As a good corporate citizen we make an ongoing effort to not only increase our corporate value but ensure compliance with all relevant laws, regulations, and social norms in order to earn the trust of our stakeholders. We work to ensure excellent standards of corporate governance with a keen focus on sound and transparent management practices that enable us to swiftly respond to changes in the business environment.
We have adopted a corporate auditor system and established a Board of Directors and Board of Corporate Auditors that play important organizational roles.
1. Corporate Directors and Board Meeting
The Board of Directors is a permanent organization that makes decisions related to the company's management policies and business operations. The Board deliberates and decides on matters specified in Japan's Companies Act that are subject to the decisions of the Board of Directors, as well as the matters specified in the Board of Directors Regulations. The Board of Directors is made up of seven corporate directors and meets on a monthly basis. Extraordinary Board of Directors meetings are held on an as-needed basis. Four corporate auditors including three external auditors also attend Board of Directors meetings.
2. Executive Officer System and Business Strategy Meeting
The executive officer system was implemented in 1999 in order to make a clear separation between the Board of Directors' decision-making and oversight function and its business performance function. Business strategy meetings, held twice a month, are attended by corporate directors, a full-time corporate auditor, and executive officers to discuss proposed agenda items prior to Board of Directors meetings. Business strategy meetings enable our management team to share information and ensure business management oversight.
3. Corporate Auditors and Auditors Meeting
Ohashi Technica has four corporate auditors, three of which are external auditors. Corporate auditors conduct audits of operations and accounting practices at Ohashi Technica and its subsidiaries throughout the world.
4. Financial Auditors
Accounting audits are conducted by Deloitte Touche Tohmatsu under a special audit agreement as required by the Japanese Companies Act and Financial Instruments and Exchange Act. We provide our financial auditors with both paper-based and computerized data to facilitate an accurate and efficient auditing process.
5. Independent Director
We have appointed one of the external auditors an independent director after having decided that he meets our qualification requirements to serve as an independent director in light of his career background and other attributes. He is capable of fulfilling all the responsibilities expected of an independent director and has no relationship with any stakeholders that would present a conflict of interest.
6. Internal Audit Department
The Operations Auditing Team and the Internal Control Auditing Team have been established under the Internal Control Auditing Division as departments dedicated to performing internal auditing functions. Both Auditing Teams conduct audits with an eye to ensuring legal compliance in the operations of Ohashi Technica and its subsidiaries throughout the world, as well as the validity of their controls and procedures, and reliability of their financial reports. The Auditing Teams report their audit findings to our management team and full-time corporate auditor.
7. Internal Control Committee
The Internal Control Committee has been set up as a permanent organization for reporting, discussing, and making decisions on key issues related to internal controls, compliance, risk management, and internal and external reporting.
The Internal Control Committee is chaired by the Ohashi Technica president and CEO and is made up of the head of relevant departments. The full-time corporate auditor serves as its permanent observer.
(Corporate Governance Organization)
The Ohashi Technica Board of Directors adopted basic strategies for internal control systems on May 18, 2006. The Board passed a resolution to partially revise the basic strategies on May 19, 2009. Below is an outline of our internal control systems designed to ensure that the corporate directors' activities comply with all relevant laws and regulations as well as Ohashi Technica's articles of incorporation and that our operations are conducted appropriately throughout the group.
1. Controls designed to ensure that the activities of corporate directors and employees comply with relevant laws and regulations as well as the articles of incorporation
(1) We have developed the Compliance Rules as an action guideline for all employees to follow. These rules ensure full compliance throughout the company enabling us to maintain high ethical standards as well as compliance with all laws, regulations and corporate bylaws.
(2) The Internal Control Auditing Division reporting directly to the president and CEO works jointly with relevant departments to implement, evaluate, and audit our internal control systems in order to ensure the seamless performance of group-wide operations.
(3) The Compliance Risk Management Team has been established under the Internal Control Auditing Division to be responsible for compliance related matters. The Internal Control Committee has also been set up as a permanent organization for discussing key issues related to internal controls, compliance and risk management.
(4) We have an internal reporting system in place for the purpose of early detection and correction of any violation of relevant laws, regulations, bylaws, and rules. We also maintain an external reporting system (hotline) for directly reporting such violations to an external lawyer.
(5) Our internal auditing departments conduct effective operational audits.
2. Controls designed for maintenance and management of information related to corporate directors' activities
Information related to our corporate directors' performance of their duties is maintained in the form of documents. All these documents are stored and managed in accordance with separately established document control procedures. Corporate directors and auditors have access to these documents at all times.
3. Loss management rules and controls
The Compliance Risk Management Team responsible for the company's overall risk management has been formed under the internal control management organization. The Risk Management Rules have also been stipulated in an effort to build a solid risk management function.
Our internal auditing departments audit each department's risk management in order to enhance efficiency of risk management.
The Business Continuity Plan has also been established to serve as an emergency response manual to be followed in case of a natural disaster or systems failure. The Plan enables us to minimize foreseeable risk and to quickly restore core corporate functions after any disruption.
4. Controls designed to ensure corporate directors' activities are conducted efficiently
(1) Regular Board of Directors meetings held on a monthly basis serve as a steady foundation upon which we can ensure the efficiency of our corporate directors' activities. Extraordinary Board of Directors meetings are also held on an as-needed basis.
Business strategy meetings attended by the president and CEO and other corporate directors are held to discuss key issues affecting our operations prior to Board of Directors meetings where the Board makes final decisions.
(2) The Organization Rules, the Rules on Divisions of Duties, and the Rules on Administrative Authorities specify persons responsible for performing operations approved by Board decision, their responsibilities, and operational procedures.
(3) The heads of each department attend monthly key operations briefing sessions where they report to the directors on the progress of Board-approved medium-term and annual business plans as well as challenges faced in achieving the goals set forth in the plans. The meetings give the directors an opportunity to provide guidance and instructions on specific actions to be implemented.
5. Controls designed to ensure that operations of the corporate group comprised of Ohashi Technica and its subsidiaries are conducted in a fair and appropriate manner
Our subsidiaries in Japan and overseas are managed in accordance with the Domestic Affiliates Management Rules and the Overseas Affiliates Management Rules. We work with the operational departments of each Group company to implement measures to improve the efficacy of internal controls. Ohashi Technica also provides its subsidiaries with guidance and support when necessary, including the appointment of their directors and auditors. Internal audits are conducted on the overall business activities of our subsidiaries to ensure complete oversight over group-wide operations.
6. Controls concerning employees assigned by corporate auditors to work as their assistants and measures ensuring they remain free from any influence of corporate directors
The Board of Directors will, upon consultation with corporate auditors, assign employee(s) to work as assistant(s) to corporate auditors when required. Any decisions concerning the appointment, evaluation, or relocation of such employee(s) or any disciplinary action against them will be made with the prior consent of the Board of Corporate Auditors in order to ensure such employee(s) remain free from any influence of corporate directors.
7. Controls concerning reporting by corporate directors and employees to corporate auditors and measures designed to ensure that corporate auditors' audits are conducted effectively
(1) Our corporate directors and employees are required to report to corporate auditors when they find any possible risk of significant damage to the Ohashi Technica Group, misconduct of any corporate director or employee, material violation of law or the articles of incorporation, or any other matter required to be reported to corporate auditors. Corporate auditors also have the right to ask corporate directors and employees to report on their activities at any time when necessary.
(2) Corporate auditors attend Board of Directors meetings, business strategy meetings, and other important meetings in order to assess how important decisions are made and how operations are performed. They are also entitled to ask corporate directors and employees for explanations on this decision-making process as well as operational status when necessary.
(3) Corporate auditors work with financial auditors, internal auditing departments, and auditors of affiliated Group companies to share information and ensure that audits of Ohashi Technica and its subsidiaries are conducted effectively.
8. Controls designed to ensure reliability of financial reports
The corporate group comprised of Ohashi Technica and its subsidiaries establishes controls designed to ensure that its financial reports are reliable, fairly presented and works to ensure these controls are appropriately implemented. The development and implementation status of these controls is evaluated on a regular basis with an eye to maintaining and improving their standard.
9. Controls for eliminating criminal elements
(1) In accordance with our Charter of Corporate Behavior, we reject any association with criminal elements and organizations that pose a threat to public order and safety
(2) Our management team is firmly committed to avoiding associating Ohashi Technica with any criminal element as part of an organization-wide effort to fight crime. We also appoint a person responsible for preventing fraudulent claims, work with external expert organizations, and implement educational and awareness raising activities throughout the entire Ohashi Technica Group and its affiliated organizations toward eliminating all interference by criminal elements.
Our corporate code of ethics serves as a guiding light that ensures compliance with all laws, regulations and ethical standards of corporate behavior so that we may best contribute to society. Legal compliance is a responsibility that we all share and must fulfill in everything we do. It is the very foundation underlying all our activities geared towards improving corporate value and meeting the expectations of all our stakeholders, including our customers, partners, shareholders, employees and communities.
The recent spate of corporate misconduct as well as environmental problems that have increasingly captured the attention of the media spotlight are serious social issues that can significantly impact corporate value. We take corporate social responsibility (CSR) very seriously. We view CSR as a key priority and are committed to enhancing compliance thorough internal audit and compliance awareness programs.
Whenever a major social problem or incident occurs, we thoroughly review our compliance status. We issue then instructions throughout the company, and conduct employee training when necessary in order to ensure that we are in complete compliance with all applicable laws and regulations.
