Compliance
Policy and Approach
We established the Kumiai Chemical Group Basic Policy on Compliance based on the Kumiai Chemical Group Basic Policy on Sustainability. To ensure that every officer and employee acts in accordance with our corporate philosophy and Code of Conduct, we have established the Kumiai Chemical Ethical Standards, a set of guidelines for correct behavior, which are also included in the booklet and inculcated in Kumiai Group.
Kumiai Chemical Group Basic Policy on Compliance
The Kumiai Chemical Group promotes and raises awareness of compliance by providing constant compliance education and awareness-raising activities to foster a corporate culture which enables officers and employees to act in accordance with our Corporate Philosophy and Code of Conduct.
Three fundamentals of compliance
- Stimulate communication in workplaces
Officers and employees can always raise the alarm, ask for help when they need it, communicate their perceptions to their supervisors and seniors, and speak up when they feel uncomfortable in workplaces. - Officers and employees consider their own words and actions from the perspective of how they would be viewed by the public if they were featured on the television news.
Officers and employees take a moment to stop and think calmly to ensure they do not misjudge the perspective of society (common sense and feelings of the public). - Act based on an awareness of representing the company at all times
Each and every officer and employee should be aware that they represent the company at all times. It is obvious to others that officers and employees are with the company, although they themselves may forget it. Officers and employees will always be associated with the company in the minds of others even after they leave the company.
Based on these three fundamentals of compliance, we pursue not only “defensive compliance,” but also “offensive compliance,” and strive to earn the trust of society and achieve the sustainable enhancement of corporate value.
Monitoring and Control with Compliance and Internal Control
Company risk management functions can be explained in terms of three lines of defense, which are (1) business divisions, (2) management divisions, and (3) internal audit division. Kumiai Group performs mutual monitoring and control within business divisions and within divisions on compliance and internal control.
Our routine monitoring includes (1) daily monitoring by supervisors, (2) cross-monitoring among colleagues at workplace, and (3) sharing individual awareness to superiors and seniors. This three-way monitoring is important for detecting and preventing misconduct and mistakes by individuals. Follow-up and correction measures are handled within report line in the workplace or by using the internal reporting system. Daily monitoring is done at each workplace, and this is the first line of defense against misconduct and mistakes. We have also added monitoring that is handled by management divisions and internal audits to increase the effectiveness of internal control.
There could be cases where a certain custom in a company is actually a law violation without it being recognized as misconduct. Therefore, it is essential for individuals to speak up when they feel something is wrong. We review procedures for this and update manuals every year to improve the effectiveness of internal control.
System
Kumiai has the Risk Management & Compliance Committee, which is chaired by the Representative Director, President, and comprises full-time Directors and Executive Officers and department heads. The committee meets once a year and additionally whenever necessary to deliberate on and approve the implementation plan of the compliance program formulated by each department. The situation of implementation and the results are reported at the committee.
Furthermore, the overview of internal reporting, results of a compliance awareness survey, and compliance promotion activities are reported, and corrective measures are discussed.
Compliance Promotion
Internal reporting system
Kumiai has established an internal consultation desk. Moreover, Kumiai Group has established the Kumiai Chemical Group external consultation desk (compliance and harassment) whose operation is contracted to a specialist company. The external consultation desk also serves as the contact point for internal whistleblowing* under the Whistleblower Protection Act, and appropriately responds to cases of whistleblowing. Having established the internal regulations governing use of the internal reporting system, a system is in place to ensure protection of whistleblowers.
The Corporate Governance Office serves as the contact point for the internal reporting system and Audit & Supervisory Board Members receive information provided through the internal reporting system.
The number of reports to the internal reporting system during FY2023 was 13 for Kumiai Group (6 for Kumiai), and there was no case of whistleblowing.
To promote the use of the internal reporting system and raise awareness of its proper use, we have posted FAQ on how to use the external consultation desk, prepared and displayed posters, and include the contact information of the external consultation desk in the monthly compliance newsletter.
- Whistleblowing: Reporting actions regarding violation of certain laws and regulations
| FY2020 | FY2021 | FY2022 | FY2023 | ||
|---|---|---|---|---|---|
| Number of reports and consultations made to the internal reporting system (Helpline) | Cases | 10(7) | 11(2) | 13(5) | 13(6) |
| Fines and settlement costs related to bribery | Millions of yen | 0 | 0 | 0 | 0 |
| Fines and settlement costs related to anti-competitive practices | Millions of yen | 0 | 0 | 0 | 0 |
| Kumiai Chemical Group (Kumiai Chemical only) | |||||
Compliance Education
We produced a booklet, “Introduction to CSR for Business persons,” and distributed it to all officers and employees of Kumiai Group. Illustrated with cartoons, this booklet is designed to encourage the use of other booklets published so far (booklets on compliance, risk management, and sustainability), so as to raise the level of awareness throughout the Group and enhance corporate value.
We conducted e-learning training for all officers and employees in August 2023 (participation rate: 93%). The content was related to harassment-related communication, which was considered an issue based on the results of the compliance awareness survey.
Kumiai also conducted a face-to-face harassment seminar for officers and employees at Head Office and Tokyo Branch in October 2023 (participation rate: 92%). The content of the seminar was geared toward each level of employees, taking into consideration the cases of Kumiai Group’s internal reporting and the results of the compliance awareness survey. Questionnaire surveys were conducted before and after the seminar to enhance effectiveness and identify issues. We will continue to implement similar initiatives throughout the Group in the future.
Compliance awareness survey
Kumiai Group conducts a periodic compliance awareness survey covering all employees. The FY2023 survey confirmed that the overall level of employee awareness remains very high. On the other hand, generational differences in awareness regarding harassment and lack of communication in the workplace were identified as issues.
Distribution of a compliance newsletter
As part of our compliance promotion activities, we distribute the Kumiai Chemical Group Compliance Newsletter and Newsletter Plus to all officers and employees of Kumiai Group each month. Moreover, we distribute the Newsletter Plus extra edition from time to time. In FY2023, we provided an overview of the results of the compliance awareness survey and explained possible disciplinary actions in the event that the Kumiai Chemical Ethical Standards were not adhered to.
Furthermore, we distribute a monthly Kumiai Chemical Compliance E-mail Magazine to managerial personnel at Kumiai. Cases of fraud, noncompliance, and harassment that have attracted public attention are explained that are useful for compliance promotion activities in the workplace.