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 and demonstrates correct behavior, we have established a set of guidelines, the Kumiai Chemical Ethical Standards, which are also included in the booklet and inculcated in our 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
Our group performs mutual monitoring and control within business divisions and within departments on compliance and internal control.
To prevent misconduct and mistakes by individuals, we conduct routine three-way monitoring at each workplace, including (1) daily monitoring by supervisors, (2) cross-monitoring among colleagues in the workplace, and (3) sharing individual awareness with superiors and seniors. This routine monitoring is the first line of defense. 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 as necessary to improve the effectiveness of internal control.
System
We have 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
We have established an internal consultation desk. Moreover, our group has established the Kumiai Chemical Group external consultation desk 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.
The Legal & Compliance Department 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 FY2024 was 14 for our group (6 for Kumiai), of which two were whistleblowing cases. Investigations found that both whistleblowing reports were based on misunderstandings by the whistleblowers, and no misconduct or violations were identified.
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 included the contact information of the external consultation desk in the monthly compliance newsletter.
- Whistleblowing: The act of a worker, former employee, or officer reporting misconduct by the party they serve through a designated reporting channel, without improper intent.
| FY2021 | FY2022 | FY2023 | FY2024 | ||
|---|---|---|---|---|---|
| Number of reports and consultations made to the internal reporting system (Helpline) | Cases | 11(2) | 13(5) | 13(6) | 14(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 Industry only) | |||||
Compliance Education
Following the booklet “Introduction to CSR for Business persons,” we produced “Introduction to CSR for Business persons Part 2” and distributed it to all officers and employees of our group. By encouraging the use of cartoon-illustrated booklets published so far (booklets on compliance, risk management, and sustainability), we are raising the level of awareness throughout our group and enhance corporate value. We also produced a booklet explaining the concept of belonging and distributed it to all officers and employees of our group.
We conduct compliance training for new graduate hires and mid-career hires. In July 2024, we conducted an e-learning training course titled “Understanding Anti-Bribery and Corruption Laws” for all officers and employees. In addition, starting in September 2024, we introduced a mandatory e-learning course for all officers and employees, to be completed every two months, to promote the acquisition of a broad range of knowledge, including compliance, harassment, and corporate ethics.
Compliance awareness survey
Our 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 our group each month.
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.