directors with factory tours and on-site visits etc. for them to develop better understanding of the Group's business, finance, and corporate structures. As necessary, Directors participate in workshops given by outside professionals such as lawyers and other subject matter experts.

Principle 5.1: Policy for Constructive Dialogue with Shareholders

The Company commits to the philosophy of "communicating with stakeholders and striving for appropriate information disclosure" defined in its Corporate Action Guidelines. Based on this philosophy, the Company strives to enhance the transparency of its management through prompt, accurate and fair means of providing the latest corporate information and to gaining a better understanding of its management policies and business