Thorough Compliance and Corporate Ethics

Basic Concept

The Nisshinbo Group included “Thorough-Going Compliance” in its Business Conduct Guidelines, which clearly states that the Group will act in constant fairness and sincerity across a broad range of issues, respecting social norms and corporate ethics, and in addition to establishing a system, will provide education to all employees.

Promotion System

Based on the “Nisshinbo Group Code of Corporate Ethics,” Nisshinbo Holdings Inc. has established a “corporate ethics committee” as an organization directly under the president and the director, with the president as the chief officer for corporate ethics, to handle matters related to compliance throughout the Nisshinbo Group.
The Business Ethics Committee Chairman is normally appointed by the Director and the Chief of the Corporate Strategy Center of Nisshinbo Holdings Inc., and the Business Ethics Committee members are appointed from among the senior manager and above of the Corporate Strategy Center (the scope of appointment may be broadened as necessary).

The Nisshinbo Group also established a “Corporate Ethics Reporting System” for the purpose of early detection of suspected violations of laws and regulations and the prevention of recurrence of such violations and has put in place a system to receive reports from both inside and outside the company. The Group employees can file reports directly with internal Corporate Ethics Committee members as well as to outside counsel. The Group strictly protects the confidentiality of whistleblowers and takes care not to cause any disadvantage to whistleblowers. The Corporate Ethics Committee takes appropriate action in response to the content of the report.

In the Sustainability Promotion Plan, the Nisshinbo Group set the goals of “Raising awareness of compliance” and “Operating the corporate ethics reporting systems,” and the Group will monitor progress by setting targets and Key performance indicators (KPIs).

Specific Initiatives of The Nisshinbo Group

In FY2022, in accordance with the “Fifth Sustainability Promotion Plan” before its revision, The Nisshinbo Group focused on thorough compliance as a priority activity item and promoted activities with the KPIs of ①Participation rate of compliance training for managers, 100% ②Response rate to corporate ethics reporting system, 100%.

In the revised “Fifth Sustainability Promotion Plan,” the Group also set thorough compliance as a key action items and will further promote activities based on the same KPIs.

Compliance Training

In order to ensure fair and honest business practices, the Nisshinbo Group conducts a variety of compliance training, such as training for different employee levels and work sites and training for employees who will receive assignments abroad.

Since FY2016, KPI has been established as part of compliance training for Group managers every year and to instill compliance in all employees. For the training materials, the Group newly prepared compliance education materials for the management group in Japanese and English and utilized them for all Group companies. Beginning in 2021, the Group also started to use movies for education through the Learning Management System. Additionally, the Group is conducting training at all of its subsidiaries that is tailored to each company’s country, region and type of business.

Anticorruption Efforts

In recent years, international legislation on bribery and corrupt practices have been strengthened, and detection has grown more rigorous. Nisshinbo Holdings Inc. formulated the “Guide to Prevent Corruption” in response to related legislation in other countries. The Group has rolled out the guide across the Group, including all subsidiaries in other countries. This guide encompasses Article 18 of Japan’s Unfair Competition Prevention Act (Prohibition to Provide Illicit Gain, etc. to Foreign Public Officers, etc.), the United Nations Convention against Corruption (UNCAC), the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the United States Foreign Corrupt Practices Act (FCPA) and related guidelines, and the United Kingdom Bribery Act. The Group reviews the content of the guide as necessary and uses it for group-wide anticorruption efforts.

Adhering Strictly to a Policy of Confidentiality

The Group has entered into confidentiality agreements with its partners to prevent leaks of intellectual property, technology and expertise disclosed throughout the supply chain from the design and development stages. To ensure appropriate trade secrets management, the Group conducts annual internal audits.

Efforts for Import and Export Control

As the workforce and work styles themselves continue to diversify, the need for appropriate management of information within the company has become more important than ever before. The revision of the Service Notification*1 related to the Foreign Exchange and Foreign Trade Law (Foreign Exchange and Foreign Trade Law), which came into effect on May 1, 2022, further clarified the operational control of the so-called deemed exports*2.

In the Nisshinbo Group, the Corporate Governance Department of Nisshinbo Holdings Inc. has been playing a central role in studying revisions to export control regulations and other internal rules in cooperation with the export control officers of each core company since November 2021, when the revised laws and regulations were announced, and has been sharing information with group companies in Japan that export. In addition, explanatory meetings were held and educational videos were created and distributed to inform export control personnel and other employees in general. For companies that have notified the Ministry of Economy, Trade and Industry of their internal rules for export control, all notifications of revised internal regulations were completed within the notification deadline.

*1 Notice of Partial Revision of Regarding Transactions or Acts of Providing Technology that Require Permission under the Provisions of Article 25, Paragraph 1, of the Foreign Exchange and Foreign Trade Act and Article 17, Paragraph 2 of the Foreign Exchange Order.

*2 "Deemed export": A transaction in which there is a high probability that the technology provided in Japan will be taken to a foreign country as a result, even if the technology is provided in Japan.

Corporate Ethics Reporting System

Guided by its Corporate Philosophy, the Nisshinbo Group endeavors to instill and firmly establish corporate ethics among all employees in all aspects of its business activities. The Group has established a “Corporate Ethics Reporting System” with the aim of promptly discovering and preventing violations of laws and regulations and alleged violations of corporate ethics.

This system accepts reports not only from employees of the Group but also from a wide range of stakeholders inside and outside the company. Employees who become aware of any violation of laws or corporate ethics by the Group, or of any conduct that raises suspicions of such violation, are advised seek consultation and report the matter. The Group will respond appropriately after investigating the facts. Concerned parties are free to consult and report anonymously; however, if they leave a name and contact information, the Group will contact them with an outline of countermeasures.

Group employees can file reports directly with internal Corporate Ethics Committee members as well as to outside counsel. The Group strictly protects the confidentiality of whistleblowers and takes care not to cause any disadvantage to whistleblowers.

Compliance-related matters for the entire Nisshinbo Group are addressed by the "Corporate Ethics Committee," which reports directly to its president. The Board of Directors receives and reviews periodic reports on important matters related to corporate ethics, including whistleblowing matters.

In the future also, through such sincere efforts, the Nisshinbo Group will strive to fulfill its social responsibility as a company and further enhance its corporate value.

Contact for consultation and report

Reception Desk, Corporate Ethics Committee

Consultation / Report Form

Number of Compliance Violations and Corporate Ethics Reports

The number of reports made to the Corporate Ethics Reporting Desk of Nisshinbo Holdings Inc. in the past three years is as follows. The Corporate Ethics Committee responds to all reports appropriately, while ensuring that confidentiality is strictly maintained and that the whistleblower is not disadvantaged. If a violation is found, the whistleblower will be punished in accordance with the Company's employment regulations.

Corporate Ethics Reporting Desk Number of Reports

2020 2021 2022
The number of cases Disciplinary action for facts The number of cases Disciplinary action for facts The number of cases Disciplinary action for facts
Harassment Related 1(0) 0 3(1) 0 3(3) 0
Violation of Law 0(0) 0 0(0) 0 3(0) 0
Labor Issues 0(0) 0 1(1) 0 2(1) 0
Accounting Irregularities 0(0) 0 3(2) Disciplinary Action 2 1(0) 0
Others (Moral Violations, etc.) 5(0) 0 2(0) 0 8(2) 0
Total number of reports 6 9 17
Total number of reports handled by the committee 6(0)
100% Responded
100% Responded
100% Responded

* The number of reports in parentheses is the number of confirmed violations and other specific facts.

Specific Activities of the Group Companies

Compliance Training by Legal Counsel

JRC Tokki Co., Ltd. conducted “Compliance Training (Elimination of In-house Misconduct and Fraud)” for all employees (excluding those on secondment or on leave) over a two-month period from November to December.

The video material (about 45 minutes) using PowerPoint covered the following four items.

①What is compliance?
Basic matters
②Compliance reporting
Information on internal and external contact points (who, what, and where to report)
③Case studies (examples)
Cases of partial embezzlement of payments, unnecessary transportation expenses from the company
Eliminate opportunities for fraud. Each and every employee should act ethically and make correct decisions. Quoting the Chinese proverb, "Abstain from all appearance of evil," report and consult with your supervisor before acting in cases that may lead to misunderstandings.

A total of 367 employees participated in the seminar, either in the company's multipurpose hall or in their own seats, and learned about the elimination of misconduct and fraud within the company.

Compliance Education for Employees

Nisshinbo Mechatronics (Thailand) Ltd. in Thailand conducts compliance education for its employees once a year during the “Training Day” hosted by the company.

In FY2022, training was provided on compliance with traffic laws and protection of personal information, which are familiar examples. Regarding compliance with traffic laws and regulations, education was provided not only on the actual situation of traffic accidents in Thailand, but also on the compliance with traffic laws and regulations that the company is working on.

In Thailand, the Personal Data Protection Act (PDPA) was enforced from 2022. The company conducted training on what the company must do based on this new law and what employees must observe in accordance with the newly created rules and procedures.