We believe that the most important aspect of corporate governance is to establish a company infrastructure that ensures sound and transparent management, as well as operates a supervising system that oversees all businesses.
1. Observance of Laws and Ethics
The board of directors of the company is composed of 6 directors including 2 external directors, one of which is the independent director. At the board meeting all directors and corporate auditors attend and discuss all important topics including ones of subsidiaries. Business progress is also examined and countermeasures are considered if necessary.
The board is defined as an organization to oversee the company business operation by “Checks and Balances” and it is held once a month or as needed so that the important business decision is made as quickly as possible.
The board of auditors of the company consists of 4 corporate auditors including 2 external auditors. It is held once a month or as needed. The corporate auditors are experts in accounting, legal affairs, management and the 2 external auditors are both independent auditors as defined by Tokyo Stock Exchange and oversee the board of directors in professional and fair point of view. In accordance with the audit plan the board determines at the beginning of fiscal year, the board of auditors conduct audit on business operation and accounting in cooperation with internal audit division and outside accuntants.
The procedure to select and appoint the board of directors and auditors is set in Company bylaws. The resolution of appointment shall be apporoved at General Shareholder’s meeting by more than half of voting rights with attending more than a third of shareholders.
2. Relationships of Company Organization, Internal Control, etc. for Our Company
The arrows indicate, reporting, direction, and audits.
3. Development status in Internal Control System and Risk Management framework
Kyosha group ensures its operational appropreateness and risk management by implementing the following Corporate Govenance framework.
- Framework to ensure business activities by directors and employees being compliant with Corporate bylaws and all the laws and regulations
Business activities that Directors and employees make are carried out in accordance with Corporte Organization code, Authorization chart and to enhance autonomous Corporte governance. There are also “Management Policy” stating the compliance is the top priority and “Code of Action” that each one of us keeps in mind so that we create Corporate culture where is more compliance conscious and prevents legal violation.
CSR Reinforcement Committee constantly keeps improving the culture through its activities.
- Framework to archive information regarding directors duties execution
Information regarding directors duties execution is archived appropreately in accordance with Corporate code of Documant management and related rules.
- Corporate code of Risk management system for loss, and other framework
With regard to risk management for loss, every section of the company and Executive Officers autonomously manage themselves in accordance with Corporate organization code, Authrization chart and Subsidiary management code. Kyosha and its group companies continually enhance its Risk management system by setting Risk management rules through out the entire group, evaluating the risk and countermeasures, and penetrating management method for daily operations into the entire organization. CSR Reinforcement Committee is also in charge of improving Risk management system.
- Framework to ensure efficient duty executions by directors
The board of directors meeting is held once a month or as needed in order for directors to efficiently execute duties. The management board meeting is also held to assist the board of directors once a month or as needed basis, in which flexible communications in terms of business operations and important decision are made.
- Framework to ensure business appropreateness by Kyosha and its subsidiary companies
The companies in Kyosha group is clearly aware of what to report to or be approved by achieve consensus and important business decision.
- In terms of the following issues: an employee whom Corporate Auditor appoints to request assistance from, the independence of the employee from Directors, and framework to ensure whether the request Corporate Auditor makes is properly done by the employee.
The appointment of the employee who assists Corporate Auditor is respected. the board of Auditors has not currently requested to appoint any employee, Internal Audit Department handles the request in case Corporate Auditor happens to demand it. The department conduct the audit based on the request and report the audit result to the board.
- In terms of Framework for Directors and employees to report to Corporate Audior, framework for Corporate Auditors to get reported on other issues, and framework to ensure that auditing activities by Corporate Auditors is conducted effectively
Corpote Auditors attend the important meetings such as board of directors and Management meeting if necessary, and CEO, Directors, Executive Officers and president of subsidiary companies report to Corporate Auditors on its management policy, status of the operations regularly. The Directors and Executive Officers in charge report to Corporate Auditors if any occurrences that have a significant impact on the Kyosha Group. Corporate Auditors are always able to request report from Directors, Auditors and employees of Kyosha and group companies. There must be no retaliation against ones who report to Corporate Auditors.
- Policy on prepament or reimbursment of expenses incurred for duties of Corporate Auditors
If Corporate Auditors request the prepayment or reimbursement for expenses they need to incur, it is immediately reimbursed or paid unless otherwise the expense is not legitimate.
- Basic pricipal against Anti Social Forces
Kyosha has nothing to do with any Anti Social Forces and clearly declare it on Kyosha code of action.