Governance and Group-wide Risk Management Centered on Trust

「In addition, the Board of Directors held 21 meetings during the fiscal year, and the attendance of each director and the principal matters discussed were as follows.」

「The Board of Directors held 18 meetings during the fiscal year, and the attendance of each director and the principal matters discussed were as follows.」

「As further measures to prevent recurrence, we are implementing appropriate personnel rotations, promoting the independence of the quality assurance function and strengthening its oversight capabilities, optimizing staffing across the quality assurance function, reviewing inspection standards, and disseminating the basic compliance policy. In addition, to strengthen the group-wide quality management system, we have reorganized the Quality and Environmental Management Office into the Quality Management Office, dedicated to quality management and reporting directly to the president, and are advancing audits and monitoring of quality assurance operations.」

「Going forward, we will establish reporting channels to ensure that inappropriate conduct relating to quality and other matters is promptly reported to the group’s senior management, and strengthen our quality control and audit systems in line with the transition to an operating company effective 1 April 2023.」

「Following external concerns regarding quality control of products manufactured and sold by 昭和電線ケーブルシステム㈱ and the report on the investigation into discrepancies in quality testing of Group products published on 29 October 2021, we are implementing measures to prevent a recurrence, including the early introduction of an automated measurement system for test results to prevent falsification and other misconduct, and the development and implementation of a systematic training program to establish a compliance-oriented culture.」

「Following the committee’s investigation, the group launched a Quality Assurance Operations Digitalization Project, tasked with introducing digital tools across all quality assurance inspection operations, and a Quality Knowledge Enhancement Project, tasked with providing education on the knowledge required in manufacturing, quality assurance, and technology, as well as compliance knowledge. The group is currently implementing measures to prevent recurrence, including the early introduction of an automated system for measuring test results to prevent falsification, and the development and implementation of a systematic training program to establish compliance awareness.」

「Accordingly, since July 2021, the group has been conducting an investigation through a committee chaired by an external expert and attorney to carry out a renewed objective investigation into all products identified by outside parties, including 7 products for which no problems were identified in the company’s internal investigation in addition to certain other products, hereinafter referred to as the “products subject to investigation.”」

「In addition, on 21 July 2021, the company established a special investigation committee chaired by an external expert and attorney. The committee is conducting a more objective investigation into the facts and causes, while the company continues efforts to prevent recurrence and restore trust.」

「The company analyzes risks reported by each group company, including by quantifying them, and then assesses as major risks those that could have a significant impact on the group.」

「Executive Officer Higuchi Yoshiaki (樋口 嘉章) Head of ICT and Cybersecurity Concurrent Head of the ICT Promotion Department Representative Director and President, Axio Co., Ltd. Head of ICT and Cybersecurity Representative Director and President, Axio Co., Ltd. 1 February 2020」

「Based on a resolution adopted at the 123rd Annual General Meeting of Shareholders held on 26 June 2019, the company changed from a company with a Board of Company Auditors to a company with an Audit and Supervisory Committee. Accordingly, the company has established the General Meeting of Shareholders, directors, the Board of Directors, the Audit and Supervisory Committee, and the accounting auditor as its corporate bodies.」

「At the same time, to further strengthen the governance framework of the group and maximize the benefits of transitioning to a company with an Audit and Supervisory Committee, the Board of Directors also resolved to review the group’s corporate governance framework from the following consolidated fiscal year, including a review of its business segments.」

「During the fiscal year, the company conducted an analysis and evaluation of the effectiveness of its Board of Directors to verify that the board was functioning appropriately.」

「The company’s basic approach to corporate governance is to pursue initiatives based on a management philosophy centered on “trust,” recognizing that the prompt and efficient management of the company, together with the strengthening of its monitoring functions, is a universal corporate challenge.」