Internal Control System
At Yokogawa, "internal control" is a management process in which business resources, such as human resources, assets, and budgets, etc., are allocated appropriately and moved functionally to increase the corporate value. An internal control system is constructed as a means to achieve internal control; this is used to control both the positive and negative aspects. By doing this, Yokogawa aims at improving the corporate value of the entire Group.
The Structure of the Internal Control System
The internal control system of the Yokogawa Group consists of 10 control systems and 4 subsystems as shown in the table below: Each control system sweeps across all divisions that are conducting business activities.
| Internal Control Systems | Subsystems | Primary laws (excerpt) |
|---|---|---|
| Business Ethics | General law, Whistleblower Protection Act, etc. | |
| Decision Making | Corporate law etc. | |
| Quality Management | Laws concerning products, such as Product Liability Act and Measurement Act, etc. | |
| Labor Management | Labor Standards Act, Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment, etc. | |
| Environmental, Safety and Health | General environmental laws, Industrial Safety and Health Act, etc. | |
| Information Security Management | Unfair Competition Prevention Act, Act on the Protection of Personal Information, etc. | |
| Export Control | Foreign Exchange Law, etc. | |
| Financial Reporting | Financial reporting | Financial Instruments and Exchange Act |
| Procurement management | Financial Instruments and Exchange Act, Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors | |
| Insider Trading Prevention | Financial Instruments and Exchange Law | |
| Information Disclosure | Corporate law, Financial Instruments and Exchange Law, etc. | |
| Crisis Management | General laws | |
| Corporate Auditing Infrastructure | Corporate law |
In addition, each internal control system consists of a layered structure as shown in the figure below. The system clarifies the roles, e.g., 1. execution of PDCA cycle at the site, and 2. oversight of PDCA cycle from a specialized perspective.
Internal Control Systems and CSR
There two sides to CSR activities that fulfill the corporate social responsibilities: one side has to do with managing relations outside the company, e.g., stake-holders, and the other side has to do with managing the internal affairs of the Group. The internal control system of Yokogawa chiefly manages the activities of the entire Group concerning corporate ethics, quality, personnel management, and occupational safety and health, etc. In the figure below, B and C correspond to the internal control systems. The figure indicates that the CSR activities are promoted by appropriate operation of the internal control system.
