Basic Philosophy of Corporate Governance
We recognize that sound Corporate Governance is indispensable in improving our corporate value as a global corporation and fulfilling all our social responsibilities to the Company’s shareholders, employees and clients, local communities and so on, and we consider the following to be the fundamentals of Corporate Governance:
– Prompt and efficient business management
– Maintenance and improvement of the internal control system
– Guarantee of transparency
Also, we are striving to enhance management transparency and build a relationship of trust with the market by promoting the strengthening and entrenchment of compliance,
making timely and appropriate disclosure of earnings, important business management information and so on, and maintaining bilateral communication with stakeholders.
Basic Policy Regarding the Internal Control System
In accordance with the Companies Act and the Ordinance for Enforcement of the Companies Act, Daiki Axis maintains an Internal Control System (“System” hereafter) as outlined below in order to ensure the appropriateness of the Company’s business activities.
System to ensure that duties corresponding to the Company’s Directors and employees are performed in accordance with laws, ordinances and Articles of Incorporation.
- Along with the Compliance System’s regulations, the Company will establish Standards of Conduct in order to have officers and employees act in adherence to laws, ordinances, Articles of Incorporation and social norms. Also, the Company will establish a Risk Management Committee as an organization carrying out overall supervision of the Compliance System.
- The promotion of compliance will be supervised by the General Affairs Department, and the education of officers and employees will primarily be carried out by the same department as well. These activities will be reported to the Board of Directors and the Audit Committee.
- Also, along with maintaining an Internal Reporting System separate from the ordinary reporting route for information regarding compliance, etc., the Company will implement the System in accordance with regulations established in line with the Whistleblower Protection Act.
- When the Audit Committee determines that there are problems with the Company’s Compliance System and/or Internal Reporting System, they will state their opinion and request remedial measures to be formulated.
System regarding the storage and management of information concerning the performance of duties by Company Directors
- Information concerning the performance of duties by Company Directors will be stored and managed in a storage medium-appropriate and conveniently searchable format in accordance with document management regulations. Company Directors and Directors on the Audit Committee will also have access to these documents on a continuous basis in accordance with document management regulations.
- The Company will establish Risk Management Regulations to form the basis of a Risk Management System. Each business department will name a manager in charge of risk and will construct a Risk Management System in accordance with the Risk Management Regulations.
- The Company and its subsidiaries will establish a Total Risk Management Committee as an organization to carry out overall supervision of risk management. In the event that unforeseen circumstances arise, the Total Risk Management Committee, headed by the Company President & CEO, will convene to address overall risk management.
System to ensure efficient performance of duties by the Directors of the Company and its subsidiaries
- To form the basis of a system to ensure the efficient performance of duties by Company Directors, the Company will hold regular Board of Directors’ meetings on a monthly basis as well as extraordinary meetings on an as-needed basis to make determinations on matters of importance as well as to supervise Directors’ performance of duties, etc.
- With regard to the execution of business in accordance with resolutions made by the Board of Directors, responsible parties, their responsibilities and the details of execution procedures shall be specified in the Rules for Administrative Authority and Rules for Segregation of Duties.
- The Company will formulate a yearly budget and medium-term management plan with regard to business operations to establish company-wide objectives. Each business department will determine and implement concrete measures in order to achieve those objectives.
System to ensure the appropriateness of business carried out by the corporate group comprising the Company and its subsidiaries
- The Company will establish a system wherein a Total Risk Management Committee supervises and promotes compliance throughout the Group. With regard to business management, the company will establish a Basic Management Policy, and its Finance Department will perform management as necessary depending on its subsidiaries’ circumstances in accordance with the Rules for Management of Affiliated Companies and will receive reports from subsidiaries on a periodic and as-needed basis.
Matters concerning employees who are to assist the Audit Committee in its duties, matters concerning the independence of those employees from Company Directors (excluding Directors who are members of the Audit Committee), and matters concerning measures to ensure the effectiveness of instructions for those employees
- The Audit Committee shall be granted the ability to direct employees affiliated with the Company’s business management headquarters on matters necessary for audit-related duties. For the duration of the time when those employees are to play roles of assistance, the authority to direct them shall be transferred to the Audit Committee, and matters of staff reassignment, etc. shall also be determined with the consent of the Audit Committee. The independence of these employees shall be ensured by guaranteeing that they will not receive instructions or orders from Company Directors (excluding Directors who are members of the Audit Committee).
System to ensure that those receiving reports from the Company’s Directors and employees or from subsidiaries’ Directors, auditors, employees, etc. report to the Audit Committee
- Company Directors and employees and Subsidiary Directors, etc. shall make prompt reports to the Audit Committee on legal matters, matters with significant impacts on the Company or its Subsidiaries, circumstances of internal audit implementation, and circumstances and contents of internal (whistleblower) reports. Regardless of the aforementioned, the Audit Committee shall have the ability to request reports from Company Directors and employees and Subsidiary Directors, etc. at any time on an as-needed basis.
- Internal regulations shall be formulated to protect whistleblowers and ensure that they are not subject to disadvantageous treatment on account of reports they have made to the Audit Committee.
- Also, in the case that it has come to light that whistleblowers have been subject to disadvantageous treatment on account of reports they have made to the Audit Committee, appropriate measures will be promptly taken in accordance with internal regulations to nullify the disadvantageous treatment.
Matters concerning policy with regard to prepayment or reimbursement procedures for expenses incurred in the Audit Committee’s performance of duties, as well as prepayment or reimbursement processing of expenses incurred in other relevant duties
- Expenditures deemed necessary for the Audit Committee’s performance of duties are to be borne by the Company and paid promptly.
System to additionally ensure the effective performance of audits by the Audit Committee
- An Internal Control Office will be established to ensure the reliability of financial reports, headed by the Company President & CEO. This Office will strengthen Control Activities throughout the whole Company as well as Control Activities for each business process in order to ensure the appropriateness of financial reports, and will formulate an operational framework for them.
Basic philosophy regarding the rejection of dealings with anti-social forces
- The Company’s President & CEO, officers and employees shall be united in their efforts to reject anti-social forces, and the foundation for this shall be expressly stated in the Company’s Standards of Conduct, internal regulations, etc.
- The Company shall have no relationships of any kind with anti-social forces, including transactional relationships. Any and all unreasonable demands from anti-social forces shall be rejected as well.
The Company’s state of preparedness regarding the rejection of dealings with anti-social forces
- The Company will put its General Affairs Department in charge of promoting the rejection of anti-social forces and will designate personnel in charge of handling unreasonable demands in all branch offices.
- The Company will establish Anti-Social Force Rejection Regulations or related regulations, and will make efforts to formulate a framework for the rejection of anti-social forces.
- The Company’s stance against anti-social forces will be explicitly stated in a Manual for Dealing with Anti-Social Forces that will serve as guidelines for conduct for all of the Company’s officers and employees.
- The absence of connections to anti-social forces will be verified for all business partners, etc.
- The Company will make efforts to collect information concerning anti-social forces from outside organizations in order to verify the presence or absence of connections to anti-social forces.
- The Company will be prepared to guard against unreasonable demands from antisocial forces and will develop close, ordinary cooperative relationships with specialized outside organizations such as the police, the National Center for the Elimination of Violent Groups and law offices.