Honda 2009 Annual Report Download - page 43

The Company is designing and implementing internal control sys-
tems in accordance with the following basic policies.
①Systems for Ensuring that the Execution of Duties by the Directors and
Employees Is in Compliance with the Law and the Company’s Articles
of Incorporation
To secure compliance of Company management and employees with
guidelines for conduct in conformity with applicable laws and internal rules
and regulations, the Company has prepared The Honda Conduct Guide-
lines and implements measures to ensure that all management and em-
ployees are made aware of and follow these guidelines.
The Company has appointed a Compliance Officer, who is a director
in charge of compliance-related initiatives. Other key elements of our
compliance system include the Business Ethics Committee and the Busi-
ness Ethics Improvement Proposal Line.
② Retention and Management of Information on Execution of Business by
Directors
Minutes of the meetings of the Board of Directors and other important
meetings as well as information related to the execution of business by
the directors will be retained and stored appropriately following the policy
for the retention and management of documents.
③ Regulations and Other Systems for Management of the Contingencies
of Losses
Important items related to management are proposed to the Board of Di-
rectors, the Executive Council, and/or Regional Operating boards, risks
are assessed, and then, decisions are made, after due consideration ac-
cording to established deliberation standards.
Regarding risks that are to be dealt with on a departmental basis,
each department will work to prevent the emergence of such risk and de-
velop policies for dealing with them. For large-scale disasters requiring
Company-level crisis management, the Honda Crisis Response Rules will
be applied, and the member of the Board of Directors in charge will be
appointed as the Risk Management Officer, who will be responsible for
designing and implementing related systems.
④ Systems for Ensuring that the Execution of Business by the Directors Is
Being Conducted Efficiently
In line with its fundamental corporate philosophy, Honda has established
organizational operating systems for each region, business, and function
and a member of the Board of Directors or an operating officer has been
assigned to each headquarters and main division. In addition, by having
the Executive Council and Regional Operating boards deliberate important
matters concerning management, the Company implements a system
that enables swift and appropriate decision making.
To conduct management efficiently and effectively, business plans are
prepared on an annual basis and for the medium term, and measures are
taken to share these plans.
⑤ Systems for Ensuring that the Corporate Group, Comprising the
Company and Its Subsidiaries, Conducts Business Activities Appropriately
The Company and its subsidiaries share The Honda Conduct Guidelines
and the basic policy regarding corporate governance. In addition, each
subsidiary works to promote activities that are in compliance with the laws
of countries where they operate and practices observed in their respective
industries as they endeavor to enhance corporate governance.
Regarding the conduct of business by subsidiaries, rules relating to
monetary settlements have been established, and, regarding important
management items, internal rules have been prepared that require prior
approval of the Company or the submission of reports. In addition, the
business management department of the Company receive reports on
business plans and other matters on a periodic basis from subsidiaries
and confirm the appropriateness of the conduct of activities.
The Company’s Audit Office, which is an independent unit reporting
directly to the President, audits the status of conduct of business activities
in each department, and works to improve the Honda Group’s internal au-
diting systems.
For companies accounted for under the equity method, the Company
requests their understanding and cooperation with Honda’s basic corpo-
rate governance policies and endeavors to improve corporate governance
on a Groupwide basis.
⑥ Matters Relating to Assignment of Personnel to Assist the Corporate
Auditors when They Request Such Assistance and Maintenance of the
Independence of Such Personnel from the Directors
The Corporate Auditors Office, which has been formed to provide staff
functions for the Corporate Auditors and reports directly to them, provides
such support for the Corporate Auditors.
⑦ Systems Providing for Reporting by Directors and Employees to the
Corporate Auditors and Other Arrangements for Reporting to the
Corporate Auditors
The status of business activities of the Company’s subsidiaries and other
associated companies and the status of the design and operation of inter-
nal control systems, including compliance and risk management systems,
are reported periodically to the Corporate Auditors. In addition, when
there are matters that have a major impact on the Company, these are re-
ported to the Corporate Auditors.
⑧ System for Ensuring that Other Auditing Activities of the Corporate
Auditors Are Conducted Effectively
The Corporate Auditors and the Audit Office, which audits the conduct of
business, work closely together to implement business audits in the Com-
pany, its subsidiaries, and other associated companies. In addition, the
Corporate Auditors also attend the meetings of the Executive Council and
other important meetings.
Honda’s basic policy is to boldly and consistently oppose antisocial
elements that present a threat to social order and safety. The or-
ganizational unit in charge of responding to these elements has
been specified, and it works together with the police and other re-
lated outside institutions to mount an appropriate response.
■ Basic Policy Regarding Exclusion of Antisocial Elements
3. Internal Control System: Fundamental Position and Implementation Status
Annual Report 2009 41
Corporate Governance