Ⅴ. Corporate Governance

A. Corporate Governance and Compliance Framework

ADIM which manages ADR’s assets, has established a corporate governance framework by setting up investment and compliance committees to oversee the execution of corporate governance and defined its commitments to its fiduciary duty.

With the framework in place, ADIM endeavors to manage risks, to comply to laws and regulations and ensure fair handling of transactions with conflict of interest,

Please refer here for details on the compliance framework.
Please refer here on measures to insure fair handling of transactions with conflict of interests.

1. Sustainability Committee & Sustainability Team

In order to systematically promote sustainability improvement activities, ADIM has established the Sustainability Promotion Committee, which is chaired by the Representative Director and consists of all directors and general managers and Compliance and Risk Management Officer and the Sustainability Practical Committee, which is composed of the practitioners of each department.

The Sustainability Promotion Committee meets twice a year to formulate sustainability goals and measures, identify and evaluate climate-related risks and opportunities, analyze and evaluate climate-related risks and manage them company-wide, and evaluate environmental performance and ESG by external organizations. ADIM are aiming to improve asset value over the medium to long term by implementing a PDCA cycle of monitoring results, confirming the degree of achievement of goals, and resetting goals for remaining issues and new issues.

In addition, the Sustainability Practical Committee is responsible for promoting various measures necessary to achieve the goals. Goals are decided by the Representative Director, who is the Chief Executive Officer of Sustainability, and the progress of goals and measures is reported to the Board of Directors and ADR Board of Directors once every six months.

And ,in April 2019, ADIM established a dedicated “Sustainability Team” to promote activities to improve sustainability.

The team has been established to run the Sustainability Promotion Committee and aims to improve the asset value of ADR over the medium and long term.

2. Management Fee Structure

The asset management fee shown on the table below paid from ADR to ADIM took effect from February 1, 2020.

It is because of simplifying the fee structure and strengthening the link between ADR’sperformance and unitholders’ interests to the amount of fees paid to the asset management company.

Asset Management Coupled to NOI*1and Adjusted EPU*2

*1 NOI=Gross Operating Income minus Gross Operating expense (excluding depreciation and loss from fixed asset retirement)
*2 Adjusted EPU=Net profit excluding AM Fee III / Number of investment units issued as of the closing date of the accounting term

*3 Adjusted FFO per Unit=(Net profit excluding AM Fee II + depreciation expense - gains on transfer of real estate + losses on transfer on real estate + impairment losses) / Number of investment units issued as of the closing date of the accounting term.

3. Directors and Officers Investment Unit Ownership Program

The number one management policy at ADIM is to place priority on ADR’s investment unit-holders’ interest and to endeavor to achieve long-term growth in investment unit-holders’ value. ADIM has made the asset management fee, which it receives from ADR, to be linked not only to the AUM and revenue but also to net profit per unit, thereby strengthening the alignment of interest between ADR’s unit-holders and ADIM. In August 2018, ADIM introduced an investment unit ownership program for employees. In September 2019,  ADIM has decided to introduce the program for directors and officers to strengthen our efforts on aligning the interests between ADR’s unit-holders and ADIM.

For details, please refer here.

ADIM executive compensation is linked to the degree of achievement of some ESG-related measures.

B. Anti-Corruption

1. Policy

ADIM recognizes that legal compliance is a matter of course, and that ADIM must continue to be an organization that is trusted by society, and ADIM have established an anti-corruption policy in our compliance manual and have a sound relationship with our stakeholders. It is stipulated that ADIM will not provide entertainment or gifts that may lead to social suspicion or distrust. Specifically, ADIM will thoroughly implement the following.

1. Do not engage in or participate in any form of corruption, including embezzlement, fraud, money laundering, embezzlement, and obstruction of justice.

2. ADIM will not provide money, services, conveniences or other benefits to civil servants or persons in a similar position, both inside and outside Japan, for the purpose of obtaining unfair profits.

3. ADIM will not provide money, services, convenience or other benefits to the officers and employees of private business partners for the purpose of obtaining unfair profits.

4. Do not request business partners to receive entertainment or gifts that exceed personal interests or common sense.

In addition, ADIM has established rules for prohibiting the provision of fraudulent profits and rules for outsourcing management, as well as prohibited acts and judgment criteria.

2. Management Structure

Internal Audit

ADIM has an internal auditor under the direct control of the president. Based on the "Internal Audit Regulations," the Internal Audit Office is responsible for all departments once a year regarding the status of compliance with laws, regulations, the Articles of Incorporation, and internal regulations, the procedures for executing duties, and the validity of the contents. ADIM also carry out unannounced inspections related to information management about twice in a year. A system audit of ADIM and major PM companies is conducted by an external third-party organization once every five years. The internal audit office is also evaluated by an external third-party organization once every five years.

If there are any indications or requests for improvement in the audit, the audited department will formulate an improvement plan and obtain approval from the ADIM Board of Directors. After that, the audit department conducts a follow-up audit and reports the improvement status to the board of directors.


Whistleblowing System

ADIM has set up "hotline counters" where all officers and employees can make direct reports at four internal counters, two parent company counters, and one independent third-party counter. By establishing this system, ADIM will protect inside information providers, establish an appropriate processing mechanism, and promptly detect and correct fraudulent acts including bribery, which will lead to strengthening of compliance management. The operational status of the internal information provision system is reported to the Compliance Committee and the Board of Directors once a year.

The Compliance Officer will immediately investigate the facts when inside information is provided. The results of the survey will be reported to the President  and the General Manager of the Administrations and Public RelationsDivision, and corrective measures and recurrence prevention measures will be decided through discussion. As a result of the discussion, if the disposition of the person subject to the inside information is deemed appropriate, the disposition will be made in accordance with the employment regulations or the regulations of the board of directors.

In addition, in accordance with the Whistleblower Protection Act, it is prohibited to take disadvantageous treatment such as retaliation against inside information providers, and it is possible to report anonymously.


Supervision by the Board of Directors, etc.

At ADIM and ADR, compliance is regarded as one of the most important management issues and respond as follows.

The status of risk management, etc. is reported to both of the Board of Directors as appropriate according to the content.

And ADIM formulates a compliance program every term as a concrete practice plan for the compliance manual, which is the code of conduct. The program is established after deliberation by the Compliance Committee and approval by the Board of Directors. The verification results of the achievement status, etc. will be reported to the Compliance Committee and the Board of Directors.

In addition, the results of internal audits and the operational status of whistleblowing system are also reported to the Compliance Committee and the Board of Directors.

The Compliance Committee, the Board of Directors, and the Board of Directors of ADR can also propose opinions, etc. regarding these reports as necessary, and the efforts for improvement are in a position to function effectively.

Furthermore, the Sustainability Promotion Committee identifies and evaluates climate-related risks and opportunities, formulates strategic plans for important issues, and confirms the results of measures based on the climate change and resilience policy.


Education for Employees

At ADIM, each officer and employee understand the purpose of laws, social norms, business rules, etc. with a high compliance mindset, and conducts continuous education and enlightenment regarding compliance so that they can comply with them.

In the training and information distribution on compliance for all officers and employees, various themes related to compliance with laws and internal regulations are taken up, and among them, the compliance manual and internal information provision system are disseminated, and anti-corruption including bribes is prevented.

3. Performance

Implementation of compliance training, etc.

ADIM holds compliance training such as general training for all officers and employees, training for new employees at the time of joining the company, and training by department and rank. Until now, ADIM have taken up socially demanding themes such as "legal amendment compliance", "power harassment / sexual harassment prevention measures", and "personal information management" in a timely manner, and continuously aimed to improve compliance knowledge of officers and employees and foster a mindset.

・General training: In FY2020, for all officers and employees (not only regular employees but also temporary employees, etc.), "Principles for customer-oriented business operations", "Revised Personal Information Protection Law", "Revised Company Law", "Company Law" In addition to conducting training on "compliance-related efforts", "sustainability" and "harassment" (6 times in total), ADUN also conducted a web test on compliance every other month.

・Training at the time of joining the company:For new employees (including mid-career employees, temporary employees, etc.), ADIM carry out training and confirmation tests a total of 9 times on what you should understand when working at ADIM.

・Training by department / rank: ADIM carries out rank-based training every year for newly appointed managers (FY2020 results: management training for managers: 18 hours, management training for next managers: 14 hours, instructors Training: 16 hours)

・Others: Information on compliance (including matters related to anti-corruption), such as internal rules, revised laws and regulations, and cases of other companies, is distributed as appropriate.

In addition, as part of group compliance, the parent company conducts a "compliance patrol training" once a year, using actual cases that occurred at group companies as teaching materials, with the aim of raising compliance awareness and preventing the occurrence of compliance cases including bribery.


Achievements of board meetings and compliance committees


Number of times (times)

Average attendance rate

Bord of Directors (ADR)



Bord of Directors (ADIM)

14 97.4%

Compliance Committee

14 97.4%

Non-compliance cases

In FY2020 (April 2020 to the end of March 2021), ADIM did not have any cases of non-compliance requiring reporting to the authorities or disposition based on the employment regulations or the board of directors regulations.


Presence or absence of cases of violation of anti-corruption policy

At ADIM, there have been no cases of violations of anti-corruption policies and no officers or employees have been disciplined or dismissed for this reason.


Payment of corruption fines and settlements

ADIM has never paid any fines or settlements for corruption.


Fine payments and settlements identified as ESG issues in audited accounting

At ADIM, there are no fine payments or settlements identified as ESG issues in audited accounting.


Donations to political parties and political funding organizations

ADIM complies with laws such as the Political Funds Control Act and the Public Offices Election Act. I have never paid any political contributions.


Disclosure of rewards

The executive compensation of ADR officers is determined as follows based on the Investment Corporation Agreement. In addition, please refer to the fiscal report for the specific amount of compensation.

(1)The maximum monthly remuneration for executive officers is 1 million yen, which is determined by the board of directors as an amount that is judged to be reasonable in general price trends and wage trends.

(2)The maximum monthly remuneration for supervisors is 500,000 yen per person, and the board of directors decides the amount as it is judged to be reasonable in general price trends and wage trends.

C. Disclosure

In order to ensure disclosure transparency, in addition to statutory disclosures, ADR will disclose information it deems useful and valuable on timely bases in an easy-to-understand form. Specifically, ADR will actively disclose information on its website in addition to disclosing on the Tokyo Stock Exchanges disclosure system (TDnet).

Please click here to read the disclosures.
Please refer here for information on investor meetings and conferences.

2020 Investor Relations Activities

Types of Meetings/Conferences

No. of meetings attended

Individual Investor Conference Attendance


Institutional Investors

Fiscal Period Conference Call


Conference Attendance


One-on-one Meetings with Institutional Investors


D. Legal and Regulatory Restrictions

  1. The executive director and the supervisory directors of ADR are not allowed to transact ADR units for itself or for a third-party in accordance to ADR’s bylaw on insider trading.
  2. If the executive director and the supervisory directors of ADR commit illegal or improper acts or make improper profits, they are punishable not only by law but by accordance to ADR’s bylaw on claw back rule on compensations.
  3. Rights of unit-holders are defined in the “Act on Investment Trust and Investment Corporations” and “Articles of Incorporation of Investment Corporation”. For detail please refer to ADR’s financial report (in Japanese only) submitted to the Financial Services Agency.
  4. The compensation to the directors of ADR is restricted by the Articles of Incorporation of ADR, in which payment rules are laid down.
  5. Due to the legal system, J-REITs cannot issue class shares. ADR does not issue class shares, and all issued investment units have one investment unit and one voting right.
  6. Partners of ADR's auditor cannot be in charge of auditing for more than 5th FP (2.5 years) under the Certified Public Accountants Act.

E. Sponsor's Sustainability Policy

ITOCHU Corporation the main sponsor of ADIM, has defined its direction on promoting sustainability in the “Basic Policy of Promotion Sustainability” and has formulated the “Sustainability Action Plan” which identifies important issues on sustainability. And they promote sustainability by holding a review board semi-annually to put the program under the PDCA cycle system.

For details, please refer here.