Basic Concept and System of Corporate Governance

Musashi Corporate Governance

The Group considers full corporate governance as one of the critical elements for management. In October 2015, to clarify the policy for our activities and to improve our corporate value, the "Basic Policy for Musashi Corporate Governance" was defined according to each principle specified in the "Corporate Governance Code" issued by the Tokyo Stock Exchange. To respond to our stakeholders both inside and outside, we will strive to fulfil corporate governance more for the sustainable growth of the company and for the improvement of the mid/long term corporate value.

Corporate Governance System

The Company has adopted the institutional design of a company with an Audit and Supervisory Committee as it works to enhance the function of its auditing and supervising directors in their execution of business and improve the effectiveness of internal control.
In addition, the Company involves its outside directors, including those serving concurrently as members of the Audit and Supervisory Committee, in the decisionmaking of the Board of Directors, thus improving the soundness and transparency of management.
Further, the Company has established the Nomination Committee and Remuneration Committee, with outside directors constituting the majority of each of these committees, to supplement the supervisory functions of the Board of Directors.
Meanwhile, authority over some matters to be resolved by the Board of Directors is delegated to the Management Committee and other committees, thus enabling prompt decision-making and the execution of business and increasing the agility of business decisions.

Group Governance System

Application / Report on Business Executions

The Company has the "Regulation on Control of the Affiliate Companies" to ensure appropriate executions of its Group companies. Based on the Regulation, the Management Committee and the Board of Directors receive application/report on executions by degree of importance.

Self-Assessment

Each Group company conducts an annual self-assessment on internal control based on the checklist provided by MSI. Results and issues are shared by the MSI Internal Control Committee and section in charge of internal control to improve the entire group system continuously.

Audit Conducted by MSI Auditor

The "Internal Audit Office" independent from business executions conducts a periodic audit on the Group companies.

Scheme of Group Governance

Basic System of Internal Control

The Company has the Internal Control Committee consisting of Directors and Executive Officers which deliberates internal control matters including corporate ethics and compliance.
The Internal Control Committee receives reports from related sections, committees
and subsidiaries on the status of design/ operation of systems and policies in terms of compliance, information control, risk management, efficiency of business execution, and group governance. The Committee deliberates global internal control matters. Each section and subsidiary conducts self-assessment on internal control every year to clarify issues for the continuous improvement in internal control.

Schematic diagram of Internal Control

Announcement from Musashi group about Governance System