Canon 2005 Annual Report Download - page 13

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11
quality, environmental issues, informa-
tion security, and physical security.
With regard to external audits, we
established regulations related to the
pre-approval of policies and procedures
for both auditing and non-auditing
services to secure the independence of
our accounting firms. Based on the
regulations, the Board of Corporate
Auditors must approve in advance the
content and related amounts of con-
tracts between the Company and
accounting firms.
Committees
The Corporate Ethics and Compliance
Committee and the Internal Control
Committee were established in 2004,
with the President appointed as chairman
of both groups. The Corporate Ethics and
Compliance Committee carries out
comprehensive activities to promote
ethical awareness and compliance within
Canon. The Internal Control Committee
serves to ensure the reliability of the
Company’s financial reporting in accor-
dance with the Sarbanes-Oxley Act, and
also aims to enhance the effectiveness
and efficiency of our business operations,
compliance with related laws and regula-
tions, as well as the implementation of
sound internal controls.
Compliance
Since its founding, Canon has relied on
its Guiding Principles focusing on the
“Three Selfs” concept, known as the
“Three Js,” or “San-Ji” in Japanese:
Ji-hatsu, which states, “Take the initia-
tive and be proactive in everything you
do”; Ji-chi, which means “Conduct
yourself responsibly and be accountable
for all of your actions”; and Ji-kaku,
which says, “Understand the situation
you find yourself in and your role in that
situation.”
Canon Compliance Cards containing
a definition of the San-Ji spirit on one
side and a compliance test on the other
have been translated into 17 languages
and distributed to all Group companies.
Group employees understand these
concepts and put them into practice
daily in their work. We believe that this
internalized sense of duty and ethics
among our employees and management
is a deep basis on which to build a
sound compliance system.
External Evaluations
Canon is a highly evaluated company
and brand worldwide, as indicated by its
top marks in numerous business maga-
zines and ratings agencies. For instance,
Canon placed 35th in Business Week’s
“Best Global Brands” of 2005 (August 1,
2005 issue). Moreover, in the FORTUNE
Global 500, Canon placed 154th in
revenues and 96th in profits (July 25,
2005 issue). FORTUNE also named
Canon CEO Fujio Mitarai as Asian
Business Leader of the Year (January 26,
2006 issue). Financial rating agencies
also hold Canon in high regard.
Standard & Poor’s continues to rate
Canon’s long-term debt at AA, and the
Aa2 rating from Moody’s Investors
Services remains unchanged after being
upgraded in 2004. Rating and Investment
Information, Inc. (R&I) also maintains its
rating of AA+ on Canon’s long-term debt.
Canon’s Current Ratings
Standard
& Poor’s
Moody’s
R&I
Short-term rating
A-1+
—
—
Long-term rating
AA
Aa2
AA+
Canon Compliance Cards defining the San-Ji
spirit are provided to Group employees