Management Policy

Corporate Governance

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Basic Policy

The basic policy of the Company is to comply with related laws and regulations as a matter of course, and to improve the corporate values and provide sufficient shareholder returns by fulfilling its responsibilities to the stakeholders including shareholders, end users, business partners, employees and local communities from the point of view of corporate governance. The Company causes all executives of the Group to make well known the importance of compliance and encourages them to judge and conduct with their common sense, and the Company sees the corporate governance as an important issue for its management in order to improve the fairness and transparency of the management as well as to carry out its decision-making and execute businesses properly and promptly.

Overview of the Corporate Governance Structure

The Company became a holding company as of October 1, 2017 and changed its corporate structure from a company with audit & supervisory board to a company with audit and supervisory committee.

The meetings of the Board of Directors, consisting of directors (excluding directors who are Audit and Supervisory Committee members) and directors who are Audit and Supervisory Committee members, are in principle held every three months and held as necessary to discuss and resolve important matters as well as report related matters as appropriate.
The meetings of the Audit and Supervisory Committee, consisting of three directors who are Audit and Supervisory Committee members and qualified for outside directors, are in principle held every month and held as necessary to deliberate and report necessary matters as an organization which is in charge of audit and supervision.
The Internal Audit Division, which is directly under the President, implements internal audit in cooperation with Audit and Supervisory Committee members and make periodic reports thereon.

The relations between the organizations and internal control of the Company are as described below.

The relations between the organizations and internal control of the Company

Reasons for Adopting a Corporate Governance System

The Company has changed its corporate structure to a company with audit and supervisory committee. The Company appointed directors (excluding directors who are Audit and Supervisory Committee members) as well as three directors who are Audit and Supervisory Committee members and qualified for outside directors as Audit and Supervisory Committee members. The Company regularly holds meetings of the Board of Directors and the Audit and Supervisory Committee.

The Company considers that various stakeholders including shareholders expect that the Company shall realize high transparency and mobility in its management by enhancing its corporate governance through exhibiting full function of the Board of Directors and the Audit and Supervisory Committee by means of strengthening the supervisory function against the Board of Directors.

In addition, the Company regularly holds the Group Management Committee meetings where various opinions and information are collected from the Group at large with an aim to improve the Group corporate governance as a whole.

Status of Organizing the Internal Control System

The structure of the internal control system is as described below.

  1. Systems related to the retention and management of information pertaining to the execution of the duties of a director
  • Documents and other information pertaining to the execution of the duties of a director shall be retained and managed properly in accordance with the internal regulations of the Company.
  1. Rules and other systems related to management of the risk of loss
  • With regard to various risks in relation to compliance, disasters, environment, quality and information security, each division which is in charge of such risks shall establish regulations and guidelines, implement trainings, and prepare and distribute manuals as necessary. In the event that any new risk occurs, the Company shall promptly appoint a director who is responsible for such risk.
  1. Systems to ensure that the execution of the duties of a director is performed efficiently
  • The Company shall ensure that the duties of a director are executed efficiently by organizing the internal regulations of the Company such as an administrative authority system and a human resources management system.
  • The Company shall establish annual budgets and performance management for the entire company and each division, and operate them properly in order to improve efficiency of the execution of duties and to ensure the profitability management.
  1. Systems to ensure that the execution of the duties of a director and an employee comply with laws and regulations and the articles of incorporation
  • The Company shall establish guidelines for actions to comply with laws and regulations and the articles of incorporation, and appoint a director who is in charge of compliance. The Company shall exert its efforts to organize a compliance system across the entire company and understand the issues relating to the system.
  • Acknowledging that any relationship with anti-social forces leads to the violation of laws and regulations or other rules, the Company shall organize a system where the Company will not have any transactional or other relationships with anti-social forces, adopting a firm stance against them to refuse any transactions with them.
  1. Systems to ensure the propriety of business activities in a group of enterprises comprised of the Company and its subsidiaries
  • The Company shall establish its code of conduct to be shared with the Group to ensure that the internal control including the compliance system functions efficiently in the Group companies.
  • The Company shall exert its efforts to organize a compliance system across the entire Group and understand the issues relating to the system.
  • The President of the Company shall regularly hold meetings with the management of Group companies in order to share information.
  • The Company shall regularly hold reporting meetings with its subsidiaries regarding management and financial status in order to properly understand the management and financial status of its subsidiaries and to ensure the propriety of their business activities.
  • The Company shall apply the risk management system stated in "b. Rules and other systems related to management of the risk of loss" to the entire Group to comprehensively manage risks of the Group as a whole.
  • Regarding decision-making by its subsidiaries, the Company shall instruct them as necessary to ensure that the business activities of the subsidiaries are carried out systematically and efficiently in accordance with the regulations of the Board of Directors, rules on administrative authorities and other rules and regulations of the subsidiaries by clarifying the authorities and responsibilities of officers who execute the business of the subsidiaries.
  • The Internal Audit Division of the Company shall audit the Company and the Group companies in accordance with the "Management Regulations for Related Companies" and other rules and regulations, and make them report the result of the audit to the President and the Audit and Supervisory Committee of the Company in order to prevent its subsidiaries from violating laws and regulations or the articles of incorporation as well as take necessary measures against issues found by such audit, if any, timely and properly.
  1. Systems to ensure reliability and propriety of financial reports
  • The Company and its subsidiaries and other related companies shall organize efficient and proper internal control system and establish a system to operate such internal control system in accordance with the Financial Instruments and Exchange Act and other related laws and regulations in order to ensure reliability and propriety of financial reports as well as continuously check the proper function of the system and take necessary remedies.
  1. If the Audit and Supervisory Committee has requested that a director and an employee be appointed to assist with the duties thereof, systems related to the employee
  • The Audit and Supervisory Committee may request the Internal Audit Division to conduct an audit, if it deems necessary.
  • If the Audit and Supervisory Committee has requested that a director and an employee (Audit and Supervisory Committee staff) be appointed to assist with the duties thereof, necessary staff shall be appointed.
  • The Audit and Supervisory Committee may order the Audit and Supervisory Committee staff to conduct necessary matters for the audit.
  1. Matters related to the independence of the directors and employees under the preceding item from directors (excluding a director who is an Audit and Supervisory Committee member) and measures to ensure the execution of instructions made by the Audit and Supervisory Committee to such directors and employees
  • In regard to personnel changes or evaluation of the employees of the Internal Audit Division and the Audit and Supervisory Committee staff, the opinions of the Audit and Supervisory Committee shall be respected.
  • The Company shall establish a system where an employee who is in charge of assisting the duties of the Audit and Supervisory Committee will exclusively obey the directions or orders from the Audit and Supervisory Committee if such employee receives instructions from the Audit and Supervisory Committee concerning the duties.
  1. Systems for the directors (excluding directors who are Audit and Supervisory Committee members) and employees of the Company and the Group companies to report to the Audit and Supervisory Committee and other systems related to reporting to the Audit and Supervisory Committee
  • The Company shall establish a system where Audit and Supervisory Committee members and the Audit and Supervisory Committee staff attend the meetings of the Group Management Committee and other internal meetings of the Company to be timely informed of important management information, and shall circulate important minutes and requests for approval to the Audit and Supervisory Committee each time.
  • The Audit and Supervisory Committee may request directors (excluding directors who are Audit and Supervisory Committee members), employees and other personnel of the Company and directors, employees and other personnel of its subsidiaries to report to it, when it deems necessary.
  • The reporting status of the whistle-blower system shall be promptly reported to the Audit and Supervisory Committee.
  • The results of internal audit conducted by the Internal Audit Division shall be also reported to the Audit and Supervisory Committee.
  • The Company shall establish a system to ensure that a reporter is not treated adversely due to his/her report to the Audit and Supervisory Committee.
  1. Other systems to ensure that audits by the Audit and Supervisory Committee are performed effectively
  • The Company shall establish a system where the Audit and Supervisory Committee is independent from the President of the Company to enable the Audit and Supervisory Committee to audit properly and effectively.
  • The Company shall establish a system where the President of the Company and the Audit and Supervisory Committee hold meetings regularly to enable the Audit and Supervisory Committee to exchange opinions and information.
  • The Company shall establish a system where the Audit and Supervisory Committee and the Financial Auditor can cooperate smoothly.
  • The Company shall establish a system where the Internal Audit Division and the Audit and Supervisory Committee hold reporting meetings regularly or as necessary so that the Audit and Supervisory Committee is informed of legality and validity of the duties of directors (excluding directors who are Audit and Supervisory Committee members), employees and other personnel.

Status of Organization of a Risk Management System

With regard to various risks in relation to compliance, disasters, environment, quality and information security, the Company has established a risk management system where each division which is in charge of such risks shall establish regulations and guidelines, implement trainings, and prepare and distribute manuals as necessary. In the event that any new risk occurs, the Company promptly appoints a director who is responsible for such risk.