Corporate Governance

The first pillar of Daifuku's management philosophy is: "Contribute to the development of industry by supplying optimal material handling systems to a global market." The second pillar encourages "healthy, growth-driven management which values profitability" to earn the trust of shareholders, business partners and employees. Our aim is a strong corporate structure that successfully guides that company in a competitive global market.

Daifuku also emphasize compliance in a rapidly changing corporate environment. Our management approach is transparent and honest. Board members are encouraged to state opinions freely to enable efficient decision-making.

The Compliance Committee chaired by our President ensures fairness and ethics of corporate activities. In one initiative, the Committee enacted a corporate standard to guide executives and employees in fulfilling their corporate and public roles as members of a leading company.

Basic Stance on Internal Control System

Daifuku understands that maintaining a robust internal control system increases the effectiveness of corporate governance to improve corporate reliability as well as operational efficiency and effectiveness. Consequently, Daifuku is committed to comply with laws and regulations, manage risk, conserve assets, and provide reliable financial reporting.

Development of Internal Control System

Daifuku has built a corporate governance framework based on a resolution of the Board of Directors, which called for construction of the system set out in the Ministry of Justice Ordinance, as prescribed in Item 6, Paragraph 4, Article 362 of the Companies Act, namely an internal control system. Daifuku recently revised the system, as portrayed in the diagram above.

To enhance its corporate governance system, Daifuku created an Internal Control Operations group and placed the BCP (Business Continuity Plan) Promotion Division under Internal Control in April 2007. Internal Control also has responsibility to oversee two established organizations - the Central Environment, Safety & Hygiene Committee and the Strategic Goods Export Control Committee.

The Executive Vice President is responsible for Internal Control and risk management in his role as Chief Risk Officer (CRO). CRO duties include identifying and evaluating risks affecting the Daifuku Group and developing and managing an appropriate risk response structure.

The Internal Control Promotion Department under the supervision of the Chief Financial Officer (CFO) has been integrated into the Internal Audit Department. The Department is responsible for educating the Daifuku internal control inspectors, who audit the company using the Plan-Do-Check-Act system.

Daifuku's internal reporting system provides a direct channel for contacting a lawyer. In May 2008, the Company introduced a system allowing global affiliate staff to directly consult the Legal Department.

Basic Stance Against Anti-Social Forces and Development of a System

Daifuku maintains a resolute stance against any force or group that threatens the order or safety of society by breaking established laws or regulations. The Company has outlined its stance in the Corporate Code of Conduct and has taken steps to ensure that it is fully understood and practiced by all associates.

Daifuku's response will be based on recommendations from the police, corporate defensive measures councils and other relevant organizations. The Company has built a framework under which its CSR (Corporate Social Responsibility) Division and Compliance Committee work closely with the above institutions and its corporate lawyer to take prompt action should any incident occur.