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Corporate Governance

Basic Policy on Corporate Governance

Sysmex considers reinforcing corporate governance one of its most important management topics. We aim to maximize the overall corporate value of the Group through management robustness, better transparency and improved management speed and efficiency.

Management Organization

Based on the stance mentioned above, Sysmex has introduced an executive officer system to accelerate business decision-making and reinforce management functions, with the aim of responding more quickly to changes in the business environment.

Sysmex has also adopted the form of a company with corporate auditors, under which its Managing Board and corporate auditors supervise and audit the execution of business by members of the Managing Board.

In addition, Sysmex has augmented the Managing Board supervisory function through the selection of external members of the Managing Board and enhanced the auditing function provided by corporate auditors by appointing external corporate auditors.
 

Management system
Matters Concerning Business Execution, Auditing, Appointments,
Supervision and Other Functions

The Managing Board consists of nine members. The board meets regularly once a month to deliberate on important management issues and convenes extraordinary meetings as necessary. The Global Strategic Committee consists of the president and CEO and executive officers. As a rule, this committee meets once a month to deliberate on the Group’s management direction and important strategic issues.

The Steering Committee consists of the president and CEO and executive officers. The committee meets once a month, in principle, serving as a consultative body to the chairman and CEO to deliberate on important matters concerning the Group’s business.

The Committee meets once a month to find solutions to cross-functional problems. In the fiscal year ended March 31, 2014, the Managing Board met 18 times, the Global Strategic Committee 16 times, the Steering Committee 19 times, the Group Management Reporting Committee four times and the Operating Committee 12 times to address matters relating to management strategy and important issues facing the Group.

The Internal Audit Office, which consists of nine employees, confirms and evaluates internal controls, the state of management and the execution of business from the perspective of the sound development of the Group, issues reports based on the results of its activities, promotes appropriate execution of business through improvements, advice and proposals, and conducts internal audits to contribute to the sound management of the Group.

The Board of Auditors consists of four corporate auditors, two of whom are outside auditors. The corporate auditors attend the Managing Board and Steering Committee meetings and maintain systems for appropriately supervising the conduct of business on the part of the members of the Managing Board.

The corporate auditors also maintain close communications with the Internal Audit Office, exchanging information and opinions as necessary, and confirm and evaluate the appropriateness of business execution. The Board of Auditors will continue to enhance management soundness by engaging in appropriate supervision of the execution of business as stipulated by law.

The Board of Auditors works closely with the accounting auditors on the audit plans report
(annual) and the audit results reports (annual), exchanging information and opinions as necessary, such as when conducting internal control audits related to financial reporting.

The Company has contracted with Deloitte Touche Tohmatsu LLC to perform a certified public accountants audit. In addition to conducting an audit of the entire Sysmex Group, the Company maintains an environment that makes it possible to rapidly cope with changes in the accounting system.  

Basic Policy on Internal Control Systems and Their State of Development

System for Ensuring the Execution of Duties by Members of the Managing Board and Employees Is Compliant with the Law and the Articles of Incorporation
Sysmex and its subsidiaries (the “Sysmex Group”) defines compliance as “the conduct of open and aboveboard business activities on the basis of observance of laws and regulations and high ethical standards” and maintains a system to ensure compliance as described below.

Recognizing that compliance countermeasures are the first and most important way to maintain society’s trust and counter risk, the Sysmex Group operates a groupwide risk management system, under which the Compliance Committee is established as the umbrella organization for compliance. The Sysmex Group has formulated a Global Compliance Code that applies to employees and members of the Managing Board and rigorously ensures compliance through education and training. The Sysmex Group promotes the rapid detection and correction of violations of the law or the Articles of Incorporation by means of an internal compliance-related reporting system, and conducts audits of the compliance structure by means of the Internal Audit Office.

System for the Retention and Management of Information Related to the Execution of Duties by Members of the Managing Board
The Sysmex Group has formulated Global Document Management Regulations. In accordance with these regulations, the Group appropriately retains and manages minutes of Managing Board and other important meetings, as well as other information relating to the execution of duties by members of the Managing Board, and maintains the information in a state available for inspection as necessary.

Regulations Concerning the Management of Risk and Other Systems
To maintain a structure concerning risk management, the entire Sysmex Group complies with risk management regulations established by the Risk Management Committee for the integrated management of risk throughout the Group and strives to mitigate risk. The Risk Management Committee endeavors to discover foreseeable risks, select the most important of these risks, clarify the sections responsible for coping with risks, establish countermeasures and confirm the implementation status of these countermeasures.

Systems to Ensure That Members of the Managing Board Execute Their Duties Efficiently
The Sysmex Group has positioned the Managing Board as the institution to make important management decisions and supervise the execution of duties. The Company has introduced the executive officer system to be capable of making swifter operating decisions and reinforce management functions in order to respond quickly to changes in the business environment.

The Sysmex Group clarifies decision-making procedures and ensures efficient business operations based on organization regulations, scope of authority regulations, regulations concerning the management of affiliated companies, and others. In addition, the Group formulates mid-term plans and annual management plans, periodically confirms the progress made with those plans and takes any necessary measures.

Systems to Ensure the Appropriateness of Business Activities in the Corporate Group, Comprising the Company and Its Subsidiaries
Sysmex ensures compliance throughout the Sysmex Group in accordance with its Global Compliance Code, which applies to members of the Managing Board and employees throughout the Sysmex Group. In conformance with regulations established with respect to risk management, Sysmex maintains a groupwide risk management system. Internal audit offices are in place at subsidiaries, and Sysmex’s Internal Audit Office conducts audits of the Sysmex Group as a whole from a regional and companywide perspective.

Based on its regulations relating to the management of affiliated companies, Sysmex respects the autonomy of the management of subsidiaries and other affiliated companies and ensures the appropriateness of business activities throughout the Sysmex Group by such means as periodic reporting on the details of their business activities and advance discussion concerning important matters.

Assignment of Employees to Assist Corporate Auditors
Employees in the Internal Audit Office assist Sysmex’s corporate auditors with their auditing activities, as necessary.

At the request of the corporate auditors, Sysmex provides full-time staff to assist the Board of Auditors. To ensure that these assistants report exclusively to the corporate auditors, members of the Managing Board discuss with the Board of Auditors in advance personnel matters related to these assistants (such as appointments, transfers and disciplinary actions).

Policy on Handling Audit Expenses
Sysmex has in place a budget corresponding to the annual audit plan in order to defray the expenses required for the execution of duties by the corporate auditors. Procedures are handled appropriately in the event additional expenses are required for the execution of duties by the corporate auditors.

Systems Related to Reporting to the Corporate Auditors and Other Systems for Ensuring Effective and Efficient Auditing by the Corporate Auditors
If a member of the Managing Board or employee of the Group discovers a violation of the law or the Articles of Incorporation or a material fact that poses risk of causing significant damage to the Sysmex Group, that fact is promptly reported to the corporate auditor according to the prescribed regulations and procedures. The corporate auditors also attend Managing Board and other important meetings, read important documents such as approval requests, and request explanations from members of the Managing Board and employees of the Sysmex Group as necessary.

Sysmex prohibits dismissal or any other disadvantageous treatment to members of the Managing Board and employees of the Sysmex Group who report information as outlined above.

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