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Basic approach |
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In order to achieve stable growth and development for our business amidst dizzying changes in the business environment, Sumikin Bussan recognizes the essential importance of improving the efficiency and soundness of our management, and constructing a fair and highly transparent management system. From this perspective, we will continue to work to further strengthen our corporate governance.
We will discharge our obligations to all stakeholders (shareholders, clients, employees, and society) by constructing a solid business base, and by providing products, services, and information that are esteemed for their high quality. |
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| 2. |
Status of the company organization and internal control system |
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| 1) |
Company organization
(Board of Directors)
The Board of Directors in general meets twice each month in order to allow dynamic decision-making. It monitors the status of operations, and makes decisions regarding important matters related to items determined by law, and to company management.
(Directors)
Directors must observe all laws and the articles of incorporation, and exercise due diligence while faithfully carrying out their duties. The term of office for directors is set at one year, in order to clarify director management responsibilities and construct a management system that can respond quickly to changes in the business environment.
(Corporate Officers)
Corporate officers were first appointed with the introduction of a corporate officer system in June 2002, with each officer concentrating on duties in a specific area. This system was intended to accelerate decision-making and streamline the conduct of operations. The term of office for corporate officers is set at one year, in order to construct an operating system that can respond dynamically to changes in the business environment.
(Corporate Management Committee)
The Corporate Management Committee was established as an advisory body to the president, and is composed of all directors and auditors. The Corporate Management Committee in general meets twice each month, on the same date as the Board of Directors. It conducts advance discussion of items for the Board of Directors meeting, and also discusses other important matters related to company management. In order to improve the functions of corporate auditors, the auditors are also members of the Corporate Management Committee, allowing them to obtain important management information.
(Audit Committee)
The Audit Committee is composed of four auditors (three of whom are outside auditors), and possesses the authority that is designated by law. By vote, this committee also decides the audit policy, the methods used to investigate the company's operations and financial status, and items related to execution of auditor duties.
(Auditors)
The term of office for auditors is set at four years. Auditors strictly monitor the discharge of director and corporate officer duties, and maintain close cooperation with the Audit Department (Internal Auditing Department) in order to carry out effective audit activities. |
| 2) |
Organizational Management and the Corporate Governance System
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| 3) |
Status of the Internal Control System
In the Sumikin Bussan Group Code of Conduct, we define guidelines for the proper attitude and conduct of the Sumikin Bussan Group, and its officials and employees. This Code of Conduct clarifies the basic position of the company with regard to legal compliance, and is included in the company rules. Steps have also been taken to ensure that everyone in the company is aware of the code. For the operating conditions, the Board of Directors and auditors receive reports at the appropriate times from the Internal Auditing Department, and as necessary hold discussions and take other steps to ensure effective auditing.
The company organization is composed of the Steel Company, Machinery & Metals Company, Textiles Company, Foodstuffs Company, and Corporate planning & Administration Division. While each division in the Corporate planning & Administration Division exercises check-and-balance functions from a whole-company perspective, the Sales Planning Department in each of the four companies exercises control functions within that company itself, while also working for cooperation with the Corporate planning & Administration Division.
The authorities, responsibilities, and chain of command for Sumikin Bussan are specified in the Authority Regulations and Office Regulations in order to make clear the authority and function of each position. A system is in place for taking appropriate measures based on the Regulations for Commendation and Punishment in case of the violation of laws, the articles of incorporation, or internal company regulations. |
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Status of Internal Audits and Corporate Auditors
The Internal Audit Department has been established as the organization for internal auditing. It maintains close cooperation with auditors, and periodically conducts audits, including audits of subsidiary companies, to determine whether the company's business activities are being carried out correctly and efficiently, and in accordance with laws, the articles of incorporation, and internal company regulations.
The Audit Committee also has been established, and is composed of directors, auditors, and other officials. This committee discusses audit plans related to internal auditing, improvements based on the audit results, and related matters, and works to strengthen the internal control functions in order to maintain sound management. |
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| 3. |
Status of the Risk Management System |
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Sumikin Bussan recognizes that risk management involves appropriate management of the various risks that are encountered as part of maintaining and growing the value of the company. The Compliance Crisis Committee has been established, chaired by the company president, in order to prevent various types of risks, or handle such risks should they become manifest. This committee meets periodically (in general once every six months), or whenever necessary, and reviews and enacts measures to prevent risks that may affect company management, or appropriate corrective measures after such risks have become manifest. This committee also receives advice from the corporate lawyers as needed.
In order to maintain sound corporate activities, a Speak Out System (employee consultation liaison) has been introduced as one link in the compliance system, and other steps taken to strengthen the system for legal compliance.
In the event of an earthquake or other natural disaster, a Disaster Response Center will be established as necessary, and the necessary steps will be taken in accordance with the response manuals already prepared. The necessary measures to prepare for such an event are implemented as a part of ordinary operations. These include creation of an internal company communications network, creation of a system for notifying related organizations, and preparation of disaster readiness supplies. |
In December 2002, Sumikin Bussan Corporation established a Compliance Crisis Committee with crisis management functions, simultaneously creating the "speak out system."* The objective of their establishment was to ensure adherence to social norms and corporate ethics. The Company then compiled a Compliance Manual to mark the May 2004 enactment of the Sumikin Bussan Group Code of Conduct. The manual succinctly organizes the basic rules to be followed by the Group's officers and employees in performing business activities.
Significant changes in the environment surrounding businesses in recent years have expanded corporate roles in and obligations to society. Proactive compliance efforts are an essential element of such corporate social responsibilities. Companies must create corporate cultures, work structures and work systems that discourage misconduct by instilling in every single officer and employee a keen awareness of compliance and an accurate understanding of the rules to be upheld. Once a problem has occurred, rapid reporting, response and measures to prevent recurrence are critical.
We strive to further strengthen compliance-based management in accordance with the Sumikin Bussan Group Code of Conduct. Each of our officers and employees shall fully comprehend the Compliance Manual and adhere to social norms and corporate ethics in the proper execution of their duties. |
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Speak-out system
This consultation system allows employees to report matters directly to the Compliance Crisis Committee in urgent cases or when certain other reasons impede reporting through the standard corporate structure. |
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