ITO EN Group Basic Policy for Internal Control System
1. Basic Policy for Business Operation
Our management principle is "Always Putting the Customer First." The ITO EN Group Founding Charter states that the ITO EN Group must fulfill its corporate social responsibility to meet expectations by actively cooperating with the government, local communities, consumers, shareholders, retailers, suppliers, financial institutions and other stakeholders, aiming for sustained corporate growth and development and the enhancement of corporate value, and we put this at the heart of our corporate management.
We also use the ITO EN Group Code of Conduct (link below), which applies the abovementioned management principle to specific conduct, as guidelines for our day-to-day business operations. The ITO EN Group Code of Conduct breaks down our relationship with laws and regulations, the Founding Charter and internal rules into nine tenets and we use these as a code of conduct for the officers and employees of the ITO EN Group.
This policy applies to all ITO EN officers (Directors, Audit & Supervisory Board Members and the equivalent) and employees, etc. (including but not limited to non-regular employees, temporary employees, contract employees and dispatched employees) .
2. Systems to ensure that the Group’s Directors and employees execute duties in compliance with laws and regulations and the Articles of Incorporation
1. The Board of Directors passes a resolution on the ITO EN Group Code of Conduct and the Guidelines for the Code of Behavior pertaining to the compliance system and defines them as the code of conduct and the code of behavior for the Group's Directors and employees, etc. to take action in compliance with laws and regulations, the Articles of Incorporation and corporate ethics.
2. The Company increases the effectiveness of the compliance system of the ITO EN Group based on the ITO EN Group Code of Conduct and the Code of Behavior by establishing the Compliance Committee chaired by the Director appointed by the President and establishing an administrative office for the Compliance Committee in the Compliance Department.
3. The Company has established a whistleblowing desk inside and outside the company as a means for the employees, etc. to be able to directly provide information on acts that run counter to laws and regulations and compliance.
3. Systems to store and manage information on the execution of duties by Directors
1. During the storage period of information on the execution of duties by Directors that is provided for by laws and regulations and internal regulations, the Company records and stores the information in documents or electromagnetic media in a searchable state and maintains a state to allow the Directors and Audit & Supervisory Board Members to inspect the information.
2. Unless otherwise provided for by laws and regulations, the storage period of documents above shall be dependent on the type of each document specified by the Documents Handling Regulations.
4. Regulations and other systems for managing the risk of loss
1. Recognizing risks concerning its business operations as follows, the Company has established a department in charge of risks, formulated regulations, rules and guidelines and built a cross-sectional risk management system.
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(1) Risks related to compliance
To fully enforce compliance based on the ITO EN Group Code of Conduct and Code of Behavior, the Company implements company-wide compliance education with the Compliance Department playing a central role.
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(2) Risks related to information security
For information protection, the Company has established the personal information protection policy to prevent the leakage of personal information, and for business information management, the Company prevents the leakage of information and unauthorized access by strengthening computer security.
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(3) Risks related to quality and the environment
The Company has built a systematic management system, including the improvement of quality and product safety, and response to product liability, etc. by establishing the ITO EN Group Quality Policy. The Company works to address environmental risks as company-wide environmental issues based on the approach of the environmental management system.
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(4) Risks related to property preservation
The Company makes efforts to prevent the occurrence of credit losses due to the bankruptcy of business partners by fully enforcing credit management and receivables collection management according to the credit management standards. The Company also works to develop a system to prevent the occurrence of dead stock by making efforts for the management of inventories such as products, raw materials and materials.
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(5) Risks related to disaster and accident
The Disaster Prevention Committee strives to minimize damages at the time of a disaster by reviewing the business continuity plan (BCP) and updating the disaster response manual.
2. The Company has organized a system to minimize damages when an unforeseen situation occurs by establishing a task force headed by the President to prevent the expansion of damages by taking prompt measures.
5. Systems to ensure the efficient execution of duties by Directors
1. The Board of Directors and the Executive Board are the basis of these systems and hold a meeting once a month, in principle, and on an ad hoc basis, as needed.
2. Each department in charge executes operations based on decisions of the Board of Directors according to the division of duties and the Authority Regulations, and the Directors in charge check the execution of operations as needed.
6. Systems to ensure the adequacy of operations in the ITO EN Group
1. The Company has established the code of behavior in conformity with the ITO EN Group Code of Conduct and Code of Behavior to ensure the compliance system in the Group companies and prepared a whistleblowing desk inside and outside the company for the employees, etc. to provide information on acts, such as a violation of the law by a Group company or the Company, directly to the Company.
2. For the business management of the Group companies, the Company has established management systems and management standards in the Affiliates Management Regulations, and they are reported and examined at a debriefing session and a conference that are held regularly. Important matters are determined by resolution of the Board of Directors of the Company.
3. The Internal Auditing Department conducts audits on the internal control system of the Company and the Group companies and reports the audit results to the President, the Board of Directors and the Audit & Supervisory Board.
7. Matters concerning a system for employees who should assist with the duties of Audit & Supervisory Board Members and their independence from Directors
1. For the employees who should assist with the duties of Audit & Supervisory Board Members, Audit & Supervisory Board Members appoint the number of the employees they need as their assistants from the employees of the Company and ensure the effectiveness of their instructions by placing the assistants under their directions and orders.
2. The Audit & Supervisory Board Members evaluate their assistants and determine the appointment, dismissal, transfer and the change in wages, etc. of the assistants with the consent of the Audit & Supervisory Board.
8. Systems for the Group's Directors and employees to report to Audit & Supervisory Board Members and other systems to report to Audit & Supervisory Board Members
1. The Group's Directors and employees appropriately report important issues that could have a major impact on the execution of operations and the management to Audit & Supervisory Board Members.
2. Audit & Supervisory Board Members may ask the Group's Directors and employees for a report, as needed. In addition, it is prohibited to treat the Group's Directors and employees who make a report to Audit & Supervisory Board Members disadvantageously as a result.
9. Systems to ensure that audits by Audit & Supervisory Board Members are conducted effectively
1. Audit & Supervisory Board Members exchange information and opinions with the President, the Internal Auditing Department and the accounting auditor to enhance their audit work.
2. When Audit & Supervisory Board Members recognize that there is a problem in the development and operation of the Company's internal systems, they may express opinions at a meeting of the Board of Directors and ask for the implementation and reporting of improvement measures.
3. The Company will secure a system for any violation of laws and regulations and other compliance problems in the ITO EN Group to be reported appropriately to Audit & Supervisory Board Members.
4. When Audit & Supervisory Board Members request the advance payment of expenses necessary for the execution of their duties, the Company appropriately processes the expenses or payables.