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 section 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 section 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 Questionnaire” to the employees of the Company and the Group Companies. In fiscal 2020, the questionnaire results continued to reveal that: “Compliance awareness remained at a high level.”
- 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 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.
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 sections 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 Corporate Officers, and has each Director and Corporate Officer 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 section in charge of internal auditing, the Independent Accounting Auditor, etc. During fiscal 2020, Audit & Supervisory Board Members had opportunities to exchange information and views with the section in charge of internal auditing for a total of 8 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 will be able to smoothly perform their duties by posting 3 dedicated employees to the Audit & Supervisory Board.
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