Governance

The Group will establish effective governance frameworks to ensure the transparency, objectivity, and fairness of the management of its companies and earn society’s trust everywhere it operates.

Internal Control

Global governance

Our Group has developed into a global company that operates in 30 countries and regions with about 34,000 employees. We have endeavored to strengthen its global governance through a series of actions, such as shifting to a company with a Nominating Committee, etc. structure in March 2020, separating business execution and supervision, and simplification of the ownership structure due to the acquisition of 100% ownership of the Asian JVs. Consequently, decision-making on the business execution has been further expedited, and the Board of Directors has become able to supervise the business execution with higher independence and objectivity. In March 2021, our Group established the Purpose to play an important role as we develop as a global paint company based on Powerful Partnerships. Our Group respects the management autonomy of its partner companies, and has positioned the Purpose as the shared identity of our Group, while respecting the management philosophies and visions set forth by each partner company. Under the leadership of Representative Executive Officers & Co-Presidents Wakatsuki and Wee, which started in April 2021, we will step up collaborations among our Group businesses worldwide that are expanding through M&A and other strategic initiatives. The Board of Directors, which supervises such initiatives, has reinforced a global audit system centered on the Audit Committee, and has been discussing the revision of the Corporate Governance Policies and appropriate forms of global risk management and internal reporting(whistleblowing) system. In these ways and others, the Board of Directors will continue improving the global governance of the Group.

Promotion of global audits

The Audit Department ensures the independence and appropriateness of audits by establishing double reporting lines to the Audit Committee and Representative Executive Officer & Co-President. Based on an internal audit plan approved by both, the Audit Department evaluates the effectiveness of the internal control systems, including governance, processes, and risk management from the perspective of risks. The activities of the Audit Department in fiscal 2021 include support to some partner companies in Japan and overseas to improve their maturity level through audits. Additionally, the Audit Department will accelerate a variety of efforts to enhance auditing skills and quality by applying advanced auditing know-how of overseas partner companies to domestic audits. Through these efforts, the Audit Department will improve and reinforce the group-wide internal audit system, thereby aiming at establishing the framework of “Audit on Audit” system based on the results of internal audits conducted by each site.


Global audit structure chart

Basic policy on internal control (Basic policy on internal control systems)

The Company, as a listed holding company, respect the independence and autonomy of its subsidiaries and, in order to ensure the sound and lawful business operations of the entire corporate group consisting of the Company and its subsidiaries (hereinafter referred to as "the Group"), based on this policy, establish an internal control system of the Group, continually assess the contents of the system and its operation, and take necessary improvement measures.
The Company shall, by making ongoing reviews on this policy in accordance with changes in the management environment, endeavor to maintain and operate more effective internal control system.

  1. Basic Approach to the Development of Internal Control Systems
  2. Matters concerning execution of duties by Executive Officers
  3. Matters relating to ensuring the appropriateness of business operations of the corporate group
  4. Matters concerning the execution of duties by the Audit Committee

Basic policy on internal control systems (Revised on January 1, 2022)

Operation status of internal control system (Internal Control System Operational Status Report)

The operational status of the internal control system is reported to shareholders as “Operational status of the system necessary to ensure the properness of operations.”

Operational status of the system necessary to ensure the properness of operations (Revised on February 26, 2021)

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