(1) The Board of Directors makes important decisions pursuant to laws and regulations, the Articles of Incorporation, and internal rules and oversees the Directors' performance of their duties. The Board of Directors includes independent Outside Directors to strengthen its function of supervising the Directors' performance of their duties.
(2) The Company establishes the Code of BELLSYSTEM24 Group Conduct ("Code of Conduct") as the standard for basic activities all of the executives and employees of the Company and its subsidiaries should voluntarily practice and clearly states that it will comply with laws and regulations. Directors, Corporate Officers, and employees of the Company and its subsidiaries must abide by the Code of Conduct to thoroughly comply with laws and regulations.
(3) The Company takes the following specific measures to act in good faith based on the ethics and values required of members of society ("Compliance"), including compliance with laws and regulations, the Articles of Incorporation, internal rules, and social standards ("Laws, etc.").
[1] Directors and Corporate Officers take the initiative to ensure compliance with Laws, etc. pursuant to the Code of Conduct. The Company develops educational programs with a focus on Compliance and provides Directors, Corporate Officers, and employees with training to ensure that compliance with Laws, etc. becomes the foundation of all corporate activities.
[2] The Company appoints a Chief Compliance Officer (CCO) as the general manager responsible for establishing and maintaining the compliance system of the Company and its subsidiaries. As the chairperson of Compliance Committee established to ensure the Company and its subsidiaries thoroughly operate the compliance system and follow its practices, the CCO facilitates the penetration of the compliance system.
[3] Directors and Corporate Officers establish the Corporate Ethics Hotline to be a point of contact for the whistleblowing system for the reporting of Compliance violations provided by the management divisions in the Company, attorneys outside the Company, and the Corporate Auditor independent of management and they inform all Directors, Corporate Officers, and employees of the Company and its subsidiaries of the system. In the operation of the whistleblowing system, Directors and Corporate Officers ensure that the anonymity of whistleblowers is guaranteed and that they are not treated disadvantageously.
[4] The Audit Division conducts internal audits to determine that the Company and its subsidiaries' performance of their duties is efficient and conforms with Laws, etc. and the division reports its results to Directors, the CRO and Corporate Officers as necessary.
[5] Upon discovering a Compliance-related issue that may seriously impact the Company or its subsidiary through the whistleblowing system or an internal audit, Directors and Corporate Officers promptly establish measures to prevent recurrence and thoroughly communicate and implement these measures.
[6] Pursuant to the Code of Conduct and the BELLSYSTEM24 Group Basic Rules for Measures Addressing Antisocial Forces, Directors, Corporate Officers, and employees establish an internal system to prevent any relationship whatsoever with antisocial forces and related groups, including business relationships, that may threaten the order and safety of civil society and resolutely refuse and respond to any and all demands that a relationship with an antisocial force be established or unjust demands made by antisocial forces.
The Management Planning Division and the Legal Affairs and Compliance Division appropriately store and maintain the minutes of General Meetings of Shareholders, meetings of the Board of Directors, and other important meetings, round robins, and other information about Directors' performance of their duties pursuant to the Basic Information Management Rules and the Document Management Rules. The divisions verify the status of document management and modify the rules as necessary.Directors and Corporate Auditors are permitted to view these documents anytime and anywhere.
(1) The Company determines its risk management system for the Company and its subsidiaries (hereinafter collectively referred to as "the Group") by establishing Risk Management Rules, and, under the leadership of the Risk Management Division, identifying, evaluating and appropriately managing risks in its management with the aim of making sound management decisions and thereby realizing sustainable growth.
(2) The Company appoints a Chief Risk Officer (CRO) to be the person responsible for integrated risk management in the Group. The CRO holds and administers the Risk Management Committee as the person with overall responsibility for risk management on the second line of defense, and manages the risks of the Group on an integrated basis. Moreover, the Company and its subsidiaries appoint a Chief Information Security Officer (CISO) and Chief Privacy Officer (CPO) to prevent the outflow and leakage of confidential information, including private information, which constitutes a significant business risk. Under the direction of CISO and CPO, the Legal Affairs and Compliance Division leads the development of an information protection system and the implementation of activities to ensure permeation of the operation and maintenance of the system among the Directors, Corporate Officers, and employees. The Company conducts internal audits to verify the appropriate operation of these systems.
(3) The CRO conducts a management risk assessment every year to comprehensively grasp risks in management strategies and to take effective steps against those risks in advance. In those risk assessments, the CRO identifies and evaluates the top risks, formulates measures against them and then reports the results of those measures to the Board of Directors.
(1) The Company has adopted an executive officer system, under which the Directors' efficient performance of their duties is ensured by delegating the authority of Directors to perform their duties to the Corporate Officers.
(2) The Company ensures the Directors' efficient performance of their duties by defining the authorities of their jobs and the division of duties pursuant to Job Authority Rules and Rules for the Division of Duties.
(3) The Company establishes Round Robin Rules and Expense Expenditure Approval Rules to ensure the efficient performance of Corporate Officers and employees' duties.
(4) The Company simplifies the decision-making process by delegating job authorities and accelerates decision making while more important decisions are made through consultation or inquiries at meetings of the Board of Directors, the Executive Committee, the advisory body to the President & CEO, and other meetings attended by management to ensure that decisions are made more carefully, and that duties are performed appropriately and efficiently.
The Company establishes its Internal Control Committee chaired by the Corporate Officer responsible for the Legal Affairs and Compliance Division as an organization that examines issues concerning the internal control systems of the Company and its subsidiaries (the "Group") and determines and implements measures to continuously improve and operate the internal control system of the Group.
(1) System of reporting matters concerning the performance of duties of subsidiaries' Directors, Corporate Officers, and others in equivalent positions ("Directors, etc.") and employees
The Company establishes Group Company Management Rules and requires that its subsidiaries obtain approval for or report important matters in the management of the subsidiary to the Company in order to build and maintain the governance system that is necessary for the Group while also respecting the autonomy of each subsidiary. The Company also receives reports from subsidiaries on a regular or irregular basis regarding the status of performance of duties by Directors, etc. and employees, business performance, financial condition and other significant issues that seriously affect their business. Directors, etc. and employees of subsidiaries must immediately report to the Directors and Corporate Officers of the Company any fact that may seriously damage the company or any misconduct or serious violation of laws and regulations or the Articles of Incorporation by a Director, etc., or employee. The Company develops appropriate systems, including the introduction of this policy in stages, for affiliates according to the purposes of its capital contribution, capital contribution ratios, and relationships with other shareholders while respecting the independence of the affiliates. For overseas affiliates, the Company comprehensively considers local laws and regulations, differences in business customs, and other matters.
(2) Rules and other systems for managing the risk of loss at subsidiaries
These are as in "3. Rules and other systems for managing the risk of loss" above.
(3) System for ensuring that Directors, etc. of subsidiaries efficiently perform their duties
Based on management guidance agreements or business trust agreements signed between the Company and its subsidiaries, the Company controls and provides guidance on business administration particularly via its administrative divisions to increase the efficiency and improve the appropriateness of the performance of duties.
(4) System for ensuring that subsidiaries' Directors, etc. and employees' performance of their duties conforms with laws, regulations and the Articles of Incorporation
[1] The Company explains its idea of legal compliance in the Code of Conduct and thoroughly communicates this to the Directors, etc. and employees of its subsidiaries to ensure the legal compliance of the Group.
[2] Specific measures to ensure the Compliance of the Company are implemented also by subsidiaries to ensure the Compliance of subsidiaries.
The Company builds and maintains an internal control system for its financial reports to submit effective and appropriate internal control reports pursuant to the Financial Instruments and Exchange Act for the purpose of ensuring the reliability and validity of its financial reports. The Company ensures its compliance with the Financial Instruments and Exchange Act and other applicable laws and regulations by continuously evaluating the effective functioning of this mechanism and correcting any inadequacy as necessary.
One or more assistants are placed directly under the Corporate Auditors to assist them in the performance of their duties.
(1) The appointment, change, and appraisal of the assistants in the preceding section, and any disciplinary action impacting them must be discussed with and approved by the Corporate Auditors in advance.
(2) Instructions given to the assistants in the preceding section will be given by the Corporate Auditors, and the assistants must follow the instructions of the Corporate Auditors.
(3) Directors, Corporate Officers, and employees must cooperate with the Corporate Auditors in the development of an audit environment to facilitate the operations of the assistants.
(1) Directors and Corporate Officers of the Company and its subsidiaries must periodically report the status of their performance of their duties and any significant issues seriously affecting the Group's business to the Board of Directors and at important meetings attended by the Corporate Auditors. Decisions that may significantly impact the Company must be promptly reported to the Corporate Auditors.
(2) Directors, Corporate Officers, and employees of the Company and subsidiaries must immediately report to the Corporate Auditors any fact that may seriously damage the company, misconduct or serious violation of laws, regulations or the Articles of Incorporation by a Director, Corporate Officer, or employee.
(3) A party that has received a report from a Director, Corporate Officer, or employee of a subsidiary must immediately report to the Corporate Auditors any serious issue that will significantly affect business, fact that may seriously damage the company, misconduct or serious violation of laws, regulations or the Articles of Incorporation by a Director, Corporate Officer, or employee.
(1) The Company clearly states that a person who has submitted a report to a Corporate Auditor will not be disadvantageously treated because of the report and it thoroughly instructs Directors, Corporate Officers, and employees of the Company and its subsidiaries to protect any person who has submitted a report to a Corporate Auditor.
(2) The Corporate Auditors may demand that Directors and Corporate Officers explain a change, personnel appraisal, or disciplinary action impacting an employee who has submitted a report.
(1) A budget planned by the Corporate Auditors is posted in each fiscal year to be appropriated for the payment of expenses incurred by the Corporate Auditors in the performance of their duties.
(2) Any expense not included in the budget in the preceding paragraph that the Corporate Auditors demand the Company to pay in connection with the performance of their duties is paid promptly if Corporate Auditors submit a claim for the advance payment of expenses or disposal of debts pursuant to Article 388 of the Companies Act unless the expense or debts in the claim are proven to have not been incurred in the Corporate Auditors' performance of their duties.
(1) The Corporate Auditors may attend and voice opinions at important meetings of the Company and its subsidiaries if they deem it necessary. The Corporate Auditors may regularly exchange information with Directors, Corporate Officers, and employees of the Company and its subsidiaries or request reports at any time as necessary.
(2) Directors, Corporate Officers, and employees performing the duties of the Company and its subsidiaries shall promptly provide the Corporate Auditors with a report on the status of assets and the performance of their duties if it is requested by the Corporate Auditors. The Corporate Auditors interview Directors, Corporate Officers, and employees of the Company and its subsidiaries as necessary and are given the opportunities to view the information they require. If the Corporate Auditors are investigating the status of a subsidiary's performance of its duties or assets based on their right to investigate subsidiaries, the Directors, Corporate Officers, and employees of the subsidiary must properly and appropriately cooperate with the investigation.
(3) The Corporate Auditors exchange information as appropriate with the Audit Division and other relevant divisions of the Company and its subsidiaries and may request reports as necessary
(4) The Corporate Auditors cooperate closely with the Accounting Auditor and receive reports from the Accounting Auditor based on annual plans and other reports as necessary.
(5) The Corporate Auditors may receive advice from lawyers, certified public accountants, and other external experts as necessary at the expense of the Company.
(6) Directors, Corporate Officers, and employees must cooperate to facilitate the effective audit activities of the Corporate Auditors based on the Regulations for the Board of Corporate Auditors and the Auditors Audit Standards established by the Board of Corporate Auditors.
(7) The Corporate Auditors hold regular meetings to strengthen the relationships with the Accounting Auditor and Audit Division in three-party audits.
(8) The Audit Division provides the Corporate Auditors with reports and information such as audit plans, audit results, and risk information to help increase the efficiency and effectiveness of audits.
(9) When the Corporate Auditors order or request an investigation to facilitate efficient audit activities, the Audit Division shall cooperate with the Corporate Auditors.
(10) The Corporate Auditors may request an advance report and voice their opinions on the appointment or dismissal of the head of the Audit Division and any disciplinary action against the head of Audit Division.
