In accordance with the Companies Act and the Ordinance for Enforcement of the Companies Act, our company has established a basic policy on internal control in order to contribute to the sustainable development of society through the enhancement of corporate value and facilitate voluntary and autonomous achievement of our goals. The Company has developed, and is implementing, an internal control system in keeping with this basic policy and strives to make continuous improvements to this system.
Structure to ensure that the execution of duties by Directors and hired experts is in keeping with corporate law and the Articles of Incorporation
Directors and executive officers shall spearhead efforts aimed at establishing corporate ethics at both the Company and its subsidiaries (referred to below as the "OKI Group") and conduct themselves in accordance with the OKI Group Charter of Corporate Conduct and the OKI Group Code of Conduct, which were formulated to ensure that all directors, executive officers, and other hired experts comply with laws, ordinances, the Company's Articles of Incorporation, and its internal rules and regulations. At the same time, directors and executive officers shall repeatedly communicate the importance of this compliance to facilitate full awareness among all members of the OKI Group.
The Compliance Committee, chaired by the compliance officer, shall be established to report, deliberate and decide upon matters related to compliance in the OKI Group.
In order to raise awareness among all members of the OKI Group regarding compliance with decisions reached by the Compliance Committee, the division responsible for compliance-related matters plans and implements relevant and concrete measures such as education and training for directors, executive officers and employees.
Violations of laws and regulations, articles of incorporation, etc. shall be dealt with strictly in accordance with disciplinary provisions.
An independent internal audit division under the direct control of the president audits the status of compliance with laws and regulations, the articles of incorporation, internal rules, etc. in the OKI Group. Through these audits, the division identifies issues, proposes improvement measures, and conducts other relevant activities.
In order to promptly detect and correct misconduct, the Company has established internal reporting rules along with mechanisms for reporting to Outside Directors and Audit & Supervisory Board Members and has set up contacts point for reporting and consultation.
In cooperation with the police and other related organizations, we will take a resolute stance against antisocial forces that threaten the order and safety of civil society, and we will seek to cut off all relations with these forces.
System relating to storage and management of information in regard to the execution of duties of Directors
Documents and information related to the execution of duties by Directors shall be appropriately stored and managed in accordance with laws, regulations and internal rules.
With regard to information security, in accordance with the Electronic Information Management Rules and related regulations, the OKI Group shall delineate systems associated with responsibility for information security and establish a framework for the continuous implementation of measures aimed at maintaining and improving information security in the OKI Group.
The OKI Group shall establish rules related to the protection of personal information and the management of trade secrets, and store and manage personal information and important trade secrets appropriately and safely.
The Company shall develop rules related to the disclosure of important information and shall establish a system for the appropriate, timely and fair disclosure of information that must be communicated in accordance with requirements stipulated by laws, regulations, stock exchange rules, etc.
Regulations and other systems related to managing the risk of losses
To facilitate risk management, the Risk Management Committee, chaired by the President and CEO, shall be established in accordance with Risk Management Rules to accurately ascertain risks associated with the business activities of the OKI Group and promote measures aimed at preventing their materialization.
In accordance with these Risk Management Rules, all divisions of the OKI Group shall manage risks that may arise in relation to the business operations for which these divisions are responsible. For risks that require company-wide management, a supervisory department shall be established, and this department shall determine a response policy after evaluating the risks, and establish appropriate systems based on this policy.
When a member of the OKI Group becomes aware of a crisis or an impending crisis, he or she shall promptly report the situation to the Secretariat of the Risk Management Committee. The Secretariat shall provide guidance concerning actions to be taken and report particularly critical matters to directors and Audit & Supervisory Board members. In the event of a disaster, the Company will respond through a variety of potential measures (establishment of an emergency response headquarters, etc.) while considering factors such as the area in which the disaster occurred and the scale of the disaster.
The Board of Directors shall also review the risk management system each year.
System for ensuring the efficiency of execution of duties by Directors
The Board of Directors meets once a month, in principle, to decide on important matters such as basic management policies and to review the status of business execution performed by Directors.
By appointing executive officers who execute business in accordance with basic management policies determined by the Board of Directors, the Company will maintain separation between business execution and supervision and accelerate the decision-making process. In addition, the Company will organize a Management Committee composed of Executive Officers, etc. to assist the President and CEO in the decision-making process.
Responsibilities and authorities related to the execution of business operations shall be defined in the Rules of Division of Duties and Rules of Authority.
The Board of Directors shall make decisions regarding the OKI Group's medium-term management plan and annual plan and supervise the status of their execution.
Executive officers shall execute their duties efficiently and in accordance with the OKI Group's medium-term management plan and annual plan, as established by the Board of Directors. The progress of the annual plan shall be confirmed by the Management Committee and reported to the Board of Directors.
System for ensuring the appropriateness of operations of the corporate group consisting of the Company and its subsidiaries
The Company shall provide guidance and support for the development of systems designed to ensure the appropriateness of operations at subsidiaries.
In order to improve the soundness and efficiency of management in the OKI Group, directors and corporate auditors shall be dispatched to subsidiaries as necessary in accordance with the management rules of affiliated companies, and a division responsible for the management of subsidiaries shall be established within the OKI Group. The division responsible for management of subsidiaries shall receive reports from these subsidiaries on important matters related to their business operations and hold relevant discussions. Matters of special importance shall be referred to the Management Committee or the Board of Directors.
Each subsidiary shall establish internal reporting rules as well as mechanisms for making reports to its Outside Directors and Audit & Supervisory Board Members. In addition, all subsidiaries shall establish contact points for reporting and consultation, and shall strive to promptly detect misconduct and correct this misconduct after reporting it to the Company.
The OKI Group shall aim to improve the efficiency of decision-making and operations performed by each group company by establishing common rules for the entire Group.
The Internal Audit Division of our company shall audit the appropriateness of the OKI Group's business operations while conducting proper verification procedures, providing advice, etc.
System for ensuring the reliability of financial reporting
In order to ensure the reliability the OKI Group’s financial reporting, the internal control system for financial reporting shall be established, maintained and improved in accordance with Corporate Accounting Regulations, the Financial Instruments and Exchange Act and other applicable laws and regulations.
As they executive their respective operations, all divisions and subsidiaries of our company shall ensure appropriate financial reporting by implementing checks and balances based on separation of duties and daily monitoring.
Matters concerning employees who are responsible for assisting Audit & Supervisory Board members and the independence of these employees from the influence of Directors
Staff shall be appointed to assist Audit & Supervisory Board members in their duties.
In order to ensure the independence and the effectiveness of instructions, staff assigned to Audit & Supervisory Board members shall be employees who are not subject to instructions and orders of Directors, and the prior consent of the Audit & Supervisory Board shall be obtained for personnel transfers and personnel evaluations.
System for reporting by Directors and employees to Audit & Supervisory Board Members, and other systems for reposting to Audit & Supervisory Board Members
If any director or employee, or any director, Audit & Supervisory Board member, or employee of a subsidiary, discovers a situation that may cause significant damage to the Company, in accordance with laws and ordinances, he or she shall immediately report all relevant information to an Audit & Supervisory Board member either directly or through the responsible principal body.
Directors shall provide opportunities for full-time Audit & Supervisory Board Members to attend both Board of Directors' and Management Committee meetings to ensure that these members can understand processes applied when making important decisions and circumstances related to the execution of business operations. In addition, directors shall develop a system that enables the viewing of requests for managerial decisions and other important documents.
Directors shall establish a system under which Audit & Supervisory Board members attend meetings of, and receive reports from, the Risk Management Committee.
Directors shall ensure that Audit & Supervisory Board members receive internal reports in accordance with the Company's Internal Reporting Regulations and provide a system through which Audit & Supervisory Board members can be informed of current circumstances related to internal reporting.
Directors shall establish a system under which Audit & Supervisory Board members receive periodic reports from directors and employees regarding circumstances related to the establishment and implementation of internal control systems and the statuses of internal audits. Additionally, directors shall provide a system that allows Audit & Supervisory Board members to request reports from directors and employees regarding matters they deem necessary.
No individual who has made a report to a corporate auditor shall be treated disadvantageously on account of this report.
Directors and employees of subsidiaries shall promptly report to corresponding corporate auditors on matters for which reports are required by laws and regulations and matters regarding which reports were requested by these same auditors. Furthermore, these directors and employees shall provide additional reports to the headquarters responsible for subsidiaries of our company.
Other systems to ensure effective audits by Audit & Supervisory Board members
When investigating the status of the Company's operations and assets and performing other auditing duties, Audit & Supervisory Board Members shall maintain close coordination with the Internal Audit Division and ensure that these auditing duties are being performed efficiently and effectively.
Audit & Supervisory Board Members shall maintain close cooperation with accounting auditors and ensure efficient audits through a variety of means, including regular meetings with accounting auditors, attendance of on-site audits performed by accounting auditors and as necessary, requests for reports from accounting auditors regarding the progress of audits.
The Company shall pay the expenses necessary for the execution of duties performed by Audit & Supervisory Board Members.
Audit & Supervisory Board Members may, if necessary, receive advice on audit services from entities such as attorneys and certified public accountants at the expense of the Company.