To earn the trust of its various stakeholders, the OKI Group recognizes ensuring sustainable growth and increasing corporate value over the medium to long term as its most important management priorities. To this end, we are working to enhance corporate governance based on our fundamental policies, including "enhancement of management fairness and transparency," "timely decision-making processes," and "full compliance and fortification of risk management."
OKI is responding to the principles prescribed in the Corporate Governance Code of the Tokyo Stock Exchange. However, the following principles are not implemented for the following reasons set out below.
[Principle 1-4: Cross-Shareholdings]
The Company is gradually reducing its cross-shareholdings, taking into overall consideration such factors as enhancing the medium- to long-term corporate value of the Company and the share-issuing companies.
The Board of Directors reviews cross-shareholdings each year. The Company considers quantitative and qualitative factors when determining the suitability of its holdings of each stock.
We will further consider whether the benefits and risks associated with cross-shareholdings are commensurate with the cost of capital.
In exercising its voting rights on cross-shareholdings, the Company categorizes agenda items as follows. We make decisions and exercise voting rights based on exercise criteria.
[Principle 5-2: Establishing and Disclosing Business Strategies and Business Plans]
The Company's capital policy is to invest for sustainable growth, to maintain a sound financial structure that allows for such risks, and to provide stable and continuous returns to shareholders.
In the "Mid-term Business Plan 2019" up to FY2019, we have presented targets for profitability but not for such measures as capital efficiency. In formulating the next medium-term management plan, the Company will continue to consider appropriate indicators, including cost of capital, when reviewing the business portfolio and allocating management resources in individual segments.