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 the duties of the Company’s and its subsidiaries’ Directors and employees complies with laws, regulations and articles of incorporation
  • 1) The “Corporate Guiding Principles” shall be established in order to ensure that the Directors and employees of the corporate group comprising the KYB Corporation and its subsidiaries (hereinafter referred to as “the KYB Group”) comply with laws, regulations and articles of incorporation, and that corporate activities are conducted impartially and in good faith on high ethical standards.
  • 2) In order to promote awareness of compliance, the Legal Affairs Dept. 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 to evaluate the maintenance and operation of internal controls as well as to suggest improvements and shall report the results of the audits to the Board of Directors.
  • 4) An appropriate whistle-blowing system shall be put in place inside and outside the Company in order to ensure that the employees of the KYB Group are able to report information or serious doubts regarding illegal or improper conduct without fear of negative consequences. The Legal Affairs Dept. 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 performance of the duties of the Company’s and its subsidiaries’ Directors
  • 1) The KYB Group shall preserve and manage information regarding Directors’ performance of their duties in accordance with laws, regulations and internal rules and regulations.
  • 2) Based on the “Standard Information Security Policy”, the KYB Group 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,” which stipulate systematic risk management, shall be established in order to promote the KYB Group’s risk management.
  • 2) A Risk Management Committee shall be established, which shall identify potential risks, measure their severity and determine serious risks and the department to be responsible for those risks. The Risk Management Committee shall report on the 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 and report the result to the Board of Directors.
  • 4) When the fact of occurrence of a serious issue is confirmed in the KYB Group, the person in charge of the prompt report shall immediately inform the President of the fact in accordance with the “Rules of Prompt Report.” The President shall give directions to the relevant parties in accordance with the fact of occurrence of the issue and take measures to minimize its impact.
(4) System to ensure the efficient execution of the duties of the Company’s and its subsidiaries’ Directors
  • 1) The KYB Group, in order to achieve swift decision making and efficient business operations, shall set “Board of Directors Regulations,” which stipulate matters to be decided by or reported to the Board of Directors.
  • 2) The KYB Group shall formulate its mid-term and fiscal-year business plans, share management objectives, and report on the progress of business execution at management meetings at fixed intervals.
  • 3) The Board of Executive Officers and other management committees shall perform adequate prior deliberations on important matters concerning management and business execution so that the Board of Directors can make decisions properly and efficiently.
  • 4)“Global Regulation Defining Extent of Job Authorities,” which specifies matters for which subsidiaries of the Company shall ask for the Company’s prior approval or on which they shall report to the Company, shall be established. Based on the “Global Regulation Defining Extent of Job Authorities,” each subsidiary shall establish its Administrative Authority Regulations.
(5) System to ensure the fair business operations of the corporate group consisting of the Company and its subsidiaries
  • 1) System related to the reporting of information to the Company regarding the execution of the duties of the Directors and other managers of its subsidiaries
    • - “KYB Group Business Procedure Management Rules” shall be established in order to maintain the soundness of the KYB Group as well as to increase the efficiency of its consolidated management.
    • - Based on the “KYB Group Business Procedure Management Rules,” the subsidiaries shall report on their management at the Company’s management meetings at fixed intervals.
(6) Matters regarding employees who assist Audit & Supervisory Board Members when Audit & Supervisory Board Members seek assistance in their duties
  •     If Audit & Supervisory Board Members should request the assistance of an employee, it falls upon the Board of Directors to arrange the provision of such employee.
(7) Matters regarding such employees’ independence from Directors and the effectiveness of instruction to such employees
  •     A personnel change involving the assisting employee, his or her performance assessment, disciplinary action against him or her and other relevant actions shall be carried out with the consent of the Audit & Supervisory Board.
(8) System related to the reporting to Audit & Supervisory Board Members by Directors and employees of the Company and its subsidiaries
  • 1) When there is concern that an incident causing substantial damage to the KYB Group may occur, Directors and employees of the KYB Group shall immediately report it to Audit & Supervisory Board Members.
  • 2) Directors and Executive Officers shall report to Audit & Supervisory Board Members through the Board of Directors and the Board of Executive Officers on the execution of the duties they are responsible for.
  • 3) The KYB Group shall not treat any person unfavorably on the basis that he or she made a report to Audit & Supervisory Board Members.
(9) Other systems to ensure effective audits by Audit & Supervisory Board Members
  • 1) The Board of Directors shall ensure that Audit & Supervisory Board Members have the opportunity to attend management meetings, access important documents and conduct on-site investigations in the KYB Group and other relevant activities.
  • 2) Representative Directors shall hold meetings with Audit & Supervisory Board Members at fixed intervals and exchange views and ideas on management policies, issues that the Company should address, risks surrounding the Company, important issues identified through audits, and other issues.
  • 3) The Company shall bear costs necessary for Audit & Supervisory Board Members to execute their duties and shall promptly carry out the procedure for advance payment or reimbursement.

(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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