Global

Select Country

Contact Us

Global

Select Country

close

Sustainability
CSR Site Map
Close

Corporate Governance

Basic Concepts and Operations for the Internal Control System

The matters determined at the Board of Directors to put in place systems to ensure proper corporate governance in operations are outlined below. (Revised in 2015)

Suntory Holdings Limited (the "Company") hereby establishes the Basic Policy on an Internal Control System outlined below to provide ongoing growth and maximize the corporate value of the entire Suntory Group for the purpose of becoming a global multi-faceted food and beverage company.

Ⅰ. System for Ensuring That the Execution of Duties by Directors, Executive Officers and Employees of the Company, as well as by Directors, Executive Officers, Others with Equivalent Duties and Employees of the Company’s Subsidiaries Conform with Laws and Regulations and the Articles of Incorporation

  1. 1.
    The Suntory Group shall adhere to the basic principles outlined below based on the Suntory Group's Code of Business Ethics.
    The Company shall respect the rules of civil society and place the utmost importance on an organization and corporate culture that prioritizes compliance with the aim of fulfilling the corporate philosophy of the Suntory Group on the basis of the Group's awareness of itself as a global corporate citizen.
    Each and every one of the Directors, Executive Officers, and employees shall carry out business activities by making decisions for the organization based on social ethics as a corporate citizen.
  2. 2.
    All Directors, Executive Officers, and employees of the Suntory Group shall have a working mindset to comply with laws and regulations as well as with social ethics in order to put the corporate philosophy mentioned above into action. The Directors and Executive Officers shall take the initiative in complying with laws and regulations, the Articles of Incorporation, and business ethics, and actively make efforts to maintain and improve compliance management.
  3. Principle 3:
    The Global Risk Management Committee as well as each risk management committee put in place throughout the Suntory Group (the Global Risk Management Committee and each risk management committee at each Group company shall hereinafter be referred to as the "Risk Management Committee") shall promote a compliance system and deliberate priority issues. In addition, each Group company shall put in place a department in charge of compliance to conduct periodic education and training activities as well as establish and promote compliance systems throughout the Suntory Group with the Risk Management Committee at the core to ensure the comprehensiveness of activities.
  4. Principle 4:
    The Risk Management Committee as well as the departments in charge of compliance shall appropriately report content of deliberations and activities to the Board of Directors and the Board of Auditors.
  5. Principle 5:
    The Directors, Executive Officers and Auditors of the Suntory Group shall report any compliance issues that are discovered immediately to the Risk Management Committee. In addition, the Company shall put in place compliance hotlines inside and outside of the Company to allow employees of the Suntory Group to directly report on compliance related issues. The Risk Management Committee shall investigate the contents of any report it receives after working to obtain any relevant information, discuss the issue with relevant departments as necessary, take corrective actions, establish measure to prevent any recurrence and put in place systems to implement any measures formulated throughout the entire Group.
  6. Principle 6:
    Directors and Executive Officers shall be dispatched to subsidiaries as necessary to appropriately execute business, make decisions and perform supervision. In addition, the relevant departments of the Company shall provide advice, guidance and support to the subsidiaries.
  7. Principle 7:
    The Audit & Supervisory Board or equivalent persons ("Auditors") shall be deployed to subsidiaries as necessary to perform audits. In addition, the Auditing Department shall carry out internal audits of subsidiaries.
  8. Principle 8:
    The Auditing Department shall carry out internal audits pertaining to the status of compliance and the appropriateness for operations of employees of the Suntory Group, and report the results of the audit to the Representative Director and President.
  9. Principle 9:
    Internal control systems shall be established and maintained to ensure the appropriateness of financial reporting.
  10. 10.
    Directors and Executive Officers of the Suntory Group shall establish and promote a system to prevent any relations with antisocial forces and clearly reject any improper demands that are made.

Ⅱ. System for the Preservation and Management of Information Concerning the Execution of Duties of Company Directors

  1. 1.
    Officers in charge of general affairs shall store and manage vital internal documents as well as revise and improve document management rules and other regulations as necessary.
  2. Principle 2:
    Directors and Executive Officers shall store and manage minutes of the shareholders meetings, minutes of Board of Directors meetings and documents pertinent to important decision-making (including electronic or magnetic records, the same applies hereinafter) as well as other important information related to the execution of duties by Directors and Executive Officers in accordance with laws and regulations as well as internal rules.
  3. 3.
    The documents and other materials mentioned above shall be kept in a condition such that allows for Directors to view them as necessary.
  4. 4.
    The Risk Management Committee shall establish and promote an informational security governance system that does not only protect and preserve information, including personal information, but also increases corporate value by use of information.

Ⅲ. Regulations and Other Systems for Managing Risk of Losses of the Company and Its Subsidiaries

  1. 1.
    The strategic decision making related to the management of the Suntory Group shall be determined by the Board of Directors.
  2. 2.
    Each Executive Director and Executive Officer shall hold responsibility for addressing risks inherent in business execution. Moreover, material risks shall be analyzed and evaluated, and improvement plans shall be discussed and determined by the Board of Directors.
  3. Principle 3:
    The Risk Management Committee as well as the Quality Assurance Committee shall comprehensively and collectively manage material risks related to Group management such as risks incidental to the execution of business and quality risks throughout the entire Group. In addition, regulations and guidelines pertaining to management of such risks shall be established, and training activities thereof shall be implemented as necessary.
  4. Principle 4:
    The Board of Directors shall promptly select Directors or Executive Officers who will hold responsibility for addressing newly emerging material risks related to Group management to determine a course of action to address such risks.

Ⅳ. System for Ensuring that Directors of the Company and Directors and Executive Officers of the Company’s Subsidiaries as well as Others with Equivalent Duties Execute Their Duties Efficiently

  1. 1.
    The Company shall determine Company-wide goals shared by the Directors, Executive Officers, and employees of the Suntory Group, and Directors and Executive Officers in charge shall specify efficient methods for achieving such goals, such as specific targets and appropriate allocation of authority aimed at achieving the Company-wide goals.
  2. Principle 2:
    Directors and Executive Officers in charge shall confirm progress made in achieving goals and report the specific measures to achieve the goals to the Board of Directors and the Management Committee.
  3. 3.
    Each Director and Executive Officer shall be in charge of appropriately executing business operations and shall strive to make decisions efficiently under the Responsibility and Authority Rules.

Ⅴ. System for Reporting to the Company Matters Related to the Execution of Duties by Directors and Executive Officers of the Company’s Subsidiaries

  1. 1.
    The status of the business execution of Directors and Executive Officers at subsidiaries shall be regularly reported to the Board of Directors and the Management Committee.
  2. Principle 2:
    Directors and Executive Officers in charge of subsidiaries shall request reports on the status of business execution from the Directors and Executive Officers of the subsidiaries as necessary.
  3. 3.
    Certain matters concerning management of subsidiaries must be consulted with and reported to the relevant departments, or otherwise must receive approval from the Board of Directors of the Company under the Responsibility and Authority Rules.
  4. 4.
    The Auditing Department shall report the internal audits results of subsidiaries to the Representative Director and President as necessary.

Ⅵ. Other Systems for Ensuring the Appropriateness of Business of the Group Consisting of the Company, Its Parent Company and Its Subsidiaries

Dealings between Group companies, including the parent company and public subsidiaries, shall ensure appropriateness in matters such as conducting business and deciding on business matters to provide objective and rational content.

Ⅶ. Matters Regarding Auditors of the Company and Employees Who Are Requested to Assist in their Duties, Matters Regarding the Independence of Such Employees from Directors and Executive Officers, and Matters Related to Ensuring the Effectiveness of Instructions Given to Such Employees

The Company shall place employees to assist the duties of auditors after deliberation if necessary for the Audit & Supervisory Board.
In addition, the Company shall respect and execute directions of the Board of Auditors such as the transfer and evaluation of such employees, and ensure the independence of such employees from Directors and Executive Officers.
Moreover, such employees shall follow the instructions and directives from the Audit & Supervisory Board when assisting in the duties of auditors.

Ⅷ. Systems for Directors, Executive Directors and Employees of the Company and Directors, Executive Directors, Audit & Supervisory Board Members, Others with Equivalent Duties and Employees of the Company's Subsidiaries or Other Persons Who Receive Reports from Such Persons to the Company’s Audit and Supervisory Committee and Other Systems Related to Reporting to the Audit and Supervisory Committee

  1. 1.
    Audit & Supervisory Board Members shall attend Board of Directors meetings, and the Representative Director and President as well as the Directors and Executive Officers in charge shall provide reports of business execution that they are in charge as necessary.
  2. 2.
    Directors, Executive Officers and Employees of the Suntory Group shall promptly and clearly respond to inquiries about operations and assets when requested by auditors to report on businesses.
  3. 3.
    The Auditing Department of the Suntory Group shall regularly hold liaison conferences between Directors and the Board of Auditors of the Company to report the current status of matters such as internal audits.
  4. 4.
    The departments in charge of internal reporting systems shall report the status of internal reports to Auditors and the Board of Auditors of the Company as necessary.

Ⅸ. System for Ensuring the Person Who Has Reported to the Company's Audit & Supervisory Board Are Not Treated Adversely Based on the Fact Such a Report has Been Made by the Person

The Directors, Executive Officers and employees of the Suntory Group shall prohibit any adverse treatment based on a report to the Audit & Supervisory Board through a department in charge of compliance or another reporting system.

Ⅹ. Systems for Ensuring Advance Payment or Reimbursement of Expenses Arising in Conjunction with the Execution of Duties by Audit & Supervisory Board Members of the Company and Other Policies for Processing Expenses and Obligations Arising with Respect to Execution of Such Duties, and Other Systems for Ensuring That the Audit & Supervisory Board Effectively Performs Audits

  1. 1.
    If the Audit & Supervisory Board, in conjunction with the execution of its duties, asks the Company for advance payment, etc. of expenses under Article 388 of the Companies Act, the Company shall promptly process such expenses or obligations, unless they are not necessary for the Audit & Supervisory Board Members to execute their duties.
  2. 2.
    The Audit & Supervisory Board shall strive to communicate and exchange information with the Audit & Supervisory Board of Company subsidiaries or the Auditing Department.
  3. 3.
    The Board of Auditors shall put in place opportunities to exchange opinions with the Representative Director and President as well as accounting auditors.

Overview of the Operational Status of Internal Control Systems

The Company recognizes the importance of establishing an internal control system for matters such as Group-wide risk management and compliance to maximize greater sustainable growth and corporate value of the entire Suntory Group for the purpose of becoming a global multi-faceted food and beverage company.
An overview of the operational status of the internal control systems for the current fiscal year are outlined below.

1) Operational Status of Risk Management Systems

  • -
    The Company has regularly held the Global Risk Management Committee and each Risk Management Committee installed within the Suntory Group to identify risk of the Suntory Group, formulate countermeasures, and confirm the progress of the response.
  • -
    The activity content of the Global Risk Management Committee was reported at the Board of Directors meetings.
  • -
    The Quality Assurance Committee was regularly held for quality risks to identify challenges in quality assurance for the Suntory Group, to formulate countermeasures, and to confirm the status of response.
  • -
    Information security rules were put in place at the various companies for proper storage and management of information. ・Initiatives were also conducted to prevent improper informational management and the leak of confidential information before it happens such as the implementation of awareness raising activities about informational management.

2) Status of Compliance Initiatives

  • -
    We have installed a worldwide common contact point for reports encompassing all Group companies in Japan and even overseas as part of our global risk management system. We align ourselves with ways to resolve and prevent the recurrence of problems by responding through actions such as corrective measures and recommendations according to surveys in-line with the protection of privacy for everyone related to each report that are carried about by the Compliance Department and departments in charge at each Group company. Furthermore, we have established an internal reporting system to thoroughly protect people who report an issue such as restricting unfair handling for not only the people who report an issue but also for people cooperating in investigation.
  • -
    The Company strives to improve compliance awareness even further by introducing awareness surveys about matters such as compliance and the organizational climate for all employees of the Group in Japan with the Compliance Department at the core and feeding those results back into compliance operations.
  • -
    The Suntory Group formulated the Global Anti-bribery Policy and the Global Anti-bribery Guidelines that define the concepts against corruption in the Suntory Group for all employees around the world and it is emphasizing education and training about the anti-bribery regulations.

3) Status of Initiatives to Improve the Efficiency of Business Execution

  • -
    Board of Directors meetings were held 21 times to make management decisions such as the formulation of the Mid-term Plan and budgets as well as investments in M&A and equipment.
  • -
    The financial results of the Suntory Group are reported at the Board of Directors meetings to confirm and debate the achievement status of management targets at the Suntory Group, management challenges and their countermeasures.

5) Operational Status of the Board of Auditors

  • -
    The Audit & Supervisory Board receives reports on business execution from Directors, Executive Officers and other management through attendance at important meetings such as the Board of Directors and Risk Management Committee meetings.
  • -
    The Board of Auditors and Audit & Supervisory Board receive regular reports on the status of matters such as internal audits from the Auditing Department.
  • -
    The Audit & Supervisory Board communicates and exchanges information with the Audit & Supervisory Board of Company subsidiaries or the Auditing Department.
  • -
    The Board of Auditors puts in place opportunities to exchange opinions with the Representative Director and President, outside Directors as well as accounting auditors.

6) Operational Status of Internal Audits

The Auditing Department conducts internal audits of each department of the Company and subsidiaries in Japan and overseas, provides instructions and guidance for improvements as necessary, and reports the results of audits to the Representative Director and President as necessary.

We welcome your feedback