Activities for Sustainable Management Corporate Governance Internal Control, Risk Management and Compliance JS Group Corporation Annual Report 2010 43 The JS Group Corporation has established the following internal control systems in order to  ensure the effectiveness and efficiency of our operations and the reliability of our financial report- ing, and to thoroughly implement compliance measures. • Determine a management philosophy and Corporate Conduct Guidelines, and make all  employees aware of them • Establish an internal hotline reporting system for the entire Group to enable quick  response to any problems within the Group • Establish in-house rules, clarify job authority and responsibilities, evaluate, manage  and control the mission and operational processes of each organization in the Group,  and continuously monitor the effectiveness of the internal control system with moni- toring functions • Clarify the decision-making process of meetings held in the Company based on   decision-making authority rules and other in-house rules The Guidelines for the Conduct of the JS Group, which defines the Group’s ethical stan- dards, provides the basis for our approach to compliance. Regular programs are implemented  through the Internal Audit Committee to ensure that all activities are fair and comply with laws  and regulations. In particular, all personnel, including executives of Group companies, part-timers  and temporary staff, are required to make a pledge to adhere to the Guidelines. JS Group Corporation has established a Compliance Committee with the goal of informing  about and enforcing compliance. This committee shares information about compliance with  employees, conducts training and other educational activities, provides instruction to Group  companies regarding the establishment, operation and management of compliance systems, and  monitors the status of legal compliance, among other activities. Also, in order to further enhance the reliability of the Group’s financial reporting, we have  developed and are enhancing a system that complies with the Financial Instruments and  Exchange Act which went into effect from September 2007, and the “Setting of the Standards  and Practice Standards for Management Assessment and Audit concerning Internal Control Over  Financial Reporting (Council Opinions),” announced by the FSA Business Accounting Council on  February 15, 2007. We will redouble efforts going forward to enhance the Group’s internal control systems and  improve business processes. The JS Group Corporation forbids its members to have any contact with antisocial forces. We  have clearly formulated our basic stance: “We do not acknowledge antisocial groups and indi- viduals such as corporate racketeers and crime syndicates, and as an organization we will resist  their threats or threatening behavior. We will adopt a resolute stance to any intimidation without  giving way, and will have no relationships whatsoever with antisocial forces.” Having established our Guidelines for the Conduct of the JS Group, which include the basic  stance described above, the top management of the JS Group Corporation seeks to ensure all  employees act in compliance with these guidelines. The holding company’s Audit Department  has designated core departments that were established in Group companies to work on this,  and as one part of risk management the Internal Audit Committee regularly reviews and evalu- ates the development of the Company’s basic stance. Basic Stance Regarding  Elimination of Antisocial  Forces and Its Development Internal Control Systems