1. Securing Appropriate Business Execution by UBE and Group Companies
The basic mission of the UBE Group, comprising UBE and its Group companies, is to secure sustainable growth throughout the Group and enhance corporate value over the medium and long term. To achieve these goals, it is important to establish effective corporate governance to enable the UBE Group to ensure the sustainability of appropriate business activities, and fulfill its responsibilities to all stakeholders including shareholders, customers, business partners, employees, and communities, while striving to earn their confidence.
A. Group Management and Consolidated Management of Internal Companies
- a. Group management
- The President is entrusted by the Board of Directors to serve as Group CEO in overseeing the business execution of the UBE Group. The Group CEO outlines the direction of business execution and sets objectives for internal companies, and determines the allocation of business resources in terms of distributing personnel, material, and financial resources to achieve the objectives of each internal company. Furthermore, the Group CEO endeavors to address important matters of business execution that are beyond the scope of the authority of internal companies.
- b. Management of internal companies and business execution
- Business resources are allocated to internal companies, guided by the direction agreed with Group management. Internal companies strive to effectively use these resources and execute their business autonomously to achieve their objectives.
- c. Group administration
- Corporate administrative departments within the UBE Group assist with the formulation of strategies for Group management and management of internal companies. These departments also procure business resources comprising personnel, material, and financial resources, to efficiently serve both the shared and specific needs of business departments.
B. Decision Making
UBE uses the following system for meetings on management decisions, in order to separate governance and management in running the company and secure the transparent and efficient execution of management.
- a. Board of Directors
- The Board of Directors deliberates on and makes decisions about matters that are stipulated in the Companies Act of Japan, and the basic corporate direction of the companies and important matters of business execution, from a medium- and long-range perspective on behalf of the interests of shareholders. Furthermore, UBE shall appoint outside directors in order to provide an independent, third party perspective for decision making and monitoring of management, and secure the efficiency, transparency, and objectivity of management. UBE also employs a Nominating Committee and an Evaluation and Compensation Committee, which are each made up of several directors and report to the Board of Directors.
- b. Group Strategic Management Committee
The Group Strategic Management Committee deliberates on and makes decisions about allocation of resources for the entire Group and matters needing coordination within the Group, as well as important matters that impact the entire Group.
The Group CSR Committee, which deliberates on and makes decisions about important matters that relate to the Group's corporate social responsibility (CSR), together with the Group Environment and Safety Committee and the Group Product Safety Committee, report directly to the Group Strategic Management Committee. Furthermore, the Compliance Committee, Competition Law Observance Committee, Information Security Committee, Restricted Cargo and Export Management Committee and Crisis Management Committee, report directly to the Group CSR Committee.
The High Pressure Gas Safety Committee juxtaposed with Group Strategic Management Committee deliberates on and makes decisions about important matters about security of chemical plant as a security measures headquarter specified in High Pressure Gas Safety Law.
- c. Company Operating Committee and Division Operating Committee
- The Company Operating Committee and Division Operating Committee deliberate and decide on important matters at the internal company and business division levels, including business strategy for UBE and Group companies. These decisions are guided by the Group Management Guidelines and rules of each Operating Committee.
2. Securing the Regulatory Compliance of Directors and Employees, and Adherence to the Articles of Incorporation in Executing Their Duties of UBE and Group Companies
The UBE Group has developed a set of Personal Action Guidelines outlining the Company's corporate ethics. The guidelines outline the standards and criteria for compliance in corporate activities, which directors and employees are expected to adhere to.
UBE appoints compliance officers who are responsible for securing and promoting compliance throughout the company, and operates a Compliance Committee that includes a legal adviser and acts as an advisory body for compliance officers.
Especially, UBE establishes Competition Law Observance Committee to prevent impeding free and fair competition and to secure soundness of business operations.
Furthermore, UBE shall make it a basic condition of export management to prohibit the illegal export or supply of restricted cargo and technology that are subject to export regulations aimed at maintaining international peace and safety, including foreign exchange and international trade legislation. The Company operates a Restricted Cargo and Export Management Committee to ensure that these restrictions are comprehensively communicated within the UBE Group.
In addition, UBE operates the UBE C-Line as a direct hotline for directors and employees to report on compliance matters by surpassing normal channels. This encourages rapid reporting and swift correction of compliance issues.
The Personal Action Guidelines outlines the UBE Group's basic commitment to eradicating anti-social forces. In addition, the Board of Directors has established a Basic Policy for Anti-Social Forces. The policy outlines specific strategies to block relations with anti-social forces such as entities and organizations that threaten civil society, and directs the Company's steadfastly refuse to meet unreasonable demands.
UBE will furthermore ensure that there is an internal framework in place to secure compliance with accounting standards and other regulations, and ensure the reliability of financial reporting.
3. Preservation and Management of Information concerning Execution of Duties by Directors of UBE
Documentation including magnetic recordings are stored and also made viewable as needed, in accordance with regulatory requirements and internal rules relating to the Board of Directors, internal memos, Group Strategic Management Committee, Company Operating Committee, and Division Operating Committee.
UBE will report on essential matters to the directors of Group companies, in accordance with the rules of various committees stipulated by UBE. Additionally, Group companies have a duty to immediately report on important events at their companies to UBE.
4. Rules and Other Measures for Risk Management at UBE and Group Companies
UBE identifies risks that could hinder the achievement of business objectives, and assesses the probability and impact of the risks in order to implement suitable measures, in the decision making by the Board of Directors and Group Strategic Management Committee.
The UBE Group Environment and Safety Committee and UBE Group Product Safety Committee oversee risk management in the respective areas of environment and safety, and safety and quality control for products. The committees formulate policies and implement measures for the entire UBE Group.
The following committees also pursue risk management for specific areas of risks.
- A. Information Security Committee
- The Information Security Committee develops information security policies, and endeavors to ensure that all employees are familiar with the policies while monitoring compliance. The committee also prepares rules and regulations for information security.
- B. Crisis Management Committee
- The Crisis Management Committee operates a unified framework for internal and external crisis management. The committee prepares manuals that outline procedures for information gathering and prescribe the internal and external response to swiftly handle emergencies that arise in and outside of Japan.
5. Securing Efficient Execution of Duties by Directors of UBE and Group Companies
UBE uses a system of executive officers to separate governance and management in running the company. The framework enables executive offers to concentrate on executing business, and facilitates faster decision making. It also clarifies the role of the Board of Directors to maximize shareholder value from a medium- and long-range perspective, on behalf of the interests of shareholders.
The Board is chaired by a director who does not serve as an executive officer. By monitoring the suitability and efficiency of business execution, the Board endeavors to increase transparency and maximize shareholder value while minimizing risks.
UBE continually studies its corporate governance and strives to strengthen and speed up its business execution, to achieve strategic decision making and better corporate governance.
As written in the first basic policy ("Securing Appropriate Business Execution by UBE and Group Companies"), Group companies as part of the UBE Group will also endeavor to ensure that their directors efficiently execute their duties through Group management and management of internal companies.
6. Framework for Support Staff where Required by Corporate Auditors, Independence of Support Staff from Directors, and Securing the Effectiveness of Instructions from Corporate Auditors to Support Staff
UBE assigns dedicated staff to assist corporate auditors. The support staff assist with formulating audit plans and audits by corporate auditors, to facilitate the efficient and smooth execution of audits under the supervision of corporate auditors. Performance review of the support staff shall be conducted by a corporate auditor designated by the Board of Auditors, and personnel transfers and disciplinary actions against staff must be authorized by said corporate auditor.
Corporate auditors consult with the representative director and outside directors with regards to enhancing support staff, securing independence from directors, and securing the effectiveness of instructions that corporate auditors issue to support staff.
7. Reporting by Directors and Employees of UBE and Group Companies, and Corporate Auditors of Group Companies, to UBE's Corporate Auditors; Prohibiting Adverse Treatment Due to Reporting
Directors and employees of UBE and Group companies, and corporate auditors of Group companies, shall immediately report to UBE's corporate auditors, if they uncover a major legal violation by UBE or a Group company, important facts related to compliance, or facts that could potentially be seriously damaging. UBE shall prohibit adverse treatment of personnel because of the reporting, and make UBE and Group companies fully aware that such adverse treatment is prohibited.
8. Policy for Reimbursing (After or In Advance) Expenses for the Execution of Duties by Corporate Auditors, and Handling of Other Expenses and Liabilities from Execution of Duties
When a corporate auditor issues an invoice to be reimbursed in advance for executing duties, UBE shall pay the expenses or debts without delay, unless after discussions it is discovered that the expenses or liabilities connected with the invoice are not essential to the duties of the corporate auditor concerned.
9. Other Matters concerning Audit Execution by Corporate Auditors
To ensure that corporate auditors are kept aware of the process for important decisions and status of business execution, corporate auditors attend meetings of the Board of Directors and other important meetings to provide feedback. In addition, corporate auditors review important approval documents and can request business reports from directors, etc.
Corporate auditors regularly meet with directors including the representative director, to verify the management policy and exchange opinions on important issues. Corporate auditors regularly exchange information with internal audit departments and auditors of Group companies, and request internal audit departments to investigate matters as required.
Furthermore, corporate auditors receive briefings from UBE's independent accounting auditors on the accounting audit plan and audit results, and work collaboratively with independent accounting auditors through the regular exchange of information.