Governance
Corporate Governance
Basic Stance
In the business area in which we operate, used car distribution centering on the auto auction business, our group's management goal is "to increase corporate value" through continuous business expansion.
Clearly, it is natural that the increase in shareholder value is the most important issue as since we are an incorporated public company, but, as illustrated and exemplified by the six core elements of our corporate vision which are "the creation of a fair market", "achieving symbiosis with our members", "providing service to consumers", "delivering returns to our shareholders," "respecting our employees," and "making a contribution to the community", our corporate value is the result of fulfilling our responsibilities to all of these interested parties (stakeholders). As such we conduct the management of our operations on the basis of the recognition that "shareholder value" is realized through "corporate value".
In addition, since every company is a member of society, it is natural that it should comply with social norms in its business activities, and so it is essential to comply with and to fully satisfy the requirements of both the Basic Policy on Corporate Governance and of the Corporate Governance Code. By conducting thorough evaluations of our operations and by formulating an improvement plan for the next fiscal year at the final regular meetings of the Board of Directors held at the end of each business year, we make every effort to ensure high performance in terms of the quality of our accountability (duty to explain and account for our activities) and of highly transparent management, and to improve our corporate governance.
Corporate Governance System
Simplified Chart of Corporate Governance
| Main Items | Content |
|---|---|
| Form of Organizational Design | Company with Board of Auditors |
| Number of Directors (Female Directors) | 8 persons (1 person) |
| External Directors (Female Directors) | 3 persons (1 person) |
| Number of Corporate Auditors (Female Corporate Auditors) | 3 persons (-) |
| Outside Corporate Auditors (Female Corporate Auditors) | 3persons (-) |
| Number of Times Board Meetings Held (FY3/2021) | 8 times |
| (Average Attendance Rate of External Directors) | 100% |
| (Average Attendance Rate of External Corporate Auditors) | 100% |
| Term of Office of Directors | 1 year |
| Adoption of Executive Officer System | Adopted |
| Voluntary Committee of Board of Directors | Nomination and Compensation Committee |
| Audit Corporation | KPMG AZSA LLC |
The Board of Directors
The Board of Directors consists of eight Directors, including five Directors who are USS executive officers and three outside Directors, which is within the limit of 12 Directors specified in the Articles of Incorporation.
Director candidates and executive officers are selected from among individuals with the extensive experience, outstanding knowledge and professional expertise required by these positions. The Nomination and Compensation Committee, where a majority of the members are independent outside directors, first discusses these selections. The Board of Directors then makes the final selections while taking into consideration the conclusions of this committee.
The Board of Corporate Auditors
The Board of Corporate Auditors consists of three members (including three Outside Corporate Auditors), who attend the meetings of the Board of Directors and conduct surveys and audits of the Directors' execution of their duties and other business and asset-related considerations. Furthermore, the Board works in cooperation with the Internal Auditing Office, which conducts audits of each division and office (including at the Company's subsidiaries).
When nominating candidates for Corporate Auditor, persons with an abundance of experience, a significant degree of insight, and the high level of expertise appropriate for a Corporate Auditor of the Company are considered as candidates, with the final decision being made after obtaining the consent of the Board of Corporate Auditors.
Corporate Governance Flowchart
Outside Directors and Corporate Auditors
The Company has appointed three Outside Directors to ensure management transparency and fairness. We consider all three Outside Directors to be Outside Executives in relation to whom there is no concern of any possibility of conflicts of interest arising with our ordinary shareholders, and have filed a report about their status as independent officers at the Financial Instruments Exchange on which the Company is listed. It is expected that, in relation to such independent directors, actions can be taken, such as stating such opinions as need to be taken into consideration at the decision phase etc. regarding execution of business by the Board of Directors etc. to safeguard the interests of our ordinary shareholders. Furthermore, the Company's three Corporate Auditors are Outside Corporate Auditors and have been reported as being independent officers because they all are possessed of a high degree of independence. These independent Corporate Auditors attend the meetings of the Board of Directors and conduct thorough investigations and audits of directors' execution of their duties and of other business operations and asset conditions.
Although there is no special provision stipulated in relation to the independence of the Company in its selecting Outside Directors and Outside Corporate Auditors, the Company is expected to maintain an objective and appropriate oversight or audit function and role, and one that is based on a wide range of experiences and professional insights, and so they have been appointed in accordance with the basic idea that there is no risk of any conflicts of interest arising with our ordinary shareholders.
Outside Directors and Outside Corporate Auditors regularly hold meetings to exchange information, share views among themselves, and work together. Furthermore, the Outside Corporate Auditors, the Internal Audit Department and the Accounting Auditors also exchange views and work together in a similar manner.
Reasons for Appointment of Officers and Status of Activities
| Category | Name | Reason for Appointment | Status of Activities in the FY3/2021 |
|---|---|---|---|
| Chairman and Representative Director, Chief Executive Officer | Yukihiro Ando | Following his election as a Director in July 1982, Mr. Yukihiro Ando was involved as a senior executive in the opening of new auto auction sites and the development of auto auction systems and was the Manager of the Nagoya Office. He became President and Representative Director in June 2006 and was named Chairman, Representative Director and Chief Executive Officer in June 2019. In this position, Mr. Ando has used strong leadership and decision-making backed by many years of experience and accomplishments to oversee large capital expenditures and M&A deals in order to achieve consistent medium to long-term growth of earnings and corporate value. | Meetings of the Board of Directors 8 out of 8 (100% attendance rate) Nomination and Compensation Committee 3 out of 3 (100% attendance rate) |
| President and Representative Director, Chief Operating Officer | Dai Seta | Mr. Dai Seta has outstanding knowledge and accomplishments concerning the operation of auction sites and was the Manager of the Auction Operations Department. He has also served as the president of consolidated subsidiaries, ARBIZ Co., Ltd. that operates a recycling business, and USS Support Service Co., Ltd. that operates a finance business.To utilize Mr. Seta's outstanding management skills, he was named President, Representative Director and Chief Operating Officer in June 2019. Since then, he has performed the roles of decision-making and supervising business operations very well. | Meetings of the Board of Directors 8 out of 8 (100% attendance rate) Nomination and Compensation Committee 3 out of 3 (100% attendance rate) |
| Executive Vice President | Masafumi Yamanaka | Mr. Masafumi Yamanaka has expertise in the fields of accounting and finance and acquired outstanding management skills as Manager of the Finance Department and was elected a Director in June 2004 to utilize these skills. Mr. Yamanaka is currently Executive Vice President and Manager of the Supervisory Office. He supervises all administrative operations and uses his thorough knowledge of USS business operations for management activities. In June 2020, Mr. Yamanaka was named president of Reproworld Co., Ltd., which buys and sells accident-damaged vehicles. | Meetings of the Board of Directors 8 out of 8 (100% attendance rate) |
| Senior Managing Director | Masayuki Akase | Mr. Masayuki Akase has considerable knowledge and accomplishments involving the operation of auto auctions and acquired management skills as General Manager of the Customer Services & Marketing Development Department of the Nagoya Office. He was elected a Director in June 2004 to utilize these skills. As a Director, Mr. Akase was Deputy General Manager of the Auction Operations Department, Manager of the Yokohama Auction Site, Manager of the Auction Operations Department, and President of USS Logistics International Service Co., Ltd. which operates export procedure agency service. He is currently Senior Managing Director and Manager of the Auction Operations Department, where he oversees the entire auto auction business. Mr. Akase has outstanding knowledge of USS business operations and management skills. | Meetings of the Board of Directors 8 out of 8 (100% attendance rate) |
| Junior Managing Director | Hiromitsu Ikeda | Mr. Hiromitsu Ikeda has experience with the opening of new auction sites and the development of auction systems. He has considerable knowledge and accomplishments involving these systems and he acquired outstanding management skills at the Nagoya Office. He was elected a director in June 2004 to utilize these skills. As a Director, Mr. Ikeda was Manager of the Systems Office, Manager of the Tohoku Auction Site, Manager of the Osaka and Kobe Auction Sites, Manager of the Shikoku Auction Site, and Junior Managing Director of HAA Kobe which is a consolidated subsidiary. He is currently Manager of Nagoya and R-Nagoya Auction Site. In these roles, he oversees auto auction sites and uses his thorough knowledge of USS business operations for management activities. | Meetings of the Board of Directors 8 out of 8 (100% attendance rate) |
| Director | Hitoshi Tamura | In his role as a Corporate Councilor of Ricoh, Mr. Hitoshi Tamura was involved with measures to increase the quality of Ricoh's management, the formulation of sales strategies and other activities. He has served for many years as a primary judge for the Japan Management Quality Awards. Overall, he has considerable experience and knowledge concerning the improvement of management. Since taking office as an Outside Director in June 2014, the Company has made use of Mr. Tamura's knowledge to provide advice about various aspects of its overall management and to contribute to the improvement of its corporate value. | Meetings of the Board of Directors 8 out of 8 (100% attendance rate) Nomination and Compensation Committee 3 out of 3 (100% attendance rate) |
| Director | Akihiko Kato | Mr. Akihiko Kato has experience of working at the Bank of Japan, as a Director of the Gifu Shinkin Bank, and also of corporate management as a Managing Director. Since taking office as an Outside Director in June 2014, the Company has made use of Mr. Kato's knowledge to provide advice about various aspects of its overall management and to contribute to the improvement of its corporate value. | Meetings of the Board of Directors 8 out of 8 (100% attendance rate) Nomination and Compensation Committee 3 out of 3 (100% attendance rate) |
| Director | Nobuko Takagi | Ms. Nobuko Takagi is a Certified Public Accountant, and has experience of working at both audit corporations and tax accountant corporations, and has also taken charge of M&A promotions at M&A advisory companies and operating companies, and so has abundant experience and specialized knowledge regarding finance and accounting, and M&A. Since taking office as an Outside Director in June 2018, the Company has also made use of Ms. Takagi's knowledge for advice about various aspects relating to its overall management. | Meetings of the Board of Directors 8 out of 8 (100% attendance rate) Nomination and Compensation Committee 3 out of 3 (100% attendance rate) |
| Corporate Auditor | Kenichi Goto | Mr. Goto has expertise concerning taxes and finance and experience working in key position at a government agency. Mr. Goto contributes comments as required, from his expertise as a tax accountant,at meetings of the Board of Directors and at the meetings of the Board of Corporate Auditors. | - |
| Corporate Auditor | Keiji Miyake | Mr. Miyake has many years of experience as a certified public accountant and expertise in the fields of finance and accounting. Mr. Miyake contributes comments as required, from his professional standpoint as a Certified Public Accountant, at the meetings of the Board of Directors and at the meetings of the Board of Corporate Auditors. | - |
| Corporate Auditor | Jun Ogawa | As an attorney for many years, Mr. Jun Ogawa has many years of experience as an attorney and an extensive knowledge of legal matters. Mr. Ogawa contributes comments as required, from his professional standpoint as a lawyer, at the meetings of the Board of Directors and at the meetings of the Board of Corporate Auditors. | - |
Nomination and Compensation Committee
The Nomination and Compensation Committee, as an advisory body to the Board of Directors, discusses the suitability of the following proposals submitted to the Board of Directors and submits reports about these proposals to the Board of Directors.
During the fiscal year that ended in March 2021, the Nomination and Compensation Committee held three meetings.
（1）Nominations of Director candidates and the appointment of Executive Officers
（2）Policy on the remuneration of Directors and Executive Officers
（3）The selection and dismissal of Representative Directors and Senior Directors
（4）The discharge of Directors and Executive Officers
In addition, the Nominations and Compensation Committee makes decisions concerning the remuneration of individual directors and executive officers in accordance with the policy for decisions concerning this remuneration.
Evaluation of the Effectiveness of the Board of Directors
To evaluate the effectiveness of the Board of Directors, USS asks all directors and corporate auditors to complete questionnaires. The results of this survey are reported to the Board of Directors.
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Evaluation process
Time:March 2021
Participants:All directors and corporate auditors (including outside directors and corporate auditors)
Method:Self-assessment using a questionnaire(1) All directors and corporate auditors complete a self-evaluation questionnaire
(2) Responses to the questionnaire are compiled and analyzed by the secretariat of the Board of Directors
(3) Results and issues are reported to the Board of Directors, which then discusses these subjects
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Items evaluated
(1) Composition of the Board of Directors - Size and composition (diversity, professional knowledge)
(2) Operation of the Board of Directors - Frequency of meetings, length of discussions of agenda items, materials provided to directors
(3) Support for the Board of Directors - Training programs, information provided to outside directors and corporate auditors
(4) Discussions by directors - Discussions concerning management strategies and equity policies and actions
(5) Board of Directors risk management - Risk management, activities concerning social and environmental problems
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Summary of evaluation results
The use of this evaluation process confirmed that all questionnaire items are generally appropriate and that the Board of Directors is effective. The evaluation also showed that there were activities to deal with the two issues identified by the last year's evaluation and that improvements have been made.
(1) Increase the percentage of independent outside directors
Following the June 2020 annual shareholders meeting, three of the eight directors (37.5%) were independent outside directors as this percentage surpassed one-third.(2) Opportunities for outside directors and corporate auditors and the internal audit personnel to share information and opinions
Outside directors and corporate auditors and internal audit personnel hold meetings to provide a place for sharing information and opinions. -
Upcoming activities
Based on the results of this effectiveness survey, the following actions will be used to further upgrade discussions at the Board of Directors and make the board more effective.
(1) Discussions concerning medium to long-term business plans will be upgraded and directors will be provided with the necessary information.
(2) Opportunities will be increased for the directors to hold discussions and receive reports concerning ESG, the SDGs, and other social and environmental issues.
Voting by shareholders
When a resolution submitted by USS at a shareholders meeting passes with an approval percentage of less than 80%, the Board of Directors follows up by examining the reasons for opposition to the proposal and the causes of the large number of opposing votes. The directors then hold discussions to consider any actions that are needed.
At the shareholders meeting held on June 15, 2021, "Item 2 Election of eight (8) directors" was approved. There was no significant opposition to the election of any director.
Executive Remuneration
Remuneration in FY3/2021
| Executive Classification | Total Amount of Remuneration etc. (Million yen) | Breakdown (Million yen) | Number of Eligible Executives (Persons) | ||
|---|---|---|---|---|---|
| Basic Remuneration | Performance-linked remuneration | Stock options | |||
| Directors (Excluding Outside Directors) | 251 | 201 | － | 49 | 7 |
| Auditors (Excluding Outside Corporate Auditors) | 6 | 6 | － | － | 1 |
| Outside Executive Officers | 24 | 24 | － | － | 5 |
- The remuneration in this table includes the remuneration of two directors who were no longer directors following the end of the shareholders meeting held on June 23, 2020.
- There are no officers who are also employees.
（1）Basic policy for remuneration of directors and corporate auditors
- The USS Group provides competitive remuneration in order to attract and retain the talented managers who can contribute to the group's sustained growth and the medium to long-term growth of corporate value.
- Remuneration is divided in a suitable manner between fixed (basic) remuneration and variable remuneration (stock options used as remuneration linked to medium to long-term results of operations) for the purpose of using remuneration as a sound incentive for achieving sustained growth.
（2）Remuneration of directors and corporate auditors (●indicates eligibility)
| Type of remuneration,etc. | Category | |||
|---|---|---|---|---|
| Internal Directors (Note.1) |
Outside Directors (Note.2) |
Auditors (Note.3) |
||
| Fixed | Basic Remuneration | ● | ● | ● |
| Variable | Stock-remuneration type stock options | ● | - | - |
- Internal directors receive basic remuneration and stock option remuneration. Basic remuneration is a fixed monthly payment based on the roles and responsibilities of each individual's executive position. Stock option remuneration is based mainly on points granted to individuals in accordance with the number of years as a director and contributions to results of operations and other accomplishments. The stock options can be exercised only after an individual is no longer a director, corporate auditor or executive officer.
- Remuneration for outside directors is only basic remuneration that is a fixed monthly payment because these directors oversee management from an highly objective and independent perspective.
- Remuneration for corporate auditors is determined by mutual agreement of the corporate auditors. This remuneration is only basic remuneration that is a fixed monthly payment because the corporate auditors oversee management and perform audits from a highly objective and independent perspective.
（3）Level and composition of remuneration of internal directors
- A suitable level and composition of remuneration is established based on the business environment for the USS Group and on business and personnel strategies. In addition, objective remuneration market survey data from external organizations specializing in this field (Sumitomo Mitsui Trust Bank and Deloitte Tohmatsu Consulting) is used for reference when determining the level and composition of remuneration.
- For internal directors, the level, format and composition of remuneration are determined with the objective of further clarifying the link between remuneration and results of operations and of further increasing motivation to contribute to the medium to long-term growth of sales and earnings and corporate value. The level, format and composition of remuneration are reexamined periodically.
| Type of remuneration | Composition |
| Basic Remuneration | 70％～90％ |
| Stock-remuneration type stock options | 10％～30％ |
（4）Process for determining remuneration for directors
To further increase the transparency and objectivity of decisions concerning remuneration for directors, these decisions are entrusted to the Nominations and Remuneration Committee by a resolution of the Board of Directors. More than half of committee members are independent outside directors. This committee makes decisions based on all applicable factors, including an individual's title, responsibilities and contribution to results of operations, and within the limit established by a resolution approved by shareholders.
（5）Policy for determining remuneration for executive officers
The policy for determining the remuneration for executive officers is based on the policy for determining the remuneration of directors. Consequently, executive officer remuneration consists of basic and stock option remuneration.
Internal Audits and Corporate Auditor Audits
As the organization responsible for the Company's Internal Audits and Corporate Auditor Audits, the Internal Audit Office (2 members) is an independent organization and strives to strengthen and enhance the quality of the discharge of its functions, including the operation and evaluation of the internal controls related to financial reporting. The Corporate Audit involves, three Corporate Auditors, including Tax Accountants, in addition to Certified Public Accountants and lawyers, attending the meetings of the Board of Directors and auditing the Directors' business execution and financial conditions. Moreover, the Corporate Auditors collaborate with the Internal Audit Office and the Accounting Auditors to further improve internal control, including on-site audits of subsidiaries.
Accounting Audits
At the 27th Ordinary General Meeting of Shareholders held on June 26, 2007, the Azusa Audit Corporation (now the Azusa Limited Liability Audit Corporation) was appointed as the Accounting Auditor and has remained so to the present. The following persons are the Certified Public Accountants who have conducted accounting audits.
| Names of the Certified Public Accountants Conducted the Audits | Name of the Audit Corporation | |
|---|---|---|
| Designated Limited Liability Partner/Engagement Partner |
Kenji Suzuki | KPMG AZSA LLC |
| Designated Limited Liability Partner/Engagement Partner |
Atsushi Ohashi | KPMG AZSA LLC |
Compliance
Basic Stance
Since our establishment, we have been conducting our business with the aim of creating a fair and highly transparent used car distribution market. In order to earn the trust of our customers, we have a strong desire to ensure that we have an operating system and rules in place to enable us to conduct our auto auctions smoothly and to guarantee that our daily operations are always conducted in the fair and equitable manner in which they need to be executed.
Moreover, since auto auctions are conducted by dealing with a lot of important information such as data on members and detailed information about auction lots and successful bids. If such information is not properly managed, it may become impossible to provide a "fair and impartial" forum for auto auctions to be conducted. Furthermore, it is also important for the functions of the used-car distribution process to be closely related to the administration in terms of issues like the registration procedures etc. and for various documents to be prepared without errors or deficiencies.
From this perspective, we constantly strive not just to improve our company's growth rate, but also to enhance the social status of the entire industry, by thoroughly complying with all the necessary regulatory and other requirements and by conducting our auto auction operations in a "fair and impartial" manner.
Basic Principles of Compliance
We have established and codified the basic principles of our compliance policy as the "USS Code of Conduct and Ethics", and our directors take the lead in respecting and adhering to our corporate ethics. We have also created and published a "Compliance Manual" in order to thoroughly enforce the "USS Code of Conduct and Ethics", and to ensure that each employee is thoroughly informed of its content through internal training programs, etc., and aim to achieve full compliance with laws and social rules and to firmly establish our corporate ethics.
■ USS Code of Conduct and Ethics
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Compliance with laws and regulations
We will strictly comply with laws and regulations (including internal rules and guidelines) concerning the operation of our businesses and will contact the Administration Division for assistance regarding any points that require clarification.
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Respect for all individuals
We will not allow discrimination regarding race, ethnicity, nationality, gender, religion, other beliefs, disabilities, sexual orientation, gender identity and other personal characteristics. We are committed to maintaining a diverse workforce.
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Relationships with business partners
USS Group executives and employees are prohibited from receiving unreasonable gifts and other benefits from auction members and business partners under any circumstances. Furthermore, services must be provided fairly with no particular auction member receiving special benefits.
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Confidentiality
USS Group executives and employees are prohibited from disclosing to external parties any confidential corporate, internal and other information about companies, customers and business partners that has not been made public.
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Antisocial organizations and associated individuals
The USS Group refuses to accept monetary and other demands from antisocial organizations and associated individuals and is prohibited from purchasing or placing advertisements in publications issued by shareholders meeting extortionists and other similar parties.
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Conflicts of interest
USS Group executives and employees are prohibited from creating conflicts between their personal interests and the interests of auction members and causing a situation that results in this type of conflict.
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Company and private affairs
USS Group executives and employees must maintain a clear separation between their duties at the group and their personal affairs.
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Sexual and power harassment
USS Group executives and employees are prohibited from engaging in sexual harassment, which seriously disrupts the atmosphere of workplaces. Individuals must not use their jobs for sexual demands, sexual statements or other activities that annoy others. Furthermore, individuals are prohibited from engaging in power harassment, which involves the use of their jobs and authority to make statements and demands that are detrimental to the dignity of others and the workplace environment.
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Insider trading
The use of confidential information not yet disclosed to the public that was acquired through an individual's job at the USS Group for personal gain is a violation of the law and is strictly prohibited.
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Protection of USS Group tangible and intangible assets
USS Group executives and employees are obligated to protect all categories of the group's assets (information, merchandise, supplies, equipment, replacement supplies, brands, software, reputation for trust, and other tangible and intangible assets) and must not improperly or fraudulently use any of these assets.
Risk Management System
We think that our Risk Management System is closely related to our Internal Compliance System, and we have established our "USS Behavior and Code of Ethics" to improve awareness of corporate ethics and comply with laws and regulations. We have created and published a "Compliance Manual" and conducted in-house training, etc., in an effort to comply with laws and regulations, social rules, and to firmly establish our corporate ethics.
In addition, in order to promptly detect and correct behaviors and actions that violate or are contrary to it, we have established and are operating the USS Corporate Ethics Helpline, an internal reporting system for USS Group employees.
The Company's Risk Management System consists of the Auction Management Headquarters for risks related to the auto auction business, the System Headquarters for risks related to information processing, and the General Headquarters for risks related to finance, personnel and disaster etc. We always strive to respond to risks and prevent their recurrence, and have a system in place that reports to the President through the Director in charge who also reports to the Board of Directors about risks that affect management.
Large Scale Earthquake Response - Business Continuity Plan (BCP)
USS has a manual that prescribes responses to a major natural disaster. This manual includes items concerning responses to a large-scale earthquake and measures to be prepared for an earthquake. In addition, there are training programs to give everyone at USS a thorough understanding of the BCP.
To confirm the safety of everyone at USS following a large-scale earthquake, USS has system linked to the earthquake bulletins of the Japan Meteorological Agency that automatically sends messages to all USS personnel. This system makes it possible to quickly determine the status of everyone in the event of an earthquake.
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Data Management System for Disasters
In order to protect transactional data from disasters, we have contracted with inland data centers with a low risk of earthquakes and tsunamis, and we have also arranged for an adequate system of backup facilities to be in place.
The systems and data formats are standardized at each venue, and so, even if a disaster occurs in any specific location, the venues in the surrounding area will provide support and attempt to achieve a prompt recovery, and the handling of processes such as the settlement of moneys and fund transfers will be distributed to the surrounding area, we have established a system that will not become congested or delayed in such circumstances.
Information Security
In conducting membership automobile auctions, it is essential to properly manage various items of information of different types, such as information on members, data about the vehicles consigned for auction, and information on bidding. Information leaks can interfere with, and disrupt the conduct of, fair and impartial transactions, and so we are working to upgrade our hardware and software to ensure that we are able to manage information and data properly. We have established and published a "Privacy Policy" outlining how to protect both the personal data and information entrusted to us by our members and the rights of individuals.
Moreover, in order to properly manage the information related to automobile auctions, the input terminals for our automobile auctions are operated independently from external networks. In addition, we have also improved the system, and have introduced a monitoring system that allows us to check who has accessed information, what type of data it was, and when it was viewed. We always keep logs of all access, of any kind, made to the information that is highly important to our business operations to ensure that this is such access is only available to authorized employees of the Company.
There were no incidents of violations of information security laws in the fiscal year that ended in March 2021.
Whistleblower System
In order to promptly redress and obviate any acts or actions that may result in our Company losing the trust of society at large, such as violations or infringements of laws and contracts, violations of the Company's Articles of Incorporation and regulations, violations of the "USS Code of Behavioral Ethics", or abuse or misappropriation of rank or status, etc. As a countermeasure to such breaches, the Company has set up and operates the USS Corporate Ethics Helpline which is an internal reporting system for Group employees.
The scope of the "USS Corporate Ethics Helpline" extends to cover not just full-time employees but also temporary and temporary employees, etc., and accepts consultation and notification messages via email. The reception desk is set up at a third-party organization (within the premises of Integrex Inc.), with the USS Headquarters subsequently being informed and notified of the contents received. However, unless obligated by law, the names and affiliations involved will not be reported to the USS Headquarters without the express consent of the adviser and the whistleblower, thereby ensuring that the anonymity of the information provider and the neutrality of the system is maintained.
Anti-corruption
Corruption and bribery form one of the major risks that can seriously impair trust in a Company. In order to maintain a sound relationship with our members, traders and other stakeholders, we have clearly stated anti-corruption in the "USS Code of Conduct and Ethics" and ensure that all of the employees of the USS Group are thoroughly aware of it.
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(Dealings with Suppliers)
The Executive officers and employees of the Company should not give or accept any excessive or unreasonable gifts or entertainment from members or dealers in any circumstances whatsoever.
Moreover, they should not make any offer of any illegal benefit or profit to any particular member in relation to the Company's services. -
(Related Party Transactions)
The Company, which shall be taken to mean the officers of the Company and their relatives within their second degree and any companies in which either a financial stake or a share is owned by these persons (in the case of listed companies, a company or companies with a holding equivalent to 1% or more of the shares in issue), shall be prohibited from entering into any transactions, other than transactions related to automobile auctions, conducted by any corporation in which a person that is substantially involved in the control or management enters into a transaction with the Company (excluding transactions conducted by the Company and the Company's subsidiaries). In cases involving automobile auction transactions, these transactions are to be referred to the Board of Directors in advance and should, provided that the circumstances surrounding the transaction are the same as apply for general members, obtain the approval of the Board, so as not to harm the common interests of the Company and its shareholders. The status of such transactions is to be reported to the first meeting of the Board of Directors held each year after the conclusion of the Ordinary General Meeting of Shareholders, and a deliberation is to be made as to whether or not these transactions are to be continued.
Initiatives to Eliminate Antisocial Elements
The USS Code of Conduct and Ethics clearly states our stance of severing and refraining from all relations and dealings with antisocial elements by using the following measures. There are activities to give everyone at the USS Group a thorough understanding of our policy of responding firmly and resolutely to all unreasonable and improper demands. To ensure that there are no relations with antisocial elements at any time, we cooperate closely with the police, attorneys and other external organizations. In addition, all departments cooperate for the collection and management of information about antisocial elements and for maintaining the necessary internal framework.
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(Dealing with Anti-social Groups and Individuals)
No response is to be made to any requests for special transactions or money, etc., from antisocial individuals and organizations. Moreover, it is prohibited to take out subscriptions to, or to place advertisements in, any newsletters or magazines published or issued by sokaiya (corporate extortionists or racketeers that threaten to disrupt shareholder meetings) or similar individuals.