P.30 Risk Management / Compliance

30 Risk Management / Compliance We position risk management and compliance as key issues to achieve sustainable growth and enhance corporate value over the medium to long term. We identify and evaluate risks associated with our business activities to prevent them and minimize their impact. We also establish a code of conduct to ensure compliance with laws, our Articles of Incorporation, internal regulations, and social norms. By consistently applying these, we build a highly transparent management structure and aim to be a company trusted by society. Approach to Risk Management We promote company-wide structural reinforcement based on our Risk Management Regulations. Directors and others build systems with responsibility within their respective areas of authority. The Representative Director, directors in charge, and executive officers focus on the early detection of potential risks. We have established a Risk and Compliance Committee to maintain and strengthen our company-wide compliance system. This committee consists of 7 members: the Representative Director & CEO as chair, 1 Senior Managing Director, 3 Managing Directors, 1 Executive Officer (General Manager of Corporate Planning Office), and 1 Outside Audit & Supervisory Board Member. The committee meets in principle every quarter to discuss policies and measures, analyze the impact of materialized risks, and deliberate on specific countermeasures. To improve compliance awareness among officers and employees and prevent insider trading, we conduct training twice a year, inviting external lecturers from the Tokyo Stock Exchange and Japan Exchange Regulation. Furthermore, the Audit & Supervisory Board and the Internal Audit Office audit operational status. We maintain a system to receive advice from external experts such as lawyers and certified public accountants as needed, striving for early detection and prevention of various risks in our business activities. Material Risks We recognize the following as major risks and continuously evaluate and manage them: 1. Decline in competitive advantage due to technological innovation 2. Damages due to system failures, system development delays, etc. 3. Management of personal and confidential information 4. Safety of handled products 5. Infringement of intellectual property rights 6. Securing and developing excellent and highly specialized human resources Basic Policy and Promotion Structure for Compliance In accordance with our Compliance Regulations, we conduct business with high ethical standards and comply with laws, the Articles of Incorporation, and social norms. The Risk and Compliance Committee meets in principle every quarter to deliberate on and advance company-wide compliance policies, key issues, and recurrence-prevention measures. Under the supervision of the Board of Directors, we continuously review and improve our internal control system and raise compliance awareness through education and training for officers and employees, thereby practicing sound and transparent management. Key Initiatives, Indicators, and Targets We provide ongoing compliance education and training for officers and employees to maintain and enhance awareness of legal and regulatory requirements. We have established Internal Reporting Regulations and operate an effective whistleblowing system to detect and address misconduct at an early stage. We maintain a strict policy of severing all ties with antisocial forces and responding firmly to any improper demands. Through these initiatives, we seek to prevent misconduct, strengthen the organization’s self-correcting capabilities, and continuously improve the effectiveness of internal controls. We will also consider establishing compliance-related KPIs and targets.