Epson 2015 Annual Report Download - page 38

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37
control risks. Also, when major risks become apparent, the president will lead the entire company in
mounting a swift initial response in line with the Company’s prescribed crisis management program.
(4) The president of Seiko Epson will periodically report to the board of directors on critical risk management
issues and formulate appropriate measures to respond to these issues.
Ensuring the appropriateness of operations in the corporate group
(1) The Group’s management structure will help to ensure that operations in the corporate group, including
subsidiaries, are conducted appropriately. Essentially, the Company will be organized into product-based
divisions. Each division will be headed by a chief operating officer who owns global consolidated
responsibility for that business. Meanwhile, supervisory functions within the Head Office will own global
responsibility. Responsibility for providing the framework for business operations at subsidiaries will be
owned by the head of each business. Group-wide corporate functions will be the responsibility of the heads
of Head Office supervisory departments.
(2) The Company will have business processes that enable business to be controlled on a Group level. This
will be accomplished by internal regulations that require subsidiaries to report or acquire pre-approval for
certain business operations from the parent company, Seiko Epson, and by requiring issues that meet
certain criteria to be submitted to Epson’s board of directors for resolution. In certain regions, moreover,
the Company will seek to ensure the suitability and efficiency of Group-wide business operations by
establishing a company that acts as a regional head office that supervises subsidiaries.
(3) An internal auditing department will conduct audits Group-wide, including subsidiaries, based on a basic
internal audit regulation, thereby strengthening and enhancing internal audits Group-wide, including at
subsidiaries.
Safeguarding and management of work-related information
(1) Information on business operations will be safeguarded and managed under regulations governing, among
other things, document control, management approval, and contracts, with directors and corporate auditors
reviewing these and other relevant documents on an ongoing basis.
(2) The Company strives to prevent the leak and loss of Epson Group internal information by managing
confidential information according to the level of sensitivity, in accordance with internal information
security regulations.
Audit system
(1) Corporate auditors will have the authority to conduct interviews with directors and other personnel
whenever they deem such interviews necessary based on corporate regulations governing auditors and
audit procedures.
(2) Corporate auditors will also be authorized to attend Corporate Strategy Council sessions, corporate
management meetings, and other important business meetings that will enable them to conduct audits
based on the same information as that available to directors. Corporate auditors will also routinely review
important documents related to management decision making.
(3) The Company will establish a Corporate Auditors’ Office that will be staffed with full-time employees.
Evaluations and transfers of Corporate Auditors’ Office employees will require the approval of corporate
auditors. If the number of full-time employees required for audit operations is insufficient, or if they lack
the requisite expertise, etc., and if corporate auditors acknowledge that special circumstances hinder the
effectiveness of audits, corporate auditors will be able to make the necessary requests to the representative
director or the board of directors.
(4) Per a corporate auditor audit regulation, corporate auditors will be able to ask directors and persons from
the internal audit department and elsewhere to report or explain the state of management within the Epson
Group, including subsidiaries, and will be able to view supporting materials. Corporate auditors will,
where necessary, be able to ask subsidiary company directors, auditors, internal audit groups, and other
personnel to report the state of management within their respective companies.
(5) Corporate auditors shall strive to enhance the effectiveness of audits by holding regular discussions with
the internal audit department and with independent public accountants.
(6) Corporate auditors will directly assess business operations by holding regular meetings with representative
directors.
(7) The expenses required to execute the duties of corporate auditors will be properly budgeted for in advance.