There are 18 members on the UACJ Board of Directors: 12 company directors (two of which are from outside of the company) and six auditors (four of which are also from outside of the company). The term for all directors is one year, and we are currently working to clarify duties. The two outside directors include a professor emeritus from a university with a wealth of knowledge and a professor with a distinguished history of experience in both academics and corporate governance. Their roles are to provide commentary from an objective viewpoint and ensure appropriate decision-making on behalf of the Board.

We have also introduced an executive officer system. The reason for this being to separate decision-making and monitoring from executive duties, thereby improving Board functionality and expediting executive duties.

The Board reviews applicable laws and ordinances, articles of incorporation and internal regulations, deliberates issues of administrative importance, and reports on the status of executive duties. There is also a group of 10 internal directors, two full-time auditors and 18 managing directors that hold regular monthly management meetings. In addition to discussing and investigating important issues, they communicate with the persons responsible for executive duties and monitor their intended actions.

The Board of Auditors consists of six auditors including four from outside of the company. Two members are also qualified to provide expert opinion on financial and accounting issues.

The Board of Auditors is an independent body that plays an integral role in corporate governance by auditing the administrative activities of the directors. The auditing officer attends all important in-house meetings, including Board of Directors meetings, and shares the information obtained from periodic auditing reports prepared by full-time auditors and delivered during the monthly meetings held by the Board of Auditors.

Internal audits are also carried out by the Auditing Department, the members of which include 12 full-time auditors and five part-time auditors. This department is under the direct control of the chairman and president. It sets yearly policies and plans based on internal auditing regulations, objectively evaluates the activities of UACJ and Group companies, reports results to the chairman and president, and drafts and suggests improvements. Additionally, whenever deemed necessary, the Board of Auditors and Auditing Department may confer with each other over policies, plans, and how audits are conducted and their results.

Based on the UACJ management philosophy, the UACJ Group utilizes a strict internal control system that ensures the legality and rationality of its operations. The Auditing Department evaluates internal controls and strives to ensure reliable reports, as stipulated under the Financial Instruments and Exchange Act.

In order to strengthen CSR management, UACJ established a CSR Committee for the purpose of creating a CSR promotion system to control group-wide, cross-sectional implementation of activities. This committee is chaired by the president and includes full-time directors and general managers from each factory and technical R&D center, and the general managers of related departments at the headquarters. The CSR Committee meets once a year to discuss and report on general policies and measures related to CSR, compliance, risk management, and the training and enlightenment of executives and senior staff. The policies and measures discussed by the committee are communicated throughout the company via committee members, and are further disseminated to Group companies through the General Affairs Liaison Committee and other departments.

In order to ensure the continuation of sound and fair business activities as a corporate group trusted by society, in June 2014, we established and distributed the Group Code of Conduct, which stipulates items that all Group company employees must observe. The Code of Conduct is translated into local languages for overseas Group companies, including English, Chinese, Czech, Indonesian and Thai. Training to ensure compliance to the Anti-Monopoly Act, Subcontract Act and other laws is also being introduced for overseas Group companies.

At UACJ, the risks that are characteristic to each department and may occur during operations are identified. They are then evaluated by the respective departments together with conducting risk management throughout the entire company. Additionally, for risks that could seriously affect business continuity, information on countermeasures, the time limit required for implementing them and progress status are collected and compiled into a “Risk Management Chart” so that information can be shared throughout the company.

We are also reviewing business continuity plans (BCPs) for large-scale earthquakes, and working to build systems that confirm employee safety, set up alternate production facilities and relocate headquarter functions elsewhere at the time of an emergency.