YKK GROUP

ORGANIZATIONAL GOVERNANCE

The YKK Group has created a foundation for fulfilling its corporate social responsibilities and is engaged in activities with the aim of enhancing its corporate value.

Corporate Governance

Basic Policy related to Corporate Governance

The corporate activities of the YKK Group are based on the spirit of the “Cycle of Goodness,” which embodies the belief that “no one prospers without rendering benefit to others.” Under this philosophy, being consistently fair is the foundation of all management activities, while the management principle “YKK seeks corporate value of higher significance” describes the commitment, direction, and consistency of management. It is in accordance with this philosophy that the YKK Group strives to further enrich its corporate governance system and enhance corporate value. The Group’s corporate governance is based on a system of management bodies in which the Board of Directors functions as an executive decision-making (e.g. management policies and other important matters) and supervisory body, while the Board of Corporate Auditors serves as an auditing body. Meanwhile, Officers are responsible for the execution of business and operations.

Internal Control

Development Status of the Internal Control System

  1. 1.

    System to ensure that the performance of duties by Directors complies with laws and regulations as well as the Articles of Incorporation

    • Directors engage in the appropriate execution of duties in strict compliance with the Board of Directors’ regulations and regulations pertaining to the execution of duties by Directors.

    • A Director in charge of compliance is assigned to develop the YKK Group compliance system. The Director reports to other Directors and Corporate Auditors regarding the status of the development of the compliance system, state of compliance, and other matters.

    • Since March 2006, Directors regularly participate in compliance training programs led by lawyers and others, and submit to YKK Corporation (the “Company”), a written oath to comply with laws and regulations in executing their duties as Directors.

  2. 2.

    System to store and manage information related to the execution of duties by Directors

    • Appropriate document control is implemented by establishing the retention period of important documents (including electronic records) based on internal regulations, such as document control regulations and confidential information management regulations.

    • Minutes of important meetings, such as meetings of the Board of Directors and Management Meeting, are appropriately prepared, stored, and managed by the division in charge according to the regulations of the relevant meeting and with accurate descriptions of such matters as the proceedings, deliberation results, and important statements.

  3. 3.

    Regulations and other systems related to the management of the risk of loss

    • A Chief Risk Management Officer (CRO) was appointed in April 2005, and the Quality Committee, Foreign Trade Control Committee, Crisis Management Committee, Technical Asset Management Committee, and Information Security Committee were established to promote the management of risks to which the YKK Group is exposed.
      Related regulations have been prepared and are implemented.

    • A Chief Financial Officer (CFO) was appointed in April 2005, and the financial risks are appropriately managed on the basis of the YKK Group’s basic policies on the management of such financial risks. In February 2006, a system for appropriately managing the investment risks to which the YKK Group is exposed was created through establishment of the Investment Council chaired by the CFO. Since April 2008, the CFO has put into effect and is promoting internal control related to financial reporting.

    • The Guidelines for Addressing Risks has been prepared (established in April 2005; revised in March 2010) and the response to be made during the occurrence of risks stipulated to enable risks to be addressed adequately and promptly.

  4. 4.

    System to ensure that the duties of Directors are effectively executed

    • The Officer System was introduced in June 1999 and management and execution separated so as to enable the faster execution of business and operations. This allows Directors to concentrate on realizing optimization for the overall Group. Meanwhile, Officers execute, with responsibility and authority, the businesses and operations of which they are in charge in accordance with the policies determined by the Board of Directors.

    • The Management Meeting was established in July 2003 as a means to carry out thorough discussions of the YKK core values, management policies and strategies, important items for resolution by the Board of Directors, and other matters. We strive to increase the efficiency of deliberations made by the Board of Directors by carrying out the resolutions of the Board of Directors after such deliberations by the Management Meeting.

    • The Management Meeting determines the environmental policies and measures of the YKK Group.

    • The Environmental Policy Promotion Committee was establishing under the Management Meeting. It determines the environmental policies and measures of the Company and monitors the state of the promotion of environmental measures in business operations.

  5. 5.

    Systems to ensure that employees comply with laws, regulations and the Articles of Incorporation in the execution of their duties

    • The Corporate Legal and Compliance Group was established under the Officer in charge of compliance. It collaborates with external compliance advisors to further develop the YKK Group’s compliance system. Specifically, it
      (1) undertakes awareness-raising among employees in relation to compliance by holding regular workshops,
      (2) develops a reporting and consultation system for matters related to compliance,
      (3) establishes and operates the Disciplinary Action Committee, and
      (4) develops monitoring functions.

    • A whistleblowing system was established in January 2006 with the objective of preventing violations of laws, regulations, and internal rules, and protect those who report such violations.

    • The Company continues to develop internal systems in order to prevent any association with adversarial forces and has established provisions, assigned a department in charge, reviewed contractual clauses, and has built a relationship of trust with external bodies such as the police and related organizations, endeavoring to collaborate with them as necessary.

    • Based on annual audit plans, internal audits are implemented from both legal and rational viewpoints, with the audit results continually reported to the President and Officers.

  6. 6.

    System to ensure appropriate business operations of the joint-stock corporation and the corporate group consisting of the parent company and subsidiaries

    • Under the consolidated management structure of the YKK Group, we appoint Group Officers from important domestic subsidiaries (core companies) in Japan and regional headquarters of the Six-Region Global Structure, etc., and put in place in April 2004 a system that enables each regional headquarters to manage and supervise the subsidiaries in its region to ensure that they are executing their duties appropriately.

    • Important matters related to the execution of duties by subsidiaries are, on the basis of the regulations of the Board of Directors, subject to discussion and resolution by the Company’s Board of Directors.

    • The Company has an appropriate understanding of the business performance and financial state of its subsidiaries through monthly reports on consolidated monthly performance given at the Board of Directors meeting by the Director in charge.

  7. 7.

    Matters regarding employees requested by Corporate Auditors to assist with their duties and the independence of such employees from Directors

    • A Board of Corporate Auditors Secretariat was established effective April 1, 2007, and staff members assigned exclusively to assist with the duties of Corporate Auditors are in place.

    • Corporate Auditors must agree to any transfers or performance evaluations of employees serving on the Board of Corporate Auditors Secretariat.

  8. 8.

    System for Directors and employees to report to Corporate Auditors, and other related systems

    • Matters related to the execution of major business operations by the Company and its subsidiaries as well as the state of the development of the internal control system, etc., are reported to Corporate Auditors on a timely and regular basis. In the case that any events arise that are material to the Company, such matters are promptly reported to the Corporate Auditors.

    • If a material violation of laws or regulations is discovered through the whistleblowing system, the Secretariat of the YKK Group Whistleblowing System reports to Corporate Auditors the content and result of investigating the alert.

  9. 9.

    Other systems to ensure that audits by Corporate Auditors are effectively implemented

    • In addition to attending meetings of the Board of Directors, Corporate Auditors are permitted to attend other important meetings, such as Officer’s meetings.

    • The Chairman of the Board and President hold, on a regular basis, meetings for the exchange of opinions with Corporate Auditors.

    • The Internal Audit Division collaborates with Corporate Auditors, such as by reporting the content of their activities as needed, and cooperates in the enhancement of the effectiveness of audits carried out by Corporate Auditors.

    • The system is such that the Company’s Corporate Auditors also engage in the audits of important domestic subsidiaries (core companies) in Japan. Furthermore, Corporate Auditors of subsidiaries in Japan and abroad as well as their internal audit divisions report regularly or as needed based on requests to do so by the Company’s Corporate Auditors. This ensures a system in which audits of all subsidiaries are carried out effectively.

Risk Management

Basic Policy related to Risk Management

The YKK Group appoints a Chief Risk Management Officer (CRO) and clearly states its risk management policy. At the same time, it has established Quality Committee, Foreign Trade Control Committee, Crisis Management Committee, Technical Asset Management Committee, and Information Security Committee and develops and operates related regulations in order to promote risk management.

YKK Group Risk Management Policy

To promote risk management Group-wide and enhance corporate value by proactively controlling risk levels, preventing various corporate risks, and reducing or avoiding human, material and other losses of managerial resources, as well as keeping to a minimum the damages and losses incurred during emergencies.


Risk Management Structure

Risk Management Structure

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