Shareholders and investors have made the practical and 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's basic policy for Japan's Corporate Governance Code (PDF: 728KB/49 pages)
- Structure and
- External Directors
- Information on Shareholdings
- Internal Control
- Information Security
Status of Internal Control System
Structure to Ensure Compliance in Business Operations and the Operational Status of Such Structures
1. Structure to Ensure that Directors Perform their Duties in Accordance with Laws and Regulations
In order to invigorate and heighten the monitoring function of the Board of Directors in accordance with advice and recommendations from external directors, the Company additionally strives to prevent illegal activities and ensure compliance through regular Compliance Committee checks etc., to strengthen the management monitoring function and enhance corporate value.
2. Structure for Storing and Managing Information Related to the Performance of Director Duties
The Company appropriately stores and manages documents and information related to the performance of directors, such as Board of Directors’ meeting minutes, in accordance with guidelines such as its “Document Management Rules.”
3. Risk Management Regulations and Other Systems
In order to properly carry out crisis prevention or address the occurrence of unforeseeable events, the Company endeavors to ensure a functioning cross-sectional risk management structure via guidelines including its "Crisis Management Rules."
4. Structures to Ensure the Efficient Performance of Director Duties
The Company has introduced a Corporate Officer System, by which it separates the duties of the Board of Directors, who determine management policy, and the corporate officers, who carry out operations, while enhancing management efficiency and promoting smooth and flexible business operations enabled by quick decision making.
5. Structure to Ensure that Employees Perform their Duties in Accordance with Laws and Regulations
The Company strives to prevent legal violations among employees with its established "Capcom Code of Conduct" as a fundamental guideline for compliance with laws and regulations, while also carrying out internal training and monitoring programs.
6. Structure to Ensure Compliance in Business Operations of the Company Group
The Company's directors participate in Board of Directors meetings of the Company's subsidiaries, which are held monthly. In compliance with the "Management Regulations for Subsidiaries," etc., the Company is required to report on important information, including sales updates and business forecasts of its subsidiaries, arising from the close communication and collaboration between the Company and its subsidiaries. Also, to comply with the "Risk Management Rules," a group-wide compliance system is being promoted to ensure operations are optimized for the effective functioning of corporate governance.
7. Structure for the Audit and Supervisory Committee Assistants, Structure for the Independence of These Assistants from Directors, and Structure to Ensure 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, while reporting audit findings and making recommendations or giving advice as necessary. Accordingly, in order to enable the Audit and Supervisory Committee to perform its duties in a smooth and appropriate manner, the Company has established the Internal Audit Division, etc., directly supervised by the Audit and Supervisory Committee. In this division, fifteen dedicated staff members carry out tasks as assistants at the direction of the Committee. Further, the Company ensures the consent of the Audit and Supervisory Committee is obtained regarding personnel reassignments for such staff members.
8. Structure for Directors, the Audit and Supervisory Committee, Officers and Employees of the Company Group 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 Group, 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 reports.
9. Structure to Ensure Efficacy of Audits 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
- In addition to each system mentioned above, important meetings the Company holds in addition to the Board of Directors meeting (held 10 times) are the Corporate Management Meeting (held 14 times) and the Corporate Officers Meeting (held 12 times); at these meetings, agenda items are deliberated, decided and reported on in accordance with the law and company guidelines. At Audit and Supervisory Committee meetings (held 10 times), in addition to deciding audit policies and plans, audits are carried out regarding matters such as the duties of directors and legal compliance.
- 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 to be actualized to the Board of Directors, thereby aiming for early detection and prevention of any violation of laws and regulations or wrongful acts.
- Furthermore, in order to help officers and employees obtain sufficient knowledge on compliance, the Company makes certain that topics are thoroughly understood, including the prevention of insider trading and information leakage, as well as how information security is ensured. This is done by confirming practical knowledge through e-learning and a periodic compliance check sheet.
- With respect to affiliate companies, the Company works to ensure that the group-wide internal control system is functioning effectively by continuously monitoring the business status of subsidiaries. This is done through measures such as communicating the Company’s management policies to the management of subsidiaries, as well as by gathering information from both the Company’s officers who hold concurrent officer positions at these companies and from employees assigned by the Company to work there.
- 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.
- As part of workplace reforms aimed at eliminating long working hours, the Company is implementing various training programs, including those for controlling hours worked, stricter oversight, labor management training and for employee mentoring. Additionally, the Company is promoting the maintenance of employee health by holding monthly Health and Safety Committee meetings, in addition to taking steps to promote awareness among officers and employees and the proactive use of paid leave.
- Following the outbreak of COVID-19, in January 2020 the Company established a COVID-19 Response Team, setting up permanent disinfectant stations and providing masks for all employees, while working to raise awareness about mask-wearing and other measures to prevent the spread of infection. Further, the Company endeavored to minimize the loss of profit or opportunities stemming from measures to prevent infection, or any accompanying impact thereof. These included those for business travel restrictions that, beginning with China and the Asian region, encompassed both overseas and domestic travel.
11. Basic Views on Eliminating Anti-Social Forces and Current Status
The Company takes a firm stand against antisocial forces that threaten social order and the safety of citizens, and strictly prohibits any association with such groups or individuals.
If we are contacted by such groups or individuals, 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.
Related Principles of the Corporate Governance Code
Initiatives to Strengthen Compliance
Focusing on the Viability and Effectiveness of Our Compliance System
As is stated in Structures and Initiatives, 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.
Furthermore, the Capcom Code of Conduct was formulated to strengthen our compliance system. Capcom is dedicated to proactively preventing illegal acts or misconduct, while ensuring legal compliance through the promulgation of corporate ethics and principles.
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.
Related Principles of the Corporate Governance Code