RHQ (Regional Headquarters) Functional Design Initiatives

Basic Approach to Group Management

We have established the "Rules on Group Management" as a basic policy for the management of affiliated companies, which is to be followed for maintaining control over the entire Group. Under this policy, CXO organizations have established regulations and manuals that define the rules and the business operations related to each function. While business units are responsible for the control and the operation of affiliated companies under their supervision, we have also established a system that enables CXO organizations to check compliance with regulations and manuals and support operations in a cross-functional manner. As part of these efforts, we established regional headquarters (RHQ) functions in North and Central America, Europe, Southeast Asia, and China, and positioned them as the cornerstone of overseas subsidiary management. Through activities conducted by RHQs in cooperation with the head office, we will strive to strengthen global governance by understanding the laws, regulations, and business practices of each country and region, and grasping and responding to them in a timely and comprehensive manner. At the same time, we are working to grasp the operational status of affiliated companies, establish a system for early risk detection, define the roles of directors and auditors of affiliated companies, and share information with the Internal Audit Department, among other measures. Through these efforts, we aim to stabilize the Group’s management foundation.

Roadmap for designing RHQ functions

In 2023, we built the common understanding between the CXO organizations and RHQs, adjusted the number of required personnel, and formulated a framework for recouping RHQ costs in preparation for the operation of RHQ functions in 2024 onward. After examining these measures, we started operation in January 2024, focusing on functions related to “defense.” In 2024, some of the high-priority functions will be put into operation in the three regions other than China. We will then work to monitor the operation status of these RHQs and establish a management system for activity records. We aim to officially launch the four-region structure in 2025, and to have the RHQs function operate independently as regional hubs in 2026 and beyond.