Corporate GovernanceWe are building relationships of trust with our stakeholders
Recognizing the importance of management in companies that have social responsibilities, Socionext sees one of its most important management tasks as being to put in place organizational structures and practices that will ensure the transparency and fairness of decision-making and to build relationships of trust with our shareholders and other stakeholders. We also aim to deliver ongoing growth and enhanced corporate value by putting our corporate governance code into practice and by making continuous improvements.
The diagram below shows how corporate governance is managed at Socionext.
Board of Directors
In addition to deciding on important business matters and matters stipulated by law or the company’s articles of incorporation, the Board of Directors also exercises oversight over the operations of the company.
The board strives to maintain effective practices by bringing in independent outside directors with expertise in a range of different fields to strengthen operational oversight and provide appropriate advice. The board has regular monthly meetings as well as extraordinary meetings whenever the need arises.
The Board of Directors has 10 members, made up of six internal and four independent outside directors.
Audit & Supervisory Committee
For the ongoing enhancement of corporate value, the Audit & Supervisory Committee maintains the integrity of the company and ensures that it acts for the mutual benefit of shareholders by monitoring the legality and appropriateness of actions taken by directors in the conduct of their duties.
A single full-time Audit & Supervisory Committee member is appointed to enhance the effectiveness of auditing and oversight functions, both by attending important meetings and by strengthening collaboration with the auditors and audit office. The committee has regular monthly meetings as well as extraordinary meetings whenever the need arises.
The Audit & Supervisory Committee has three members (of which two are independent outside directors) and is chaired by an independent outside director.
Membership of Appointments and Remuneration Committee
The Appointments and Remuneration Committee is made up of Board Directors appointed by the board. It operates as a voluntary advisory body to the Board of Directors with aims that include improving transparency in the appointment and remuneration of Board Directors.
The committee gives advice on matters such as the appointment and remuneration of Board Directors in response to inquiries from the Board of Directors. Its duties involve formulating selection criteria and policies for Board Directors and Executive Officers and reviewing candidates for such positions. It also formulates policies for Board Director and Executive Officer remuneration and deliberates on the level of remuneration. To adopt an independent position, the committee is chaired by an independent Outside Board Director and two-thirds of its members are also independent Outside Board Directors.
Core Philosophy on Compliance
The Socionext Group recognizes “compliance with legal and societal expectations” and “fair trading practices” as important duties, both of which are included in the CSR policies that represent the group’s guiding principles.
[Compliance with legal and societal expectations]
We will justify the trust placed in us by society through the strict observance of legal requirements and societal expectations.
[Fair trading practices]
We will follow fair trading practices to build relationships of trust with our customers and suppliers.
The Socionext Group has also laid out compliance criteria that are based on these CSR policies. We take care to ensure that all company employees maintain high ethical standards and act in ways that are cognizant of compliance requirements so that we remain a company that is trusted by all of its stakeholders.
●Risk and Compliance Committee
The Socionext Group has a Risk and Compliance Committee made up of executives and others and led by the CEO. The committee meets once a quarter to assess, analyze, and formulate actions on issues such as compliance, information security, and disaster risks.
●Internal Reporting System
The Socionext Group has established an internal reporting (whistle-blowing) system for the early detection and response to unauthorized activities that is intended to reinforce fair business practices that are in accord with the law. The system provides for both internal reporting (to the Socionext Risk Compliance Committee Secretariat) and external reporting (to the Socionext Reporting Contact at TMI Associates). The diagram below shows a flowchart of how this works.
In accordance with the law and company policy on this issue, measures are in place to ensure that the persons making and receiving reports are not identified so as to prevent them from being subject to any unfavorable treatment. To date, the company has not received any reports of serious breaches of the law, CSR policies, or company rules.
Main Actions on Compliance
●Compliance education and Training
The Socionext Group conducts education and training to raise employee awareness and understanding of compliance.
The main instances of compliance education and training in the March quarter of 2022 were as follows.
Education and training
Basic compliance education for all employees provided by e-learning (100% participation)
e-learning programs for all employees on the following topics (100% participation)
Laws on subcontractor payments and security-related export controls, harassment prevention, information security, and insider trading.
Group classes for new recruits on compliance, information security, and human rights
●Ensuring exclusion of Antisocial forces (organized crime)
The Socionext Group stipulates the exclusion of antisocial forces in its CSR policies and compliance criteria, explicitly declaring its intention to be resolute in its attitudes and response to all forms of antisocial activity and to avoiding such relationships, with this stance being clearly communicated to employees. The company has also formulated rules on dealing with antisocial forces and laid out specific measures for their exclusion.
To ensure the exclusion of antisocial forces, provisions to this end are either included in supplier and other contracts or are contained in separate agreements reached with such parties.
Socionext cooperates with the Police and has put measures in place to collect information about antisocial forces. It has appointed a person to be responsible for preventing extortion and has joined an association of companies in Kanagawa for defending against such forces.
External agencies or similar are used to review all parties with which the company has contractual arrangements to determine whether they have connections with antisocial forces or are suspected of doing so, both at the time of entering into the contract and at regular intervals thereafter.
●Action on Preventing Insider trading
Socionext has formulated rules for preventing insider trading, with stipulations that include the appropriate handling of material information and the pre-approval and post-fact reporting of company shares. We also ensure that these rules are clearly communicated to employees. To ensure that insider trading does not occur, the rules have also been accompanied by an e-learning course for all employees to raise their awareness and understanding of the topic.