About Compliance
Penetrate Newly Integrated Global Compliance Standards and Code of Conduct into the Group in order to Enjoy Mutual Trust
(Left in the photo)Hiroshi UkitaManager, General Affairs Department, Showa Denko K.K.
(Right in the photo)Daisuke YoshidaSenior Manager, Compliance Group, Legal Department, Showa Denko Materials Co., Ltd.
We see compliance not only as strict observance of the law, but also as “Solid Integrity” that goes beyond what is legally binding. We are promoting activities to link these ideas to the understanding and actions of people working at our Group globally. We want to ensure that each and every one of us has high ethical standards and that compliance awareness is instilled in each of our workplaces. We would like to explain what we are working on now to achieve “Solid Integrity” and what we will work on as a newly integrated company. (The dialogue was held in a former Showa Denko conference room on June 1, 2022.)
1. Present job duties
We are building a system to ensure that each and every person working for the Showa Denko Group, including Showa Denko Materials, does not breach laws, regulations and rules. To enforce compliance, we are preparing to introduce our new Global Compliance Standards, which set out the standards we must adhere to as one Group.
In addition, a new Code of Conduct is currently being formulated. By promoting these initiatives and helping to raise everyone's awareness of compliance, we will help to prevent compliance failures from recurring.
2. About the KPIs set for compliance based on our sustainability-related material issues (materiality)
The KPIs set for compliance based on our sustainability-related material issues (materiality)
| Priority measures | Targets for 2025 | Results in 2021 |
|---|---|---|
| Entrenchment of the Group Code of Conduct | Increase workplace communication opportunities and number of participants | Commencement of the formulation of the new Group Code of Conduct (scheduled for completion in 2022) |
| Penetration of Group Global Compliance Standards | Reduction in number of serious legal breaches and increase in number of reports through the whistleblowing system | Commencement of the formulation of Global Compliance Standards (introduction completed in 2022) |
About the first key item, “Entrench the Group's Code of Conduct”
A Code of Conduct for the new integrated company is currently being formulated. While the Global Compliance Standards are a set of principles that must be observed, the Code of Conduct is being developed to include content appropriate for the conduct of employees of a co-creating chemical company, based on high ethical standards, Purpose and Values. Based on the codes of conduct that existed at both Showa Denko and Showa Denko Materials, Project members from both companies have gathered to discuss the contents.
About the second key item, the Group's Global Compliance Standards
We will introduce our new Global Compliance Standards in 2023. They are a set of rules that systematize the policies and systems for dealing with key compliance issues directly related to business activities, such as competition laws, prohibition of bribery and prevention of transactions related to illicit activities, as common rules for the Group. They stipulate the systems, business processes, etc. that must be put in place to meet the compliance standards required by the international community as a global company. "Solid Integrity" will lead to employee pride and engagement. It is important that each and every employee understands and acts accordingly, so we will carefully explain and instill these standards.
In order to implement the Global Compliance Standards in the same way all over the world, a common awareness and understanding is necessary. Laws differ from country by country, but there is not much difference in the fundamental concepts. We would like to formulate the core of each such law in the form of rules that are adapted to our Group.
Specifically, we are concerned with the prohibition of private monopolies and ensuring fair trade, as well as the prohibition of bribery and the prevention of transactions related to illicit activities. In addition to simply setting global compliance standards, we regularly organize specialized training by lawyers in key regions of the world, which can be accessed online from all over the world.
One of the KPIs: Whistleblowing system
The whistleblowing system not only functions to keep the Group in good standing, but is also positioned as one important tool for fostering a healthy corporate culture by resolving potential risks at an early stage and maintaining high ethical standards. For this reason, the number of whistleblowing cases is set as a KPI. We believe that an increase in the number of whistleblowing cases measures the degree of openness in the Group and the degree to which the whistleblowing system has penetrated the Group. We have produced posters and booklets to raise awareness, and we plan to include this information in our Code of Conduct Handbook.
Reason for not upholding “zero noncompliance cases” as a target
Of course, we would like to achieve zero, but first of all, we would like to aim for psychological safety, that people can talk to their supervisors and colleagues about their concerns, openly honestly and confidently. We believe that if each of us shows openness in our actions, such as consulting with each other when we are unsure and giving each other our honest attention, it will lead to a positive chain of events, and as a result, a decrease in the number of incidents.
Safety and compliance take precedence over everything else. We will create mechanisms and systems to prevent compliance breaches, raise awareness of compliance and promote an environment in which it is easy to seek guidance.