Internal Control Systems

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LIXIL Group Corporation’s system to ensure the adequacy of business is outlined in the section “IV. Matters Related to the Internal Control System Updated” of the Governance Report. Please see the latest version of the Governance Report. The contents outlined under the section have been formulated as the basic policy on the internal control system pursuant to the Companies Act, in accordance with a resolution by the Board of Directors.

Operating Status of the System to Ensure the Appropriateness of Operations

The following are among major internal control initiatives implemented in FYE 2019.

1. Compliance
The LIXIL Group Code of Conduct has been translated into 17 languages and promoted among employees through training and awareness-raising activities. For high-risk areas identified in the Code of Conduct, LIXIL Group has developed various policies and guidelines in line with its basic principles and procedures, and provided training therein. The status of these measures and activities is reported to the Compliance Committee on a regular basis to confirm their effectiveness.
Compliance >
2. Managing the Group’s Risk of Loss
Items related to LIXIL Group’s risk management system and risks for the new fiscal year are reported at Risk Management Meetings or other meetings with a risk management agenda. For crises such as natural disasters, the status and responses are reported in a timely manner in accordance with the basic policies for crisis management of the Group.
Risk Management >
3. Appropriateness and efficiency of business execution
The status of major business initiatives is reported to the Board of Directors, which meets at least once a month to deliberate on important matters. Business decisions are thereafter efficiently executed based on the LIXIL Group’s rules pertaining to each executive's area of authority.
4. Audit Committee
Audit Committee members attend important meetings such as the Board of Directors and the Executive Officers Meetings, and receive reports on necessary information for audits. The Committee members also hold meetings with Group audit committees, accounting auditors, and executive officers to receive reports and exchange opinions.

Basic Stance Regarding Elimination of Antisocial Forces and Its Development

The LIXIL Group Corporation forbids its members to have any contact with antisocial forces. In LIXIL Group Conduct, we have clearly formulated our basic stance: "We will not be voluntarily involved with any act which may endorse or contribute to the activities of criminal organizations or individuals, such as corporate extortionists and members of organized crime, including as customers, business partners, or otherwise. We will not give in to threats by such parties and will promptly report any such threats to the company."

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