Notice of Partial Revision to the Basic Policy for Building Internal Control Systems

Summary of Revisions

This revision reviews the basic policy for building internal control systems based on the assumption of transitioning to a company with an audit and supervisory committee under the Companies Act effective March 1, 2021. Major revision items include strengthening the foundation of the compliance framework, establishing systems for retention and management of information, enhancing risk management, improving efficiency of business execution by directors and executive divisions, organizing oversight and monitoring systems for group companies, ensuring the independence and effectiveness of staff assisting the audit and supervisory committee, strengthening reporting systems, and utilizing external experts. These measures are expected to enhance the audit functions of the audit and supervisory committee and increase the transparency of management decisions.

Impact and Outlook

Through ensuring the appropriateness of internal controls and strengthening audit functions, improvements in legal compliance and risk management are expected. The transparency of decision-making processes of the board of directors and management meetings is likely to increase, contributing to strengthened governance across the group including subsidiaries. The implementation timing and specific operational procedures for the revisions are expected to be notified separately.