Compliance
Policy and Approach
Kumiai Group views Compliance as an important element of sustainability management, and our “Basic Policy on Sustainability” requires the realization of a disciplined organization.
Because of this, we also established our “Basic Policy on Compliance” for organizing systems and promote various initiatives.
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 (Helpline). 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
In Kumiai, important matters related to compliance are discussed by the Risk Management & Compliance Committee, which is chaired by the President. We hold meetings twice a year.
We also have the Corporate Governance Office in charge of compliance. To improve its effectiveness, we are provide compliance education and training for officers and employees. We are always looking for ways to improve the system.
Compliance Promotion
Internal reporting system
Kumiai Group has established an external consultation desk (compliance and harassment) as an internal reporting system (Helpline). To help employees understand how to use the system, we published a Q&A. The Helpline phone number and website address are posted in the monthly Compliance Newsletter (e-mail magazine), and we allow anonymous reporting to encourage its use. The Helpline also functions as a window for whistleblowing*, and “Regulations for using the internal reporting system” have been established to indicate the protection of the person making report and proper way of processing report.
The number of reports to the internal reporting system (Helpline) during FY2022 was 13 for the whole Kumiai Group (5 from Kumiai itself), and there was no case of whistleblowing. We prepare a poster for informing about the internal reporting system and distribute it to group Companies, and create an environment where it is easy to consult.
- Whistleblowing: Reporting actions regarding violation of certain laws and regulations
| FY2019 | FY2020 | FY2021 | FY2022 | ||
|---|---|---|---|---|---|
| Number of reports and consultations made to the internal reporting system (Helpline) | Cases | 4(1) | 10(7) | 11(2) | 13(5) |
| 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
As requests on compliance from stakeholders have become more diverse and strict, if the statement or actions by Company employees are out of harmony with social norms, it could lead to loss of trust from society. During FY2022, we provided in-person compliance training by means of an inhouse lecturer for new employees and mid-career hires.
Compliance awareness survey
Kumiai Group regularly conducts a compliance awareness survey with employees. This allows us to understand tendencies for the whole group, offices, and individual workplaces, which we use to promote compliance and education/training.
Distribution of a compliance newsletter
Kumiai Group has a Compliance Newsletter (e-mail magazine) that is distributed monthly to all officers and employees. It includes examples along with explanations regarding compliance and harassment cases that are common at workplace, and cases that have appeared in the news. We create opportunities for officers and employees to understand the latest information to improve the compliance awareness of the whole group.