Management System

Corporate Governance

For Ajinomoto Co., Inc., strong corporate governance is a top priority, both for improving competitiveness and for establishing a positive presence in society. The company is creating an effective system of business execution and supervision that incorporates global best practices and retains the positive aspects of Japanese-style management. The company aims to increase its corporate value through an emphasis on group-wide management and efforts to strengthen business competitiveness under this system.
Board of Directors and Management Committee: The Board of Directors is the highest decision-making body within the management structure. The board makes decisions on matters relating to laws and ordinances and the company's by-laws as well as other important matters, and supervises the work of the directors and corporate executive officers. The Management Committee is comprised of senior executive officers who are also directors. The committee deliberates on basic policies regarding management of the company and makes decisions on important matters regarding business execution.

Corporate organization

Auditing and supervision: The Internal Auditing Department was established to follow internal auditing rules and an auditing plan to conduct operational audits of the company as well as the management and operation of affiliates. Corporate audits are conducted by five appointed corporate auditors, three of whom are outside auditors. Appointed outside auditors supervise business execution independently and impartially.
Nominations and compensation: Ajinomoto Co., Inc. has established a Nominating Advisory Committee and a Compensation Advisory Committee, which are composed of several directors, including outside directors, to strengthen the transparency and objectivity of executive appointments and compensation. The two committees carry out discussions with the Board of Directors regarding appointment plans and compensation of candidates, such as directors and corporate executive officers, and report the results of the review to the Board of Directors.

Risk Management

The Ajinomoto Group established its Risk Management Committee in 2002 to carry out thoroughgoing risk management with the aim to plan crisis response measures and identify risks in advance to avert the onset of a crisis.

As part of these efforts, the group has created business continuity plans (BCP) to minimize the impact on business and society in the event of an outbreak of a new influenza strain or a major earthquake. Measures to respond to such emergencies have been systematically developed.
At the time of the Great East Japan Earthquake, certain measures functioned adequately while others proved to be insufficient. Consequently, the group is in the process of undertaking a thorough review of the problems that became apparent in the aftermath of the earthquake.

Internal Controls

Ajinomoto Co., Inc. has established and implemented an internal control system group-wide over financial reporting in accordance with Japan's Financial Instruments and Exchange Act. Through the system, the company has identified potential risks by assessing the design and operating status of company-level control and analyzing business processes. Improvements were subsequently carried out. Furthermore, the company has established internal controls for critical risks and performs ongoing monitoring to maintain the internal control system.

On this basis, Ajinomoto Co., Inc. has been assessing the effectiveness of its internal controls over financial reporting through internal control operating tests, mainly conducted by the Internal Control Assessment Group of the Internal Auditing Department, which is independent from the company's day-to-day operations. In addition, the assessment of internal controls has also been audited by Ernst & Young ShinNihon LLC.

Based on the results of assessments conducted in fiscal 2010, the effectiveness of internal controls over financial reporting for the Ajinomoto Group was verified as of the end of the fiscal year.

Through these activities, the company is working to fulfill its corporate social responsibility by maintaining effective internal controls and ensuring the reliability of its financial reporting.

Information Security

Under the Ajinomoto Group Information Security Policy, the group carries out measures related to systems, such as formulating information handling rules and implementing in-house training. Technology-related measures, such as restricting electronic devices allowed at group companies, the recording of computer operation logs, and detecting external Internet attacks or alterations of the group's Web site are also carried out. Through both measures, the Ajinomoto Group aims to raise the standards of its information security.

The Ajinomoto Group Information Security Policy

We shall make clear rules regarding information and implement proper management.
We shall take technical measures to prevent information from being stolen, interpolated, altered, destroyed, or interfered.
We shall acquire sufficient knowledge about information security.
In the event that any problem of information security occurs, we shall strive to find the cause and minimize the damage.
We shall make efforts to implement the abovementioned actions, and promote improvements of information security on an ongoing basis.

Personal information management

On the basis of the Act on the Protection of Personal Information and other related laws in Japan, Ajinomoto Co., Inc. has established Guidelines for Handling Personal Information as in-house rules for clarifying the responsibilities and procedures concerning the management of personal information held by the company, including employee data. When personal information is managed outside of the company, the consignment of such duties is restricted, in principle, to group companies that have acquired ISO 27001 Information Security Management System certification.

The company has also determined rules for operating and maintaining information systems that manage personal data, taking into consideration the human factors involved in information management. For example, data must be managed by two personnel, one performing operations and the other monitoring, as a check and balance system. On the technical side, information systems must be periodically examined for weaknesses and upgraded accordingly as required.

A number of cases involving leaked personal information have arisen around the world in recent times. In response, Ajinomoto Co., Inc. has examined whether the factors underlying these leaks are inherent in the group's information systems, and confirmed that no major security issues exist. Going forward, the company intends to step up efforts to protect and manage personal information in its possession.

Confidential information management

The Ajinomoto Group has formulated Information Management Regulations and published an information handling guidebook on the basis of the Ajinomoto Group Information Security Policy established in 2004. The materials are used in regular training programs, including new hire training and management training attended by a large number of group employees every year.

The Ajinomoto Group moved its computer center off-site in fiscal 2009 to the premises of an external specialist as a means to strengthen disaster and security countermeasures. The current center prohibits electronic devices from being taken in or out of the facility, and conducts entry and exit checks, including a full-body X-ray, that are more stringent than inspections performed when boarding aircraft.

Through system development and education plus the enhancement of facilities, the Ajinomoto Group is striving to ensure thorough compliance and confidentiality.

Overview of activities in fiscal 2010

In fiscal 2010, the Ajinomoto Group provided training on the handling of information to about 500 group employees in order to raise their awareness of information security issues. The group also proceeded to revise in-house rules beginning with the Information Management Regulations, and intends to strictly enforce the revised rules going forward.

As a technical-related counter-measure, the Ajinomoto Group upgraded its servers for protection against Internet viruses and improve vulnerable OS software. The group intends to continuously undertake such counter-measures in the future in light of recent global trends related to Internet security.

Addressing a promotional campaign error

The Osaka Branch of Ajinomoto Co., Inc. had been collaborating with a mass retailer in a promotional campaign featuring a prize giveaway through a lottery to customers that applied by postcard. Regrettably, however, the branch demonstrated extreme carelessness by losing the postcards it had received in July 2010 before the scheduled lottery. To apologize to these customers, Ajinomoto Co., Inc. posted a formal apology at the retailer's outlets and on its Web site.

To prevent this kind of incident from recurring in the future, the company is working to more strictly enforce its information management rules and improve compliance.

Compliance Framework

The Ajinomoto Group Principles consists of the Ajinomoto Group Philosophy, the Ajinomoto Group Way and the Ajinomoto Group Standards of Business Conduct

Messages like this are produced weekly by the Business Conduct Committee and appear on company computer screens during startup

In keeping with the group's shared values as defined by the Ajinomoto Group Way, and to realize the Ajinomoto Group Philosophy, the group has created the Ajinomoto Group Standards of Business Conduct to present model behavior for all employees to follow and put into practice in their daily work. The group is promoting the standards to ensure their full awareness among employees and managers at group companies both in and outside Japan. Toward this end, the Ajinomoto Group is providing a wide range of opportunities for employees to engage with the Standards of Business Conduct, such as educational and training programs, in-house manuals and promotional posters, and communications over the intranet.

The Ajinomoto Group companies in Japan regularly monitor the status of compliance through questionnaires and review meetings in the workplace to identify potential issues. The company works to solve any problems through its divisional management structure comprising the Business Conduct Committee, General Affairs & Risk Management Department, Legal Department, and other relevant departments. Each of the Ajinomoto Group company outside of Japan formulates its Codes of Conduct based on the respective country, region, and business characteristics within the scope of the Ajinomoto Group Standards of Business Conduct and the Ajinomoto Codes of Conduct. In this way, the company ensures that conduct standards can be clearly understood and readily carried out at worksites overseas.

Moving forward, the Ajinomoto Group will continue to maintain a sound compliance framework as a basis for becoming a genuine global company.

Business Conduct Committee

Overview of committees

In May 1997, Ajinomoto Co., Inc. established the Business Conduct Committee as an organization responsible for ensuring that all personnel are kept well informed of the Ajinomoto Group Standards of Business Conduct, and verifying that business activities are being carried out in accordance with the standards. The committee has since been centrally involved in promoting compliance-related activities. Ajinomoto Co., Inc. is currently working to establish Business Conduct Committees at its main group companies to carry out equivalent activities independently.

For group companies in Japan, members of Business Conduct Committees attend review meetings at worksites to exchange views on relevant matters. For example, members have been involved in ongoing discussions concerning the causes of and countermeasures for a violation of the law that occurred at the Tokai Plant of Ajinomoto Co., Inc. in fiscal 2009, and are also listening to opinions and discussing problems concerning harassment and diversified employment.

At group companies outside of Japan, independent Business Conduct Committees are established to initiate activities aimed at increasing employee awareness of the Ajinomoto Group Standards of Business Conduct and Codes of Conduct, which are formulated according to the culture and characteristics of the respective countries.

In addition, the company is promoting awareness of its whistleblower hotline, an important means for ensuring compliance among all employees. The hotline enables employees to make reports or seek advice on possible compliance violations at the company, by way of communication methods including telephone, e-mail, facsimile, and letters. The Hotline Operation Rules clearly state that the privacy of personnel using the hotline is guaranteed, and that users will not be subject to retaliation for making reports.

R&D compliance

As a growth driver for the Ajinomoto Group, R&D at Ajinomoto Co., Inc. is intended to contribute to the group's development while helping solve the challenges for humankind in the 21st century, namely global sustainability, food resources, and healthy living. The future of the company's R&D will include plans to accelerate global development and open innovation. Therefore, the company is continuously striving to train employees and establish relevant in-house rules while improving existing rules in line with laws and standards at the international, national, and local levels.