CSR Report > CSR Report 2013 - Reliable and Trustworthy Business Practices

CSR Report

Reliable and Trustworthy Business Practices / To gain and secure the trust of our stakeholders, we exercise fair and sound judgment  when running our business, and emphasize corporate compliance and risk management.

  • Corporate Governance
  • Compliance
  • Basic Policy on Risk Management
  • Information Disclosure

Corporate Governance

At Nintendo, we strive to maximize long-term corporate value while carefully considering the benefits for everyone we touch. We are working to achieve a highly transparent and sound system of corporate governance; we also educate our employees about our policies, including good corporate ethics.

Execution and Supervision of Business Operations

Nintendo's unique business is based on the software-driven integration of hardware and software. We believe that the optimal managerial structure allows our Directors, individuals familiar with our unique business, to execute their own business operations, make company-wide business decisions and oversee other Directors' execution of business operations as experienced members of the Board of Directors. To strengthen shareholder supervision of Directors and to respond in a timely manner to changes in the managerial environment, Directors are elected for a term of one year.

In addition to the Board of Directors, the Executive Management Committee, which consists of key members from the Board of Directors, drives prompt and efficient decision-making.

Audits

Nintendo Co., Ltd. has five Auditors, including three Outside Auditors (as of the end of June 2013) who are Independent Officers with no stakes in Nintendo. In addition to attending meetings of the Board of Directors and other important meetings, Auditors meet regularly with the President and hold monthly meetings of the Board of Auditors to exchange views. Auditors strive to make audits more efficient and effective by holding discussions with the Internal Auditing Department, which is under the direct supervision of the President.

The Accounting Auditor conducts audits efficiently and effectively, sharing required information and exchanging views based on close coordination with the Auditors and the Internal Auditing Department.

The Internal Auditing Department conducts internal audits of business operations from the perspectives of efficiency, efficacy and legal compliance, maintaining a fair and unbiased position independent from operational departments.

Strengthening Internal Controls

To maintain and improve Nintendo's sound management structure and ensure appropriate business operations, we established the Internal Control System Committee, chaired by the President, which continues its efforts to strengthen the system of internal controls for the entire Nintendo Group.

The main companies in the Nintendo Group have internal audit divisions that conduct investigations of the group as a whole, in conjunction with the Internal Auditing Department of Nintendo Co., Ltd. The Nintendo Group internal auditing process involves not only the auditing of business operations in each region, but also the auditing of internal controls, including compliance with Japan's Financial Instruments and Exchange Act, and a review of risk management. The internal audit divisions also promote mutual understanding between the divisions of each region, share information and build consensus through frequent communications.

System of Governance

Compliance

As a company with the goal of persistent growth and expansion, Nintendo realizes the importance of building and maintaining trust, which requires adherence and compliance to laws, social norms and Nintendo's internal rules and conventions. To firmly base its business operations on compliance, Nintendo has established and implemented region-specific codes of conduct.

Activities of the Compliance Committee

Nintendo Co., Ltd. has established the Compliance Committee, under the supervision of the Executive Management Committee, to develop measures and policies for facilitating compliance. Although no legal or other violations were found in fiscal year 2012 audits, the Compliance Committee stays informed about current global issues and makes appropriate improvements, so as to foster a firmly rooted awareness of compliance.

Promoting Compliance in the Group

To enhance and promote compliance throughout the Nintendo Group, we set up the Global Compliance Committee (GCC), comprising executive management and core personnel responsible for legal affairs and compliance from Nintendo Co., Ltd. and our major overseas subsidiaries. This Committee holds global meetings for core personnel at the major group companies bi-annually, as a practical channel for sharing and exchanging information about compliance-related issues and future legal tasks that affect each of our companies.

Compliance Hotline

Nintendo Co., Ltd. has established a system, called the Compliance Hotline, for the internal reporting of compliance-related issues. Using the Hotline, employees can report suspected illegal actions or other misconduct directly to the President. We specify in our standards that employees are protected from any disadvantage when they use this Hotline. Our major overseas subsidiaries have also established similar reporting systems, adapted to the laws and regulations of their respective regions. In the unlikely event that employees at one of our subsidiaries become aware of any misconduct of a member of their executive management, a system is in place that enables any employees to report the incident directly to the President of Nintendo Co., Ltd.

Protecting and Managing Information

Nintendo Co., Ltd. has established in-house standards, including the Information Management Standards and the Personal Information Management Standards, to ensure that important information is handled appropriately. We employ physical and technological measures, including access controls, to facilitate proper management of confidential and personal information.

In fiscal year 2012, we implemented an e-test system to raise awareness about information management. An information management textbook was distributed to each employee in order to instill knowledge, and all employees took a series of e-tests via the corporate intranet. Pre-and-post surveys were conducted to evaluate the usefulness of the test. Based on these results, we continue to work on increasing employee awareness of the importance of protecting and managing information.

Overseas subsidiaries also have established information management policies. Each organization employs physical and technological measures based on its policy and conducts internal seminars in order to increase awareness of information protection. In fiscal year 2012, seminars for managing personal and confidential information were held at various subsidiaries' offices.

Internal Seminars

Nintendo Co., Ltd. focuses heavily on compliance training. In fiscal year 2012, a total of 700 participants took part in compliance training and educational programs. Each department is given a questionnaire requesting suggested topics for the seminar; seminar planning is based on departmental needs and the results of these surveys. Our overseas subsidiaries also hold compliance seminars based on regional requirements.

Compliance Seminar Data (FY2012)

Basic Policy on Risk Management

Nintendo recognizes the importance of having systems in place to identify, understand and evaluate the various risks surrounding the company; we take every measure to avoid or reduce such risks. In the event of an incident or accident, we believe it is important to seek prompt resolution.

Risk Management

Nintendo's risk management gives each division of the Nintendo Group direct responsibility for the management of its own risks. Nintendo Co., Ltd.'s Internal Auditing Department verifies the risk-management system of each group company and, as needed, suggests policy changes and offers advice.

Risk Management for Potential Emergencies

In preparation for emergencies, including natural disasters, Nintendo Co., Ltd. has created the Emergency Action Plan, which outlines the company's initial response to an emergency, and the Business Continuity Plan, which provides a strategy for business restoration. In addition, Nintendo Co., Ltd. has created and published for all employees the Crisis Management Manual, which defines the fundamental actions employees should take in the event of an emergency. Furthermore, Nintendo Co., Ltd. has introduced a system for confirming employee safety in the event of an emergency. We periodically conduct drills to administer the system. Our overseas subsidiaries have also created manuals for responding to emergencies in their various regions. For example, Nintendo of America has defined basic actions for employees at each of its branch offices and conducts periodic training, evacuation drills and other exercises.

The Crisis Management Manual

The Crisis Management Manual is the size of a business card so that employees can carry it at all times.

Nintendo of America Inc. Incident Management Team

  Nintendo of America periodically conducts facility-wide evacuation drills in order to ensure employee understanding of safety procedures for any emergency situation. In addition, selected employees from each location, who take the leading role in an emergency, receive annual training in order to respond to a wide variety of emergency situations, such as earthquake or fire, in a multi-functional capacity, adaptable to the current situation and immediate needs. These employees direct the evacuation, and are accountable for all employees. Moreover, leaders of the selected employees receive extra training for the evaluation and zoning of structures after damage has occurred.

Incident Management Training
Incident Management Training

Intellectual Property Protection

Intellectual property is the fruit of Nintendo's research and development, and serves as the foundation of Nintendo's success. Recognizing the critical importance of protecting our intellectual property, Nintendo is taking anti-counterfeiting protection measures in cooperation with industry groups and investigative agencies in many regions. We continue to take legal action against those who infringe upon our intellectual property; we also educate the public about the importance of intellectual property protection. To improve the ability of consumers and other stakeholders to help us identify and pursue counterfeit products, Nintendo added pages to the Nintendo Co., Ltd. and Nintendo of America websites that enable individuals to provide information on the sale and distribution of counterfeit products. We have been able to act on this information in combating piracy by taking actions such as sending out warning letters to infringers, removing counterfeit products listed on Internet auction sites and filing criminal complaints.

Information Disclosure

To gain and secure the trust of our shareholders and investors, Nintendo works to ensure the fair, appropriate and timely disclosure of information. We have also created a corporate environment that facilitates the exercise of voting rights.

Financial Results Briefings and Corporate Management Policy Briefings

At Nintendo, we believe that it is vital not only to provide information about our business performance, but also to make sure that our corporate management policy is well understood. After the announcement of our financial results, Nintendo Co., Ltd. holds Financial Results Briefings for securities analysts and institutional investors (fiscal year 2012: three briefings) and an annual Corporate Management Policy Briefing that all Representative Directors attend.

Corporate Management Policy Briefing

Corporate Management Policy Briefing

Smooth Management of Shareholders' Meetings

To provide our shareholders with even more time to exercise their voting rights, Nintendo Co., Ltd. issues the convocation notice three weeks prior to the General Meeting of Shareholders (one week earlier than the legal requirement) and enables shareholders to vote via the Internet. In addition, for the benefit of our foreign investors, we have made the notices available in English and have adopted the Electronic Voting Platform system for institutional investors.

Nintendo Co., Ltd. Information Disclosure

We strive to provide all stakeholders with prompt access to information provided at these meetings by posting reports from the meetings, including the Q&A sessions, on our website in both Japanese and English. In addition, since fiscal year 2010, we have posted summaries of the Q&A sessions from the General Meeting of Shareholders on our website as a part of our efforts to achieve broader disclosure.

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