Corporate

Corporate Governance

Basic Perspective

The Mitsubishi Rayon Group is working to enhance its corporate governance by undertaking fair business activities in compliance with laws and with a high standard of corporate ethics.

Fundamental Policy on Internal Control System

The Company hereby establishes its "internal control system" as below, which shall be reviewed and improved going forward as necessary. The purpose of this fundamental internal control system is to contribute to the achievement of MRC's corporate philosophy and to maximize the Company's corporate value by securing proper execution of business activities, ensuring efficiency of business activities and managing business risks.

1. System to ensure business operation by Board Directors ("Directors") to comply with laws and the Articles of Association

  • Directors shall act as a role model for others and execute their duties in accordance with the "Corporate Behavior Charter" whose purpose is to achieve the Company's corporate philosophy.
  • Directors shall not only make business decisions but also make business reports and share information necessary for execution of Company's business at regular Board Meetings and at special Board Meetings.
  • Directors shall mutually monitor and oversee other Directors' execution of duties to ensure entire legal compliance thereof. Should Director(s) be in violation of laws or Articles of Association committed by other Director(s), such instances must be immediately reported to the Corporate Auditors and to the Board and corrective measures shall be taken.

2. System to store and manage information related to business execution by the Directors.

  • The Company shall establish the "Important Documents Retention Regulations" and place appropriate controls on important documents related to business execution by the Directors (e.g. Shareholders' Meeting minutes, Board Meeting minutes, etc.).
  • The Company shall establish the "MRC Information Security Committee," which shall supervise MRC Group's information security and management activities.
  • The Company shall appropriately manage all of the MRC Group's information assets by establishing a basic information management policy and the "Mitsubishi Rayon Group Information Security Policy" and "Information Asset Management Regulations."
  • Online Document Management System consisting of online "Bulletin Board", online "Koshin", etc. shall be utilized to transmit promptly and accurately the minutes of the Board Meetings and resolutions of the Management Meeting and other matters to be announced to other MRC Group companies.

3. Regulations and other system to manage risk of loss

  • The Company shall capture and categorize external risk factors; political and economic conditions, natural disasters and other significant risks concerning overall business operations i.e. production, sales, products, finances, R&D, systems, etc. The Company shall implement a system to prevent risks appropriately and mitigate risks.
  • The Company shall establish the "Risk Management Committee," which shall supervise MRC Group's risk management activities.
  • The Company shall specify managerial responsibilities and management methods concerning the important risks related to the Company's business operations in the "Risk Management Regulations", and Directors and the head of each department shall take managerial responsibility for prevention and treatment of material risks in the business operations assigned to them. As to individual operational risks, the Company shall standardize business activities in the "Business Operations Regulations" and put the risk prevention system in operation on a daily basis.
  • As to disaster, accident, incident and other crisis management, the Company shall, pursuant to the "Risk Management Regulations," set up a Crisis Task Force as needed for organisational response. The Company shall prepare a risk management system for all conceivable risks, and develop and update the Crisis Management Procedures.

4. System to ensure efficiency of business operation by the Directors

  • In addition to the regular and special Board Meetings, the Management Meeting, chaired by the President, shall be held to deliberate important matters concerning business operations of all the Group Companies and Departments for the purpose to improve the efficiency of performance of respective duties of each of the Directors.
  • The President shall promptly transmit the resolutions by the Board and the decisions by the Management Meeting to all Executive Officers and concerned departments using the online bulletin board. Operations based on those resolutions and decisions shall be executed quickly by the employees in accordance with the authorities and responsibilities defined by the "Office Organisation Rules" and "Segregation of Duties Rules".
  • The Company shall establish the "CSR Management Meeting," which oversees the activities of the Risk Management Committee, Safety, Environment & Quality Assurance Committee, Compliance Committee, and Information Security Committee. Each such committee shall enhance efficient business operations and compliance systems.

5. System to ensure business operation by employees to comply with laws and the Articles of Association

  • The Company shall endeavor to spread the "Corporate Behavior Charter" and the "Compliance Code of Conduct," and shall disseminate employees the significance and purposes of all types of internal regulations concerning the execution of other business operations and improve the employees' understanding thereof.
  • To further ensure strict adherence to the "Corporate Behavior Charter" and compliance requirements, the Company shall establish the "Compliance Committee". The "Compliance Committee" shall be the cornerstone of the compliance framework. Each of the Executive Officers, General Managers, and Directors shall promote compliance activities within their organisations on a daily basis in accordance with the policies implemented by the "Compliance Committee".
  • The Company shall establish the "Safety, Environment & Quality Assurance Committee," which shall oversee the risk management related to safety, environment and quality assurance and compliance activities in accordance with "Safety, Environment & Quality Assurance Regulations".
  • Audit Office shall submit internal audit reports to the President and to the concerned departments in accordance with the "Internal Audit Regulations" and exchange information with the Corporate Auditors.
  • Should Director(s) discover serious violations of laws and material facts concerning compliance, such instances must be immediately reported to the Corporate Auditors, the Board, and the Management Meeting.
  • The Company shall establish the Compliance Hotline System pursuant to the "Compliance Hotline System Regulations" for early discovery of violation of compliance issues and proper treatment thereof.

6. System to ensure proper operation by the Corporate Group

  • The Company and its Group companies shall adhere to the "Charter of Corporate Behavior" and related policies etc. set forth by its parent company Mitsubishi Chemical Holdings Corporation and seek its approvals on, and report to it, any important management matters.
  • The Company shall ensure that all the Directors and employees of both the domestic and overseas Group Companies comply with the "Corporate Behavior Charter" and the "Compliance Code of Conduct" as their common norm.
  • Group Company President (CEO) shall oversee and be responsible for the compliance activities of such group company in accordance with the "Corporate Behavior Charter" and the "Compliance Code of Conduct".
  • In order to properly manage the operations of Group Companies, the Company shall establish the "Group Companies Management Regulations", which shall apply to all Group Companies. While honouring the independent activities of Group Companies, the Company shall ensure it receives reports and notifications from Group Companies, and provide guidance, etc., to Group Companies.
  • Risk management at each Group Company shall be incorporated into the risk management system of its parent company.
  • The Company shall regularly hold meetings that are attended by its Group companies' presidents and share the Online Document Management System consisting of online "Bulletin Board", online "Koshin", etc.
  • In addition to as provided for in Paragraph 5. (6), MRC shall position the Compliance Hotline System as an internal reporting system for all Group Companies and as a reporting channel for cases of compliance issues with the business management or management guidance of the parent company.
  • Internal audit of Group Companies shall be conducted in accordance with the "Internal Audit Regulations". The Audit Office shall share information with Corporate Auditors of Group Companies through communication and consultation concerning auditor's duties.

7. System to ensure credibility of Financial Reporting

  • To ensure reliable financial reporting, MRC shall develop and operate an internal control system and report the results of assessments of its effectiveness based upon the "Operation Rules for Internal Control over Financial Reporting".

8. Matters for Employees that assist duties of Corporate Auditors

  • MRC shall appoint audit assistants who will assume the position in charge of support auditing duties and responsibilities of Corporate Auditors.
  • When deciding personnel issues such as appointment, evaluation, transfer, etc. of audit assistants, prior consent of the Corporate Auditors shall be required and such decisions shall remain independent from the Directors.
  • The audit assistants shall follow corporate auditors' instructions and orders and assist in execution of corporate auditors' duties.

9. Reporting systems to Corporate Auditors.

  • With regard to important issues concerning operation of business such as matters reported to or resolved at the Management Meeting, the personnel in charge for such issue shall be caused to provide explanation to the Corporate Auditors upon request by the Corporate Auditors to enhance effectiveness of the report to the Corporate Auditors.
  • The Company shall secure a system whereby Corporate Auditors is entitled, in addition to receiving reports from the Directors, to attend important meetings and express their opinions, and conduct separate meetings with Management Meeting members, etc. including the President and the Corporate Auditors on a regular basis to collect information.
  • The Company shall mandate the Internal Control Department to report to the Corporate Auditors concerning each instance raised through the Compliance Hotline System.
  • The Company shall have the responsible department(s) report to Corporate Auditors concerning status of implementation of the internal control system approved at the Board Meeting, and whether such system is functioning effectively. The status of risk management shall also be reported regularly to the Corporate Auditors.
  • The Company shall ensure directors or employees not to be given any disadvantageous treatment because of the reports that they make to the corporate auditors by setting forth a relevant provision in "Rules on Compliance Consultation Desks."

10. Other systems to ensure effective Audit by Corporate Auditors

  • Corporate Auditors, Accounting Auditors and Audit Office shall regularly exchange information. The Company shall ensure a system whereby Corporate Auditors, Accounting Auditors and Audit Office can maintain close liaison, conduct effective audit, and exchange theme specific information when carrying out audit work. In conducting internal audit, the Audit Office shall maintain close contact and coordination with the Corporate Auditors and cooperate with Corporate Auditors' audit. In addition, the Corporate Auditors shall focus on strengthening the effectiveness of the audit system for auditing Group Companies including overseas subsidiaries and affiliates.
  • The Company shall be responsible for the payment of costs, among the costs paid by corporate auditors, which are deemed adequate to regard as costs necessary for conducting audit.
2015/06/23