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Corporate Governance / Corporate Activities Deserving Stakeholder Trust

Internal Control System

The Denka Group’s Internal Control

Our Philosophy and Principles

Based on “The Denka Value” (corporate philosophy), which serves as the cornerstone for all the corporate activities undertaken by the Denka Group, we are committed to fulfilling the expectations and trust of many stakeholders, including shareholders, customers, local society and employees. Accordingly, we consider the fulfillment of our social responsibilities, especially those related to compliance, to be essential to sustainable corporate development. With this in mind, we are striving to ensure that all officers and employees within the Group abide by laws, regulations and in-house rules as well as social and ethical norms.
Aiming to secure conformity with laws, regulations and the Articles of Incorporation in all activities undertaken by the Denka Group as a whole and to improve corporate value via appropriate and efficient business operations, the Company established a basic policy on the development of internal control systems. In line with this policy, we made it a rule to periodically assess the operational status of internal control systems and constantly improve and strengthen these systems. Moreover, we established the Denka Group Ethics Policy to provide action principles for all Group members.

Efforts to Raise Awareness among Group Members

To convey the philosophies discussed above, Denka’s President takes advantage of various opportunities and methods to deliver his message to all Group officers and employees, communicating the importance of a shared sense of crisis with regard to the consequences of corporate misconduct, which can damage the Group’s credibility from the perspective of social responsibility, put it in position to draw harsh criticism from the general public and endanger the continuity of its business operations. Furthermore, representatives of the main Group companies meet twice a year with Denka’s directors and heads of corporate departments to ensure a shared understanding of the corporate philosophy and management policies as well as of current issues before the Group. These meetings also address material risks associated with internal control and discuss policies on how to handle such risks.
In fiscal 2019, the Legal Department prepared the Denka Global Compliance Program, a compliance education program designed to ensure the Group measures up to the global standard in terms of guiding employee conduct to maintain compliance with laws, regulations and corporate ethics. Via this program, we have systematically provided all Group officers and employees at home and abroad with compliance education so that they are properly educated about the Group Ethics Policy and other compliance matters.

Monitoring, Internal Auditing and the Compliance Hotline System

To ensure the appropriateness of business operations undertaken by the Denka Group as a whole, the Audit Committee performs audits targeting Denka and its main subsidiaries.
The Internal Auditing Department consists of general managers and 10 staff members and maintains an independent status to fulfill its one and only role, namely, monitoring business operations. In addition to assessing the status of internal control in accordance with Japan’s Financial Instruments and Exchange Law, the department is tasked with audits aimed at identifying operational and management risks. The Internal Auditing Department not only reports findings from such audits to the heads of the business execution departments it audits, it also shares its insights with the Audit Committee and otherwise acts in close collaboration with the committee. Moreover, the department provides the President and the Board of Directors with periodic reports on audit plans and results.
In addition to targeting Denka and its subsidiaries, the aforementioned operational and management risk audits encompass some affiliates led by individuals dispatched from Denka to assume representative director or other positions with significant management responsibilities. As a large number of business units are subject to these audits, we strive to enhance the effectiveness and efficiency of auditing by narrowing down material risks via the self-evaluation of compliance status. With regard to on-site audits, we focus on assessing the status of internal control related to risk management within the Group, legal compliance, asset management and operational management. By doing so, we seek to identify risks inherent in and issues associated with these matters while monitoring the effectiveness and appropriateness of each process. Addressing issues identified via audits, the Internal Auditing Department provides executives of audited entities with advice on how to resolve these issues or make improvements in a way that respects said entities’ autonomous management. As necessary, the department acts in collaboration with Denka’s relevant business units to resolve such issues. In these ways, it is endeavoring to help each Group entity reduce operational and management risk while contributing to improvement in their corporate value.
In addition, the Accounting & Finance Department separately performs accounting audits of main subsidiaries, while the Legal, Environment and Safety, Quality Assurance and other departments likewise undertake audits on a standalone basis or in collaboration with the Internal Auditing Department to secure legal compliance in their areas of specialty.
Also, we began monitoring internal control systems in place at local business units in Southeast Asia in response to the expansion of our operations in the region. In fiscal 2019, a dedicated department was established for this purpose within a local subsidiary serving as regional headquarters and it is currently conducting monitoring in collaboration with Denka’s Internal Auditing Department.
To supplement the internal audits discussed above, we maintain the Group Compliance Hotline System, which is designed to ensure the early detection of incidents involving the violation of laws, regulations and in-house rules while supporting the swift implementation of correction measures.

デンカ株式会社, デンカ株式会社 IR室
Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Strengthening corporate governance
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Strengthening corporate governance

Basic Approach to Corporate Governance In order to fulfill the expec...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
BCP
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BCP (business continuity plan)

Our basic BCP policies are as follows: Even in the event of a crisi...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Internal Control System
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The Denka Group’s Internal Control

Our Philosophy and Principles Based on “The Denka Value” (corporate ph...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Board of Directors
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Board of Directors

Evaluation of the Effectiveness of the Board of Directors Method of Ev...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Directors
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Directors

Manabu Yamamoto Chairman(Born March 31, 1956...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Outside Directoers
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A Message from an Outside Director

Denka’s founding dates back more than 100 years. Having sta...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Compliance
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Compliance Basic Policy

The Denka Group Ethics Policy codifies Groupwide standards of conduct. To...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Compliance
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Utilization of the Legal Hazard Map and Strengthening of Compliance Structure

Having identified more than dozen legal fields closely associated with th...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Risk Management
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Risk Management

To achieve the goals of the Denka Value-Up management plan, we aim to str...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Compliance Hotline System
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Compliance Hotline System

Based on guidelines formulated by the Consumer Affairs Agency, in additio...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Response to Human Rights Violation Risk
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Response to Human Rights Violation Risk

We have been encouraging the “maintenance of favorable human relationship...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
System to Review Contractual Legal Matters
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System to Review Contractual Legal Matters

In order for Denka Group to conduct fair and equitable transactions with ...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Our Stance against Corruption and Money Laundering
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Our Stance against Corruption and Money Laundering

The Denka Group Ethics Policy prohibits employees from engaging in briber...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Security Export Control
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Security Export Control

Regarding security export control that prohibits the export of products a...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Prevention of Insider Trading
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Prevention of Insider Trading

In recent years, information leaks and insider trading by company personn...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Information Protection and Management
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Information Protection and Management

(1) Information Protection and Management The compliance of informatio...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Information Protection and Management
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Online Information Management

We ensure management transparency by disclosing corporate information in a ...

Corporate Governance / Corporate Activities Deserving Stakeholder Trust
Protection of Intellectual Property Rights
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Protection of Intellectual Property Rights

Under the new management plan “Denka Value-Up,” we are focusing on global...