System to Ensure the Appropriateness of the Company’s Operations and Operational Status of the System
The Board resolves matters concerning the basic design and operation of the internal control system specified in the provisions of the Companies Act and the Ordinance for Enforcement of the Companies Act, as a system to ensure appropriate business operations of the Company, and promoting sound management and business operations by enhancing internal controls.
System to Ensure the Appropriateness of the Company’s Operations
- ①System for ensuring that the directors, managing officers, and employees of our company and subsidiaries execute their duties while they comply with laws and regulations, and the Articles of Incorporation
- ②System for storing and managing the information related to the execution of duties of our directors
- ③System for the rules, etc. that are related to the management of the risk of losses of our company and subsidiaries
- ④System for ensuring that the directors of our company and subsidiaries effectively execute their duties
- ⑤System for reporting to our company about the execution of duties of the directors, etc. of subsidiaries
- ⑥System for relating to the employees who are asked to support auditors' duties by the auditors
- ⑦Matters relating to the guarantee of the independence of the above-mentioned employees from the directors and of the effectiveness of the orders given by the auditors
- ⑧System for having the directors, managing officers, as well as employees of our company, and the directors, auditors, managing officers, as well as employees of subsidiaries, or the persons receiving a report from any of the above-mentioned persons report to our Audit & Supervisory Board and its members and other systems for reporting to auditors
- ⑨Matters relating to payment for auditors for executing their duties and other systems for ensuring that audits are effectively carried out by the auditors
Operational Status of the System to Ensure the Appropriateness of the Company’s Operations
Compliance Initiatives
The Company established an annual compliance program ("the program") and confirms the status of progress through the Compliance Committee, which convenes four times a year. In the program, regular compliance training for employees and the distribution of compliance-related news ensure thorough compliance, including severing any ties with anti-social forces. Compliance training is also separately provided for officers.
In addition, the internal reporting system or Compliance Hotline ensures prompt detection and resolution of issues as well as to protect the whistleblower. Reports are regularly made to the Board of Directors concerning the status of operations and reporting. Moreover, since FY2018, we added an independent outside contact, as well as one female manager as an internal contact, with the aim of improving the effectiveness of the internal reporting system.
In FY2023, we conducted trainings on insider trading and anti-social forces.
Efforts to Manage the Risk of Losses
The Company’s Risk Management Committee convenes every quarter and conducts appropriate risk management in response to fluctuations in risk by assessing the predetermined monitoring items. We also conducted two Business Continuity Plan (BCP) drills in FY2023 as part of our BCP preparedness. In order to establish a system enabling more effective response procedures within our BCP, members of the emergency response headquarters as well as some of their substitutes took part in the training.
Initiatives for Ensuring Appropriate and Efficient Business Execution
In addition to regular Board of Directors meetings held each month, the Company also holds extraordinary Board of Directors meetings as required to ensure effective decision-making and the oversight of business execution. We are also striving to ensure efficiency, for example by consolidating common operations in the Group to a shared service company.
Initiatives to Ensure Appropriate Group Operations
The Company’s subsidiaries apply for approval and make reports on important issues based on the Regulations for Business Management of Affiliated Companies. Furthermore, the Corporate Audit Department conducts audits with appropriate intervals and Business Planning and Management Department regularly provides guidance to the subsidiaries.
Companies that have recently become subsidiaries receive individual guidance on areas including risk management based on the Company regulations.
Initiatives to Ensure the Effectiveness of Audits by the Audit & Supervisory Board Members
The Company has an Audit & Supervisory Board, which meets more than once a month in principle, to make decisions on, make reports, and discuss important issues related to auditing. In addition, the Audit & Supervisory Board members ensure the effectiveness of audits by attending various meetings and reviewing the minutes of meetings.
The Audit & Supervisory Board Office was established to create a system for promptly responding to requests from Audit & Supervisory Board members.