Corporate Information

Corporate Governance

KYB has developed effective corporate governance structure as a responsible and accountable entity that places importance on contributions to the society.

In order to fulfill the corporate social responsibility as to contribution to the society as well as to meet shareholders’ expectations through realization of sustainable and stable growth and the increase of corporate value, we pursue a speedy and efficient management structure, a highly fair and transparent management supervisory function, and continuous efforts to strengthen and enhance our corporate governance by the following corporate spirit and basic policies.

Corporate Spirit

By serving technologies and products that make people’s life safe and comfortable, KYB group dedicates to the society.

  • 1. We shall build a corporate culture full of vitality, and hold high goals.
  • 2. We shall value sincerity, cherish nature, care for the environment.
  • 3. We shall constantly pursue creativity, contribute to the prosperity of customers, shareholders, suppliers and society.

Basic Policies

  • 1. We shall respect the rights of shareholders, and ensure the equal and fair treatment of all shareholders.
  • 2. We shall take the benefits of stakeholders into consideration and endeavor to appropriately cooperate with those stakeholders.
  • 3. We shall disclose not only the information in compliance with the relevant laws and regulations, but also actively provide the important and/or useful information to stakeholders for their well-informed decision making.
  • 4. The Board of Directors shall be cognizant of its fiduciary responsibility and accountability to shareholders, and shall appropriately fulfill its roles and responsibilities in order to promote sustainable and stable corporate growth and increase corporate value, profitability, and capital efficiency.
  • 5. We shall engage in constructive dialogue with shareholders, and make efforts to obtain shareholders’ support regarding the Company’s Business Policies and also reflect shareholders’ opinions and concerns in the improvement of management.

1. Overview of the corporate governance system

We take “Audit & Supervisory Board system” defined by Companies Act in Japan and our corporate governance structure mainly consists of Board of Directors, Audit & Supervisory Board and Audit & Supervisory Board Members. In addition, we have Board of Executive Officers for the purpose of making speedy decisions and the effective execution of operation. The Audit & Supervisory Board, which includes two (2) outside members, monitors management activities of Directors and Executive Officers. In order to enhance independent and objective function of the management, the Board of Directors elects two (2) independent outside members. With aforementioned system, we assess our system creates an effective framework for the corporate governance.

(1) Board of Directors
The Board of Directors consists of eight (8) members, including two (2) outside Directors. In principle, the Board of Directors is held once each month. The Board of Directors makes decisions of items prescribed by laws, article of association and company regulations as well as policies and other important matters involving management. The Board of Directors also oversees the management of business operation.
(2) Board of Executive Officers

The Board of Executive Officers, a pre-deliberative body to the Board of Directors, discusses and authorizes important matters concerning management from a company-wide perspective.

(3) Other Management Committees
We have other Management Committees such as “Japan Group Company Management Conference”, “Global Strategy Committee” for the purpose of overseeing management condition of KYB group companies regularly. In addition, “Operation Review with the President” is held at each production affiliates, with KYB’s president to review and follow-up the matters relating to quality and Monozukuri.
(4) Audit & Supervisory Board
This board consists of four (4) standing Audit & Supervisory Board Members (the “Audit Members”). Among four members, two are outside Audit Members. We believe that audits performed by outside Audit Members provide for us with the effective oversight of management and create an appropriate framework for governance. In addition, one of the outside Audit Members is selected as an independent officer.
(5) Corporate Governance Structure
Management Structure and Internal Controls

2. Internal controls

To ensure the appropriateness of business operations, following “ Basic Policy for Internal Control System ” has been resolved by the Board of Directors.

(1) System necessary to ensure that the execution of duties by the Company and its subsidiaries Directors and employees complies with laws, regulations, and articles of incorporation
  • 1) "Corporate Guiding Principle" has been established in order to ensure that the Directors and employees of the corporate group comprising the KYB Corporation and its subsidiaries (the KYB Group, hereinafter) shall comply with laws, regulations, and articles of incorporation, and that corporate activities shall be conducted impartially and in good faith on the basis of high moral ethics.
  • 2) The Internal Control Office has been established under the Legal Affairs Dept. for the purpose of overseeing and promoting compliance. In order to promote awareness of compliance, the Internal Control Office shall provide education and training for the Directors and employees of the KYB Group, and maintain the KYB Group’s compliance system.
  • 3) The Audit Dept. shall conduct internal audits of the KYB Group, evaluate the maintenance and operations of internal controls, and report the results of its audits to the Board of Directors.
  • 4) An appropriate whistle-blowing system shall be maintained inside and outside the Company in order to ensure that the KYB Group employees are able to report information or serious doubts regarding illegal or improper conduct without fear of negative consequences. The Internal Control Office shall present information regarding the Group’s internal reports to the Board of Directors at fixed intervals.
(2) System for preserving and managing information on the Company and its subsidiaries Directors’ performance of their duties
  • 1) Information regarding Directors’ performance of duties shall be properly preserved on the basis of laws, regulations, rules for important document management and the criteria of document organizing and storage.
  • 2) Based on “Standard Information Security Policy”, the Company shall construct a system to protect information assets and take measures against the risk of information leaks and information system failures caused by cyberattacks.
(3) System related to the management of the risk of loss and relevant regulations of the Company and its subsidiaries
  • 1) Risk management rules that determine systematic risk management shall be established, and promote the KYB Group’s risk management system.
  • 2) The Company shall establish a Risk Management Committee, which shall detect and measure the severity of potential risks, as well as determine serious risks and the department to be responsible. The Risk Management Committee shall report on the responsible department’s activities aimed at countering serious risks to the Board of Directors at fixed intervals.
  • 3) The Audit Dept. shall audit the KYB Group’s risk management situation though audits of the Head Offices’ risk management situations, and shall report to the Board of Directors at fixed intervals.
  • 4) If the impending occurrence of a serious issue for the KYB Group is detected, the person in charge of the report will immediately inform the President, as based on “Rules of Prompt Report” determined by the KYB Group. The President will give directions to the relevant parties in accordance with the impending issue, and take measures to limit damages to as little as possible.
(4) System to ensure the efficient execution of duties by the Company and its subsidiaries Directors
  • 1) The KYB Group, in order to achieve swift decision making and efficient business operations, shall set the Board of Directors Regulations, which will consist of items to be decided by and items to be reported to the Board of Directors.
  • 2) The Company will formulate the KYB Group’s mid-term and fiscal year business plan, share management objectives, and report on progress with business execution to the Board of Executive Officers and other meeting committees at fixed intervals.
  • 3) The Company will perform adequate beforehand deliberation regarding important matters in the Board of Executive Officers and Other Management Committees, and adjust and optimize decisions made by the Board of Directors.
  • 4) The Company shall set “Global Regulation Defining Extent of Job Authorities”, which will consist of items that affiliates need to be decided by and to report to the Company. Based on “Global Regulation Defining Extent of Job Authorities”, group subsidiaries shall establish Administrative Authority Regulations for each company.
(5) System to ensure the fair business operations of the KYB Group consisting of the Company and its subsidiaries
  • 1) Systems related to the reporting of information to the Company regarding the execution of business duties by the Directors and other managers of subsidiaries
    • - To maintain the soundness of group companies, Group Company Management Rules shall be determined to promote the optimization of consolidated management.
    • - Based on the Group Company Management Rules, group subsidiaries shall report on the status of management at the Company’s management meetings at fixed intervals.
(6) Matters regarding employees when Audit & Supervisory Board Members request assistance in the Audit & Supervisory Board Members’ duties and matters regarding such employees’ independence from Directors and effectiveness of instruction to the employee
  • 1) If Audit & Supervisory Board Members should request the assistance of an employee, it falls upon the Company’s Directors and Board of Directors to arrange the provision of such employee.
(7) Preceding matters regarding such employees’ independence from Directors and effectiveness of instruction to the employee
  • 1) Audit & Supervisory Board Members shall make clear the following requirements in order to ensure the independence of the assisting employee.
    • - Jurisdiction of assisting employee
    • - Organizations to which the assisting employee is affiliated
    • - Orders and instructions to assisting employee
    • - Right to consent for approval of the assisting employee’s personnel change, human resources evaluation, disciplinary measures, and other relevant factors.
(8) Systems related to Directors and employees of the Company and its subsidiaries for reporting to Audit & Supervisory Board Members
  • 1) When there is concern that an incident causing substantial damage may occur, Directors and employees of the KYB Group shall immediately report to Audit & Supervisory Board Members.
  • 2) The Company’s Directors and Executive Officers shall make progress reports on the execution of the duties for which they are responsible to Audit & Supervisory Board Members through the Board of Directors and the Board of Executive Officers.
  • 3) Audit & Supervisory Board Members and Directors shall deliberate and reach decisions on the items that are reported and the persons who have made reports to the Audit & Supervisory Board Members or Audit & Supervisory Board at fixed intervals or in extraordinary circumstances.
  • 4) Audit & Supervisory Board Members shall call for the Directors or the Board of Directors to maintain a cooperation system with the Audit Dept., in order to efficiently develop and make practical use of this system.
(9) System to ensure that persons who have made reports to Audit & Supervisory Board Members will not receive any adverse treatment for having made such reports
  • 1) The KYB Group shall not conduct any adverse treatment for the reason that a person made a report to Audit & Supervisory Board Members.
(10) Matters concerning procedures for advance payment or the reimbursement of expenses incurred in relation to the execution of duties by Audit & Supervisory Board Members and any other policy for processing of costs and obligations incurred in relation to the execution of duties
  • 1) The Company shall bear costs necessary for Audit & Supervisory Board Members to execute their duties, and shall quickly comply with procedures for advance payment or reimbursement.
(11) Other systems to ensure effective audits by Audit & Supervisory Board Members
  • 1) Audit & Supervisory Board Members shall hold meetings with Representative Directors at fixed intervals, and exchange opinions on important issues determined by audits involving management policies, issues that the Company should address, the risks surrounding the Company and other issues, assurance of assisting employees and the reporting system to Audit & Supervisory Board Members, and environmental maintenance for other Audit & Supervisory Board Members’ inspections.
  • 2) Audit & Supervisory Board will exchange information with Outside Directors as well as discuss which to cooperate, ensuring the effectiveness of audits.
  • 3) Audit & Supervisory Board Members shall hold meetings at fixed intervals to exchange opinions with outside accounting auditors, auditors from affiliates, and the Audit Dept., individually, and share information.
  • 4) Upon conducting auditing duties, Audit & Supervisory Board Members shall receive the cooperation of the Audit Dept.

(1) Internal audit

The Audit Department is established as the internal audit organization.

Based on the internal audit regulations, the Audit Department carries out internal audits of KYB Group Companies. It also reports the results of internal audits and various kinds of internal and external information to Audit & Supervisory Board Members in a timely manner.


The Audit Department and accounting auditors hold regular meetings and occasional meetings as required regarding audit plans and results regarding internal controls evaluations in connection to financial reports.

(2) Audits by Audit & Supervisory Board Members

Based on the audit plan drafted by Audit & Supervisory Board Members, they attend the Board of Directors and other important units, and inspect the state of duties performed by directors by conducting visiting audits at each business.

Audit & Supervisory Board Members have additional posts as part-time Audit & Supervisory Board Members of major subsidiaries, where they audit the state of management in each company.

Information relating to each company and unified group auditing policies are shared at regularly held “group Audit & Supervisory Board Members liaison committees”. Audit & Supervisory Board Members work closely with accounting auditors, exchanging opinions and information so as to implement effective and efficient audits.

Audit & Supervisory Board Members have knowledge and/or experience of management, finance, and audit. Their opinions reflect both their expertise as well as the general public opinion, and they maintain a neutral and fair standpoint.

If Audit & Supervisory Board Members should request the assistance of an employee, it falls upon the Company’s Directors and Board of Directors to arrange the provision of such employee. The employee is ensured the independence from directors regarding personnel change and evaluation, and effectiveness of orders and instructions from Audit & Supervisory Board Members.

(3) Cooperation between Audit & Supervisory Board Members and accounting auditors

Audit & Supervisory Board Members regularly receive reports and explanations from accounting auditors regarding audit results, and honest opinions and information regarding audits are exchanged as appropriate.

(4) Cooperation between Audit & Supervisory Board Members and internal Audit Department

The Audit Department holds meetings with Audit & Supervisory Board in a timely manner to share information in order to optimize audits (annual audit planning, consideration auditing topics, and information/opinion exchanges regarding internal controls, etc.) and cooperate with each other.

(1) Election of outside directors and outside Audit & Supervisory Board Members

KYB elects two (2) outside directors and two (2) outside Audit & Supervisory Board Members.
The election of the outside directors and outside Audit & Supervisory Board Members is based on the requirements of the Company Act. The election of independent officers is based on the evaluation criteria for independence as set forth by the financial instruments exchange.

There are no special interests between KYB and them.

(2) Function and role of outside directors

The Board of Directors has eight(8) members, including two (2) outside directors. The outside director provides opinions to the Board from an independent standpoint, and plays a role in enhancing the management function as well as improving corporate governance.

(3) Function and role of outside Audit & Supervisory Board Members

KYB strengthens its management observation function by appointing two (2) outside Audit & Supervisory Board Members from among the four (4) full-time Audit & Supervisory Board Members on the Board of Directors, which is responsible for management decisions and supervising the duties performed by executive officers.

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