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Corporate Governance

Latest Update :
Jul.1, 2011

Internal Control System

Enhancement of Internal Control System

Based on the "Basic Policy for Internal Control System", Minebea has comprehensively implemented such systems as the compliance system, information storage system, risk management system, efficiently performing duties system, group company control system, and auditing system, and is working to further strengthen them. (For details, please refer to "Basic Policy for Internal Control System and its Enhancement Situation.")
On June 1, 2009, Minebea established the CSR Promotion Division with an eye to further boosting its internal control system. Comprised of the Internal Auditing Office, Internal Control Promotion Office, Compliance Office and CSR Promotion Office, the new division is working to seamlessly integrate Minebea's systems for internal controls and financial reporting with Company Law.
On June 1, 2010, Minebea also established CSR Promotion Office to this division.

By establishing an internal control system that disciplines business management, we will reinforce corporate governance and strongly fulfill the company's social responsibilities, as well as further increase corporate value.
For this purpose, in order to ensure the health of the management of the company, Minebea has resolved the basic policies for the internal control system, based on the Company Law, at the Board of Directors Meeting.

(Structure of Internal Control System, etc.)

(a) Structure to assure that Board Members', Executive Officers' and employees' execution of duties conform to laws and articles of incorporation (Compliance system)

  1. Minebea has set up a management structure regarding compliance and established the Minebea Group Code of Conduct in order to have group company Directors, Executive Officers and Employees follow laws, Minebea's Articles of Incorporation and corporate philosophy.
  2. This Group Code of Conduct has set the specific standards that have to be observed for labor, safety and health, environment protection, and ethical management. In order to enforce this, the Compliance Committee was established to control the Group's compliance efforts in a cross-section manner, as well as educating officers and staff members.
  3. The Minebea Group will have nothing to do with antisocial influences that threaten social order or safety. It will not acquiesce to unreasonable demands, and it will work uncompromisingly in cooperation with external authorized institutions such as police and lawyers.
  4. The activities of the Compliance Committee will be reported regularly or accordingly to the Board of Directors.
  5. Independent directors in the Board of Directors will be appointed in order to have the check-and-balance system that assures the legality of the Board Members' execution of duties.

(b) Storage and management of information related to execution of duties by Board Members and Executive Officers (Information Storage System)

  1. The Board of Directors has established the Minebea Group Document Management Rules for maintaining documents (including electronic records) and other relevant materials.
  2. If the documents should be kept for a certain period of time or at a certain location, the preservation period and location must follow these rules except in cases where there are specific provisions in any law. The documents are stored by a method as it can be viewed within 2 days, if there is an inspection request from a Board Member or Corporate Auditor.

(c) Rules for Risk of Loss Management and other Structures (Risk Management Structure)

  1. Minebea established "Minebea Group Basic Regulations for Risk Management" that systematically sets up risk management. The Chief Officer of the risk management of Minebea Group shall be the Representative Director, President and Chief Executive Officer, and the Risk Management Committee is under his direct control.
  2. Based on these Regulations, the individual risks will be monitored continuously by each responsive organization, and we also assume and classify specific risks in advance, and develop a quick, adequate communication and emergency structure in case of an emergency.
  3. The Risk Management Committee will regularly review above structure, verify specific items and report the status of risk management including such verification results to the Board of Directors regularly, or whenever necessary.

(d) Structure that assures the execution of duties by the Board Members and Executive Officers are efficiently done (system for an Efficient Execution of Duties)

  1. Minebea has a ten-member Director system to facilitate prompt and strategic decision making. At the same time, by introducing an Executive Officer system, we have delegated significant authority from the Board of Directors to Executive Officers, clearly divide the role of management / supervision functions from execution functions, and heighten the organization's agility.
  2. While everyone at Minebea shares the same vision in working toward a common goal, the leaders of each business headquarters, business unit and division decide on their own specific targets and how to achieve them.
    Their performance results are converted into verifiable data via an IT system and are regularly reviewed by the Board of Directors after being analyzed by each relevant business headquarters, business unit and division. Leveraging the inherent strength of this process, enables us to sweep away obstacles to efficiency, bring everyone closer to achieving their goals, and lay a solid foundation upon which we can build a more efficient organization.

(e) Structures to ensure that the Operations of the Company's and its Affiliated Companies are adequate (Management of Group Companies)

  1. Minebea's business headquarters, business units and divisions take all necessary steps to provide effective guidance on group company business operations.
  2. Our common commitment to legal and ethical standards is reflected in the Minebea Group Code of Conduct.
  3. In order to increase the effects of the internal control system audits for Group Companies currently done by the Corporate Auditors, we maintain a cooperative posture toward the Corporate Auditors.
  4. We set numerical goals for each group company, review them regularly, and provide relevant organizations with feedback after performing a thorough performance review.
  5. The Internal Auditing Office regularly audits the Group Companies.

(f) Structures to ensure that the Audits by the Corporate Auditors are effective (Audit System matters)

  1. Issues when a Corporate Auditor requests for an employee to assist him/her.
    When such employee is required, he/she is properly set, and we assist the audit.
  2. Independence from the Board of Directors of the employee mentioned in the preceding paragraph 1. hereof
    • (1) The audit support by such employee is done under the Corporate Auditor's directions and orders.
    • (2) The Board of Corporate Auditors' opinion is respected on the personnel changes and personnel evaluation regarding such employee.
  3. Structure of Board Members', Executive Officers' and employees' report to the Corporate Auditor, and other reporting structure to the Corporate Auditor
    • (1) The Board Members report the following to the Board of Corporate Auditors
      (i) Matters discussed at the Senior Executive Officers Council
      (ii) Matters that might cause the company a significant loss
      (iii) Monthly business conditions that is important
      (iv) Important matters regarding internal audit status and risk management
      (v) Significant violations of law or articles of incorporation
      (vi) Status of calls to the compliance hotline and its contents
      (vii) Other important matters related to compliance
      (viii) Matters related to request for approval decided by Board Members or Executive Officers
      (ix) Agreements executed by Board Members or Executive Officers
      (x) Matters related to litigations
    • (2) Executive officers directly report (ii) through (v) in the previous paragraph (1) hereof to the Board of Corporate Auditors.
      Also, if the employee discovers a significant fact related to (ii) and (v) in the previous paragraph (1) hereof, he/she may directly report it to the Board of Corporate Auditors
  4. Other matters in order to ensure the efficiency of the Corporate Auditors audit
    • (1) The Corporate Auditor has an opportunity to interview Board Members, Executive Officers and important employees, as well as hold informal meetings regularly with Representative Director, President and Chief Executive Officer and the Independent Auditor respectively.
    • (2) The Internal Auditing Office carries out the internal audit items requested by the Corporate auditors based on discussions with the Corporate Auditors and reports those results to the Corporate Auditors.

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