Corporate governance

We at the NICHIAS Group believe that enhancing transparency, fairness and efficiency in management and stably improving our corporate value over a long period of time are the top priorities for the management.

Strengthening Corporate governance

Improvement of the corporate value of the Nichias Group is only possible after it accomplishes its social mission through fair corporate activities and gains the trust and support of all its stakeholders. Enhancing the group’s corporate governance is an essential platform for creating a framework for this.

In order to increase the transparency and fairness of management and rapidly carry out managerial decision making, the Nichias Board of Directors comprises eight directors who are highly knowledgeable and experienced in the company businesses, and two outside directors who contribute proposals from an independent standpoint. They hold meetings on a specific day each month and extraordinary meetings when necessary to make important managerial decisions. In fiscal 2018, they met a total of 14 times. In addition, management meetings of the directors, full-time auditors, and executives in charge of each division are normally held on a weekly basis, serving as a deliberative body to ensure the efficiency of the board meeting. The meeting provides a framework that facilitates consideration of matters for approval, issues on company-level management and important individual matters, and flexible decision-making.

Also, the Board of Company Auditors is made up of outside auditors and full-time auditors who are knowledgeable in specialized fields to ensure the objectivity and neutrality of the managerial monitoring system, and actively expresses its opinions concerning management.

By establishing such systems, the company is increasing the transparency, fairness, and effectiveness of its management.

Corporate Governance System Chart

Compliance

The Nichias Group is proactively engaged in compliance activities, in running its businesses and as a member of society, in accordance with public decency and common sense in addition to the laws, regulations and company rules, so that it can establish good relationships with its many stakeholders.

Nichias’ HQ Compliance Committee, which meets each month, and Divisional Compliance Committees, which hold quarterly meetings at their respective workplaces every three months, provide a basis for such activities, with the intention of eliminating behaviors that could lead to compliance violations.

Also, a questionnaire survey of all employees is conducted roughly every three years as a fixed point observation. In addition, we are providing year-round education by company instructors through programs tailored to each workplace, stratified training, etc. Further, in addition to putting up awareness posters about our compliance counter, which serves as an information office, we provide a compliance portal site on the company intranet and awareness material for all company employees. Through these activities, we are actively promoting increased awareness among employees and the creation of an open system that enables informants to easily provide information.

Furthermore, Nichias is continuing its efforts to put compliance management into practice within a highly transparent system through such improvements as setting up a third party General Hotline.


An awareness comic used for compliance education

Internal Control Assessment

In order to improve the corporate values of the entire group, we are maintaining a system for internal controls and organizing an evaluation structure for the same. In order to clarify fairness and independence, we are establishing an internal control auditing office under the direct control of the president and systematically implementing internal auditing of the group.

In fiscal 2018, we conducted internal audits of 9 business units in Nichias itself (8 in sales and 1 in research) and 31 business units within the group (20 in Japan and 11 overseas). We have confirmed that the management conditions in each of these business units are excellent. We also drafted and submitted an “Internal Control Report” determining that the internal controls concerning financial reporting of the group were effective.

Protection of Intellectual Property

In the company group, intellectual property (IP) is positioned as an important matter in the continuing development of its business.

As a result, with respect to technology created by new product development and new research, we actively promote acquisition of rights and strive to protect technology. When a new product goes to market, the group respects the intellectual property rights of others, conducts the appropriate surveys and checks so that there are no infringements of rights, and responds appropriately to infringements of rights from others. Also, by conducting counterfeit product surveys as appropriate and suitably responding when counterfeit products are discovered, as well as advancing the acquisition of rights for the company’s brands in each country, the group is working to maintain and improve our brand value and ensure the safety of users.

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