About Sysmex

Corporate Governance

Basic Policy on Corporate Governance

Sysmex considers reinforcing corporate governance one of its most important management topics. We aim to maximize the overall corporate value of the Group through management robustness, better transparency and improved management speed and efficiency.

Status of Implementation of Corporate Governance Measures

The execution of business, auditing and internal control at Sysmex are described as follows.

Management Organization

Based on the stance mentioned above, Sysmex has adopted the system of a company with an Audit and Supervisory Committee to reinforce the Managing Board’s audit and supervisory function, as well as to heighten management transparency and objectivity. Furthermore, we have introduced an executive officer system to accelerate decision-making on business execution and respond swiftly to changes in the business environment.

■Corporate Governance Structure

Matters Concerning Business Execution, Auditing, Appointments, Supervision and Other Functions

The Managing Board consists of 12 members (including one woman). The board, which meets regularly once a month, in principle, and convenes extraordinary meetings as necessary, is the body for making important management decisions and supervising executive officers.

Sysmex has established the Nominating Committee, an advisory body to the Managing Board on executive appointments, and the Compensation Committee, an advisory body to the Managing Board on executive compensation. Each committee is made up of three or more members of the Managing Board and meets as necessary.
The Audit and Supervisory Committee, comprising Audit and Supervisory Committee members, is a legally independent institution that mainly audits the execution of duties by directors. This committee meets once every three months.

The Global Strategy Committee consists of the chairman and CEO and senior executive officers as an advisory body to assist decision-making by the chairman and CEO. As a rule, this committee meets once a month to deliberate and discuss the Group’s medium- to long-term management direction and important strategies and issues.

The Steering Committee consists of 16 executive officers (five of whom are members of the Managing Board). The committee meets once a month, in principle, to discuss, deliberate and report on projects that are important projects with regard to advancing the Group’s plans for the fiscal year.

In the fiscal year ended March 31, 2021, the Managing Board met 17 times, the Global Strategy Committee 12 times and the Steering Committee 16 times to address matters relating to management strategy and important issues facing the Group.

The Internal Control Committee is made up of the chairman and CEO and senior executive officers and members of the Audit and Supervisory Committee (excluding outside members of the Managing Board). The committee serves as an advisory body to the chairman and CEO, who chairs the committee. As a rule, the committee meets four times each year to deliberate and report on important matters related to the Group’s overall internal controls, including risk management. 

The Compliance Committee comprises executive officers and some division leaders. The committee meets twice each year, in principle, to deliberate and report on important matters related to Group compliance.

Sysmex’s Audit and Supervisory Committee comprises three members, two of whom are appointed as outside members of the Managing Board. Audit and Supervisory Committee members attend meetings of the Audit and Supervisory Committee, Managing Board, Global Strategy Committee and Steering Committee, providing a structure that enables the appropriate monitoring of business execution by members of the Managing Board. The Audit and Supervisory Committee met 20 times in the fiscal year ended March 31, 2021.

The Audit and Supervisory Committee also maintains close relations with the internal audit divisions and divisions in charge of internal control in conducting audits. A system is also in place for the committee to issue directions to the internal audit divisions, if necessary. The Audit and Supervisory Committee works closely with the accounting auditors to confirm the audit plans and the audit results, exchanging information and opinions, such as when conducting internal control related to financial reporting.

Going forward, the Audit and Supervisory Committee will continue to enhance management soundness by auditing and supervising members of the Managing Board, as appropriate, based on laws and regulations.

The Internal Audit Office, consists of 13 employees, and internal audit offices are in place at key subsidiaries. These offices confirm and evaluate the establishment and operational status of the Company’s internal control system from the perspective of the sound development of the Group, issue reports based on the results of its activities, promote appropriate execution of business through improvements, advice and proposals, and conduct internal audits to contribute to the sound management of the Group. 

The Company has contracted with Deloitte Touche Tohmatsu LLC to perform a certified public accountants audit. In addition to conducting an audit of the entire Sysmex Group, the Company maintains an environment that makes it possible to rapidly cope with changes in the accounting system.
The Company has contracts in place with several law offices and maintains a structure to solicit and obtain advice on important matters as necessary.

Basic Policy on Internal Control Systems and Their State of Development

Basic Policy

Sysmex has established and applies a system required for ensuring appropriate operations, which forms the basis for processes required for maintaining organizational soundness and, by realizing the "Sysmex Way", the corporate philosophy of the Sysmex Groupcontributes toward the achievement of business objectives and the enhancement of corporate value. 

The Managing Board has formulated the Basic Policy for the Internal Control System outlined. The board directs and supervises the implementation status of internal controls, confirms the status of its maintenance and operation, as well as its appropriateness, making revisions as necessary. To augment effectiveness, the Internal Control Committee and a specialized organization have been established as organizations dedicated to internal control, that maintains and applies the internal control system. This committee is chaired by the president and representative director, who has overall responsibility for internal control. 
Systems to Ensure the Appropriateness of Business Activities in the Corporate Group

Sysmex has formulated the “Sysmex Way” and core behaviors based on this philosophy and promotes appropriate operations throughout the Group. In accordance with the Basic Policy for the Internal Control System formulated by the Managing Board, Sysmex promotes the overall maintenance and application of internal control across the Group, centered on the Internal Control Committee and a specialized organization for internal control. In each control area, such as compliance and risk management, Sysmex has established administrative sections and committees, formulated related global regulations, and put in place and operates a system to ensure operational appropriateness as a group.

Internal audit offices are in place at key subsidiaries, and Sysmex’s Internal Audit Office conducts audits of the Sysmex Group as a whole from a regional and companywide perspective.Based on its regulations relating to the management of affiliated companies, Sysmex respects the autonomy of the management of subsidiaries and other affiliated companies and ensures the appropriateness of business activities throughout the Sysmex Group by such means as periodic reporting on the details of their business activities and advance discussion concerning important matters.

System for Ensuring the Execution of Duties Is Compliant with the Law and the Articles of Incorporation

The Sysmex Group defines compliance as “the conduct of open and aboveboard business activities on the basis of observance of laws and regulations and high ethical standards” and maintain a system to ensure compliance as described below.

Recognizing that compliance countermeasures are the first and most important way to maintain society’s trust and counter risk, Sysmex operates a groupwide risk management system, under which the Compliance Committee is established as the umbrella organization for compliance. The Sysmex Group has formulated a Global Compliance Code that applies to employees and members of the Managing Board and rigorously ensures compliance through education and training. The Sysmex Group promotes the rapid detection and correction of violations of the law or the Articles of Incorporation by means of an internal compliance-related reporting system, and conducts audits of the compliance structure by means of the Internal Audit Office.  
System for the Retention and Management of Information

Sysmex has formulated Global Document Management Regulations. In accordance with these regulations, the Group appropriately retains and manages minutes of Managing Board and other important meetings, as well as other information relating to the execution of duties by members of the Managing Board, and maintains the information in a state available for inspection as necessary.

Regulations Concerning the Management of Risk and Other Systems

To maintain a structure concerning risk management, Sysmex complies with risk management regulations and strives to mitigate risk, centered on the Internal Control Committee, for the integrated management of internal control throughout the Group. The Internal Control Committee endeavors to discover foreseeable risks, select the most important of these risks, clarify the sections responsible for coping with risks, work with these sections, business divisions and other risk owners, establish countermeasures and confirm the implementation status of these countermeasures.

Systems to Ensure the Efficient Execution of Duties

Sysmex has positioned the Managing Board as the institution to make important management decisions and supervise the execution of duties. The Company has introduced the executive officer system to be capable of making swifter operating decisions and reinforce management functions in order to respond quickly to changes in the business environment.

The Sysmex Group clarifies decision-making procedures and ensures efficient business operations based on organization regulations, scope of authority regulations, regulations concerning the management of affiliated companies, and others. In addition, the Group formulates mid-term plans and annual management plans, periodically confirms the progress made with those plans and takes any necessary measures.
Assignment of Employees to Assist the Audit and Supervisory Committee

At Sysmex, the Internal Audit Office provides organizational assistance for the duties of the Audit and Supervisory Committee.

When employees at the Internal Audit Office assist the Audit and Supervisory Committee in its duties, they obey the Audit and Supervisory Committee’s orders and instructions.
To ensure the independence of members of the Managing Board (excluding members of the Managing Board who are Audit and Supervisory Committee members), personnel matters involving employees of the Internal Audit Office (including appointments, transfers and disciplinary actions) are discussed in advance with the Audit and Supervisory Committee.

Policy on Handling Audit Expenses

Sysmex has in place a budget corresponding to the annual audit plan in order to defray the expenses required for the execution of duties by the Audit and Supervisory Committee.
Procedures are handled appropriately in the event additional expenses are required for the execution of duties by the Audit and Supervisory Committee.

 

Systems Related to Reporting to the Audit and Supervisory Committee and Other Systems for Ensuring Effective and Efficient Auditing by the Audit and Supervisory Committee

If a member of the Managing Board or employee of the Group discovers a violation of the law or the Articles of Incorporation or a material fact that poses risk of causing significant damage to the Sysmex Group, that fact is promptly reported to the Audit and Supervisory Committee according to the prescribed regulations and procedures. Members of the Audit and Supervisory Committee also attend Managing Board, Steering Committee and other important meetings, read important documents such as approval requests, and request explanations from members of the Managing Board and employees of the Sysmex Group as necessary.

Sysmex prohibits dismissal or any other disadvantageous treatment to members of the Managing Board and employees of the Sysmex Group who report information as outlined above.

Corporate Governance Report