Sustainability

Initiatives to Ensure Thorough Compliance

Compliance with Competition Laws

Observing Competition Laws on an International Level

In addition to mandating compliance with competition laws in the NGK Group Corporate Business Principles, we have established the Competition Laws Compliance Rules, which have been set forth to comply with international standards. These standards are strictly enforced by the NGK Group. We have established these policies and procedures in order to eradicate unfair business practices and maintain fair and equitable business relationships with our business partners.
We also provide education and training aimed at ensuring widespread awareness and thorough compliance with the Competition Laws Compliance Rules and the Competition Laws Compliance Handbook. The Competition Laws Compliance Activity website we established posts practical manuals to guide compliance with competition laws. We have revised the Competition Laws Compliance Handbook to accommodate changes in social conditions, etc., and reviewed our internal rules in FY2023, before publishing the 4th edition.

Strengthening Our Compliance System in Relation to Competition Laws

Year conducted	Regulation development	Creation of internal systems	Education
FY1997	Formulated guidebook and briefing document for the Anti-Monopoly Act	Required each headquarters to submit a Compliance Status Report on the Anti-Monopoly Act	Lectures on the Anti-Monopoly Act by outside instructors (lawyers) (subsequently held annually)
FY2011	Formulated Competition Laws Compliance Rules
FY2012	Created and distributed the Competition Laws Compliance Handbook Created and distributed an Appendix to the Competition Laws Compliance Handbook	Established an independent committee	In-house training led by Legal Department staff Lectures by local lawyers held at Group companies outside Japan
FY2013			Conducted briefing on the Competition Laws Compliance Handbook Invited U.S. lawyers to lecture on competition laws
FY2014	Revised Competition Laws Compliance Rules Launched operation of a database for advanced notifications and participation reports pertaining to meetings Launched operation of an e-mail monitoring system Revised Competition Laws Compliance Rules at North American sales subsidiaries	Introduced company-wide centralized supervision and reporting structures led by the Board of Directors (independent of the President) Appointed company-wide competition laws supervisory managers Enhanced the helpline	Conducted study meetings for newly appointed directors on competition laws and the Companies Act by Japanese and U.S. lawyers (subsequently held annually) Conducted study meetings on competition laws at Group companies outside Japan (corresponding to laws and regulations in each country)
FY2015	Competition Laws Compliance Rules of all NGK Group companies in and outside Japan were revised to ensure that the NGK Group’s compliance system meets global standards Revised the Competition Laws Compliance Handbook	The Competition Laws Compliance Program was resolved by the Board of Directors Established the Global Compliance Office Contracted Pricewaterhouse Coopers to conduct an unbiased expert review of the implementation status of the NGK Group’s Competition Laws Compliance Program and assess the overall oversight and reporting structures in place for NGK Group companies	Conducted study meetings on competition laws for new employees Distributed a DVD on competition laws to Group companies in Japan Upgraded training on compliance with competition laws provided in and outside Japan
FY2016	The U.S. version and Chinese version of the Competition Laws Compliance Handbook were created and distributed to Group companies in the U.S. and China	Progress status of the Competition Laws Compliance Program was quarterly reported to the Business Ethics Committee, which is composed mainly of outside directors. The program was promoted based on suggestions received from the Committee. Retained PwC Advisory to assess the status of competition law compliance	Expanded seminars led by lawyers in Asia Held seminars on the Companies Act and competition laws for newly appointed executive officers Prepared online-based training aimed at realizing broader training programs (implemented in FY2017 in Japan)
FY2017	Created an operating manual for database used to document competition law compliance	Top management of headquarters, business groups, and Group companies provided notifications about compliance with competition laws at beginning of term	Online seminars provided to 861 employees in Japan
FY2018	Clarified items that should be reported to the hotline when there were violations or fear of violation of competition laws, and revised Competition Laws Compliance Rules Created a working manual for compliance with competition laws	Top management of headquarters, business groups, and Group companies provided notifications about compliance with competition laws at beginning of term^*	Held seminars on the Companies Act and competition laws for newly appointed directors and executive officers^* Held competition law compliance lectures. All executives and managers attended.^*
FY2019	Revised Competition Laws Compliance Rules at NGK Electronics Devices, Inc. to strengthen that subsidiary’s competition laws compliance system	Top management of headquarters, business groups, and Group companies provided notifications about compliance with competition laws at beginning of term^*	Held seminars on the Companies Act and competition laws for newly appointed executive officers^* Held competition law compliance lectures. All key personnel and those designated by competition law compliance managers attended.^* Information session provided regarding the Competition Laws Compliance Handbook’s key points (on competitor information when creating email and documentation)
FY2020	Established the Competition Laws Compliance Activities Portal Site	Top management of headquarters, business groups, and Group companies provided notifications about compliance with competition laws^*	Held seminars on the Companies Act and competition laws for newly appointed directors and executive officers^* Held competition laws compliance lectures attended by executives, all key personnel, and those designated by competition law compliance managers^*
FY2021	Revised the Competition Laws Compliance Handbook		Conducted legacy training for all NGK directors and general managers about past violations of competition laws at NGK
FY2022		Added the Corporate NV Creation as the headquarters responsible for things such as implementing a Competition Laws Compliance Program	Conducted legacy training for managers in sales positions at NGK about past violations of competition laws at NGK
FY2023	Revised the Competition Laws Compliance Handbook		Compliance with domestic competition laws Conducted comprehensive training about violations of competition laws at NGK for those responsible and in charge of operations.

These items continue every year

Third-Party Review of Competition Laws Compliance Program

Since FY2015, NGK has contracted PwC Risk Advisory LLC (PwC) as a compliance specialist to review the operation of our Competition Laws Compliance Program based on the Competition Law Compliance Rules, as well as NGK Group's unified supervision and reporting system for domestic and international group companies, from an objective point of view. Since FY2017, PwC has been conducting interviews with executives of our business groups in order to assess their attitude toward compliance with competition laws, and to further raise their awareness of such compliance efforts. The results of these reviews are used to operate and improve our Competition Laws Compliance Program.

Instances of Anticompetitive Behavior

In FY2023, no instances of anticompetitive behavior were observed within the NGK Group.

Instances of Anticompetitive Behavior

Governance Data Collection

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Export/Import Transaction Management

Strict Adherence to Laws and Regulations Relating to Export/Import Management

As part of its full compliance efforts, NGK is engaged in strictly observing and enforcing laws and regulations related to export and import control. Based on the NGK Group Corporate Business Principles, we stipulate abidance with laws and regulations related to secure export control, and we carry out export control and employee training in accordance with internal rules and the Export/Import Handbook.

Using Databases to Conduct Comprehensive Inspections and Customs Management

In response to the Foreign Exchange and Foreign Trade Act and other export control-related laws and regulations, NGK has screened exports to determine whether export licenses are required and has recorded screening results in a security export control database. However, since October 2017, we have moved to a security export control system (TTP) and are performing management via this new system. Furthermore, export management with respect to the export of certain products is conducted under the Japanese government’s AEO (authorized economic operator) Program.
We have used an export/import cargo management ledger to fulfill our obligations to track and record export and import; however, since our switch to a security export control system (TTP), we have been using the system’s shipment ledger to track and record exports. We continue to use an import cargo control ledger for imports. Each department performs voluntary inspections of export and import under the AEO Program at the start of the fiscal year.
In addition, we use NACCS data (Nippon Automated Cargo and Port Consolidated System) to verify the completeness of import cargo management ledgers and shipment ledgers. We have achieved nearly 100% completeness for both export and import.

Familiarization with the Export/Import Handbook

NGK also makes efforts toward thorough compliance with the Export/Import Handbook, in use since FY2021 and revised in FY2022, that summarizes items for the observance of export/import customs clearance regulations. In addition to publishing this handbook on the company intranet where it can be viewed throughout the entire company, we provide training to spread awareness of the content of the handbook through study meetings related to export/import management conducted in each department.
Study meetings on the AEO Program and export/import management are held one or more times per year targeting relevant staff in departments responsible for export and import activities. In FY2023 these meetings were held not only in-person, but via web conferencing and newsletters. The meetings were held a total of 26 times, with 535 employees in attendance.

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Anti-Harassment Measures

NGK conducts annual position-based training as part of our measures to combat harassment. In FY2022, we also began training on prevention of workplace bullying, which targeted executives at Group companies in Japan, and employed a group discussion format utilizing specific case studies. In FY2023, 141 employees from four companies and five locations attended. We also added sexual harassment to the training content for general employees, and conducted training in the form of lectures. 637 employees from four companies and four locations attended. In addition, we distributed learning materials throughout the NGK Group for use as part of self-study and harassment training by each department, based on the results of the compliance awareness survey conducted in FY2023. These were viewed more than 3,000 times in the first three months of distribution. The Compliance Department also visits each department and Group company to actively conduct training using these learning materials. We continue working to prevent harassment before it occurs and further improve the workplace environment by providing more effective training content.

Number of Position-based Anti-Harassment Training Sessions

Number of Participants in Position-based Anti-Harassment Training

Governance Data Collection

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Compliance Awareness Survey

In FY2023, as part of our efforts to strengthen the NGK Group compliance structure, we conducted our fourth Compliance Awareness Survey for employees working at NGK and Group companies in Japan. Therein, we identified risks that have become apparent, and asked respondents what they thought about their impacts, etc. Each department and company is now formulating initiatives and working to reduce risks based on the results.

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