Epson 2005 Annual Report Download - page 26

27Seiko Epson Annual Report 2005
Compliance Committee
(Chaired by executive vice
president)
Compliance Sub-Committee
(Chaired by chief executives of operations
divisions and presidents of affiliate companies)
Risk Management Sub-Committee
(Chaired by chief executives of operations
divisions and presidents of affiliate companies)
Crisis Management Committee (Chaired by President)
Occurrence of Risk
쎱
Risk Management System Supervised by the President
and the Flow of Information
“No Hiding,” “No Cheating,” and
“Report Bad News Quickly”:
Epson’s Mantras for Maintaining
a Sound Corporate Culture
Epson views compliance as a means
of reducing management risk. In con-
trast to external risk factors such as
accidents, natural disasters, or social
unrest, the management risk Epson
addresses concerns risks directly
associated with its corporate activities;
in other words, risks stemming from
the actions of Epson employees.
Epson has appointed a director who
is responsible for trust-based manage-
ment and has established a structure
for promoting compliance.
Compliance
directors. Two committees specifically
responsible for exploring these issues
have been put in place. The Nominating
Committee is responsible for setting
nomination criteria and for selecting
candidates. The Compensation Com-
mittee is charged with defining the pa-
rameters of the remuneration system
and drafting policies governing directors’
remuneration. These committees
conduct extensive deliberations in their
respective areas, ultimately presenting
their conclusions for consideration by the
board of directors.
Epson also has an internal compli-
ance system in place that is designed
to prevent any potential legal or inter-
nal regulatory violations within its
operations. An internal audit office that
reports directly to the president regu-
larly audits operations, including those
at Epson subsidiaries. The internal
audit office evaluates the efficacy of
governance processes, requests
improvements where needed, and
reports audit results to the president.
The internal audit office regularly meets
with Epson’s independent auditors
and statutory auditors in an effort to
heighten the efficacy of internal audits.
Major points of this framework include:
•A Compliance Committee for
building and maintaining Epson’s
compliance structure
•A Management Trust by Office
responsible for operating the internal
Compliance Hotline for reporting
compliance issues
•In-house compliance training,
including a code of conduct manual
and Web-based seminars
When it comes to compliance, Epson
is aware that no framework alone is
enough, since corporate activities are
determined by the thoughts and actions
of employees. For this reason, the
company’s senior management has
developed a culture of not hiding difficult
information, not cheating, and reporting
bad news quickly.
For Epson, compliance of this kind
is the cornerstone of its approach to
corporate governance.