Our company is positioned with the strengthening of corporate governance as one of our business challenges. For that reason, aiming for (1) building trust with shareholders, (2) contributing to society’s progress and development, and (3) the continuous growth of business value, we work on "transparent and efficient corporate management", "expediting management decision-making", as well as "establishment of corporate governance that pursues compliance risk management."
Furthermore, we recognize that it is our mission to realize the goal of corporate governance which is the maximization of shareholder value by supervision of the CEO.
This company, putting the president as the chief executive of the company, conducts business based on the management decision-making body - the management committee. After deliberating in the management meeting that is held once a month, management decisions are made based on the deliberations of the board of directors meeting.
The board of directors meeting that is composed of six members of which three are an outside director, held in principle once a month, oversees the management decisions of important issues and its implementation.
The supervisory board is composed of three outside auditors of which one is a statutory auditor. These auditors attend the board of directors meetings and important meetings, understanding the internal functioning of the company, and conduct audits while communicating with the auditing firm and internal departments. Regarding the internal audit, the internal audit representative selects, on a company-wide perspective, the departments where the audit is to be carried based the annual audit plan and conducts the audit. We have the system that in addition to notifying the president and the auditors of the results at each occasion, regularly reports to the board of directors and the management committee.
Regarding actual management, the management’s basic policy is articulated by the president who, in addition to setting the concrete business objectives, formulates the business plan and undertakes efficient achievement of the goal. In order for that, we are committed to flexibly organize structures with a small number of people, and position the right personnel at the right function. Furthermore, for the sake of promoting smooth management of the organization and enriching communication, we abandon hierarchy, clarify the chain of command, and delegates appropriate authority to the head of each department.
Compliance, i.e. complying with the law and taking actions that are in line with social norms is considered the top priority when it comes to job performance. For that reason, along with spreading the corporate vision, we established the "FunPep Co., Ltd. Charter of Corporate Conduct," which determines basic matters related to compliance, and periodically communicate with the managers.
Also, with regards to situations related to compliance, in addition to a structure that receives reports from each department, we have established a system of internal reporting so that the direct access to internal audit chief or outside attorney is possible. In case a problem occurs, as per these systems, we identify the issue and share relevant information, and if necessary, report to the board of directors.
We have divided risks that accompany business conduct into various categories such as: 1) product manufacturing and sales risks, 2) asset management risks, 3) system risks, 4) administrative risks, 5) reputation risks, 6) emergency disaster risks, 7) legal risks, 8) overseas business risks, 9) information leakage risks, 10) patent rights infringement risks, 11) financial reporting risks, and have established the policy/systems/procedures for risk management. As for new risks that may emerge, the president, as a central pillar, promptly determines the responsible department and takes appropriate measure.
Information related to business conduct, is classified into separate information by the information management supervisor depending on the importance of its content, we ensure the individual information security and commits to efficient administration and information sharing.
Each department regularly inspects and improves its work performance by its own responsibilities. Moreover, in order to objectively inspect and evaluate each department's performance of duties, we appoint an internal audit representative to regularly conduct an audit.
The scheme of the Company's corporate governance structure is as follows: