Governance & compliance

Company profile

Feature Story

Harmony with the environment

Improving value

Communication with society

Producing an employeefriendly workplace

Supply chain management

Governance & compliance

GovernanceCorporate governance structure
Our basic view on corporate governance■ Board of Directors

INOAC considers the improvement of corporate governance to be an important managementtask in order to raise the group’s performance, value and social credibility.

Comprised of 10 members, the Board of Directors decides important issues in INOAC’s business. Each board member
reports the execution, financial and performance statuses of his/her division, based on which the Board supervises andcontrols the business execution of the company.

■ Executive officer system
In order to separate supervisory and executional responsibilities, INOAC has introduced an executive officer system.
Each executive officer, endowed with his/her own authority from the Board, acts as the head of the department, groupcompany or major functional organization to speed up decision-making, optimize business operations and handle
critical business execution.

■ Corporate governance structure (organizational structure)

Appointment and dismissal

Internal audit

President

SuperviseMonitor
CCO

Compliance Officeand ComplianceOfficers

CSR REPORT 2021

Executive
Management
Committee
Associated/affiliatedgroupcompanies

Businessunits

CrisisManagement
Committee

Accounting audit
Accounting auditor

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The Board of Auditors is composed of three company auditors including two external auditors. The company auditors
attend important meetings, such as board meetings, and audit the execution of duties by the directors by inquiring
about the status of their business operations.

Internal Control System
Cooperation

Business Auditors’Office

Board of Directors

Shareholders’meeting■ Board of Auditors

Audit

Cooperation
Appointment and dismissal

Appointment and dismissal

Board of Auditors (including outside company auditors)

Various measures are implemented to ensure that we comply with applicable laws as well as the company’s articles ofincorporation in our business execution.

■ Compliance
All employees are educated on our system for promoting compliance and our Corporate Code of Conduct.
■ Information management
Documents are managed by the Document Control Procedure that defines the responsible department/section andstorage period for each document.
■ Control structure as a corporate group
Governance rules for associated companies are established for associated and affiliated companies. Rules for business
operations are also clarified along with audits conducted by company auditors when necessary.
■ Risk management
The Executive Management Committee manages each risk and Crisis Management Committee meetings are held
when necessary. The Negative Information Hotline is always ready to quickly obtain information about risk and provide
a structured response.

Governance & compliance

Company profile

Feature Story

Harmony with the environment

Improving value

Communication with society

Producing an employeefriendly workplace

Supply chain managementGovernance & compliance

Compliance

Compliance education
Basic views on compliance
INOAC believes that the compliance requirement goesbeyond simply following the applicable laws and requires
each employee to act with a high level of ethics. In orderfor INOAC to satisfy its corporate responsibilities andexpectations from customers, it is not enough to simply
follow the applicable laws. Employees must also recognize
their social responsibilities as part of the corporation.

Compliance and Ethics Program

Internal reporting system

In addition to establishing internal regulations, an educational program

In order to thoroughly enforce compliance, the company must be ready toaimed to raise awareness on compliance is provided to sales

act immediately in the event of any compliance-related violation. To thisrepresentatives, staff in charge of procurement, new employees andend, INOAC has established the Help Line through which anyone may

mid-career hires at all INOAC business locations. The educational program

consult directly with both the Legal Affairs Department and an externallooks at examples of compliance violations that have occurred at otherlaw firm about their concerns. Internal Reporting and Whistleblower

companies and conducts case studies on how such issues could occur inProtection Regulations have also separately been established to protect

one’s own workplace. The program also holds discussions on questions

whistleblowers from any form of retaliation.

about matters requiring clarification which arise in day-to-day work
operations. Through these efforts, we are working to raise each individual’sawareness of compliance.

Internal audits

Negative Information Hotline

The Compliance and Ethics Program has been implemented, and a

Field audits are conducted at each section and domestic group company

The Negative Information Hotline (consultation line) has been establishedCompliance Office has been established within the Tokyo Head Office. We

covering aspects such as compliance, risk management and observance offor employees to report not only compliance issues, but also any issues

have appointed a Chief Compliance Officer (CCO) to lead the Compliancelaws. Areas that are deemed in need of improvement by the results of field

regarding product quality, safety, the environment, sales, procurement andOffice and Compliance Officers for each jurisdiction and business location

audits are tracked regularly to raise the governance standards of the INOAC

more. When such issues arise, the company will be able to respondin Japan and overseas. In addition to establishing internal regulations, weGroup as a whole.

immediately and take measures to keep problems from spreading.

are also creating systems to raise employee awareness toward compliance.

Quality-related issues
Global Quality Assurance Division

Negative
Information
HotlineSafety and environmental issues
Safety Environment Management Section

Information on compliance
Legal Affairs Department

Information on sales, procurement, etc.
Corporate Planning Div.

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CSR REPORT 2021