MaterialityStrengthen corporate governance and compliance
From the General Meeting of Shareholders for FY2021, we shifted to a monitoring-type management system in which the President & CEO complements the seven outside directors with advanced expertise and management experience. We are now focusing on medium- to long-term strategic issues and achieving corporate growth while receiving appropriate involvement and advice.
Corporate Governance
Basic Approach to Corporate Governance
Our basic approach to corporate governance is that management can check the status of compliance with laws, regulations, and the Articles of Incorporation, and that the management system is maintained to preserve this approach. In order to achieve our corporate philosophy and management goals, we believe that establishing a management system that can direct the awareness and business activities of all officers and employees will lead to fairer and more transparent management, which will serve the interests of all stakeholders.
Overview of Corporate Governance
We have adopted the system of corporate governance that adopts an Audit and Supervisory Committee. We believe that this system can enhance the transparency and objectivity of the Board of Directors as well as further strengthen corporate governance by developing a system for auditing and supervision by the Audit and Supervisory Committee and increasing the composition and diversity of outside directors serving on the Board of Directors. We also believe that this system (monitoring model) will speed up decision-making related to business execution by promoting separation between business execution and supervision and by delegating authority to executive officers supervised by the President & CEO.
Board of Directors, Audit and Supervisory Committee, and Nomination and Remuneration Committee
The Board of Directors (eight directors, seven of which are outside directors) supervises (monitors) the execution of duties based on decisions on basic management policies and other important matters of the Group and reports on business execution, based on the belief that it is a forum to discuss basic management policies and medium- to long-term strategic issues. Additionally, the three Audit and Supervisory Committee members, who are outside directors, constitute the Audit and Supervisory Committee, which confirms the execution of duties by directors by attending meetings of the Board of Directors and conducting audits as needed in the course of daily operations. We have also established the Nomination and Remuneration Committee, the majority of whose members are independent outside directors.
Corporate Management Committee
The Corporate Management Committee, which is comprised of executive directors and executive officers, supports the decision-making of the President & CEO, discusses matters to be resolved by the Board of Directors, and examines other important management matters delegated by the Board of Directors.
Compliance Framework
In accordance with the Compliance Policy, we have established an Internal Control Committee chaired by the President & CEO and composed of external experts, and others, for the purpose of establishing a compliance framework and preventing violations of laws and regulations. Through regular meetings of the committee, necessary improvement measures and company-wide awareness measures are taken across Group companies, with the status reported to the Board of Directors as appropriate. To conduct audits of the compliance practices and internal control system of each division, we have established the Internal Audit Department under the direct control of the President & CEO. This occupies a position independent of the business execution divisions.
We have put into place a system to report the results of audits to the Audit and Supervisory Committee and the Internal Control Committee as appropriate. We have established a hotline for reporting and consultation on compliance violations and other matters to quickly identify information related to violations and resolve the situation.
Risk Management System
We established the Risk Management Regulations and the Internal Control Committee with the purpose of identifying all risks that threaten the continuous development of the company and to establish a risk management system. Using risk maps and formulating improvement measures, the Internal Control Committee has established a system for appropriate risk management, such as identifying, analyzing, and evaluating risks that are important to the Group’s management. We established the Internal Audit Department under the direct control of the President & CEO to conduct periodic operational audits, request improvements and provide guidance to audited departments, and report the results of audits to the President in a timely manner.
In addition, the Internal Audit Department, Audit and Supervisory Committee members, and the accounting auditors work closely with one another by exchanging information as necessary to eliminate risks, and the Internal Audit Department regularly reports to the Internal Control Committee on risks.