The Company shall work to improve the internal control system in accordance with the following basic policy for establishment of internal control system.
In order to ensure fair and appropriate corporate activities, the Company has thoroughly notified Nihon Kohden Charter of Conduct, which codifies the basic criteria for business conduct, and Nihon Kohden Code of Ethics and Conduct, which stipulates the way of conduct to be observed from the point of view of compliance with laws, to directors and employees by training and promotion activities.
The Compliance Committee and compliance officers at departments and Group companies promote the implementation of compliance.
The Company has established an internal compliance hotline for reporting and consultation in order to find and cure unfair practices as early as possible.
The Company stands against antisocial forces that threaten the order and safety of civil society, and has no relationship with them.
Information related to the execution of duties by directors are stored and managed appropriately during the storage period set for each information in accordance with Standards for Procedures for Requesting Deliberations and Making Decisions. Documents are stored and made available for inspection depending on recording media.
The Company has established the risk management system for managing risks associated with overall operations of the Company Group in accordance with Risk Management Rules in order to ensure the sound and appropriate business operations. The Company shall work to improve the effectiveness of the system.
The risk management department implements group-wide risk management, assigning responsibility for each risk associated with operational execution to specific departments.
In the event of an emergency, such as a natural disaster, emergency response measures shall be implemented with regard to internal rules such as BCP.
Meetings of the Management Council, at which directors and operating officers attend, are held once or twice a month aiming at prompt decision making and flexible business operation.
The Company has introduced an operating officer system that provides a clear segregation between managerial decision making and supervisory functions on the one hand and the execution of operations on the other.
The Company will endeavor to ensure the effective business execution by establishing internal rules to clarify the allocation of duties, authority, responsibility and execution procedures of each director, operating officer and council.
The Company has established the management system to ensure the proper business execution of the Company Group in accordance with the internal rules, assigning responsibility for the appropriate management of each Group company to specific departments, receiving the periodic report regarding the business performance and other important matters from each Group company, and requiring Group companies to obtain prior approval from the Company before conducting important matters.
The Internal Auditing Department is in charge of auditing the Company and Group companies.
The Company has established the internal control system to ensure the reliability of financial statements under the Financial Instruments and Exchange Act and will assess and improve the system continuously.
The Audit & Supervisory Committee Secretariat assists with the Audit & Supervisory Committee’s duties when the Audit & Supervisory Committee requests or instructs.
Personnel changes of the Audit & Supervisory Committee Secretariat shall require prior consent of the Audit & Supervisory Committee.
The Audit & Supervisory Committee Secretariat is independent from the directors’, excluding Audit & Supervisory Committee members, line of command when they work under the instruction of the Audit & Supervisory Committee.
Directors, excluding Audit & Supervisory Committee members, and employees of the Company Group shall promptly report to the Audit & Supervisory Committee concerning matters that may cause serious damage to the Company Group, material violations of laws and the Articles of Incorporation, unfair practices as well as results of internal audit.
The Audit & Supervisory Committee may request reports of directors, excluding Audit & Supervisory Committee members, and employees of the Company Group as necessary.
Directors, excluding Audit & Supervisory Committee members, or employees who report to the Audit & Supervisory Committee will not be subjected to disadvantageous treatment because of such report.
The Audit & Supervisory Committee audits the performance of the directors', excluding Audit & Supervisory Committee members, duties by attending the important meetings such as the Management Council.
Representative directors have periodic meetings with the Audit & Supervisory Committee and exchange opinions regarding challenges that the Company should deal with, the audit environment of the Audit & Supervisory Committee, and other important audit issues.
The Audit & Supervisory Committee shall maintain close contact and share information with the Accounting Auditor and Internal Auditing Department in order to ensure effective audit of the Company and Group companies.
The Company will promptly reimburse expenses invoiced by Audit & Supervisory Committee members that are deemed necessary for the execution of their duties in accordance with Auditing Standards Conducted by the Audit & Supervisory Committee.
