We believe that it is crucial that the Asahi Group appropriately establishes and operates an internal control system and works to enhance corporate governance with the aim of continuing to maintain healthy development together with our stakeholders.
Based on this viewpoint, the Asahi Group has defined the following basic policies for establishing an internal control system.
Overview of operation of internal control systems
1. Overall Internal Control System
- In order to develop and operate the Internal Control Systems of the Company and the Group Companies and effectively achieve the objectives of internal control, the organization of the Company in charge of internal auditing cooperates with the internal auditing organs established within the Asahi Group in conducting audits to determine whether business operations are executed properly and efficiently in accordance with annual audit plans.
- With respect to internal control over financial reporting, the organization of the Company in charge of evaluation of internal control cooperates with the organs in charge of evaluation of internal control established within the Asahi Group and performs evaluations of the Group Companies’ internal control activities pursuant to the “Policies of Management Assessment and Reporting of Internal Controls over Financial Reporting.”
2. Compliance System
- The Company established “The Asahi Group Code of Conduct,” and tries hard to keep its employees informed about it.
- The Company promotes awareness of compliance by putting managers responsible for compliance in place in the Company and the Group Companies and conducting education by job class.
- The Company conducts multifaceted and multilayered surveys of compliance awareness and behavior by conducting a “Compliance Survey” to the employees of the Company and the Group Companies.
- By keeping in place the “Clean Line System,” the Company detects and resolves risk problems early, and effectively prevents risk problems themselves from occurring.
3. Risk Management System
- The Risk Management System adopts enterprise risk management (ERM) for the overall Asahi Group.
- The respective companies of the Asahi Group identify and evaluate critical risks that could impede achievement of business objectives across all risk categories such as strategy and operations. They also draw up action plans and continually implement and monitor such plans. The respective companies of the Asahi Group report details of such initiatives to the Company’s Risk Management Committee, which monitors such initiatives, while its members identify and evaluate critical risk across the Group, draw up action plans, and execute and monitor such plans. They also report to the Board of Directors with the aim of ascertaining effectiveness of such initiatives.The Company has a risk management system in place to deal with any major accident, disaster, scandal, etc. by setting up an “Emergency Response Headquarters” under the management of the President and Representative Director. The Company assigns top priority to the safety of its business partners and employees with respect to COVID-19. To such ends, it continues to implement measures to prevent further spread of infection and has been promoting various initiatives seeking new work arrangements, which has entailed making teleworking more of the norm in Japan and carrying out meetings and business discussions online.
- In addition, the Company has been making progress in setting the stage for facilitating a seamless transition to a crisis management approach to be set into action in times of crisis. During 2021, this has entailed implementing risk management practices under ordinary conditions, which involves pinpointing risk that must be addressed immediately should such risk materialize, as well as envisioning ramifications of such risk scenarios and measures necessary in response. Meanwhile, in alignment with its transition to a framework consisting of four Regional Head Quarters (RHQ) including one in Japan, the Company has been strengthening its crisis management structure internationally in part by clearly assigning entities primary responsibility for addressing different categories of crisis and by streamlining flows of information used in the event of a crisis.
4. Business Management of Group Companies
- With respect to the Group Companies’ business management, the Company has put in place a system whereby, pursuant to the “Asahi Group’s Delegation of Authority,” the Group Companies’ business executions are subject to resolutions of the Company’s Board of Directors or decisions of an individual Director or the responsible persons of the responsible organizations of the Company, depending on the degree of their importance.
- Once a month, the “Corporate Strategy Board” receives reports from main Group Companies on the status of their business executions.
5. Execution of Directors’ Duties
In order to ascertain the efficiency of Directors’ duties, the Board of Directors conducts rational assignment sharing of services to be performed by Directors, and has each Director report on the status of his/her business execution once every 3 months.
6. Execution of Audit & Supervisory Board Members’ Duties
- Audit & Supervisory Board Members attend meetings of the Board of Directors, the “Corporate Strategy Board,” the “Risk Management Committee,” the “Compliance Committee” and other important organs, and receive reports from Directors, employees, thereby confirming the status of development and operation of the Internal Control System.
- Audit & Supervisory Board Members work to enhance the effectiveness of auditing by finding opportunities regularly or as needed for exchanging information and views with the organization in charge of internal auditing, the Independent Accounting Auditor, etc. During fiscal 2021, Audit & Supervisory Board Members had opportunities to exchange information and views with the organization in charge of internal auditing for a total of 10 times, with the Independent Accounting Auditor for a total of 16 times. Audit & Supervisory Board Members also find opportunities to exchange information and views with Audit & Supervisory Board Members of the main Group Companies once a month.
- The Company ensures that Audit & Supervisory Board Members and the Audit & Supervisory Board will be able to smoothly perform their duties by posting 3 dedicated staff members to the Audit & Supervisory Board.
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