Sustainability ESG Management: Governance / Internal Control System

Status of Internal Control System and Risk Management System development

System for ensuring that Directors and employees execute their duties according to laws and regulations and the Articles of Incorporation

The Company has established a “Code of Conduct” and “Compliance Management Regulations” to ensure that Directors and employees comply with laws and regulations, the Articles of Incorporation, other social norms. In order to thoroughly implement these, a Compliance Committee supervises the whole organization, provides education for Directors and employees on the code of conduct, etc., and has set up an internal reporting desk. The Internal Audit Department audits whether the compliance system is functioning effectively.

Matters related to the storage and management of information as Directors execute their duties

取Information related to the execution of duties by Directors is recorded in documents, etc., which are stored and managed according to the “Basic Regulations on Information Security” and “Document Management Regulations.” Directors and Audit & Supervisory Board members are able to access these documents at any time.

Regulations and system for managing risk of loss

The Company Group has established a risk management system for the various risks surrounding the Group based on our “Risk Management Regulations.” The Risk Management Committee formulates risk management policies and confirms that risk reduction is thoroughly implemented throughout the organization while every department implements control activities through risk inspections and internal audits. In addition, the Company will quickly determine a policy for dealing with any risks identified through control activities as well as any new risks that appear.

System for ensuring that Directors execute their duties efficiently

To ensure the efficient execution of duties by Directors, in addition to monthly board meetings, extraordinary board meetings are convened as needed for making decisions on important matters specified in laws and regulations and on management. Moreover, in addition to revising and deleting “Regulations of Administrative Authority” and decision-making regulations, we are managing Company operations based on proper and efficient systems for execution of duties such as by establishing systems for improving the efficiency of company-wide operations through the use of information technologies. We have also established a system for promoting quick management decisions and execution of duties by principally holding management meetings every week to check on target development and the progress of responses to issues.

System for ensuring proper operations by the Company Group including the Company and its subsidiaries

The Company has entrusted affiliated divisions of the Company with the authority and responsibility of managing affiliate companies according to the “Regulations on Division of Duties,” etc., and provides guidance on internal control of affiliated companies in collaboration with related departments.
Directors or executives of the Company are appointed as officers of affiliated companies to ensure the proper execution and supervision of business operations. Business operations are reported and discussed with affiliated companies to share information and collaborate on business operations for ensuring that these are being executed properly. The Internal Audit Department conducts internal audits of the Company and its affiliates, and reports the results to the Board of Directors and Audit & Supervisory Board (members).

System for appointing relevant employees as assistants, etc. when requested by the Audit & Supervisory Board (members), and matters related to the independence of those employees from the Directors, etc.

Departments assisting with the duties of the Audit & Supervisory Board (members) and persons in charge of such assistance are appointed, and the Audit & Supervisory Board (members) may request necessary matters for the execution of audits to the relevant departments and persons in charge of assistance. Additionally, the person in charge of assistance who receives requests necessary for the execution of the audit by the Audit & Supervisory Board (members), does not receive instructions or orders about this from Directors.

System allowing Directors and employees to report to Audit & Supervisory Board members, and system for reporting to the Audit & Supervisory Board

Matters that are to be reported to the Audit & Supervisory Board (members) are determined based on discussions between Directors and Audit & Supervisory Board members, and matters that have a major impact on business management, and the implementation status and contents of internal audits are reported without delay.

Other systems for ensuring that audits are performed effectively by Audit & Supervisory Board members

Principally, all Audit & Supervisory Board members attend meetings of the Board of Directors, receive reports and explanations, etc. about how Directors are executing their duties, and when necessary, monitor and supervise the execution of duties by Directors while giving feedback. It is also possible for them to contact an accounting auditor or an attorney when necessary. Such costs and other fees for audits are borne by the Company.
Audit & Supervisory Board members hold regular meetings with the President and CEO, Accounting Auditor and Internal Audit Department in order to exchange opinions.

System for eliminating anti-social forces

The Company has determined “Regulations for Responding to Antisocial Forces” in order to ensure that there is no connection including ordinary business transactions with antisocial forces who threaten the order and safety of society, and that no monetary or other profit are provided to such groups. Moreover, we take a firm stand against unlawful requests, and will work closely with external agencies including police departments.