Compliance

For more details of our basic policy, compliance structure, and compliance training, click here.

Risk Management

For more details of our risk management system and initiatives for addressing major risks (business/administrative risks), click here.

The Board of Directors also monitors the conduct of the Company's business activities as well as environmental, social, and governance (ESG) risk.

Responding to Major ESG Events (e.g., Large-Scale Natural Disasters)

In addition to creating disaster-resilient neighborhoods, the Group aims to ensure the safety and security of employees, tenants, and customers at facilities it operates by working on business continuity plan initiatives, such as by running disaster countermeasure training and first-aid training.

In principle, we hold Groupwide disaster countermeasure training three times a year, which imagines different scenarios where a large-scale earthquake has occurred. We carry out these drills to make sure we can respond smoothly to a variety of situations.

(Theoretical scenarios)

• An earthquake occurs directly below Tokyo during working hours
• An earthquake occurs directly below Tokyo outside working hours
• A major earthquake occurs outside Tokyo near branch offices

For more details, please see the Providing Value through Customer Satisfaction and Creation of Neighborhoods page, click here.

Strategy Planning Special Committee

The goal of the Strategy Planning Special Committee is to manage business risk by reviewing management plans and specific management issues, and managing the execution of responses to such issues.
The Strategy Planning Special Committee provides the following functions for Mitsui Fudosan and the Mitsui Fudosan Group.

• Formulation and review of Group strategies
• Medium- to long-term business planning and fiscal-year planning, prior review, and coordination
• Review of policy responses to specific management issues, and promotion and management of such policies
• Planning, proposal formulation, and review of organizational structures, staffing, etc.
• Supervision of business risk management for Mitsui Fudosan and the Mitsui Fudosan Group
• Review of other important matters

Risk Management Special Committee

To manage business risk, the Risk Management Special Committee formulates risk management policies and plans, identifies and assesses risks, formulates response measures, and issues instructions.

Based on ISO 31000, the international standard on risk management, the Risk Management Special Committee implements a PDCA cycle to comprehensively manage administrative and operational risk, and it also precisely engages in preventative risk management while standing at the ready to respond in a crisis. When a compliance violation occurs, the Risk Management Special Committee orders an investigation and response, and monitors the situation.

The Risk Management Special Committee fulfills the following functions for Mitsui Fudosan and its Group companies.

• Formulating risk management policies and plans
• Improving risk management-related organizations, and clarifying roles and responsibilities
• Understanding and assessing risks that require management, formulating response measures, and issuing instruction
• Understanding and assessing the status of risk management, formulating improvement measures, and issuing instruction
• Deliberating response measures and issuing instruction in cases of business risk arising from emergency incidents, accidents, etc.

The Risk Management Special Committee meets, as a rule, on a once-a-month basis, to identify and understand risk issues, and then review and propose preventative and response measures. The committee conveys information to the entire company and the Mitsui Fudosan Group as necessary.

Main Agenda Items of the Risk Management Special Committee

• Report on condition of risk (incidents, accidents, etc.)
• Report on legal issues and compliance
• Plan and report on J-SOX compliance
• Plan and report on protection of personal information
• Inspect and report on information systems security

Response to Compliance Violations

When the Compliance Management Department determines that a particular matter involves a compliance problem, it conducts an investigation in collaboration with the relevant Company department. If necessary, appropriate action is taken with respect to the individuals who are out of compliance, as well as those individuals’ departments, after deliberation by the Risk Management Special Committee.

Establishment of an Internal Consultation Service

The Company has established internal contact points for consultation. These can be used by regular employees, and anyone engaged in work for our company based on an individual labor contract (contract employee), temporary transfer agreement, worker dispatch contract, part-time contract, or other agreement. Two contact points, internal and external, have been established, and workers can consult with either. The external contact point is provided at a law office, and it accepts consultations from a neutral standpoint,*1 notifies the Company of the consultation content, and encourages a response.

Topics for consultation include: wrongful conduct violating laws, regulations, internal rules, general social norms, or corporate ethics, sexual harassment, abuse of power, other forms of harassment, employment problems, and issues with the workplace environment.*2 The privacy of those who engage in consultation is protected, and there is never any retaliatory action or disadvantageous treatment due to such consultations in terms of personnel decisions. Consultations can be conducted under a real name, or anonymously.*3

Moreover, to handle questions and complaints from other external stakeholders regarding compliance, we have set up business-specific helpdesks on the corporate website.

Our Commitment to Auditors

Mitsui Fudosan has established the Nomination Advisory Committee to enhance transparency of the nomination process for corporate auditors.

Auditors conduct audits of business execution by directors while coordinating with the Audit Department, which serves as the internal audit department of the Company, as well as certified public accountants. To ensure proper operation of the auditing function, we rotate our auditors in an appropriate way. The Audit Department periodically conducts audits to review observance of the Code of Conduct and Code of Ethics, and identify any compliance violations.

Tax Transparency

Policy

Based on its compliance policies, the Group pays an appropriate level of tax and through its fair and highly transparent corporate activities, contributes to co-prosperity in harmony with society and the realization of a sustainable society. As a global entity, the Group pays attention to international organizations and trends-such as the OECD and the BEPS Project-and has constructed a suitable tax affairs framework for the Group. Maintaining this system, the Group will fulfill its social obligation in regard to taxation.

Compliance with Tax Laws

The Group conducts its corporate activities in strict compliance with all applicable tax laws and in the spirit of taxation, as well as guidelines from international organizations such as the OECD, the EU, the UN, etc., and takes into consideration legislative intent. Furthermore, it pays all prescribed taxes by their designated due dates in accordance with their country of origin.

Transfer Pricing

With regard to dealings among its international partners, the Group will take into consideration the arm’s length price and appropriately distribute earnings based on the degree to which each party contributed, as well as on analysis of the functions, assets, and risks of the relevant subsidiary and country.

Eliminating Double Taxation

In order to avoid tax on the same economic gains being applied across numerous countries, the Group will implement measures, including adhering to the tax treaties of those countries in which it is conducting its business.

Securing Transparency

The Group will disclose its policies regarding taxes, and take care to provide easy-to-understand explanations and maintain a high level of transparency for each respective country’s taxation authorities.

Relationships with Taxation Authorities

The Group will obey each respective country’s tax administration and tax collection procedures. Further, it will maintain healthy and normal relations with relevant taxation authorities, and will not offer any inappropriate benefits or provisions. Should the Group and taxation authorities come into conflict, we will proactively discuss the matter with the authorities to find a resolution and prevent reoccurrences through appropriate improvement measures concerning the issue.

Tax Planning

In order to maximize value for shareholders, the Group will implement appropriate and fair tax minimization measures. It will not, however, conduct any inappropriate tax planning, including measures such as applying beneficial taxation systems that disregard the legislative intent behind laws and regulations. Nor will it deliberately avoid taxes in ways that are not in line with its business goals or actual conditions, or by utilizing tax havens.

Governance System

While the Board of Directors bears oversight responsibility for tax-related risks, under the Executive Management Committee, which supervises overall risk management for the Group, the Risk Management Special Committee manages business risk, including tax affairs. The Managing Director who acts as the person in charge of legal affairs and compliance, the Chief Risk Officer, the Chief Legal Affairs Officer, and the Chief Officer for Compliance is the person with overall responsibility for tax affairs, belongs to the Risk Management Special Committee, and periodically reports on risk management to the Board of Directors. As part of our risk management, the Audit Department periodically conducts audits to review observance with the Code of Conduct and Code of Ethics. When the Audit Department identifies any compliance violations, it reports the results to the Board of Corporate Auditors. For more details on the specific framework and other aspects of the system, please see the Risk Management section.