Corporate Governance

Strengthening corporate governance is a key management priority.
We are working to build and improve a structure for enhancing transparency and ensuring fairness
in our business activities, and promoting the reinforcement of internal controls.

Internal Control System

Nissha Printing Co., Ltd. builds and operates an internal control system in accordance with a Policy for Internal Control formulated by the Board of Directors. The system is designed to ensure that the duties of each internal organization are carried out legally, appropriately, and efficiently toward enhancing our corporate value. To ensure reliability of financial reporting, we submit the assessment results of our internal control system in the form of internal control reports to the Prime Minister of Japan and disclose the contents to our shareholders and investors.

Policy for Internal Control

Pursuant to the Companies Act and the Ordinance for Enforcement of the Companies Act, the Company shall establish systems to ensure the properness of operations (hereinafter referred to as “Internal Control”) of the group consisting of the Company and its subsidiaries (hereinafter referred to as the “Nissha Group”) as follows:

1. Systems necessary to ensure that the execution of duties by Directors, Members of the Board and employees of the Nissha Group complies with laws and regulations and the Company’s articles of incorporation

(i) The Company shall establish a “Guideline of the Corporate Ethics and Compliance” and “Code of Conduct” based on its corporate mission and Shared Values so as to comply with laws and social ethics from a global point of view.
(ii) The Company shall establish a Corporate Ethics and Compliance Subcommittee under “Guideline of the Corporate Ethics and Compliance” to carry out monitoring and educational activities to ensure compliance with laws and regulations, the Company’s articles of incorporation and social norms. In addition, the Company shall appoint a Manager and Leader in charge of promotion in each business unit of the Nissha Group to establish a structure for promoting Corporate Ethics and Compliance. An “in-house reporting system” shall be established and operated, through which employees may provide information directly to the Company, while due measures are taken for the protection whistleblowers.
(iii) The Company shall elect multiple Independent Directors, Members of the Board to maintain and enhance the function of supervising the execution of duties by Directors, Members of the Board.
In addition, the Company shall establish a Nomination and Remuneration Committee as an advisory panel for the Board of Directors of the Company in order to ensure the objectiveness and fairness of the nomination of Directors, Members of the Board and Audit & Supervisory Board Members as well as the remuneration of the Directors, Members of the Board. The Nomination and Remuneration Committee shall be chaired by an Independent Director, Member of the Board and the majority of its members shall be Independent Directors, Members of the Board.
(iv) The Internal Audit Division, which is under the direct control of the President and Representative Director, shall analyze and evaluate the state of the establishment and operations of an Internal Control system, propose an improvement plan, and enrich the system.
(v) The Company shall set a basic policy to counter antisocial forces, shall not have any relationship with antisocial forces, and shall not respond to any unreasonable demands with a resolute attitude in compliance with the Regulations regarding antisocial forces, and the Nissha Group shall strive for thorough implementation of the same.

2. Systems regarding the retention and management of information relating to the execution of duties by Directors, Members of the Board

(i) The Company shall retain and manage information regarding execution of duties by Directors Members of the Board, including the minutes of the General Meetings of Shareholders, the minutes of the meetings of the Board of Directors and the requests for managerial decision, properly and with certainty pursuant to the laws and regulations and in-house regulations on information management, and the information shall be maintained in a condition which can be inspected.
(ii) The Company shall disclose important information on the Nissha Group timely and properly by establishing a Disclosure Control Committee which shall discuss the necessity of timely disclosure of corporate information and the contents of disclosure.

3. Rules and other systems for risk management of the Nissha Group

(i) The Company shall formulate the Basic Policy for Risk Management to specify the Nissha Group’s initiatives in risk management.
(ii) The Company shall respond to the risk of managerial losses by organizing company-wide and cross-organizational subcommittees to manage the issues of corporate ethics and compliance, BCM, labor and human rights, environment and safety, information security, trade control, product quality, and improved customer satisfaction under the CSR Committee led by the President and CEO, Chairman of the Board as the acting Committee Chairman.
(iii) Each subcommittee and the superintending division shall establish a management policy, rules, etc.; determine risk analysis, risk assessment, and related measures; conduct daily monitoring activities; and report the results of reviews to the CSR Committee.

4. Systems necessary to ensure the efficient execution of the duties by Directors, Members of the Board of the Nissha Group

(i) Through introduction of the corporate officer system, the Company shall establish functional segregation between strategy development and management monitoring functions to be undertaken by the Board of Directors and business executive functions to be undertaken by the Corporate Officers.
(ii) The Board of Directors of the Company shall approve medium-term business plans, and the Directors, Members of the Board and employees shall execute operations based on such strategic and performance plans.
(iii) The President and CEO, Chairman of the Board shall request the Corporate Officers to report the status of their execution of business and confirm whether or not the business is executed according to the plans at a monthly meeting (MBR: Monthly Business Review).
(iv) The Company shall share the status of execution of business by the Corporate Officers and the strategy implementation items to be undertaken by the organization through the use of IT to improve business efficiency.

5. Systems necessary to ensure the proper business operation of the Nissha Group

(i) The Company shall formulate the Affiliated Company Management Regulations to set basic administration policy for each company of the Nissha Group. In addition, the Company shall manage the performance of important operations of each company of the Nissha Group by designating matters requiring approval of and reporting to the Company with regard to the execution of those operations in the Regulations on Requests for Managerial Decisions.
(ii) The Company shall appoint its officers or employees to become Directors, Members of the Board and Audit & Supervisory Board Members of each company of the Nissha Group in order to ensure the proper execution of operations.
(iii) The corporate division shall manage the proper execution of operations at each company of the Nissha Group and lead and counsel it, as necessary.
(iv) The Company shall periodically convene the Group Audit & Supervisory Board meeting for the exchange of information among the Audit & Supervisory Board Members of the Nissha Group and strive to improve and strengthen the audits for each company of the Nissha Group.

6. Matters regarding employees assisting the duties of Audit & Supervisory Board Members, when Audit & Supervisory Board Members ask for appointment of such employees, and matters regarding the independence of such employees from Directors, Members of the Board

(i) The Company shall establish an Auditor & Supervisory Board Member’s Office to assist the duties of Audit & Supervisory Board Members, and shall arrange for employees to be exclusively assigned to the office.
(ii) The Auditor & Supervisory Board Member’s Office shall belong to the Audit & Supervisory Board and be independent of Directors, Members of the Board. With regard to matters regarding the personnel affairs of the employees of the Auditor & Supervisory Board Member’s Office, approval of the Audit & Supervisory Board shall be obtained through consultation.

7. Systems for reporting to Audit & Supervisory Board Members by Directors, Members of the Board and employees of the Nissha Group and other systems regarding reporting to Audit & Supervisory Board Members

Directors, Members of the Board and employees of the Nissha Group shall quickly report to the Audit & Supervisory Board items that have a serious influence on the Nissha Group, the status of risk management, the results of internal audits, the status of internal reports and the details of such reports, etc. The Audit & Supervisory Board Members of the Company shall request the Directors, Members of the Board and employees of the Nissha Group to report the same as necessary. In addition, whistleblowers shall not be treated disadvantageously in any way whatsoever as a consequence of such reporting.

8. Other systems necessary to ensure the effective audit by Audit & Supervisory Board Members

(i) The regular meetings for exchanges of opinions between the President and CEO, Chairman of the Board, Directors, Members of the Board and the Audit & Supervisory Board shall be held. The Audit & Supervisory Board Members shall also set up regular meetings with the Accounting Auditor, Internal Audit Divisions and corporate division to cooperate with them closely.
(ii) The Audit & Supervisory Board Members shall attend not only the meetings of the Board of Directors, but also other important meetings (MBR: Monthly Business Review, etc.), and express their opinions as necessary. In addition, they shall also examine the requests for managerial decision and other important documents.
(iii) The Company shall ensure objectivity and effectiveness of audits through Independent Audit & Supervisory Board Members, including those who have considerable knowledge concerning finance and accounting or legal affairs, such as a certified public accountant or an attorney, etc.
(iv) The Company shall bear expenses necessary for the execution of duties by the Audit & Supervisory Board Members. If an Audit & Supervisory Board Member requests the Company to make an advance payment of such expenses pursuant to laws and regulations, the Company shall promptly comply with the request upon confirmation .

Risk Management

With a risk management policy in place to clarify our approach, we promote risk management to counter risks that may have a significant impact on our business activities, and to be fully prepared in the event an emergency does occur.

Having organized a CSR Committee chaired by the President and CEO and defined risks that require addressing as “any thing or situation that hinders Nissha’s implementation of the corporate mission,” since fiscal year 2016 we are working to reduce all conceivable risks associated with business processes, including those related to disasters, accidents, and compliance, as well as to appropriately cope with risks that have surfaced. The CSR Committee consists of eight subcommittees—Labor and Human Rights, Corporate Ethics and Compliance, Business Continuity Management (BCM), Environmental, Safety and Health, Information Security, Trade Administration and Control, Quality, and Customer Satisfaction Improvement—each of which operates a management system from the viewpoints of basic CSR and strategic CSR.

In the area of crisis management, we have in place a set of Emergency Response Regulations stipulating that we set up a group-wide response task force headed by the President and CEO in the event of a serious interruption of business due to emergency over a certain level, such as a large earthquake or new global influenza epidemic. Furthermore, we promoted activities to enhance employee awareness about the general rules for action and response in an earthquake, such as stockpiling supplies at major bases in Japan, distributing “survival cards” listing information about what to expect and do should an earthquake strike to all officers and employees of the Nissha Group in Japan, and conducting emergency drills.

For the purpose of ensuring business continuity and maximum service to our customers, securing the safety of our employees and their families, and contributing to the restoration of communities and of society at large, we conduct desktop simulation exercises aimed at verifying the effectiveness of our BCM. In fiscal year 2016, we began formulating a Basic Plan for Business Continuity Management, and under the slogan “BCP in Action” conducted training and business impact assessment (BIA) for management and divisions that are a potential bottleneck to BCP.

Risk Management Policy

The Nissha Group strives to accurately identify the risks we face, avoid unexpected loss, and appropriately control risks, thereby ensuring business continuity and enhancing our corporate value toward realizing a mutually trustful Co-existence with our stakeholders.

  1. We build and maintain a structure for responding to the various risks present in our business environment.
  2. We promote risk management at the managerial level toward conducting organization-wide activities and preserving management resources.
  3. In the event of an emergency, such as a situation with critical managerial consequences or a natural disaster, we work to minimize damage, resume business activities as quickly as possible, and prevent recurrence while prioritizing the safety of human lives.
  4. We conduct in-house training to enhance awareness of and the ability to respond to risks, and ensure that each employ takes responsible, swift, and appropriate action.
  5. We periodically review our risk management structure, including this policy, and make improvements on a continuous basis to ensure effective risk management at all times.
July 1, 2015

Junya Suzuki
President and CEO
Chairman of the Board
Nissha Printing Co., Ltd.

Initiatives of Internal Audit

Internal Audit, to maintain impartiality and objectivity in its functions, serves as an organization independent of business execution divisions in drawing up annual auditing plans, investigating whether business activities are carried out appropriately and efficiently, and offering advice and recommendations to internal organizations. Furthermore, it conducts follow-up audits to confirm how each finding that has surfaced through the audits is improving. The office makes reports and offers suggestions based on the results of its audits to the President and CEO at monthly meetings, and presents particularly important matters at Board of Directors’ meetings. Moreover, it holds meetings with full-time Audit and Supervisory Board Members every three months to establish mutual cooperation with the Audit and Supervisory Board.

Audits in fiscal year 2016 focused on governance, compliance, and work processes at North American bases and at consolidated subsidiaries in Japan. Internal Audit, as a third party, also performed an independent assessment of financial reporting-related internal controls, including at subsidiaries that joined the Nissha Group through M&A, in accordance with the Financial Instruments and Exchange Act.

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