Management Monitoring System

In 2019, we have changed to a company with Audit & Supervisory Committee, and have appointed 4 audit and supervisory committee members, including 3 highly independent, outside audit and supervisory committee members.

Audit & Supervisory Committee Members and Audit & Supervisory Committee

Mabuchi has appointed four Audit & Supervisory Committee members, three of whom are outside members with a high degree of independence. Mabuchi has also established a department for Audit & Supervisory Committee members and has made it possible for Audit & Supervisory Committee members to request audit-related assistance from employees of the Internal Audit Department and other departments where appropriate. Audit & Supervisory Committee members carry out audits on the execution of duties by directors and other bodies in accordance with legal stipulations and the auditing standards, policies, plans, and apportioned duties determined by the Audit & Supervisory Committee.
Specifically, Audit & Supervisory Committee members attend meetings of the Board of Directors and the Executive Committee, as well as other important meetings, and oversee major business execution decisions and documentation related to their execution, if necessary, requesting directors and employees to provide such documents or submit reports, in order to audit and supervise the execution of duties by directors. The Audit & Supervisory Committee convenes every second month and holds regular monthly meetings for the exchange of opinions between Audit & Supervisory Committee members along with essential deliberations regarding the execution of duties by directors.
Beyond emphasizing high-level independence of outside Audit & Supervisory Committee members, Mabuchi's policy is for outside Audit & Supervisory Committee members to represent more than half of the Audit & Supervisory Committee. Mabuchi also elects Audit & Supervisory Committee members with either specialist viewpoints or considerable knowledge of legal, financial and accounting matters.
As necessary, Audit & Supervisory Committee members receive relevant material information from the director responsible for internal control, the Internal Control Department, the independent auditor, and the Internal Audit Department upon inquiry. Audit & Supervisory Committee members and directors receive reports and advice from the Audit & Supervisory Committee.

Internal Audit Department

Mabuchi has established the Internal Audit Department under the direct control of the president. This body liaises with the Audit & Supervisory Committee (members), the director responsible for internal control, and the Internal Control Department on a timely basis and conducts ongoing supervision of the upgrading, running, and effectiveness of the internal control framework for Mabuchi and its Group companies. The Internal Audit Department reports its findings to the president, directors, and Audit & Supervisory Committee members.

Independent Auditor

With respect to accounting audits, the Company has formed an auditing agreement with Ernst & Young ShinNihon LLC to carry out audits under Japan's Companies Act and Financial Instruments and Exchange Law. Ernst & Young ShinNihon conducts audits and reviews of the Company's annual and quarterly financial results based on an independent, third-party standpoint. From Ernst & Young ShinNihon, the Company receives reports as appropriate on issues identified during the audit implementation process. The Company also receives reports from Ernst & Young ShinNihon on both the results of audits and the effectiveness of internal control regarding financial reporting at the Audit Report Meeting (attended by the director responsible for internal control and Audit & Supervisory Committee members) following the end of each financial period, and responds in a timely manner if there are any discrepancies.