Corporate Governance

Initiatives to Strengthen Corporate Governance

Nihon Kohden recognizes that its most important responsibility to stakeholders is continually fulfilling its corporate social responsibilities through sound business activities.
At the same time, Nihon Kohden believes that corporate governance, in particular, compliance and risk management, is key to fulfilling this responsibility.
To that end, Nihon Kohden strives to strengthen and enhance its corporate governance as a top priority.

Corporate Governance Structure

A corporate governance structure with management soundness, transparency, and efficiency is important. In addition to a framework where directors supervise management and make decisions while operating officers handle business execution, Nihon Kohden appointed outside directors with a high degree of independence to supervise management.

Strengthening Our Risk Management System

Approach to Risk Management

To ensure the sound and smooth operation of business, Nihon Kohden has established a management framework to prevent risks in overall business operations and has prescribed methods for dealing with risks when they occur.

Risk Management Framework

The Board of Directors is responsible for establishing basic policies concerning risk management in overall Group business operations, and ascertaining the improvement and promotion status of the Group-wide risk management framework. The Risk Management Supervisory Division is tasked with improving and promoting the overall risk management system of the Nihon Kohden Group.
The risks present in the execution of business activities have been classified into nine types, and the Risk Management Divisions and Risk-Related Committees have been assigned to each risk type. The Risk Management Divisions provide training and support to operating divisions and subsidiaries with regard to their assigned risk types, and report the system improvement and promotion status to the Risk Management Supervisory Division. The Risk-Related Committees report to the Board of Directors and Management Council on matters including assessments of management system appropriateness, validity, and effectiveness for related risk types.
In addition, the Internal Auditing Department report to the president on risks discovered during audits.
Risk Management Framework

Risk Types

The Risk Management Regulations, which set forth the basic policies for risk management, classify risks into the nine types of risk shown in the following table.
Risk Description
Compliance Risks Risk of losses due to failure to comply with laws and regulations, etc.
Quality Control Risks Risk of losses due to problems related to the safety or reliability of our products or services
System Risks Risk of losses due to failure, malfunction or unauthorized use of networks and computer systems which used in internal IT infrastructure, products and services
Disaster and Accident Risks Risk of losses due to interruption of business operations caused by disasters or accidents
Environmental Risks Risk of losses due to occurrence of environmental pollution, etc., caused by insufficiency in reduction of environmental impact or prevention of environmental pollution
Financial and Accounting Risks ・Risk of losses due to change in value of assets held, which is caused by changes in market environment and credit standing of business partners, etc.
・Risk of losses due to inappropriate accounting practices
Information Disclosure Risks Risk of losses due to inappropriate disclosure of information
Strategic Risks Risk of losses due to incorrect business strategies
Human Rights Risks Risk of being liable for compensatory damages or decrease in its corporate value due to human rights violations by the Company or its business partners

Self-Assessment of Risk Management

Nihon Kohden’s offices, subsidiaries, and the departments in the head office conduct self-assessment of risk management regarding compliance and others using divisional inspection sheets. The Risk Management Supervisory Division verifies the progress of risk management system implementation and future responses, and reports the results of the self-assessment to the Board of Directors. Overseas subsidiaries also report to the Board of Directors on the development and progress of their risk management systems and measures to strengthen the implementation. In addition, the Company provides education on risk management to its executives and employees to ensure that they are fully aware of the importance of risk management.
In FY2021, in light of the cyber-attack against our European subsidiary, we worked to strengthen information security for the entire Group by establishing a ransomware/malware countermeasure and monitoring system, as well as conducting targeted email attack response training and e-learning for employees. In addition, we have strengthened our response to compliance risks by clarifying standards for business partner due diligence at overseas subsidiaries and hiring compliance specialists qualified as attorneys in Europe and the U.S. as Local Compliance Officers.

Response in the Event of a Risk

The response to be taken when a risk occurs have been set forth in the regulations established for each risk type.

Response as a Medical Equipment Manufacturer

As a medical equipment manufacturer, Nihon Kohden focuses on product risk control to avoid accidents related to its products. In addition to the rules for normal operation, we have stipulated the rules and reporting line in case of an accident. In order to prevent an accident and communicate quickly when an accident takes place, we have established a system to collect a broad range of information from clinical practice quickly and accurately as well as a framework for disseminating information.

Disaster Risk Management

Basic Approach

Medical devices on which people’s lives depend need to be supplied continually and smoothly even in the event of a large-scale disaster. As a medical device manufacturer, Nihon Kohden has formulated a Business Continuity Plan (BCP) to ensure the continued supply of products and services while ensuring the safety of employees and their families in the event of a large-scale disaster. We also conduct periodic company-wide education and training in relation to disaster preparedness and the BCP.

Business Continuity Plan (BCP)

In March 2015, Nihon Kohden drew up a business continuity plan to ensure that even if the Company suffers damages and losses due to a major earthquake, the provision of products and services can continue or be quickly restored. The BCP sets forth organizational charts, initial response manuals in the event of a disaster, subsequent restoration plans following an initial response, operational procedures, and disaster mitigation measures to be taken under normal conditions for each business site. In February 2020, we also drew up an initial response manual for a possible flood disaster.

Business Continuity Management (BCM)

To ensure that the business continuity plan will function effectively during a disaster, Nihon Kohden sets the BCP Operating Regulations and established the BCP Operation and Management Committee tasked with operating and managing the BCP. To ensure the effectiveness of the BCP during a disaster, the Committee conducts periodic Company-wide education and training. In addition, the BCP is reviewed periodically to make ongoing improvements.

Nihon Kohden’s Basic BCP Policy

  1. Protect employment while placing a priority on the lives and health of employees and their families
  2. Fulfill our responsibility to supply products and deliver services to customers, and endeavor to maintain a healthcare structure
  3. Support customers and contribute to local communities
  4. Maintain close coordination with affiliate companies and minimize the impact on the management of both parties

Safety Confirmation System

Nihon Kohden rolled out its safety confirmation system in 2009. The safety confirmation system enables us to quickly ascertain the safety of employees and their families after a disaster as well as ascertain the extent of the damage and implement measures to restart business operations. During a disaster, an email is sent to all employees in the affected region. Responses to this email are monitored on a dedicated web page. To ensure access to a communication method, Nihon Kohden deploys satellite phones that are not bound to the normal telecommunications networks in each of its principal business locations in Japan.

Disaster Preparedness Kits

Disaster Preparedness Kits
Nihon Kohden provides a disaster preparedness kit to each of its employees in Japan. This is a portable bag containing essential supplies for an earthquake, typhoon or other natural disaster.
Each Nihon Kohden site also maintains food and water rations in preparation for emergencies.

Response to COVID-19 Pandemic

Nihon Kohden has established a response headquarters to address COVID-19, and has been conducting business in accordance with the basic policies: (1) Ensuring health and safety of employees at work and their families. (2) Fulfilling our responsibility to supply products and services to maintain the medical system. In accordance with the Ministry of Health, Labor and Welfare’s “new lifestyle” and with the Keidanren (Japan Business Federation)’s Guidelines for Preventing the Spread of COVID-19, we have established a set of behavioral guidelines (“Guidelines”). The main contents of the Guidelines are as follows:
  • Protect the health and safety of employees by requiring daily temperature measuring, mask wearing, frequent hand-washing, gargling and disinfection.
  • Continue to promote staggered commuting and telecommuting (work from home at least 3 days a week under a declared state of emergency).
  • Recommend holding meetings, events and training online.
  • Secure social distancing and refresh the air at fixed intervals.
  • Limit domestic/overseas business trips to under unavoidable circumstances only. Refrain from private international trips for the time being.
  • Continue to adhere to the Company’s activity manual when visiting medical institutions for sales, service activities and IT systems delivery and when lending/repairing medical devices.
As the policies and guidelines of the national/local governments are expected to change as appropriate, depending on the status of the COVID-19 pandemic in the future, we will review the Guidelines as necessary.
Nihon Kohden continues to prioritize the prevention of infection inside and outside the Company and safety of employees and their families, and will continue to ensure the stable supply of medical devices and services needed by patients and healthcare professionals around the world as a medical device manufacturer.

Information System Risk Management

Basic Policy

Information-related technologies and environments are continually changing. New ways of using information along with new risks emerge on a daily basis. While we promote the utilization of highly convenient information technology to improve business efficiency, we also undertake various measures in response to changing conditions to safeguard confidential company information and personal information from leaks.

Initiatives to Ensure Information Security

To protect the personal information and important confidential information of all stakeholders including customers, patients, business partners, and employees, we have established regulations concerning personal information and IT utilization.
An ICT Committee prescribes the rule concerning IT utilization.
We have also deployed members of the IT support personnel in operating divisions and subsidiaries to disseminate rules to employees, as well as to provide guidance and support.

Employee Education

Nihon Kohden conducts periodic training for employees to disseminate information on rules concerning IT utilization and ensure that compliance with the Act on the Protection of Personal Information has taken root and that internal rules are widely known and taken root.

Obtaining Third-Party Certification

To further enhance information security, Nihon Kohden has also obtained outside certification. We obtained PrivacyMark certification in July 2005, and obtained Information Security Management System (ISMS) JIS Q 27001 (ISO / IEC 27001) certification in January 2015; the scope includes management and operation of remote service facilities for Nihon Kohden Group system products.

We  obtained PrivacyMark certification from the Japan Institute for the Promotion of Digital Economy and Community (JIPDEC) in July 2005.
JIS Q 27001 (ISO / IEC 27001) certificate JIS Q 27001(ISO/IEC 27001)certificate
We also obtained Information Security Management System (ISMS) JIS Q 27001 (ISO / IEC 27001) certification in January 2015; the scope includes management and operation of remote service facilities for Nihon Kohden Group system products.

Registration item Registered content
Certificate number IS 617365
Scope of registration The operation and management associated  with remote maintenance service
Location Nishiochiai office
Tokorozawa office
AS Kansai Division
Original resistration date January 19, 2015
Last renewal date December 25, 2020

Human Rights Risk Management

Basic Approach

To appropriately manage human rights risks, such as unfair discrimination or harassment, poor working environments, unfair wages, excessive work, slave labor, forced labor, and child labor, we established the Nihon Kohden Group Human Rights Policy and Human Rights Policy Rules in December 2020.
In FY2021, as part of our efforts to strengthen the promotion of sustainability management, we conducted a questionnaire survey on the environment, human rights, quality, and governance at each company of the Nihon Kohden Group, as well as among our suppliers in Japan and internationally. We also confirmed the status of human rights efforts, identified relevant issues, and formulated a three-year road map.

 Respect for Human Right