Sustainability

Governance

Corporate Governance

Fundamental Concept of Corporate Governance

Under the corporate philosophy, "Company delivering Kando beyond expectations," Komori understands that it is one of the most important material issues to meet expectations from all stakeholders including shareholders, customers, suppliers, local communities, and employees and their families in its business activities, fulfill its responsibilities and maximize corporate value. To that end, Komori employs a Company with Audit & Supervisory Board system as a core part of its corporate governance activities.
Komori also acknowledges that securing management transparency, prompt decision-making, compliance, and strengthening the audit function are fundamental to corporate governance. Based on these fundamental concepts, the Company pursues efforts to ensure solid corporate governance in all facets of management, including the supervision of management.

Corporate governance structure

The above table can be viewed in its entirety by scrolling horizontally.

Compliance and Internal Control

Concepts of Compliance and Internal Control

Compliance

We ensure that all our officers and employees in Japan and overseas conduct their activities in compliance with laws, regulations, social ethics, and respect for human rights based on the "Komori Group Code of Corporate Conduct" and the "Komori Group Employee Conduct Standards" both of which were formulated as basic guidelines for corporate activities. In addition, we have established the CSR Committee and the section in charge of compliance to promote and raise compliance awareness throughout the Komori Group by providing a whistle-blowing system for domestic Group companies, as well as compliance education for all employees.

Internal control

Internal control system We have an internal control system in place, based on a basic policy for establishing it approved by the Board of Directors. We annually review and evaluate the operational status of the internal control system, reporting the results to the Board of Directors.
Internal audit We have an internal control system in place, based on a basic policy for establishing it approved by the Board of Directors. We annually review and evaluate the operational status of the internal control system, reporting the results to the Board of Directors.
Cooperation with Audit &
Supervisory Board members/
Independent Auditors
We closely collaborate with the Audit & Supervisory Board members by regularly exchanging opinions, conducting joint audits, and sharing audit results, aiming to enhance the efficiency and quality of audits. We engage in discussions with our Independent Auditors through meetings on their quarterly review reports, interim/final audit result reports, and other occasions.

KOMORI Group Basic Policy on Anti-bribery and Corruption

Enforced on December 26, 2017

Background

Laws and regulations controlling bribery and corruption have tightened on an international scale in recent years, with exposure of such activities becoming ever more severe. Although the KOMORI Group has always endeavored to prevent violations through our corporate behavior charter which includes the statement of "fair and transparent corporate activities in accordance with laws, regulations, and social ethics," and specifically defining employee standards of conduct as "prohibiting bribes to civil servants." In light of the global development of the Group's business, tightening laws and regulations, and more severe exposure of such activities, it is necessary for the KOMORI Group as a whole to further enhance measures against the risk of bribery.

Declaration

In 2011, the board of directors expressed their resolve to ensure that the KOMORI Group "takes a firm stance on preventing bribery." In view of increasing worldwide interest in preventing bribery such as the American Foreign Corrupt Practices Act, the British Bribery Act, the Chinese Commercial Bribery Regulations, and the Japanese Unfair Competition Law, we declare that the laws and regulations regarding anti-bribery measures that apply in the countries and regions where the KOMORI Group operates its businesses will be strictly adhered to, that reception of bribes is prohibited, and that accurate records of all Group transactions will be maintained. In addition to eliminating bribery from the businesses involved in the Group, we request that companies who conduct business on our behalf, whether fully or partially, and our partners in business dealings, be in compliance with anti-bribery laws and regulations in order to conduct our business with integrity.

Conditions

The KOMORI Group requests the following of all Group executives, employees, agents, and business partners.

1. Prohibition of bribes

Do not give, offer, promise, or accept bribes to or from any person, whether directly or indirectly.

2. Proper authorization procedures and follow-up confirmation procedures

Payments to public officials must conform to proper authorization procedures and proper follow-up confirmation (review procedures). The same also applies to payments to executives of private enterprises.

3. Understand and abide by KOMORI Group policy on bribery regulations

Undergo training to sufficiently understand and abide by laws and regulations on bribery and the KOMORI Group code of conduct.

4. Due diligence and introduction of anti-bribery clauses by agents and business partners

Business may only be conducted with legitimate and trustworthy agents and business partners, due diligence must be conducted before executing business with such persons, and the contract concluded with such parties must contain an anti-bribery clause.

5. Periodic risk evaluation

Bribery risk evaluation must be conducted periodically for all KOMORI Group companies.

6. Records maintenance

Records must be maintained in order to show compliance with bribery-related laws and regulations and the KOMORI Group code of conduct.

7. Periodic review and improvements

The code of conduct and controls for preventing bribery and corruption must be periodically reviewed and amended/improved as necessary.

8. Prompt reporting

If any KOMORI Group executive, employee, agent, or business partner is suspected of violating the anti-bribery laws and regulations or the terms of this policy, a report must be promptly filed with the immediate supervisor or supervisor of the department in charge in order to take timely and appropriate measures.

Definitions

  • "Public officials" include all public officials, members of a political party, official candidates, and state-owned businesses and businesses under the control of the government (examples include employees and executives at a state-owned bank).
  • "Agents" refer to persons who act as an intermediary in transactions or act on behalf of or as an intermediary for the KOMORI Group.
  • "Business partners" refers to those with whom the KOMORI Group conducts business.
  • "Bribes" denotes presenting something of value to a civil servant or other party with the goal of obtaining or maintaining business or obtaining unfair advantages, and a so-called facilitation payment (payment intended to facilitate government affairs) would constitute a bribe.
  • The "code of conduct" is a set of rules and concepts that must be followed by all KOMORI Group executives and employees which covers the policy, regulations, standards, and guidelines on preventing bribery and includes the KOMORI Group Basic Policy on Anti-bribery and Corruption.

Risk Management

We have identified individual risks in the Komori Group and examined countermeasures for them at various meetings, and responded to issues in daily operations to a certain extent. However, as the environment surrounding us is changing, there are concerns that any lack in common understanding and partnership between departments regarding important risks could lead to a delay in taking countermeasures. Therefore, the CSR and Environmental Countermeasure Planning & Coordination Office is working together with each department to narrow down and manage 21 risk factors, including those stated in the Securities Report, in view of the severity of the risks we faced in the past and the priority of risks we are currently facing.
In our internal activities, the risk management organization headed by CEO was formed, taking responsibility for identifying and assessing risks from group-wide perspectives. In accordance with the Regulations for Risk Management and the Operational Guidelines for Risk Management established to this end, we set up the Risk Management Committee which is responsible for formulating the group-wide risk management policy, reviewing the risk management system, monitoring the status of measures taken for each individual risk, and implementing necessary follow-up action. The status of progress is reported to the CSR Committee quarterly and the Board of Directors as necessary. The emergency headquarters will be in charge for risks in emergencies.

Risk type Risk factor Number of risk factors
1.Management risk of overseas subsidiaries
  • Risk of reduced profitability of subsidiaries in Europe and the U.S.
  • Risk of possible damage due to product quality claims
  • Risk of deterioration in cash flow due to excess inventories
3
2.Hazard risk
  • Risk related to information security breach (BCP to respond)
    Important information: Customer information, employee information, drawings, intellectual property information, design/manufacturing technology information, financial information
  • Risks linked to Headquarters functions and plants
  • Country risk involved in overseas business
3
3.Market volatility risk
(Market monitoring risk)
  • Risk of offset printing market shrinking
  • Risk caused by currency exchange fluctuations
2
4.New business management risk
  • Risk of digital printing business growth stagnating
  • Risk of target areas in PE business
2
5.Supply chain risk
(parts supply risk)
  • Risk related to price hikes on raw materials, electronic parts, etc.
  • Risk of supply of electronic parts, etc. being delayed
2
6.Risk related to environment/climate change
  • Risk of making little progress in developing next-generation technologies in environmental response
  • Risk of energy costs increasing
2
7.Risk related to human resources
  • Risk related to human resource employment/diversity
  • Risk of employees quitting
2
8.Risk related to compliance
  • Risk related to wrongdoing and harassment
1

The above table can be viewed in its entirety by scrolling horizontally.

Information Security

Risk related to information security breaches

If information security is breached, resulting in information leaks, destruction or falsification of data, or suspension of operations or services, it could not only affect our Group's business performance but also lead to a loss of trust in our group.
To this end, our Group has established policies for the promotion of information security in the form of Information Security Standards and specific guidelines for usage and operation rules, as well as an IT Security Committee as a promotion organization, which is responsible for building, maintaining, and improving security systems, including those of Japan and overseas Group companies. In addition, regular vulnerability and risk assessments are carried out to identify risks at an early stage and establish a system for taking countermeasures.
We will continue to monitor changes in threat trends and continue our cybersecurity initiatives.