Fundamental Concepts on Corporate Governance
To continually enhance corporate value and realize a corporation that is trusted by all of its stakeholders, including shareholders, the Noevir Group (“the Group” or “the Company”) has positioned corporate governance as a key management issue. Accordingly, the Group has developed a robust management structure while strengthening auditing functions to ensure strict compliance with laws, regulations and corporate ethics as well as its articles of incorporation. Moreover, the Group works on maintaining systems for internal control and risk management.
Corporate Governance Policy
The Group works to further enhance its corporate value, while fulfilling its corporate social responsibilities to the five groups listed below. Further, the Group discloses to all stakeholders important business, financial, and other material information pertaining to the Group in a fair, timely, and appropriate manner.
- Customers and business partners
Code of Conduct
The Group’s directors and employees are expected to act fairly in compliance with the laws and regulations and social rules, taking into consideration the Group’s corporate governance policies. Each individual is charged with being clearly aware that they represent the Group and taking responsibility for adhering to the Code of Conduct items listed below.
- Comply with laws and regulations, etc.
- Prevent conflicts of interest
- Prevent insider trading
- Protect personal information and confidential information
- Exclude antisocial forces
- Do not offer or accept socially inappropriate entertainment or gifts
- Respect human rights
- Protect privacy
- Prohibit harassment
- Do not engage in political or religious activities at the workplace
Overview of the Existing Corporate Governance Structure
The Board of Directors of the Company strives to build an effective internal control system and establish a system to comply with laws and regulations and its articles of incorporation as a whole from the viewpoint of further strengthening corporate governance to execute business appropriately and soundly overall.
The Board of Directors consists of eight members, including three outside directors. Board of Directors’ meetings are held monthly on a regular basis, with extraordinary meetings convened as necessary. The Company utilizes an executive officer system to bolster the supervisory and decision-making functions of the Board of Directors, facilitate swiftness of execution of duties and clarify responsibilities and strengthen corporate governance. Executive officers appointed by the Board of Directors perform corporate operations in accordance with business policies determined by the Board of Directors. The Group Executive Council consists of five executive directors and five executive officers and meets regularly to discuss specific policies for execution of duties and other material items based on management policies decided by the Board of Directors to appropriately and effectively execute duties.
The Company has established an Audit & Supervisory Board consisting of one standing Audit & Supervisory Board member and two non-standing Audit & Supervisory Board members. The two non-standing Audit & Supervisory Board members are outside directors. The Company also retains multiple law firms as advisors and receives legal advice.
The Company has established an Internal Audit Department that conducts regular audits of all divisions and reports directly to the President and Representative Director. The Department also responds as needed for other matters requiring urgency.
The Internal Audit Department is independent from divisions executing duties and conducts audits of all operational activities based on an annual audit plan.
Results of audits are reported to President and Representative Director and the Audit & Supervisory Board members and guidance for improvement is carried out.
The three Audit & Supervisory Board members attend Board of Directors’ meetings, state their opinions and supervise overall management.
Audit & Supervisory Board members and members of the Internal Audit Department attend the Audit & Supervisory Board whenever necessary, sharing information, facilitating mutual cooperation and striving to achieve an effective three-way audit control system.
Internal Control System: Fundamental Concepts and Steps in Place
- 1. Ensuring the Group’s directors and employees execute their duties in accordance with the laws and regulations and the Company’s articles of incorporation
- To ensure sound, appropriate corporate operations, the Board of Directors works to bolster corporate governance by establishing effective internal controls and frameworks so that the organization as a whole complies with the laws and regulations and the Group’s articles of incorporation.
- The Corporate Governance Policy and the Code of Conduct form the foundation of the compliance system. They serve to prohibit improper and antisocial actions, and the Group strives to ingrain their principles throughout the organization.
- The Group strengthens its Legal Affairs Department and enhances its compliance system.
- Regarding internal reporting systems, the Group has in place frameworks for maintaining transparency and appropriately responding to issues while protecting whistleblowers in accordance with the Whistleblower Regulations.
- The Internal Audit Department has a system of multiple specialist members periodically conducting internal audits of all divisions.
- The Group utilizes outside specialists as necessary to prevent violations of the laws and regulations or the Company’s articles of incorporation.
- 2. Managing and retaining information related to directors’ execution of duties
- Board of Directors’ meeting minutes, proposals, and other information pertaining to the execution of their duties are managed and retained in accordance with internal policies including the Document Retention and Disposal Regulations and the Basic Regulations on Information Systems.
- 3. Managing the risk of loss to the Group
- The Company clarifies risk management systems to recognize risks pertaining to the Group’s business activities and respond to risks that arise in accordance with the Risk Management Regulations.
- In the case of unforeseen events, the Company establishes a risk management committee headed by the President and Representative Director and takes steps to prevent and minimize damage.
- The Company appropriately manages and protects confidential and personal information in accordance with such regulations as Confidentiality Regulations and the Personal Information Protection Regulations.
- 4. Ensuring efficient execution of duties by Group directors
- As a fundamental step to ensure directors’ duties are effectively carried out, regular Board of Directors’ meeting are held monthly, with additional meetings as necessary. The meetings provide a forum for making decisions about important management issues and matters as prescribed by laws and regulations, as well as overseeing the execution of duties.
- The Company has in place a framework to ensure efficient, proper execution of duties via administrative authority and decision-making rules based on the Board of Directors Regulations, Administrative Authority Regulations, and Proposal Regulations.
- Directors execute their duties with an eye to achieving key business goals for the Group overall in accordance with the medium-term management plan.
- The Company utilizes an executive officer system to bolster the supervisory and decision-making functions of the Board of Directors, facilitate swiftness of execution of duties and clarify responsibilities and strengthen corporate governance. Executive officers appointed by the Board of Directors perform corporate operations in accordance with business policies determined by the Board of Directors.
The Group Executive Council consists of five executive directors and five executive officers and meets regularly to discuss specific policies for execution of duties and other material items based on management policies decided by the Board of Directors to appropriately and effectively execute duties.
- 5. Ensuring appropriate operations throughout the Group
- The Group strives to create an environment where operations are properly executed in accordance with the Corporate Governance Policy and the Code of Conduct. To fulfil the Group’s corporate social responsibilities, this aims to ensure that actions are fair and comply with the laws and regulations and the Company’s articles of incorporation as well as social rules.
- Regarding the operations of Group companies, the Company collaborates closely with subsidiaries while respecting their autonomy. To ensure smooth operations with an eye toward comprehensive business development, subsidiaries periodically provide updates on operations and consult before making important decisions in accordance with the Group Company Regulations.
- Each subsidiary has a director from the parent Company assigned to it to provide comprehensive oversight of operations.
- The Company’s internal audits also apply to subsidiaries.
- 6. Providing staff to assist Audit & Supervisory Board members with their duties as required and securing the staff’s independence from directors
- Audit & Supervisory Board members may have staff assigned to help them perform their duties as necessary. Such staff members are determined by the Board of Directors with the agreement of the Audit & Supervisory Board, and their independence from directors is secured. Furthermore, a staff member assisting an Audit & Supervisory Board member executes business based on instructions and orders given by that member, and prioritizes executing duties to ensure the Audit & Supervisory Board member’s instructions are effective.
- 7. Group director and employee reporting to Audit & Supervisory Board members, and other matters related to reports to Audit & Supervisory Board members
- The Group’s directors and employees are to promptly report to an Audit & Supervisory Board member or the Audit & Supervisory Board any violations of the laws and regulations or the Company’s articles of incorporation related to the execution of duties, any misconduct, any matters that may cause material damage to the Group, and any decisions that significantly affect operations or the organization. Furthermore, reports are periodically made on subsidiaries’ business performance, financial conditions, and other important information, and any requests from Audit & Supervisory Board members for information pertaining to the execution of duties are to be promptly met.
- 8. Ensuring those making reports pursuant to item 7 above are not treated unfairly due to the said reports
- The Company prohibits unfair treatment of Group directors and employees reporting information to Audit & Supervisory Board members due to those reports, and makes that known to Group directors and employees.
- 9. Ensuring other Audit & Supervisory Board members’ audits are effectively executed
- Audit & Supervisory Board members meet with representative directors to the extent possible to exchange opinions pertaining to business operations, apart from business reports, as well as otherwise foster communication.
- Audit & Supervisory Board members periodically exchange opinions with independent auditors and the Internal Audit Department.
- When Audit & Supervisory Board members issue requests for advance payments or reimbursement of expenses connected with the execution of their duties, the requests are promptly processed and granted unless those expenses are deemed unnecessary in regard to the Audit & Supervisory Board members’ performance of duties.
- 10. Ensuring the reliability of financial reports
- To ensure the reliability of financial reports, the Company has established internal controls pertaining to financial reporting and operates the controls properly. In addition, the Company continually evaluates their effectiveness and makes improvements as necessary.
Eliminating antisocial forces: Fundamental Concepts and Steps in Place
The Group’s policy is to have no relationships whatsoever with antisocial forces and resolutely refuse any unjustified demands.
The Group clarifies its commitment to excluding antisocial forces in the Code of Conduct, Employee Work Regulations, and Risk Management Regulations, and makes this policy known thoroughly among employees.
In addition, the Group has the following internal system in place.
Organizational responsibility for the exclusion of antisocial forces is assigned to the General Affairs Department. It participates in a corporate defense countermeasures council in Kobe, collects relevant information on the topic, and strengthens ties with outside specialists such as the police and lawyers.
- Investor Relations
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- Annual Report
- General Meeting of Shareholders
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