MessageMessage from Executive Officer

Executive Officer Shun Sakurai

INTERNAL CONTROLS TO MEET
STAKEHOLDER EXPECTATIONS

Shun SakuraiExecutive Officer

In January 2018, I was appointed executive officer from outside Dentsu to be in charge of internal controls. To address a series of labor issues and proceed resolutely with working environment-related reforms, it was decided that a person with an outside perspective and no prior experience in this position should be placed in the executive structure to review Company management. Looking at Dentsu from the viewpoint of someone with experience outside the Company, it would appear that all employees are engaged in their work with a high degree of motivation. In addition, since Dentsu develops business in many areas, I sense diversity in human resources. That said, even with the high quality of these human resources, there are some areas in need of consideration with respect to the working environment.

As I understand it, my role in internal controls is to set up a mechanism ensuring thoroughgoing, solid Company management. This includes ensuring financial soundness, appropriate business processes, IT environment improvements, and legal compliance. I am then to verify the proper functioning of the mechanism, and to see that risks surrounding the Company are at a minimum. In light of labor issues, in April 2017 Dentsu took steps to enhance its internal control function by setting up the Internal Control and Compliance Committee under the Board of Directors. As the chairman of this committee since January 2018, I was selected as the executive in charge of identifying and analyzing critical risks surrounding Dentsu, and the one to engage in responding to each of these risks by preventing or mitigating them.

In addition to maintaining this system of controls, I liaise with the Internal Audit Office and the Audit and Supervisory Committee. This reflects the need to properly implementing the plan–do–check–act process and product improvement cycle. Further, we are creating an internal control system for the Dentsu Group to identify Group-wide risks in an attempt to thoroughly manage the Group from the standpoint of internal controls. I think about internal controls and compliance in the context of sports. In the sporting world, one is required to strictly follow the rules to win the competition. Even if you win, you will not be respected unless you have followed the rules. The same is true in business; we must compete while following basic rules. Internal controls—a prerequisite for successfully developing any business—are the product of rules that have been formulated and to which there must be strict adherence.

With rapid advances in the digital economy and other developments, the business environment is undergoing massive changes. In order to contribute to the resolution of issues at the societal and international levels, and to the achievement of the United Nations’ Sustainable Development Goals while pursing the Dentsu Group’s own sustainable development, we must address corporate management issues head on and meet stakeholder expectations.

© DENTSU GROUP INC. ALL RIGHTS RESERVED.

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