Governance

Corporate Governance

Policies

To maximize our corporate and shareholder values, we recognize the importance of establishing a fair and sound corporate management system and a managerial structure that enables quick and accurate decision making to accommodate an ever-changing business environment, and the execution of legitimate and appropriate business operations. To that end, we are currently working to improve and enhance our approach to corporate governance.

Corporate Governance Structure

Board of Directors

Meetings of the Board of Directors are held regularly on a monthly basis and whenever necessary to discuss and decide important agenda items and the execution of important business concerning the Group’s management policies and strategies. It supervises the management from an independent and objective standpoint.

Board of Managing Directors

The Board of Managing Directors mainly consists of representative directors, managing directors, executive directors, senior executive officers and statutory auditor. They hold discussions at the meetings before making decisions on the execution of business operations.

Management Meeting, etc.

Mainly comprising the president and the head of the Company’s business divisions (including those who serve concurrently as director or executive officer), the Management Meetings and the Division Head Meetings are held to report and discuss matters concerning the execution of businesses at the business divisions, in order to expedite decision making processes and ensure that unified decisions are reached. On a Group-wide level, twice a year, in order to facilitate consolidated management within the Group, the Domestic Group Company Meeting is held by the top executives responsible for the management of the domestic Group companies; the Global Budget Meeting is held by the top executives of the overseas Group companies to discuss their budgets; and the Global Strategy Meeting is held to discuss global strategies with regard to sales, technology, quality control and manufacturing. Through these meetings, we share and reaffirm the direction in which the entire Foster Group is heading, and reinforce collaborative efforts within the Group.

Nominating Committee and Remuneration Committee

The Company has established Nominating and Remuneration committees as advisory organizations offering voluntary advice to the Board of Directors. These committees are designed to enhance fairness and transparency in selecting and appointing people to managerial positions, and in determining the details of their remuneration, etc. Each committee consists of representative directors, managing directors, directors, standing statutory auditors, and statutory auditors (currently a total of six members including two independent officers).

Corporate Governance Guidelines

The Foster Group has established Corporate Governance Guidelines that express our basic way of thinking and framework with regard to corporate governance. Details of these guidelines can be viewed here(Japanese):

http://www.foster.co.jp/csr/foster_group/pdf/20160401_corporate_governance_guideline.pdf(PDF:195KB)

Corporate Governance Report

This report describes the concept and structure of our corporate governance in accordance with the regulations of the Japanese stock exchange.

Foster Group Corporate Action Guideline

The Foster Group has established Corporate Action Guideline that express our actions with public decency in compliance with laws and regulations inside and outside of Japan, international rules, and their spirit and intent as well as corporate ethics.

Foster Group Corporate Action Guidelines:
http://www.foster-electric.com/csr/governance/pdf/corporate_action_guideline.pdf(PDF:18KB)

Compliance

Policies

The Group emphasizes compliance (with laws, regulations and corporate ethics) as a core element of its CSR philosophy and promotes a compliance program—setting internal rules and building a structure for management—to all Group companies.

Compliance Structure

The Foster Group places emphasis on the internal whistleblowing system to promote compliance. Such system is under operation through the Compliance Hotline that connects whistleblowers to corporate lawyers or the highly independent Internal Audit Office to early detect violations of compliance. The whistleblowing hotline is extensively available to employees and officers of the entire Group as well as to their families and the employees of business associates.
For the protection of whistleblowers, internal regulations are established and disseminated to ensure that are treated fairly or not involved in any trouble as a result of the their act.
Another specific effort is to reinforce the development and operation of internal control systems, with a focus on meeting the internal control requirements of the Financial Instruments and Exchange Act, the J-SOX requirements, for the reliability of financial reports. Currently, the business operational processes at the Group’s headquarters and 11 major business locations are under supervision for compliance with the J-SOX requirements.

Organization of the Compliance Committee (The same applies to the Risk and Crisis Management Committee)

Compliance Committee

Compliance efforts are led by the Compliance Committee based on the respective internal regulations.
In fiscal 2017, a compliance test was conducted to help improve awareness of compliance among employees, and in an initiative led by the Compliance Committee, an outside expert (lawyer) was invited to lecture to employees with the objective of making compliance related issues known and ensuring thorough observance.

Risk Management

Policies

The risk management activities of the Foster Group are focused on predicting risks and taking preventive measures so that such risks will not materialize. They also focus on minimizing damage to the Company should a risk develop and materialize, resulting in the occurrence of danger. Specifically, we have established a structure for prompt response in the event of a crisis and a response structure for any serious risk or incident when it is predicted. Meanwhile, we are strengthening the risk management structure for usual conditions under our basic operation policy of enhancement and global expansion of risk management ability and crisis responsibility.

Risk Management Structure

As the foundations for the Foster Group's risk management structure, we have established the Rules on Risk and Crisis Management and the Risk and Crisis Management Committee with the president as the chairman to identify risks using a checklist, analyze such risks and promote preventive measures on a Group-wide basis.
In the event of any incidents or accidents, we will set up a task force, mainly consisting of the Risk and Crisis Management Committee members, and take prompt measures to minimize damage, ensuring restoration of the original state as early as possible and preventing any recurrences.

Risk and Crisis Management Committee

As the basic operation policy in fiscal 2017, we promoted the enhancement and global expansion of risk management ability and crisis responsibility and established a structure for prompt responses in the event of a crisis and a response structure for any serious risk or incident when it is predicted, and enhanced the risk management system for usual conditions. In fiscal 2017, we extracted important items to be monitored at the Risk and Crisis Management Committee and held the Risk and Crisis Management Committee on a regular basis (once every three months). Through the regular implementation of the Risk and Crisis Management Committee meeting, we established a Foster Group-wide health and safety management structure, reviewed the business continuity plan (BCP) and monitored the establishment of the bribery prevention structure. In addition to those activities, we extracted important items to be monitored in fiscal 2018 at the Risk and Crisis Management Committee, aiming to enhance the risk and crisis management structure.

Our Stance on Tax Matters

Basic Stance

The Foster Group works to maintain and improve tax compliance and perform proper filing and payment of taxes in accordance with the local tax-related laws and international rules.

Dealings Between Affiliated Companies

The Foster Group determines prices for dealings between its affiliated companies based on the principles of pricing between independent companies. Taxes are paid in a timely and appropriate manner according to the earnings based on tax laws and agreements in each country.

Relationship with Tax Authorities

The Foster Group works to reduce tax uncertainty by responding in good faith to prior consultations and related information disclosure to tax authorities. In addition, it uses the Advance Pricing Agreement (APA) to obtain prior agreement with tax authorities.

Transparency

The Foster Group prepares and discloses its financial statements in compliance with the Financial Instruments and Exchange Act and related laws. It also discloses tax information in the financial statements based on the related laws and regulations.
The Foster Group also understands that the BEPS (Base Erosion and Profit Shifting) project by OECD is essential to prevent international tax avoidance and abusive tax planning and to secure the transparency of taxes through the disclosure of tax information. As such, it gives proper responses.

Business Continuity Plan (BCP)

Policies

The Foster Group is taking steps to prevent and avoid various business risks and crises as risk/crisis control and to minimize the damage to the Company and avoid inconvenience to customers should a risk occur or be embodied, with the highest priority given to preventing the recurrence of risks/crises.
In these activities, the Company has developed the “Business Continuity Plan” in order not to suspend important business operations in the event of disaster and even when operations are suspended, resume them as quickly as possible to minimize the effects on customers and other stakeholders and enable a smooth response to an emergency.

Activity Promotion Structure

The Foster Group promotes business continuity through the function recovery activities undertaken by each function department of headquarters and through collaboration with the task forces at each site in accordance with the decisions made by the Risk and Crisis Management Committee consisting of its senior management.

Main Activities and Measures

Operation of the emergency-contact network (safety confirmation system)

To keep the headquarters functional, Foster Group has introduced a safety confirmation system using mobile phones that allow headquarters to issue an emergency notice to confirm the safety of its employees and their families when an earthquake, disaster, or other emergency occurs.

Certification of Excellent Fire Prevention Property

As one of the disaster-prevention activities, our headquarters is certified as an Excellent Fire Prevention Property under the cooperation of the Akishima Fire Department. This year, we renewed the certification for the first time. The activities of our self-defense fire fighting force were inspected by the fire department. We will unite all the employees, including the self-defense fire fighting force, to continue our certification and do activities as a company needed by the local community.


Certification of Excellent Fire
Prevention Property


Presentation ceremony for the certification of
Excellent Fire Prevention Property

Disaster drills conducted by headquarters and domestic offices

Once a year, the Foster Group conducts disaster drills involving all employees at headquarters and domestic offices. At headquarters, a drill was conducted in February 2018. Firefighting training, evacuation guidance training and so on were conducted by the self-defense fire fighting force.


Disaster drill (Headquarters)

Information sharing and health and safety activities with overseas sites

Our headquarters and other departments share the information on the disasters and accidents that occurred at overseas sites and actions taken for them via the regular video conference.

Disaster drills at overseas sites

The Foster Group appoints a person in charge of BCP for each overseas site and conducts activities for continuing business globally. We also implement disaster drills on a regular basis to improve our employees’ disaster prevention skills so that they can react without confusion in the event of a disaster.


Evacuation drill (Vietnam)


Firefighting training (China)


Injured person rescue training (China)


Night evacuation drill (Indonesia)

Responsible Procurement

Basic Principles of Procurement

Basic Principles of Procurement

CSR Procurement

Policy for Conflict Mineral

Green Procurement

Green Procurement