Corporate Governance
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Internal Control
Pursuant to the Companies Act and the enforcement regulations of the Companies Act, we upgraded the mechanisms we use to ensure that operations of the company are appropriate (hereinafter referred to as "internal controls") as follows:
1. Ensuring that the actions of directors and employees comply with laws and the Articles of Incorporation
In the event the internal audit section in charge of internal audits at Okasan Securities Group Inc. or any other Group company detects an action that contravenes or may contravene a relevant law or the Articles of Incorporation, the director in charge of internal audits reports to the board of directors and, where necessary, an appropriate course of action is recommended after deliberation by the board of directors. The internal audit section upgrades regulations and clarifies the relevant procedures and other matters for internal audits at Okasan Securities Group Inc. and other Group companies.
Okasan Securities Group has consistently maintained a resolute attitude towards anti-social forces and organizations that threaten the order and stability of society. To reinforce this position, the Company has decided to establish internal company systems to comprehensively eliminate business relations and all other types of relations with anti-social forces and organizations.
2. Retaining and handling information pertaining to the duties of directors
Retention periods and the sections in charge of retaining documents (or electromagnetic media) are prescribed by the Regulations Governing the Handling of Documentation. Directors and auditors are permitted to browse such documents by request. In principle, access to such documents must comply with the applicable regulations when such requests are submitted by directors and auditors.
3. Regulations and other mechanisms pertaining to the management of exposure to loss
Regulations govern the management of exposure to loss. These regulations stipulate the sections responsible for different risk categories and provide the mechanisms to deal with risk management issues. The director in charge of risk management formulates appropriate measures for optimal risk management mechanisms applicable to operations and reports on the outcomes to the board of directors. The internal audit section audits the status of risk management in each Group company and reports regularly on its findings to the board of directors.
4. Ensuring that duties are efficiently performed by directors
Efficient management by directors is determined from the perspective of achieving the policy goals in our medium-term business plan. At least once every three months, financial conditions and operating results of Okasan Securities Group Inc. and other Group companies are reported to the board of directors. On the basis of these reports, management promotes the improvements needed to facilitate the attainment of the targets. The plan is also reviewed every six months.
5. Ensuring the appropriateness of functions carried out by the corporate group consisting of Okasan Securities Group Inc. and subsidiaries
The section in charge of operations in the management of each group company enforces measures to heighten the effectiveness of internal control and leads and supports the group companies when necessary. Additionally, the group company management regulations is established and the approval or report from the board of directors or committee of the executive officers are required for all items that are pertinent to the group companies. General meetings, management strategy meetings, and management meetings of the group companies are to be held to improve the communication of group management policies and the sharing of information on important matters.
6. Matters applicable to employees assigned to assist auditors in the performance of their duties and the independence of such employees from directors
An office of auditors is established and one or more employees are exclusively assigned to assist auditors in their duties. Consultations with auditors are designed to determine details of any reassignment of employees and matters concerning personnel evaluations and disciplinary measures.
7. Mechanisms to enable directors and employees to report to auditors and other mechanisms relating to the submission of reports to auditors
Mechanisms are upgraded to permit directors and employees to promptly report legal matters or any of the following, where there is a material impact on Okasan Securities Group Inc. or a Group company, to the board of auditors:
1. A matter that may cause serious damage to the company;
2. An important matter concerning the implementation of internal controls or the management of risks;
3. Any other important compliance matters.
8. Other mechanisms for ensuring effective audits by auditors
Auditors attend and read the minutes of important meetings of the board of directors, and where necessary, request briefings from directors and employees to ascertain important decision-making processes and the conditions of business operations. In addition, at least one interview per year is separately conducted with each director and key employee, and regular discussion sessions between the president and the audit firm are arranged. At the same time, a meeting of the board of auditors for the Group is regularly convened to improve the level of audits by Group companies through the sharing of audit-related information, workshops, and other such initiatives.
