Business Ethics and Corporate Governance

Business Ethics

In order to realize its corporate philosophy, Kinsho Corporation has established a set of Ethics Regulations setting out its ethical approach and values. These regulations set standards for the company and its executives and employees in carrying out corporate activities. Click here to view the Code of Ethics.

Corporate Governance

Kinsho Corporation recognizes that corporate governance is a key management issue and will continue working to earn the trust of all shareholders through transparent decision-making backed by accurate and timely information, strengthening of internal control systems, and enhanced risk management mechanisms.

[1] Implementation of Corporate Governance Measures

1. Audit system
   Under the Commercial Code of Japan, companies may adopt one of two audit systems: the "company with corporate auditors" or the "company with committees" system (whereby nominating, audit and compensation committees are established within the board of directors; a majority of committee members are outside directors and no outside auditors are appointed). Therefore, Kinsho adopts the "company with corporate auditors" system.
   
   
2. Selection of outside directors/outside auditors
   The company currently has no outside directors. In order to enhance the soundness and transparency of corporate management by facilitating shareholder checks at shorter intervals, on June 27, 2002, the term of office for directors was changed from two years to one year. To strengthen the audit function, two outside auditors have been appointed.
   
   
3. Assignment of dedicated staff to assist outside auditors
   Dedicated staff members have not been assigned to assist the outside auditors, but the appropriate departments provide assistance.
   
   
4. Compliance initiatives
   Compliance systems have been reinforced by making all staff members fully aware of the Kinsho Corporation Regulations on the Conduct of Executives and Employees established in 2001, appointing a compliance officer, and establishing an Ethics Committee. Furthermore, a compliance assessment mechanism has been introduced as part of the new personnel system implemented on April 1, 2003, and awareness of compliance issues has been raised to prevent any actions by executives or employees that could violate laws or regulations. Note that in conjunction with the establishment of the Code of Ethics, the regulations governing conduct - which embody the corporate ethics - were revised and their title was changed from "Kinsho Corporation Regulations on the Conduct of Executive and Employees" to "Code of Conduct." Click here to view the Code of Conduct.

[2] Structure of Operations and Oversight

The chart below shows the company’s management organization, internal control systems and risk management systems.