Sustainability

Compliance Initiatives

Whistleblowing system

Our whistleblowing system (helplines and hotlines) can be used by everyone who works at NGK and every Group company location. This includes officers, employees, employees dispatched on external assignments, advisors, contract employees, temporary employees based on a temporary employment agreement, and resident employees accompanying a service contract. Consultations and reports should be handled by a designated agent in principle, but it is also possible to seek consultation anonymously through an outside hotline. Our company rules guarantee protection of those seeking advice or reporting issues. We have also revised the company rules and established a structure to align with enforcement of the revised Whistleblower Protection Act.

Organization of whistleblowing system

Organization of whistleblowing system

Helpline

We have established a helpline to receive inquiries and reports from employees aimed at curtailing and preventing activities contrary to the spirit of the NGK Group Code of Conduct and to facilitate quick resolution when issues occur. Each Group company outside Japan has its own helpline. In FY2021, these helplines received requests for consultation on a variety of issues, including harassment, rule violations, and quality issues.

Number of Helpline Consultation Cases (NGK)

FY2017 FY2018 FY2019 FY2020 FY2021
43 75 55 28 43

In FY2021, there were a total of 43 consultations concerning harassment, interpersonal relations, various rules and regulations, and the like. Each case was handled carefully in consultation with outside lawyers, and none of the details of the whistleblowing had an impact on company operations. Hereafter, we will continue to periodically evaluate and improve the effectiveness of the NGK Group Code of Conduct and our compliance measures.

Hotline

We have established a hotline as a whistleblowing system for responding to fraud and legal infractions committed by senior management of NGK, and all violations related to competition laws and anti-corruption laws. Outside lawyers manage the hotline and the Business Ethics Committee, which consists mainly of outside directors, handles issues. The Committee reports these issues to the Board of Directors and takes corrective steps.
We continue to set up hotlines at Group companies outside Japan to respond to fraud and legal infractions committed by senior management, while taking the circumstances in each country into consideration. All Group companies outside Japan have set up hotlines for matters related to competition laws and anti-corruption law-related violations.

Compliance Card

To ensure thorough awareness of the whistleblowing system, we created a Compliance Card that employees could keep with them at all times, and distributed it to all employees at NGK and all Group companies in Japan. Also, in line with the revisions to the Whistleblower Protection Act, in FY2021 we revised our company regulations to allow former employees to contact the helpline/hotline for one year after leaving the company.

This is a photo of the Compliance Card that we distribute to employees to make them aware of the whistleblowing system.

Compliance with Laws and Regulations

Observing Competition Laws, other laws and regulations pertaining to business transactions

In addition to mandating compliance with competition laws in the NGK Group Code of Conduct, we have established the Competition Laws Compliance Rules, 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. The Competition Laws Compliance Handbook was revised in FY2021 to accommodate changes in social conditions.

Anti-Competitive Behavior Incidents

In FY2021, there were no confirmed incidents of anti-competitive behavior in the NGK Group.

FY2017 FY2018 FY2019 FY2020 FY2021
0 0 0 0 0

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 Business Group 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 comprehensive education for all NGK directors and general managers on handling company violations of competition laws

These items continue every year

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

As part of its full compliance efforts, NGK is engaged in strictly observing and enforcing laws and regulations related to import and export control. Based on the NGK Group Code of Conduct, 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 16, 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 imports and exports; 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 imports and exports 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 export/import cargo management ledgers and shipment ledgers. We have achieved nearly 100% completeness for both imports and exports.

Familiarization with the Export/Import Handbook

NGK also makes efforts toward thorough compliance with the Export/Import Handbook, which was published in FY2012 and 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 business division.
Study meetings on the AEO Program and export/import management are held one or more times per year targeting relevant staff in divisions responsible for export and import activities. In FY2021 these meetings were held not only in-person, but via web conferencing and newsletters. The meetings were held a total of 32 times, with 963 employees in attendance.

Independent review of Competition Laws Compliance Program

Since FY2015, NGK has contracted PwC Advisory LLC (hereinafter, “PwC”) as an independent compliance professional. We retain PwC to perform an annual review of the NGK Group’s implementation of its competition law compliance program according to the Competition Laws Compliance Rules. PwC also assesses the overall oversight and reporting structures in place for NGK Group companies, both in Japan and overseas locations. In FY2017, PwC began conducting interviews with the directors overseeing NGK’s various business groups in order to assess the tone of each director’s approach toward competition law compliance and further enhance their awareness of these efforts. The results of these reviews are used in operating and improving the competition law compliance program and other purposes.

Corruption Prevention Structure

The NGK Group Code of Conduct states, “We will never in any manner undertake bribery” and “We will undertake business activities with common sense and based on strict compliance and ethics.” To this end, we implement anti-bribery measures in order to ensure fair and transparent transactions. In FY2015, we formulated anti-bribery rules for dealing with foreign public officials in order to ensure compliance with anti-bribery laws as well as ethical standards for business conduct. These rules prohibit engaging in acts of bribery, either directly or indirectly through a third party (entertainment, gifts of money and/or goods). The rules likewise prohibit payments to public officials to facilitate administrative procedures. Our Auditing Department also began reviewing overseas money transfers and entertainment expenses from FY2017.

Conducting Anti-Bribery Training

In addition to having in-house lecturers provide job grade-specific training to NGK employees, in FY2019 we began conducting training for sales department employees that incorporates interactive lectures by outside lawyers and group discussion of case studies. We also arrange attorney-led seminars and other training at all Group companies.

Corruption and Bribery Incidents

In FY2021, there were no confirmed incidents of corruption or bribery in the NGK Group.

FY2017 FY2018 FY2019 FY2020 FY2021
0 0 0 0 0

Anti-Harassment Measures

In FY2021, our measures to combat harassment in the workplace included the position-based lectures we have carried out in the past, plus a continuation of the video-based training targeting executives and employees at NGK and Group companies in Japan that we held in FY2020 out of consideration for the risk of infection with COVID-19. It defined both sexual harassment and harassment from a position of power, explained how to handle them in accordance with workplace regulations, and used multiple case studies to deepen participant understanding of what constitutes harassment and how it can be prevented. We continue working to prevent harassment before it occurs and improve the workplace environment.

Anti-Harassment Training

Item FY2017 FY2018 FY2019 FY2020 FY2021
Sessions held 5 5 5 4 4
Number of participants 350 464 419 417 448

Compliance Education

Compliance Education for Employees

Compliance training and awareness among corporate officers and employees is driven primarily by the Group Compliance Department and the Legal Department. In addition to career training and training for employees to be posted overseas, we provide Laws and Compliance Seminars to explain laws and regulations and to introduce case studies. Since FY2018, we have included quality compliance and contract observance as part of our career education courses.

Compliance Education Conducted in FY2021 (Overall)

Name Target Content Instruction Format Number of sessions
Career education New hires Compliance basics, competition laws, anti-bribery regulations for dealing with foreign officials Training by an in-house instructor 1
Promoted or career-change employees Compliance basics Video presentation 1
Mid-career hires Compliance basics, competition laws, anti-bribery regulations for dealing with foreign officials Video presentation 1
Newly appointed supervisors General compliance, competition laws, anti-bribery regulations, quality compliance, contract observance, security export control Video presentation 1
Newly appointed managers General compliance, competition laws, anti-bribery regulations, quality compliance, contract observance, security export control Video presentation 1
Managers promoted to second grade Compliance (including quality compliance) Video presentation 1
Training for employees scheduled for postings abroad (global training) Employees scheduled for postings abroad Competition laws, anti-bribery regulations, security export control Video presentation 1
Compliance education Managers and sales staff of Group companies outside Japan Compliance basics, competition laws, anti-bribery regulations for dealing with foreign officials Lectures provided by lawyers and paper materials-based in-house training 19 (24 sites)
General employees of NGK and Group companies in Japan Compliance, harassment prevention, whistleblowing system Video presentation 1
Sales staff of NGK and Group companies in and outside Japan Anti-bribery regulations for dealing with foreign public officials Lawyer-led seminar 4
Executive officers Competition laws Lawyer-led seminar 2
Newly appointed executive officers Companies Act and competition laws Lawyer-led seminar 1
Managers and sales staff of NGK and Group companies in Japan Competition laws Video presentation 1
Executive officers and general managers Lectures on property inheritance Seminar by executive officer or General Manager of Group Compliance Department 4
Laws and Compliance Seminars Managers and other targets depending on content May Export controls for technical information Video presentation (in-house instructor) 1
July Electronic contracts Video presentation (in-house instructor) 1
September Latest trends in insider trading regulations Video presentation (in-house instructor) 1
November Latest trends in anti-bribery regulations Video presentation (outside lawyer) 1
January Handling revisions to the Electronic Books Maintenance Act Video presentation (in-house instructor) 1
March Act on the Protection of Personal Information
- Explanation of revised law and our company’s response -
Video presentation (in-house instructor) 1
Other training Directors and managers of NGK and Group companies in Japan Quality compliance seminar “Thorough Quality Compliance”
- Reviewing NGK inspection non-conformities -
Training by executive officers 1
Business Divisions and Group companies in Japan Competition laws, anti-bribery regulations, Subcontract Act Training by an in-house instructor 5

Competition Law Education Conducted in FY2021

Name Target Content Number of sessions
Training for newly appointed directors Newly appointed directors and executive officers Outside lawyer-led live seminar 2
Competition law compliance lectures All directors, managers, and sales staff of NGK and its Group companies in Japan Streamed video of outside lawyer-led live seminar 2
Compliance training for Group companies outside Japan Managers and sales staff of Group companies outside Japan Lawyer-led live seminar and online seminar; seminar conducted by an internal lecturer; conducted using paper-based resources 19 (25 sites)
Training on competition laws by internal lecturer Targets depend on content Division-requested on-site training; training by Legal Department staff 2

Anti-Bribery Training Conducted in FY2021

Name Target Content Number of sessions
Training for sales staff Sales staff in Japan and some Heads of Group companies outside Japan Anti-bribery regulations for dealing with foreign public officials 2
Compliance education Managers and sales staff of Group companies outside Japan Outside lawyer-led live seminar and online seminar; seminar conducted by an internal lecturer; conducted using paper-based resources 16 (23 sites)

Other Dissemination Activities

We post the Compliance Newsletter on the company’s intranet once a month. The Newsletter features a four-frame cartoon that explores familiar themes followed by detailed explanations of what we can learn from these examples.
In FY2017, we began making October the annual compliance strengthening month, during which we do things such as put up educational posters and inform employees about the whistleblowing system.
In FY2021, we trialed a Compliance Activities Award System and have begun to put it into practice from FY2022. We give awards for compliance activities, from each department and Group companies, that are particularly independent and original. They are then publicized throughout the NGK Group as good examples.

This is a photograph of the four-frame cartoon featured in the Compliance Newsletter.
Note: Provided by “Compro Custom” compliance training tools service

Themes Covered in the Compliance Newsletter in FY2021

April If you push yourself to get to work...
May Let’s greet each other
June An open workplace
July Work advice
August Discriminatory posts on social media
September Long working hours when telecommuting
October Compliance strengthening month
November Information leaks in web conferencing
December Human rights week
January Countermeasures against infection
February Working with only a vague understanding
March Television when telecommuting