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Risk Management and Compliance

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 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.

Images:Kyocera Group's Risk Management System

Compliance Promotion

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

Risk Management and Compliance Conference

At Kyocera Risk Management and Compliance Conference is held four times a year to promote risk and compliance initiatives throughout our business. This conference is a forum for information sharing and opinion exchange between business divisions, indirect divisions and Japan-based affiliates.

Risk & Compliance Month

For Kyocera Corporation, each December marks Risk & Compliance Month, observed to raise awareness and provide risk and compliance training for all employees. In addition, to reaffirm employee awareness of the importance of risk and compliance activities, employees are addressed by the President, important points are disseminated at shift-start meetings, and e-learning exercises are conducted for all employees. By sharing these initiatives among our Group companies, we will become an enterprise permeated with risk management, compliance, and BCP awareness.

At Kyocera, risk management, compliance, and BCP-related activities are collectively referred to as risk compliance activities.

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 the U.S., Europe, China, Asia / Pacific, and Japan / South Korea, prompting lively discussion based on local circumstances.

Images:Kyocera Global Legal Compliance IP Meeting
Kyocera Global Legal Compliance IP Meeting

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.

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.

Image:Kyocera Group Global
Antitrust Compliance Manual
Kyocera Group Global
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.

Image:Authorized exporter certificate
Authorized exporter certificate
Images: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.

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.

Images: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 93 matters in FY2022, and steps toward resolution were taken in each case.