Corporate Governance
Governance System
The DMC Board of Directors has responsibility for making business management decisions through active discussions and reinforcement of supervisory functions over the Company’s management activities. The Board of Directors is composed of eight Directors (As of the end of March 2024), and Board Meetings are held to address important matters regarding monthly management activities and to report the state of business execution.
DMC also holds Management Meetings with the participation of Directors, external advisors, and other appropriate individuals to reinforce prompt decision making, supervisory, and business execution functions. At Management Meetings, members thoroughly discuss basic measures regarding business, management policy, management plans and other important issues submitted by divisions and departments prior to Board Meetings, which enhances the optimization of decision making.
In addition, Group Company Meetings of USCO, the parent company of DMC, are held with the participation of the presidents of each Group company to report the state of business performance of each company, discuss, and make decisions regarding business strategy and operation as the USCO Group.
Audit System
DMC has two outside corporate auditors (part-time) qualified as tax accountants who conduct accounting audits and verify the appropriateness of financial information (As of the end of March 2024). Regarding matters related to the status of business operations, the supervisory authority of shareholders has been strengthened to supervise compliance of the execution of business by the Board of Directors in accordance with laws and regulations. Shareholders have the right to request the convocation of a Board of Directors Meeting in the event that a director acts outside the scope of the purpose of the Board of Directors, and to express their opinions at the Board of Directors Meeting.
Compliance
With approximately 24% of its products exported overseas, compliance with not only domestic but also overseas laws, regulations, and social norms is the top DMC priority in all business activities. DMC strives to ensure compliance throughout the organization. In FY2023, no serious violations of laws and regulations were reported.
Prevention of Bribery
DMC recognizes bribery and corruption as serious risk factors that have the potential to significantly damage the reputation of the company, and is committed to preventing illegal acts as well as scandals due to a lack of awareness.
In accordance with this Basic Policy, we have established our own Anti-Bribery Regulations, which prohibit the following:
- Officers, directors, employees, and others are prohibited from facilitating, directly or indirectly, the offering, requesting, demanding, receiving, or giving of bribes, kickbacks, or the like for the purpose of improperly exercising authority or conducting activities with any person. This does not apply to acts in accordance with explicitly written laws and regulations.
- It is prohibited to provide entertainment or gifts to public officials or persons equivalent thereto (hereinafter referred to as “public officials, etc.”), whether in Japan or abroad. In the case of exceptions within the scope of common sense in light of socially accepted practices in Japan and overseas locales, the appropriate approval procedures shall be followed.
- The DMC Group requires its clients, suppliers and other business partners to comply with this basic policy.
In addition, as a means of preventing bribery and corruption, we make all employees aware of relevant rules, such as requiring advance application for and detailed reporting after the use of customer-related entertainment expenses. We will also conduct regular risk assessments and record keeping, and require that any suspicious events be reported through the company's internal reporting system.
Whistle-Blower System (Hotline)
For various types of reporting and consultation on problems and other issues that arise in the workplace, DMC Group has established internal and external consultation desks that are available to all employees at any time for early detection and resolution of problems. DMC confirms the content of reports and consultations, takes corrective action and provides guidance. We also provide follow-up support to confirm that employees are not treated unfairly in order to provide appropriate protections. We received two reports and consultations in FY2022.
To establish a framework to accept reports and provide consultations for violations of compliance and harassment policy in business activities, we have established consultation desks at Human Resource & General Affairs Divisions at DMC and General Affairs Division at USCO.
At our Indonesia Factory, we have established a communication forum* and have developed our own reporting system based on the reporting process stipulated in our company regulations. In addition to serving as a whistleblower system, it is also used as a forum for communication among employees and with management.
* Communication forum: A meeting attended by some 120 employees in which the head of the department in charge reports on the current state of the company. In addition, top management announces information that should be shared and a question and answer session is also held.
Compliance Seminars
DMC strives to increase employee awareness of compliance through seminars. In FY2023, we held eight human rights seminars for managers as well as seminars on harassment and human rights in each area. These seminars were conducted by outside instructors. At the Indonesia Factory, compliance is promoted through monthly reporting meetings to confirm that the compliance targets set by the Corporate Management System Division are being met.
Information Security
DMC recognizes the importance of personal and other information received from our customers. In line with this, we have established a system to control such information and work to increase employee awareness and knowledge of the appropriate handling thereof to enhance the management system.
DMC has established “Information Management Regulations” and “Personal Information Protection and Management Regulations” for appropriate information management. We assign an Information System Manager and Personal Information Protection Manager in accordance with the regulations described above to ensure appropriate management and initiate measures for security. Our plan, starting in FY2023, is to conduct awareness checks of IT literacy for all employees three times by the first half of FY2024, and to promote security-related education throughout the company in the second half of the same year. Through these activities, we intend to increase awareness of the importance of ISO 27001 and its mechanisms among all employees. DMC is working to strengthen its network, including its security and emergency response. As such, we launched an internal project in FY2023 and created internal regulations and information system manuals in preparation for meeting ISO certification standards. In addition, we enhanced information security by installing a fingerprint authentication system for entry to and exit from the Indonesia Factory to prevent unauthorized entry and information leakage.
Risk Management
Risk Management System
DMC places a priority on risk management to accurately recognize risks that may have a significant influence on corporate value and business continuity, and strives to minimize damage by such risks.
Every year, each division manager clarifies both internal and external issues to identify and evaluate risks associated with such issues. Measures for risk assessment and effectiveness are appropriately managed through monitoring in accordance with the management plan and targets set for each risk. Top management assesses appropriateness, validity, and effectiveness quarterly and shares its assessment with each division manager to realize effective risk management. At the Indonesia Factory, we identify potential risks and report on the progress of measures to deal with the identified risks at a meeting attended by all divisions once a month in an effort to prevent the risks from materializing.
Approaches to the Business Continuity Plan (BCP)
The DMC Group established and operates a BCP in preparation for emergencies to ensure the safety of human life and the continuation of business activities. When a large disaster occurs, we must continue to provide supplies to customers, which we believe leads to the promotion of employment and vitalization of the local economy.
For emergencies, we have established an organizational structure headed by the president and subleaders assigned to perform external response, restoration, financial management and logistics support. This structure is capable of receiving top-down instructions and securing information management.
From FY2023, we have been reviewing, developing, and maintaining the content of normal operations and general maintenance by item in order to develop our Business Continuity Manual into a Business Continuity Plan. We believe that these efforts will streamline advance preparations and facilitate organized response in emergency situations.
In particular, with the expansion of the number of production sites to three in Japan and one overseas, it became necessary to review the way in which production facility data is managed. We thus restructured the way in which we manage this data and added the necessary information to our BCP. We also operate an efficient employee contact network, improving our emergency response.
In response to the flooding at the Indonesia Factory in 2021, we have been installing exterior walls around the factory, repairing and performing maintenance on buildings, and adjusting the height of electrical power sources in stages. Further, since 2023, we have been conducting fire and flood evacuation drills twice a year.
In response to not only COVID-19 but other infectious diseases as well, DMC has implemented thorough infection control measures to protect the health of its employees and their families as well as to maintain stable business activities. We will continue to develop our response in accordance with the state of infectious diseases and strive to prevent the spread of infection through risk management in the event of a serious infectious disease situation.
We will also continue striving to build mechanisms to maintain and update our BCP, and promote its entrenchment through BCP education and regular training for our employees as well as opinion exchange. In addition, through opinion exchange with other companies, we will heighten our attitude toward BCP engagement. Together with this, we will endeavor to formulate effective business plans and develop systems for our operation by working together with business partners, others in the industry, and local communities.