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Compliance

Aiming to remain a company trusted by society by strengthening compliance on a global basis

Our Approach to ComplianceCompliance depends on the good intentions of each employee

Compliance Management Principles

Compliance Management Principles

The Sekisui Chemical Group carries out compliance management based on fundamental principles, including contributing to society, being a trusted company, and adherence to both the letter and spirit of the law, principles that are spelled out in its Compliance Declaration announced in 2003. Based on the spirit of the company philosophy and our Corporate Code of Ethics, our compliance initiatives are in tune with the ethics and social norms valued by society as we strictly adhere to laws, regulations and internal rules. Our business and compliance activities support the corporate value of the Sekisui Chemical Group, and compliance is the basis of all management activities. We aim to remain a company in which each individual employee can be proud of our good intentions. To this end, we strive to improve awareness of compliance throughout the Sekisui Chemical Group in order to remain in the trust of society.

Compliance Management Principles

Principal Initiatives in FY2015Principal initiatives toward reinforcing accounting compliance

In fiscal 2014, we decided that October of each year will be Compliance Reinforcement Month for all employees to reflect on their compliance awareness and actions.

Improper accounting practices were uncovered at Group companies in the previous fiscal year, in fiscal 2015 we focused mainly on implementing educational programs designed to prevent any recurrence. Among other measures, we implemented training sessions that specialized in accounting compliance based on cooperation with division companies. Targeting business sites inside and outside Japan, the training aimed to change director and employee ways of thinking with regard to compliance awareness.

Initiatives Taken during Compliance Reinforcement Month (FY2015)

  1. Transmitted Top Message
    • The Top Message of the President was published on the corporate intranet and in the Group newsletter.
  2. Implemented Compliance Implementation Program 2015
    • Open seminars were held in 10 locations in Japan
    • Training was implemented at affiliated companies
  3. Conducted e-Learning
    • Implemented e-learning on corporate intranet
  4. Used of compliance awareness surveys
    • Feedback of results from survey on compliance awareness conducted in fiscal 2014

Main accounting compliance education programs implemented in fiscal 2015

Compliance education programs for full-time directors and corporate auditors at affiliated companies

Compliance education programs for Group companies

Accounting compliance education programs for executive officers

Compliance education programs and e-learning during Compliance Reinforcement Month

Compliance education programs at meetings of overseas company presidents


Trends in class participation (All Sekisui Chemical Group Employees)

e-Trends in class participation

Implemented on four sessions in fiscal 2015. However, as the third and fourth sessions are under way, the abovementioned figures are averages of the results from the first and second sessions.

Upgrade of Legal StructureReinforcing the legal structure to support global business development

The Sekisui Chemical Group has been reinforcing its legal affairs structure by developing and deploying legal personnel, and strengthening collaboration among legal departments and enhancing legal functions.

In fiscal 2015, the Sekisui Chemical Group hired one legal expert who is a Chinese national in order to reinforce ongoing business development in China.

VOICEStrengthening legal responsiveness on a global scale

VOICE

Wang Tingting
Business Strategy Department
Sekisui Chemical Co., Ltd.

As the manager in charge of legal affairs, it is my responsibility to facilitate legal risk management and compliance management at local companies in China, while addressing changes in social and economic conditions. In my daily work and while collaborating with the head office, it is important to understand the laws and regulations related to corporate activities in China, such as labor regulations, contracts, debt collection, intellectual property, and foreign currency management.

I aim to build up my awareness and perception of legal matters by working with a stronger focus on compliance and learning more about judicial precedents, starting with my knowledge of the law. I concentrate on minimizing the damage caused by problems as they arise in order to avoid serious risks, such as legal problems, non-performing loans, and issues related to maternity leave following the government’s abandonment of its one child policy.

The S.C.A.N. Whistle-blowing ProgramSystem further enhanced, such as by making the reporting of violations mandatory

FY2015 Whistle-blowing Reports and Consultations

FY2015 Whistle-blowing Reports and Consultations

In 2002, the Sekisui Chemical Group developed the S.C.A.N. (Sekisui Compliance Assist Network) intra-company whistle-blowing system, which is the mechanism that has been made available for use by all Group employees.

S.C.A.N. is operated under the supervision of the executive officer in charge of the legal department. The program is accessible to employees through a special website on our intranet as well as a dedicated toll-free telephone number. Whistle-blowing rules are in place to protect whistle-blowers, and the confidentially of the whistle-blower and their information is carefully protected to prevent retribution.

In fiscal 2015, the Group made revisions to part of its S.C.A.N system with the aim of creating an environment in which the required information is more easily provided.

Principal Revisions to Intra-Company Whistle-blowing System

  1. Reporting of compliance violations made mandatory
  2. Enhanced protection for whistle-blowers who report compliance violations
  3. Scope of whistle-blowers extended to principal domestic suppliers

Marketing CommunicationsLegal compliance with regard to advertising and labeling

When conducting business activities, the Sekisui Chemical Group strictly adheres to laws and regulations while engaging in good-faith marketing activities. In fiscal 2015, there were no serious violations of laws, regulations or internal rules to report within the context of marketing communications related to advertising and product labeling.

Legal Violation

In February 2009 the Fair Trade Commission found Sekisui Chemical to have colluded with other firms in the determination of sale prices of polyvinyl chloride pipes and fittings over the period 2004-2006 and issued an order for Sekisui Chemical to take measures to eliminate such collusion and to pay surcharges (hereinafter referred to as the “order”). Since Sekisui Chemical's determination of the facts of this case differs from that on which the order was based, in April 2009 the Company asked the Fair Trade Commission to cancel the order. Appeal procedures are still under way.


In December 2014, our consolidated subsidiary Nippon No-Dig Technology Co., Ltd. was found to have engaged in improper accounting practices. In January 2015, Sekisui Chemical set up a special investigative committee consisting of external experts, and this committee released its findings in March 2015. We are taking this matter seriously and put in place measures to prevent a reoccurrence.

  1. Enhance measures to improve awareness of accounting compliance
  2. Strengthen and improve internal controls
  3. Improve feedback on internal audits