Risk Management and Compliance
Risk Management
The Kyocera Group's business environment involves volatility, uncertainty, complexity, and ambiguity, driving the need to review our supply chain to shore up economic security amidst the decoupling of the world's economies.
The Kyocera Group will strive to reinforce our management foundation and achieve sustainable growth by pursuing risk management, compliance, and BCP activities essential for survival in these uncertain times.
Risk Management Initiatives
The Kyocera Group is making group-wide efforts to reinforce its risk management system to cope with global risks that are becoming more complex. The Kyocera Group faces various risks that may affect the credibility or business sustainability of the Kyocera Group, including changes in the market environment, the occurrence of natural disasters, incidents and accidents, the impact of climate change, information security, stoppages and deficiencies in labor conditions in the supply chain, and violations of human rights. To cope with these issues, the Kyocera Group endeavors to reduce and mitigate risks while implementing countermeasures through the Business Continuity Plan (BCP) and acting on the Basic Policy on Risk Management put in place for this purpose.
Kyocera Group Basic Policy on Risk Management
- In accordance with assurance of compliance and the spirit of the Kyocera Philosophy, the group will consider what is the right conduct as a human being and act based on the value standards.
- In accordance with the spirit of the Kyocera Philosophy, the group will accept "the highest priority is to ensure safety of bodies and lives of people," deal with crisis, and for convergence of crisis, cooperate among employees as a unit to minimize loss, recover the damage, and make efforts to prevent reoccurrences, thereby attempting to remove or mitigate impediments to the interests of each stakeholder (the interested party), including customers, business partners, shareholders/investors, and the community.
- The Kyocera Group will attempt to continuously develop its business through implementing risk management.
- The group will act with its social mission to stably supply products and services helpful to the progress and development of society.
Risk Management System
The Kyocera Group reformed its Risk Management Committee in June 2022 and holds meetings periodically to determine risk management policies, identify corporate risks, assign risk owners, and review risk-handling progress. Items discussed at the Risk Management Committee are reported to the Board of Directors, and policies are shared among departments responsible for risks, factories, branch offices, and Group companies. We also established a Risk Management Division in April 2023 to reinforce our risk management structure.
Organization Chart of Risk Management
Risk Management Process
The Kyocera Group conducts regular assessments to identify, analyze, and evaluate major risks. We identify corporate risks with significant potential impact on our business, take necessary countermeasures, and review the risk-handling process using the "plan, do, check, act" (PDCA) improvement cycle shown below.
Corporate Risk Management Process Flow
Corporate Risk
Corporate risks and countermeasures identified through the risk management process are as follows:
| Risk Classifications | Specific Risk Details | Main Countermeasures |
|---|---|---|
| Risks Regarding Economic Security |
●Risk related to unexpected changes in laws and regulations regarding economic security policies, investment regulations, product import and export restrictions, and/or restrictions on repatriating profits, due to political, geopolitical, or economic factors affecting international business operations |
●Establish an economic security project to enact risk prevention measures such as the monitoring of international risks ●Collect information about changes in regulations regarding investment and profit repatriation, and take all necessary measures |
| Risks Regarding Human Rights |
●Legal and/or reputational risk related to changing laws and regulations regarding human rights both at the Group companies and in supply chains |
●Respect human rights of all stakeholders associated with the Kyocera Group, including employees, customers, shareholders, investors, and business partners, and take action to reduce or eliminate any human rights risks ●Comply with EU Conflict Minerals Regulations and other legal requirements; survey, evaluate and take corrective measures for risks related to conflict materials and human rights violations. ●Join the Responsible Business Alliance; conduct human rights due diligence on supply chain, and provide education about the prohibition of harassment and discrimination |
| Risks Regarding Information Security |
●Risk of damages from information leakage, falsification, loss, or business interruption due to hardware or software failure or cyberattack ●Risk of additional cost for information security in response to new requirements related to technical innovation and customer demands ●Reputational risk and loss of business competitiveness caused by information breach, loss or hacking |
●Improve rules regarding information securi ●Provide education to employees, enhance security measures for networks and IT assets, and reinforce business continuity plans (BCP) to establish rapid recovery measures |
| Risks Regarding Barriers to the Hiring of Excellent Human Resources |
●Risk of becoming unable to fulfill human resource requirements due to fierce labor market competition and shrinking labor pool ●Risk of becoming unable to maintain current human resources by not improving work-life balance, or not promoting diversity and social inclusion |
●Strategically determine the location of new factories based on the expected number of employees and local labor resources ●Secure adequate human resources with an eye on the future, including further expansion outside Japan, and salary levels adjusted to local labor markets and inflation rates ●Improve work-life balance; promote diversity and inclusion; implement flexible work systems |
| Risks Regarding Earthquakes and Other Natural Disasters |
●Risk to business from large-scale disasters caused by earthquake, typhoon, heavy rain, flooding or other inevitable natural disasters, equipment failure, and/or human error ●Risk to financial performance and business results from direct damage caused by disaster, and/or economic harm caused by impaired market conditions resulting from disaster |
●Develop BCP structures that model earthquakes and other natural disasters, as well as large-scale disasters caused by equipment failures or human error; prepare countermeasures in advance ●Create disaster-response plans to ensure early recovery and supply-chain alternatives; conduct BCP education and training |
Please see the annual report (pdf/3,781KB) for details on risks and major countermeasures.
Promotion of Risk Crisis Management
The Kyocera Group has in place the Basic Guidelines for Crisis Management to promote risk management measures. Based on these Guidelines, we formulated the Risk Management Manual that stipulates actions to take to ensure the safety of employees working at overseas sites in the event of a terrorist attack and various other emergency situations.
Compliance Initiatives
The Kyocera Group has established a "Kyocera Compliance Statement" to clarify its stance towards compliance activities on a global level, which was announced both within the Company, and to external stakeholders. This Kyocera Compliance Statement has been issued across the Group, and is used to ingrain a deeper awareness of compliance issues. In addition, as the Company's business activities expand outside of Japan, we must comply with personal information protection restrictions imposed by each country. After the General Data Protection Regulation (GDPR) took effect in Europe, we have seen a push to introduce strict laws concerning the handling of personal data in countries around the world, including new restrictions on the transfer of personal data and other information outside a country or region. We will continue to cooperate with all divisions and Group companies to study and implement measures for the handling of personal information to address concerns regarding to global digital marketing. Further, in a step toward addressing the recent tightening of anti-corruption laws and regulations, of which many international companies have run astray, we have published the Kyocera Group Basic Policy on Anti-Corruption as our guide for global business activities. This compliance system is defined in the anti-corruption regulations of Kyocera Corporation. Additionally, Group companies are implementing internal regulations and training employees on anti-corruption rules and procedures.
Kyocera Compliance Statement
The Kyocera Group applies the spirit of its Corporate Motto "Respect the Divine and Love People - Preserve the spirit to work fairly and honorably, respecting people, our work, our company and our global community" as its basic code on global compliance with laws and regulations.
Since its founding, the Kyocera Group has maintained a fair and honest corporate culture as established in the Kyocera Philosophy whose central principle is "Do what is right as a human being". In alignment with the Kyocera Philosophy, we have never accepted anticompetitive practices such as cartels or acted to endorse criminal organizations, and we have consistently maintained appropriate accounting practices according to the Kyocera Accounting Principles.
"Living Together" has been the foundation of our corporate activities, and as such, we honor coexistence within society and diversity, the traditions and cultures of the related countries, and the humanity of employees, and pursue both material and spiritual happiness for our employees with concern to their physical and emotional health.
Today, laws and regulations that align with Kyocera Group's basic principles are being enacted across the globe. The Kyocera Group fully supports this movement and complies with competition laws, anti-bribery regulations, personal information protection laws, tax laws (including laws preventing facilitation of tax evasion) and any other related laws and regulations of the related countries. The Kyocera Group also respects the efforts of international organizations and countries to protect human rights.
Corporate compliance with laws and regulations is a subject of increasing attention in society, and compliance demanded by society is increasing. The Kyocera Group understands that compliance with laws and regulations is an important endeavor essentially required by the Corporate Motto and Kyocera Philosophy that have regulated our company since founding, and that compliance with related laws and regulations in all countries of the world where the Kyocera Group conducts business is crucial for maintaining the trust of customers, business partners, suppliers, investors, employees and any other stakeholders, therefore the Kyocera Group actively establishes specific departments and prepares regulations for the cause to ensure Group-wide and global compliance with laws and regulations.
January 1, 2020
Kyocera Corporation
Goro Yamaguchi, Chairman
Hideo Tanimoto, President
Risk and Compliance-related Initiatives
Global Five-Regional Legal and IP System
Our proactive M&A strategy has seen the number of Kyocera Group companies grow to around 300, a figure expected to increase in future. For efficiency, the Corporate Legal and Intellectual Property Group divides the globe into five regions. Each local headquarters works with the Kyocera Group companies in its region to build a system for reducing legal risk and ensuring to compliance activities. Building a network to facilitate cooperation between Group companies is vital for the efficient implementation of compliance activities globally. To this end, we established the "Kyocera Group Global Legal Compliance Meeting", for the headquarters and operating companies in each region to our policies alongside local challenges. These conferences are actively held in each of the five regions, including Americas, Europe / Middle East / Africa, Japan / Korea, China, and Asia-Pacific, prompting lively discussion based on local circumstances.
Risk & Compliance Month
Kyocera Corporation has designated each December as Risk & Compliance Month.
To heighten awareness, employees are addressed by the president, key priorities are shared at shift-start meetings, and e-learning exercises are widely conducted. By sharing these initiatives with other group companies, we are working to build a group-wide system to ensure that risk management, compliance, and BCP activities permeate the entire company. We refer to our activities related to risk management, compliance, and BCP collectively as risk and compliance activities.
At Kyocera, risk management, compliance, and BCP-related activities are collectively referred to as risk compliance activities.
Fair and Free Competition
The Kyocera Group bases its decisions on "what is right as a human being," and believes it is important to maintain and promote fair and free competition. As part of these activities, the Kyocera Group publishes the Kyocera Group Global Antimonopoly Law Compliance Manual and disseminates the Antimonopoly Law and the Antimonopoly Law Compliance Regulations to employees in Japan and overseas, which specifically stipulate matters to be observed as employees. The Kyocera Group conducts training on global antitrust law and complementary training for all Kyocera Group employees every two years, alternating between the two. In addition, interview-style education for management-level employees is conducted. We will continue to improve understanding of the Antimonopoly Law and ensure compliance with the Antimonopoly Law and other related laws and regulations through ongoing education.
Antitrust Compliance Manual
Ensuring Fairness in Outsourced and Subsidized Projects
The Kyocera Group (in Japan) has established "Management Regulations for Commissioned and Supported Projects" to clarify the management system for commissioned or supported projects funded by public research organizations or administrative agencies and to prevent misconduct, and is committed to appropriate research activities.
Measures for Anti-Corruption
The Kyocera Group has established a basic policy on anti-corruption and publicizes the basic policy in order to let its basic stance of actively working to eradicate corruption known both internally and externally. The Kyocera Group makes thorough efforts based on the Kyocera Philosophy to prevent bribery by rolling out anti-corruption regulations established at each group company. These anti-corruption regulations prohibit not only bribery such as the offering and receipt of excessive gifts or entertainment, but also activities that deviate from ordinary business practices. The Kyocera Group also provides anti-corruption training internally so that the employees are well aware of basic policies and anti-corruption regulations.
Kyocera Group Basic Policy on Anti-Corruption
The Kyocera Group has been conducting business based on the Kyocera Philosophy. The basis of the Kyocera Philosophy is "Do the Right Thing as a Human Being". The Kyocera Philosophy emphasizes the importance of conducting business activities in a fair manner, as exemplified by principles such as, "Pursue Profits Fairly" and "Insist on Playing Fair". Therefore, in light of the Kyocera Philosophy, it is impermissible for Kyocera Group employees to take unfair measures to gain profits.
Anti-corruption regulations have been strengthened around the world, and efforts to curb corruption are recognized as a social responsibility of the company. The Kyocera Group is a participant of the "United Nations Global Compact", which requires its participants to follow its principle, "Businesses should work against corruption in all its forms, including extortion and bribery". In response to the efforts to eradicate corruption, the Kyocera Group has formulated the Kyocera Group Basic Policy on Anti-Corruption ("Basic Policy on Anti-Corruption") in accordance with the Kyocera Philosophy and the Kyocera Compliance Statement, in order to become "The Company" which is respected by all.
Prohibition of Bribery
- The Kyocera Group will not provide, offer or promise to provide bribes to any person directly or indirectly, but will compete based on quality and price and pursue profits fairly.
- Officers and employees of the Kyocera Group will not engage in acts of bribery, including making facilitation payments to public officials, or those equivalent to public officials, or persons with business influence, even if we are asked to do so. Officers and employees of the Kyocera Group will follow the straight and true road.
- Officers and employees of the Kyocera Group will separate personal matters from business and will never receive bribes.
Establishment of the Anti-Corruption Compliance System
The Kyocera Group will establish an Anti-Corruption Compliance System to prevent people from committing fraud. For example, the Kyocera Group will take the following measures.
- Establishing anti-corruption regulations for each Kyocera Group company and guidelines for officers and employees to refer to in specific situations, according to each country and region.
- Implementing anti-corruption training to ensure that officers and employees are fully familiarized with the contents of the anti-corruption regulations and guidelines.
- Ensuring that business partners are familiar with the contents of this Basic Policy on Anti-Corruption and reconsidering transactions with business partners that violate anti-corruption laws and regulations, including the suspension of transactions with such business partners.
- Establishing a hotline for Kyocera Group employees to consult or report any instances of corruption.
Bribery Risk Assessment and Control Procedures
- The Kyocera Group conducts risk assessments based on anti-corruption laws and regulations in countries all over the world. The Kyocera Group will conduct periodic reviews of the Anti-Corruption Compliance System, and make improvements as necessary.
- In order to prevent bribery through third parties such as distributors, agents etc., and to reduce the bribery risk relating to business mergers and acquisitions, the Kyocera Group will conduct preliminary evaluation of such third parties and candidates for acquisitions, mergers, joint ventures, etc. in accordance with bribery risks prior to the commencement of transactions.
- When engaging a third party, such as a distributor, an agent, etc. the Kyocera Group will require such third party to comply with this Basic Policy on Anti-Corruption and the anti-corruption regulations in order to build a healthy business relationship.
Appropriate Accounting and Monitoring
- To ensure transparent management, the Kyocera Group will perform accurate accounting based on the Kyocera Management and Accounting Principles, and will keep proper accounting books and records pursuant to the rules of each Kyocera Group company.
- The Kyocera Group will monitor the implementation of this Basic Policy on Anti-Corruption through self-reviews, internal audits, etc. and will take corrective measures promptly should there be any problems found.
Disciplinary Measures
Each Kyocera Group company will fairly and strictly discipline its officers and employees who violate this Basic Policy on Anti-Corruption and any applicable anti-corruption laws and regulations, according to the internal rules of each Kyocera Group company.
April 1, 2020
Kyocera Corporation
Goro Yamaguchi, Chairman
Hideo Tanimoto, President
Conducting Legal Audits
As part of its efforts to enhance its compliance framework, the Kyocera Group carries out legal audits to confirm the status of compliance with various laws in Japan. In FY2018, Kyocera built an auditing framework for major group companies in Japan, focusing on operational processes to prevent legal violations before they happen. Since FY2019, there has been a continuous implementation of legal audits focusing on operational processes at all group companies in Japan.
Security Trade Control System
The Kyocera Group complies with the Foreign Exchange and Foreign Trade Act and other regulations relating to international security. In addition, the Kyocera Group is establishing a system for heightening security trade control. Its purpose is to prevent the outflow of components for weapons of mass destruction and conventional weapons, or products and technology that could be used for their production and development.
Measures taken to ensure strict compliance with the Foreign Exchange and Foreign Trade Control Act and other export-related laws and regulations in Japan include sharing of relevant information among all sites, with Kyocera as the main player, and implementation of audits to continuously maintain the security trade control system. Group companies (Outside of Japan) have in place a system that puts an emphasis on education and auditing on security trade control to reinforce control assuredness.
Example Approach
Measures to Ensure Security in International Distribution
Kyocera is recognized as an authorized exporter and authorized importer according to the AEO (Authorized Economic Operator) system, an international standard designed to ensure safety and smoothness of international trading and for which the mechanism of mutual approval is established in each country. This authorization helps us ensure security and smooth trading related to products delivered to customers outside Japan. We will continue to ensure legal compliance and security management in international logistics.
Appropriate Information Disclosure
The Kyocera Group complies with regulations relating to the disclosure of information. The Kyocera Group endeavors to provide appropriate information without falsehoods or expressions that invite misunderstanding, in accordance with social and moral principles. Additionally, display of product labels and operating instructions, catalogs, sales promotion documents, advertisements and other materials by Kyocera is in line with the company standard as set out in our Public Document Verification Guidelines. We are building a monitoring system for verification by the Quality Assurance, Legal, Intellectual Property and Corporate Communications divisions.
Ensuring Transparency in Political Donations
The Kyocera Group may provide political donations as required from perspectives such as the realization of policy-oriented politics and contributing to the sound growth of parliamentary democracy. When we make political donations, we will comply with relevant laws and regulations including the Political Funds Control Act.
Measures for Prevention of Insider Trading
The Kyocera Group has in place management systems to prevent insider trading and educates employees thoroughly on insider trading compliance. Kyocera has created an internal information management system based on the Insider Trading Prevention Regulations, as well as implementing a ban on stock trading for a fixed period before the company announces its financial results. An Insider Trading Prevention Handbook has been compiled by the company and distributed among employees to ensure comprehensive awareness of the issue. New recruits and recently promoted employees are also provided with training to prevent insider trading. Kyocera is engaging in continued efforts to ensure compliance, including informing employees about the dates of the ban on stock trading at morning meetings.
Measures for Exclusion of Antisocial Groups
The Kyocera Group established a basic policy for corporate governance and internal control including the prevention of involvement in management activities by antisocial groups and the prevention of damage by such groups.
The basis of the measures for exclusion of antisocial groups is that the entire company is united in confronting antisocial groups with determination. The Kyocera Group CSR Guidelines clearly specify how to handle antisocial groups in order to notify all employees of the company's attitude. The basic transaction contact form Kyocera has with our business associates now contains terms on exclusion of antisocial groups. More efforts will be made in the entire supply chain to redouble exclusion of antisocial groups.
Establishment of Employee Consultation Hot-Line Center (Internal Reporting System)
Kyocera Group employees can consult the Employee Consultation Hot-Line Center on a diverse range of issues. Employees can seek advice and consultation, as well as report actions that are or may be in violation of laws and internal regulations relating to human rights, labor, safety and health, environment, fair business practices, etc. Measures for protection of individual privacy are clarified, and employees can consult the Hot-Line Center directly by telephone, e-mail or other means. Details of the consultation are investigated and ascertained in cooperation with the relevant divisions. This is followed by corrective action and preventive measures against recurrence. At Kyocera, consultations were undertaken on 93 matters in FY2022, and steps toward resolution were taken in each case.
Corporate Motto / Management Rationale
- Our Thoughts on Sustainability Activities
- Top Management Message
- Kyocera Group's Value Creation Model
- Sustainability Management
- Kyocera Group CSR Guidelines
- Stakeholder Engagement
- Environmental Safety Policy / Targets and Promotion System
- Measures to Fight Climate Change -Information Disclosure Based on TCFD Recommendations-
- Water Risk Response
- Recycling Activities
- Initiatives to Prevent Environmental Pollution
- Conservation of Biodiversity
- Environmentally Friendly Products / Green Procurement
- Environmental Communication
- A History of Our Environmental Protection Activities
Social Citizenship Initiatives
- The Kyocera Group Human Capital
- Respect for Human Rights
- Promoting Diversity and Inclusion
- Occupational Safety
- Occupational Health, Safety, and Fitness Initiatives
- Supply Chain Management
- Approaches to Raising Quality and Customer Satisfaction Levels
- Social Contribution Activities
- Academic Advancement and Research
- Support for Culture and the Arts
- International Exchanges and Collaboration
- Environmental Protection Activities
- Local Community Activities
- Contributions to Society through Business Activities
Relevant data
- ESG Data Sheets
- Third Party Assurance of Environmental and Social Data
- Promoting Digitalization
- Innovation Management
- Integrated Report
- Employees Creating the Future
- GRI Standards Comparison Table
- Editorial Policy
- Participation in Sustainability Related Initiatives & External Evaluation
- News & Announcements