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Risk Management and Compliance

As uncertainty in the environment surrounding us grows on a global scale year by year, risks continue to diversify and increase in size. In order to meet these challenges, our compliance and risk management systems must advance accordingly. For this reason, the three separate divisions responsible for compliance, risk management and our Business Continuity Plan (BCP) have been integrated as of April 2020. This integration was implemented with the aim of actively promoting risk management within the Kyocera Group and contributing to the group’s development through, faster, more efficient operation and the creation of synergies.

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 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 conducts risk management, with the President as the Group Chief Officer and the General Manager of the Corporate Legal and Intellectual Property Group as the Chair of the Risk Management and Compliance Conference. The Risk Management and Compliance Conference provides a means to share information and exchange opinions with business and back-office divisions regarding important measures and issues facing the company. Risk management and compliance managers have also been assigned at each business and back-office division. These managers attend the Risk Management and Compliance Conference and are responsible for actively promoting risk management activities within their respective divisions.

Kyocera Group’s Risk Management System

The Kyocera Group Risk Management System

Systematic Diagram of Risk Management

Systematic diagram of risk management

Risk Management Training

At Kyocera, we are making efforts to raise awareness of risk management, compliance, and our BCP among all employees through measures such as messages from the company President at morning meetings, the publication of short memos, e-learning-based training and the creation of a new Risk Management and Compliance Month, which was held for the first time in December 2020. We are also implementing initiatives to disseminate systems for understanding incidents, including raising awareness of the Major Incident Reporting System at the Risk Management and Compliance Conference, which is held four times a year.

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.

Thorough Legal Compliance

The Kyocera Group makes its basic stance handling compliance management actively widely known internally and externally through enacting the 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 of new laws and regulations or revisions to laws and regulations, the establishment of Employee Consultation Offices (an internal reporting system), the implementation of regular legal compliance audits, and the provision of compliance education to employees upon joining the company or receiving a promotion.
We also regularly hold the Kyocera Group Global Legal Compliance 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 Group Global Legal Compliance Meeting
Kyocera Group Global Legal
Compliance Meeting

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

Fair and Free Competition

The Kyocera Group advocates for fair and free competition, a cornerstone of our decision-making criterion to “Do what is right as a human being.” We have published a Kyocera Group Global Antitrust Compliance Manual for all employees, with education and training on antitrust compliance conducted both in and outside of Japan. E-learning on global antitrust compliance is provided on a two-year rotation for the entire Kyocera Group, and managers are given supplemental interview-based training. Kyocera intends to continue these training initiatives to improve employee understanding of antitrust risk and ensure compliance with all related laws and regulations.

Photo: Kyocera Group Global Antitrust Compliance Manual
Kyocera Group Global
Antitrust Compliance Manual

Ensuring Fairness in Outsourced and Subsidized Projects

The Kyocera Group strives to ensure that research activities are carried out appropriately. In Japan, the group has clarified its management system relating to projects that are outsourced or subsidized through the receipt of public research funds from government bodies or administrative agencies, and has established a set of Management Regulations for Outsourced and Subsidized Projects in order to prevent fraudulent activities.

Ensuring Fairness in Outsourced and Subsidized Projects

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 improve maintenance of the security system for distribution.

Photo: Authorized exporter certificate
Authorized exporter certificate
Photo: Authorized importer 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 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

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 by laws.

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.

Photo: Insider Trading Prevention Handbook
Insider Trading Prevention Handbook

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 63 matters in FY2020, and steps toward resolution were taken in each case.