I-ne Co., Ltd.｜I-ne

Corporate Governance

Fundamental Policy on Internal Control Systems

The management philosophy of the I-ne Group, which comprises the Company and its subsidiaries, is to create a “Chain of Happiness,” that is, making the world happy through products, in order to bring joy and smile to customers and their families and happiness to business partners and their families, local communities, and the Company’s own employees and their families through employment and profits. Based on this management philosophy, we have established the following fundamental policy on internal control systems so that we can carry out highly transparent and efficient management and thereby raise corporate value through the efforts of the entire group.

1.Systems for ensuring that the performance of duties by directors and employees are in compliance with laws, regulations, and the Articles of Incorporation

  1. We shall establish Compliance Rules  applicable to the entire group in order to create a corporate culture of compliance by directors and employees with laws, regulations, and the Articles of Incorporation and the implementation of business with high ethical standards.
  2. We shall establish a Compliance Committee  and create and operate legal compliance systems to ensure that directors and employees have a strong awareness of legal compliance and that compliance is strictly implemented.
  3. We shall not maintain any relationships including transactional relationships with anti-social forces. If an improper demand is made by anti-social forces, the entire organization shall take a firm stand.
  4. We shall establish internal reporting systems that ensure that individuals who make internal reports regarding conduct suspected of being in violation of laws and regulations do not suffer any detriment.

2.Rules and structures concerning management of loss crises

  1. Major risk that we are aware of include compliance risk, operational risk, disaster risk, quality risk, environmental risk, and risk of data breaches. To manage these risks, we shall establish Risk Management Rules  and risk management structures.
  2. We shall establish a Risk Management Committee  to formulate fundamental policies relating to groupwide risk countermeasures relating to risk management, inspect and follow-up on the status of implementation of risk countermeasures, and implement control measures if a risk occurs. If a major risk occurs, a Countermeasures Headquarters  will be established to take measures to minimize the harm.

3.Systems to ensure that directors efficiently execute their duties

  1. We shall establish Board of Directors Rules  relating to operation of the Board of Directors, key matters shall be determined at periodic Board of Directors meetings, and supervision of the execution of duties and so on is performed by requiring directors to report on operations. In addition, extraordinary meetings of the Board of Directors shall be held as necessary.
  2. The allocation of duties among directors and executive officers  shall be specified. In addition, we shall establish Rules on Work Authority  and other internal rules to ensure that the execution of duties by directors is efficient and appropriate.
  3. We shall announce quantitative targets for budget periods based on business plan, clearly state the targets and responsibilities of business divisions and subsidiaries, and work to achieve performance targets for the specified fiscal year by analyzing differences between budgets and results.

4.System for ensuring the appropriateness of business by the corporate group (group companies) comprising the Company and its subsidiaries

  1. While respecting the autonomy and independence of the management of each Group company, the Company shall establish Rules on the Management of Affiliated Companies  and related rules to contribute to the appropriate and efficient management of the Group, and subsidiaries shall establish various rules to conduct business operations appropriately based on these rules and shall periodically report to the Company’s Board of Directors on the details of their management and business operations.
  2. Important committees including the Compliance Committee and Risk Management Committee shall implement measures that take into consideration each subsidiary, and the representative of each subsidiary shall report on major risks to these committees.
  3. The Internal Audit Office  shall implement or oversee audits of each subsidiary, and perform supervision and provide guidance to ensure that each subsidiary creates systems that comply with the Company’s internal controls and properly implements them.

5.Systems relating to the preservation and management of information concerning the execution of duties by directors

  1. Information relating to the execution of duties by directors shall be documented (including electromagnetic recording) and preserved along with relevant materials relating to management decision-making and so on. A department responsible for document management shall be established, and documents subject to management, the departments responsible for retaining documents, retention periods, management methods, and so on shall be specified in rules.
  2. Information relating to the execution of duties by directors shall be maintained in a format that is accessible in a timely manner in anticipation of requests from directors, corporate auditors , or the like,

6.Matters concerning employees who are requested by corporate auditors to assist them in their duties and matters concerning the independence of those employees from directors

  1. Employees shall be assigned to assist the corporate auditors to ensure that the corporate auditors can effectively conduct audits.
  2. Employees assigned to assist the corporate auditors shall be independent of the direction and orders of directors, and personnel matters relating to those employees shall be determined through consultations with the corporate auditors.

7.Systems for directors and employees to report to corporate auditors and other systems for reporting to corporate auditors

  1. Directors and employees shall report on the status of execution of their duties through the attendance by corporate auditors at meetings of the Board of Directors and other important meetings. In addition, the Internal Audit Office shall report on the status of implementation of internal audits and the status of business at Board of Corporate Auditor meetings . Furthermore, reports on the status of business and assets shall be made upon request from the corporate auditors.
  2. If a director or employee discovers a serious violation of laws and regulations or other material facts relating to compliance within the Company or an affiliated company  within the Group, such director or employee shall immediately report to the corporate auditors.
  3. Corporate auditors shall attend committee meetings and important meetings  relating to internal controls as observers and shall view approval documents relating to important decision-making by the Company.

8.Other systems to ensure that audits by corporate auditors are conducted effectively

  1. Corporate auditors shall attend meetings of the Board of Directors and, when necessary, other important meetings and shall collaborate with the Internal Audit Office and the audit corporation  to increase the efficiency of audits.
  2. Expenses deemed necessary for the execution of the duties of the corporate auditors shall be budgeted in advance, and expenses incurred by the corporate auditors on an emergency or extraordinary basis may be billed to the company after the fact.
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