Governance Internal Control

At the Nihon Parkerizing Group, we have established an internal control system and operate it appropriately to ensure the soundness of corporate management. We strengthen compliance, manage risks, and take other initiatives under our Basic Internal Governance Policies, aiming to build a more effective governance system.

Basic Policy on Internal Control

At Nihon Parkerizing, the Board of Directors has established basic policies on internal governance systems to strengthen its corporate governance. The policies are outlined below.

1. System to ensure duties executed by directors and employees comply with laws, regulations, and the articles of incorporation
2. System to store and manage information on how directors execute their duties
3. Rules and other systems for managing the risk of loss
4. System to ensure that directors efficiently execute their duties
5. System to ensure proper operations in group companies
6. System to assign employees to assist the Audit and Supervisory Committee in matters related to the independence of the relevant employees and issues related to ensuring the effectiveness of instructions from the Audit and Supervisory Committee to the relevant employees
7. System for reporting to the Audit and Supervisory Committee and system to ensure that persons who reported to the Audit and Supervisory Committee will not be mistreated as a result
8. Other systems to ensure the effectiveness of audits by the Audit and Supervisory Committee

Moreover, at Nihon Parkerizing, we have established a Code of Conduct for Executives and Regular Employees that shows exemplary mindset and behaviors and distributed it to all executives and employees of the Group in our efforts to increase their awareness of the importance of good corporate governance.

Internal Governance Committee

To carry out internal control, we have established the Internal Governance Committee, chaired by the president and composed of directors, and the Risk Management Committee and Compliance Committee as its subordinate organizations, aiming to build a more effective governance system that includes Group companies.

Internal Audits

Under our Internal Audit Rules, we set the internal audit plan for each fiscal year based on risk assessments and conduct audits following the plan. The results of audits are reported to the president, the Board of Directors, the Audit and Supervisory Committee, and others. Regarding matters pointed out in audits, the Internal Audit Office continues to monitor the status of the implementation of improvement measures until they are completed.

J-SOX (internal control concerning financial reports) Assessment

At Nihon Parkerizing, we assess the effectiveness of internal control concerning financial reports (J-SOX) each fiscal year based on the internal control standards of the Financial Services Agency and report the results of the assessment to the president, the Board of Directors, the Audit and Supervisory Committee and others. We request that the relevant departments correct any inadequacies or other problems and evaluate the status of the corrections on a timely basis. At the end of the fiscal year, managers submit the internal control report, which details the results of the internal control assessments. We also have an external auditor conduct internal control audits.