Basic Policy to Establish the Internal Control Systems
For information on the establishment of Nippon Paper Industries internal control system, please refer to the following basic policy.
"System to Ensure Directors' Compliance with Laws, Regulations, and the Articles of Incorporation"
To ensure the proper and sound execution of the Company's business, the Board of Directors shall establish an effective internal control system and a framework for compliance with laws, regulations, and the Articles of Incorporation.
The Audit & Supervisory Board shall audit the effectiveness and functioning of the internal control system.
"System to Ensure the Proper Operations of the Company and its Subsidiaries"
System for Storing and Managing Information Related to Directors' Execution of Duties
Statutory documents and other documents pertaining to the execution of duties by directors shall be appropriately stored and managed in accordance with the Document Management Regulations, etc.Regulations and Other Systems for Managing Risks of Loss for the Company and its Subsidiaries
Regarding risks related to the business execution of the Company and its Group companies, the responsible department shall establish necessary rules and guidelines tailored to the nature of each risk. We will endeavor to prevent risks through education and training based on manuals. In the event of a risk materializing, the parent company and its subsidiaries will work together to prevent the expansion of losses for the Group and establish the necessary systems to minimize them.System to Ensure the Efficient Execution of Duties by Directors of the Company and its Subsidiaries
Each body and organization, including the Board of Directors, shall establish a system to ensure that duties are executed appropriately and efficiently, functioning effectively through decision-making rules such as the Board of Directors Regulations, Approval Regulations, and Rules for Segregation of Duties.
We will introduce an executive officer system to separate the overall management oversight and decision-making functions of the Board of Directors from the business execution functions of individual departments by executive officers, thereby clarifying responsibilities and authority.
For each business (Group company), we formulate a medium-term plan, clarify issues and goals, and thoroughly manage performance based on these on an annual basis.
To promote the development of the Group as a whole, the Group Management Strategy Committee is held as necessary to deliberate on important matters concerning the Group, such as management strategies for each business field.
System to Ensure Employees of the Company and its Subsidiaries Comply with Laws, Regulations, and the Articles of Incorporation
The "NIPPON PAPER GROUP Standards of Business Conduct" and "NIPPON PAPER GROUP Code of Conduct" have been established to ensure the thorough dissemination and enforcement of compliance.
The Management Audit Office conducts internal audits of the Company and its Group companies in accordance with the Internal Audit Regulations.
The Group will establish and strictly operate the internal whistleblower system, "NIPPON PAPER GROUP Helpline."
System for Reporting to the Company on Matters Related to the Execution of Duties by Directors, etc., of its Subsidiaries
To ensure the proper execution of the Group's business, the Group has established the Basic Policy on Business Management of Group Companies and the Business Rules of Affiliated Companies. Through approval applications to the Company and a pre- and post-reporting system, the Group appropriately conducts its management.
In addition to the Company's Audit & Supervisory Board, the Audit & Supervisory Board Members preside over the "NIPPON PAPER GROUP Audit & Supervisory Board Members Liaison Committee," which is composed of the Audit & Supervisory Board Members of the Company's major Group companies. They regularly discuss audit policies and methods, exchange information to strengthen cooperation, and thereby ensure the proper execution of business within the Group.
Meetings of presidents of affiliated companies are held as appropriate to receive reports on the current situation and issues of major Group companies.
Matters Related to the System for Employees Assisting the Audit & Supervisory Board Members, Their Independence from Directors, and the Effectiveness of Instructions to Such Employees
An Audit & Supervisory Board Assistant shall be appointed from the Company's employees to assist the Audit & Supervisory Board Members in their duties. The prior consent of the Audit & Supervisory Board is required for such personnel appointments.
Employees assisting the Audit & Supervisory Board Members in their duties shall follow the instructions of the Audit & Supervisory Board Members and give priority to the work pertaining to those instructions.
System for Directors and Employees to Report to the Audit & Supervisory Board Members, Other Reporting Systems to the Audit & Supervisory Board Members, and Systems to Ensure the Effective Conduct of Audits by the Audit & Supervisory Board Members
Directors, executive officers, and employees shall report to the Audit & Supervisory Board without delay if they become aware of a serious violation of laws, regulations, or the Articles of Incorporation, misconduct in the execution of their duties, or any fact that may cause significant damage to the Company. Furthermore, the Audit & Supervisory Board Members may request reports from directors, executive officers, and employees at any time.
In addition, to ensure that information about the Company is properly communicated to the Audit & Supervisory Board Members, we will create an environment where information can be exchanged closely not only through reports from directors, executive officers, and employees, but also with accounting auditors, legal counsel, etc.
The Representative Director shall endeavor to communicate with the Audit & Supervisory Board Members as much as possible, such as by holding meetings. Furthermore, at the request of the Audit & Supervisory Board Members, their attendance at important meetings shall be ensured.
The Audit & Supervisory Board Members shall receive explanations from the Audit & Supervisory Board Members of the Group companies regarding the content of reports received from the officers and employees of those companies at the "NIPPON PAPER GROUP Audit & Supervisory Board Members Liaison Committee."
The department in charge of the Company's "NIPPON PAPER GROUP Helpline" shall regularly report to the Company's Audit & Supervisory Board Members on the status of internal whistleblowing from officers and employees of the Group.
Regulations for the operation of “NIPPON PAPER GROUP Helpline”shall be established, and it shall be clearly stated that users of theinternal whistleblower systemshall not be treated unfavorably, and that internal disciplinary action may be imposed on those who have been treated unfavorably.
The Company shall establish a certain annual budget to cover expenses incurred in the execution of duties by the Audit & Supervisory Board Members, based on the audit plan established by the Audit & Supervisory Board Members.
The Company shall promptly process expenses or debts when the Audit & Supervisory Board Members request the Company to pay expenses in advance, etc., under Article 388 of the Companies Act for the execution of their duties.
Systems to Ensure the Reliability of Financial Reporting of the Company and its Subsidiaries
To ensure the reliability of financial reporting, the Company shall appropriately develop and operate internal controls related to financial reporting in accordance with the Regulations on Internal Control Related to Financial Reporting. It will also continuously evaluate their effectiveness and implement necessary improvements.System for Eliminating Anti-Social Forces for the Company and its Subsidiaries
The Company and its subsidiaries shall have no relationship whatsoever with anti-social forces or organizations. We will take firm action against unreasonable demands and, when necessary, cooperate with external specialized organizations to address such issues.
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