Internal Control and Internal Audit Activities

Internal control

The Internal Control Committee is chaired by the president and tasked with enhancing internal control systems and strengthening control within the group. It takes the lead in regular programs to confirm the status of controls throughout the organization and use findings to make improvements. The board of directors determines and amends basic guidelines for the development of internal control systems that comply with the Japanese Company Law.

We also create the internal controls required to ensure the appropriateness of financial statements as mandated under the Financial Instruments and Exchange Act, and perform assessments of the effectiveness of systems and their operations.

Internal audit activities

Internal audit activities confirm the soundness, effectiveness, and efficiency of management, provide recommendations on improvements, and follow up on progress. The internal audit chamber conducts audits of the NYK headquarters as well as operational audits for approximately 130 Japan-based group companies. Internal audits of NYK's approximately 190 international group companies are conducted by the internal auditors assigned to regional management companies at four locations overseas^*1 and are reported to the internal audit chamber and the heads of regional management companies. NYK also considers sub-subsidiaries in which it has management rights and affiliates in which its holdings are less than 50 percent to be within the scope of its auditing activities. The company conducts on-site audits on a roughly three-year cycle, including international group companies, supplementing them with annual questionnaires for all Japan-based and international group companies.