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Promoting Strong Corporate Ethics by Recognizing the Importance of “Sincerity”
The Benesse Group has established operations in the fields of education, lifestyle, welfare and languages. The Company's compliance activities focus not only on adhering to legal regulations and promoting a high standard of corporate ethics, but also fostering an attitude of “sincerity” throughout the Company, and making sure that every employee recognizes the importance of these principles.
Comments from a Corporate Auditor
Preventing Problems before They Occur, through Close Contact with Front-line Workers
Yoshinori Matsumoto
Corporate Auditor
In order to promote management transparency, Benesse has established a thorough compliance structure that promotes very high standards of corporate ethics, surpassing those standards required by law. I am proud to say that these efforts have earned the Company top recognition. In March 2009, Benesse was awarded the Outstanding Performance Prize as part of the Japan Internal Control Awards Integrity Award. The important issue in good corporate governance, however, is not simply what sort of structure a company adopts, but how it is implemented. Even if the basic structure is good, it has no real value if it fails to work properly at a critical moment. Therefore, I constantly check the system, as well as the manner in which it is managed, to make sure that it is performing the functions for which it was intended.
At Benesse, we try to emphasize “preventative audits.” The best way to prevent problems from ever occurring is to create a corporate culture where people feel free to discuss any concern they might have, before it becomes a problem. During our audits, we communicate with the people who actually implement plans and procedures, to get a clear picture of how the business really operates.
Adjusting the System to Effectively Address the Demands of New Business Segments
At present, Benesse is seeking to expand operations in overseas markets, particularly in Asia. As this expansion progresses, it is only natural that risk will increase. One of the most important issues, therefore, is how to control the risk that accompanies the expansion of operations into new markets. In addition to my auditing activities in Japan, I visit Benesse offices in China and South Korea, in order to evaluate the production structure, quality control activities, outside suppliers, and other factors to make sure that adequate measures have been introduced to manage risk.
In October 2009, Benesse adopted a holding company structure. The new organizational structure will give each business unit within the Group a greater degree of independence and management responsibility than before. Therefore, it is extremely important to make sure that the holding company does an effective job of coordinating operations. As an auditor, my role will be to monitor the systems of corporate governance and compliance, to make sure that they are fulfilling their intended functions and promoting the Benesse Group's most basic principles-to help customers “live well.”
Benesse Group Code of Conduct
The Benesse Group Code of Conduct was established in January 2005 and partially revised in April 2008 when it was also extended to cover all Group companies, including those overseas. Putting clear emphasis on customers and consumers, the Benesse Group Code of Conduct explains in detail areas that our people should focus on with respect to stakeholders of the Benesse Group, as well as protecting personal information, promoting environmental management, and conducting business activities in general. All the Benesse Group's senior managers and employees are required to adhere strictly to the provisions of the code.
The Internal Whistleblower System
Benesse has the Benesse Group Speak Up Line, and Corporate Auditor Hotline. The Benesse Group Speak Up Line enables employees to report breaches or possible breaches of the Benesse Group Code of Conduct. The Corporate Auditor Hotline, meanwhile, was set up specifically for employees to provide information that could relate to directors and other senior managers of Benesse Corporation, and issues that involve the management of the entire Benesse Group. This will allow more rapid responses by ensuring information is reported directly to the Company's full-time corporate auditors, who are independent of other senior management.
Speak Up Line and Corporate Auditor Hotline Operating Frameworks
| Reasons for Contact | Department/Individuals Responsible | Individuals Authorized to Know Identity of Whistleblower | Contact Method | |
|---|---|---|---|---|
| Benesse Group Speak Up Line | Cases that infringe, or potentially infringe, the Benesse Group Code of Conduct | Management Process Control Dept., Benesse Corporation | Individual responsible for Speak Up Line in Management Process Control Dept. and Corporate Executive Officer responsible for Management Process Control Dept. | Email via third-party organization * There is also a contact point on the top page of the Company intranet |
| Corporate Auditor Hotline | Cases that infringe, or potentially infringe, the Benesse Group Code of Conduct that include
|
Full-time Corporate Auditors of Benesse Corporation | Full-time Corporate Auditors of Benesse Corporation or their appointees | Email via third-party organization
|
Strengthening the Internal Control System
Following the enforcement of the Companies Act of Japan in 2006, the Benesse Group established the basic policies of the Internal Control System and other necessary systems by a resolution of the Board of Directors'meeting held in May 2006, in accordance with Article 362, Paragraph 5 of the Companies Act. Since then, the policies and systems have been reviewed every year. Furthermore, Benesse has established a dedicated Management Process Control Department to create an internal control system for reporting financial information and to respond to other requirements stipulated by Japan's Financial Instruments and Exchange Law. The department's role is not limited only to internal control over financial reporting, however. The department is also working to build other internal control mechanisms required by the Companies Act and other regulations, as well as the Financial Instruments and Exchange Law.
Benesse Wins Integrity Award in 2009 Japan Internal Control Awards
The ceremony for the 2009 Japan Internal Control Awards Integrity Award
In March 2009, Benesse received the Outstanding Performance Prize in the 2009 Japan Internal Control Awards Integrity Award (sponsored by the Japan Internal Control Awards Integrity Award Council). The award recognized the fact that Benesse is a company that demonstrates integrity and transparency with an emphasis on corporate ethics and compliance, and has established a highly effective internal control system, which is a key element in corporate management.
Framework for Ensuring Product Safety
In January 2008, Benesse established the Product Safety Inspection Center, putting into place a quality assurance system, not just for education equipment and toys, but for all products provided by Benesse. The four main functions of the center are as follows.
- Carrying out safety inspections on products from all divisions;
- Collecting data on regulations and other matters related to safe product development from regulatory authorities and related organizations in Japan and overseas and incorporating this into in-house standards;
- Inspecting factories of business partners and contract manufacturers; and
- Training employees in safety practices and sponsoring activities designed to promote awareness of product safety.
Protecting Personal Information
Benesse has established a Personal Data Protection Office under the Chief Privacy Officer (CPO). This is Benesse's main body responsible for protecting personal information. Privacy protection officers have also been appointed at each division and department to ensure personal data is strictly controlled across the entire Group. Following improvements to our personal information protection measures, Benesse acquired Privacy Mark certification in January 2006 from the Japan Information Processing Development Corporation (JIPDEC). In 2008, Benesse renewed its certification, and we will continue to improve the Company's personal data protection system going forward through further enhancements and regular verification.
Benesse Group Action Plan
- Establish regulations, prepare documents and promote awareness
Create documents (internal regulations, etc.) that satisfy Privacy Mark requirements; ensure compliance and thorough awareness of these documents. - Formulate and implement training programs
Develop personal information training programs and conduct training for all employees. - Analyze and mitigate risk related to information leaks
Identify all personal information, create business flow processes and analyze risk continually on an annual basis. Systematically deal with any identified risks. - Conduct audits and reviews
Conduct annual operational audits of relevant documents, including progress on Groupwide convergence with regard to shared Privacy Mark requirements, and personal information protection systems; individuals responsible to systematically deal with any areas requiring improvement. Create a framework to ensure these audits are conducted on an ongoing basis. - Supervision of subcontractors
Select all subcontractors and outsourcing personnel on the basis of their ability to meet Privacy Mark requirements, conclude personal information protection contracts with them, and conduct regular audits.
