Basic Principles Regarding Internal Controls
Pursuant to Article 362 of the Companies Act (Japan) and Article 100 of the Ordinance for Enforcement of the Companies Act, CMK Corporation (the "Company") has adopted the following Basic Policy on Internal Control.
Establishing a structure to ensure compliance of director and employee duties with legal requirements and articles of incorporation
- At the CMK Group ('the Group'), our officers and employees are committed to upholding legal obligations, articles of incorporation, and societal standards. We actively work to strengthen our compliance framework by aligning our professional responsibilities with the CMK Group Action Statement, a document that articulates our fundamental commitment to compliance.
- As a part of our commitment to robust governance, the Company is dedicated to strengthening its management monitoring capabilities. This includes enhancing the supervisory role of our Board of Directors in overseeing directors' duties and reinforcing the audit functions of our Audit & Supervisory Board members.
- The Company maintains a strict stance against any association with antisocial forces or groups that pose a threat to societal order and safety. We approach such entities with unwavering determination and a resolute attitude.
Framework for the storage and management of information on directors' execution of duties
Documents and related information, including electronic records, concerning the execution of directors' duties are to be appropriately stored and managed by the respective departments in accordance with internal regulations.
Regulations and other frameworks concerning risk management for losses
To address all risks surrounding our organization, we have established a comprehensive cross-functional risk management framework. We are dedicated to enhancing our risk management efforts in accordance with our company-wide policies.
Within our 'Internal Control Committee,' we focus on risk identification, assessment, control, and the development and strengthening of proactive risk prevention systems. In the event of risk occurrences, our 'Crisis Management Committee' ensures swift and appropriate responses, further fortifying our company-wide risk management.
Regular and direct communication between the 'Internal Control Committee' and the Representative Director enables us to continually enhance the effectiveness of our internal control system.
Framework to ensure the efficient execution of directorial duties
The Company has streamlined decision-making by introducing an executive officer system, ensuring more efficient decision-making by our directors.
To adapt to the ever-changing business landscape, The Company has established agile organizational structures that align with current circumstances. Simultaneously, we have refined internal regulations to provide greater clarity regarding the authorities and responsibilities of each role.
The Company proactively engages in improvement initiatives within each business and supervisory department. By continuously identifying factors that impede efficiency and implementing responsive measures, we drive ongoing enhancements in operational efficiency across the entire organization.
Framework to ensure the proper execution of operations within the corporate group, comprising our organization and its subsidiaries
- The Company shall engage in business management and provide management guidance to each of its subsidiaries, placing emphasis on prior consultations between the Company and each subsidiary with regard to important issues such as regularly reporting the content of business operations, while at the same time respecting the operational autonomy of each subsidiary.
Significant issues that could have an impact on financial performance shall be subject to approval by the Company's Board of Directors. The Company shall dispatch directors and corporate auditors to each subsidiary, as necessary, to ensure the appropriateness of operations.
- In accordance with the Group's risk management regulations, the Internal Control Management Committee shall deliberate on issues concerning the promotion of Group-wide risk management and devise measures in relation to such issues.
In the event of an unforeseen circumstances occurring within the Group, the Risk Management Committee shall lead the Group's response to the situation to ensure continuity of the Group's business operations.
- In order to formulate and actualize a medium-term management plan on a consolidated basis, key management goals shall be set for each fiscal year for the entire Group, and details of actual performance shall be monitored and shared among Group companies.
- The Company shall seek to maintain and improve compliance awareness through continuous efforts such as training and awareness-raising activities in order to familiarize all officers and employees of the Group with the CMK Group Action Statement, which is based on the Group's management philosophy. Persons in charge of compliance matters shall be appointed within the Group, as appropriate, to ensure the cultivation of compliance awareness throughout the Group.
The Internal Audit Division shall audit actual conditions at subsidiaries and provide them with guidance, support and advice for improvement.
The Group shall create an environment that promotes the accessible utilization of its whistleblowing system by its officers and employees.
- A whistleblowing system--for which corporate auditors and external law firms shall serve as points of contact for consultations--will be established for the entire Group, including overseas locations, to identify compliance violations and prevent their recurrence.
Matters concerning employees requested by auditors to assist them in the performance of their duties
If a corporate auditor requests the appointment of an employee or employees to assist with his/her duties as a corporate auditor in order to ensure an effective audit, directors shall appoint an employee or employees to do so, upon discussion with the relevant corporate auditor. The employee(s) appointed shall have the necessary knowledge and skills, and shall follow the directions and instructions of the corporate auditor.
Matters concerning the independence of the employee(s) mentioned in the previous section from directors
To ensure the independence of the employee(s) mentioned in the previous section from the directors, matters concerning authority over personnel issues pertaining to the employee such as employee evaluations and transfers shall be determined after obtaining the consent of the full-time corporate auditors.
System for directors, employees, and other personnel, as well as subsidiary directors and employees, to report to the auditors
- Corporate auditors shall attend meetings of the Board of Directors and other important meetings and request reports on important information concerning management issues and risks, as appropriate. Minutes of important meetings and approval documents for management decisions, etc., shall be made available for viewing by corporate auditors at all times.
- When a director discovers any fact that has caused or may cause serious damage to the Group, he/she shall immediately report it to the corporate auditors.
- When a corporate officer or employee of the Group is requested by the Company's corporate auditors to make a report on matters concerning execution of business, he/she shall promptly make an appropriate report.
- When a corporate officer or employee of the Group discovers any fact that has caused or may cause serious damage to the Company or the Group, including violations of laws, etc., he/she shall immediately report to the relevant division in charge and directly notify corporate auditors using such frameworks as those prescribed in the whistleblowing system regulations.
System for preventing reprisals against parties submitting reports as per the preceding section
The Company forbids the dismissal or any other unfair or disadvantageous treatment of any officer or employee of the Group who has made a whistleblowing report to the corporate auditors for the reason of having made such a report. The Company shall familiarize all officers and employees of the Group with this rule.
Matters related to the policy regarding the treatment of expenses incurred in the execution of the duties of auditors
When a corporate auditor requests the advance payment of costs relating to When a corporate auditor requests the advance payment of expenses relating to the execution of his/her duties pursuant to laws and regulations, the Company shall promptly pay such costs, except when the requested amounts are proven to be unnecessary for the execution of said duties.
Other measures in place to ensure the effective execution of auditors' oversight and audits
- The Company's representative director and the director in charge of internal control shall ensure the creation of sufficient opportunities for the exchange of information and opinions, etc., with corporate auditors as appropriate, and shall endeavor to improve and enhance the internal control system as suitable for the Group.
- In executing their duties, company auditors shall, at their own discretion, ensure the creation of opportunities to cooperate with attorneys, certified public accountants, and other external professionals.
Safety and Health Policy
- We prioritize safety above all else and promote safety and health initiatives in all processes of our business activities.
- We will comply with safety and health-related regulations.
- We will promote communication with employees and work to continuously improve workplace safety and health.
- We will enhance safety and health education to raise awareness and ensure a safe and secure working environment.
- We are committed to preventing workplace accidents and illnesses among employees while promoting overall physical and mental well-being.
- We will collaborate with the local community and business partners to advance safety and health initiatives, fostering trust and building relationships.
- We strive to prevent environmental pollution and protect the environment by addressing legal requirements, customer demands, and societal expectations.
- We are committed to mitigating climate change, adapting to its impacts, and working towards achieving a carbon-neutral society.
- We value finite resources and promote resource recycling and the substitution of environmental impact materials.
- We highly value biodiversity, cherish the richness of nature, and strive to protect ecosystems while fostering harmonious coexistence with local environments.
- We will operate an environmental management system and engage in continuous improvement to enhance our environmental performance.
- We will actively disclose our environmental impact and initiatives and engage in dialogue with stakeholders.
- We conduct environmental education and awareness campaigns to enhance the environmental consciousness of our officers and employees.
- By complying with legal requirements and responding to customer demands and societal expectations, we will practice transparent and ethical manufacturing.
- We will continuously improve our quality management system and strengthen our quality assurance framework.
- We consistently aim for quality improvement by setting quality objectives and establishing action plans to achieve them.
Human Resource Development Policy
- We respect diversity and human rights, and we will create a workplace environment where each employee can feel a sense of fulfillment.
- We provide equal opportunities for skills development and career advancement to maximize the potential of each and every employee.
- We promote the active participation of diverse employees through appropriate personnel placement and transfers in response to changes in the environment and other factors.
- We achieve fair personnel evaluations and use feedback to contribute to the development of employees.
- We establish a personnel system that allows employees to build their careers autonomously and sustainably grow while maintaining continuous development.
CMK Group Procurement Policy
We value our business partners as valuable collaborators and place great importance on mutual growth.
With the aim of achieving the sustainable development of our respective business activities, we will conduct procurement activities based on the following principles, fulfilling our corporate social responsibility alongside our business partners.
1. Compliance with laws and societal norms
We will comply with the laws, regulations and social norms of the countries and regions in which we conduct procurement activities.
2. Fair and equitable transactions
We provide equal trading opportunities to all companies, both in Japan and overseas.
We do not abuse our dominant position in transactions and do not seek or accept favors such as gifts, entertainment, or any form of undue advantage beyond the boundaries of social norms.
3. Responsible procurement
We will conduct responsible procurement activities that consider human rights and the global environment.
Supplier Selection Policy
In our pursuit of building stronger partnerships with our business associates, and when initiating or continuing transactions, we comprehensively consider the following factors in a fair and equitable manner to evaluate and select our business partners.
- Compliance with laws and social norms
- Initiatives for human rights, labor, health and safety, environment, ethics, fair trade, and information security
- Integrity of management
- Quality maintenance and improvement, optimal pricing, compliance with delivery deadlines
- Resilience and cooperation in unforeseen events such as natural disasters
Information Security Policy
At CMK Group, we consider the proper management of information assets, which are one of our valuable resources, to be of paramount importance.
Based on this fundamental policy, we are committed to the organized and continuous efforts to maintain and enhance information security.
- We will comply with relevant laws, internal regulations, and other social norms and standards.
- In order to appropriately manage our information assets, we will ensure information security according to the degree of importance and risk associated with each.
- We will provide education on information security for officers and employees.
- We will establish and maintain relevant management systems through continuous improvement activities in information security.