Corporate Governance

Tokyo Seimitsu Group is committed to establishing and running a highly transparent management system and aims to achieve sustainable growth and increase corporate value in a medium- and long-term basis.

Corporate Governance

Basic Views on Corporate Governance

Our group philosophy is "to create the world's No.1 products and grow significantly with our partners and customers by integrating the excellent technology, wisdom, and information available in the world." By putting this philosophy into practice under the corporate brand "ACCRETECH*," we strive to achieve sustainable growth and increase corporate value.
To meet this goal, we recognize the need to ensure fair and transparent management activities as a reliable corporate citizen in the international community and have established the basic policies to enhance corporate governance.

*ACCRETECH is a term coined by the Company , combining ACCRETE, meaning “to grow together,” and technology.

Transition to Company with Audit and Supervisory Committee

In accordance with the approval of resolution at the 96th Term Regular Shareholders' Meeting on June 24, 2019, the Company made a transition from Company with Board of Company Auditors to Company with Audit and Supervisory Committee. By establishing the Audit and Supervisory Committee and granting voting right at the Board of Directors to directors who are members of the Committee (including outside directors), this intends to strengthen the audit and supervisory function and reinforce the corporate governance structure to further improve the corporate value.

Basic Policies

  1. The Board of Directors strives to properly perform its roles and responsibilities to make transparent, fair, quick, and committed decisions.
  2. The Company respects the rights of shareholders and ensures the equality of shareholders.
  3. The Company strives to have constructive dialogues with shareholders on investment policy that places emphasis on mid- to long-term returns for shareholders.
  4. The Company strives to maintain appropriate collaboration with stakeholders other than shareholders, such as customers, suppliers, employees, creditors, and local communities.
  5. The Company strives to ensure proper information disclosure and transparency.
The full text of the Corporate Governance Report can be downloa ded from our website.
http://www.accretech.jp/company/basicpolicy.html

Stance and system on Internal Controls

We are committed to reinforcing our corporate governance and compliance and ensuring sound and transparent management by establishing internal control systems.

The Board of Directors strives to build an effective internal control system and establish a structure for complying with relevant laws, regulations and articles of incorporation to ensure that all business operations are performed appropriately and soundly. Also, the Audit and Supervisory Committee audits the effectiveness and functionality of the internal control system.
The Audit Department, established as an organization under the direct control of the president, conducts internal audits to verify that the business operations of Tokyo Seimitsu group are conducted in compliance with relevant laws, regulations, articles of incorporation, and internal rules, as well as to assess the validity of controls. The Audit Department also carries out IT control audits in cooperation with other relevant departments and teams.
The Audit Department checks the establishment and operation status of internal controls related to financial reporting of the Tokyo Seimitsu Group and evaluates their validity.
If the Audit Department finds any violation of laws, regulations, articles of incorporation, or internal rules, or any risk due to some other reasons, its General Manager immediately notifies the President and the Board of Directors takes actions.
Internal audits are conducted according to an annual plan approved by the Board of Directors, and their results are immediately reported to the President as well as at the Board of Directors and Executive Management Meetings. Audit results and suggested improvements are also shared with related sections and divisions.

Details of the basic policy for the internal control system are available at our website.
http://www.accretech.jp/company/internal_control.html

Compliance

Basic Views on Compliance

The Tokyo Seimitsu Group is determined to observe laws, regulations and social norms and take sincere and ethical behaviors to meet the expectations of all stakeholders. To ensure that all officers and employees have self-awareness as a good business person and good citizen and act according to conscience with a sense of high ethics, we have established the Compliance Management System and developed policies and regulations concerning compliance and ensure that such policies and regulations are thoroughly understood and followed by all through education and training.
In addition to making efforts to routinely grasp the compliance status, we have established a whistle blower system to enable officers and employees to consult for and report any incidents relating to compliance that they have noticed, aiming to capture issues relating to compliance at an early stage.

Compliance Management System

The Tokyo Seimitsu Group has the Compliance Committee as an organization to manage compliance-related efforts. This organization is led by the board directors and executive officers, the other members include directors in charge of production, engineering, and personnel management, presidents of the group companies, etc.
Revision of the ACCRETECH Group Code of Conduct, which is the basic policy concerning compliance, establishment and revision of regulations, planning and implementation status of compliance education and training, etc. are reported and discussed at this committee. Also, in case of any risk of violation of or conflict with laws and regulations, report is given promptly, and response measures and recurrence prevention measures are deliberated at the committee.
In fiscal 2018, the Compliance Committee functioned and operated without any problems as a place for report and deliberation.

Compliance Education

It is important that thorough compliance, all directors and employees should understand applicable laws, regulations, and rules and realize their obligation to comply with them.
The Tokyo Seimitsu Group provides a variety of education programs for the purposes of enrichment of knowledge concerning compliance and maintenance and improvement of awareness level for compliance. In addition to level-specific education programs such as new employee training and training for managers, we have implemented an e-learning training system in Japan.
Education programs for specific job fields and sections, such education for compliance of relevant laws and regulations as part of industrial safety and health training on production site and legal compliance education concerning quality and environmental management, are also implemented.
It has been a practice to periodically report the plans and results of compliance education programs at the Compliance Committee. In fiscal 2018, the programs were implemented as had been planned, as with the previous years.

Whistle Blower System

The Tokyo Seimitsu Group has the Compliance Consultation Service as a whistle blower system since 2006.
This service is offered through the following channels inside and outside the company. ① Whistleblower contact point (Compliance Committee members) ② Personnel Counseling Dept. ③ External lawyers ④ Outside directors ⑤ Directors who are members of Audit and Supervisory Committee. Every effort is made to protect the anonymity and privacy of whistle blowers and shield them from any negative consequences.
According to the whistleblower records in fiscal 2018, there was no problem with regard to compliance that may affect the business activities of the Tokyo Seimitsu Group.

Status of Legal Compliance

Results of evaluations conducted in internal audits and by external audits showed no misconduct, legal violation, compliance violation or any other problem that affects business activities with regard to the appropriateness of financial
statements, the quality of products and environmental activities in fiscal 2018.

Risk Management

Our Approach to Risk Management

Risk management policy

We prevent the occurrence of potential risks and respond to appa rent risks revolving around the business of the Tokyo Seimitsu Group.

(Risk management policy)

  1. The Tokyo Seimitsu Group strives to prevent the occurrence of potential risks. If any risk has become apparent, President & CEO and all employees work in unison to take prompt and prudent action.
  2. If any risk has become apparent, priority is given to protec tion and saving of human life.

(Risk items and content)
The following risks are assumed to be the risks revolving aroun d the business.
(1) Risks of occurrence of natural disasters and sudden events (ear thquake, fire, storm and flood damage, terrorism, etc.)
(2) Risks caused by economic and financial market trends (busin ess trends, fluctuation of currency rates, etc.)
(3) Risks caused by changes in customer investment trends (changes in semiconductor industry, automotive industry, etc.)
(4) Risks caused by competitor and industry trends (price competiti on, development competition, intellectual property rights, etc.)
(5) Risks concerning public regulations, policies and taxation (country risk, etc.)
(6) Risks concerning human resources (industrial accident, unex pected incident and accident, etc.)
(7) Risks concerning capital providers (changes in share owners hip, etc.)
(8) Risks concerning IT system (IT system failure, etc.)
(9) Risks concerning the quality of products and services
(10) Other risks associated with business execution

Risk Management System

The Risk Management Committee is in place to manage risk for the Tokyo Seimitsu Group. Headed by the President and CEO, the Committee consists of executive officers from Companies and directors of group company appointed by the Chair.
Measures to prevent potential risk are reported from relevant sections to the Committee, which will then report to the Board of Directors as necessary. When risk becomes obvious, the Risk Task Force is established immediately.

Risk Measures

BCP (Business Continuity Plan)

In line with the "Business Continuity Policy", Tokyo Seimitsu reviews and refines its business continuity plan (BCP) and Plant BCPs. In fiscal 2018, for each company and plant, damage estimation in the event of threats and analysis of the fragility of the current measures were conducted again. After that, BCPs and manuals were reviewed from the aspect of business in each department, such as Administration, Production Control, Manufacturing, IT, etc., for refinement and reinforcement. Also, from the viewpoint of fulfilling the basic policy of confirming and ensuring the safety of employees and their families, evacuation drill was implemented to reconfirm the basics of evacuation and disaster prevention and response, and issues were identified to take additional measures. Moreover, with regard to the BCPs of subsidiaries in Japan, organizational structure in line with the parent company policy, priority business and operational structure based on alignment with the parent company were formulated. Going forward, we will continue the initiatives for periodic review and improvement of the BCPs.
Tokyo Seimitsu Group has a "safety confirmation system" in place that enables us to check whether employees are safe in the event of a disaster or accident by using cellular phones or smartphones. While ensuring that every employee is explained about this system when joining the Company, in order to check its effectiveness and to raise awareness of all employees, we conduct semiannually a "drill to operate the safety confirmation system" and announce its results. We also trace once a month employees whose e-mail address is not registered yet and invalid e-mail addresses.

Information Security

Advancement of information technology and globalization of business management present new challenges in the information management of intellectual property rights (such as patents and trade secrets, etc.), requiring us strengthened structure and management.
Establishing the "Information Security Committee" in 2004, headed by the chairperson selected by the Board of Directors, Tokyo Seimitsu has been committed to enhancing information security by obtaining and managing intellectual property rights, managing trade secrets, preventing leaks of technology, etc.
The Information Security Committee has IT System Working Group, Office Security Working Group and Education and Audit Working Group as subordinate organizations, which implement periodic activities. The IT System Working Group is mainly in charge of security relating to IT equipment, the Offi ce Security Working Group mainly deals with security in the operation of office work and the Education and Audit Working Group is mainly engaged in education and awareness activities and audit of activity status.

Information Security Measures

The internet environment in recent years requires us to deal with new risks on a daily basis. Under the initiative of the Information Security Committee, we develop and maintain relevant regulations, and we also implement personnel training, technical measures and physical measures.
For the personnel training, we make it a duty for all employees to annually attend the information security education program in which awareness is raised for the latest points of attention and trends of information security, thereby striving to prevent leakage of information. As the technical measures, we have set up a system for analysis, monitoring and control of suspicious packets by network security equipment. Also, we are committed to prevention of security accidents by introducing various endpoint security software, log acquisition software, encryption software and MDM (mobile device management) for PCs and smartphones.