A summary of the matters resolved at the Board of Directors as a system to ensure properness of corporate operations is provided below.

System for retaining and managing information pertaining to the performance of duties by Directors of the Company

Following laws and regulations and internal regulations, the Company records and stores in the appropriate format as either printed documents or electronic media, the minutes from the General Meeting of Shareholders, the minutes from the Board of Directors, the minutes from the Management Meeting, and minutes from other important meetings, as well as other documents associated with the operational execution by the Directors. The Company establishes rules related to document management, and in addition to assigning a division responsible, the Company makes specific decisions on the management, storage methods, and storage periods of both printed documents and electronic media.

Rules and other systems to manage financial risk of the Company

The risks associated with the Company’s business operations are classified into quality risk associated with services provided by the Company, information management risk, compliance risk, legal risk, credit risk, market-related risk, investment risk, system risk, brand risk, human assets risk, intellectual property risk, and business continuity risk. A division responsible is assigned to each risk, which decides the policy, systems and procedures for risk management. When a new type of risk develops, a division responsible is quickly chosen to address the risk.

System to ensure efficient execution of duties by Directors of the Company

Based on the policy regarding human assets development and working environment improvement in accordance with the content of the Company’s business, the Board of Directors decides on the annual business plan, and each division formulates a strategy and implementation budget for achieving the business plan for that fiscal year.

System to ensure that execution of duties by Directors and employees complies with laws and regulations, and the articles of incorporation of the Company

  1. To create a corporate culture in which Directors and employees comply with laws and regulations and act according to sound corporate ethics, the Company establishes SIGMAXYZ Group Human Rights Policy, Compliance Code of Conduct, Basic Sustainability Policy and rules on compliance organizations and operations.
  2. To ensure that our legal compliance system is effective, the Company selects a Chief Compliance Officer at the Company’s Management Meeting, and establishes a Compliance Committee chaired by the Chief Compliance Officer. The Chief Compliance Officer has organization-wide control of the compliance initiatives within the Company, and the Compliance Committee, under the direction of the Chief Compliance Officer, promotes awareness of legal compliance among Directors and employees by disseminating SIGMAXYZ Group Human Rights Policy, Compliance Code of Conduct, Basic Sustainability Policy, and rules on compliance organizations and operations, and it has established a system to promote and manage activities such as regular training.
  3. In addition to establishing operating rules related to our whistleblowing system, based on these rules, the Company has established an internal and external consultation desks as part of our whistleblowing system as a means for employees to provide information directly to the Company on legal and regulatory violations and on actions and facts that may pose risks in terms of SIGMAXYZ Group Human Rights Policy, Compliance Code of Conduct, Basic Sustainability Policy, and rules on compliance organizations and operations.
  4. The Company maintains absolutely no relationships with criminal elements, including transactional relationships, and takes a firm stand throughout our entire organization against improper requests from criminal elements.
  5. By prohibiting bribery and declaring our initiatives to prevent bribery, we strive to detect and prevent fraudulent acts.

System to ensure the properness of operations by the corporate group comprised of the Company and its subsidiaries

  1. Regarding the Company’s subsidiaries and affiliates, a division in charge is established within each subsidiary and affiliate to ensure the suitability of operations by gauging quantitative and qualitative information, assigning officers and employees, establishing authority and responsibilities, and exercising voting rights.
  2. The Company requires the Directors and employees of its subsidiaries to report to the Company or obtain its approval regarding important matters related to the execution of operations, and conducts internal audits of its subsidiaries.
  3. The Company establishes internal regulations based on the characteristics of the businesses of its subsidiaries, and requests their participation in the Company’s whistleblowing system.
  4. The risks associated with the business operations of the Company’s subsidiaries are classified into quality risk associated with services provided by the Company’s subsidiaries, information management risk, compliance risk, legal risk, credit risk, market-related risk, investment risk, system risk, brand risk, human assets risk, intellectual property risk, and business continuity risk. A division responsible is assigned to each risk, which decides the policy, systems, and procedures for risk management. When a new type of risk develops, a division responsible is quickly chosen to address the risk.

Matters regarding Directors and employees assigned to assist the Audit & Supervisory Committee of the Company in its duties

When a Director who is an Audit & Supervisory Committee Member (hereinafter “Audit & Supervisory Committee Member”) requests the assignment of a Director or employee to assist in the duties of the Audit & Supervisory Committee, the Company shall promptly and appropriately assign a Director or employee.

Matters concerning the independence of Directors and employees assigned to assist the Audit & Supervisory Committee in its duties from other Directors (excluding Audit & Supervisory Committee Members), and matters regarding ensuring the effectiveness of their instructions

Regarding the supplementary services assigned by the Audit & Supervisory Committee Member, only the Audit & Supervisory Committee Member shall provide directions to the Director or employee that is providing the assistance, and the personnel rotations and evaluation of the employee assisting with the duties of the Audit & Supervisory Committee will be decided after hearing the opinions of the Audit & Supervisory Committee Members.

Systems for reporting to the Audit & Supervisory Committee by Directors (excluding Audit & Supervisory Committee Members) and employees of the Company and its subsidiaries and other systems related to reporting to the Audit & Supervisory Committee

  1. The Company’s Directors (excluding Audit & Supervisory Committee Members) and employees, as well as the directors, audit & supervisory board members, and employees of the Company’s subsidiaries will provide reports on the execution of the duties for which they are responsible at the Company’s Board of Directors meetings, Management Meetings, and other important meetings attended by the Company’s Audit & Supervisory Committee Members.
  2. If the Company’s Directors (excluding Audit & Supervisory Committee Members) or employees, as well as the directors, audit & supervisory board members, and employees of the Company’s subsidiaries discover matters that risk seriously impacting the operations or finances of the Company or its subsidiaries, or matters that otherwise risk causing serious damage, such as acts that violate laws and regulations, the Articles of Incorporation, SIGMAXYZ Group Human Rights Policy, Compliance Code of Conduct, Basic Sustainability Policy, or rules on compliance organizations and operations, or if they receive reports from Directors or employees of the Company’s subsidiaries or other such persons to this effect, a report will be made immediately to the Company’s Audit & Supervisory Committee Members, and the same shall apply to the person who receives a report of the findings of the relevant matter from such persons.
  3. A system shall be established so that persons responsible in the preceding item shall not be treated unfairly for making reports to the Audit & Supervisory Committee.

Matters concerning expenses or liabilities arising from the execution of duties by the Company’s Audit & Supervisory Committee Members

The Company will promptly process any expenses or obligations incurred in the execution of duties by Audit & Supervisory Committee Members based on invoices from the Audit & Supervisory Committee Member.

Other systems to ensure that auditing by the Company’s Audit & Supervisory Committee functions effectively

  1. The Company’s Audit & Supervisory Committee Members shall exchange opinions with Directors who execute operations, internal auditors, the Accounting Auditor, or directors or employees of subsidiaries on issues to be addressed by the Company, the status of the preparation of an environment for auditing by the Audit & Supervisory Committee, and key issues in the auditing process.
  2. Where the directors and employees of the Company and its subsidiaries are requested to provide a report on the business of the Company or its subsidiaries, or to assist in a study of the state of the business or finances of the Company or its subsidiaries by the Company’s Audit & Supervisory Committee Members, they will cooperate in these processes.