Business Report - Shiseido group website

• Clarifying the allocation of responsibility (Introduction of the corporate executive officer
system and the like)
• Enhancing management transparency and soundness (Establishment of the Remuneration
Advisory Committee and the Nomination Advisory Committee)
• Reinforcing supervisory and auditing functions (Inviting external directors, appointing
highly independent external directors and external auditors)
• Strengthening decision-making function (Establishment of the Corporate Executive
Officer Committee and the like)
In order to strengthen these functions, the Company has adopted the framework of a
company with the Board of Corporate Auditors system as its base to which it has integrated
the superior functions of a company with Committees.
7.2 System under Which Execution of Duties by Directors Is Ensured to Comply with
Laws, Ordinances, and the Articles of Incorporation of the Company; System under
Which Business of the Company Is Ensured Duly to Be Conducted (As of March 31,
2012)
The Board of Directors held on May 31, 2011, revised “Basic Policy regarding
Internal Control Systems” established by Board of Directors held on May 12, 2006 due to
establish structure encouraging corporate ethical activities.
“Basic Policy regarding Internal Control Systems” of the Company is as follows.
(1) System under Which Execution of Duties by Directors and Employees Is Ensured to
Comply with Laws, Ordinances, and the Articles of Incorporation of the Company;
System under Which Business of the Company and Its Subsidiaries and Affiliates as a
Group Is Ensured Duly to Be Conducted
The Board of Directors shall determine important matters which will affect the Company
and its subsidiaries and affiliates as a group. The representative directors of the Company
shall regularly report the status of execution of business to the Board of Directors. The
Company shall appoint external directors to strengthen and maintain the Board of Directors'
supervisory functions in regard to operational execution. The corporate auditors audit legality
and appropriateness of the director's execution of business. Upon request of any corporate
auditor, directors and employees shall report the status of execution of business to the
corporate auditor.
In order to realize “Our Mission,” which defines the Shiseido’s Group corporate
philosophy and business domains and sets out its raison d'être, the Company has established
“Our Values,” which must be held and shared by each and every employee of the Shiseido
Group, and “Our Way,” which sets out the action standards for business conducts with highest
ethical standards, and promotes corporate activities that are both legitimate and fair. (*)
The “CSR Committee,” under jurisdiction of the Board of Directors, shall be responsible
for improving the quality of the Company by enhancing legitimate and fair corporate activities
of the group, and risk management. The committee shall propose and report the plans and
activities to the Board of Directors.
The Company positions a “Corporate Ethics Promotion Leader” at each domestic business
office and a "Corporate Ethics Leader (CEL)" at each overseas office, who shall promote
legitimate and fair corporate activities, and the Company shall conduct regular training
programs for compliance. The “Corporate Ethics Promotion Leaders” and the "Corporate
Ethics Leaders" shall report the status of such activities to the “CSR Committee”.
The Company shall provide multiple reporting and consultation help lines, which include
external lawyers, to detect and correct at an early stage actions that contravene the law,
ordinances, the Articles of Incorporation and other regulations of the Company.
Internal auditing shall be conducted with respect to the overall group companies to assure
[Translation: AGM 2012]
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