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Home  >  Investor Relations  >  Corporate Governance

Corporate Governance

YAMAZEN’s management places the highest importance on the issue of elevating fairness and transparency in corporate management, as well as on maintaining and improving the corporate management structure to ensure that it is capable of providing appropriate responses to changing business environments in a timely manner. Determined to become a corporate entity that is trusted, supported, and looked favorably on by a broad spectrum of society, YAMAZEN and its group companies have established committees for the promotion of various Corporate Social Responsibility activities, formulated the “Charter for the Corporate Behavior of the Yamazen Group,” and built a corporate governance structure so as to not only ensure risk control and legal compliance but also to reciprocate the trust accorded by society.

(Updated Jun.29, 2018)

Board of Directors

The Board of Directors meets each month to decide on basic management policies and other important business matters, with the aim of maximizing corporate value. This meeting is, in principle, attended by all directors. The Board of Directors consists of ten internal directors and three outside directors. The directors who are not audit and supervisory committee members serve for one-year terms, while those who are audit and supervisory committee members serve for two-year terms. In arriving at this scale and composition, emphasis has been given to ensuring lively debate.

Management Meeting

The Management Meeting is held once a month as a conference body for carrying out reporting and information exchange on business execution. It is attended by all directors (excluding non-standing audit and supervisory committee members) and operating officers.

Operations Structure

The operations structure is the basic framework for the conduct of business, centered on the operating officers (currently twenty-seven officers, nine of whom also serve as directors), who have been given explicit authority and responsibility by the Board of Directors. The conduct of operations is considered and debated at the monthly meeting of the Operating Officers Board.

Audit and Supervisory Committee

The directors who are audit and supervisory committee members consist of three individuals (of who, one is a standing audit and supervisory committee member and two are outside audit and supervisory committee members). Through their attendance at meetings of the Board of Directors and other important meetings, the Audit and Supervisory Committee audits the legality and appropriateness of the business execution of directors. The Audit and Supervisory Committee also reaches formal opinions on the selection, dismissal, resignation and remuneration, etc. of directors who are not audit and supervisory committee members.

Internal Auditing Structure

The internal auditing structure consists of seven individuals who carry out verification of the effectiveness of internal controls inside the Internal Audit Department, which is headed directly by the Representative Director. These individuals ensure appropriate coordination among the Audit and Supervisory Committee, Internal Audit Department and the accounting auditors, as part of efforts to ensure effective auditing.

YAMAZEN considers internal control and compliance a crucial management issue, especially in today’s business environment, which is underscored by increasing globalization and complexity. To achieve greater fairness and transparency in corporate management, YAMAZEN has established an Internal Control Committee. In addition, based on the belief that active, voluntary, and ongoing CSR activities are indispensable for any corporation that aspires to be a business entity that is trusted, supported, and looked favorably on by a broad spectrum of society, a Compliance Committee has been created to ensure the specific and effective implementation of actions for the full enforcement of and familiarization with this policy.
The current state is as follows.

1. Systems for Ensuring Efficient Performance of Directors' Duties

Authority exercisable by the directors in the course of performing their duties has been explicitly defined upon taking into account managerial risks and the scope thereof and upon further clarification of the assignment of duties to the directors.

The Management Meeting, the Corporate Officers Committee and other committees undertook deliberations with respect to important issues ahead of formal decision-making to facilitate prompt and proper decisions by the directors.

2. Rules and Systems for Management of Risks Against Losses

The sharing of functions and responsibilities, operational flows and operational rules (control procedures) with respect to the identification of important risks inherent in the Company and the avoidance and minimization thereof, have been defined and placed in order (documented) in the form of rules and regulations, which are to be followed when performing any important processes.

For the promotion of CSR activities, the Corporate Planning Department, which provides administrative support for CSR activities, is responsible for comprehensive risk management and the administration of oversight with respect to the execution of risk management. The Internal Control Committee evaluates the effectiveness of CSR activities from an independent point of view, and the Compliance Committee rolls out specific and effective actions designed to mitigate risks and prevent risks from becoming full-fledged issues.

3. Systems for Preservation and Management of Information Related to Directors' Performance

Systems based on Yamazen's document control rules and other relevant company regulations are in place to ensure the preservation and management of information concerning the execution of the directors' duties, which may be viewed by the directors and at any time.

4. System for reporting to YAMAZEN on matters regarding execution of duties by directors and others of subsidiaries

YAMAZEN requires subsidiaries to report regularly to YAMAZEN in accordance with the internal rules, concerning the subsidiary’s operating performance, financial position, and other important information.

5. Systems for Ensuring Proper Business Operations within the Yamazen Group

In an effort to ensure proper business operations at Yamazen's Japanese and overseas affiliate companies, systems will be implemented at respective locations commensurate with their sizes and in conformance with the provisions concerning the seconding of officers, rules governing authority (sharing of authority between Yamazen and its affiliates), business reporting, document storage, internal auditing, risk management and education.

6. Systems for Ensuring Compliance with Laws of Incorporation

In solemn recognition of the importance of corporate social responsibility, YAMAZEN has embarked on a structure to advance CRS activities. It has also formulated the “Charter for the Corporate Behavior of the Yamazen Group” to ensure compliance, which is an important issue in corporate management.

For the full enforcement of legal compliance and corporate ethics, every attempt is made by management to voluntarily set a good example and demonstrate good practices to employees to facilitate the penetration of the principles throughout the group. Education and training are also administered to ensure compliance. For employees, the “Charter for the Corporate Behavior of the Yamazen Group” serves as a code of conduct, and YAMAZEN carries out systematic programs to familiarize employees with the charter.

In an effort to prevent corporate misdemeanors, Yamazen has set up a window within the Company through which company members can report suspicious activities (a system for internal reporting). The system is also designed to ensure the protection of informants with due cause and help corporate ethics take root.

As in the case of above 2., the Internal Control Committee evaluates the effectiveness of CSR activities from an independent point of view, and the Compliance Committee rolls out specific and effective actions designed to mitigate risks and prevent risks from becoming full-fledged issues.

7. Matters relating to directors and employees who assist in the duties of the Audit and Supervisory Committee

More than one staff member with a prescribed level of knowledge and experience (“Staff of the Audit and Supervisory Committee”) are assigned to assist in the duties of the Audit and Supervisory Committee.

8. Matters relating to independence of the directors and employees of the previous item from other directors (excluding directors who are audit and supervisory committee members), and matters relating to ensuring the effectiveness of instructions of Audit and Supervisory Committee to such directors and employees

Matters relating to human-resource management of Staff of the Audit and Supervisory Committee shall require the consent of the Audit and Supervisory Committee. 

The duties of the Staff of the Audit and Supervisory Committee shall be carried out under the direction of the Audit and Supervisory Committee.

9. Systems for Reporting by Directors and Employees to the Audit and Supervisory Committee

Directors and employees are required to immediately report to the Audit and Supervisory Committee in accordance with the internal rules, if they become aware of an incident that has caused or might cause significant damage to the Company or a violation of any law or of the Articles of Incorporation.

10. System to ensure that the reporting person of preceding item does not receive unfavorable treatment for making such report 

In YAMAZEN’s internal rules, it states that a point of contact that is independent from the management must be established, that the reporting person must remain anonymous, and that any dismissal or other unfavorable treatment for making such report is prohibited.

11. Matters relating to procedures for prepayment or reimbursement of costs arising from the execution of duties of audit and supervisory committee members (limited to matters relating to the execution of duties of the Audit and Supervisory Committee) and policy related to the handling of costs and liabilities arising from the execution of other duties 

YAMAZEN shall promptly handle expenses and liabilities such that have been incurred by an audit and supervisory committee member in executing his or her duties (limited to matters relating to the execution of duties of the Audit and Supervisory Committee; the same applies hereinafter this item), in cases where a request is made to the Company for advance payment of expenses or the like, and whereby, after deliberations at the department or section responsible, except for the case where it is deemed that the expense or liability pertaining to such request is not necessary for the audit and supervisory committee member to execute his or her duties.

12. Systems for Ensuring Effective Auditing by the Audit and Supervisory Committee

The Audit and Supervisory Committee holds periodic meetings with representative president in an attempt to confirm the management principles of the Company and to exchange opinions regarding challenges that need to be met by the Company, risks surrounding the Company, the state of the auditing environment for audits by the Audit and Supervisory Committee, and significant auditing issues, among others, for better mutual communication.

The Audit and Supervisory Committee makes efforts to share views and thoughts with the Internal Audit Department and the account auditors to deepen mutual understanding by maintaining an appropriate relationship and coordination with the Internal Audit Department and by holding periodic discussions with the account auditors.

The Audit and Supervisory Committee may attend Management Meetings and other important meetings, as well as maintain files on meeting minutes, reports, approvals, and other important documents, in order to allow easy and timely browsing only when they deem it necessary.

Documents whose disclosure is required by law are subject to reporting to and inspection by the Audit and Supervisory Committee in advance of such disclosure.

13. System for ensuring the reliability of financial reports

To ensure the reliability and appropriateness of financial reports, an internal control system designed for the appropriate and valid filing of internal control reports is in place in conformance with the provisions of the Financial Instruments and Exchange Act. For the operation of the system, an Internal Control Committee has been established. To reasonably ensure the reliability and appropriateness of the system, the committee, in cooperation with the Auditing Department responsible for internal audits, assesses the effectiveness of the system and its operational state.

14. Basic policy toward the elimination of antisocial forces and actions implemented to date

YAMAZEN’s basic policy calls for a resolute stance when dealing with anti-social forces, which threaten order and safety of civil society and impede sound economic and social development.

This basic policy has been expressly incorporated into the “Charter for the Corporate Behavior of the Yamazen Group,” which stipulates YAMAZEN’s code of conduct as a basic concept of compliance matters. A companion guidebook has been prepared and distributed to all employees of the YAMAZEN Group for full enforcement.

As a member of the Osaka Corporate Defense Countermeasures Federation, YAMAZEN receives its guidance and shares pertinent information with the federation.

A diagram of Yamazen's corporate governance structure is as follows.

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