Basic Policy on Internal Control
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.
System to ensure the adherence to laws, regulations, and the articles of incorporation by directors and employees in their execution of duties
- Officers and employees of the CMK Group (the "Group") shall comply with laws and regulations, articles of incorporation and social norms, and endeavor to enhance the compliance system by performing their duties in accordance with the CMK Group Action Statement, which clearly states the Group's basic stance on compliance.
- The Company shall seek to enhance its management monitoring functions by enhancing the supervisory function of its Board of Directors for overseeing the execution of duties by directors and the audit functions of Audit & Supervisory Board members.
- The Company shall have no relationship whatsoever with antisocial forces or groups that threaten the order and safety of society, and shall respond to such entities with a firm and resolute attitude.
System regarding storage and management of information on directors' execution of duties
Documents and other information (including electronic records) relating to the execution of duties by directors shall be stored and managed appropriately by the relevant departments, etc., in accordance with internal regulations.
Regulations and other systems for managing the risk of loss
The Company shall establish a cross-departmental risk management framework in order to deal with any and all risks surrounding the Company, and seek to enhance its risk management in accordance with Company-wide policies.
The Company shall seek to strengthen the risk management of the entire Company by having its Internal Control Management Committee identify, assess and control risks, validate risk management plans, and establish and improve a risk prevention system; and by having its Risk Management Committee respond promptly and appropriately to risks that have occurred.
The effectiveness of the internal control system shall be further enhanced by sharing of regular direct instructions and reports between the Internal Control Committee and the Company's representative director(s).
System to ensure efficient execution of duties by directors
The Company shall introduce an executive officer system to ensure efficient decision making by directors.
The Company shall improve the organizational structure in line with actual conditions, based on an understanding of changes in the business environment surrounding the Company, and shall develop internal regulations to clearly define the authority and responsibilities of each officer. The Company shall work to improve the efficiency of the entire Company's operations by continuously improving the efficiency of each business and administrative division, discovering factors which impede efficiency and taking measures against them.
Systems to ensure proper business operations as a corporate group consisting of the Company and its subsidiaries
- The Company shall engage in business management and provide management guidance for 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.
Material issues that could have an impact on profits or losses 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 at the subsidiary.
- In accordance with the Group's risk management regulations, etc., 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 situation arising 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 instillment 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 develop an environment that facilitates easy use of its whistleblowing system by 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 out for the entire Group, including overseas locations, to detect compliance violations and prevent their recurrence.
Matters concerning employees assisting corporate auditors appointed upon such company auditors' request
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 reporting to corporate auditors, etc., by directors and employees, etc., of the Company and its subsidiaries
- 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 the party submitting the report in the preceding section from being unfairly treated because of the report
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 concerning the policy for the treatment of expenses arising from the execution of duties by the corporate auditors
When a corporate auditor requests the advance payment of costs relating to the execution of his/her duties pursuant to laws and regulations, the Company shall promptly pay such costs, etc., except when the requested costs are proven to be unnecessary for the execution of his/her duties.
Other systems for ensuring the effective audit by the corporate auditors
- 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
- Safety is our highest priority. We will conduct safety and health activities in every process of our corporate activities.
- We will comply with laws and regulations related to safety and health.
- We will promote communication with employees and work to continuously improve workplace safety and health.
- We will reinforce safety and health education and enhance employees' awareness to ensure a safe and comfortable work environment.
- We will endeavor to protect employees from occupational accidents, prevent disease and improve their physical and mental health.
- We will conduct safety and health activities in coordination with local communities and business partners and build trust with them.
- By complying with relevant laws and regulations and responding to the demands and requirements of customers and society, we will endeavor to prevent ambient pollution and protect the environment.
- We will endeavor to mitigate and adapt to climate change and aim at realizing a decarbonized society.
- We will conserve limited natural resources and promote resources recycling and the replacement of substances that have a significant environmental impact.
- We will value bio-diversity and the richness of nature and make efforts for ecological preservation and harmonious coexistence with the local environment.
- We will operate environmental management systems and make continuous improvements to strengthen our environmental performance.
- We will proactively disclose our own environmental impact and initiatives to reduce it and will work to promote dialogue with stakeholders.
- We will work to improve the environmental awareness of officers and employees by conducting environmental education and enlightening activities.
- By complying with the relevant laws and regulations and responding to the demands and requirements of customers and society, we will conduct open and fair manufacturing operations.
- We will enhance the Quality Assurance System by continuously improving our Quality Management System.
- We will constantly aim at quality improvement through the formulation and implementation of action plans for establishing and achieving quality targets.
Human Resource Development Policy
- We will respect diversity and human rights and improve the working environment to ensure that each employee feels fulfilled on the job.
- To maximize each employee's potential, we will provide fair opportunities for competence development and career advancement.
- Through personnel allocation and changes to ensure the optimal placement of human resources and respond to changes in the environment, etc. we will help a diverse range of employees thrive.
- By conducting fair personnel appraisals and through feedback, we will nurture employees.
- We will develop a personnel system that allows employees to voluntarily plan their career and achieve sustained growth.
CMK Group Procurement Policy
Based on the recognition that our suppliers are good partners, we will value mutual growth.
By conducting procurement activities based on the following policy, we will fulfill our corporate social responsibility together with our business partners with the aim of achieving the mutual development of corporate activities in a sustained manner.
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 will provide equal opportunities for transactions to all companies in Japan and overseas.
We will not engage in abuse of a superior bargaining position and will not accept or demand gift-giving, entertainment or other benefits beyond socially prevailing standards and common sense.
3. Responsible procurement
We will conduct responsible procurement activities by considering human rights and the global environment.
Supplier Selection Policy
In commencing and continuing transactions, we will evaluate and select suppliers in a fair and impartial manner, by comprehensively taking the following items into account with the aim to build good partnership with suppliers.
- Compliance with laws and societal norms
- Initiatives regarding human rights/labor, safety and health, the environment, ethic/fair transactions, information security, etc.
- Management soundness
- Quality maintenance and enhancement, optimal prices, observance of delivery date
- Supply chain continuity capability and degree of cooperation during times of disaster and other unforeseen circumstances
Information Security Policy
The CMK Group believes that the appropriate management of information assets, one of its managerial resources, is most important.
Under this Basic Policy, we will endeavor to maintain and enhance information security in a systematic and continuous manner.
- We will comply with relevant laws, regulations, internal rules, other social norms, etc.
- In order to appropriately manage the information assets that we own, we will ensure information security according to its degree of importance and risk.
- We will provide officers and employees with education regarding information security.
- Through continuous activities to enhance information security, we will establish and maintain the relevant management systems.