Internal Control

The Company’s system to ensure that execution of duties by Directors and employees complies with laws and regulations, and with the articles of incorporation

1. The Company is building a compliance promotion system based on Compliance Regulations to ensure that execution of duties by Directors and employees complies with laws and regulations and the articles of incorporation, as well as social responsibilities and corporate ethics.
2. The Company has established a Compliance Committee and a Compliance Committee secretariat. The Risk Management Department is in charge of the Compliance Committee secretariat.
3. With regard to the promotion of compliance, the compliance policies of the Company are set out in compliance manuals, and shall be thoroughly instilled in all Directors and employees. Guidance is provided through training and other methods to ensure that compliance is seen by all Directors and employees as something that involves them directly, and is reflected in business operations.
4. For situations in which there are doubts as to whether acts, etc. are in compliance with laws and regulations, the Company has established a whistleblowing hotline to ensure that employees, etc. have the means for direct reporting, and has also set up an external point of contact for receiving direct reports from employees, etc. of clients. The Company prohibits the unfair treatment of whistleblowers in our “Whistleblowing System Regulations.”

System for the preservation and management of information relating to the execution of duties by the Company’s Directors

1. Documents, etc. are stored and managed appropriately based on the duties for which the individual is responsible, in accordance with laws and regulations, and internal regulations.
2. Management of information is conducted in accordance with the Information Asset Management Regulations, Basic Regulations for Information Security, Information Security Countermeasures Rules, and Basic Regulations for the Protection of Personal Information.

Regulations pertaining to crisis management involving losses by the Company, and other systems

1. In accordance with the Basic Regulations on Risk Management, risk management is to be dealt with by the Compliance Committee.
2. The Risk Management Department is in charge of the Compliance Committee secretariat.
3. Risk management is practiced in accordance with the Basic Regulations on Risk Management and Basic Regulations on Crisis Management, in addition to which the Company seeks to ensure safety and minimize losses in the event of a crisis occurring.

The Company’s system to ensure efficient execution of duties by Directors

1. The Board of Directors of the Company holds monthly meetings to decide important matters and to supervise the efficient execution of business.
2. The Company has adopted a divisional structure under which management is undertaken by multiple operations divisions split into different business areas.
3. General managers of operations divisions use the authority they have been delegated under the Authority for Approval Regulations, etc. to efficiently execute management plans determined in advance.
4. The Company has established a Nomination Committee and Remuneration Committee with members consisting mainly of Outside Directors. Each committee reports its findings in response to consultations from the Board of Directors, undertakes deliberations and decision-making delegated by the Board of Directors, and reports on the performance of its duties to the Board of Directors, thus ensuring the fairness, transparency, and objectivity of procedures related to the nomination and remuneration of Directors, etc.

System to ensure the properness of operations by the corporate group comprised of the Company and its subsidiaries

1. The Group is building a compliance system under which the presidents of Group companies are the persons responsible for promoting compliance at each company, in accordance with the Compliance Regulations.
2. The Group seeks to ensure that the Group Management Information-Sharing Meeting is used to discuss and thoroughly publicize the promotion of compliance.
3. The Company has established internal and external whistleblowing hotlines that can be used by all employees of Group companies, their families, and persons who resigned no more than one year previously.
4. The Company seeks to strengthen cooperation within the Group while respecting the autonomy of Group companies by holding monthly Group Management Information-Sharing Meetings to share information on and ensure thorough implementation of policies determined by the Board of Directors of the Company, and to promote the sharing of information on the state of business at Group companies.

Matters relating to Directors and employees who should assist in the duties of the Audit and Supervisory Committee

In the event of a request by Audit and Supervisory Committee Members, an employee will be assigned to assist as required after taking into account their independence and expertise in audit procedures, and after discussion with Audit and Supervisory Committee Members.

Matters relating to the independence of the Directors and employees referred to in the preceding item from Directors (excluding Directors who are Audit and Supervisory Committee Members), and matters relating to ensuring the effectiveness of instructions from the Audit and Supervisory Committee to Directors who are Audit and Supervisory Committee Members and employees who assist with the duties of the Audit and Supervisory Committee.

In order to ensure the independence of the employees referred to in the preceding item and the effectiveness of instructions from the Audit and Supervisory Committee, decisions regarding assignments, personnel transfers, personnel evaluations, and disciplining of said employees shall require the approval of the Audit and Supervisory Committee.

System for reports to the Audit and Supervisory Committee of the Company

In the event that Directors or employees become aware of matters that could cause significant harm to the Company, or illegal acts, or material violations of laws and regulations or the articles of incorporation, they shall make a report to the Audit and Supervisory Committee in accordance with laws and regulations, and internal regulations such as the Audit and Supervisory Committee Auditing Standards and the Audit and Supervisory Committee Rules.

System to ensure that persons making a report as described in the preceding item are not subject to unfair treatment as a result of making such reports

Unfair treatment of Directors or employees of the Group as a result of making such reports is prohibited in internal regulations, etc.

Matters relating to the treatment of expenses or debts incurred in the course of the execution of duties by Audit and Supervisory Committee Members (restricted to matters related to the execution of Audit and Supervisory Committee duties)

When an Audit and Supervisory Committee Member invoices the Company for prepayment, etc. of expenses relating to the execution of duties, said expense or debt shall be processed promptly, except in cases where it is recognized that the expense or debt is not required for the execution of duties by said Audit and Supervisory Committee Member.

Other systems to ensure that audits by the Audit and Supervisory Committee of the Company are conducted effectively

1. In addition to attending meetings of the Board of Directors, etc. in order to gain an understanding of important decision-making and the state of business execution, Audit and Supervisory Committee Members may view important documents related to business execution, such as approval documents, and require explanations from Directors or employees as necessary.
2. Audit and Supervisory Committee Members work to conduct effective audits by holding regular meetings with the Representative Directors to exchange opinions, and by cooperating with the internal control departments and the Accounting Auditor.