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Internal Control Relations with Shareholders and Investors

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Internal Control Relations with Shareholders and Investors FY2010 Activity Results Internal Auditing agents from the perspective of operations and insurance agents, in to identify risks in each business and Our CSA initiative methods are being nationwide each year as a regular part The Internal Audit Department has compliance and risk management. The order to ensure its checking functions develop and introduce countermeasures constantly improved and enriched, of company-wide efforts to promote been established to perform auditing Internal Audit Department is a separate and the effectiveness of its operation in order of priority in order to mitigate and CSA is carried out in all head operation improvements. of departments responsible for the organization, isolated from departments auditing. risks and improve operations (❷). office departments and all branches execution of operations and insurance responsible for the execution of Regulatory Compliance Initiatives Create Sustainable Corporate Value Information Disclosure The company management—in Status of Compliance Promotion Information Property Protection the form of groups such as We consider the timely and transparency, and the ensuring of Information Disclosure Policy and and Management We understand that business the Compliance Committee appropriate disclosure of company accurate awareness and evaluation defined internal rules regarding the activities in compliance with and Executive Management In order to further enhance our information to customers, society, of our company to be important disclosure of information in the event of laws and regulations and social Board—checks progress conditions protection and management of and shareholders and investors, corporate governance strengthening inappropriate occurrences. standards are the foundation regularly, making Program revisions information property, in FY2010, we the increasing of management measures. We have established a Basic Create Sustainable Corporate Value for carrying out our social as necessary. instituted stronger controls on Internet responsibility. Compliance has been In FY2010, in order to achieve e-mail usage, reduced external storage Maximize Customer Satisfaction positioned as one of our most greater legal and regulatory compliance media usage, and enhanced our Internal Control important management issues, in conjunction with our demutualization systematic checks, in order to prevent and the entire company is working and listing, we carried out successive the leakage of important information. Internal Control Policy together to promote compliance. enhancements to our management of We also carried out supervision and Specifically, we establish a company information such as important inspection of contractors, including We have established a “Basic for driving the establishment and protection of information property, Compliance Program in accordance facts and shareholder information, and subcontractors, as well as regularly Internal Control Policy,” which sets operation of an internal control system; risk management, and the handling of with the issues identified for each our insurance solicitation management performing training and inspections out our basic approach and policy checking the appropriateness of antisocial forces as an organization. The fiscal year. Based on this Program, systems, as critical compliance company-wide in order to ensure the ❶ Maximize Customer Satisfaction concerning internal control ( ), and financial reports and the effectiveness Internal Control Committee consists our departments and branches initiatives. protection of information property by set up an Internal Control Committee of internal audits. And as an of representative directors and the work to promote compliance. officers and employees. as part of the establishment of our organization overseeing the Compliance executive officers in charge of the internal control system. The Committee Committee, Risk Management departments responsible for internal Secure Social Trust is a special organization assisting the Committees, and Antisocial Forces control, and in principle holds a meeting Board of Directors and the Executive Handling Committee, it also checks every month. Relations with Shareholders and Investors Management Board and is responsible and discusses issues of compliance, the Communication with Shareholders and Investors, Secure Social Trust and Corporate Dividend Policy Risk Management first ordinary general meeting of Dialog with Shareholders and Corporate Dividend Policy Foster Employee Potential operational risks, we also carry out methods, in all operations. CSA targets shareholders (attended by 1,655 Self-Assessment Investors internal control self-assessment (CSA), “operational risks,” such as “clerical shareholders, and lasting for 3 hours We aim to realize medium and long- To enhance the effectiveness a systematized and standardized set work risks” and “system risks” lurking We place importance on dialog and 6 minutes). term stable shareholder returns, striking of internal controls with regards to of risk assessment and evaluation in day-to-day operations. It is used with our shareholders and investors. In At this general meeting of a balance between financial soundness FY2010, in addition to 4 results briefings shareholders, we further visualized the improvements and policyholder 1 Basic Internal Control Policy 2 Risk Mitigation and Operation Improvement Cycle and 2 management briefings, executives content of our FY2010 business report dividends. Specifically, we target a 1 Identification of Risks 1. Conduct business activities in compliance attended over 350 meetings with and the explanation of our “FY2011 to dividend payout ratio equal to between Foster Employee Potential with laws and regulations, the Articles of Take inventory of what operations are being carried out, Incorporation, social standards, and rules and identify individual latent risks, such as improper processing and information leakage. institutional investors (108 of which 2012 Medium-Term Management Plan,” 20% and 30% of consolidated adjusted in the market were overseas). They also proactively striving to create even clearer and easier net income*, deciding each period’s 2. Protect and manage information assets appropriately, including customer 5 Implementation Status Verification 2 Risk Evaluation participated in IR events and company to understand presentations. dividends after a comprehensive information, shareholder information, The status of countermeasure important facts, and other unique Evaluation of Severity (Impact) of Risks information sessions for individual We used color and styles creatively assessment that includes consolidated information implementation is verified, and the results are carried over into the risk Even risks which happen less than once a year may have investors, held by third parties, in order in our general meeting of shareholders and non-consolidated financial result 3. Manage risks effectively in accordance mitigation and operation improvement tremendous impacts when they do occur, so the severity with the characteristics of those risks cycle of the following year. (impact) of latent risks is identified. to deepen investor understanding of convocation notice for greater clarity, trends, the market environment, and 4. Block any relationships with antisocial forces to prevent any damage that might our company. Presentation materials are and sent these notices at an early stage. regulatory trends. occur 4 Countermeasure Implementation Evaluation of Measures posted on our website, and have been After the general meeting of * Consolidated adjusted net income is a unique 5. Ensure appropriate operations at Risk mitigation and operation for Prevention of Risk Manifestation Dai-ichi Life indicator that shows effective subsidiaries improvements are promoted through widely viewed by shareholders and probability, calculated by adding items such as the successive implementation of Operational systems, rules, and check systems are shareholders, we posted video of 6. Ensure the reliability of financial reports countermeasures. confirmed in order to evaluate risk prevention measures. provisions for contingency reserves in excess of the and disclose them appropriately on a investors. these presentations, an overview legal amount (after tax) to consolidated net timely basis of the meeting records, and voting income. 7. Check the appropriateness and 3 Establishment of Countermeasures General Meeting of Shareholders effectiveness of internal control through results, taking an active approach to operational audits The priority of operational improvements is clearly identified in accordance with individual risk severities, and effective and efficient improvement measures are established. On June 27, 2011, we held our information disclosure. 23 24.
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