Corporate Governance Structure and Initiatives | Matters Related to the Internal Control System
Shareholders and investors have made the effective functioning of internal control into a key issue amidst an epidemic of corporate misconduct in Japan and overseas. In this section, Capcom will explain the corporate governance structure and systems that it has initiated so far based on the key concepts of “effectiveness and visibility” in terms of the results of third party assessment.
(Assessment areas are highlighted in yellow.)
Capcom Corporate Governance Guidelines (June 21, 2023)
Corporate Governance Report (June 21, 2023)
- Information on
- Internal Control
Matters Related to the Internal Control System
Basic Views on Internal Control System and the Progress of System Development
As part of directors’ due diligence, the Company developed the following internal control system based on the Companies Act of Japan and its enforcement regulations to ensure that all Company practices comply with regulations and are executed in an appropriate and efficient manner.
1. Structure to Ensure that Directors Perform their Duties in Accordance with Laws and Regulations
To strengthen the management monitoring function and enhance corporate value, the Company strives to prevent illegal activities and ensure compliance through regular Compliance Committee checks etc., while attempting to invigorate and heighten the monitoring function of the Board of Directors in accordance with advice and recommendations from external directors.
2. Information Management and Storage related to Directors’ Execution of Duties
The management and storage of documents and information related to directors’ execution of duties, such as the minutes of the meetings of the Board of Directors is conducted in accordance with the “Document Management Rules.”
3. Risk Management Regulations and Other Systems
Efforts have been made so that the cross-sectional risk management system functions in accordance with the “Risk Management Rules,” to proactively prevent crises and execute the appropriate actions if an emergency occurs.
4. Structure to Ensure that Directors Perform their Duties Efficiently
The Company introduced a “Shikko Yakuin” (Corporate Officers) System under which the duties of the Board of Directors, who determine management policy, and the corporate officers, who carry out operations, are separated to enable smooth and flexible business operations and enhance efficient management with speedy decision-making.
5. Structure to Ensure that Employees Perform their Duties in Accordance with Laws and Regulations
The “Capcom Code of Conduct” is the fundamental guidance to comply with laws and regulations. Preventive measures, including internal training and monitoring programs, are also in place.
6. Structure to Ensure Compliance in Business Operations of the Company
The meetings of the Board of Directors of the Company’s subsidiaries are held approximately once a month, and are attended by the Company’s directors. In compliance with the “Management Regulations for Subsidiaries,” etc., the Company developed close communication and collaboration between the Company and its subsidiaries, requiring reports on important information, including sales updates and business forecasts. Also to comply with the “Risk Management Rules,” a group-wide compliance system is being promoted to ensure appropriate operations so that corporate governance functions effectively.
7. Structure for the Audit and Supervisory Committee Assistants, Structure for their Independence of these assistants from Directors, and Structure to Assure the Effectiveness of Instruction given to them
For effective internal control, the Audit and Supervisory Committee strives to perform audits on the work of directors and employees based on the audit policy, report audit findings and make recommendations and advice as necessary. Accordingly, in order to enable the Audit and Supervisory Committee to perform its duties in a smooth and appropriate manner, the Internal Audit Division, etc., as organizations are directly supervised by the Audit and Supervisory Committee where fifteen dedicated staff members are in charge of performing tasks as assistants under the instructions of the Committee, and the Company ensures the consent from the Audit and Supervisory Committee is obtained regarding the personnel relocation of such staff members.
8. Structure for Directors, the Audit and Supervisory Committee, Officers and Employees of the Company to Report to the Audit and Supervisory Committee, Structure to Report to the Audit and Supervisory Committee Other than the First Case, and Structure to Assure No Unfavorable Treatment will Result from the Reporting
Directors, the Audit and Supervisory Committee, Officers or employees of the Company, if asked for necessary information about the execution of their duties by the Audit and Supervisory Committee, respond quickly and appropriately to such requests, and properly report on required issues. Directors or employees who report to the Audit and Supervisory Committee will not be treated unfavorably because of such report.
9. Structure to Ensure Effective Audit by the Audit and Supervisory Committee and Other Issues
Expenses incurred for executing the duties of the Audit and Supervisory Committee are budgeted. Directors who serve as members of the Audit and Supervisory Committee may request a cash advance on such expenses.
10. Summary of operating status of system to ensure proper business execution
Summary of operating status of system to ensure proper business execution as of March 31,2022 are as follows:
1) In addition to each system mentioned above, the Company held important meetings as below to make necessary resolutions and reports as deemed required by the laws and/or regulations.
・Board of Directors 10
・Corporate Management Council 13
・Board of Corporate Officers 12
Eleven (11) meetings of the Audit and Supervisory Committee were also held to discuss its audit policy and plan as well as any audit matters relating to the board meeting and various rules.
2) The Company holds the quarterly meeting of the Compliance Committee chaired by an external director and reports recognized inherent risks and the probability of such risks being actualized to the Board of Directors, thereby aiming at the early detection and prevention of any violation of laws and regulations and wrongful acts.
3) Furthermore, the Company ensures that compliance is thoroughly understood by officers and employees, including the prevention of insider trading and information leakage and the ensuring of information security, by confirming effectiveness using e-learning and the periodic compliance check sheet in order to help officers and employees obtain sufficient knowledge on compliance.
4) With respect to affiliate companies, the Company also undertakes effective functioning of the group-wide internal control system by continuously monitoring the status of subsidiaries’ businesses through measures such as communicating the Company’s management policies to the management of subsidiaries and gathering information from the Company’s officers holding concurrent officer positions at subsidiaries and employees assigned from the Company.
5) The Audit and Supervisory Committee performs stringent checks as to whether or not the internal control system is being implemented effectively through organizational audits including periodically receiving reports from the Internal Audit Division, etc. and giving instructions as necessary.
6) As countermeasures against novel coronavirus infections (COVID-19) for the fiscal year ended March 31, 2022, the Company continued to place importance on the health of its employees and their families, implemented strict measures including those for preventing infections at the workplace, and otherwise responded appropriately as the situation changed. At arcades, the Company has been taking adequate measures to prevent infections targeting customers as well as making efforts toward their sound operation in accordance with national and local government guidelines, etc.
7) As for information security system, we have achieved the expected goals, including those related to the operations and monitoring of systems and the reinforcement of emergency responses. The Company will continue to work to maintain and strengthen its systems on an ongoing basis based on, among others, the advice of the Security Oversight Committee.
11. Basic Views on Eliminating Anti-Social Forces
The Company has a firm stand against antisocial forces that threaten social order and the safety of citizens, and strictly prohibits any association with such groups at the organizational, employee and individual levels. If we are contacted by such groups, in addition to swift organizational measures, we will cooperate with the police and other relevant authorities to firmly refuse unlawful demands.
While the Company attempts to remain aware of information related to these groups in order to avoid contact or involvement, if we discover that we have unknowingly become involved with them, we will immediately terminate the association with help from the police and other relevant authorities.
Initiatives to Strengthen Compliance
As is stated in Structures, in order to prevent any violation of laws and regulations Capcom has established the Compliance Committee, which is chaired by an external director who is a qualified lawyer, and which consists of directors and directors who serve as members of the Audit and Supervisory Committee. In addition, the Company is working to improve the effectiveness of compliance on a group-wide basis through measures such as posting matters necessary for the department responsible for accepting consultation requests and whistleblower reports to function on the Company’s intranet.
Compliance is the foundation of corporate governance and the basis for the fulfillment of corporate social responsibility.
Capcom will continue to instill this understanding in all its officers and employees.
- Messages from CEO Management
- Value Creation
- Material Issues
Educational Support Activities
Photos taken at the on-site classes are available on Flickr.
- Request Materials