Corporate Governance
Basic Principle
The Morita Group has clarified its purpose, which is our reason for being in society, as "Safeguarding lives and the environment.
Securing peace of mind. Technology, powered by visionary challenge" and its vision, which pertains to the society we envision and our aspirations, as "To be a valued and respected company by serving to shape a safe, accessible, and thriving society" and has established Morita's Philosophy on the basis of the above purpose and vision. Furthermore, the important ideals for attaining the philosophy are defined as "values" which are regarded as the basis for corporate activities performed by each officer and employee of our group.
Against this backdrop, our group recognizes the "implementation of viable corporate governance" as an important issue and takes it on with the aim of further improvement of our medium- to long-term corporate value.
- Corporate Governance Report *Japanese language version only
Corporate Governance System
1. Execution of business operations
For the execution of business operations, Corporate Executive Officers who are appointed by the Board of Directors pursuant to the provisions of the Articles of Incorporation to take charge of execution of company operations engage in their duties under the supervision of the Board of Directors and the Representative Director. Also, as the basis of the system to ensure effective execution of duties, a meeting of the Board of Directors is held monthly on a regular basis, and an extraordinary meeting thereof is held if an urgent resolution is required. Furthermore, a Group Management Meeting is held with the representatives, etc. of our company and its main subsidiaries, in principle, once a month to report on the progress of the management plan and discuss priority issues from various aspects.
2. Audit and supervision
- The Board of Auditors consists of four members including three Outside Auditors, and each Auditor conducts audits on legality in the execution of business operations in accordance with audit standards and audit plans set down by the Board of Auditors.
- Auditors regularly meet up with the Representative Director and exchange opinions on compliance and the status of implementation of internal control.
- Although Outside Directors do not come from our group companies or key business partners, etc., they have considerable insights into the business environment of our company, attend meetings of the Board of Directors from an independent standpoint and offer valuable opinions, and engage in management supervision.
- With respect to internal audits, an Internal Audit Office has been set up directly under the control of the President to systematically audit the business operations of each group company to verify whether its operations are properly carried out in accordance with laws and regulations as well as internal rules.
- As our Accounting Auditor, we have appointed Grant Thornton Taiyo LLC and executed an audit agreement therewith.
Corporate Governance Chart
Internal control systems
On the basis of the purpose "Safeguarding lives and the environment. Securing peace of mind. Technology, powered by visionary challenge" and the vision "To be a valued and respected company by serving to shape a safe, accessible, and thriving society," we have established our basic policy as follows pertaining to the construction of our internal control systems to ensure the appropriateness of our group's business operations.
1. System to ensure that the execution of duties by Directors, employees, etc. complies with laws and regulations as well as the Article of Incorporation
The Board of Directors strives to construct and operate viable internal control systems in order to ensure that the execution of duties by Directors and employees complies with laws and regulations as well as the Article of Incorporation, and that company operations are executed properly. In accordance with the Morita Group Basic Compliance Policy and by developing organizations and regulations to implement that policy, our group has organized a system to ensure that the execution of duties by its Directors and employees complies with laws and regulations as well as the Article of Incorporation.
- As an organization to oversee compliance, a Compliance Committee has been set up in our company and each of its main subsidiaries.
- With respect to risk information discovered, for instance, through a whistleblowing report, the Compliance Committee chaired by the Representative Director of our company is responsible for, among other actions, independently investigating relevant facts, determining responses, reporting to the Board of Directors, giving feedback, reporting to the relevant company, and proposing and implementing measures to prevent recurrence.
- In order to discover risk information early and improve the effectiveness in restraining improper conduct, internal and external whistleblowing contact points have been set up. When a whistleblowing report is made, the relevant Compliance Committee is responsible for, among other actions, investigating relevant facts, determining responses, reporting, and proposing and implementing measures to prevent recurrence.
2. System for storing and managing information on the execution of duties by Directors
- Directors are required to properly store and manage documents concerning the execution of duties, including electromagnetic records, and other important information in accordance with laws and regulations as well as internal rules.
- Auditors are required to conduct audits to verify whether Directors' storage and management of information such as documents concerning their execution of duties has been implemented in conformity with relevant rules, and, where necessary, to report to the Board of Directors.
- Directors and Auditors may view such documents, etc. at any time.
3. Regulations and other systems concerning the management of risks of loss
Risks concerning our group's business and investment are managed by various deliberative bodies, such as the Board of Directors and the Group Management Meeting, on a company- wide basis.
4. System to ensure Directors' efficient execution of duties
- In order to clearly distinguish between management and the execution of business operations, our company and its main subsidiaries have adopted a corporate executive officer system to realize Directors' efficient and prompt management decision-making.
- Our company holds a meeting of the Board of Directors monthly on a regular basis and an extraordinary meeting thereof if an urgent resolution is required. Our subsidiaries also hold meetings of their Boards of Directors on a regular basis to reach resolutions on important matters concerning management in accordance with the Rules on the Board of Directors.
- Furthermore, a Group Management Meeting is held with the representatives, etc. of our company and its main subsidiaries, in principle, once a month on a regular basis to report on the progress of the management plan and discuss priority issues from various aspects, thereby improving the effectiveness of the Board of Directors.
5. System to ensure the appropriateness of business operations carried out by our company and the corporate group consisting of the subsidiaries of our company
- Each group company reports its business performance and management status to our company's division in charge of such matters on a regular basis. In addition, the management plan, annual budget, and important management- related matters of each group company are reported and deliberated in Group Management Meetings to ensure the appropriateness of group companies' business operations in coordination with them. Furthermore, we hold a liaison meeting with consolidated subsidiaries on a quarterly basis, thereby striving to ensure appropriate account closing operations.
- In order to obtain information, we have our company's officers and employees concurrently serve as directors and auditors of our group companies on a part-time basis and have them attend important meetings such as meetings of their Boards of Directors.
- Our company's auditors visit our group companies to conduct their audits in a systematic manner, checking the status of execution of business operations by the directors, etc. of subsidiaries.
In addition, the effectiveness of audits is also enhanced by periodically exchanging information with the auditors of subsidiaries. - The Internal Audit Office directly under the control of the President of our company audits the business operations of each of our group companies in a systematic manner, checking whether business operations are carried out properly in accordance with laws and regulations as well as internal rules.
6. If an auditor requests any employee to be assigned to assist with their duties, matters concerning that employee
Our system assigns employees to assist auditors in their execution of duties and ensures that those employees assist auditors in their work under the instructions thereof.
7. Matters concerning the independence of employees under the preceding item from Directors, and matters concerning ensuring the effectiveness of auditors' instructions to such employees
- With respect to the personal affairs of employees under the preceding item, the independence of such affairs from Directors is ensured by obtaining the prior consent of the Full-Time Corporate Auditor.
- The authority to give instructions to employees assisting auditors in their execution of duties under the preceding item is vested solely in those auditors or the Board of Auditors to the extent of relevant business operations, and Directors, Corporate Executive Officers, or other employees do not hold such authority.
8. System for the Directors, employees, etc. of our company and its subsidiaries and other persons who have received reports from such Directors, employees, etc. to report to auditors
- The Corporate Executive Officers and employees in charge of the execution of business operations by each of our group companies reports, in a periodically-held meeting of the Board of Directors, the execution of business operations by the divisions in their charge, and auditors attend such meeting of the Board of Directors on each occasion to receive such a report.
- If any Director, employee, etc. of a company of our group discovers the presence of any fact that may potentially cause a considerable loss to the company, the director, employee, etc. must immediately report it to an auditor.
- In the event of a report made by an employee through the whistleblowing system, the relevant Compliance Committee investigates the reported fact. Furthermore, we have developed a system under which auditors may participate in a Compliance Committee as its members so as to ensure that information on any case of improper conduct is reported to those auditors early.
9. System to ensure that any person who has made a report under the preceding item is not to be subjected to any disadvantageous treatment on the grounds of having made the report
Our compliance regulations provide that the disadvantageous treatment of any Director, employee, etc. of our group on the grounds of their having made any report to any auditors is prohibited.
10. Matters concerning the procedures for advance payment and reimbursement of costs incurred in the execution of duties by Auditors, and matters concerning other policies on the processing of costs and payables incurred in such execution of duties
If an Auditor requests the advance payment or reimbursement of any cost, etc. incurred in executing their duties, we will promptly process the cost or other relevant payable, unless the cost or other payable associated with the request is not found to be necessary for the Auditor's execution of duties.
11. Other systems to ensure effective audits by Auditors
- Auditors attend the periodically-held reporting meetings, etc. of our group companies, in addition to meetings of the Board of Directors, to grasp the process of decision-making in relation to important matters and the status of execution of business operations and also view important documents concerning the execution of business operations, such as requests for approval, and require relevant Directors, Corporate Executive Officers, or employees to provide explanations on such documents, where necessary.
- Auditors receive explanations on the details of financial audits from the Accounting Auditor and promote their mutual cooperation, for example, by exchanging information therewith.
- Auditors maintain close cooperation with the Internal Audit Office in connection with internal audits and, where necessary, request that office to conduct investigations.
- The Representative Director periodically holds a reporting session with auditors and maintain mutual understanding with them.