Governance

The Nihon M&A Center Group constantly strives to strengthen and push forward corporate governance, strictly enforcing compliance, implementing risk management and keeping a tight rein on information security.

Compliance

Our group places the utmost importance on on-going compliance activities, which we regard as essential for maintaining and improving trustworthiness in our business.

Underlying compliance principals

Our group has established compliance principals requiring employees to perform duties to society acting in accordance with applicable laws, company regulations and ethical standards, behaving in a fair and appropriate manner.
Our policy for matters such as anti-corruption is manifested in ten articles outlining our Ten Guiding Principles for Compliance Behaviour, respecting the Ten Principles of the UN Global Compact.


We conduct regular training for all of our employees reflecting the importance we assign to compliance.
The Staff Handbook encapsulates internal rules, including those governing management principals, corporate behaviour standards and regulation for observation of compliance, besides topics such as respect for human rights and the prevention of harassment. Not only is it distributed to all employees, but the information is also always available to read on the intranet. At our overseas group offices we strive in various ways to increase compliance awareness using appropriate channels of communication and translated documentation.

Ten Guiding Principles for Compliance Behaviour

These are our Ten Guiding Principles for Compliance Behaviour.

  1. Preservation of confidentiality
    • As employees of this company we pledge to undertake the duty of confidentiality with which we have been entrusted. We act in accordance with all company rules on treatment of information and under no circumstances would we misuse information about our projects.
  2. Prohibition of dealing on insider information
    • Under no circumstances would we as employees of the company misuse inside information or act in a way which might arise to suspicion thereof. Moreover, concerning rules for the trading of shares of our own company, we undertake always to make an application appropriately in advance of any transaction.
  3. Prohibition of relationships with criminal organisations and illicit businesses
    • We disallow any kind of relationship with criminal organisations and illicit businesses, or with any counterparty which may be suspected of a corrupt activity such as bribery. Prior to engaging in a new assignment we conduct an appropriate review process, gathering all necessary information to make careful investigations including face to face contact. Moreover, upon selecting a new alliance partner we do careful research to be sure that the alliance partner candidate has not engaged in any form of corruption, be it in the giving or taking of profit.
  4. Compliance
    • We act in compliance with all laws, conduct business according to ethical standards and deal strictly with any form of illegal action or antisocial behaviour. No individual may act in an illegal or disruptive way such as drink driving, acting violently or being in a state of extreme drunkenness.
  5. Prohibition of discrimination
    • We value acting in a spirit of collaboration and teamwork. We do not tolerate any form of discrimination, bullying, harassment or adultery in our company. The definition of discrimination includes nationality, race, sex, faith, religious or political beliefs, age, disability, sexual orientation and gender identity.
  6. Reports, communication and discussion
    • We continuously and diligently conduct reports, communication and discussion with superiors and colleagues, thereby enabling smooth progression of the business and elimination of risk.
  7. Quality assurance elevation
    • We continuously strive to improve the quality of our business during the process of our assignments by adherence to company rules on matters such as company valuation methodology and scrutiny of contracts.
  8. Prohibition of bribery
    • We maintain a healthy relationship with our clients and associates, under no circumstances receiving or offering bribes, exchanging large gifts, receiving or offering excessive entertainment or engaging in any other such form of inappropriate activity. We regard it as a form of corruption to use designated authority to profit on a personal basis irrespective of whether there is a monetary gain, and any form of corruption is prohibited, be it through entertainment, gifts or profit share.
  9. Accurate reporting and calculation of expenses
    • We accurately calculate and submit claims for expenses or purchases of goods pertaining to the business activities of the company such as travel and entertainment. There is no toleration of inappropriate behaviour such as making claims for private or fictitious expenses.
  10. Delineation of privacy
    • We clearly distinguish between the realms of the company and the individual, not allowing use of the company for furthering private relationships or use of the status as a member of the company to profit in any personal way. Any employee leaving the firm must not engage in any business activity making use of company information or our clients.

Internal notification system

We have put in place an in-house notification system using an external lawyer as a point of contact. We respond in an appropriate fashion upon notification of any kind of breach in compliance, illegal conduct or suspicious activities. This includes bullying, harassment and forms of corruption such as illicit profit sharing, excessive entertainment and gifts. This is applicable to employees bound by employment contracts such as directors, staff and part-time workers, as well as those who are seconded to our firm on a temporary or agency basis. All of this is with a view to strengthening our compliance system and prevent breeches.


The discussions can be done anonymously and under strict confidentiality such that the whistleblower is not disadvantaged in any way and is strictly protected.
Should it nevertheless occur that such a person is put at any form of disadvantage, help will be provided and there will be remediation, with the perpetrator also dealt with in an appropriate manner.

Compliance training implementation status (FY2019)

Applicable employees Period Theme
All employees Mar-20 Anti-corruption
Feb-20 Prevention of insider trading
Jan-20 Risk management
Nov-19 Information security rules, Compliance
Oct-19 Management of working hours, Information security rules
Sep-19 Compliance, Anti-corruption
Jul-19 Information security rules, Information management
May-19 Information management, Prevention of insider trading
Apr-19 Rules on use of printed documents

New employees At start of employment Information security rules
Risk management
Information management
Prevention of insider trading

Investigation, procedures and consequences when compliance regulation is deemed to have been infringed

In the event that a problem arises causing an infringement of compliance regulations, be it a concern this might be the case or that there is any doubt about conformity with compliance, the process outlined in our compliance procedure enables the employee concerned to report the matter to an appropriate party within the company such as a senior officer or a member of the Compliance Committee. A senior officer who has received a report of this kind in turn has the duty to report the matter concerned swiftly to the Compliance Committee, followed by a discussion of the content of the report, which is to be conveyed in turn to the president. The report of the problem received by the president along with the status of the treatment thereof is reported to the Board of Directors along with any related reports from subsidiaries and reports of areas of concern.


The Compliance Committee will research as necessary the subject of the written and verbal reports, taking due care to protect the privacy, individual rights and reputations of all parties including the whistleblower, the purportedly guilty party and those helping with the investigation.
The outcome of this is announced to the person who made the report, the Senior Directors Meeting and the Board of Directors so that it can be used by the Board of Directors for formulation and implementation of measures to prevent a future occurrence. The Board of Directors designates to the Disciplinary Committee the decision on the verdict on what action to take towards the guilty party and it is incumbent upon the president to act accordingly.


As of March 2019 there had not been any instances of reports of such misconduct and there have been no cases of any non-compliant matter having had a significant impact on management of our group.

Risk management

Our group implements a risk management system to ensure that we can respond in a quick and appropriate way to large risks which may adversely impact our business activities.

The Risk Management Committee

There is a regular cycle of monthly meetings convened for the Risk Management Committee, whose members comprise executive directors and a senior manager of the legal department. Besides in-depth discussion of matters pertaining to overall risk administration, including adherence to our Ten Guiding Principles for Compliance Behaviour, the committee reports regularly to the Board of Directors in an appropriate fashion, when necessary with reference to guidance and advice from external parties such as legal advisors whom we may consult.
In this way we have a structure in place to respond quickly to any important matter impacting the business, with swift discussions to reach a mutual understanding.
Moreover, the committee provides encouragement and carries out checks to ensure employees continuously act in accordance with compliance rules and social ethics.
The effectiveness of the Risk Management Committee is evaluated by the Board of Directors with a view to revising the guidelines as and when appropriate. Furthermore, in the event that it is necessary to respond to changes in the business environment that require our reaction to be disseminated to all employees or to respond to a new form of risk category, we have in place measures to report issues and actions of each case appropriately to management.

Responding to incidents

The Risk Management Committee is the first call for when an incident occurs and will act in an appropriate manner at the right time, deciding how the incident should be reported, communicated and discussed, depending on its content, urgency and importance. Also it analyses incidents and takes appropriate measures to prevent a recurrence.

Anti-corruption

Evaluating corruption risk in our business

In order to develop our business activities in other countries it is necessary to understand anti-corruption measures required to operate locally in compliance with laws and regulations and international standards. We put in place the necessary procedures in consultation with both in-house counsel and external legal advisors for corruption risk assessment to prevent risks such as entertainment or present giving which people might think suspicious or dubious; inappropriate cash incentives for generating profit, and any other form of attempt to profit by bribery. Accordingly, employees associated with overseas business undertake training to raise awareness of the risk of corruption in “high risk” emerging markets that may arise from local customs such as excessive entertainment, present or profit giving incentives.

Political contributions

Our Group does not make donations to political parties, political fundraising bodies or individual politicians. In FY 2019 political contributions were ¥0.

Number of cases of employee sanctions or dismissal for contravention of anti-corruption policies

None

Costs arising from fines, penalties or settlements related to corruption

Total: ¥0

Corporate governance

It is of paramount importance for us as a company that corporate governance systems are in place to enable us to contribute continuously to society based on our management principals and to meet the expectations of our various stakeholders.
Through pursuing the highest standards of corporate governance we strengthen oversight and control functions of the business activities of the company, striving on a daily basis to embody the following core principals in our management:

  • Maintain sound and fair management, enforcing compliance
  • Maintain transparency of management, meeting our duty to explain
  • Maintain effective management, working towards maximizing shareholder value

Corporate governance organisation

Our corporate governance organisation is illustrated in the chart

Our corporate governance organisation is illustrated in the chart

Our Board of Directors comprises 13 members including Audit and Supervisory Committee members, with 5 independent directors making up over a third of the total.

Internal control systems

Internal control systems have been put in place to ensure thorough adherence to compliance is reflected in effectiveness and efficiency within business operations in tandem with trustworthy financial reporting.

Commitment to gender mix and diversity in the Board of Directors

Our target is to take into account diversity in the composition of our Board of Directors, including ability, breadth of experience, term of service, age and gender. The Mid-Term Plan aims for the percentage of female members of the Board of Directors to be 10% by 2025. In June 2020 it was 15%.

Terms of reference for the Board of Directors

The Board of Directors undertakes reviews as appropriate to see if any changes are required to the Risk Management Committee and ten compliance principals which form our code of ethics. Furthermore, in the event that it is necessary to respond to changes in the business environment that require our reaction to be disseminated to all employees or to respond to a new form of risk category, we have in place measures to report issues and actions of each case appropriately to management.

Information security

We strive to handle security of information in the best possible way. Confidentiality obligations are of paramount importance to our group's business activities. We give consideration both to what is expected of us by our stakeholders and what is mission critical for our M&A professionals.


Response to incidents

When an incident occurs we respond in a timely and appropriate way based on procedures for reporting, communicating and discussing the incident according to the content, urgency and priority. We then analyse the incident to implement an appropriate policy for the prevention of any reoccurence.

Information security procedures and ISO27001 certification

Our group has built highly secure systems with support from external specialists. We work hard to ensure that we have in place comprehensive rules for information security and that these are fully in operation through training of employees and use of the intranet. Furthermore, systems are verified inter alia by internal audit for operational performance and to see if they remain fit for purpose.
On 25 May 2016 we obtained ISO27001 certification, the Information Security Management System (ISMS) international standard.

Obtaining ISMS certification

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