Corporate Governance

The Basic Policy on Corporate Governance sets out the AEON Group's (hereafter "AEON") basic stance on corporate management and corporate governance and pure holding company AEON CO., LTD.'s (hereafter the "Company") policy concerning its corporate governance system and serves as a guideline for all corporate activities. Institution, amendment, and abolition of this policy shall be subject to approval of the Company's Board of Directors.

Ever since its founding, AEON has remained customer focused and adhered to the conviction that unstinting contribution to customers and local communities and realization of employee happiness are the timeless mission of the retail industry.

In keeping with these values, AEON has set forth the Foundational Ideals of "pursuing peace, respecting humans, and contributing to local communities, always with customers as our starting point" and used it as a guideline for all corporate activities.

As expressed in the Foundational Ideal, AEON firmly believes that retailing is an industry to promote peace, humanity, and local communities. To remain a thriving corporate group that fulfills this mission, we are committed to continuous innovation, with customers as our starting point.

Peace cannot be achieved without active and conscious engagement, whether it be in recovering from war and disaster or in maintaining and promoting living in peace. Our conviction is grounded in the real-life experience of Takuya Okada, Honorary Chairman and Senior Advisor to the President. After the Second World War, Mr. Okada witnessed a customer in line at a store, holding a flyer and weeping tears of joy, saying, "The war is really over," and he came to realize that the existence of retailing was a symbol of peace. From this realization, he decided that peace was a prerequisite for retailing to exist, and that retailing must contribute to the maintenance of peace.

Peace is more than just the absence of war and violence. It encompasses not only peace of mind but also resilience in the face of wars, disasters, and other hardships. Even in the 21st century, we continue to witness wars and face natural disasters such as earthquakes and extreme weather events more frequently than ever. This calls for us to rethink the value of peace now. Peace cannot be given by itself. Peace can only be maintained through our active and conscious engagement.

AEON will never do anything that contradicts peace. AEON will never take part in any such actions or activities. Our aim is to make a positive contribution to peace.

As for humans, by believing in and respecting each person, their abilities and aspirations will flourish, and by connecting with others, they feel much happier in their lives.

Honorary President Okada called the retailing sector a "humanistic industry." This means respecting the "human way," which includes having respect for each person’s individuality, dignity, and autonomy. It also means believing in their potential and encouraging them to grow and become better humans through work and learning. However, it is difficult for humans to grow alone, and it is through "human connections" that we can become better humans together with others. It is both a realization of happiness and a pursuit of norms among people. In short, retailing is an industry of people’s happiness and norms.

Enriching local communities requires us to respect the diversity and independence of each region, and to constantly meet and care for their specific needs.

Retailing is by nature a region-based industry that flourishes with the local communities. To maintain the richness and well-being of regions and the local communities within them, it is vital to take care of them continuously. This is one of the important roles of retailing. As regions and local communities increasingly become more important in the future, AEON will actively contribute to their prosperity by developing products tailored to each region and promoting the welfare of the local people.

AEON is committed to actively engaging in peace efforts, supporting human happiness and norms, and contributing to the prosperity of local communities. These ideals form the foundation of putting "customers as our starting point," which places the needs and preferences of our customers first at the center of our operations.

Putting our customers first means that we do not put ourselves first, that is, we do not think and act for our own convenience. On the contrary, we always put our customers first and act with the highest standards of integrity, which is the foundation of AEON. We will use this as a mirror to reflect ourselves and as the standard for every decision and action made by all AEON People. Even when it becomes tempting to prioritize our company's or personal interests or convenience, we must firmly resist and overcome such temptations to preserve our unwavering dedication to our customers.

To achieve this, AEON must be a corporate group that continues to innovate.

Ensuring a company’s growth and survival is of paramount importance, but without constant innovation, it will decline and eventually perish. Even if maintaining the status quo is stable and comfortable, a company should not be complacent but continuously change and improve itself. Having the foresight and insight to constantly look ahead to changes in our customers and various social changes, it is essential for us to continue innovating. All AEON People are dedicated to anticipating the evolution and changes in our customers’ lifestyles and the needs of society.

AEON has transformed from a family business to a corporation, and then to an industry. It has always preserved a dynamic corporate culture. However, as society changes faster and faster, we are most worried about losing the required innovative and entrepreneurial spirit and becoming stagnant like many large companies. We understand that static equilibrium, where the status quo continues without change, will not last at all. The only way to avoid being overtaken by newer innovators is for AEON to remain the largest and most advanced innovator. It is our firm determination to be an organization that constantly renews itself by keeping its founding spirit and staying ahead of its time.

AEON will act with the firm belief that by embodying and practicing these ideals, we can contribute to the maintenance and development of peace, humans, and local communities.

On the basis of this recognition, we have set forth the basic concept of values, management stance and corporate governance to be emphasized in AEON's corporate governance in the following Basic Stance on Corporate Governance and have enacted and published the Basic Policy on Corporate Governance, with the Basic Stance at its core, in order to continue into the future to practice management grounded in a long-term perspective built on the Foundational Ideal and AEON's DNA of innovation.

The Company has adopted the “company with a nomination committee and other committees system” and has established a Board of Directors, Audit Committee, Nomination Committee, and Compensation Committee.

At AEON, to ensure that the Board of Directors will effectively perform the management supervision function, four out of the seven members of the Board are outside directors. All the four outside directors have been registered with the Tokyo Stock Exchange as independent directors, indicating that the Company has no interest relationship with them. Outside directors also comprise a majority of the Nomination Committee and the Compensation Committee (two out of the three members, respectively) as well as the Audit Committee (all three members), and each of the Three Committees is chaired by an outside director. These are a measure to ensure management transparency.
Outside directors are selected properly based on two internal regulations: Outside Directors Nomination Standards that describe requirements for supporting the Foundational Ideals and having built appropriate management experience and expertise; and Outside Directors Independence Standards that define independent positions to be able to make impartial decisions against the management.

Since the Company has Nomination Committee, etc., the Board of Directors and the Audit Committee play a central role in the management monitoring function. All three members of the Audit Committee are outside directors, further clarifying their independence from business execution.
The Audit Committee audits business execution by Directors and Executive Officers, prepares audit reports, and decides the content of proposals for submission to the General Meeting of Shareholders concerning the appointment, dismissal, and non-reappointment of the independent auditor. The Audit Committee strives to improve its function through assistance with its duties provided by the Internal Audit Department, which is independent from the operating divisions, and cooperation with the external independent auditor.
Mr. Kotaro Ohno has extensive experience and insight in legal and compliance matters as a lawyer who has served as the Vice Minister of Justice, the Chief Public Prosecutor, and the Prosecutor General.
Mr. Takashi Tsukamoto has served as a corporate manager at a major financial institution, has been internationally active in the field of banking and finance, and has considerable knowledge concerning finance and accounting.
Carrie Yu belongs to CPA associations in various countries. She has international expertise in accounting and the retail sector gained primarily from serving as a leader of retail and consumer group in Asia Pacific region at PricewaterhouseCoopers (PwC), and has knowledge concerning international accounting.

Regarding our internal audits, as an organization that assists the Audit Committee, AEON have set up the "Management Audit Office", which is an organization independent of the business execution department and consists of 29 full-time employees, conducting internal audits related to group management and also cooperating with accounting auditor, assisting the duties of the Audit Committee and carrying out the secretariat work of the Audit Committee. The consent of the Audit Committee is also required for the transfer of the Management Audit Office.
The Internal Audit Department dispatches members to attend important meetings, receives reports from the Executive Officers on their performance of duties, and reports to the Audit Committee. Also, the status of internal audits and internal control relating to the Group and the content of reports made to the internal reporting system, which covers all Group employees, are periodically reported to the Audit Committee.