[Important Issues] Ensuring Compliance

To raise awareness about thorough compliance and ensure it is practiced throughout the corporate group, the Nippon Kayaku Group has created a portable card displaying its corporate vision, Charter of Conduct and Code of Conduct in six different languages (Japanese, English, Chinese, Spanish, Malay and Czech) spoken by all of the countries where we have manufacturing hubs. The card is distributed to all executives and employees of the Nippon Kayaku Group so that they can refer to Nippon Kayaku Group Charter of Conduct and Code of Conduct whenever necessary. Also, a pamphlet with easy-to-understand explanation of the Charter of Conduct and the Code of Conduct is distributed to all employees of domestic companies of the Nippon Kayaku Group.
Further, we have determined that every October will be compliance promotion month. During October, the chairperson of the Ethics Committee shares a message with all of the employees of the domestic companies of the Nippon Kayaku Group via the company newsletter. We also conduct compliance awareness surveys to continually monitor the compliance awareness of our colleagues and enable this awareness to lead to improvement.
We concluded an agreement with a consulting firm in FY2015 to conduct compliance awareness surveys. Problems in different workplaces related to the encouragement of compliance are identified from the aggregated data and the analysis of the results of the compliance awareness surveys. Improvement proposals and other feedback are then provided to the workplaces. Referring to this feedback, our colleagues in different workplaces formulate compliance action plans for the following year and implement the PDCA cycle to raise awareness.
The compliance activities of the overseas companies of the Nippon Kayaku Group are in line with laws and business practices of the respective countries in which they operate. In China, general managers and ethics representatives of the Nippon Kayaku Group’s companies gather and hold a meeting each year to report on the companies’ compliance-related efforts and problems, identify problems and discuss measures to address them. Nippon Kayaku’s Internal Control Management Division and the Legal Department of KSC^* cooperate with each other to provide local employees with compliance training in their offices. In consideration of the situations in the different countries, we will deepen cooperation between the companies and divisions of the Group so that their global compliance activities become more effective and efficient.

The Nippon Kayaku Group holds domestic compliance education and training on different themes every year, and uses regular meetings at business sites to conduct study groups and training based on case studies. The FY2022 compliance training was themed on psychological safety at workplaces. Nippon Kayaku provided training, mainly e-learning programs, and the companies of the Nippon Kayaku Group mostly conducted group training with the goal of providing all employees with training opportunities and programs.

Nippon Kayaku has a Whistleblower System and, by establishing the Compliance Hotline, endeavors to prevent, detect at an early stage and correct wrongful acts.
The Compliance Hotline is available to all executives, employees (including contract employees and part-time employees), temporary employees and retirees (within one year of retirement) of the domestic companies of the Nippon Kayaku Group. The overseas companies of the Group use their own whistleblower systems.
Subjects for the report include violations of laws, wrongful acts, violations of the Nippon Kayaku Group’s internal regulations such as the Charter of Conduct and the Code of Conduct, violations of corporate ethics rules and other matters. Human rights infringement, harassment, bribery, illegal transactions and comprehensive acts of corruption are also included. Whenever appropriate, the Compliance Hotline accepts reports and consultations on wrongful acts that occurred in the Nippon Kayaku Group’s operations and matters that may result in wrongful acts.
The Compliance Hotline set up offices within the Ethics Committee’s administrative office (Compliance Department, Internal Control Management Division) and at an outside law firm so that whistleblowers can choose which office they would like to report and consult on problems to either anonymously or disclosing their name. Employees may submit whistleblowing reports by phone, e-mail, letter or in person (round the clock with the exception of whistleblowing over the phone or in person).
When a Compliance Hotline office receives a report or consultation, the Ethics Committee’s administrative office discusses the need for an investigation and conducts an investigation if deemed necessary. If an investigation confirms a wrongful act, corrective actions and recurrence prevention measures will be swiftly taken. Subsequently, the Ethics Committee’s administrative office informs results of the investigation and corrective actions to the whistleblower.
Our Whistleblower System ensures confidentiality and anonymity. The Guidelines for Handling Whistleblower Complaints explicitly ban any disadvantageous treatment of a whistleblower.
To make the Whistleblower System and Compliance Hotline offices better known throughout the Group, information is communicated via group training, e-learning programs, our internal portal site, posters at workplaces, the distribution of portable cards and other means.

The Nippon Kayaku Group has established a Compliance Hotline for Suppliers to report acts in violation of laws and regulations. Please read items 1 through 5 and report an incident or seek advice via “6. Compliance Hotline for Suppliers” if you wish to do so.

1. Eligible hotline users
   All officers and employees of suppliers engaged in business transactions with the domestic Nippon Kayaku Group.
2. Subjects for a report or a consultation
   When any officer or employee of a Nippon Kayaku Group company in Japan is identified as engaging in, or having the intention to engage in, an illegal or unethical act.
3. Contact for reporting
   Ethics Committee administration office, Nippon Kayaku Co., Ltd. (Internal Control Management Division)
4. Requests for hotline users
   Hotline users should specify their full name and the name of their company/affiliation. We do accept Reports and consultations if the hotline user wishes to remain anonymous, but please be advised that this may hinder fact-checking and other investigations and prevent us from offering the hotline user a response, including regarding investigation findings and measures to prevent recurrence.
5. Protection of hotline users
   The personal information of hotline users will be used exclusively for matters related to an investigation and other steps necessary to look into the reported incident, and will be handled with the utmost care based on the Company’s Personal Information Protection Policy. Hotline users will not be disadvantaged because of their submitting a report.
6. Reporting method
   Reports and consultations should be submitted via the “Compliance hotline for suppliers.”