Governance

Progress of Activities

　Following is the status of activities for FY 2018 and the plan for FY 2019 in the field of corporate governance.

FY 2018 Results

Corporate Governance Priority Measures	Tasks	Indicator	Evaluation	Main Results
Internal control and governance	Supporting internal control activities of domestic and overseas companies	Prepare an executive handbook	△	Explanation of responsibilities during executive training
Compliance and risk management	Conducting briefing sessions about harassment	3 times	○	700 participants
CSR procurement promotion	Revise the promotion system and methods	Implement a revision based on exchanges with other types of industries	○	By participating in the Global Compact Network Japan Supply Chain Subcommittee, collaborated and cooperated with other companies
	Promote in-house education	Implement CSR procurement training targeting those responsible for procurement	○	Development of original training tools, and training for a total of 66 procurement staff and new employees

FY 2019 Initiatives and Goals

Internal control and governance	Establish a nominating committee		Establish
	No. of important deficiencies that should be disclosed		Zero incidences
Compliance and risk management	Conduct compliance training for those posted overseas		Conduct compliance training in group training of foreign location managers
CSR procurement promotion	Create an education tool through collaboration with other companies		One incidence

Corporate Governance

　The DOWA Group positions the strengthening of corporate governance as one of the highest management tasks, and we are working on group-wide efforts to develop and operate a system that is effective and efficient in contributing to society and for internal control.

Corporate Governance System

　At the DOWA Group, in order to operate the organization soundly and efficiently, and at the same time to speed up decision making and to boost management efficiency, in addition to adopting an executive officer system, we have adopted a holding company system and have separated our business divisions into subsidiaries. In addition, by establishing the board of corporate auditors, and by appointing outside directors, we are trying to ensure the soundness of management.

Board of Directors and Directors

　The board of directors is composed of eight directors (seven men and one woman), including two outside directors appointed in consideration of their expertise and background, with attendance by four auditors, including three outside auditors. With regards to their decisions for business execution and the supervisory function of the board of directors, we evaluate the effectiveness of the board of directors every year with the aim of continuous improvement. 　In the fiscal year that ended in March 2019, the board of directors met 15 times, and the attendance rate of outside directors was 100%. In addition,outside directors and auditors hold regular meetings to exchange opinions and ensure cooperation.

Evaluation results on the effectiveness of the board of directors

　We conducted a questionnaire (self-evaluation) for all directors and auditors, including those outside the company, and through discussions with the board of directors, analyzed and evaluated the effectiveness of the entire board of directors.

With regards to basic policies and initiatives about governance, please see our report about corporate governance.

Status of voluntary committees that have been established

　With the advice of the compensation committee, which consists of outside directors and outside experts, the executive compensation system is designed to incorporate an objective perspective, such as the consolidated business results of our group, dividends to shareholders and external compensation levels. For particularly important matters, such as the appointment and dismissal of executive managers, the nominating committee has been established to obtain advice from an objective position. Both committees consist of five or more members, including two outside directors, one outside auditor and one outside expert. The chairperson is elected by the board of directors and, in principle, the committees meets once a year or more.

Compliance

　At the DOWA Group," compliance" is positioned as the basis of corporate management. The" DOWA Group's Values and Code of Conduct" has been established for each employee to not only comply with the laws and regulations, but also carry out activities in accordance with the common sense of society. Together with contributing to society through our business activities, the whole group is working to establish and operate an effective internal control system. In addition, each company in the DOWA Group aims to improve the awareness of compliance as they deal with the annual internal audit.

Internal Control Activities

　In order to strengthen corporate governance in the DOWA Group, the holding company and each group company share the basic policy and basic system for internal control, and by utilizing the uniqueness of each company for specific activities, we are aiming for an effective and efficient internal control according to the holding company system.

Please refer to our annual report on the basic policy and operation status with regards to the internal control system.

Internal Reporting System

　In order to encourage early detection of risks associated with corporate activities, and aiming for employees to feel more secure and comfortable in the workplace environment, we have set up a "DOWA Consultation Desk" that allows direct consultation with external lawyers. Confidentiality concerning the report, and that the person reporting is not subject to disadvantageous treatment, are both guaranteed, and it becomes commonly known through the intranet, posters and group reports.
　Moreover, in order to build a healthier partnership with suppliers and cooperating companies, we have also set up a point of contact at the DOWA Consultation Desk for those outside our company, and have made it possible for employees of suppliers and cooperating companies to use it. At this point of contact, confidentiality is kept for the consultations made and opinions given, and we respond promptly and appropriately.

Risk Management

　The DOWA Group works on risk management with the goal of properly controlling risks that may hinder the realization of our business philosophy and achievement of our business plans, and to fulfill our social responsibilities, and to contribute to the improvement of our sustainable corporate value. Among the risks surrounding the group, the board of directors is responsible for“ business risks”, and the environmental and safety department is responsible for“ CSR risks” in cooperation with other departments.

Participation in International Organizations and Consortium

　In March 2009, the DOWA Group endorsed and signed the UN Global Compact (UNGC), which are voluntary principles of corporate action proposed by the United Nations. We respect the 10 principles in the four fields of “human rights, labor, environment and anti-corruption” that are listed in the UN Global Compact, and we are working toward the sustainable development of society.

　We reflect the principles of the Global Compact, such as respect for human rights and elimination of child labor, in the formulation of our CSR procurement policies and guidelines. We are also actively participating in the activities of the Global Compact Network Japan (GCNJ), UNGC’s local network in Japan. In FY 2018, we participated in the “Supply Chain Subcommittee” of GCNJ, and while cooperating with various companies, we work to promote its activities.

Global Compact Network Japan

Initiatives for Human Rights and Anti-Corruption

　Based on the 10 principles of the UN Global Compact, the DOWA Group prohibits unfair discrimination, child labor and forced labor due to nationality, race, ethnicity, religion, gender, age or disability, and works to prevent corruption. Regarding human rights, we conduct a questionnaire annually of our operating subsidiaries, including offices overseas, and work to understand the current situation.