Pentax 2009 Annual Report Download - page 28

sound internal control systems with the objective of ensuring
appropriate and efficient business management.
Each business division and facility develops and improves
the control environment, evaluates and responds to risk, and
verifies and improves control processes to ensure that the con-
trol systems that operate within each division and facility are the
most appropriate for their operating environment.
The head of each business division has managerial authority
and is responsible for improving business results. Each head is
also obligated to seek to further improve internal control sys-
tems, with the objectives of maintaining compliance, the effec-
tiveness and efficiency of work practices, the reliability of
financial reporting and the integrity of management assets.
The Audit Department at Hoya Group Headquarters is
responsible for the regular auditing and verification of adminis-
trative processes for each division and business office from an
independent standpoint. It conducts operational audits, checks
that internal control systems are functioning as they should,
ensures that there is no dishonesty, and checks for areas for
potential improvement. Problems that come to light as a result
of audit procedures become the subject of a recommendation
for improvement. Particularly important matters are reported to
the Audit Committee and the Board of Directors, as well as to
the executive officers. The executive officers decide upon and
issue directives for speedy, appropriate responses.
• Hoya Business Conduct Guidelines
To achieve the best results from internal control systems, it is
essential that all employees performing duties for an organiza-
tion work to foster greater awareness. The Hoya Group has
established a set of Business Conduct Guidelines that clarify the
guiding principles under which each employee should perform
his or her duties, with resolute adherence to professional ethics.
The Group also conducts a wide range of employee education
activities to foster awareness of regulations and rules.
• Hoya Help Line
In 2003 the Company implemented another initiative, the Hoya
Help Line (HHL), as an internal reporting and consultative
CORPORATE GOVERNANCE
system for the Group. If there is an act that contravenes the law
or the Hoya Business Conduct Guidelines, the Hoya Help Line is
intended to enable early discovery of the contravention and
quick reporting to top management, enabling timely and
appropriate action to be taken on the issue. This structure helps
to preserve the integrity of the Hoya Group as a whole. The
Hoya Help Line is a dedicated system located within the Com-
pany’s headquarters for internal use, and it can also be used as
a point of contact with external legal counsel who is available to
listen to employees. This separation preserves anonymity and
works to maintain the system’s functional effectiveness. As of
the end of March 2009, the system had been introduced at
Group companies in Japan, North America (the United States
and Canada), Thailand and Europe. It is scheduled to be intro-
duced in the Philippines in June 2009. The intention is to con-
tinue to expand the number of countries covered, giving the
Hoya Help Line worldwide coverage.
• Internal Control Reporting System
Hoya has completed the creation of a system for visualizing the
status of internal controls over financial reporting for the
Group’s key operating divisions. The Group has also created a
framework for evaluation of these controls. In the fiscal year
under review, the Group will begin conducting verifications of
the effectiveness of internal controls. Items that do not conform
or for which internal controls are found to be inappropriate or
insufficient will be improved, and Hoya will continue its efforts
to ensure the reliability of financial reporting.
Full Disclosure and Investor Relations Activities
Hoya considers fair and prompt disclosure of information and
other investor relations activities to be a fundamental duty of
management. The Company also values communication with
shareholders, and it continues to clearly reflect their views in its
management practices.
In 1998, Hoya began the disclosure of quarterly financial
statements, ahead of many other Japanese firms. Since then the
Company has sought to increase the timeliness and broaden the
scope of disclosure by shortening the period between the
Transparent Governance
26 HOYA Annual Report 2009