Corporate Governance
We will continue to work on establishing and augmenting a highly effective governance system to achieve sustainable growth and enhancement of corporate value.
Director's Remuneration and ESG Indexes
With the aim of actively solving issues related to sustainability management to improve corporate value of the Morinaga Milk Group in the medium- to long term, we have added ESG external indexes, objective pre-financial (non-financial) indicators, as criteria for evaluating director's remuneration since FY 2024.
To evaluate E (environment), S (society) and G (governance) comprehensively and objectively, we adopt FTSE and MSCI, major ESG evaluating organizations globally developing services, as our evaluation indexes. (For remuneration related to ESG indexes, these indexes will be used when payment coefficient is determined.)
| Evaluating organization | Index | Reference value | Evaluation for the previous fiscal year |
|---|---|---|---|
| FTSE | ESG score | 4.0 | 3.5 |
| MSCI | ESG rating | AA | A |
Other detailed information is disclosed in our IR Information, Corporate Governance Report, Corporate Governance Guidelines, and Integrated Report.
IR Information (Corporate Governance)
Compliance and Prevention of Corruption
Pursuant to the Code of Conduct, directors and employees thoroughly perform their duties toward the realization of the corporate slogan under the premise that the corporate activities comply with the law, the Articles of Incorporation, company regulations, and social ethics.
Compliance Promotion System
Morinaga Milk Group has established the Internal Control Committee chaired by the president, along with four subcommittees under its control: the Compliance Subcommittee, the Risk Management Subcommittee, the Financial Reporting Subcommittee, and the Information Security Subcommittee. This system is responsible for internal control of the entire Group and strives to develop the structure underpinning audits. The promotion of compliance is carried out mainly by the Compliance Subcommittee, which also determines compliance action policy and directs and verifies activities. Additionally, we confirm conformity to the Compliance Code of Conduct by means including an annual compliance awareness survey. We use the survey as reference to appropriately review compliance promotion initiatives.
Instilling Compliance Awareness
Morinaga Milk Group provides rank-based training, organization-based training that includes Group companies, and e-learning in order to instill and consolidate awareness of compliance.
Compliance Training
In addition to understanding compliance, compliance training covers a broad range of topics including the corporate slogan, awareness and actions, etiquette and morals, the Human Rights Policy, the whistleblower reporting system, harassment, the Road Traffic Act, information management, working hours, response to antisocial forces, mental health, Act against Unjustifiable Premiums and Misleading Representations, and the Subcontract Act, among others.
Target: Employees working at our Group (workers in the same workplace, including employees, temporary employees, part-time workers, and employees of partner companies), etc.
e-Learning
Targets and Training Content
| Morinaga Milk Group employees | Short e-learning compliance class |
| New leading players | Basic course on corporate ethics and compliance |
| New managers | Basic series on labor management |
| Directors and managers of Group companies | Basic course on corporate ethics and compliance, course on sexual harassment prevention, course on power harassment prevention, basic course on workplace mental healthcare for managers |
Implementation of e-Learning for All Group Employees (FY 2023) (Morinaga Milk Industry Co., Ltd. and domestic consolidated subsidiaries)
| May | August | November | February | |
|---|---|---|---|---|
| Number of participants | 7,559 | 7,561 | 7,496 | 7,458 |
| Completion rate (%) | 98.6 | 99.2 | 98.8 | 98.9 |
Compliance Consultation System: Morinaga Milk Helpline (Whistleblower Reporting System)
The Morinaga Milk Group has established the "Morinyu- Helpline" as a contact point for employees to consult on compliance issues. In addition to the internal consultation counter, an external consultation counter has been set up with a lawyer as the recipient of information. The names of consultants, their affiliations, and the content of consultations are protected by internal regulations that clearly stipulate the law and confidentiality obligations, so that any director, employee, retiree, or family member can consult with the Helpline with confidence. The Morinaga Milk Helpline Office conducts necessary investigations into cases of consultation and reporting, giving due consideration to the human rights and privacy of the consultants and other concerned parties. Inappropriate situations will be notified to the department or person in question and a request for improvement will be made. The subject department and the person consulted will then be asked to confirm that improvements have been made, and the matter will be reported to the Compliance Subcommittee, the Internal Control Committee, etc., for use in improving compliance measures. For consultations and questions related to the whistleblower's own work, advice on how to deal with the situation will be provided, including the opinions of attorneys, if necessary.
Morinaga Milk Group established the Morinaga Milk Helpline as a Implementation of E-Learning for All Group Employees (FY 2020)reporting website that supports submissions and responses in English and German. The cumulative number of reports is currently zero.
In addition, the Compliance Subcommittee receives quarterly reports on the status of the help line and makes necessary improvements to the internal structure.
Number of Consultations to Morinaga Milk Helpline
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Total number of consultations | 41 | 47 | 52 | 58 | 55 |
Risk Management
We identify individual risks, determine the responsible manager for each, and are moving forward with the construction of our Risk Management System.
Risk Management System
We established the Risk Management Subcommittee under the Internal Control Committee chaired by the president. The Risk Management Subcommittee operates a management cycle that evaluates risk items that should be managed company-wide, examines countermeasures, and identifies new issues.
Risk Management Promotion Committee Members are assigned to all business sites and all affiliates to advance the development of a system for reporting to the Internal Control Committee and Risk Management Subcommittee and a system for cooperation between organizations. These Members also practice management of individual risk items set by the individual organizations.
We are also preparing systems to take prompt action in line with crisis management rules in the event of unforeseen circumstances, through means such as establishing task forces to contain and minimize damage.
Business Continuity Plan (BCP)
Morinaga Milk Group is a food company that has a strong element of social and public interest. We have formulated a Business Continuity Plan (BCP) aimed at promptly determining products demanded by society in the event of disaster or other emergency, and at restoring and maintaining stable supply of products.
Based on our BCP, which serves as a basic guideline for dealing with disaster, disorder, and other emergencies, we have created manuals for roles and procedures to address such situations in order to ensure effectiveness.
Morinaga Milk Group BCP Basic Policy
| Protecting human life | ： | We place our highest priority on protecting the lives of Morinaga Milk Group employees, their families, partners, neighboring communities, related parties, and customers. |
| Making a difference in society | ： | We contribute to society by working toward food support and supply, including in areas hit by disasters. |
| Continuity of business | ： | We will build essential systems with utmost consideration for the safety of employees, and will work toward the stable supply of Group products that meet the needs of customers, partners, and areas hit by disasters. |
BCP System / Routine readiness
Immediately following a disaster or disorder, the head office will organize a task force to establish policies and procedures for first response and to share these with related parties. In addition, we take steps to ensure that employees at not only the head office but also business sites at the location of disasters respond flexibly and appropriately with a sense of ownership, following the BCP and manuals. In terms of routine readiness, we have prepared disaster actions plans covering earthquakes, fires, typhoons, floods, and so on, which we enforce through regular disaster readiness training. We conduct this training once a year. Training includes evacuation guidance, fire extinguisher operation, transport of injured people, and AED training provided by business sites, under the guidance of local fire stations to improve proficiency.
In addition to disaster actions plans, we stipulate that manufacturing sites (plants) must carry out prompt collection of information and take recovery measures based on the Emergency Countermeasures Operating Manual. In addition to annual disaster readiness training, we work to maintain and enhance response capability through disaster readiness organizations carrying out their roles and through practical training with fire extinguishing equipment, while collaborating with local fire stations to form in-house fire brigades that take part in regional rallies to improve their techniques. We are also implementing earthquake resistance measures for buildings. Moreover, we contract with SECOM CO., LTD. to provide employees with safety confirmation training.
Support system for disasters
Morinaga Milk cooperates with relevant government bodies and industry groups to supply affected areas with infant milk and long-life products as emergency foods in the event of disaster. After the Great East Japan Earthquake, we provided aid in the form of 8,000 cans of infant milk through the Japan Dairy Association. We will continue to offer disaster relief in partnership with our stakeholders.
Response to climate change
Viewing climate change as a significant risk to the continuity of business over the medium to long term, Morinaga Milk conducted a scenario analysis of climate risks and opportunities, in accordance with the Task Force on Climate Related Financial Information Disclosure (TCFD). We will use the results of the analysis to study and implement measures for climate change mitigation and adaptation.
Priority Issue: Mitigation of and adaptation to climate change
Information Security
Morinaga Milk Group’s basic approach aims to improve performance by maintaining and managing the confidentiality, integrity, and availability of all of its information assets and to make proactive use of such assets. This approach is made known to all officers and employees.
In addition, to respond to changes in the external environment and to make the information security management more reliable, the Group decides and reviews the relevant rules as appropriate.
Information Security System
Morinaga Milk Group has established the Internal Control Committee chaired by the president, along with the Information Security Subcommittee under it. The subcommittee meets once per month to identify issues concerning the Group’s information security as well as to plan and implement responses and spearhead audits. The Information Security Subcommittee also plans and implements reliable information security countermeasures
For departments and Group companies, the head of each organization is responsible for information security. We also established a Technical Information Subcommittee in 2019 to strengthen our management system for confidential information. (*The roles of Customer Personal Information Working Groups that had been operating under the Information Security Subcommittee were transferred to the Information Security Subcommittee as of July 2023 to align with the current management system.)
Furthermore, in July 2024, we established a Computer Security Incident Response Team (CSIRT) as a subordinate organization of the Security Subcommittee to enable us to more quickly and accurately grasp the situation and respond to incidents both internally and externally.
Information Security Countermeasures
Occurrence of a Serious Information Security Incident
In April 2018, the servers of Morinaga Milk Group's e-commerce site were illegally accessed by an external party, and the leak of credit card information and other personal information of customers was confirmed. An investigation by a third-party organization was requested and countermeasures were implemented. Morinaga Milk Group sincerely apologizes for the inconvenience caused to many customers.
Handling Incidents such as Information Leakages
When an incident such as an information leakage has been confirmed, we will take prompt action in line with standards for the handling of emergency problems.
When a situation has occurred, a countermeasures headquarters chaired by the president will be established to promptly disseminate information to all board members and related departments, and work to solve the emergency. Should an investigation confirm violations of laws or regulations by subcontractors, employees, etc., our response will be sanctions including dismissal, criminal charges, and pursuit of civil liability.
Routine information security measures
Morinaga Milk gives priority to illegal access countermeasures when a serious incident occurs.
In addition to technical and physical measures, Morinaga Milk also enacts ongoing system measures, such as reviewing security standards (rules) and further strengthening against vulnerabilities.
Moreover, as a countermeasure against increasingly sophisticated cyberattacks, Morinaga Milk provides targeted e-mail attack training for all employees and implements virus countermeasures for information equipment.
Training on Information Security Management
Morinaga Milk Group is working to strengthen the awareness of information security among all employees through targeted e-mail attack training, e-learning, and compliance training. About 5,500 employees throughout the Group have completed such training through e-learning.