Basic way of thinking
We aim to continuously increase corporate value and implement the basic philosophy of "realizing the happiness of all people involved in Nichiban.” To this end, we will develop and operate a management system and internal control system, conduct efficient, sound, and highly transparent management, and promote initiatives related to corporate governance to become a trusted, ideal company.
The company has adopted a company with a board of corporate auditors, and has appointed multiple outside corporate auditors as members of the board of corporate auditors so that they can appropriately supervise and manage the status of execution of duties in group management. In addition, as IR activities for investors and shareholders, we hold financial results briefings, provide business reports and provide various information, such as financial information, through our website, etc. Through these measures, we endeavor to maintain effective relationships with each stakeholder.
Overview of corporate governance system
The board of directors of the company is composed of nine members, including three outside directors, and has introduced an executive officer system for business execution. The company has adopted a corporate auditor system, and the Board of Corporate Auditors is comprised of four members (including two outside corporate auditors). The Internal Audit Office (consisting of three members) has been established under the direct control of the president.
Status of internal control system development
The board of directors, in principle, holds regular meetings once a month, and other meetings as necessary, to determine matters stipulated by law and important management-related matters and supervise the status of business execution.
Audit & Supervisory Board members attend board of directors meetings and other important meetings and audit the execution of duties by directors from an objective and independent standpoint.
The Internal Audit Office oversees overall business-related operations in accordance with the internal rules, "internal audit rules," and conducts periodic audits of accounting, business, and efficiency including subsidiaries to discover defects that should be avoided in management to increase management efficiency and to conserve corporate assets.
Basic policy on establishing internal control systems
1.System to ensure that directors and employees perform their duties in compliance with laws and the articles of incorporation
- 1)To ensure that the execution of duties by directors and employees complies with laws and regulations and the articles of incorporation, an Internal Control Committee chaired by the president has been established to oversee the establishment and operation of the company's internal control system and take necessary measures such as maintenance of the system and checking of the operation.
- 2)The Internal Auditing Office conducts audits in accordance with the internal auditing rules, etc., and when it is found that the execution of duties by directors and employees is at risk of loss due to violation of laws and regulations, the articles of incorporation, or other reasons, the representative director and the report to an Audit & Supervisory Board member.
- 3)Establish a “Nichiban Group Ethics Violation Consultation Desk” with internal personnel and external legal counsel as direct recipients of information, to protect whistle blowers, maintain transparency, and respond appropriately to consultation/reporting cases. In addition, the entire group has established a system that includes the establishment of an "internal reporting rule" that clearly states that the person who consulted or reported will not be punished due to the report. We comply with internal regulations, such as "Nichiban Ethics" and "Compliance Rules", and strive to detect violations or the possibility of such violations at an early stage.
2.System for storage and management of information related to directors' execution of duties
Regarding the preservation and management of information related to the execution of duties by directors, establish a system to store and manage information appropriately and reliably in a highly search-able state so that it can be browsed as required by directors and corporate auditors. Review the system and develop rules according to the requirements.
3.Rules and other systems for managing the risk of loss
- 1)The department in charge of general affairs comprehensively manages the risk of loss based on the “risk management rules,” and establishes a company-wide risk management system, develops rules, checks the operation status, and takes necessary measures, such as appropriate communication, as a company-wide supervision department.
- 2)For each risk of loss (quality, finance, etc.), each department in charge of the risk takes necessary measures, such as establishing a risk management system and confirming the operation status, based on the “risk management rules”.
- 3)In the event of a crisis for the group, such as a large-scale disaster, an emergency response headquarters will be established promptly based on the Business Continuity Plan (BCP) to minimize losses and recover quickly.
4.System to ensure that directors execute their duties efficiently
- 1)The board of directors meets once a month as a basis for ensuring that directors execute their duties efficiently, and other meetings are held as needed. In addition, a management strategy meeting, chaired by the company's representative director, will be held twice a month to discuss basic management strategies, policies and various measures in advance, and to promote faster and more efficient management activities. In order to further strengthen the functions of the board of directors, the executive officers meeting, which is attended by all executive officers, is held once a month to confirm basic and important matters related to business execution.
- 2)With regard to business execution based on the decisions of the board of directors, the person responsible for business execution, the scope of responsibility, and the details of the procedure are specified in the “organization rules”, “rules for authority”, and “rules for approval procedures”.
5.A system to ensure the appropriateness of operations in the corporate group consisting of the company and its subsidiaries
- 1)To ensure the appropriateness of operations in the corporate group consisting of the company and its subsidiaries, the presidents of each subsidiary make regular business reports to the executive committee. In addition, the board of directors of the company, while respecting the independence of the management of each group company, promotes cooperation among the entire group, and aims to ensure the consistency of business operations of the entire group and to execute efficiently. The company shall establish a "company management regulations" and conduct preliminary consultations on important matters that are determined to have a significant effect on the assets and profits and losses of each subsidiary.
- 2)In order to ensure the appropriateness of operations in the corporate group consisting of the company and its subsidiaries, the group will maintain and improve internal controls, such as ensuring compliance at subsidiaries and ensuring the same accounting standards; management in accordance with "management rules". Also, once every six months, a liaison meeting of group company presidents, chaired by the company's representative director, will be held, and each subsidiary will make the necessary reports.
- 3)Auditors regularly check the status of business execution by the directors of each subsidiary, and monitor the development and operation of internal controls in cooperation with the auditors of each subsidiary.
- 4)The Internal Audit Office audits each subsidiary based on the "internal audit rules", etc., and when it finds a business execution act that could result in loss due to violation of laws and regulations, inform the subsidiary, the company's representative director and Audit & Supervisory Board members of the impact.
6.Matters concerning ensuring the effectiveness of instructions to employees assisting the duties of Audit & Supervisory Board members
When there is a request from the Audit & Supervisory Board members for job assistance, the contents of the request will be respected, and employees in the relevant departments, such as accounting and general affairs, will assist the Audit & Supervisory Board members in their duties. We strive to improve the system to ensure the quality.
7.The system for directors, accounting advisors and employees to report to corporate auditors, and other systems for reporting to corporate auditors
- 1)Audit & Supervisory Board members attend important meetings such as the board of directors, management strategy meeting, management execution meeting, Business Strategy Meeting, Group Company President's Liaison Meeting, etc., and constantly monitor and audit the business condition and decision-making process.
- 2)For the Audit & Supervisory Board Members, a system to promptly and effectively report on the facts that could cause significant damage to the Company and the matters to be reported to the Audit & Supervisory Board determined in advance in consultation with Directors shall be established.
- 3)Corporate auditors shall receive a report on the status of the internal audit and the results of the audit from the Internal Audit Office, or request an investigation if necessary, and conduct efficient audits in close coordination with the Internal Audit Department.
- 4)Auditors may consult with the accounting auditor, attorneys, etc., as necessary, and the company shall not be responsible for the advance payment or redemption of costs incurred in the execution of duties of Audit & Supervisory Board members or any other costs incurred in the execution of such duties.
8.Other systems to ensure that audits by corporate auditors are conducted effectively
- 1)In order to enhance the effectiveness of audits by corporate auditors, secure collaboration between corporate auditors, accounting auditors, and the Internal Audit Office as necessary.
- 2)Directors and employees of the company shall promptly report to Audit & Supervisory Board members when they are requested by the Audit & Supervisory Board members to explain matters related to the execution of their duties or when they are aware of any violation of compliance. In addition, no detrimental treatment will be given due to the employee's provision of information to Audit & Supervisory Board members.
9.Basic approach to eliminating antisocial forces and the status of their development
The group has no relationship with anti-social forces, directly or indirectly, from the perspective of social justice practices. In cooperation with related administrative organizations, lawyers, and other legal experts, we must firmly eliminate unreasonable demands. We will also work to gather information by strengthening cooperation with police stations and neighboring companies.
The “Nichiban Group Action Handbook”, which is a guide to the group's actions, clearly states that anti-social forces should be excluded, and all directors and employees will practice these guidelines in conducting daily corporate activities.
Corporate Governance Report
You can see the status of our Corporate Governance.