The Company has strengthened corporate governance to increase the transparency of management and to create a more equitable, efficient and sound company. We will improve corporate governance with the aim of winning the support of all our stakeholders, including shareholders, customers and employees, and increasing our enterprise value.
Corporate Governance System
The Company has an Audit & Supervisor Board. Audit & Supervisor Board and its members, as an independent organ, audit the directors' performance of their duties.
Of the four Audit & Supervisory Board Members, three are outside Audit & Supervisory Board Members, and they sufficiently fulfill the function of external monitoring and supervision of management through recommendations and advice from an objective point of view, based on their knowledge and experience. In addition, the Company endeavors to enhance and improve the effectiveness of supervision of management and the transparency of decision-making by the Board of Directors by appointing more than one highly independent outside director. As these measures have put created a corporate government system to increase the management transparency of the Company and pursue fairness, efficiency and soundness, the Company has adopted the current system.
The Corporate Governance Structure concerning decision-making regarding the company's management and execution, supervision, and the like is as follows:
Board of Directors
The Board of Directors consists of eight directors and makes decisions on items specified in laws and regulations or in the company's constitution, as well as important decisions on the company's management policy, and also supervises the execution of duties by the directors. By appointing three outside directors among its eight directors, the Company encourages appropriate decision-making by the Board of Directors and further strengthens its oversight of the execution of operations.
In principle, the Company's Board of Directors meets once a month, with extraordinary meetings held as necessary.
To respond appropriately to changes in the business environment, the term of office of directors is one year.
The Executive Officer system was enhanced since June 24, 2014 in order to accelerate decision-making on management and to clarify duties and responsibilities by separating the supervisory function and the function for the execution of operations, and to make the execution of operations more flexible.
The Executive Officer executes of the bussiness of the Company in accordance with decisions of the Board of Directors, based on delegation of the Board of Directors.
In order to accelerate decision-making and achieve flexible management, the Management Committee consists of specified executive officers including the President, and generally meets twice or more a month. Based on the basic policy determined by the Board of Directors, the Management Committee sets a basic policy for the execution of overall operations throughout the company, and directs and instructs the execution of operations.
Project Deliberation Committee
In order to accelerate final decisions on important issues and enhance deliberations, the Project Deliberation Committee holds investigations and discussions from a company-wide perspective and offers recommendations to the decision-maker before the final decision is made by the decision-maker specified in the rules on authority vested in an office. The Project Deliberation Committee generally meets twice or more a month.
Internal Control & Compliance Committee
In order to evaluate overall potential risks in our company, pursue the effectiveness and efficiency of operations, and secure the reliability of financial reporting, and in view of the importance of compliance in a company, the Internal Control & Compliance Committee has been established.
The CSR Committee formulates a policy for company-wide activities as required on a variety of issues concerning Corporate Social Responsibility (CSR), including social contribution and environmental protection, and also enhances the PDCA cycle for the promotion of CSR.
Audit ＆ Supervisor Board
The Company has an Audit & Supervisor Board. Audit & Supervisor Board and its members, as an independent organ, audit the directors'performance of their duties. Four members including three outside receive reports directors and employees on the performance of their duties as required, attend meetings of the Board of Directors, Management Committee, Project Deliberation Committee, Internal Control and Compliance Committee, and otJubnher important meetings and committee meetings, and audit the performance of duties by directors.
Internal Auditing Department
An audit charter is established and internal auditing is performed for each division and consolidated subsidiary in order to secure the appropriateness of accounting records and monitor the appropriate execution of operations.
Initiatives as a Corporate Group
Kanematsu Group holds meetings for the Presidents of the group companies, where the top management of companies in the Group meets twice a year and as required to share information on group-wide management. With these activities, we seek to achieve a thorough mutual understanding and a strong common awareness of corporate governance.
We have built an internal control system in order to evaluate overall potential risks in our group, pursue the effectiveness and efficiency of operations, compliance with laws and regulations concerning business activities and the protection of assets, and secure reliable financial reporting. In addition, the Internal Control & Compliance Committee has been established to advance the construction of the internal control system effectively and efficiently.
Concerning internal control on financial reporting, we prepare, operate, audit, and improve internal control by constructing a system to ensure the appropriateness of the financial reporting of the Kanematsu Group in accordance with the internal control report system specified in the Financial Instruments and Exchange Act.
We have designated a division in charge for each of the potential risks that may occur in operations including market risk, credit risk, investment risk, and country risk based on the rules on authority vested in an office, and we formulate company rules and detailed enforcement regulations and an operation guide to strive to keep our personnel informed through training and the like. In addition, an across-the-board committee and the like are established as required to control risks.
In order to evaluate the overall potential risks in our company, pursue the effectiveness and efficiency of operations, and secure reliable financial reporting, the Internal Control & Compliance Committee has been established as an across-the-board organization.
In order to minimize business risks, we have built a company ringi system (a system for reaching a decision by using a document circulated to all members concerned) based on the rules on authority vested in an office. Concerning major investments and loans, we have established a committee to deliberate investments and loans and undertake comprehensive investigations from the perspective of a variety of risks.
Concerning crisis risks in operations when a serious problem occurs, including natural disasters, we have formulated a rule and a course of action, building an appropriate management system.
Information Management System
With regard to information management, Kanematsu set standards for the storage, archiving, and destruction of accounting records and balance sheets, contract documents for the company's basic rights and duties and deeds on assets, and other equivalent documents. In addition, with a view to information maintenance and management as important assets of the company and as compliance for personal information protection, we have established rules on information security management and are seeking to enhance it.
With regard to information security in our information system, in terms of preventing the leakage of important information, we have established rules on information security management and have established a standardized norm for the usage of PCs, a network, and e-mail in order to protect company and personal information. In addition, we constantly review the basis for the system that enhances the security level and undertake maintenance and operations to secure the necessary and appropriate security level.
In view of the importance of compliance by a company, the Internal Control & Compliance Committee has been established to enhance the compliance system.
We have prepared a compliance handbook that will work as normative guidelines for the Company, including Group companies, and we strive to enhance our understanding of compliance with education and training to provide a thorough understanding of sensible behavioral ethics.
In addition, we have introduced a hotline system that enables employees to directly report to and consult with the Internal Control & Compliance Committee or an outside lawyer, and we have formulated operating rules for the hotline.
The Company has set "responding to anti-social forces with a resolute attitude and having no relationship whatsoever with them" as one of the matters to observe in its compliance. The Company is in close touch with the police under normal circumstances to eliminate anti-social forces by sharing information as a member of the Tokuboren of the Metropolitan Police Department. In the event if receives an unreasonable demand from anti-social forces, the Company has also developed a system to respond in cooperation with external institutions such as the police and lawyers, positioning the Personnel & General Affairs Department as a unit to adopt a company-wide response and gather information.
Our company discloses important management information on our company swiftly and accurately to all stakeholders including shareholders, employees, clients, institutional investors, analysts, and the media to promote appropriate and highly transparent management.
In addition to timely disclosure to the financial instruments exchange, we disclose information on our website and also aggressively promote investor relations (IR), including holding regular company information sessions and meetings for institutional investors and analysts.