Governance

At Mitsuba, the Board of Directors makes decisions on important managerial matters, and the operating officers execute the decisions under the supervision of the directors. As a director-auditing system, under Mitsuba's board of auditors, the duties and their execution are audited by the auditors for their compliance with laws and regulations.

Mitsuba aims to fulfill our corporate social responsibility by practicing our corporate philosophy. We have established the CSR Risk Management Committee as a deliberative body, with our CEO as chairperson, in charge of handling all risk of potential losses that Mitsuba may incur as well as the organizing of all our CSR efforts.

In addition, our directors are dedicated to taking the lead in compliance with our code of conduct in order to enhance the awareness of compliance across the Mitsuba Group in order for Mitsuba to become a trusted company that answers the expectations of society.

Based on the laws, regulations, statutes, and Mitsuba's rules, we will fairly and properly manage and save information related to the directors' execution of his/her duties as well as other important documents such as financial data and minutes from the board meetings and other managerial decision-making. We have formulated the Confidentiality Rules for the protection of confidential information, including our development data. The Confidentiality Rules set forth the management system and approaches to proper handling of information, as well as serves the purpose of preventing unauthorized access.

Furthermore, we will continue to protect personal information and preserve documents in accordance with the relevant laws and regulations, as well as our rules, including the "Basic Policy for Personal Information Protection" and "Document Management Rules."

Mitsuba formulated rules for risk management to minimize our risk. As part of our CSR efforts, through the above-mentioned CSR Risk Management Committee, we will respond to the risk of any potential loss that Mitsuba may incur. Two sub-organizations are placed under the CSR Risk Management Committee in order to further support the enhancement of the Mitsuba brand.

The Supply Chain Risk Subcommittee handles production-related risks. This subcommittee is responsible for identifying risks in terms of quality assurance and stable supply of products in the realms of production, procurement, and logistics, as well as risks from the perspective of disaster prevention. It also performs other necessary operations such as instructions for countermeasures, audits and improvements.

Covering other areas, the Compliance Committee is set up to handle the risk of other losses, and takes actions that cover group companies.

Should a company-wide crisis occur, Mitsuba will without delay establish the Company-wide Action Headquarters and Local Action Headquarters for mutual collaboration in order to deal with the issue as a group.

In order to ensure swift decision-making, Mitsuba adopts the operating officer system, in which operating officers are entrusted with business operations decided by the Board of Directors. The Corporate Officers Committee (including representative directors and full-time auditing officers), which consists of executive officers, deliberates and makes decisions on key business matters. The Executive Committee (including representative directors and full-time auditing officers), consisting of operating officers, shares information. Operating officers manage the organization based on their duties and authorities in order to achieve efficient business operations. Certain Board of Directors meetings require the attendance of operating officers, in order for them to receive reports on the status of execution, and thus achieving the directors' supervisory responsibility.

Mitsuba mapped out the midterm (3-year) business plan and the annual business plans along with profit targets. Individual departments devise specific action plans that are necessary for the attainment of business plans and goals, and carry them out. The business plans are revised in a timely manner should a sudden change in the business environment occur.

Mitsuba will continue to abide by the laws, regulations, and social norms through our compliance efforts at Mitsuba and our affiliated companies. The Compliance Committee, mentioned above, will implement education and training targeting our employees on compliance with statutes and corporate ethics. As part of such efforts, we have formulated the code of conduct "Our Rule-abiding Conduct" and disseminated it across the group.

To check the status of the employees' performance of their duties, the Internal Auditing Department conducts internal audits (business operation audits and accounting audits) to ensure internal checks and balances, and provides instructions for necessary improvements.

In addition, Mitsuba has established a system for internal reporting. As a contact for when the management or a group employee discovers wrongful conduct or notices a sign thereof, we have the "Mitsuba Consultation Desk" for reporting such matters and receiving consultations. The names and other information of reporters to the Consultation Desk are kept secret, and Mitsuba ensures that such reporters do not incur any disadvantage from reporting.

Mitsuba has, as part of our consolidated management efforts, grouped the Group companies into three domains, each with a supervisory company assigned to it. Additionally, the Group Executives Committee is organized by the members of the Corporate Officers Committee (including representative directors and full-time auditing officers) and representatives of each domain's supervisory company, and decides on the Group's management strategies and distribution of business resources. Through such operations, we as a corporate group will intensify our consolidated management framework. At the same time, Mitsuba also respects the autonomy of the supervisory companies in domain management while building and operating internal control centering on Mitsuba.

Mitsuba has employees that assist the duties of auditing officers. Particulars concerning the selection/assignment, relocation, and evaluation of such assistants are deliberated on and decided by the auditors and the General Affairs Department. The employees who assume this role are not subject to instructions or orders by any director in relation to the auditors' duties in which they are to assist.

Directors and employees must report appropriately to an auditor in a timely manner on the status of major business operations and other key matters that involve the Group's business, operations, and finances. The auditing officers attend the meetings of the Board of Directors and Corporate Officers, as well as other meetings that are deemed important to managerial decision-making and business execution in order to monitor and verify the decision-making process on substantial topics and the carrying out of business operations.

In order to ensure the effectiveness of auditing, the auditing officers attend the meetings of the Board of Directors and Corporate Officers, as well as other meetings that are deemed important to managerial decision-making and business execution, and request reporting and explanations as necessary. Auditing officers interview representative directors, other directors, operating officers, heads of departments and other necessary individuals based on the auditing policy and plan established by the Board of Auditors, as well as inspect bases in and out of Japan for information to be shared.

The Internal Auditing Department and the accounting auditors are to work closely together to approximate the annual auditing plan and request, as necessary, explanations and reports on the status of mid-term auditing and term-end auditing results. By holding periodic information sharing sessions, we intend to ensure effective auditing.

To ensure reliability and fairness in our financial reports in accordance with the Financial Instruments and Exchange Act, Mitsuba continually conducts evaluations to ensure that our systems are effectively and appropriately functioning based on the "Internal Control Rules for Financial Reports," and if any problem is discovered, implement the necessary corrective actions.

Mitsuba does not tolerate relationships with anti-social forces as per the code of conduct "Our Rule-abiding Conduct." We do not affiliate with anti-social forces, which disrupt social order and security, or any individual or company that is associated with such an organization.