Advantest has set up and maintains internal control systems that correspond to the requirements of the Companies Act and the Financial Instruments and Exchange Act. In order to manage the group with an emphasis on performance evaluation based on the consolidated financial statements, these systems are built as a unified system that includes both Advantest and its affiliates.
Advantest has established an Internal Control Committee in which the Representative Director acts as the chairperson and outside Directors are observers. This committee identifies and analyzes significant risks for the whole company, and clarifies the responsible department and procedures for responding to each risk. Regarding the Internal Control System, the execution status of implementation of the system to ensure the appropriateness of business is reported directly to the Board of Directors once a year. Furthermore, if a material weakness is found in the internal control system development and operating status and the internal control evaluation process, it is reported to the Board of Directors.
Risk Management System
Thus, Advantest's risk management system is based on management supervision of risk analysis and risk response at the unit level. At the same time, regarding corporate-level risks, the Board of Directors or the Management Committee makes timely decisions and issues instructions to relevant departments to create a system that combines bottom-up and top-down risk management.
Bottom-up Reporting Line
Based on the risk management policy established by the Internal Control Committee, each unit conducts risk management and reports to the Internal Control Committee (twice a year). The Internal Control Committee supervises and evaluates the management status and provides feedback to each unit.
The organization to whom risks are reported varies depending on the risk being reported. Risks related to information disclosure is collected by the Disclosure Committee, while those related to compliance is collected by the Chief Compliance Officer (CCO), which are collectively reported to the Executive Management Committee and Board of Directors through the respective officers in charge. Some risks are also reported directly to the Executive Management Committee, Board of Directors, and Audit and Supervisory Committee.
When each unit incorporates the management plan formulated by the Board of Directors and the Executive Management Committee into its own department's measures, we have a system in place to provide support according to its content.
The Internal Control Committee has defined factors that may hinder business management as risks, and has asked each unit to submit reports while supporting each unit from a company-wide perspective. The Sustainable Management Promotion Working Group encourages each unit for the planning and implementation of measures from an ESG perspective.
In the case of an emergency, necessary measures are taken in accordance with the directions given by the Risk Management Group.