The Morinaga Group will enhance its corporate governance with the aim of maximizing corporate value and achieving perpetual corporate growth based on the basic policies of improving the health and efficiency of management, ensuring the reliability of financial reporting, providing timely and appropriate disclosure of information, complying with laws and regulations, and strengthening the trust and relationships with all stakeholders.
In accordance with the Rules for Decision-making Criteria, the Board of Directors, management meetings, individual directors, executive officers, division managers, and directors are all assigned specific responsibilities and authority.
Operating under the direct supervision of the company president, the Audit Department (which is responsible for conducting internal audits) comprises four (4) staff members who systematically audit all divisions, including subsidiary companies, and together with standing auditors conduct discussions with each division. There are four auditors, two of whom are external auditors. Of the two external auditors, one is a standing auditor, and all four auditors are male. In accordance with the Guidelines for Auditors, the auditors oversee the activities of the directors. In addition, standing auditors regularly meet with the Board of Directors and attend important management meetings in order to monitor and audit the activities of the directors. The accounting auditors meet with all auditors, and the auditing manager meets with the standing auditors on a regular basis or as necessary to exchange information and opinions while maintaining cooperation. The audit manager and standing auditor also attend meetings of the Internal Control Management Committee, which comprises members selected from the primary departments within the corporation, and regularly conduct discussions with members of this committee. The company has appointed Deloitte Touche Tohmatsu LLC as the accounting auditor.
Selection and compensation of company directors are decided by the Officer Appointment and Remuneration Committee and approved by the Board of Directors.
Compensation for auditors is determined through discussions amongst the auditors.
In order to maximize the company’s value and achieve perpetual corporate growth, we are committed to strengthening our internal control system and making management more efficient, increasing the reliability of business operations and ensuring effective audits and monitoring. To ensure that business operations are carried out appropriately, the Board of Directors endeavors to construct an effective internal control system and establish a system of compliance for both legal requirements and the Articles of Incorporation, and the Board relies on the auditors to monitor the effectiveness and functionality of the control system. Furthermore, a helpline has been established for both internal and external use for all related entities, including our subsidiary companies, as a means of gathering information related to compliance issues and implementing appropriate action.
Based on our awareness that compliance is a priority issue for all business activities, the Morinaga Group formulated the Morinaga Code of Conduct/Standards of Conduct in 2001. In 2008, the Morinaga Group Code of Conduct/Standards of Conduct was revised as the group-wide compliance management system.
Furthermore, we have created a Compliance Committee headed by the company president and are building and promoting compliance management. A helpline has also been established as a way to report compliance violations and consult about compliance issues. Consultation windows have been established at three points—within the company, labor union, and outside legal office—and efforts are being made to ensure the system becomes firmly established.
In order to diffuse and firmly establish an atmosphere of compliance, Morinaga displays the Morinaga Group Code of Conduct/Standards of Conduct on panels in each company office and also distributes booklets and cards to all employees. In order to increase compliance awareness, compliance training is provided as part of stratified training, such as training for new recruits and newly appointed managers, and training is also provided on a continual basis at the corporate head office and individual company offices. Furthermore, all employees complete a compliance questionnaire every year in order to provide understanding of the status of compliance at the company and obtain information that can be used in formulating responses in the future.
In order to address potential risks to group business activities, the Morinaga Group formulated the Rules for Total Risk Management in 2001 as part of the internal control system. The company analyzes and evaluates expected risks and implements preventative measures during normal periods.
In addition, we have created a Total Risk Management Committee headed by the company president to formulate and implement total risk management plans.
In the event of a crisis, we endeavor to swiftly evaluate and determine the situation, set up a Response Headquarters, disclose information, and implement any other necessary response measures to identify causes and implement measures to prevent a reoccurrence.
With regard to antisocial forces, we gather information on a regular basis from the relevant government agencies and organizations and have measures in place for the entire organization to respond swiftly in the event of an incident by cooperating closely with the police and other related agencies.
Within the Rules for Total Risk Management, the Morinaga Group has formulated the Guidelines for Natural Disaster Crisis Management and other guidelines, which are revised on a regular basis. These guidelines prescribe the measures for setting up a Disaster Response Headquarters and SCM (Supply Chain Management) Response Council to allow employees to recommence their activities as quickly as possible in the event of a disaster, as well as to set the standards for establishing a temporary head office if the company head office loses its functionality. Drills for setting up a temporary head office were carried out in January 2014, and a manual was compiled. We routinely conduct tests of the employee safety confirmation system at the corporate head office and other offices and work to ensure that all employees are thoroughly aware of evacuation procedures, secure the satellite telephones and other forms of communication, conduct regular drills, and stock emergency supplies. In addition, we are currently strengthening our IT system backup system through the construction of a DR (Disaster Recovery) site.
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