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• Corporate Governance
  Structure
• Board of Directors
• Internal Control
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  Business Continuity
  Management
• Compliance Structure

Corporate Governance Structure

In order to realize our corporate mission of making profits and continuously enhancing our corporate value, we believe that KYODEN must fulfill its responsibilities towards its stakeholders. For this purpose, through establishing and enhancing internal control and risk management, we consider it important to strengthen the supervisory functions of the Board of Directors, Board of Auditors, Internal Audit Office, Accounting Auditors, etc. and raise the compliance awareness of individuals, and we work on improving corporate governance based on the purport of the Corporate Governance Code. Moreover, we are committed to building relationships of trust by striving for the rapid and accurate disclosure of information.

Outline of the Corporate Governance Structure and Reasons for its Adoption
KYODEN has established a Board of Auditors comprising a majority of outside auditors to supervise the company’s management and strive to secure its soundness. In addition to attending important meetings of the Board of Directors, Management Conference, Internal Control Committee, etc., the Auditors receive reports on performance of duties from directors, employees, etc. and request explanations as needs dictate.
 The Board of Directors, considering the effective supervision of top management and directors to be one of its key roles and responsibilities, appropriately evaluates the company’s business performance, etc. Moreover, an independent outside director has been appointed to enhance the objectivity and transparency of management and obtain appropriate opinions and counsel in deciding important matters concerning appointments, remuneration and so on. In this way, we have strengthened our management supervisory functions.
Regarding the structure of governance over the KYODEN Group, the Auditors attend meetings of each company’s board of directors and management conference to receive progress management reports on business plans, budget, etc. Moreover, KYODEN’s approval is required for important matters of business operation in each company, while matters of particular importance are referred to KYODEN’s Board of Directors.
 Judging from the above brief description, we consider KYODEN’s current corporate governance structure to be ideal in light of our scale of business.

Board of Directors

 The Board of Directors is composed of six directors including one outside director, and our articles of incorporation state that each director will serve for a term of one year. Moreover, to ensure the ongoing improvement of effectiveness, we have implemented the Board of Directors annual effectiveness assessment since 2018. According to the questionnaire survey that was implemented in April 2021, it was confirmed that the composition, operation, approach to governance and other items related to the Board of Directors are generally appropriate and that the effectiveness of the Board is adequately secured. On the other hand, since it was found desirable to further strengthen risk management and supervisory functions, it was decided to hold further discussions in the Board of Directors and implement ongoing improvements from now on.
 Based on the results of these assessments, the Board of Directors will continue to advance initiatives geared to building an even better corporate governance structure.

Internal Control

 Based on the “Basic Policy of Internal Control System Construction” that was adopted by the Board of Directors, KYODEN has established the Internal Control Committee and is striving to strengthen and improve internal control for the objectives of “securing effectiveness and efficiency of work”, “securing credibility of financial reports”, “ensuring compliance with laws and internal rules, etc.” and “preserving assets”.
 In terms of internal control activities, we are striving to build an organization in which checks and balances can function effectively. Moreover, while seeking cooperation from external consultants, our Internal Audit Office conducts constant monitoring to make sure that these control activities are functioning effectively and efficiently in compliance with laws.

Three Pillars of “G, R, C” for Sound
Business Administration

• Governance By clarifying organization, roles, decision-making processes and so on, formulate the rules that need to be observed into “internal regulations”, detailed rules, workflows, etc. to be followed in administering operations.
• Risk management Analyze and identify important management risks and decide on activities by selecting from options such as mitigating, averting, transferring, or retaining.
• Compliance In addition to promoting education and awareness among employees, thoroughly ensure compliance through audits and patrols.

Risk Management
Structure/Business
Continuity Management

 The Risk Management Committee, which was established based on the “Risk Management Regulations”, addresses issues related to the management of risks. It has formulated a list of important management risks, and each business division periodically reports to the Committee on the progress of measures being taken in response to those. The Risk Management Committee then reports on conditions regarding protection against important management risks to the Board of Directors.
 In the event where a situation arises that can impart a critical impact on KYODEN and the KYODEN Group, a Taskforce headed by the President is established to implement the necessary countermeasures so that losses can be kept to a minimum and the situation can be restored as quickly as possible.

 Furthermore, we have established Business Continuity Management (BCM) based on risk management and conduct advance preparations for disasters and other anticipated emergency scenarios that could impact our business value.
 We are also committed to establishing further crisis management with a view to preventing risks that could impart losses and impacts to our stakeholders.

Basic Policy
 To ensure preparedness for massive earthquakes, flooding, other natural disasters, issuance of J-ALERT, explosions, fires, other incidents and various risks at business facilities and centers that could interrupt business continuity, and ensure prompt responses for customers and stakeholders while giving top priority to saving lives, KYODEN Co., Ltd. and its associated subsidiaries have compiled business continuity plans and promote business continuity management.

• 1. We will give top priority to securing the lives and physical safety of employees and their families.
• 2. We will strive to prevent the expansion of damage and occurrence of secondary disasters.
• 3. We will take actions to minimize impacts on management.
• 4. We will strive to maintain supply and secure early recovery as far as possible and thereby fulfill our responsibility
  to supply products.
• 5. We will cooperate with local residents and nearby local governments in supporting recovery and reconstruction.
• 6. We will formulate business continuity plans and conduct regular inspections to confirm that they are implemented.
• 7. We will provide education and training to employees concerning the business continuity plans.

Compliance Structure

 To ensure that the execution of duties by executive officers and employees of KYODEN and its group companies is in conformance with laws, internal rules and articles of incorporation and fulfill our social responsibility, we have formulated a compliance policy (Corporate Principles of Conduct) and ensure that all members act in accordance by conducting training, etc. implemented primarily by the Compliance Committee.
 Moreover, we have established a report and advice window (hotline) staffed by internal and external members (lawyers) for receiving reports from and offering advice to employees of KYODEN and its group companies. In addition to recognizing reports made anonymously, we strive to ensure that persons making reports do not receive unfair treatment.

Promotion and Management Structure

 The Compliance Committee, which is chaired by the Director in Charge of Compliance, holds meetings to identify the issues that require strengthening and work on their resolution.
 Moreover, we are striving to reinforce information security via the Information Security Committee.

Compliance Guidelines

Information Security Basic Policy

Developing the Compliance Mind

 Considering how important it is to ensure that each employee hones a “compliance mind” and acquires knowledge, we distribute and conduct readings of the “Compliance Guidebook” and “Information Security Guidebook” and implement education targeting all employees.

Self-check and
Internal Reporting System

 Compliance self-checks are implemented four times a year in each section, and a report window is established for employees to contact if they become aware of any dishonest activities, unlawful activities or unethical practices. In this way, we have established and operate systems geared to quickly discovering and preventing illegitimate activities, etc.
 Moreover, we address issues upon taking care to uphold the welfare and privacy of persons who make reports.