Corporate Governance

Basic Stance on Corporate Governance

We aim to maximize our corporate value by providing customers with reliable products and services based on our management philosophy and the Group’s Code of Conduct and meeting the demands of shareholders and other stakeholders to pursue appropriate profit margins. With this basic recognition and thorough compliance as our basic approach to corporate governance, we will respect the rights of our shareholders and conduct management that lives up to the trust of society.

Basic Policy

We recognize that enhancing corporate governance is an important management issue from the sustainable growth and medium- to long-term enhancement viewpoint of corporate value. In line with the following basic policy, we will enhance and strengthen our corporate governance to realize transparent, fair, prompt, and decisive decision-making in management.

• (1) We will respect the rights of shareholders and strive to ensure their equality.
• (2) We will strive for appropriate cooperation with all stakeholders, including shareholders, customers, business partners, employees, and local communities.
• (3) We will appropriately disclose corporate information and strive to ensure transparency.
• (4) We will strive to appropriately execute the roles and responsibilities of the Board of Directors in order to make decisions in a transparent, fair, prompt, and decisive manner.
• (5) We will strive to engage in constructive dialogue with shareholders in order to achieve sustainable growth and enhance corporate value over the medium to long term.

Corporate Governance Report

Internal control (systems to ensure the appropriateness of operations)

The following summary specifies our systems to ensure that directors’ execution of duties complies with laws and regulations and the Articles of Incorporation and ensures the appropriateness of our operations.

• 1．System ensuring that the execution of duties by directors and employees of the Corporate Group consisting of the Company and its subsidiaries complies with laws and regulations and the Articles of Incorporation
  • （1）In order to ensure that the execution of duties by Directors and employees complies with laws and regulations and the Articles of Incorporation, the Company shall establish the Yamaichi Electronics Group’s Code of Conduct and shall operate and thoroughly enforce it.
  • （2）The Company shall establish a Compliance Committee chaired by the President to promote the development, maintenance, and improvement of the Group’s compliance system.
  • （3）The Group shall establish and operate an internal reporting system (Compliance Helpline) for Directors and employees to report any suspicious activities in terms of legal compliance.
  • （4）The President and Representative Director of the Company shall directly supervise the Corporate Audit Department. The Corporate Audit Department shall conduct internal audits of the status of business execution of the Group under the direction of the President.
  • （5）The Group has designated the General Affairs and Human Resources Group as the department responsible for dealing with antisocial forces to sever all relationships with antisocial forces. At the same time, the Company establishes rules and regulations for reporting and responding to incidents and takes resolute action against antisocial forces in cooperation with the police and other relevant organizations.
• 2．System for the storage and management of information related to the execution of duties by directors
  • （1）Documents (including electromagnetic records) and other vital information related to the execution of duties by directors shall be appropriately stored and managed under the Document Management Regulations and the Information Security Policy.
• 3．Rules and other systems for managing the risk of loss of the Group
  • （1）In order to deal with risks that threaten the realization of sustainable development of corporate activities, the Group establishes rules for risk management in accordance with the nature and scale of the Group’s business, and globally and comprehensively manage the risks of the entire Group.
  • （2）In the event that an unforeseen situation arises in the Group, the Company shall respond promptly and appropriately in accordance with the Management Crisis Management Regulations.
• 4．System to ensure that the execution of duties by directors of the Group is carried out efficiently
  • （1）The Company holds meetings of the Board of Directors and the Executive Officers’ Meeting, composed of Executive Officers, every month in principle, which grasps the status of the entire Group’s business and shares information, in addition to making decisions on important matters related to the Company’s operations.
  • （2）With respect to the execution of duties based on the decisions of the Board of Directors, the Group shall stipulate the details of the respective responsibilities and execution procedures in the Organization Regulations, Regulations for Segregation of Duties, and Regulations for Administrative Authorities.
  • （3）The Group shall set management goals and policies and goals and policies for each business unit and implement measures to achieve the management plan as planned by systematically developing activities for the entire Group.
• 5．System to ensure the appropriateness of business operations in the Group
  • （1）Under the Affiliate Company Management Regulations, the Company regularly requires prior consultation and periodic reporting on management information from its subsidiaries. Through the support and guidance necessary for efficient management, all Group companies shall collaborate closely with each other to develop their business comprehensively.
  • （2）The Company’s Corporate Audit Department shall conduct the internal audits of the Group to ensure the effectiveness and adequacy of internal controls over the Group’s overall operations.
• 6．Matters concerning employees assisting the Audit Committee in the performance of its duties, matters concerning the independence of these employees from Directors, and matters concerning the securement of the effectiveness of instructions given to the employees by the corporate auditors
  • （1）The Company shall assign employees to assist the duties of the Audit Committee and Audit Committee members in their duties. These employees shall assist the duties of the Audit Committee and Audit Committee members under the instructions of the Audit Committee and Audit Committee members on a priority basis.
  • （2）The appointment, transfer, evaluation, and disciplinary action of the employees outlined in the preceding paragraph shall be made with the consent of the Audit Committee. The independence of the employees from Directors shall be ensured.
• 7．System for reporting to the Audit Committee from Directors and employees of the Group and system to ensure that those who report shall not be subject to any disadvantageous treatment based on their report
  • （1）The Audit Committee members shall attend meetings of the Board of Directors and other important meetings to receive important reports.
  • （2）The Audit Committee may request reports from Directors and employees of the Group, as necessary.
  • （3）The Directors and employees of the Group shall report to the Audit Committee on important matters affecting the business or performance of the Group on a case-by-case basis.
  • （4）The Company shall prohibit any disadvantageous treatment of the Directors and employees of the Group because of making such reports to the Audit Committee.
• 8．Matters concerning the corporate policy on prepayment for expenses or processing debts incurred in the performance of duties by the Audit Committee
  • （1）Audit Committee and Audit Committee members may request advance payment for expenses in connection with the performance of their duties. In that case, the Company shall promptly dispose of the expenses or liabilities related to the request.
• 9．System to ensure that audits by the Audit Committee are conducted effectively
  • （1）The Audit Committee shall maintain close contact with the Accounting Auditor, the Corporate Audit Department, and the Corporate Auditors of the Company’s subsidiaries to ensure the effectiveness of audits from the perspective of legality and reasonableness in all management activities within the Group.
  • （2）Audits conducted by the Corporate Audit Department will be conducted under the audit direction of the Audit Committee. The President can also give audit direction to the Corporate Audit Department. However, if the direction of the Audit Committee and that of the President are incompatible, the Audit Committee’s direction shall take precedence.

Corporate anti-corruption initiatives

Anti-corruption policy

One of the basic concepts of our corporate governance is to ensure thorough compliance, and we will continue striving to achieve this goal. With this in mind, we recognize the anti-corruption provisions of the Group’s Code of Conduct as one of the most critical issues to be addressed in order to ensure compliance. As laws and regulations regarding anti-corruption continue to be strengthened in Japan and overseas, we will strive to prevent corruption and manage our business in a manner that will live up to society’s trust.

Specific form of anti-corruption

The following is a list of corrupt practices that should be prevented in the Company.

• • Acting against the Company’s legitimate interests for the benefit of oneself or third parties
• • Giving gifts or entertainment to foreign public officials, etc., to obtain improper business benefits in connection with international commercial transactions
• • Acts that deviate from sound business practices and common social sense concerning entertainment and gifts given to or received from business partners, etc.
• • Donations that may fall under the category of profit sharing or improper expenditure
• • Use of inside information obtained in the course of business to buy or sell shares, etc., before the information is disclosed (insider trading)
• • Activities related to antisocial forces and groups

Anti-corruption initiatives

• • Every year, we distribute a YAMAICHI CARD, which describes the Group’s Code of Conduct, to each employee to ensure that they are fully aware of the Code of Conduct.
• • We provide training on the Group’s Code of Conduct when employees join the Company.
• • The Company has an internal reporting system to prevent corruption.

Political donations

FY2023: Not applicable.

Number of employee disciplinary actions and terminations resulting from violations of anti-corruption policies

FY2023: Not applicable.

Related fines, penalties, and settlements

FY2023: Not applicable.