Basic policy for establishment an internal control system
Basic policy for establishment an internal control system
We will set forth the management philosophy, risk management rules, compliance rules, and other rules concerning the compliance system as standards for our directors and employees to follow in compliance with laws, regulations, and social norms. In addition, the Board of Directors shall endeavor to establish an internal control system and a system for legal compliance by us and our subsidiaries to ensure the execution of business by us and our subsidiaries is carried out properly.
The storage and management of information relating to the execution of duties by directors shall be kept in an appropriate manner and for an appropriate period of time in accordance with the document management rules and shall be maintained in a condition that can be accessed by directors.
The Risk Management Committee, chaired by the director in charge of the Administration Division, shall supervise the risk management of the Company and its subsidiaries in accordance with the risk management rules. The Risk Management Committee analyzes and evaluates risks to us and our subsidiaries, continuously monitors perceived risks, and regularly reports to the Board of Directors on the status of activities. In addition, in the event of a risk that may have a significant impact on management, the Risk Management Committee shall consider countermeasures and make recommendations to the Board of Directors. In the event of an emergency, the Risk Management Committee shall establish a system for promptly communicating information and giving directions.
Regular meetings of the Board of Directors shall be held every month, and extraordinary meetings of the Board of Directors shall be held as necessary to make important management decisions and supervise the execution of business by the directors. In addition, management meetings composed of executive directors and division general managers are held weekly to conduct preliminary deliberations on matters to be discussed by the Board of Directors. In addition, matters to be decided by the Board of Directors are communicated to each division, and the status of business execution by each executive director and division general manager is monitored.
The internal auditors, who report directly to the President and Representative Director, shall, in accordance with the rules for internal audits, audit the status of business execution by employees of the Company and its subsidiaries and ensure the appropriateness of business operations.
The Board of Directors shall dispatch our officers and employees as directors of subsidiaries to establish a group governance system.
In addition, based on the rules governing the management of affiliated companies, the Corporate Planning Office, which is mainly supervising the subsidiaries, shall develop a system for receiving reports on important management matters from subsidiaries.
The Audit and Supervisory Committee may request necessary assistance for audit operations from an employee in charge of internal audits or the Administrative Division. When assisting the duties of the Audit and Supervisory Committee, said employees shall comply with the instructions and orders of the Audit and Supervisory Committee and shall not be directed by the directors. In addition, the Audit and Supervisory Committee shall conduct personnel evaluations of the said employees (limited to those related to audit assistance operations) and the approval of the Audit and Supervisory Committee shall be required for personnel changes.
Directors (excluding directors who are Audit and Supervisory Committee Members), auditors, and employees of the Company and its subsidiaries shall promptly and appropriately report to the Audit and Supervisory Committee or directors who are Audit and Supervisory Committee Members not only statutory matters, but also matters that may have a material impact on the Group, the status of the implementation of internal audits, and other matters.
The Audit and Supervisory Committee may, whenever it deems necessary, request reports from the directors (excluding directors who are Audit and Supervisory Committee Members), auditors, and employees of the Company and its subsidiaries.
The Company stipulates protection of whistleblowers in the rules for internal reporting and prohibits directors, auditors, and employees of the Company and its subsidiaries from giving unfavorable treatment on the grounds of the report set forth in the preceding paragraph.
Directors who are Audit and Supervisory Committee members may attend meetings of the Board of Directors and other important meetings as necessary to grasp the process of important decision-making and the status of business execution of the Company, and may inspect documents related to business execution and request explanations from executive directors and important employees. In addition, the Audit and Supervisory Committee may utilize experts such as attorneys at law and tax accountants if necessary for conducting audits, and the Company shall bear the costs thereof. If a director who is an Audit and Supervisory Committee Member requests advance payment of expenses with regard to the execution of his/her duties, we shall promptly respond except in cases where it can be proved that the expenses, etc. pertaining to such a request are not necessary for the execution of the duties of the director who is an Audit and Supervisory Committee Member.
To ensure the appropriateness and reliability of financial reporting, necessary systems shall be established at the Administrative Division, the effective functioning of control over operational processes pertaining to financial reporting shall be regularly assessed, and any deficiencies shall be corrected as necessary. The process and results of the evaluation and the state of improvement shall be supervised by the Board of Directors.
We and our subsidiaries shall always maintain an awareness of risk management and take a resolute stance as an organization against antisocial forces that pose a threat to social order and safety. In responding to anti-social forces, we will cooperate with external specialist organizations, such as police-related organizations and attorneys, to collect information, and the entire organization will respond to ensure the safety of employees.