A Management Structure Based on CSR
We continue to improve and build upon our CSR-based management structure here at Leopalace21. That includes internal control systems in accordance with the Japanese SOX Act, disclosure and information security, as well as corporate governance, the cornerstone of all of our management activities.
We position the establishment and enhancement of corporate governance as one of our most critical management issues, and it is our basic philosophy of corporate activities to pursue an efficient, fair and highly transparent operation in order to attain higher corporate values for the sake of all stakeholders.
Based on this philosophy, we endeavor to improve our management system and management organization mainly through reinforcing our monitoring function of our decision making, establishment of a compliance system, improvement and strengthening of an internal control system and establishment of good relations with stakeholders.
Our Systems of the Board of Directors and the Audit & Supervisory Board
While we set up the Board of Directors to enhance business performance through appropriate and rapid decision making, responding dynamically to the changes within our business and our management environment, we strive for the strengthening of our management monitoring function by setting up the Audit & Supervisory Board as a supervisory organ of the business execution by directors.
Board of Directors
The Board of Directors which is composed of 8, including 1 outside director, directors holds regular meetings once a month, while extraordinary meetings are held at any time as required, in order for decisions to be made on critical management issues as well as to monitor the performance of business operations. Furthermore, meetings of the Management Committee are held as needed to discuss policies on execution of business operations and to study measures for their implementation.
Audit & Supervisory Board
The Audit & Supervisory Board is composed of four Audit & Supervisory Board Members including two externally appointed members. We adopt a system to enhance the effectiveness of auditing by members' participation in essential meetings such as the Board of Directors meetings and by conducting operational status investigations, based on an auditing plan prepared by the Audit & Supervisory Board. (The company has no business connection with the external members)
As of April 1, 2014, Leopalace21 implements a four-headquarters system comprised of Marketing and Sales Headquarters, Management Planning Headquarters, Management Headquarters, and a newly established Corporate Business Promotion Headquarters with the purpose of strengthening ties between business divisions.
Through this system, we will endeavor to further improve structure and governance, while clarifying areas of responsibility and authority.
Ensuring Corporate Governance
At Leopalace21, the top executive of our Management Planning Headquarters must unify the management of Leopalace21 and its affiliated companies to implement the optimal comprehensive group-wide governance, and is responsible for facilitating smooth information exchange and advancement of group activities. Additionally, directors in charge of each governance department in each affiliated company must establish a CSR promotion system, compliance systems, and risk management procedures in accordance with policies arising from the management plan and consistent with efficient work flow methods.
Internal Control Systems
Our basic policy of the internal control system is to base our corporate activities on legal compliance and compliance with social ethics. Specifically, we adopt a system by which the Audit & Supervisory Board, Compliance Committee, General and Legal Affairs Department and the Auditing Department supervise if relevant laws and regulations have been complied, on the very basic internal understanding of the Corporate Ethics Charter. Additionally, we have established the Auditing Council to prepare appropriate financial statements while aiming to comply with all laws and regulations, to safeguard the company's assets, and to carry out our business activities efficiently. We have also created the Risk Management Committee, establishing a system to conduct research on all management risks within the company group and to conduct prior check of importance and necessity of the outstanding issue. Furthermore, we opened a window for the internal communication in order to grasp and improve various other issues of problems to accomplish further improvement and reinforcement of the internal control system.
CSR Promotion, Compliance System and Risk Management System
CSR Promotion System
We position CSR activities as an important managerial issue and pursue promotion of CSR by setting 5 basic policies.
With regard to the CSR promotion system, we created a CSR Committee in order to aim at the sustainable development of society and our corporate group by performing our accountability in response to explicit as well as implicit requests from our stakeholders.
The CSR Committee, which is composed of the top executive of our Management Planning Headquarters as the chairman and supervisors of each division as members, implements various measures in tie-up with the Compliance Committee and the Risk Management Committee, being conscious of how to respond to requirements from society. In order to promote the measures regarding CSR, a person in charge of CSR has been assigned in each business division and office to assume the job responsibility.
With regard to the compliance system, along with establishment of the Corporate Ethics Charter and the internal reporting system, we have created the Compliance Committee to strengthen its commitment.
As an advisory organ of the Board of Directors, the Compliance Committee is composed of the President and CEO as the chairman and external members (lawyers and outside director). It plans and implements various measures concerning compliance such as educational training and improvement and reinforcement of the information control system.
As a system to aggressively implement such measures regarding compliance, a person in charge of compliance has been assigned at each business division and office to assume the job responsibility.
Risk Management System
With regard to the management system, the Risk Management Committee has been created to grasp and manage the risks of the whole company in a comprehensive manner.
As an advisory organ of the Board of Directors, the Risk Management Committee, composed of President and CEO as the chairman and external members (lawyers and CPA), not only verifies status of risk management, but also plans and implements educational training and others in order to realize reduction and prevention of risk.
Each division extracts and analyzes risks concerning their operations, establishes and supervises measures to manage these risks, and reports to the Risk Management Committee. The Risk Management Committee ensures the proper management of risks of the individual divisions, through consultation and guidance.
Basic Policies on Financial Reporting
In the interests of reliable financial reporting, we ensure adequate disclosure of financial information and implement transparent, sound corporate management in accordance with the following basic policies.
1. We will comply with standards and legislation, formulate accounting and other applicable regulations, and put in place the necessary IT environment to adequately process our accounts.
2. We will design organizations and systems to ensure that all information pertaining to financial reports is provided quickly and accurately, both inside and outside the group.
3. We will rigorously implement risk management as part of all operating processes within the group, and strive to create internal control systems that are both efficient and transparent.
4. We will regularly evaluate the standard and implementation of internal controls in accordance with generally accepted standards, and continue to improve our operations on an ongoing basis.
5. We will continue to improve and implement internal controls in relation to financial reporting, and submit valid and adequate internal control reports.
Internal Auditing System
With regard to the internal auditing system, we have formed the Auditing Department out of the independent internal auditing units from each operations unit. In the past, the Auditing Department was aiming to strengthen its capabilities by working under the direct supervision of the president, but we have recently set up a new Audit Council with the aim of strengthening the department's capacities even further. Based on our basic internal control system policies, we are verifying and evaluating the efficacy of, as well as making improvements in, the new system.
Corporate Ethics Charter
We do business based on our corporate philosophy to "create new value." As part of that process, we have set out a Corporate Ethics Charter. We are determined to establish legal and social compliance as the cornerstone of all of our corporate activities. This is exemplified by our President and CEO, whose role is to share the spirit of this charter with all of our executives and employees.
Here at Leopalace21, we have two compliance hotlines for employees to consult or notify if they identify any breaches of the law or other illegal actions, both internal (Legal Group) and external (law firm). These hotlines are designed to protect whistleblowers, in accordance with the Whistleblower Protection Act and our own in-house whistle-blowing regulations. They enable us to investigate issues and respond appropriately, as well as improving problem areas for the future. Also, we accept opinions regarding the company, meaning that they effectively double as a suggestion box.
Compliance Manual and Cards
We aim to give executives and employees throughout the Leopalace21 Group a better understanding of our Corporate Ethics Charter, and to enable them to put it into practice as part of their work. To achieve that, we distribute copies of our Compliance Manual, which sets out codes of conduct in accordance with our Corporate Ethics Charter, to all executives and employees in an effort to raise awareness. We also ask executives and employees to carry cards with them at all times, containing details of our Corporate Ethics Charter and compliance hotlines.
Education and Training
It is important, or rather essential, to improve knowledge and raise awareness amongst individual executives and employees in order to ensure compliance. Here at Leopalace21, we organize group training sessions led by both internal and external instructors, and provide regular and ongoing training via on-demand e-learning, in an effort to raise standards of compliance and ethics even further.
Topics covered (fiscal year ended March 2014)
- Dealing with antisocial forces
- Power harassment
- Information security management
- Whistleblower Protection Act
- Labor Standards Act
- Insider trading etc.
Dealing with Antisocial Forces
Our Corporate Ethics Charter clearly sets out our determination to "oppose all antisocial forces" here at Leopalace21. We are committed to eliminating all ties and dealing resolutely with any antisocial forces or organizations posing a threat to public order or safety.
We are proactively disclosing information to our shareholders and investors in order to secure transparency and objectivity in our management. In addition to speeding up announcements of financial statements and timely disclosures, provided through distribution over the Internet, we enrich investor relations activities through our timely delivery of news releases, holding financial accounting explanation meetings, issuing business reports intended for investors, issuing Annual Report, as well as implementing timely overseas investor relations activities that reflect the proportion of shares held by our foreign shareholders.
We promote reinforcement of our information security system in order to properly manage corporate information as well as private information of apartment owners and tenants.
With regard to private information, the executive officer in charge of the Management Headquarters as supervisor of the private information, together with the Compliance Committee, make proper use and control of the information in accordance with relevant laws and regulations including the Private Information Protection Law, having prepared a system which enable us to respond quickly in case of an accident.