SPARX Group Co., Ltd. has a guideline for corporate governance to conduct our business properly and efficiently as stated below:
1. Corporate governance to meet the requirements of the laws and regulations in handling duties of directors
- The board of directors has external independent directors to enhance the monitoring system to check
for the lawfulness and appropriateness in making decisions and operating the business. And external
independent auditors monitor the appropriateness in operating the business.
- The board of directors obeys the laws, contract articles, and company rules, which are explained in the
compliance manual, SPARX VISION STATEMENT, and SPARX Group Code of Ethics to achieve a goal to
become the most trusted and respected investment company in the world. In addition, the directors
are required to attend a compliance training class at least once a year to better understand the
laws and regulations to manage the company.
- In order to obey the laws and regulations in Japan and the overseas, there is Legal & Compliance
Department, which is responsible for conducting a compliance committee and reporting to the board
of directors monthly about the status of the compliance-related issues.
- The head of Legal & Compliance Department, internal auditors, and the outside law office receive
information from employees about unlawful acts of the directors based upon the internal compliance
- We have independent advisors who suggest the business advice from their profound knowledge or useful
experience for our business.
2. Rules for creating and keeping reports in the company
- In accordance with internal document control rule, the following documents, including the
electronically saved documents in the company, are handled and stored.
- Resolution of the Shareholders
- Resolution of the Directors
- Resolution of the Auditors
- Other documents required by the documentation requirement
- In the case that directors or auditors ask for any of the documents mentioned above, a responsible
qdepartment is supposed to show the proper document or provide a copy of it anytime.
3. Rules for risk management
- SPARX Group Co., Ltd. and its subsidiaries are responsible for risk management and risk control.
We have and follow the general rules of group risk management based upon the SPARX VISION STATEMENT
2006, which is emphasizing that "SPARX Group Co., Ltd. and its subsidiaries must always be prepared
for the worst situation or damage.
- As our behavior of risk control, we have a group risk management section and assign a responsible
person for group risk management. Also, this risk management section and its head have to create
an annual plan for the group risk management, and they have to evaluate and understand potential
risk. In addition, they have to suggest the detailed risk control system for the company.
Moreover, the board of directors must regularly evaluate the effectiveness of the risk management
system and process in the company.
- In order to manage potential damage that may be caused by such disaster as an earthquake, a fire, a
power outage, or a terrorist attack, we must create a policy to manage risk in the company.
4. Corporate governance to maintain efficiency in handling duties of directors
- Directors must be aware that they are fully responsible for making right decisions, keeping efficiency
in operations and maintaining financial stability in the company. The term of directors is one year to efficiently manage the company's business.
- Directors attend a monthly board meeting to review the monthly performance and discuss other important
issues. Also, directors review the status of projects and make business decisions for the company.
In addition, directors review and update provisions in the company guideline as necessary.
- Senior managers have a management committee at least once a month. Senior managers make business
decisions for the issues for which they are given authority by the board of director. Also, senior
managers discuss issues which need to be brought to the board of directors. In addition, the board
of directors and a management committee set up a corporate governance committee and a compliance
committee as advisory members.
5. Corporate governance for employees' activities to meet the requirements of the laws and regulations
- Employees must follow the laws, regulations and company guideline. Also, employees must follow the
company policies stated in the compliance manual, SPARX VISION STATEMENT and SPARX Group Code of
Ethics "to become the most trusted and respected company in the world."
- The company advises all the employees of new changes in the company guideline, which had to be made to
reflect the new changes in the laws and regulations. All the new employees of the company have to
attend a compliance training class when they are hired. Employees have to continue to attend a
compliance training class every year to better understand the laws and regulations.
- As mentioned above, Legal and Compliance Department is directly reporting to the board of directors.
In order to obey the Japanese and overseas laws, Legal and Compliance Department conducts a
compliance committee to evaluate the compliance system and examine compliance issues. After this
committee, the board of directors discusses how to take the action to these Legal & Compliance
- A department or a subsidiary reports a compliance-related problem to Legal & Compliance Department and
Internal Control Department through the "Incident/Near Incident Report", then a compliance committee
will examine the issue. And then, the result of discussion at Legal & Compliance committee is
brought to the board of directors. In the case of breech of rules, if necessary, a punishment
committee will take place to further examine the issue and may give a punishment in accordance with
the employee handbook.
- According to the compliance reporting system, the head of Legal & Compliance Department and auditor are
internal contact points, and the law firm is an outside contact point to report an unlawful conduct of an employee or a director.
- Internal Audit Department directly reports to the board of directors. Internal Audit Department is
responsible for monitoring whether employees are handling their jobs in accordance with the laws,
regulations and the company guideline. Internal Audit Department is also responsible for reporting
the results of their audit examinations to the board of directors.
- In order to make the corporate governance system work effectively for financial reporting, we have the
manual covering the IT structure and data processing. We evaluate the effectiveness of corporate
governance and continue to improve the corporate governance system. In addition, the board of
directors monitors the status of projects along with corporate governance.
6. System to enhance corporate governance for the company as a whole, including SPARX Group Co., Ltd. and its
- Directors of SPARX Group Co., Ltd. hold a monthly global strategy meeting to discuss business
strategies for SPARX Group Co., Ltd. as a whole.
- Subsidiaries of SPARX Group Co., Ltd. regularly report important business issues to the board of
directors of SPARX Group Co., Ltd.
- Auditors of subsidiaries of SPARX Group Co., Ltd. in Japan organize a group audit committee to share
information and exchange opinions about the audit-related issues.
- Compliance managers of the subsidiaries hold a committee to obey the laws and regulations, rules of
subsidiaries, and SPARX Group Code of Ethics. They discuss compliance issues and consider risk
management from a global perspective at the committee.
7. Auditors hiring an employee for support
In accordance with the request from auditors, an assistant of auditor is hired.
8. Independence of the assistant
An assistant of auditors has to be independent of directors and is fully committed to an audit committee. In
addition, an audit committee has to approve the assistant's performance evaluation, job transfer or any
other HR-related issues.
9. The reporting system of the directors and audit assistant
- When a director finds some conduct that will severely damage the company, the director will have to
follow the corporate governance system to immediately report to an auditor.
- Directors and senior operation staffs have regular meetings with auditors to report any problems, check
the status of the projects and exchange management ideas.
- Auditors have to attend the board meeting, a management committee and other important meetings. Also,
auditors have to review resolutions of those meetings that are submitted by directors and senior
10. Other corporate governance issues for auditors to practically handle their audit examinations
- Auditors have regular meetings with the representative director to check the current status of audit
examinations, exchange business opinions and discuss problems.
- Auditors have regular reports from Internal Audit Department for the internal audit examination results
and have regular meeting with an external accounting auditor for the accounting audit
In addition, they have to communicate well internally, so that they can efficiently handle audit
examinations results. Moreover, auditors read resolutions of the important meetings, and they may
ask for more detailed explanation if necessary.
11. Basic Policy for Exclusion of Anti-social Forces
SPARX Group established the basic policy against Anti-social Forces (ASF) which threatens social order and sound
that SPARX Group will not have any relations with ASF, will not give economic benefits to them, will not
make backstage deals with them and will not accept undue or illegal demands from them. In order to realize
the policy, SPARX Group will carry out thorough compliance education to its officers and employees by
divisions in charge and will associate with police, lawyers or other external professionals.
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