Sustainability
Compliance Promotion Structure
NGK Group Corporate Business Principles and Code of Conduct
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 (currently Sustainability 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 2023.
NGK Group Corporate Business Principles and Code of Conduct
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 NGK Group. They also receive job grade-specific training and other instruction.
Non-Compliance Incident Reports
In FY2023, 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, human rights, 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. The Compliance Committee regularly reports the matters it handles to the Board of Directors, and the Board of Directors supervises the activities of the Compliance Committee.
Compliance Promotion Structure Chart
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 of the Group Compliance Department
- Embed the idea of “compliance first” within the corporate culture across the NGK Group
- Ensure thorough compliance throughout the NGK Group by promoting compliance activities, which meet international norms and establish mechanisms for ongoing improvement
- As for Group companies outside Japan, promote compliance for our globalized operations by obtaining the most up-to-date information regarding applicable laws and social demands in each region
Mission Achievement-Focused Initiatives of FY2023
- At the beginning of the year, the president shares a message about compliance being our top priority (continued from previous years)
- During Compliance Strengthening Month in October, we shared the President's message and put up educational posters
- Promoting awareness of NGK 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: Check operational status of revised Whistleblower Protection Act, Outside Japan: Adapt to EU Directive on the Protection of Whistleblowers, and review each company’s regulations)
Interaction with Suppliers
We ask all of our suppliers to comply with the NGK Group Supplier Code of Conduct. This code of conduct stipulates specific initiatives related to ethics and compliance, including comprehensive measures for anti-corruption, intellectual property protection, and fair trading. We ask all our suppliers to consent to compliance with this code once a year. We also ask suppliers to consent to compliance with this code when starting new transactions.
Whistleblowing System
The NGK Group has established various whistleblowing systems to detect compliance violations early and to promote the organization's self-purification function.
The Helpline and Hotline are internal reporting systems that comply with the Whistleblower Protection Act and other relevant laws and regulations. These systems 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.
Reports and consultations are generally accepted by an external contact operated by a third party via telephone or the internet. The systems handle consultations and reports not only in Japanese but also in English. Additionally, if the reporter or consulters prefers not to disclose their name or affiliation to the reception window or company (anonymity), their reports and consultations will be accepted anonymously.
Our company rules guarantee protection of those seeking advice or reporting issues, and the NGK Group Code of Conduct prohibits retaliation against those who make reports. Upon receiving a report or consultation, we will carry out the response process from investigation to corrective actions under the advice of external independent lawyers and all the processes will be conducted in a fair, impartial and honest manner. If the investigation reveals misconduct or a violation of the law, NGK will impose penalties on those involved in accordance with our employment regulations.
In addition, we have established a system to receive reports from all stakeholders involved in the business activities of the NGK Group (such as suppliers, customers, and local residents) through contact points such as the supplier helpline and our website.
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 Corporate Business Principles and Code of Conduct and to facilitate quick resolution when issues occur. Each Group company outside Japan has its own helpline.
Senior management officers and managers undergo training regularly conducted by external lawyers about how to handle consultations, investigate the facts, matters to bear in mind concerning corrective action, and specific case studies on reports of incidents including harassment and how to deal with it. In FY2023, this training included examples of fraudulent case, in addition to power harassment case.
Number of Helpline Consultation Cases
In FY2023, there were a total of 35 reports and consultations. There were 16 concerning harassment, 7 concerning the personnel system and work regulations, 3 concerning rules and regulations, and 9 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. Although none of the details of the whistleblowing had an impact on company operations, compliance violations were confirmed in 8 cases, and corrective measures were promptly taken. 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.
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 have set up hotlines for all Group companies outside Japan where employees can report violations of competition laws and anti-corruption laws at overseas Group companies. We continue to set up hotlines to respond to fraud and legal infractions committed by senior management, while taking the circumstances in each country into consideration.
Communication with Stakeholders
The NGK Group has established contact points not only for employees working within the group but also for a wide range of stakeholders to provide information on compliance violations in order to ensure the early detection of compliance violations and to further promote the organization's self-purification function.
The website contact accepts reports from all stakeholders who have some form of interest in the NGK Group, including customers, shareholders, and local residents.
Additionally, for stakeholders who are suppliers from whom the NGK Group directly procures goods and services, we have established a dedicated contact point, the Supplier Helpline.
Corruption Prevention Structure
Assessing Risk and Dealing With Corruption
The NGK Group carries out risk management for major compliance risks, including corruption, by considering them from a management-level perspective. We then sort those deemed important risks into the categories of business environment, strategy, and internal factors, and continually review them. The Compliance Committee and other committees and responsible departments take a leading role in working to avoid and prevent risks in each business by conducting risk analysis through surveys and the evaluation of special risks in internal control processes.
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 FY2023 (Overall)
| Name | Target | Content | Instruction Format | Number of sessions |
|---|---|---|---|---|
| Career education | New hires | Compliance, competition laws, anti-bribery regulations for dealing with foreign officials | Seminar by in-house instructor | 1 |
| Promoted or career-change employees | Compliance, Corporate Business Principles / Code of Conduct (Honest Business Activities) | Video presentation | 2 | |
| Mid-career hires | Compliance, competition laws, anti-bribery regulations for dealing with foreign officials, Corporate Business Principles / Code of Conduct (Honest Business Activities) | Seminar by in-house instructor / Video presentation | 1 | |
| Newly appointed supervisors | Compliance, competition laws, anti-bribery regulations for dealing with foreign officials, quality compliance, contract observance, security export control, Corporate Business Principles / Code of Conduct (Honest Business Activities) | Seminar by in-house instructor / Video presentation | 1 | |
| Newly appointed managers | Compliance, competition laws, anti-bribery regulations for dealing with foreign officials, quality compliance, contract observance, security export control | Seminar by in-house instructor | 1 | |
| Managers promoted to second grade | Compliance, quality compliance | Seminar by in-house instructor | 1 | |
| Training for employees scheduled for postings abroad (global training) | Employees scheduled for postings abroad | Competition laws, anti-bribery regulations for dealing with foreign officials, security export control | Video presentation | 1 |
| Compliance education | Managers and sales staff of Group companies outside Japan | Compliance, competition laws, anti-bribery regulations for dealing with foreign officials | Lecture provided by lawyer and e-learning | 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 officials | Lawyer-led seminar | 1 | |
| Executive officers | Competition laws | Lawyer-led seminar | 1 | |
| 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 | Lawyer-led seminar / video presentation | 1 | |
| People responsible for Competition Law Practice, etc. | Oral training on competition law | Seminar by the Compliance Department | 2 | |
| Laws and Compliance Seminars | Managers and other targets depending on content | May Export controls on semiconductor manufacturing equipment, etc. for Japan and the USA | Seminar by in-house instructor / video presentation | 1 |
| July Training about anti-bribery regulations | Seminar by outside lawyer / video presentation | 1 | ||
| September Construction Business Act | Seminar by in-house instructor / video presentation | 1 | ||
| November Helplines and hotlines that protect both you and the company | Seminar by outside lawyer / video presentation | 1 | ||
| January Latest trends in insider trading | Seminar by in-house instructor / video presentation | 1 | ||
| March Contract observance | Seminar by in-house instructor / video presentation | 1 |
Competition Law Education Conducted in FY2023
| Name | Target | Content | Number of sessions |
|---|---|---|---|
| Training for newly appointed directors | Newly appointed directors and executive officers | Live seminar by outside lawyer | 1 |
| Competition law compliance lectures | All directors, managers, and sales staff of NGK and its Group companies in Japan | Streamed video of live seminar by outside lawyer | 2 |
| Compliance training for Group companies outside Japan | Managers and sales staff of Group companies outside Japan | Lawyer-led live seminar; e-learning; seminar conducted by an in-house instructor | 19 (24 sites) |
| Training on competition laws by internal lecturer | Targets depend on content | Department-requested on-site training | 2 |
Anti-Bribery Training Conducted in FY2023
| 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 officials | 1 |
| Legal Compliance Seminars | Managers of NGK | Anti-bribery regulations for dealing with foreign officials | 1 |
| Compliance education | Managers and sales staff of Group companies outside Japan | Live seminar by outside lawyer and online seminar; seminar conducted by an in-house instructor; conducted using paper-based resources | 19 (24 sites) |
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 relevant to participants’ work. We also arrange lawyer-led seminars and other training at all Group companies. In addition, starting in FY2023, we have expanded the scope of training from just the sales department to include other departments that are exploring new businesses.
Other Dissemination Activities
Compliance Newsletter
Once a month we publish a Compliance Newsletter to the company intranet that uses four-frame cartoons to allow readers to learn about topics relevant to them in an easy-to-understand manner. We use examples to explain in detail what readers should learn.
Themes Covered in the Compliance Newsletter in FY2023
| April | Are you employing the corporate philosophy in your work? |
|---|---|
| May | How do we create an open workplace? |
| June | What are pregnancy discrimination and paternity harassment (parental discrimination)? |
| July | Don't use smartphones while walking |
| August | When work gets too busy, reduce or spread out the load |
| September | What can happen if you throw away old documents without looking at them |
| October | Compliance Strengthening Month |
| November | The importance of participating in disaster prevention drills |
| December | Human Rights Week |
| January | What to do if you witness someone sharing confidential information with someone outside the department |
| February | Creating an atmosphere in which people can express their opinions without hesitation |
| March | When sending products overseas |
Compliance Strengthening Month
Since FY2017, we have declared October to be Compliance Strengthening Month, and take actions such as sharing the President's message, putting up educational posters, and making sure employees know about the internal whistleblowing hotline. In FY2023, we distributed a video message from the President to NGK and our Group companies both inside and outside of Japan.
Compliance Award
In FY2021, we launched the Compliance Activities Award System. This system recognizes particularly outstanding activities, among the initiatives pursued by each department and Group company inside and outside of Japan, that demonstrate qualities such as autonomy and originality. We also publicize them within the NGK Group as good examples. In FY2023, we recognized the NGK Manufacturing Division's Komaki Plant for their Organizational Revitalization through Safety Symbol Zone Initiatives. We also presented certificates of commendation from the chairman of the Compliance Committee, and held a round-table discussion with members of the award-winning divisions.