Compliance Promotion Structure
NGK Group Corporate Business Principles
The NGK Group Corporate Business Principles has been compiled as a guideline for everyone who works within the NGK Group so that they are aware of what is expected of them in terms of work-related compliance in order to ensure honesty and reliability in our business activities. It has been translated into 11 languages, including English and French. All NGK Group employees will act with high ethical standards according to these principles as they fulfill their social responsibilities throughout the entire supply chain to build societal trust in NGK.
At the beginning of FY2022, the ESG Management Department delivered an awareness-raising message to the entire NGK Group about strictly adhering to the Corporate Business Principles. We also began using the company intranet to show popup notifications about the Corporate Business Principles on the computers of all employees at NGK and Group companies in Japan.
The NGK Group Code of Conduct revised in 2019 divided into “the NGK Group Corporate Business Principles” that stipulate the basic approach for our corporate activities, and “the NGK Group Code of Conduct” that summarizes the points that officers and employees must comply with. These were put into practice in August 2023.
Scope of Application
The NGK Group Corporate Business Principles applies to all employees and suppliers of the NGK Group. Employees are provided with the NGK Group Corporate Business Principles and guidebook on putting the Corporate Business Principles into practice upon joining the company. They also receive job grade-specific training and other instruction.
Non-Compliance Incident Reports
In FY2022, there were no incidents of serious legal non-compliance in the NGK Group.
Examples of Legal Violations
NGK Group Basic Guidelines for Compliance Activities
The idea of what constitutes good compliance activities continues to evolve worldwide amidst a changing social and legal landscape, and the NGK Group requires mechanisms for objectively evaluating and verifying, as well as continually improving, its own activities in light of international norms. It is also important that compliance-related activities as a whole be improved qualitatively by ensuring that compliance-related ideals and values be standardized not only in areas of legal compliance but also in areas such as safety, the environment, and quality. Thus, in April 2021, it was in this context that the new NGK Group Basic Guidelines for Compliance Activities were created in order to codify in writing the NGK Group’s basic stance on, and approach to, compliance activities. Based on our NGK Group Basic Guidelines for Compliance Activities, related business groups and departments are working together to qualitatively improve compliance activities with regard to safety, the environment, quality, exports, competition laws, and the like, so that they are more effective.
Compliance Promotion Structure
The NGK Group has established a Compliance Committee, which reports directly to the president. A Compliance Activity Promotion Subcommittee was established as part of the Compliance Committee to ensure proper execution of the Committee’s work.
Since FY2021, we have asked Group companies to select compliance administrators and compliance officers and have begun discussions with them to establish the foundations of an effective and efficient compliance structure for the entire NGK Group. The Group Compliance Department is also leading the introduction of innovative training formats in each company using hybrid communication that includes group discussions as well as online and in-person meetings in an effort to enhance learning through interactive education. We have participants fill out questionnaires after they complete the training to gauge their level of understanding and consider improvements for the next round of training. The goal of pursuing these efforts is to make sure that each NGK Group company will be able to independently formulate, implement, confirm effectiveness, and improve compliance measures in the future.
Mission Achievement-Focused Initiatives of FY2022
- At the beginning of the year, the president shares a message about compliance being our top priority (continued from previous years)
- Promoting awareness of NGK Group Basic Guidelines for Compliance Activities and providing examples of its utilization in department work
- Risk-based compliance education (NGK and Group companies in and outside Japan) with a focus on effectiveness
- Adapting to global laws and regulations (competition laws, anti-bribery laws, etc.)
- Operation and maintenance of a whistleblowing system (In Japan: Adapt to revision of the Whistleblower Protection Act, Outside Japan: Adapt to EU Directive on the Protection of Whistleblowers)
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. We can handle consultations and reports via telephone or email in either Japanese or English. In principle, these should be directed to a designated agent, 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
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 Corporate Business Principles and to facilitate quick resolution when issues occur. Each Group company outside Japan has its own helpline. These helplines receive requests for consultation on a variety of issues, including harassment, rule violations, and quality issues.
Managers in-charge of internal whistleblowing system hotline and consultation work undergo annual training conducted by external lawyers about how to handle consultations, investigate the facts, matters to bear in mind concerning corrective action, and specific case studies about reports of harassment and other incidents. In FY2022, this training included examples of fraudulent conduct, in addition to power harassment and sexual harassment.
Number of Helpline Consultation Cases
In FY2022, there were a total of 38 reports and consultations. There were 22 concerning harassment, 7 concerning the personnel system and work regulations, 5 concerning rules and regulations, and 4 concerning other issues. Each case was handled carefully following the process from receipt, investigation, judgment, and corrective measures in consultation with third-party outside lawyers, and none of the details of the whistleblowing had an impact on company operations. We continue to periodically evaluate and improve the effectiveness of the NGK Group Corporate Business Principles and our compliance measures based on the content of these reports and consultations.
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.
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.