Corporate Governance

Corporate Governance

1. Basic Policies for Corporate Governance

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.

(1) Positioning of Stakeholders
To enable us to fulfill our social responsibility in all areas of our business activities, we are committed to maintaining and further developing strong relationships with all stakeholders, who sustain our company, and achieving coexistence with society and sustainable growth in accordance with corporate principles and the code of conduct.
(2) Management Monitoring Functions
We are committed to building an effective internal control system by strengthening the management monitoring functions of the Board of Directors, appointing outside directors and auditors, requiring attendance by standing auditors at important meetings, and placing the Audit Department under the direct control of the president.
(3) Consistency in Thinking within the Entire Group
While respecting the independence of our subsidiaries, we endeavor to maintain close ties amongst Group member companies.

2. Corporate Governance System

Management of Corporate Affairs

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.

<Board of Directors>
The Board of Directors carefully makes decisions related to legal matters, important business operations based on the principles of managerial judgment, and oversees business operations. The Board consists of ten members: two members are outside directors and nine are male and one is female.
<Management Meetings>
Management meetings are attended by members of the Board of Directors and standing auditors. At these meetings, decisions are made after deliberations regarding important management issues and matters that have been referred to the Board of Directors. To insure the practicality and efficiency of the decisions of the Board of Directors and management, detailed deliberations are conducted in advance by various committees, which act in advisory roles. For example, the IR Committee has been established to discuss disclosure of information, and the Officer Appointment and Remuneration Committee has been established to discuss personnel matters and compensation for directors.
<Executive Officer System>
Morinaga has adopted an executive officer system in order to improve its agility in responding to changes in the business environment and to speed up the decision-making process. Under this system, the executive authority and responsibilities for daily operations with respect to strategic corporate activities are assigned to executive officers to ensure the efficiency of management and clarify management responsibilities.
<Board of Executive Officers>
In order to ensure the execution of corporate operations, a Board of Executive Officers consisting of the company president, executive managing directors, and executive officers has been established.

Auditing System

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.

Officer Selection and Compensation

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

Compensation for auditors is determined through discussions amongst the auditors.

Corporate Governance System

Corporate Governance System

Internal Controls

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.

Compliance / Risk Management

Promotion of Compliance

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 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.

Compliance Management SystemCompliance Management System

Increasing Compliance Awareness

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.

Risk Management Policies/System

To respond to the potential risks of any business activity, the Morinaga Group established the Total Risk Management Rules in 2001 as part of the internal control system to categorize and evaluate possible risks to implement preventive measures in normal times.
The Total Risk Management Rules provides various guidelines such as guidelines for natural disaster crisis preparedness to establish measures for an early resumption of business in case of crisis. From FY 2017, the BCP (business continuity plan) are further enhanced to set up a BCM (business continuity management: continuous improvement plans to continue operations in case of disaster or accident, or if interrupted, the operations will be resumed as fast as possible).
In the event of a crisis, the situations will be evaluated and determined promptly to take the necessary actions for the establishment of a task force and information disclosure, as well as to investigate the cause and implement measures to prevent the recurrence of such an incident.
Morinaga designated the person responsible who prevents unjustified demands to express that we act resolutely against antisocial forces. We also collect information from related government authorities to work closely with these authorities when necessary and implement swift countermeasures across the entire organization.

GET ADOBE READER

Acrobat Reader is required to enable PDF files to be displayed.
If you are unable to display a PDF file, please click on the button at left to install Acrobat Reader.

Human Rights Policy

MORINAGA Group Human Rights Policy

As a member of the international community, the MORINAGA Group respects fundamental human rights, undertaking sincere business activities that do not tolerate human rights violations.

1. Respect for human rights and prohibition of discrimination
We respect fundamental human rights, and will not discriminate in any way based on a person’s race, gender, nationality, religion, ideology, age, or physical characteristics, or for any other reason.
2. Prohibition of harassment
We will not participate in power harassment, sexual harassment, or any other behavior whatsoever that injures human dignity.
3. Consideration of safety/hygiene
We will give consideration to safety and hygiene in the workplace, endeavoring to ensure a comfortable work environment, and respect employees’ fundamental human rights.
4. Building and maintenance of good labor-management relations
We will respect the right to freedom of association and collective bargaining and other fundamental rights, building and maintaining good labor-management relations.
5. Elimination of child labor/forced labor
In our various business activities, we will not accept child labor, forced labor, or any other unfair labor practices.

MORINAGA Group Human Rights Policy (established May 2018)