Basic Policy for Internal Controls
（March 27, 2020）
The Company and its subsidiaries and affiliates (“Group”) maintains and develops the following systems to ensure the appropriateness of its operations in accordance with the following, which collectively form the basis of the Company's corporate philosophy: the ASICS SPIRIT, the ASICS Corporate Social Responsibility Policy and ASICS Basic Policy on Corporate Governance and based on the Companies Act, and the Ordinance of Enforcement of the Companies Act.
1. Basic policy on corporate activities
The Group operates its business with the objective of realizing its vision, “Create Quality Lifestyle through Intelligent Sport Technology,” which is based on the Company’s business philosophy as described in the ASICS SPIRIT, “Anima Sana In Corpore Sano (a sound mind in a sound body),” and the following corporate philosophy:
・Provide valuable products and services through sport to all our customers;
・Fulfill our social responsibility and help improve conditions for communities around the world;
・Share profits brought by our sound services with our shareholders, communities and employees; and
・Maintain a spirit of freedom, fairness and discipline, respectful of all individuals.
2. Ensuring that the performance of duties by the Group’s directors and employees complies with the law and the Company’s Articles of Incorporation
Based on the basic policy above, the Group has sets forth its ideal for corporate behavior in the ASICS Corporate Social Responsibility Policy—mainly with regard to compliance and corporate ethics—and also has provided the ASICS Global Code of Conduct and the Global Policies which regulate the behaviors of individual officers and employees. These policies and code are the basis for our achieving corporate behavior that can be accepted and respected by people all over the world.
In order to ensure compliance with the ASICS Corporate Social Responsibility Policy, the ASICS Global Code of Conduct and the Global Policies, the Compliance Committee both comprehensively and cross-departmentally manages compliance measures of the Group under the Compliance Policy, supports officers and employees in operating in an appropriate manner, and gives education and guidance through training and other means.
The Internal Audit Department is directly controlled by President of the Company and audits the status of compliance of the Group individually or in cooperation with the Audit & Supervisory Committee and the Accounting Auditor, and reports the result directly to the President, Directors, Executive Officers, and the Audit & Supervisory Committee, or Audit & Supervisory Committee members selected by the Committee (“Selected Audit & Supervisory Committee Members”).
The Group has established a Global Whistleblowing System under the Global Policy on Protected Disclosure (Whistleblowing). Officers, employees and business partners who have become aware of any act violating the ASICS Corporate Social Responsibility Policy, the ASICS Global Code of Conduct or the Global Policies, or of any other important compliance-related matter can directly send information to and consult with the internal or external contact via e-mail, telephone or in writing and so forth. In response to the internal or external contact, the Compliance Committee will investigate promptly and takes corrective actions. The Compliance Committee reports the situation to the Audit & Supervisory Committee or the Selected Audit & Supervisory Committee Member. Furthermore, the Group takes care to ensure that people providing it with information are not mistreated.
In addition, the Group will never enter in any form of relationship whatsoever with anti-social forces and other organizations that threaten public order and safety.
3. Ensuring the efficient performance of duties by the Group’s directors, etc.
The Board of Directors clearly sets forth the responsibilities of each Director, and the procedures for the performance of their duties in the Rules on the Segregation of Duties and the Limits of Authority or by the assigning of duties, etc. The Board of Directors also ensures that the Representative Director and Executive Officers perform their duties.
Based on the mid-term management plan established by the Board of Directors and the management plan for each business year, the Representative Director and Executive Officers set objectives for the whole company and also detailed objectives for each department and each subsidiary, and manage the achievement of objectives on a monthly and quarterly basis.
The Board of Directors is held regularly to determine certain matters that statutorily require a resolution of the Board of Directors, important management policies of the Group, and important operational performance issues, as well as supervise the performance of duties by the Representative Director and Executive Officers.
In order to discuss in the matters requiring a resolution of the Board of Directors and other important management issues of the Group, as well as to enhance the functions of the Board of Directors and achieve an expeditious management decision-making system, the Company holds an Executive Board meeting regularly that includes Chairman, President, and those who are appointed by Chairman and President.
In addition, in order to respond to the expansion of our business and changes in the global management environment, the Company aims to accelerate management and strengthen systems for business operations by using the executive officer system.
4. Rules on crisis and risk management of the Group
Pursuant to the Risk Management Policy, the Group has established the Risk Management Committee chaired by President and the Risk Management Team. To avoid crisis and mitigate losses arising from it, the Risk Management Committee manages the risks comprehensively by identifying business risk that needs to be dealt with priority and assigning the division in charge. The Committee reports its activities to the Board of Directors twice a year.
The Risk Owners, appointed by each divisions, lead to mitigate the assigned risks and manage their progress.
The Risk Management Team monitors the effectiveness and appropriateness of our Risk Management operations.
The Group appoints an Officer in charge of crisis management in accordance with the Crisis Management Policy. When the Officer in charge of crisis management becomes aware of an incident and accident that can potentially develop into a crisis, the Officer promptly reports it to Chairman and President in the methods and procedures provided in such Policy and establishes a Crisis Management Center depending on the emergency level predetermined in such Policy. The Officer in charge of crisis management decides anti-crisis measures and communication strategies, and so forth, and supervises negotiations with external bodies and publication, and directs the implementation of measures to deal with the crisis and remedial measures.
The Internal Audit Department periodically audits the risk management status.
5. Storage and management of information on the performance of duties by the Group’s directors
The Group stores information on the performance of duties, minutes and relevant materials, and other important information and documents in accordance with the law and internal rules. These documents are always available to Directors, the Audit & Supervisory Committee, and the Selected Audit & Supervisory Committee Member. Information management is performed in accordance with the Information Security Policy and other internal rules on information management.
Under the Limits of Authority, certain matters are approved through ringi, a process in which an internal memo is circulated to the Board of Directors and other persons with approval authority, who then authorize the matter in question by signing off on it. In regards to such matters, the Group has created a computerized system that visualize contents of application and situation of decision, and also stores records of approvals by those with approval authority as electronic data.
6. Ensuring the appropriate performance of operations by the ASICS Group
The directors, auditors and heads of each department for each Group company are assigned from the Company’s Executive Officers or heads of departments. This is done so that the Group companies operate in an appropriate manner and so that the group can exert its strength collectively and that such strength is controlled.
The Group companies may approve each management plan and make decisions on important matters at their respective Board meeting. However, regarding the important matters for the entire Group at a global level, the Group companies are required to report to the Company and obtain its approval.
In addition, the representative of each Group company has the authority and responsibility to operate that business efficiently in accordance with the Limits of Authority provided by each company in compliance with the Company’s standards, but each Group company president must report to the Company and obtain its approval on individual important issues whose reporting is required by the Company.
The Internal Audit Department conducts internal audits on the status of control over the general operations of the Group, and reports its audit results directly to President, the Directors, Executive Officers, and the Audit & Supervisory Committee or the Selected Audit & Supervisory Committee Members.
Furthermore, in order to ensure the appropriateness of financial reporting, the Company has developed and maintains an internal control system for the Group’s financial reporting, carries out regular and continuous assessments of this system's operations, and has established mechanisms for the maintenance and improvement of the system.
7. Employees requested to assist with the Audit & Supervisory Committee' duties and the independence of such employees from Directors (excluding those who are Audit & Supervisory Committee members), etc.
To assist the performance of duties of the Audit & Supervisory Committee Members and the Audit & Supervisory Committee, the Audit & Supervisory Committee Secretariat has been established under the Audit & Supervisory Committee.
The Audit & Supervisory Committee Secretariat may, based on instructions from the Audit & Supervisory Committee, request each department or each subsidiary to provide necessary information for an audit. The Audit & Supervisory Committee Secretariat liaise with and makes adjustments between the Internal Audit Department and the audit & supervisory board members of subsidiaries based on instructions from the Audit & Supervisory Committee and assists with sharing information on audits.
An employee of the Audit & Supervisory Committee Secretariat is not subject to the instructions and orders of any Director (excluding those who are Audit & Supervisory Committee members) regarding the operations within the scope of the order given by the Audit & Supervisory Board Members. Furthermore, before any such employee is subjected to transfer, personnel evaluation or disciplinary action, the prior approval of Audit & Supervisory Committee is required.
8. Reporting to Audit & Supervisory Committee by the Group’s directors(excluding those who are Audit & Supervisory Committee members) and employees, other reporting to Audit & Supervisory Committee, and ensuring the effective performance of Audit & Supervisory Committee's duties
The Selected Audit & Supervisory Committee Members identify the overall status of the Group’s corporate management by attending important meetings (including those of the Board of Directors, the Executive Board and Risk Management Committee), by exchanging information with the Group’s officers and employees, and by reading internal approval documents and reports. Audit & Supervisory Committee also consult with the Accounting Auditor accordingly and receive reports from Directors (excluding those who are Audit & Supervisory Committee members) or the Board of Directors on the matters listed below:
・Misconduct by Directors and employees in the course of their duties, violations of the law and The Company’s Articles of Incorporation, and other compliance issues;
・Facts that may cause serious loss or damage to the Company;
・Important information to be disclosed; and
・Matters of which the Global Whistleblowing System has been informed.
The Group has developed a system that enables officers and employees to provide information speedily and seamlessly in response to request from the Audit & Supervisory Committee or the Selected Audit & Supervisory Committee Members, and does not mistreat any officer or employee who has provided information.
Upon request of the Audit & Supervisory Committee or the Audit & Supervisory Committee Members, the Company pays in advance the expenses incurred for the execution of duties by the Audit & Supervisory Committee Members (limited to those in relation to execution of duties of the Audit & Supervisory Committee) (including the expenses incurred for obtaining advices from lawyers, certified public accountants and other external experts), reimburses such expenses and settles the payment of debts.