Risk Management and Compliance

| Risk Management Promotion | Promotion of Contingency Planning | Promotion of Risk Crisis Management
| Information Security Efforts | Protection of Intellectual Property Rights | Thorough Legal Compliance |

 Risk Management Promotion
The Kyocera Group is making group-wide efforts to reinforce its risk management system to cope with global risks that are becoming ever more complicated. The Kyocera Group faces various risks that may affect the credibility or business sustainability of the Kyocera Group, including changes in the market environment, occurrence of natural disasters, incidents and accidents, the impact of climate change, information leakage, deficiencies of labor conditions in the supply chain, and violation of human rights. To cope with these, the Kyocera Group endeavors to reduce and mitigate risks while acting on the Basic Policy on Risk Management put in place for this purpose.

  Basic Policy on Risk Management

1. In accordance with assurance of compliance and the spirit of the Kyocera Philosophy, the Kyocera Group will consider what is the right conduct as a human being and act based on this value standards.

2. In accordance with the spirit of the Kyocera Philosophy, the Kyocera Group will accept that “the highest priority is to ensure physical safety and human life,” deal with crisis, and for the convergence of crises, cooperate among employees as a unit to minimize loss, recover damage, and make efforts to prevent reoccurrences, thereby attempting to remove or mitigate impediments to the interests of each stakeholder, including customers, business partners, shareholders/investors, and the community.

3. The Kyocera Group will attempt to continuously develop its business through implementing risk management.

4. The Kyocera 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 conducts risk management, with the President as the group chief officer and the General Manager of Corporate General Affairs Human Resources Group as his assistant to supervise the risk management divisions. The Risk Management Committee conducts risk assessment of each department and each site in and out of Japan and formulates, examines, and approves response measures and monitors their progress with respect to risks considered to be particularly high in importance.

In FY2018, the Kyocera Group assigned risk management personnel at each department and domestic site, provided education on major risks such as natural disasters, terrorist responses, and information security and reinforced risk management.

Image: Kyocera Group’s Risk Management System
Kyocera Group’s Risk Management System
Image: Systematic diagram of risk management
Systematic diagram of risk management

 Promotion of Contingency Planning

The Kyocera Group has a Disaster Response Manual established based on the Basic Guidelines for Disaster Response to take appropriate actions in the event that a large-scale natural disaster causes damage to the Kyocera Group, including minimization of personal and physical damage and implementation of swift restoration of business operations.The Disaster Response Manual is established and specifies regulations on collection and distribution of information on disasters and response measures for earthquakes, tsunami, wind, and flood damage.

Image: Basic policy of disaster response
Basic Policy of Disaster Response

Actions to Deal with Earthquakes

In an attempt to minimize injury and damage from a major earthquake, the Kyocera Group (Japan) is installing a disaster warning system at all plants and offices using the Earthquake Early Warning System provided by the Japan Meteorological Agency. The Kyocera Group endeavors to minimize earthquake damage through diverse means, including drills utilizing the Earthquake Early Warning System, disaster prevention training for employees, and regular disaster drills held with local fire stations and other organizations.

Considerable damage is expected from a tsunami that could be generated by an earthquake in the Nankai Trough. To counter the potential damage, evacuation areas have been prepared for sites that are likely to sustain damage, based on the expected maximum tsunami height and shortest arrival time. Steps have been taken to ensure employees are fully aware of what they need to do in the event of a tsunami.

Example Approach

Holding of General Drill for Large-Scale Earthquakes
The Kyocera Group regularly holds a general drill simulating a building fire following the occurrence of a major earthquake. Drills were held at various sites in FY2018, as in the previous year, in cooperation with the local fire-fighting administration supposing the collapse of equipment, the breakout of a fire, and an elevator malfunction following a major earthquake. Kyocera continues to hold regular drills for unforeseen situations to improve our disaster preparedness.
Evacuation drill supposing a large-scale earthquake (Kagoshima Kokubu Plant) Fire-fighting drill using fire extinguishers (Nagano Okaya Plant)
Evacuation drill supposing a large-scale earthquake
(Kagoshima Kokubu Plant)
Fire-fighting drill using fire extinguishers
(Nagano Okaya Plant)

Business Continuity Plan (BCP) Efforts
The Kyocera Group (Japan) formulated BCP against occurrence of a major earthquake and has taken necessary measures including fixation of important equipment, dispatch of repair components, and acquisition of alternative production means. In FY2018, we reexamined the entire flow of emergency action starting from initial response to business restoration with the sample response case of the Kumamoto Earthquakes used as reference. We endeavor to maintain our BCP in an adequate condition by evaluating its activities based on the international standard or industrial standard. Also in FY2019, Kyocera continues the formulation of measures to cope with identified risks, implementation of regular drills, and sharing of information with relevant departments to improve our emergency preparedness. Our overseas Group companies expand and maintain BCP activities as appropriate for the disaster risk expected to occur in respective areas, such as natural disasters or epidemics.
Desktop drill assuming 
an earthquake disaster(Tokyo Office)

Desktop drill assuming an earthquake disaster (Kanagawa Hadano Plant)

Training of checking the power systemrestoration procedure(Toyama Nyuzen Plant)
Damage reporting drill assuming the case of disaster (Tokyo Ome Plant)

BCP Efforts for the Supply Chain

The Kyocera Group promotes evaluation of alternative items and multiple purchasing sources with respect to the procurement of raw materials and components so as to prevent the stagnation of production activities during a disaster situation.

Kyocera has distributed the Supply Chain CSR Procurement Guideline to all business partners to help them understand our concept of BCP. For business partners who supply us with important raw materials and components, we are carrying out a survey on the progress of their BCP efforts in more detail.

Policy and Systems Related to Purchasing Activities

 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.

 Information Security Efforts
The Kyocera Group makes effective and efficient use of information assets. We have clarified the basic requirements that employees should comply with in the handling of information assets and established an information management system.
Policy and System of Information Security Management

The Kyocera Group has in place the Information Security Management Policy for the entire Kyocera Group as we see management strategies, product development, expertise, technology, organization, personnel information and others as the company's important assets. Based on the Information Security Management Policy, we set up the Digital Information Security Management Regulations, Personal Information Protection Management Regulations, and Technological Know-how Leak Prevention Guideline for classified information management, intellectual property management, physical security management, visitor control, and human control, thereby ensuring thorough information security management.

The Kyocera Group established a Digital Information Security Committee with the President as its chairman and is implementing various digital security measures including periodic employee education by post or job, restrictions on the external use of information equipment, measures to prevent information asset leaks, thorough management of IT assets, enhancement of information security against cyber-attacks and internal audits.

Protection of Personal Information

The Kyocera Group regards the personal information obtained from stakeholders through business activities as important private information and strives to protect it thoroughly as a primary social responsibility.

Kyocera has set up rules on protection of specific personal information, clarified usage purposes of personal information, set up a dedicated contact for inquiries, and provided regular education to employees handling private information, thereby ensuring thorough management.

Communication system on personal information
Communication system on personal information

 Protection of Intellectual Property Rights

The basic policy of the Kyocera Group is to safeguard the outcome of research and development by the Group as intellectual property rights, and to respect the intellectual property rights of others. We assign liaison officers responsible for intellectual property to main offices and manufacturing plants. Their role is to facilitate the processes of obtaining intellectual property rights, maintaining control of rights, and negotiating licenses for intellectual property rights. The Kyocera Group is undertaking activities relating to intellectual property in close cooperation with relevant business units.

Kyocera also regularly holds the Global Intellectual Property Partners Meeting for patent offices and the personnel of Group companies in charge of intellectual property in the U.S.A., Europe, China, Korea, and Japan, which help us obtain patents in those countries. Participants in the meeting discuss improvement of patent application specifications, and response actions to patent acquisition using specific case examples so that Kyocera can improve the Guideline and the system of sharing information.

Global Intellectual Property Partners Meeting

Global Intellectual Property Partners Meeting

Example Approach

  Awarded the "Top 100 Global Innovators 2017"
  Kyocera was awarded the Top 100 Global Innovators 2017 by Clarivate Analytics, an international information service company. The award, which ranks companies based on Clarivate Analytics' own unique analysis of proprietary patent date, is given annually to companies that lead the world in innovative activity. Kyocera was given high evaluation for its "success ratio of patents" and global performance and has been awarded the commendation consecutively for four years. Trophy awarded to Kyocera
Trophy awarded to Kyocera
Trophy awarded to Kyocera
Measures for Dealing with Counterfeit Products
The Kyocera Group is implementing diverse measures in various countries around the world to protect customers from the harm caused by counterfeit products, and to enable product use with peace of mind. Kyocera monitors mail order web sites and distribution sites around the world looking for counterfeit products. Vendors selling counterfeit products are given warning or are reported to authorities and are asked to pledge they will no longer handle the products.They are requested to destroy stocks and reveal the names of their suppliers. Kyocera also uses hologram seals to distinguish between genuine and counterfeit products for some products, such as toner containers, making it easier to determine whether a product is authentic.

Kyocera Document Solutions Inc. Intellectual Property Protection
Counterfeit ceramic knife

Counterfeit ceramic knife

 Thorough Legal Compliance

Kyocera Group Global Legal Affairs Meeting

Kyocera Group Global Legal Affairs Meeting

The Kyocera Group makes its basic stance handling compliance management actively widely known internally and externally through enacting "Kyocera Compliance Statement", and ensures thorough compliance with the law by taking measures including management by each division in charge of a specific law or regulation, the establishment of an in-house communication system for notification of the enactment or revision of a law or regulation, the establishment of Employee Consultation Offices (internal reporting system), the implementation of regular legal compliance audits, and the provision of compliance education to employees upon new employment or promotion.

We also regularly hold the Kyocera Group Global Legal Affairs Meeting, in which legal and compliance affairs personnel of major Group companies in the U.S.A., Europe, and China participate in order to reinforce global cooperation. At each Meeting, participants learn about each others results, share information on legal issues currently being faced by each company, and engage in discussions regarding various legal issues affecting the Group.

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 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, 2019
Kyocera Corporation
Goro Yamaguchi, Chairman
Hideo Tanimoto, President

Measures for Fair and Free Competition

Kyocera Group Global Antitrust Compliance Manual
The Kyocera Group considers it important to maintain and promote fair and free competition while using these as a judgment criterion for the concept, “What is the right thing to do as a human being?” As part of its activities, the Kyocera Group Global Antitrust Compliance Manual, common to the entire Kyocera Group, was published, and education and training on the Antitrust Act and the Antitrust Act Compliance Regulations, which specifically stipulates the rules for employees to observe, were provided to employees both in and outside of Japan in FY2018. In FY2019, the second global Antitrust education was provided to all the Kyocera Group employee to improve understanding of the Antitrust Act. We ensure thorough compliance with the Antitrust Act and other related regulations by continuously providing relevant education and training to our employees.
Conducting legal audits
As a part of strengthening its compliance system, the Kyocera Group conducts legal audits to check its status. Kyocera established and manages the compliance system for each working process. In FY2018, establishment of a system of legal audit of operation processes was completed at each major domestic Group company. In FY2019, the operation process audit will be sequentially conducted at all domestic Group companies.
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. The purpose is to prevent the outflow of components for weapons of mass destruction and arms, 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 the sites, with Kyocera as the main player, and implementation of audits to continuously maintain the security trade control system. Our Group companies outside 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 improve maintenance of the security system for distribution.

Authorized exporter certificate Authorized importer certificate
Authorized exporter certificate Authorized importer certificate
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.
Measures for Prevention of Bribery and Corruption
For the Kyocera Group, the basis of dealings with business associates is to always be fair and just, and to approach all manner of transactions in the spirit of fair play with the correct attitude as a human being. The Kyocera Group CSR Guidelines prohibit the excessive exchange of gifts, the provision and receipt of excessive entertainment, and other corrupt activities. The Guidelines also forbid activities that depart from customary business practice.
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 as well as relevant bylaws.
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 enacted the Insider Trading Prevention Regulations, which establish a management system for insider information and provide restrictions on stock trading. The company prepared an Insider Trading Prevention Handbook and distributed it to employees to enhance understanding of its importance. In addition, the company takes various continuing actions including provision of education on prevention of insider trading to newly hired or promoted employees and advising of no stock trading periods at morning meetings.

In FY2019, we intend to provide refresher courses to all employees of Kyocera.

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 27 matters in FY2018, and steps toward resolution were taken in each case.
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