Corporate Governance

We believe that the primary objective of corporate governance is to constantly enhance corporate value by increasing management efficiency and by securing soundness and transparency in every phrase of business activities. We recognize the fulfillment of this aim as our most important management issue. Additionally, we have adopted the company auditor system and established the Sumitomo Osaka Cement Corporate Governance Policy in order to achieve sustainable growth and enhance corporate value over the medium to long-term.

The details of our basic policies, frameworks and guidelines are set out in the SUMITOMO OSAKA CEMENT CORPORATE GOVERNANCE POLICY.

Status of meeting bodies and internal control system

Corporate Governance System

Board of Directors and executive officers

The Board of Directors consists of eight Directors, including two Outside Directors and convenes meetings at least once monthly to make decisions regarding material matters affecting management and to receive reports on the status of business operations. We have also introduced the executive officer system in order to separate management decision making and supervision from actual execution and to raise management efficiencies by reinforcing each function, speeding up decision making and clarifying authority and accountability.

Reason for election of Outside Directors
Kunitaro Saida Mr. Saida has served as the Superintendent Public Prosecutor of the Osaka High Public Prosecutors Office and has experience as an outside director and outside corporate auditor for other companies. As a result, we have determined that Mr. Saida can utilize his excellent discernment and broad experiences to fulfill his duties appropriately.
Akira Watanabe Mr. Watanabe has been a university professor, dean, and president, while he has also been involved in university administration and operations. As a result, we have determined that Mr. Watanabe can utilize his excellent discernment and broad experiences to fulfill his duties appropriately.

There are no instances where either Outside Director has a conflict of interest with general shareholders, and their independence has been verified.

Board of Company Auditors

The Board of Company Auditors consists of five Company Auditors, three of which are Outside Company Auditors. Company Auditors take part in Board of Corporate Auditor meetings convened at least once monthly as well as attend other important company meetings, including meetings of the Board of Directors.

Reason for election of Outside Company Auditors
Fuminori Tomosawa Mr. Tomosawa has been a university professor and served as a member of the Science Council of Japan. As a result, we have determined that Mr. Tomozawa can utilize his excellent discernment and broad experiences to carry out audits from an objective standpoint.
Shoji Hosaka Mr. Hosaka has served as a director and company auditor for other companies. As a result, we have determined that Mr. Hosaka can utilize his excellent discernment and broad experiences to carry out audits from an objective standpoint.
Kazuo Suzuki Mr. Suzuki has broad experiences and advanced knowledge of corporate management from his many years as a Certified Public Accountant. As a result, we have determined that Mr. Suzuki can utilize this to carry out audits from an objective standpoint.

There are no instances where any of the Outside Company Auditors has a conflict of interest with general shareholders, and their independence has been verified.

Remuneration Committee

The Remuneration Committee, as an advisory body to the Board of Directors, deliberates on the remuneration of Directors and executive committee members, taking into account Directors’ performance and contribution to the sustainable growth of the Company, from the standpoint of the validity of remuneration standards and the objectivity and transparency of performance evaluations, and then makes recommendations to the Board of Directors.

Compliance

We have established the Compliance Committee chaired by the President to establish, spread and elevate the compliance awareness of all executives and employees of the Sumitomo Osaka Cement Group, including executive officers, contract employees and temporary employees. Also, we have formulated the Regulations of the Compliance Committee in order to clarify the roles and responsibilities of the committee.

Compliance Committee

The Compliance Committee creates a compliance action plan every fiscal year and monitors its progress.

Compliance audits are carried out by the Internal Audit Department mentioned below, with the results reported to the Compliance Committee. The Compliance Committee takes appropriate action, when necessary, based on the results, and reports the results of audits to the Board of Directors and Company Auditors.

Risk management

We have established the Risk Management Committee, chaired by the President, in order to identify, evaluate and respond to risks facing the entire Group. Additionally, we have formulated the Regulations of the Risk Management Committee in order to clarify the roles and responsibilities of the committee.

Risk Management Committee

The Risk Management Committee prepares an action plan for risk management every fiscal year and monitors its progress. Audits on the status of risk management are carried out by the Internal Audit Department, with the results reported to the Risk Management Committee.

The Risk Management Committee takes appropriate action, when necessary, based on the results, and reports the results of audits to the Board of Directors and Company Auditors.

Information security

Basic policy on the protection of personal information

Following the basic principles of Japan’s Act on the Protection of Personal Information, we consider the appropriate handling of personal information to be an important management task, and as such, we have established our own basic policy. We determine policies and the in-house organizational structure for the protection of personal information in accordance with this basic policy.

Policy on the Protection of Personal Information
(1) Acquisition

Sumitomo Osaka Cement obtains personal information using legal and fair means.

(2) Use

Sumitomo Osaka Cement shall use personal information within the scope of the purpose of use indicated when the information is obtained wherever necessary for its business operations.

(3) Provision to third-parties

Sumitomo Osaka Cement shall never provide personal information to third parties without the prior consent of the individual, except instances where prescribed by laws and ordinances.

(4) Management

1. Sumitomo Osaka Cement shall manage the personal information in its possession in a secure manner while maintaining its accuracy.
2. Sumitomo Osaka Cement shall take appropriate information security measures to prevent the loss, destruction, modification or divulgation of the personal information in its possession.
3. Sumitomo Osaka Cement shall never divulge personal information caused by taking it offsite or transmitting it.

(5) Disclosure, revision, suspension of use, and deletion, etc.

Sumitomo Osaka Cement shall respond promptly when an individual requests that his/her own personal information in the company’s possession be disclosed, revised, suspended from being used, or deleted.

Organizational structure for protecting personal information
(1) Personal Information Protection Manager

Sumitomo Osaka Cement shall appoint a Personal Information Protection Manager who will promote and ensure thorough protection of personal information.

(2) Making it known to all executives and employees

Sumitomo Osaka Cement shall make the protection and appropriate handling of personal information known to all executives and employees.

(3) Establishment of regulations, etc.

Sumitomo Osaka Cement, in order to implement this policy, shall establish company regulations on the protection of personal information and ensure that all of its executives and employees are familiar with and execute the regulations to promote the protection of personal information.

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