Corporate Governance System and Risk Management System
The following is the basic policies regarding the systems to ensure the appropriateness of execution of duties (internal control systems), which were resolved at the Board of Directors Meeting of the Company.
1.Systems to ensure that Directors’ and employees’ execution of their duties complies with laws and regulations and the Articles of Incorporation
- ①The Board of Directors shall formulate “The Suzuki Group Code of Conduct” to ensure Directors and Managing Officers and employees in the Company and its consolidated subsidiaries (hereinafter “the Suzuki Group”) execute their duties in a healthy manner as well as shall oversee the state in which the Code is fully known to the Group.
- ②A corporate governance committee, chaired by the Director or Managing Officer in charge of corporate planning, shall be established under the Board of Directors. The Corporate Governance Committee shall deploy measures for advancing in thorough compliance and promote efforts to address cross-sectional challenges in coordination with the relevant sections.
- ③Executive General Managers shall clearly define the division of work among their responsible sections and establish work regulations and manuals that include compliance with laws and regulations related to their responsible duties, approval and decision procedures, and rules for the confirmation process by other sections as well as make them fully known to people concerned.
- ④The Personnel section shall hold seminars about compliance and individual laws/regulations for Directors, Managing Officers and employees in a continuous manner in cooperation with the Corporate Planning, Legal, Engineering and other related sections.
- ⑤To prevent violations of laws and regulation and take corrective measures at an early stage, a whistleblowing system (The Suzuki Group Risk Management Hotline) shall be established inside and outside the Company to allow Directors, Managing Officers and employees to report on violations of laws and regulations or their possibility without receiving disadvantageous treatment for doing so.
The Corporate Planning section shall strive to make the whistleblowing system fully known and promote its use.
2.Systems relating to the storage and administration of the information in relation to Directors’ execution of their duties
Meeting minutes and other information related to Directors’ execution of their duties shall be retained and administered by responsible sections pursuant to laws, regulations and internal regulations as well as shall be available to Directors and Company Auditors for examination when the need arises.
3.Rules and other systems relating to management of the risk of loss
- ①Important matters regarding corporate management shall be decided after the Board of Directors meetings, the Executive Committee, circular resolutions and other systems deliberate and evaluate their risks in accordance with the standard for deliberation.
- ②Executive General Managers shall establish work regulations and manuals that include preventive measures against risks that can be presumed in their responsible duties, and counter-measures in case of their occurrence and make them fully known to people concerned.
- ③To prepare for a large-scale disaster, action manuals and business continuity plans shall be formulated, and drills shall be carried out.
4.Systems to ensure that Directors’ execution of their duties is made efficiently
- ①Important matters regarding corporate management shall be deliberated at the Executive Committee and other meetings prior to decision-making.
- ②The Board of Directors shall clarify responsibilities regarding the execution of Executive Officers’ and Executive General Managers’ duties and supervise their execution.
- ③The Board of Directors shall receive reporting from the person responsible for the execution of the duties, as necessary, on how the matters, which were decided at Board of Directors’ meetings, the Executive Committee and other meetings, are executed to give necessary instructions.
- ④The Board of Directors shall formulate mid-term management plans that include consolidated subsidiaries and regularly verify the progress in the business plans of the fiscal years that Department General Managers make in order to achieve the mid-term plan.
- ⑤The Internal Auditing section, which directly reports to President, shall audit the state of establishment and operation of internal controls, which are based on the basic policies, on a regular basis and report on the outcome to the Board of Directors.
The Board of Directors shall make Executive Officers and Executive General Managers attend Board of Directors meetings, if necessary, and ask them to explain or report on issues that were detected in activities such as internal audits and whistleblowing. Accordingly, the Board of Directors shall give instructions for correction of the issues and ask reporting on the result.
5.Systems to ensure proper business operation of the Corporate Group consisting of the Company and subsidiaries
- ①The Board of Directors shall formulate mid-term management plans that include consolidated subsidiaries, and the presidents of the subsidiaries shall make business plans in the fiscal years in order to achieve the mid-term plans.
- ②The Company shall set forth regulations for managing subsidiaries, which clarify the sections that are responsible for administering the subsidiaries, and receive reporting from subsidiaries on the situation of their business on a regular basis and on matters set forth in the regulations. Important matters related to the corporate management of subsidiaries shall be subject to prior approval from the Company.
- ③The Corporate Governance Committee shall deploy thorough compliance and measures for risk management, which include consolidate subsidiaries, to the presidents of subsidiaries as well as give them necessary assistance in coordination with the relevant sections.
The Internal Auditing section, directly reporting to President, shall audit subsidiaries to make “the Suzuki Group Code of Conduct” fully known, and regularly audit the state of compliance, risk management and the state of establishment of a whistleblowing system as well as report the results to the Board of Directors.
The Board of Directors shall make the presidents of subsidiaries attend Board of Directors meetings, if necessary, and ask them to explain or report on issues that were detected in activities such as internal audits and whistleblowing.
Accordingly, the Board of Directors shall give instructions for correction of the issues and ask reporting on the result.
- ④The Corporate Planning section shall make the Suzuki Group Risk Management Hotline fully known to subsidiaries to allow the Directors, Managing Officers and employees of subsidiaries to report directly to the Company on violations of laws and regulations or their possibility.
6.Matters for employees to support the business of the Company Auditors when the Company Auditor seeks appointment of the employees, matters for independence of such employees from the Directors and matters for ensuring the efficiency of instructions given the employees
- ①The Company shall establish Secretariat of Audit & Supervisory Board in which staff is dedicated to executing their duties under the direction of Company Auditors.
- ②Company Auditors whom the Audit & Supervisory Board appoints can ask a change of their assistants anytime, and Directors shall not refuse the requests without right reason.
- ③Transfers, treatments, disciplinary punishments, etc. of the staff in the Secretariat of the Audit & Supervisory Board shall be subject to approval from Company Auditors whom the Audit & Supervisory Board appoints. The staff’s performance assessment shall be conducted by Company Auditors whom the Audit & Supervisory Board appoints.
7.Systems for reporting to the Company Auditors
- ①Company Auditors may attend the Executive Committee, other important meetings and various committees in addition to Board of Directors meetings to ask questions and express their opinions.
- ②In addition to delivering circular resolutions and other important documents to Company Auditors, the Board of Directors, sections and the presidents of subsidiaries shall submit necessary information and report on the state of business and duties at the request of Company Auditors.
- ③On finding the fact that can cause serious damage to the Suzuki Group, the Board of Directors shall report on the fact to the Audit & Supervisory Board immediately.
- ④The Internal Auditing section, directly reporting to President, shall report on the results of audits to the Audit & Supervisory Board.
- ⑤One of the contacts of the Suzuki Group Risk Management Hotline shall be Company Auditors. In addition, the state of whistleblowing activities outside that of Company Auditors shall be reported to Company Auditors on a regular basis.
- ⑥The Company must not treat those who reported to Company Auditors to their disadvantage and shall ask subsidiaries to treat them in the same way.
8.Matters regarding procedures for prepayment or redemption of expenses arising from the execution of duties of Company Auditors and processing of other expenses or liabilities arising from the execution of such duties
The Company shall budget a certain amount of fund each year to pay expenses, etc. caused by the execution of Company Auditors’ duties. When Company Auditors claim an advance payment of expenses and others related to the execution of their duties, the Company shall treat the claim without delay.
9.Other System to ensure effecting auditing by the Company Auditors
Regarding expenses that the Company bears, Company Auditors may seek advice, etc. from lawyers and other external experts, if necessary.
Overview of significant actions based on the above Basic Policy in FY2016 is as follows.
[Action related to Compliance]
- The Company newly formulated the “Suzuki Group Code of Conduct” to stipulate the actions required by various stakeholders including regulatory compliance, which the code is fully disseminated throughout Directors/Managing Officers and all the employees of the Group including domestic and overseas subsidiaries (translated into languages in each country by each subsidiaries).
- Together with this code of conduct, the Group’s whistleblowing system, the “Suzuki Group Risk Management Hotline”, is fully disseminated through various education and seminars and the Company is making effort to be alarmed of compliance problems as early as possible and take appropriate measures. Company Auditors and external lawyers who are independent from the chain of command of the management are also the whistleblowing contact points.
- Corporate Governance Committee shall enlighten employees’ compliance consciousness and call all the employees attention to individual regulatory compliance. In occurrence of compliance matters, it shall take necessary action after deliberation, and the outline shall be reported to the Board of Directors meeting whenever necessary.
- Also, as to improper activities that were inconsistent with national regulation in exhaust emission and fuel consumption testing process of the Company’s automobiles, the company reported to the Ministry of Land, Infrastructure, Transport and Tourism on May 2016, and worked to ensure implementation of the following 7 preventative measures.
- ①Enhancement of engineers’ education and seminars
- ②Define responsibilities on determining Rolling Resistance application value
- ③Enhancement of internal verification system on Rolling Resistance application value
- ④Upgrade testing facilities for measuring coasting method and improvement of measurement technique
- ⑤Resolution of self-enclosed habitus of the Automobile Engineering
- ⑥Enhancement of audit system on engineering
- ⑦Utilisation promotion of whistleblowing system
These preventative measures have all been implemented in FY2016 without delay, however the Company shall continue these measures by improvement based on the verification of the effectiveness.
[Action related to risk management]
- For risks such as quality and work safety, the Company is taking action to create global system or structure to prevent occurrence of serious problems, using problems occurred in the past as a precept.
- For risks related to violations of laws and regulations, the Company is sorting out laws and regulations related to each and every business of the Company as well as all the domestic and overseas subsidiaries, to verify the compliance status and taking corrective measures when necessary.
- The Company is continuously upgrading the internal regulations on duties of each department, making effort to strengthen the system for efficient and appropriate business operation in line with laws and regulations.
- The Company formulated the “Suzuki CSR Guidelines for our Business Partners” to fulfil the social responsibility including safety, quality, human rights, labour, environment and regulatory compliance together with the suppliers.
- As a part of measures for natural disasters, the Company presumes occurrence of the Great Nankai Trough Earthquake and conduct Tsunami evacuation trainings twice, as well as updated Business Continuity Plan.
[Action related to efficient execution of duties by the Directors]
- Board of Directors meetings is taking sufficient time to deliberate important matters regarding corporate management.
- The Company is enabling efficient and timely decision making at the Board of Directors meetings by entrusting decision making of each individual matter to the Directors and Executive Officers with the circular resolutions and other systems, by receiving reports on the progress of the execution of operation and business plan of each department every month and by prior deliberation of important matters at the weekly Executive Committee.
[Systems to ensure proper business operation of the Group]
- Following the “Policy for management of business operation of subsidiaries and affiliates”, the departments that are responsible for administering subsidiaries in the Company clarified by such internal regulations, receive reporting from subsidiaries on the situation of their business on a regular basis and on matters set forth in the regulations. As for Important matters, the Company is managing and supervising the subsidiaries to obtain prior approval by the Company.
- The Company is alerted of the problem and taking corrective measures at an early stage on problems occurred at the subsidiaries through the “Suzuki Group Risk Management Hotline”.
- Based on the audit plan, the Audit Department confirms adequacy and efficiency of duties of each department of the Company as well as domestic and overseas subsidiaries, verify the status of compliance with laws, regulations and internal rules and the status of establishment and operation of internal controls such as status of asset management, by auditing the workplace or survey document on a regular basis. Based on that result, the Audit Department gives advice and guidance until completion of improvement. Furthermore, experts in engineering, quality assurance, manufacturing, purchasing and global marketing are assigned to the Audit Department since FY2016 to establish a system which enables audit in broad fields globally as a part of improvement of business in general.
[Action related to Company Auditors’ audit]
- The Company Auditors are able to confirm the decision making process and at the same time receive necessary reports by attending the Board of Directors meetings, Executive Committee, Corporate Governance Committee, and other management and execution of operation related to various meetings.
- To assist Company Auditors grasp information, document related to execution of operation of the Company and the subsidiaries are made available for inspection.
- To enable information related to various internal problems delivered to the Company Auditors, the Company established a system to share all the whistleblowing received at contact points of the “Suzuki Group Risk Management Hotline” other than Company Auditors without delay.
- Audit Department reports the result of the audit to the Company Auditors whenever necessary so that the Company Auditors are able to carry out efficient audit with a mutual cooperation of the Audit Department.
- The Company has established the Secretariat of Audit & Supervisory Board as the dedicated staff organisation that is independent from the chain of command of Directors, etc. in order to reinforce the supportive system for duties of Company Auditors. Evaluation of the Staff in the Secretariat of Audit & Supervisory Board shall be done by the Company Auditors whom the Audit & Supervisory Board appoints and transfers of the Staff in the Secretariat of Audit & Supervisory Board shall be subject to approval from Company Auditors whom the Audit & Supervisory Board appoints.
- Implementation Status of Compliance Training by Managerial Hierarchy, etc.
- Compliance training by managerial hierarchy
Number of trainings: 28 in total
Number of trainees: 2,424 in total
- Compliance E-learning
Step 1 Step 2 Step 3 Period From 13 September to 30 November 2016 From 23 January to 28 February 2017 From 1 to 31 March 2017 Number of trainees 10,367 9,906 9,799
Confirmed its effect by collecting surveys after the training.
- Compliance training by managerial hierarchy
- Trainings concerning technological standards related to safety and environment
- Set up 25 lectures related to technological standards including vehicle regulations and certification, and implemented for engineers of automobile, motorcycle, and outboard motor.
- All trainees who took the compulsory lectures relating to their operations finished their lectures by June 2017.
- After the lectures, tests to confirm their understanding were implemented through E-learning, requesting all trainees to pass the tests.
- Compliance Practical Examples
This Compliance Practical Examples has been compiled under Paragraph 6 “Compliance” of “Suzuki Group Code of Conduct” so that each and every employee of Suzuki Group companies could behave observing applicable laws. Portable booklets which contain the below information along with the Suzuki Group Code of Conduct are handed out.
All directors, officers and employees of Suzuki Group companies are required to behave at least in accordance with the following in the light of legal compliance.
- You shall not engage in any act to force specific conditions or detriment on others or pursue your own interests by abusing your superior position in business trading.
- You shall not provide inappropriate benefits or facilities exceeding the standards set by the company to politicians, government officials, etc.
- You shall always convey accurate information to regulative authorities.
- When doing business with customers, suppliers, government officials, subcontracting companies or competitors, you shall not sacrifice interests of the company for your own self-interests or those of your relatives or friends.
- You shall properly treat confidential information of the company which has come to your knowledge in the course of your business and shall not disclose it to any third party without the company’s prior approval.
- You shall not engage in insider trading using unreleased corporate information.
- Recognising that intellectual property and trade secrets are valuable property for the company and that providing them to others whether paid or unpaid without the company’s approval constitutes an offence, you shall not do such a thing.
- Recognising that obtaining trade secrets of any other persons without their consent constitutes an offence, you shall not do such a thing.
- You shall obtain customer information and personal information through proper procedures and take utmost care when handling it and shall not use it for purposes for which it was not originally intended when the information was obtained.
- Consultation & Reporting Desk
In addition to preventing violations of laws and regulation and take corrective measures at an early stage by establishing a whistleblowing system that enables Directors, Managing Officers and employees of the Suzuki Group to report on violations of laws and regulations or their possibility inside and outside the Company, portable booklets which contain the below information along with the Suzuki Group Code of Conduct are handed out to each Director, Managing Officer and employee to make them fully known and promote their use.
- In case you noticed a breach or a suspicion of a breach of this Code of Conduct, please take action following the below mentioned flow.
- a）Consult with your supervisor.
- b）In case you think it is improper to consult with your supervisor, please report through another procedures provided by your company.
- c）In case you think it is improper to consult your supervisor or to report through the procedures provided by your company, please report to the External Contact Point of [Suzuki Group Risk Management Hotline].
- d）Report to Suzuki’s Internal Contact Point of [Suzuki Group Risk Management Hotline]
- We guarantee there will be no disadvantage to the Whistleblower by reporting to the Hotline. In case any inappropriate action was taken against the Whistleblower, we will take discharged action or other necessary measures according to law and/or regulations against the person who took such action.
- Your reporting might allow Suzuki Group to reduce loss or damage by immediate recognition and action against the problem therefore please consult or report with valour.
- In case you noticed a breach or a suspicion of a breach of this Code of Conduct, please take action following the below mentioned flow.
Protecting Personal Information
We fully recognise that personal information (information regarding our customers, business partners, shareholders, investors, employees, etc.) is a valued asset that we receive from individuals, and it is our obligation under the law and our accountability to society, to handle this information properly and with care. In response to this, we establish the “Basic policy on protection of personal information” and work hard for protection of personal information. Details of handling of personal information are released on our public website: http://www.suzuki.co.jp/privacy_statement/index.html (in Japanese language only)
We establish the in-house rules and revise them as required according to revision of related laws etc. in order to handle personal information appropriately. To familiarise our employees with these rules, Suzuki provides education through employee seminars or enlightenment from the in-house homepage so that all employees thoroughly become aware of protection and appropriate handling of personal information. In addition, the “Basic policy on protection of personal information” is followed also at member companies of the Suzuki Group to thoroughly ensure protection of personal information. We will continuously review and improve the personal information protection system.
Activities on Information Security
As described in the section “Protecting Personal Information”, Suzuki prepares codes related to protection of personal information and those related to information control in order to manage information useful for the company including those provided by other companies.
In addition, we thoroughly ensure appropriate handling of confidential information by prescribing proper handling and leakage prevention of confidential information in the Suzuki Group Code of Conduct for employees.
As for information security, we promote improvement in work by introducing the information system and network, and determine the concept and rules to build, manage and operate such information system and network in order to prevent information leakage and unauthorised access, while improving availability of information.
Servers which may cause severe influence if it stops and those that save data important for security such as personal information are installed in the lockable server room with seismic countermeasure taken by seismic isolators etc.
Suzuki organises the confidential information control promotion committee and reinforces the information control system of the entire Suzuki Group.
Disaster measures by Suzuki
Suzuki takes various measures for natural disasters including Great Earthquake along the Nankai Trough to minimise influence of damages, giving top priority to “protecting employees’ lives” and “quickly restoring ourselves for our customers”. For example, we have taken various preventive measures such as earthquake-resistant measures for buildings and facilities, fire prevention measures, establishment of the disaster action manual and Business Continuity Plan (BCP) that include establishment of the disaster response organisation, and purchases of earthquake insurances.
While the Group has been taking various measures to prevent anticipated damage caused by Great Earthquake along the Nankai Trough, after experiencing the Great East Japan Earthquake, it has diversified production and research sites including overseas. Firstly, it is relocating plants and facilities to Miyakoda district in northern part of Hamamatsu City from Ryuyo region in Iwata City, Shizuoka Prefecture since massive tsunami damages are anticipated in the region. The Group decided to found the test course of the motorcycle in the Aoya district of Tenryu-ku, Hamamatsu City. Also, the Group has diversified its production of engine for minivehicle, which was concentrated to Sagara Plant, to Kosai Plant to mitigate risk. Further, the Group is expanding its research facilities in India partly in order to mitigate risk concerning product development facility for automobile in Sagara test course. The Group will continue to enhance its preparedness against natural disasters.
Measures against earthquakes and tsunami taken by Suzuki for local residents
A part of Suzuki’s facilities is registered as an emergency shelter for local residents when a disaster occurs. We have a system for an earthquake to deploy watchmen on the roof of the headquarters, let them check occurrence of tsunami, and sound a siren to notify residents when tsunami is found. Manual and electric sirens are installed on the roof of the headquarters. The electric siren is designed to be operated even with the dedicated electricity generator in case of a power failure.
Measures against earthquakes and tsunami taken by Suzuki for employees
Aimed to protect the lives of our employees, Earthquake Early Warning Systems are installed at the headquarters and each plant. Earthquake and tsunami evacuation drills are repetitively conducted with all employees participating. In this drill, when the Earthquake Early Warning System alerts, the employees secure their safety and the employees at offices with risk of tsunami evacuate to safe places where the water of tsunami cannot reach. We have a system to confirm safety of employees immediately when a disaster occurs via satellite telephones set at each plant and sales distributors all over Japan as an emergency communication tool. We conduct a drill for satellite telephones every month to be ready for an emergency.
In addition, relief method trainings are conducted by retired fire fighters in all offices, and repetitive trainings are continuously carried out regularly twice a week. This enables our employees to arrest bleeding or treat injuries and convey in stretcher on their own upon large-scale disasters.
Furthermore, in order to confirm safety of off-duty employees, we introduce the "safety information system" in case an earthquake or tsunami occurs. In order to confirm safety of employees and their family, this system automatically sends “safety inquiry e-mail” to e-mail addresses that each employee has registered and those who receive the e-mail send a reply about their own safety situation.
Measures for fire disasters
At the headquarters and each plant, all unpredictable fires are treated as fire disaster. Regardless of how small the size of the fire, we conduct an initiative to find out the real cause of fire and thoroughly carry out effective measures. All cases of fire are shared throughout the Company in an effort to cross-functionally take measures in preventing familiar disasters. A fire drill using fire extinguishers and fire hydrant is conducted at plants so that everyone in a worksite can perform first-aid firefighting to minimise damage caused by fire.
Also, water discharge drills by fire engine or small transportable pump are performed for promoting individual disaster prevention activities by the private fire brigade. Above all, the premises of headquarters, Kosai Plant, Iwata Plant, Osuka Plant, and Toyokawa Plant are certified as cooperative business entities for local fire brigades by Hamamatsu City, Kosai City, Iwata City, Kakegawa City, and Toyokawa City, respectively because of their contribution to reinforcement of local fire-fighting and disaster-prevention system etc.
Contribution to construction of storm surge barrier in coastal zone of Hamamatsu City
Suzuki contributed 500 million yen by FY2014 to "Hamamatsu City Tsunami Protection Measure Fund" that Hamamatsu City founded for constructing the storm surge barrier as a measure for tsunami caused by an earthquake.
The Suzuki Suppliers Association organised by Suzuki's associated companies also decided to contribute 39.06 million yen in total for five years.
The Company also contributed 270 million yen in total to neighbouring eight cities and towns for disaster measures such as earthquakes and tsunami by FY2016.
In addition, a total of 500 million yen was contributed to "Hamamatsu City Sports Facility Align Fund" by FY2014 to cooperate with construction of a sports facility which has both tsunami evacuation base and urgent relief heliport functions in the accident.