Non-financial Information(ESG)

Compliance / Internal Control Systems

Compliance

Basic Approach
Makita holds a philosophy of “striving to exist in harmony with society,” which is a uniform approach affecting our Management Policy / Quality Policy. As such, we thoroughly ensure that executives and employees comply with legal, regulatory, and ethical principles. Makita’s “Code of Ethics” and “Guideline to the Code of Ethics”, which outline the conduct expected of Group Executives and employees, stipulate the importance of ethical conduct, avoiding conflicts of interest, complying with relevant laws and social standards, properly disclosing information, respecting human rights, restricting gifts and incentives, prohibiting bribes, and prohibiting unfair business transactions.
Our Board of Directors constantly monitors important compliance-related matters. It has established the "Code of Ethics" and the "Guideline to the Code of Ethics”, and it revises them when necessary. Additionally, it receives quarterly reports on the occurrence of misconduct, etc.

The full text of the Makita's "Code of Ethics" and "Guideline to the Code of Ethics" can be found below.
Education
The Company communicates the "Code of Ethics" and the "Guideline to the Code of Ethics" and provides relevant education to all officers and employees, including part-timers, regularly once a year. This applies to overseas subsidiaries, and the entire Group is working to improve compliance.

In Japan, we conduct compliance training to educate employees on the importance of compliance and the content of the Code of Ethics at the time of important milestones, such as when they join the Company or assume the position of supervisor. In FYE2021, a total of 247 employees participated in compliance training.

In addition, in terms of raising awareness of the importance of compliance, we conduct an employee survey on ethical compliance in Japan once a year to confirm the status of the dissemination of the Code of Ethics, etc., and publish the results internally.
Internal Reporting System
In order to minimize, pre-empt, and if necessary, quickly discover and resolve, conduct in violation of the “Code of Ethics,” Makita has established “Regulations Regarding Corporate Ethics Helpline (Internal Reporting)” with provisions for accepting internal as well as external reports. Under the "Regulations Regarding Corporate Ethics Helpline (Internal Reporting)", an informant is protected thoroughly so that he/she will not suffer any disadvantages as a result of making a report, except in the case where such informant makes a false report on purpose. Also, the Helpline sets forth that if such informant receives any disadvantages, corrective/remedial measures shall be taken. Anonymous reporting is also accepted. We disclose the content of the reports internally when necessary, and we also take corrective and recurrence prevention measures.
In addition, we have established a section on our website(https://www.makita.co.jp/inquiry/index.html) to receive "Opinions and suggestions regarding accounting, internal control, and auditing".

Systems and Policies of the Company

1. Systems to ensure that Company's operations will be conducted appropriately

  • (1) Systems to ensure that the duties of Directors and employees are executed in compliance with laws and regulations and the Articles of Incorporation
  •  ・ The Board of Directors establishes the “Code of Ethics” and the “Guidelines to the Code of Ethics for Makita” as the principles for all officers and employees of Makita and each of the Directors shall keep all Corporate Officers and employees informed of and in compliance with such ethics.
  •  ・ In order to ensure corporate ethics and compliance, Makita establishes the “Regulations Regarding Corporate Ethics Help Line (Internal Reporting),” sets contact points both internally and outside Makita, and builds a system to discover internal problems. In addition, an inquiry point shall be established on the Makita’s website, to receive opinions and suggestions from outside Makita concerning accounting, internal controls and auditing.
  •  ・ An Internal Audit Division conducts internal audit as deemed necessary.
  • (2) Systems concerning the retention and management of information regarding the execution of duties by Directors
  •  ・ Information regarding the execution of duties by Directors shall be appropriately kept and managed in accordance with internal regulations such as the Regulations of the Board of Directors and the Regulations on Corporate Approval. Directors shall have access to such information.
  • (3) Rules and other systems for risk management
  •  ・ Each Director has the power and responsibility to build a risk management system in Makita in the business areas of which they are in charge, and in the case where a significant event affecting the management of Makita arises, the Director shall report such event to the Board of Directors and the Audit & Supervisory Committee.
  •  ・ Rules and guidelines on risk management regarding quality control, accident prevention, cash management and others, shall be established as necessary and operated by each department.
  • (4) Systems to ensure the efficient execution of Director’s duties
  •  ・ A regular meeting of the Board of Directors shall be held once a month and extraordinary meetings shall be held whenever necessary. In addition, pursuant to management policy decided by the Board of Directors, priority targets shall be established for each department in each period. Each Director shall execute his duty to accomplish relevant target and the Board of Directors shall oversight the progress and performance thereof.
  •  ・ The Board of Directors establishes standards concerning management structure and organization, positions, divisions of functions and duties and powers, which constitutes the basis for implementing management policy, and operates business systematically and efficiently.
  •  ・ The Board of Directors introduces the Corporate Officer System in order to promptly implement Makita strategy and strengthen the operational organization, and thereby make the business operation flexible and efficient.
  •  ・ Makita assigns respective liaison departments to all subsidiaries within the Company, and makes efforts to enhance group-wide management efficiency through discussions and consultations, and information exchanges with the objective of efficiently operating subsidiaries.
  • (5) Systems to ensure the adequacy of business operations within Makita
  •  ・ Each of all subsidiaries is under control of Directors who are in charge of such subsidiary and important management matters and matters concerning misconduct shall be reported appropriately to such Director in accordance with the Reporting Policy. The Director who is in charge of such subsidiary, upon receipt of such report, shall inform the Board of Directors of the status of supervision when necessary.
  •  ・ To ensure the credibility of financial reporting, the Company establishes policies on documentation and assessment of internal controls of financial reporting of Makita and evaluates the effectiveness of said policies.
  •  ・ For supervision and review of internal control systems of Makita by the Audit & Supervisory Committee, a system shall be established for the Audit & Supervisory Committee to cooperate with the Internal Audit Division and other related division and to receive report from Accounting Auditors.
  • (6) Matters concerning employees to assist the duties of the Audit & Supervisory Committee
  •  ・ As employees assisting the duties of the Audit & Supervisory Committee, necessary personnel shall be posted to assist the duties of the Audit & Supervisory Committee.
  • (7) Matters to ensure the independence of employees from Directors (excluding Directors who are Audit & Supervisory Committee Members), as stated in the preceding item, and the effectiveness of directions given by the Audit & Supervisory Committee to those employees
  •  ・ Employees assisting the duties of the Audit & Supervisory Committee shall not work concurrently at other divisions, but shall exclusively follow directions from the Audit & Supervisory Committee.
  •  ・ In order to ensure the independence of such employees from Directors, the consent of the Audit & Supervisory Committee is required for decisions on matters concerning the appointment and change of such employees.
  • (8) Systems in accordance with which the Directors (excluding Directors who are Audit & Supervisory Committee Members) and employees report to the Audit & Supervisory Committee, other systems concerning reports to the Audit & Supervisory Committee and systems to ensure that Directors and employees who make a report are not treated unfairly because of the report
  •  ・ Directors, Corporate Officers and employees of Makita shall report to the Audit & Supervisory Committee with respect to matters that may cause significant damage to Makita, important management matters, matters concerning misconduct, status of structures and operation of the internal control system, and the operation of internal reporting system and the results of reports received under such system.
  •  ・ The Company shall prepare a system that enables the Audit & Supervisory Committee Members selected by the Audit & Supervisory Committee of the Company to request reports from Directors, Corporate Officers and employees of Makita when necessary and allows the Audit & Supervisory Committee to exchange opinions with the Directors and Accounting Auditors of Makita.
  •  ・ The Company prohibits any unfair treatment of Directors, Corporate Officers, and employees of Makita who make a report to the Audit & Supervisory Committee as a result of such report, and ensures all Directors, Corporate Officers, and employees of Makita are informed to that effect.
  • (9) Other systems to ensure that audits by the Audit & Supervisory Committee will be conducted effectively
  •  ・ In order to enhance the supervisory function of the Audit & Supervisory Committee over Accounting Auditors, “Policies and Procedures concerning Prior Approval of Auditing and Non-Auditing Services” shall be established. In addition, to ensure that audits by the Audit & Supervisory Committee will be conducted effectively, audit shall be conducted in accordance with Standards for audit, etc. by the Audit & Supervisory Committee.
  •  ・ Full amount of the compensation to Directors who are Audit and Supervisory Committee Members shall be fixed so that the independence of the Audit & Supervisory Committee can be secured.
  •  ・ Expenses related to executing the duties of the Audit & Supervisory Committee Members (limited to those related to executing the duties of the Audit & Supervisory Committee) are securely budgeted each fiscal year and borne by the Company.

Implementation status of systems necessary for ensuring that the Company's operations are conducted appropriately

  • (1) Compliance
  •  ・ The Company keeps all officers and employees of Makita informed and provides training on the “Code of Ethics,” “Guidelines to the Code of Ethics for Makita,” and “Regulations Regarding Corporate Ethics Help Line (Internal Reporting),” on a continual basis.
  •  ・ The Company conducts a questionnaire survey of all employees to raise awareness about the importance of compliance and have them better understand the “Code of Ethics.”
  • (2) Risk management
  •  ・ The Disclosure Committee meetings will be held, at which Representative Directors, Directors in charge, Directors who are Standing Audit & Supervisor Committee Members, and General Managers of Internal Audit Division and respective departments of the Company meet to detect and extract and examine risks involved in the business activities of Makita.
  • (3) Internal audits
  •  ・ The Internal Audit Division shall carry out internal audits of Makita, and report their results to the Audit & Supervisory Committee and the management team.
  •  ・ The Company has established a framework under which any deficiency in internal controls found during an internal control audit is appropriately corrected or redressed in a timely manner.
  • (4) Systems to ensure the efficient execution of Directors' duties
  •  ・ The Board of Directors approves annual targets set by each department and oversees their progress toward achievement.
  •  ・ Corporate Officers in charge of operation (18 officers as of March 31, 2021, including 5 officers overseas) are assigned to major departments in order to operate business systematically and efficiently.
  • (5) Duties of the Audit & Supervisory Committee
  •  ・ The Audit & Supervisory Committee will have a meeting with Accounting Auditors and exchange information every quarter.
  •  ・ The Audit & Supervisory Committee will have individual interviews with all Directors (excluding Directors who are Audit & Supervisory Committee Members) to exchange information.
  •  ・ Expenses necessary for executing the Audit & Supervisory Committee Members’ duties (limited to those related to executing the duties of the Audit & Supervisory Committee) will be handled promptly at the request of Audit & Supervisory Committee Members.

Systems to ensure elimination of antisocial forces

  • (1) From the viewpoint of corporate social responsibility, Makita will consistently take a resolute stance against involvement in, and have absolutely no relationship with, the activities of antisocial forces that may threaten the order and the security of civil society.
  • (2) Makita's policy of "no intervention by antisocial forces has been permitted" is publicly announced, both internally and outside the Company, by expressly stipulating it in the management policy/quality policy and by displaying it on the Company's website.
  • (3) The ban on transactions with antisocial forces is expressly stated in the "Guideline to the Code of Ethics" which prescribes the standards for officer and employee conduct applicable in the execution of their tasks. Each Director shall keep all Corporate Officers and employees informed of and in compliance with such prohibition.
  • (4) The Company has been liaising closely with the police and external related organizations, including the Public Interest Incorporated Foundation for Aichi Residents' Conference for Violence, and endeavors to prevent any involvement in activities of antisocial forces, any damage caused thereby, and others.
  • (5) In addition to collecting information relevant to activities of antisocial forces from the police and external related organizations, the Company voluntarily participates in seminars. Also, the Company endeavors to share information within the Company and related departments of Makita.