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Regulations for compliance and risk management

Chapter 1　General provisions

Article 1　Purpose

The purposes of these regulations are to recognize the establishment and proper application of an internal control system as an important issue in management, examine risks that degrade the appropriateness and effectiveness of compliance and internal control and hinder the achievement of goals and execution of professional duties, grasp problematic points, and create concrete countermeasures in order for our company to soundly and continuously grow.

Article 2　Definition of compliance

In these regulations, “compliance” shall refer to “observance of all laws and regulations related to the business activities of our company and thorough enforcement of corporate ethics in order to earn the trust and admiration of society,” and “the charter for corporate ethics” sets forth the items for promoting compliance.

Article 3　Definition of a risk

In these regulations, a “risk” shall refer to the following cause of the impedance to the achievement of goals set forth below as well as to the business operations of our company.

  1. Matters related to the effectiveness and efficiency of business operations
  2. Matters related to the credibility of financial reports
  3. Matters related to the compliance
  4. Matters related to the preservation of assets
  5. Matters related to disasters, incidents, etc.
  6. Other matters related to the business operations of our company

Chapter 2　System for compliance and risk management

Section 1　Internal control promotion committee

Article 4　Establishment of the committee

  1. An internal control promotion committee shall be established within our company.
  2. The internal control promotion committee shall establish a subcommittee for compliance and risk management.

Article 5　Purpose of the committee

  1. Internal control promotion committee

    Its purpose is to implement the following items.

    1) Decision-making for annual plans on compliance and risk management measures

    2) To manage reports and progress of the subcommittee and give instructions

  2. Subcommittee for compliance and risk management

    Its purpose is to implement the following items.

    1) Internal matters related to compliance and internal control (including matters of meetings such as the management meeting, the help line and whistle-blowing), the sharing of information on risks that may occur and concrete solutions to them, discussions on measures for preventing recurrence, giving instructions to each department, and confirming progress

    2) The planning of education and training as well as enlightenment activities on compliance and risk management for executives and employees

    3) Identifying and dealing with company-wide risks and assessing the degree of their impact (once per year)

    4) Formulation of annual plans for compliance and risk management measures (including monthly campaigns) and giving instructions to each department (once per year)

    5) Simulations and drills of crisis management

Article 6　Organizations, including committees

  1. Internal control promotion committee

    Chairperson　　President

    Vice-chairperson　　The general manager of the management headquarters, the chief of the internal audit office, or the person nominated by the chairperson

    Committee members　　The chairperson of the subcommittee, full-time auditors, members of the internal audit office, or other persons nominated by the chairperson

  2. Subcommittee for compliance and risk management

    Chairperson　　The general manager of the general affairs planning department, or a person nominated by the chairperson and the vice-chairperson of the internal control promotion committee

    Subcommittee members　　Persons nominated by the chairperson of the subcommittee for compliance and risk management from among the general affairs planning department, the marketing planning department, Monogatari Academy, the internal audit office, the FC support office, the growth strategy office, the human resources support department, the accounting department, and the public relations/IR office

Section 2　Compliance and risk management of departments

Article 7　Manager for compliance and risk management as well as the person in charge of compliance and risk management

  1. Each department shall have a manager for compliance and risk management as well as a person in charge of compliance and risk management who shall conduct risk management within said department.
  2. The manager for compliance and risk management in each department shall be the head of said department, and shall supervise the business operations related to compliance and risk management in said department.
  3. The person in charge of compliance and risk management arranges the tasks related to risk management in his/her department.

Article 8　Duties of the manager for compliance and risk management, etc.

The manager for compliance and risk management and the person in charge of compliance and risk management shall follow instructions from the committee or the subcommittee when they receive the instructions.

Article 9　Cooperation with other committees and organizations

  1. The committee shall closely cooperate with other committees and organizations (hereinafter referred to as “other committees, etc.”) in compliance and risk management.
  2. If a serious violation of laws or regulations or a risk thereof is identified in our company, other committees, etc. shall report said matter to the committee and follow the instructions they receive.
  3. The committee shall request that other committees, etc., submit materials or provide explanations if it is considered necessary.
  4. As soon as the committee formulates countermeasures against serious violations of laws or regulations or risks thereof, the committee shall report the details thereof to the Board of Directors and obtain their approval.

Section 3　Response to a crisis

Article 10 Response to a crisis

The shared policies for dealing with a crisis and the details of the framework, etc., for responding to a crisis are set forth in the manual for responding to a crisis.

Chapter 3　Miscellaneous rules

Article 11　Duty of confidentiality

Any of executives and employees as well as those appointed to the committee or subcommittee who are engaged in tasks related to the compliance and risk management of our company shall not reveal any confidential information that they come to know in the course of conducting said tasks. This provision shall remain effective even after they retire from their posts.

Article 12　Supplementary provisions

  1. These regulations shall be reviewed by the internal control promotion committee when necessary, amended by a resolution of the Board of Directors, and announced quickly.
  2. These regulations shall come into force on July 1, 2021.