Governance

Hirata’s Corporate Governance
The Company aims to make everyone involved in Hirata content and to contribute to society throughtechnology. To achieve this, we believe that it is essential to build and effectively operate a management
system that enables transparent, fair, prompt, and resolute decision-making. We will thus work to strengthen
corporate governance as one of our most important tasks.

Governance Framework and Summary
Shareholders’ Meeting
Appointment/
Non-reappointment

Appointment/
Non-reappointment

Basic Stance
As a company that targets the global marketplace,

improve its corporate value.
From the standpoint that a company is an entity thatmanagement activities with an emphasis on corporate

bears public, public interest, and social responsibilities,

governance to fulfill its social responsibilities. Hirata is thus

Hirata believes that the maintenance of good relations

working to enhance its compliance system, continuouslywith all stakeholders will lead to improved shareholder

strengthen its business competitiveness, and further

value over the long term.

Changes to Corporate Governance

2006

Audit andSupervisory Board

Board of Directors

Hirata Corporation has promoted sound and effective

2005

Appointment/
Non-reappointment• Introduction of executive officer system• Management Meeting established

Nomination andCompensation
Advisory Committee

Directors

Reports

Audit and Supervisory
Board members

AuditsRepresentative Director, President

Cooperation(Decision-making and Management Oversight)

Reports

Appointment/
Non-reappointment

Sustainability
Promotion Committee

Supervision

Reports

Financial auditors

AuditsManagement Meeting

Risk Management
Committee

Executive Officers(Operational Execution)

Compliance
Committee

Business Headquarters /Administration Division /Subsidiaries

Reports

AuditsCooperation

Cooperation

Internal Audit Department• Stock listed on JASDAQ Securities Exchange
Independent
outside directors

2014• Appointed one independent outside director• Abolition of executive retirement benefits system

2016• Appointed two independent outside directors

2017• Stock market listing changed to First Section of Tokyo Stock Exchange• Establishment of independence standards for outside directors• Introduction of stock options• Began evaluations of Board of Directors’ effectiveness2018• Establishment of voluntary Nomination and Compensation Advisory Committee

2019• Shortened director term of office from two years to one year
• Independent outside directors to account for at least one third of those present in Board of Directors’ meetings

Body

Board of Directors

Internal directors

Independent outside Audit andSupervisory Board members

Nomination and Compensation
Advisory Committee

Outside Audit andSupervisory Board member

Audit and Supervisory Board

Chairperson

Composition

46

2021

• Policy decisions on executive compensation, etc.
• Introduction of performance-linked compensation system

2022• Moved to Tokyo Stock Exchange Prime Market• Appointed two female directors• Appointed one female Audit and Supervisory Board member• Skills matrix disclosure

Hirata Integrated Report 2022

Four members(Outside 1; independent outside members 3)
One independent outside Audit and(Internal 5; independent outside members 3) (Internal 1; independent outside members 2)
Supervisory Board member is female
Two independent outside directors are female One independent outside director is female

Eight members

Three members

Operational Status of Board of Directors, Discretionary Committees, and Audit
and Supervisory Board (FY2021)

Body

Record of
Meetings Heldin FY2021

Board of Directors

Nomination and Compensation
Advisory Committee

Audit and Supervisory Board

13 times

10 times

17 times

Average attendance rate: 99.3%(Directors and Audit and Supervisory
Board members)

Average attendance rate: 100%
(All committee members)

Average attendance rate: 98.5%(Audit and Supervisory Board members)

Main Themes• Medium-Term Management Plan
• Policy to reduce cross-shareholdings• Identification of materiality

Main Themes• Creation of skills matrix• Selection of director candidates• Determining of director compensation

Main Themes• Audit of operational status of Grouprisk management system• Audit of operational status of Group
compliance system

Hirata Integrated Report 2022

47

GovernanceEvaluations of Effectiveness of Board of Directors’ Meetings (FY2021)
To improve the effectiveness of its Board of Directors’ meetings, the Company has evaluations of their effectivenessconducted by a third-party organization. Based on the results from the evaluations, the issues are shared and countermeasures
discussed at Board of Directors’ meetings.
Method of
Evaluation
Main Evaluation
Question Items

Anonymous questionnaires and individual interviews for directors and Audit and Supervisory Board
members conducted by a third-party organization (Individual interviews held every other year)
Include composition, operation, discussions, and monitoring functions of the Board of Directors,
performance of directors, support system and training for directors/Audit and Supervisory Board
members, voluntary committee operations

Name

Corporate
management

Industryknowledge

Technology,
research anddevelopment

Global

●

●

●

●

●

●

Yuichiro Hirata
Shojiro Hirata
Yasuhiro Fujimoto
Shigeru Maeda
Masaru Kozaki
Satoru Ogawa
Tamami Koyama
Ryoko Ueda

Risk management

Finance andaccounting

●

●

●
●

●

●

●

●

●

●
●

ESG

●

●

●
●

●

●

Note: The above shows the knowledge, experience and capability particularly expected of each individual, and is not a complete list of all the expertisepossessed by the individuals.

Reference: Initiatives prior to FY2021

Appointment/Non-reappointment of Directors

These have included the formulation of medium-term management plans, responding to the revised Corporate Governance
Code, such as ESG management and a director skills matrix, and monitoring the operational status of the internal control
system. In addition to formulating and implementing an annual schedule for Board of Directors’ meeting agenda items thatincorporates priority issues, we have expanded the functions of the Board of Directors’ secretariat to include, for example, theproviding of support for outside directors.

• Nomination and Compensation Advisory Committee

Directors, which makes the decisions after receiving reports

The Company established the Nomination andfrom the Nomination and Compensation Advisory Committee

Compensation Advisory Committee as a voluntary advisoryon the basis of the candidates’ knowledge, experience,

body to the Board of Directors. The purpose of thisability, performance evaluations and other factors.

committee is to deliberate important matters, such as the• FY2021 Evaluation Results and Initiatives to Be Addressed
Main Issues

Initiatives to Be Addressed• Formulation and follow-up of management strategies for• Monitoring of medium-term management plan progress andmedium- to long-term improvement of corporate value,
discussions on human resource strategies to be incorporated
strengthening of monitoring functions
into annual schedule of Board of Directors’ agenda items• Formulation of human resource strategies consistent with• Continuous reviews of Board of Directors’ meeting discussion
medium- to long-term strategies
standards• Optimization of Board of Directors’ meeting agenda items• Earlier provision of more accurate agenda items,• Strengthening of Board of Directors’ secretariat functions, etc. strengthening of secretariat functions such as support foroutside directors and training

Concerning the Audit and Supervisory Board member

nomination and compensation of directors and executive

candidates, after having obtained the consent of theofficers, and to thereby ensure the objectivity and

Audit and Supervisory Board, those with the knowledge,transparency of these matters and to further strengthen

experience, and skills necessary to perform their duties

the corporate governance system.

as corporate auditors will be selected as Audit andCommittee Chair: Yuichiro Hirata (Representative Director, President)
Committee members: Satoru Ogawa (Independent Outside Director),
Ryoko Ueda (Independent Outside Director)

Supervisory Board member candidates. Those candidates
to be proposed at the Annual General Meeting of
Shareholders are determined by resolution of the Board of
Directors.

• Appointment/Non-reappointment of Directors

If a director or executive officer breaks the law or acts

In addition to the above, the Nomination and Compensation Advisory Committee was consulted on previous matters, such

To ensure transparency and fairness in the nomination

in a manner contrary to the Articles of Incorporation oras the nomination and compensation of director candidates, and newly consulted concerning the size and composition of theof both director candidates and executive officers, theinternal regulations, or should it be recognized that there

Board of Directors and approaches to succession planning.

Nomination and Compensation Advisory Committee, in

is a difficulty to perform duties properly due to physicalBased on the results of the effectiveness evaluations and analyses of the status of compliance with the Corporate

which independent outside directors form the majority,

or mental breakdown or a lack of ability, in such cases

Governance Code, we will continue to make ongoing efforts to further improve the effectiveness of the Board of Directors indeliberates the criteria and policies for nominating thethe Board of Directors will consider dismissal after having

the years to come.

candidates as well as candidate nomination proposals. The

received a report from the Nomination and Compensation

results of those deliberations are reported to the Board ofAdvisory Committee.

Skills Matrix of the Company’s Directors
For the Board of Directors to fulfill its responsibilities of

Executive Training, Support System for Outside Directors“realizing sustainable growth” and “supervising businessexecution,” the Company has defined the key skills andWhen new directors and executive officers are appointed,

understanding of the Company by providing them withareas of experience required of its directors—corporate

they are provided with opportunities to attend training

information and explanations about Hirata and by visiting

management, industry knowledge, technology/researchsessions, including on compliance, that are geared toward

our production sites. We also assist outside officers

and development, global, risk management, finance andnewly appointed directors. The Company will also provide

in fulfilling their roles by holding preliminary briefings

accounting, and ESG—and aims to maintain a Board ofthem with opportunities to acquire the necessary knowledge

for them prior to Board of Directors’ meetings and by

Directors that is well-balanced in terms of its composition.

on an ongoing basis even after having taken office.

providing opportunities for interviews with key executive

We are also working to deepen outside directors’48

Hirata Integrated Report 2022

officers and employees.

Hirata Integrated Report 202249

GovernanceOutside Director’s Message
Executive Compensation• Executive Compensation Policy
The Company’s decision-making policy with regard to
executive compensation and associated matters is decided
upon by the Board of Directors. The main basic policies are
as follows:- To achieve sustainable growth and increase corporate value
over the medium to long term, directors’ compensation
shall involve a system that functions as an incentive and at
an appropriate level based on position and responsibility.
- Specifically, in addition to their basic compensation,
executive directors will receive executive bonuses andstock compensation as performance-linked compensation,
the ratios of which shall be approximately 1:0.5:0.3 (ifperformance indicator targets are achieved).
- Outside directors who are primarily responsible forsupervisory functions shall receive only basic compensation.
• Process for Determining Compensation
The Board of Directors entrusts the representative director
and president with specific decisions regarding individualcompensation for directors.
To ensure that delegated authority is properly exercised,
the Board of Directors consults with the Nomination andCompensation Advisory Committee on the drafting ofindividual compensation amounts. That report having beenobtained, the representative director and president makes

decisions based on its content.
• Details of Performance-linked Compensation
Intended to raise awareness of improving performanceeach fiscal year, the bonuses in performance-linked
compensation shall be regarded as cash compensationthat reflects performance indicators. Such bonuses arecalculated in accordance with the level of achievement of
the consolidated ROE targets for each fiscal year.
By sharing the profits and the risks of stock pricefluctuations with shareholders, stock compensation isintended to raise awareness of contributing to improving
medium- to long-term business performance and increasing
corporate value. Stock compensation shall be paid via astock delivery trust mechanism. For each fiscal year, points
are awarded according to position and length of tenure of
office as well as according to the level of achievement of
the target values for evaluation indicators (consolidated ROE
and consolidated operating income ratio) in the settlementof accounts. At the time of retirement, stock equivalent topoints shall be delivered.
The performance indicators and their target values
for the performance-linked compensation are reviewed
based on recommendations from the Nomination andCompensation Advisory Committee depending on changes
in the business environment and other factors.

• Composition of Executive Compensation

1

0.8

：

Performance-linked compensation

Basic compensation

Executive Director

Basic compensation* In the event that performanceindicator targets have beenachieved

Performance-linked bonus

Performance-linked
compensation

Short-term incentive

Medium- tolong-term incentive

0.5

：

0.3

Fixed compensation

Outside director

Basic compensation• Executive Compensation List (FY2021)

Basic compensation

Stock delivery trust

Directors(excluding outside directors)

255,719

164,800

Audit and Supervisory
Board members(excluding outside Audit andSupervisory Board members)—

78,500Outside directors

50

Total amount by type of compensation, etc. (Thousands of yen)

Total amount ofcompensation(Thousands of yen)

Director classification

Hirata Integrated Report 2022

Bonus

Of the items on theleft, non-monetarycompensation, etc.

Number of eligible
directors

36,13754,782

36,137

6

—

—

—

—

78,500

—

—

—

—

8

While handing down Hirata
Corporation’s DNA, I willassist further improvements
in profitability and in theGroup’s growth.
Satoru Ogawa
Outside Director

Looking Back on First Year after Appointment
More than a year has passed since I was appointed as
an outside director. Although there were many remotemeetings due to the COVID-19 pandemic exactly at thattime, I have recently been able to visit various offices
and meet face-to-face with employees to ascertain thesituation on the spot.
Looking once again at Hirata Corporation, besides theenthusiasm for manufacturing conveyed from each andemployee, I can sense the Company’s strength as a oneof-a-kind production equipment system integrator. Basedon my experience so far, I have gained the impressionthat makes me ask myself the question “Would it not be
possible to secure higher profitability?” I recognize that
improving profitability for further corporate growth is an
issue, and I have been saying to all of Hirata’s employees,“Let's make more money.”
To Further Improve Corporate ValueAt Board of Directors’ meetings we are discussing ideas
for further growth in light of the booming markets in the
EV and semiconductor fields, but I think it would be niceto have franker exchanges of opinions. It is also necessary
to discuss the formulation of business strategies that can
improve profitability.
One of the most important issues for management
is sustainability, in other words, the pursuit of business
continuity. The necessary tools for Hirata to havesurvived 100 to 200 years from now are the formulationof visions and long-term strategies. To achieve these,
we must further improve the quality and quantity of theManagement Meetings and Board of Directors’ meetings.
In addition to monthly regular and special meetings, forexample, it may be effective to have a training camp withall officers and think about these matters all at one time.

Governance System and Board of Directors’Management
Hirata Corporation’s governance system is managed ina well-balanced manner, with business execution andoversight checking each other. Drawing on my experiencein a global company and my track record in corporate
management, I provide independent oversight and advice
from both monitoring and managing perspectives.
As part of that, I am also a member of the Nomination
and Compensation Advisory Committee. In June 2022,
Ms. Tamami Koyama, who has extensive experience inmanufacturing and is familiar with ESG, and Ms. Ryoko
Ueda, who has a background in finance and specializes ingovernance and ESG, joined the outside directors. Thus
the composition of the Board of Directors has become
more diverse in terms of gender and knowledge. However,I believe it is necessary to continue to consider the skills
matrix for the sustainable growth of the Company.
With regard to the operation of the Board of Directors,
I hope that the participation of newly appointed internaland outside directors will allow management supportand monitoring from new perspectives, including
business models, beyond the conventional concept ofmanufacturing.
To Our Stakeholders
Hirata Corporation’s DNA is to hand down our founder’sspirit, to treat our employees as part of the family, andalways to think deeply about what would make theCompany better, people better, and what makes everyone
content. In addition to handing down this tradition, it is also
my intention to provide advice to management. In the hopethat all of the Company’s stakeholders will gain a deeper
understanding of Hirata Corporation, which is the “only oneof its kind in the world,” I will endeavor to further improve
profitability and support the Group’s growth.

Hirata Integrated Report 2022

51

Governance

List of Directors(as at June 24, 2022)

Directors(Note) Extracts from the reasons for selection are provided.

Yuichiro Hirata

Shojiro Hirata

Yasuhiro Fujimoto

Shigeru Maeda

Representative Director

Director

Director

Director

As Representative Director and President, has
led the management of the Company and theGroup and made a meaningful contribution to thedevelopment of its businesses.

Has made a meaningful contribution toenhancing the Chinese business, developing theCompany’s device business and enhancing its
procurement function, through his managementof a Chinese subsidiary and the operation of thebusiness and procurement divisions.

Familiar with accounting, IR and public relations,is currently leading the promotion of corporate
governance, the improvement of the internal
control system, and the implementation of SDGs.

Having previously served as manager mainlyof automobile sector departments as well as
manager of the business promotion division for
the entire Company, had more recently been
fulfilling his role in supervising overall business
management.

Masaru Kozaki

Satoru Ogawa

Tamami Koyama

Ryoko Ueda

Director

Outside Director Outside Independent officer

Outside Director Outside Independent officer

Outside Director Outside Independent officer

In addition to having served in the capacity of
the representative of the local subsidiary in
Singapore for six years, has made a meaningful
contribution to the business development of theGroup globally by, for example, being in chargeof affiliate companies.

In addition to extensive experience in theformulation of information strategies andcorporate management at other companies,
possesses sophisticated insights into
manufacturing and corporate management. Has
served as an Outside Director of the Company
since 2021.

Ms. Koyama possesses sophisticated insights
into technology, research and development
and ESG acquired through her experiencein the organic EL field in another company
and as director in the launch of ESG-relatedorganizations. Ms. Koyama has served as an
Outside Director of the Company since 2022.

Ms. Ueda possesses extensive experience andsophisticated insights as an expert on corporate
governance and ESG. She has served as an
Outside Director of the Company since 2022.

Audit and Supervisory Board Members
Naokuni Motoda

Ken Imamura

Yasuhiko Endo

Asako Okabe

Full-time Audit and Supervisory
Board Member Outside

Audit and Supervisory Board
Member Outside Independent officer

Audit and Supervisory Board
Member Outside Independent officer

Audit and Supervisory Board
Member Outside Independent officer

Possesses specialized knowledge and extensive
experience as a director and executive officer ofa financial institution as well as a representative
director of a general corporation. Has served as
the full-time auditor on the Company’s Audit andSupervisory Board since 2015.

Possesses specialized knowledge and experience
as a lawyer handling corporate legal affairs. Has
served as an Outside Auditor for the Company
since 2015.

Possesses specialized knowledge as a Certified
Fraud Examiner (CFE) and a wealth of experienceand insight regarding stocks and management.
Has served as an outside auditor for theCompany since 2018.

As a certified public accountant (CPA) possessing
specialized knowledge and extensive experiencein corporate accounting, Ms. Okabe has served
as an outside member of the Company’s Audit
and Supervisory Board since 2022.

Executive Officers
Yuichiro Hirata

Shojiro Hirata

Yasuhiro Fujimoto

Shigeru Maeda

Masaru Kozaki

President andChief Executive Officer

Managing
Executive Officer

Managing
Executive Officer

Executive Officer

Executive Officer

Division Director, Procurement Division,
Quality Control

Division Director, Administration
Division, Internal Controls, SDGs

Division Director, Business
Headquarters

Division Director, Global Business
Headquarters

Yoshitaka Taniguchi

Masahiro Koizumi

Takenori Hirakawa

Michinobu Shuto

Shigeharu Nishimura

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive General Manager,#2 Kumamoto Business Divisionin #2 Business Unit

Executive General Manager,#2 Business Unit,
Kansai Business Division

Executive General Manager,#3 Business Unit,#2 Equipment Business Division*

Administration Division,
Corporate Planning, IT Planning,
Investor Relations & Public Relations,
Secretariat

Division Director, Research andDevelopment Headquarters*

Kazuhiro Toda

Toshiyuki Matsuzaki

Hideki Ninomiya

Jo Yoneda

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive General Manager,#4 Business Unit,
Device Center*

Executive General Manager,#1 Business Unit

Administration Division,
Deputy Division Director,
Administration Division,
Legal, Intellectual Property,
Compliance, Accounting

Administration Division,
General Affairs, Human Resources

Front row, from left

①Asako Okabe, ②Tamami Koyama, ③Shojiro Hirata, ④Yuichiro Hirata, ⑤Yasuhiro Fujimoto,⑥Ryoko Ueda
Back row, from left

⑦Naokuni Motoda, ⑧Yasuhiko Endo, ⑨Ken Imamura, ⑩Satoru Ogawa, ⑪Shigeru Maeda,⑫Masaru Kozaki

⑦
①

⑧
②

⑨
③

⑩
④

⑪
⑤

⑫
⑥

* Following management changes on October 1, 2022.

52

Hirata Integrated Report 2022

Hirata Integrated Report 2022

53

GovernanceGroup Governance
The Hirata Group consists of Hirata Corporation and
12 Group companies. Based on three businesses—
automotive- and semiconductor-related equipment andother automatic labor-saving equipment—the Group isdeveloping its businesses at bases in North America,
Europe, Southeast Asia, China and Taiwan.
Having established a Basic Policy for Establishing an
Internal Control System, the Board of Directors is working
to strengthen Group controls.
In addition to monitoring the execution of duties bymanagement at Group companies, directors and Audit andSupervisory Board members dispatched or appointed by
the Company are working to strengthen Group controls.
They ensure that the Company is involved in important
decision-making and that, on the basis of affiliatedcompany management regulations, serious matters suchas compliance violations are reported to the Company.
Forming part of our efforts to strengthen risk
management and promote compliance, the most recent(from fiscal 2020 onwards) major initiatives in Group

Compliance
control have included: the setting up a whistleblower
hotline for overseas Group companies; the issuing of a
No Harassment Declaration, the establishment of a Risk
Management Committee; and the conducting of reviewsof our credit management systems and rules.
To enhance the synergies within the entire Group,
we hold Group company debriefings on a regular basis(every quarter for domestic affiliates, every six months foroverseas affiliates), share business strategies and issues,
while monitoring performance as appropriate.
In terms of audits, audits of Group companies are
conducted by Audit and Supervisory Board members, and
we also regularly hold Group Company Auditor Liaison
Meetings. We are increasing the effectiveness of auditsof the corporate group by sharing the audit status and riskrelated matters of each Group company. The Internal Audit
Department also conducts audits of Group companies ona regular basis and reports to the Board of Directors andthe Audit and Supervisory Board in a timely manner.

(2) Verification of Crossshareholding Suitability

In working to maintain medium- tolong-term relationships and expand
transactions with its business partners,
the Company’s basic policy is to hold
only those stocks that contribute to theenhancement of its corporate value.

In line with the basic policy, verificationof aspects such as the benefits andrisks associated with the holdings
and whether to continue with themis undertaken at Board of Directors’
meetings. The Company shall consider
selling shareholdings that are judged tohave low rationality.

■ Fundamental Principles
Because of our global nature, we at Hirata Corporation as well as each of our Group companies abide by a set of establishedrules we call our Code of Conduct. We strive for total compliance with the Code to effectuate commercial endeavors that areboth fair and transparent always in accordance with legal statutes both domestically and abroad along with societal norms andin-house regulations.

■ Code of Conduct
Based on our business principles, we at Hirata are fully aware of our mission and role as a corporate entity with respect to ourvalued customers, shareholders, business partners, employees as well as the members of our local communities. To make acontribution to society at large, the following Code of Conduct is applied to all employees of every company in the Hirata Group
with every single employee having the responsibility of maintaining and improving upon them.
1. Abiding by legal statutes and regulations
2. Engaging in fair and just business3. Disclosure of corporate information

4. Proper management and utilization of
corporate assets
5. Contribution to society

Note: For more details on each of these items please visit:

6. Respecting the individual
7. Controlling confidential information
8. Duty of practice and accountability

https://www.hirata.co.jp/en/corporate/csr/compliance

Compliance System

Cross-shareholdings(1) Approach to Cross-shareholdings

Compliance Charter(3) Criteria for Exercising Voting
Rights Relating toCross-shareholdings
With regard to the voting rights
relating to the shareholdings, thesewill be exercised in an appropriatemanner with the sustainable growth of
the issuing company as an evaluation
criterion and on the premise that they
will contribute to the improvement of
the Company’s corporate value.

• Compliance Promotion Framework
Having established a Compliance Committee that reports
to the Board of Directors, the Company formulates
compliance measures and, should a compliance violationarise, conducts investigations and analyses, issues ceaseand desist orders, and formulates measures to prevent a
recurrence based on Board of Directors’ resolutions andinstructions from the Representative Director. Including theimplementation status of each measure and the operational
status of the internal whistleblowing system, reports arealso made to the Board of Directors.
• Efforts to Strengthen ComplianceTraining sessions on compliance, which for example
cover the Act against Delay in Payment of Subcontract
Proceeds, Etc. to Subcontractors, security export controls,
and harassment, are conducted as appropriate for Group
employees.
Having conducted compliance fact-finding surveys since
fiscal 2020, the Company is continuing to conduct a variety

of measures and education based on the survey results.
The Company has also set up a compliance webpage on its
intranet, on which educational and other materials based on
violation case studies are regularly posted for employees.
Board of Directors
Instructions

Reports

Compliance Committee
Committee Chair(Representative Director, President)

Audit and Supervisory
Board members

Committee Vice Chair(Can attend Committee meetings andstate their opinions)(Person in charge of risk management)

Full-time Committee Members
Non-permanent Committee Members
Compliance Committee Secretariat
Investigations/Cease andDesist Orders/Guidance

Reports

All Departments
Divisional compliance promotion managers

Whistleblowing System (Compliance Hotlines)
The Company has established a whistleblowing systemthat enables reports from domestic and overseas Group
company employees and suppliers. In addition to an internal
hotline that accepts reports, we have put in place anexternal point of contact that enables anonymous reportingin the local language, and a supplier hotline that can beused by suppliers. Each hotline has a system that complies
with the amended Whistleblower Protection Act, and the54

Hirata Integrated Report 2022

helpline operation regulations stipulate confidentiality ofwhistleblower information and prohibit disadvantageous
treatment of a whistleblower on the grounds of having
passed information.
Processed in accordance with regulations, any suchinformation received is reported to the Board of Directors
via the Compliance Committee secretariat.

Hirata Integrated Report 2022

55

GovernanceRisk Management
Risk Management System

Business Continuity Plan (BCP)
Based on its BCP policy, the Company is working toprevent, defend itself against and mitigate risks. In theevent of an emergency, the BCP organization will be central
to the initial response and business continuity/recovery inaccordance with the flowchart for implementing the BCP.

Board of Directors
Instructions

Reports/Proposals

Risk Management Committee
Committee Chair(Representative Director, President)

Audit and Supervisory
Board members

Committee Vice Chair(Can attend Committee meetings andstate their opinions)(Person in charge of risk management)

Full-time Committee Members
Risk Management Committee Secretariat
Reports

All Departments

Ascertaining of/Responding to Risk
The Company has created a Hirata Risk Map that broadlyclassifies 70 risk items into four categories: management
process risks, which include governance; external factor
risks such as market changes; indirect business processrisks that cover human resources and IT systems; anddirect business process risks related to business activities
such as production. Based on the Hirata Risk Map, theCompany has established the main department in chargeof each risk item, and put in place a mechanism whereby
the information collected on assumed and incurred risks

Reports

Persons in charge ofIT security

Matters of concern Aggregation of
informationthat may affectmanagement/
Risks that havealready emerged

External factor risks
Risks from external inﬂuencessuch as natural disasters

Direct business process risks
Risks directly related to businessactivities such as production
and design

Discusses risk mitigation/
recurrence prevention

Reports

Compliance Committee
Compliance
Committee
Secretariat

Risk Management
Committee

IT security policy, rules,
procedures and monitoring

IT Management
Department

IT Systems Managers

IT Managers

AuditsAll Departments

Handling ofrequests Formulation and implementationof measures to mitigate
risk/prevent recurrence

Reports

Incident reports

System Management
Department

Deliberations aimed at
resolving compliance violations

Management Meeting

Indirect business process risks
Risks related to management
infrastructure such as humanresources and legal affairs

Risk Management
Committee
Secretariat

Board of Directors

All Departments

Risk Management Committee

Board of Directors

PolicyExamines risk-handling departments based on
Hirata Risk Map
Determines responses in accordance with nature of
risk/circumstances

Management process risks
Risks related to fundamental
management such as governance

Hirata Integrated Report 2022

Management Meeting

IT Security Committee

Committee meetings held should
Company-wide response be required

Contact customers, suppliers andall persons concerned

Support clients and Support employees
partner companies
and businessresources
Adjust and restore deals
Administer emergency
aid and restoration

Handleﬁnancial liabilities
Ensure, pay and ﬁnanceworking capital

Restoration and reconstruction

IT Security

Risk Integration Department

Hirata Risk Map

56

is aggregated by the Risk Integration Department that has
been placed in overall charge.
From the aggregated risk information, the Risk
Integration Department comprehensively reviews factorsthat include the nature of the risk, the likely magnitudeof its impact, and the level of priority. Deliberations are
conducted by the Risk Management Committee andCompliance Committee, and reports made to the Board of
Directors as necessary.

Initial response, BCP operations
Establish task force, conﬁrm conditions of damage and personnel’s safety

Draft policy for continued operationof core business, establish system
From few days to few
months after occurrence

Monitoring

Occurrence of emergency

Activities to assist
affected region/area

Non-permanent Committee Members• BCP Policy
To as far as possible avoid unexpected disasters or
problems that could endanger business continuity, we plan
to continue business by having extracted risks in advance,and preventing, defending ourselves against and mitigating
those risks, and to restore business operations in a shortperiod of time in emergency situations.
• Give top priority to the lives and safety of employees andtheir families.
• Minimize any negative impact on our customers’
businesses.
• Assist our stakeholders.
We review our Business Continuity Plan on a regularbasis for continuous improvement.

• Flowchart for Implementing BCP
From day of occurrence

To deal with events that may interfere with the achievementof its business goals or hamper sustainable management,
the Company has established a Risk Management
Committee that reports to the Board of Directors.
Headed by the Chief Risk Officer (CRO), company-widerisk management is carried out in accordance with theCompany’s Risk Management Regulations. The Committee
formulates and implements measures to prevent theoccurrence or recurrence of risk and monitors risks basedon information collected from all departments.
The Internal Audit Department verifies theimplementation status of the initiatives that have beenformulated and implemented.

Internal audits

IT Security Management
To protect information and information assets, including IT
equipment, from threats such as leakage and damage as well as
to conduct its business activities safely and securely, the Company
established an IT security basic policy and formulated IT security
management regulations.
To act as a management system, we have established an
IT Security Committee while reviewing policies and regulations,conducting risk analysis, and monitoring IT security measures,
including those of Group companies and the supply chain. In theevent of a security incident, we form a response team in accordancewith set procedures so that we can respond swiftly.

Efforts to Strengthen IT Security
To ensure the safety of the IT assets handled by the Company, we
have implemented a raft of measures from both system and humanresource perspectives. As an example of one such system, we haveintroduced an Endpoint Detection and Response (EDR) service toquickly implement appropriate countermeasures against new threats,such as previously unknown computer viruses and targeted threat
emails. We are working to improve IT security literacy by providing
our employees with IT security education and targeted threat email
training.

Hirata Integrated Report 2022

57