Basic Policy on Internal Control System
The Nikon Group's basic policy on its internal control system was established based on Japan's Companies Act and its Ordinance for Enforcement (enacted May 2006) as a structure for ensuring appropriate business operations.
Structuring of Responsibility and Authority
Nikon Corporation has created Rules Governing the Authority of the Organization and Personnel, which clearly define the structure of authority for each post and organization. Furthermore, by implementing management and guidance of all Group companies in line with the Decision and Reporting Rules for Subsidiaries and the Decision Standard for Subsidiaries, we strive to perform duties efficiently and in an organized manner.
Nikon has designed systems for enabling the Internal Audit Department to fully perform its functions, including securing the independence from operational divisions.
Based on the annual audit plan reported to the Executive Committee and the Board of Directors subsequent to the President's approval, the Internal Audit Department audits whether or not each division conducts their operations in accordance with laws and regulations and internal rules, manages risks effectively, and so on to evaluate the appropriateness of the internal control systems and implemented operations at the Nikon Group (including non-consolidated subsidiaries), and presents them with proposals for improvements.
Furthermore, the Internal Audit Department conducts the assessments of the company to be made for the Internal Control Report System specified by the Financial Instruments and Exchange Act (J-SOX), and also evaluates the effectiveness of the internal control system from the standpoint of observing the Companies Act.
Internal audit sections established at regional holding companies in Europe (the Netherlands), the Americas (the United States), and the Asia and Oceania region (Hong Kong) conduct audit engagements and J-SOX evaluations for subsidiaries in each region from perspectives independent of business operations. The Internal Audit Department of Nikon Corporation supervises these internal audit activities to be conducted at each internal audit section to strive for performing effective audits on a global scale.
All of the internal audit results are reported to the president and the directors concerned, and follow-ups are implemented with proper timing. Also, an overview of annual audit activities is reported to the Executive Committee and the Board of Directors.
Internal audit results are also shared with the Audit and Supervisory Committee, and regularly scheduled meetings are held between the Internal Audit Department and the Audit and Supervisory Committee to ensure their close cooperation.