Basic Philosophy on Corporate Governance
As a public company, the MIMAKI Group aims to establish and maintain good relationships with its stakeholders, including shareholders, customers, employees, and local communities.
We recognize that strengthening and enhancing our corporate governance system is an important management issue toward this end. This is why we are striving to establish and firmly entrench a sound and highly transparent management system that can respond rapidly and accurately to changes in the business climate, a system for timely and appropriate information disclosure to fulfill accountability to stakeholders, and a system for carrying out corporate operations in compliance with the law, while maintaining high ethical standards.
We believe that it is important for all employees, not just the management team, to be aware of and to practice compliance at all times.
Corporate Governance Structure
Overview of the Corporate Governance Structure
MIMAKI ENGINEERING has adopted a "company with corporate auditors" system. An overview of each organization within that system follows.
- Directors, Board of Directors
Our Board of Directors, which comprises nine directors, is responsible for making important decisions for the Company and fulfilling a supervisory function. The Board of Directors holds regular meetings once a month and convenes extraordinary meetings as needed.
- Management Council
The Management Council, the main members of which are full-time executives, general managers, and division managers, is responsible as an advisory body to the president for preparing analytical reports on the implementation of company budgets as well as budget control in operating departments and deliberation of relevant measures. The Management Council meets regularly each month.
- Auditors, Board of Auditors
MIMAKI ENGINEERING has established a Board of Auditors with one full-time auditor and two outside auditors. The three auditors hold discussions at meetings of the Board of Auditors that are held regularly once a month. Auditors also attend meetings of the Board of Directors to monitor the process of important decisions and the status of the execution of operations. They strive to enhance the auditing of the execution of operations by directors. They also seek to strengthen the operational auditing structure by monitoring each division, interviewing responsible persons, and attending board meetings at subsidiaries. Additionally, the auditors regularly exchange opinions and information with the accounting auditor to maintain the effectiveness of accounting auditing.
- Auditing Office
An Auditing Office was established as an organization responsible for internal audits. It is under the direct supervision of the president and has a staff of two. By the end of each fiscal year, the office conducts an internal audit based on an internal auditing plan approved by the president, promptly produces an audit report after completing the audit, and makes a report to the president. The head of the Auditing Office then passes on the audit results to the heads of audited departments after writing up recommendations for improvement from the president into the improvement instructions. The heads of the audited departments then submit a prescribed improvement report on the status of improvements to the head of the Auditing Office and the president.
Reason for Adopting the Corporate Governance Structure
MIMAKI ENGINEERING has appointed two outside director. It has also established a Board of Auditors with three members, two of whom are outside auditors, as a system for auditing directors’ execution of duties.
The Company appoints as the outside director and outside auditors people who can observe and give advice on corporate management based on their expertise and experience. By adopting an external monitoring function in this way, we are striving to develop a system for properly executing management activities.
Status of the Development of Internal Control Systems
MIMAKI ENGINEERING adopted the following Basic Policy on Internal Control Systems by resolution of the Board of Directors, and is taking steps to put the systems into place.
System for ensuring that directors’ execution of duties conforms with the law and articles of incorporation
- MIMAKI ENGINEERING shall establish and enforce Compliance Rules, ensure that every director is aware of the importance of compliance, and make thorough efforts to ensure compliance, to meet the demands of stakeholders, including customers, shareholders, and employees.
- The Board of Directors shall make decisions on important matters related to management based on the law, articles of incorporation, and the Rules of the Board of Directors.
- An Auditing Office shall be established as a department under the direct supervision of the president and shall conduct internal audits. If matters in violation of the law, articles of incorporation, or company rules are discovered through audits by the Auditing Office, the Auditing Office shall immediately report to the executive chairman and the president.
- An internal whistleblowing system shall be put in place so that directors can inform the compliance promoter if they discover any acts that violate the law, articles of incorporation, or company rules.
System for the storage and management of information related to directors’ execution of duties
- A system shall be put in place to properly store and manage the minutes of board meetings, requests for managerial decisions, and other information related to directors’ execution of duties in accordance with the law, the Rules of the Board of Directors, and the Rules on Requests for Managerial Decisions.
- A system shall be put in place to properly store and manage the information in accordance with the Information Security Management Rules and the Privacy Management Rules.
Rules related to and a system for managing the risk of loss
- A system shall be put in place to conduct business after obtaining certain approvals and authorizations, in accordance with the Rules of the Board of Directors, the Rules on Organizations, Division of Duties, and Authority, and the Rules on Requests for Managerial Decisions.
- The general manager of the management division shall have the role and responsibility to put in place and operate internal controls based on the basic policy decided by the Board of Directors.
- A system shall be established for immediately reporting to the executive chairman and the president information such as the content and degree of risk, where the Auditing Office discovers violations of the law or articles of incorporation or other execution of operations with a risk of loss through audits.
System to ensure the efficient execution of directors’ duties
- In principle, regular board meetings shall be held once a month to decide important matters and the execution of operations and to audit the status of the execution of operations. In addition, the term of office of directors shall be one year, to clarify responsibilities for the execution of operations.
- Directors’ execution of duties shall be conducted so that all matters specified in the Rules of the Board of Directors and the Rules on Organizations, Division of Duties, and Authority as matters to be discussed in the Board of Directors shall be discussed and decisions are made after multifaceted deliberation.
- With respect to the everyday execution of directors’ duties, authority shall be defined based on decision-making rules such as the Rules on Organizations, Division of Duties, and Authority and the Rules on Requests for Managerial Decisions, and an efficient method of achievement shall be established. Additionally, the Board of Directors shall conduct regular reviews of progress and promote improvements in an effort to achieve efficient management of operations.
System for ensuring that employees’ execution of duties conforms with the law and articles of incorporation
- MIMAKI ENGINEERING shall establish and enforce Compliance Rules, ensure that each and every employee is aware of the importance of compliance, and make thorough efforts to ensure compliance, to meet the demands of stakeholders, including customers, shareholders, and employees.
- An Auditing Office shall be established as a department under the direct supervision of the president and shall conduct internal audits. Where matters in violation of the law, articles of incorporation, or company rules are discovered through audits by the Auditing Office, the Auditing Office shall immediately report to the executive chairman and the president.
- An internal whistleblowing system shall be put in place so that employees can inform the compliance promoter if they discover any acts that violate the law, articles of incorporation, or company rules.
System for ensuring appropriate operations in the corporate group consisting of MIMAKI ENGINEERING and its subsidiaries
- The Rules on the Management of Affiliated Companies require subsidiaries to send regular reports to MIMAKI ENGINEERING on their business performance, financial condition, and other important information. Additionally, the Management Planning Office, which is specified in the Rules on the Management of Affiliated Companies as the department for coordinating with subsidiaries, as well as the departments that serve as points of contact with subsidiaries, shall maintain a system so that if it is ascertained that a risk of loss has occurred at a subsidiary, the contents of the discovered risk of loss, the degree of risk, and the effects on MIMAKI ENGINEERING shall be reported immediately to MIMAKI ENGINEERING’s Board of Directors, executive chairman, and president.
- MIMAKI ENGINEERING shall formulate a group medium-term management plan and, to execute this medium-term plan, it shall establish important management goals and budget allocations for each fiscal year.
- The Compliance Consultation Hotline established and operated by MIMAKI ENGINEERING shall ensure a system that can be used by officers and employees of MIMAKI ENGINEERING and its subsidiaries as well as others.
- The Auditing Office shall maintain a system so that if violations of the law or articles of incorporation or other execution of operations with risk of loss are discovered in the course of internal audits on subsidiaries, it shall report the contents of the risk of loss, the degree of risk, and the effects on MIMAKI ENGINEERING to the executive chairman and the president.
Matters relating to employees appointed to assist auditors in their duties where auditors have requested such assistance
- Where auditors have requested the appointment of employees to assist them in their duties, such employees shall be appointed. The personnel affairs for these employees shall be decided after an exchange of opinions between the directors and auditors.
- Careful attention shall be paid to ensuring the independence of these employees and to the effectiveness of instructions given to them. The prior consent of the Board of Auditors shall be obtained regarding matters such as the reassignment, evaluation, and discipline of these employees.
System for directors and employees to report to auditors and a system related to other reports to auditors
- Directors and employees shall provide necessary reports and information upon the request of an auditor, as required by the Board of Auditors.
- Directors and employees shall, as called for by the occasion, report the status of their execution of duties at important meetings, such as board meetings.
- In accordance with the Compliance Rules, a system shall be established so that directors and employees can report to the Board of Auditors where violations of the law or articles of incorporation or other execution of operations with risk of loss are discovered at the management level.
System for the directors and employees of subsidiaries as well as persons who have received reports from them to report to the auditors
- Where a situation has occurred that could have a significant impact on the business or financial condition of a subsidiary, directors and employees of the subsidiary shall report promptly to MIMAKI ENGINEERING’s directors, the head of the Management Planning Office, and the departments that serve as points of contact with subsidiaries. The reported matters that are within the scope needed for MIMAKI ENGINEERING’s auditors to execute their duties shall be reported promptly.
- The Auditing Office shall report to MIMAKI ENGINEERING’s auditors the implementation status of internal audits on subsidiaries as well as important matters relating to subsidiaries reported through the Compliance Consultation Hotline. Also, where requested by MIMAKI ENGINEERING’s auditors, directors and employees of subsidiaries shall promptly make appropriate reports.
System to ensure that a person who makes a report indicated in the previous clause is not subjected to adverse treatment for making the report
The same as with whistleblowing to the Compliance Consultation Hotline, a document clearly stating that a whistleblower shall not suffer any drawbacks for having made a report to MIMAKI ENGINEERING’s auditors that contributes to the execution of their duties shall be produced, and thorough efforts shall be made to ensure that all officers and employees in the Group are aware of this policy.
Matters relating to the procedures for payment in advance or reimbursement of expenses arising from the execution of auditors’ duties as well as policy pertaining to the processing of other expenses or debt arising from the execution of their duties
The processing of expenses and debt arising from the execution of the duties of the auditors and Board of Auditors shall be budgeted for ordinary auditing expenses, and outside experts may be appointed when it is deemed necessary for the execution of the duties of the auditors and Board of Auditors.
Other systems for ensuring the effective performance of audits by auditors
- To increase the effectiveness of auditing activities, the representative directors and directors shall communicate on a regular basis with auditors, including exchanging opinions about important issues.
- The Auditing Office shall cooperate with auditors as needed through reports on the results of internal audits and regular meetings.
System aimed at the exclusion of antisocial forces
MIMAKI ENGINEERING has established a Manual for Dealing with Antisocial Forces and shall assume a resolute attitude toward crime syndicates and other antisocial forces, blocking any kind of connection. Moreover, before initiating new transactions, an investigation shall be conducted to ensure the other party is not an antisocial force.
System for ensuring the trustworthiness of financial reporting
In accordance with the provisions of the Financial Instruments and Exchange Act, MIMAKI ENGINEERING and its subsidiaries shall strive to maintain a sound internal control environment. Furthermore, it shall establish an internal control system to enable valid and reasonable evaluation, and by striving for fair application of that system shall ensure the trustworthiness and appropriateness of financial reporting.