We place importance on relationships of trust with our shareholders, employees, customers, business partners, creditors, local communities, and other stakeholders. In addition, in order to achieve sustained growth and increase corporate value over the medium to long term, we will provide appropriate information disclosure, including non-financial information, and support transparent, fair, prompt and decisionmaking by directors and others.
We recognize that realization of a corporate governance system and constructive dialogue with shareholders are the most important issues. We will continue to strive to achieve sustained growth and increase corporate value over the medium to long term.
As a company with an Audit and Supervisory Committee, we have established a corporate governance system centered on the Board of Directors and the Audit and Supervisory Committee. In order to accelerate business execution and clarify the roles of supervisory and executive functions, we have delegated part of the decision-making authority for business execution to the President and Representative Director, and introduced an operating officer system.
In accordance with the Companies Act and the Enforcement Regulations of the Companies Act, we have established a system (internal control system) to ensure the appropriateness of our business as described in the preceding clause, and we will further enhance this system.
We hold regular meetings between the Accounting Auditors and the Audit and Supervisory Committee to share information, and regular monthly meetings between the Internal Audit Division and Directors of the Audit and Supervisory Committee to share and cooperate with the audit results.
In addition, we hold three-pronged audit meetings with accounting auditors, the Audit and Supervisory Committee, and the Internal Audit Division about three times a year to share information on internal control issues.
Corporate
Governance Report
【Evaluation process】
Every year, we analyze and evaluate the effectiveness of the Board of Directors as a whole by conducting a questionnaire survey to directors who comprise the Board of Directors, reviewing the results by independent outside directors, and reporting the results to the Board of Directors.
【Summary of evaluation results】
As a result, the effectiveness of the entire Board of Directors in the previous fiscal year.
Directors was confirmed that they have secured the effectiveness of the management of the Board of Directors, the monitoring function of the Board of Directors, and the method of reporting to the Board of Directors was also evaluated that improvements are made. On the other hand, they shared the need for more opportunities to discuss medium-term issues. Based on these opinions, we will work to make improvements to further improve the effectiveness of the Board of Directors.
When nominating candidates for the Board of Directors, the Nominations Committee, which is chaired by an independent outside director and constituted by a majority of independent outside directors, shall consider the experience, abilities, and achievements of the Executive Officer in a comprehensive manner, and in the case of re-appointed directors, the nomination shall be made after considering the contribution of the re-appointed directors to the performance during their term of office.
Regarding candidates for outside directors, please express your opinions from an external objective point of view by making use of (1) knowledge and experience as an expert to the formulation of management strategies and plans and the execution of important operations (2) reflecting in the decision-making process of the company, management team, controlling shareholder, etc.
We select and nominate candidates based on a comprehensive assessment of the international perception, expertise, and background of candidates indispensable for the future development of our group, based on the roles we expect of outside directors, such as ensuring that conflicts of interest do not arise between the Company and the Board of Directors, and reflecting the opinions of shareholders and other stakeholders.
Knowledge that enables us to appropriately fulfill the roles required of the Audit Committee when nominating candidates for the Board of Directors who are members of our Audit, etc.
Nominations are made after comprehensively considering knowledge, experience, abilities, and personal achievements.
We have established a Risk Management Committee to reduce and respond to various risks in our business operations. The Risk Management Committee consists of the BCP Subcommittee, the Disaster Prevention Subcommittee, and the Confidential Information Management Subcommittee. The BCP Subcommittee and the Disaster Prevention Subcommittee formulate business continuity plans and reduce disaster risks, and the Confidentiality Management Subcommittee implements information security measures.
In recent years, earthquakes, fires, explosions, wind, snow, and flood damage have occurred one after another in countries around the world, and pandemic (a new type of coronavirus) has spread throughout the world. Since it is expected to have a significant impact on the maintenance of the supply chain, it is necessary to determine what measures are being taken to deal with the risks and bottlenecks of stopping business activities. It is also necessary to formulate and implement a business continuity strategy that can be implemented in order to avoid a "loss of management" in the event of an accident.
In order to prevent the suspension of business operations due to disasters such as fires, earthquakes, wind, snow, and floods, and infectious diseases, the Group is narrowing down important operations and promoting the formulation of business continuity plans.
In the event of a disaster, accident, or incident, the President and Representative Director takes the lead in deliberating measures to minimize losses, the possibility of business continuity, and the risk of delivery to customers.
Our group is working on safe information management globally by building an ISMS (Information Security Management System) system and continuously maintaining and improving information security, including employee education. In particular, we consider customer information, sales information, technical information, personal information, etc. to be important information, and take appropriate security measures to protect this information from risks such as
leakage, loss, destruction, and falsification.
In terms of IT security, in response to the recent increase in the risk of cyber attacks, we have introduced stronger defense mechanisms such as EDR across the group.
In addition to internal systems, we maintain and improve security standards by obtaining information security certification in Japan and Europe established by the German Automobile Industry Association called TISAX, and complying with Japan's automobile industry
cybersecurity guidelines.
In addition, we are building and operating a system globally that complies with the standardization of measures (ISO/SAE 21434) in response to the growing awareness of product safety in the automobile industry, and are ensuring that our products have cybersecurity
measures in place.
We promote intellectual property activities based on our basic policies of securing beneficial rights, ensuring intellectual property safety, and strengthening the utilization of rights.
To secure beneficial rights, we seek and evaluate patentable inventions, acquire rights from highly valued inventions, and promote the creation of a foundation to advance business superiority. In addition, to support the acquisition of orders, we will promote the acquisition of rights corresponding to the countries in which we distribute our products and to our competitors.
"Ensuring Intellectual Property Safety" manages intellectual property risks by conducting patent research in accordance with the development and design phases.
As part of our efforts to strengthen the use of rights, we are promoting verification of other companies' products. When the use of our rights is confirmed, appropriate use of rights such as licenses is made.
The Nippon Precision Industries Group strives to be a corporate group that is even more trusted by society by placing importance on compliance in its management, complying with laws and ethics as a responsible member of society, and practicing sound corporate activities.
With the Compliance Code of Conduct and directors We aim to be a corporate group that is trusted by society by each and every employee acting in accordance with their action guidelines. We will also contribute to the prosperity of society by providing high-value products and services that satisfy customers.
Compliance
Code
We have established a Compliance Committee under the Representative Director to promote compliance, and appoint a Director or an executive officer with an official title as the Compliance Officer. The Compliance Committee is responsible for establishing a company-wide compliance system, identifying problems and issues, and conducting awareness-raising activities.
The committee deliberates on important issues related to violations of the law and promotes continuous improvement.
In addition, the Directors in charge of operations and Executive Officers analyze compliance risks specific to each business division and take countermeasures to continuously improve the quality of these risks.
We have included the Compliance Declaration, the Internal Reporting System, and the Compliance Code of Conduct in the TQM notebook carried by all employees, and are working to educate employees about the meaning of compliance and to publicize it.
Based on the annual activity plan of the Compliance Committee, compliance training for new employees, compliance training for managers by corporate lawyers, and distribution of educational materials (quarterly).
These measures are implemented by all group companies. In addition, we are working to prevent recurrence of compliance incidents occurring at Group companies by sharing information with the Compliance Committee and the General Affairs Manager of each company.
In addition, we are working to raise awareness of legal compliance by holding antitrust law training for sales departments and employees on overseas assignments, and holding annual training for all employees to prevent insider trading.
In accordance with the Whistleblower Protection Act, we have established an internal reporting system that accepts reports from employees, including affiliated companies, who are aware of improprieties, at internal and external contact points (attorneys), protects whistleblowers, and implements appropriate investigations, corrections, and preventive measures.
Confidential information may be kept anonymous to the person in charge.
We are strictly protecting whistleblowers by imposing obligations. In addition, the Compliance Committee is responsible for the internal whistleblower hotline. The Compliance Committee mandates the submission of reports on certain serious cases to outside directors, and prohibits the involvement of interested parties in cases. In this way, the fairness and independence of the whistleblower hotline is ensured.
Nippon Seiki Co., Ltd. is committed to appropriate collaboration with multi-stakeholders based on the importance of value creation not only with shareholders but also with employees, business partners, customers, creditors, local communities and other stakeholders in corporate management.
Multi-Stakeholder
Policy
Corporate Governance
Compliance Action Guidelines