Updated in August 2023
We consider compliance not only to comply with laws and regulations, the Articles of Incorporation, and internal rules, but also and continue to comply with corporate ethics and social norms.
Compliance is a major premise of business activities. It is the cornerstone of the trust of our stakeholders and is an important management issue.
We have established a group compliance system on a global level as a management foundation for increasing the corporate value of the Denka Group into the future and continue to strive to strengthen our system.
The Denka Group Ethics Policy codifies Groupwide standards of conduct. To ensure that this policy guides the actions of all, the Ethics Committee chaired by the President oversees the overall compliance structure and reports to management on compliance matters. Moreover, under the initiative of the Ethics Committee, such key business units as the Legal, Internal Control, HR Strategy, Intellectual Property, Environment and Safety, and Quality Assurance departments ensure thorough legal compliance in their respective areas of specialty.
We also formulated the Standards of Business Conduct. Aiming to live up to the global standard, this move is intended to provide all Group officers and employees at home and abroad with clear and detailed guidelines on the actions they are expected to take in accordance with the provisions of the Denka Group Ethics Policy.
Furthermore, we employ a “legal hazard map” to analyze the significance of compliance-related risks that may affect each Group company with the aim of enhancing the effectiveness and efficiency of compliance structures being developed and operated within the Denka Group.
Denka Group Compliance System
The Denka Group considers robust corporate governance to be fundamental to earning the trust and support of stakeholders and improving our corporate value. Accordingly, we strive to maintain transparent and sound management and thereby enhance corporate governance.
| Purpose | Measures | |
|---|---|---|
| 2007 | To speed up decision-making | Cut the number of directors by half and introduce an executive officer system |
| 2008 | Ensure that Directors monitor and supervise the execution of business on an equal footing | Abolition of executive titles (such as Senior Managing Director, Managing Director) |
| Clear separation of monitoring and supervisory functions from the execution of business | Reassigning the authority of business execution and executive titles from directors to executive officers | |
| Flexibly perform checks on directors | Shortening the length of directors’ appointments to one year | |
| Step up checks on management from an external perspective | By appointing two Outside Directors, the number of appointments of outside officers rises to four, including two Outside Audit & Supervisory Board Members (per statutory requirements) | |
| Create system enabling appropriate advicegiving even outside of meetings of the Board of Directors, by arranging ample exchange of opinions | Implement regular opportunities for outside officers to exchange opinions with top management | |
| Speed up decision-making by deepening discussions of important management matters | Establishment of a Management Committee comprising Directors, Audit & Supervisory Board Members (internal), and some executive officers | |
| 2015 | Improve the governance framework and raise standards of transparency and soundness of management | Increasing the number of Outside Directors (from two to three) and reducing the number of members of the Board of Directors (by two) |
| Create venues for free, vigorous and constructive deliberations, exchange of opinions and information and alliancestrengthening for internal and Outside Directors and Audit & Supervisory Board Members | To step up round-table meetings of Outside Directors and Audit & Supervisory Board Members formerly held twice per year, hold a round-table conference of Directors and Audit & Supervisory Board Members |
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| Achieve optimum standards of corporate governance to ensure sustainable growth and improve medium to long-term corporate value | Compilation of the Denka Corporate Governance Guidelines | |
| Deepen understanding of the Company’s business, and stimulate debate at meetings of the Board of Directors | Enhance the provision of advance explanation for outside officers regarding specific agenda items that require adequate explanation | |
| Enable exchange of information and formation of consensus among outside officers | Holding “Outside Officer Liaison Committee” four times per year | |
| 2016 | Promote understanding of the Company’s medium- to long-term and short-term business and research objectives | Holding business and research objective briefings (currently referred to as objective briefings) for outside officers twice a year |
| Ensure adequate auditing and supervision of business execution by executive officers | Clarification of the details of agenda and report materials at the Board of Directors meetings | |
| Step up the effectiveness of the Board of Directors | Report Arrangement for all Directors and all Audit & Supervisory Board Members to annually analyze and evaluate the effectiveness of the Board of Directors, and disclose the results in the Corporate Governance Report | |
| 2017 | Foster greater transparency and objectivity in business decision-making, with the Board of Directors accepting diverse opinions and advice from the outside officers with regard to major business topics including appointments, remuneration and other governance matters | Establishment of the Management Advisory Committee comprising all Outside Directors, all Outside Audit and Supervisory Board Members, the Chairman and the President |
| Renaming the “round-table conference of Directors and Audit & Supervisory Board Members” the “D&A Round Table” | ||
| 2019 | Further strengthen corporate governance and improve corporate value by further strengthening the supervisory role of the Board of Directors, by enabling more rapid decisionmaking and vesting directors who are members of the Audit & Supervisory Committee with voting rights at the Board of Directors meeting | Shift from the “Company with Audit & Supervisory Board” model to that of a “Company with Audit Committee” |
| Change the name of the “Management Advisory Committee” to the “Nomination & Remuneration Advisory Committee | ||
| 2021 | Review of regulations regarding the appointment of retirees from the office of Chairman and President as Counselors and Advisors. | Abolish the office of Counselor |
| Clarify the roles of the Board of Directors and the executive structure, further enhance the effectiveness of discussions at Board of Directors meetings, and further expedite its decision-making process | Reduce the number of Directors from 12 to 9, and raise the proportion of Outside Directors on the Board of Directors to over 44% | |
| 2023 | Effictive management of committees by strengthening independence and objectivity | Appoint an Outside Director as chair of the Nomination & Remuneration Advisory Committee |
| Strengthening of incentives |
Revise the executive renumeration system
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| Sustainability-related activities, progress with achievement of non-financial targets and KPIs, and responses to risks and earning opportunities | Established of Sustainability Committee, with Outside Directors and Full-time Audit Committee Members as observers | |
The "Denka Group Ethics Policy" establishes the code of conduct that officers and employees of each Denka Group company must comply with to maximize the corporate value of the Denka Group. Denka has established an Ethics Committee chaired by the president to ensure compliance with the Denka Group Ethics Policy within the Denka Group. The Ethics Committee comprehensively supervises and reports to management on the Denka Group's compliance. Under the Ethics Committee, in accordance with internal regulations, the Legal Department, which constitutes the Ethics Committee Secretariat, has established group rules, which are the common rules of the Denka Group.
We are promoting the strengthening of the group compliance system on a global level, including the establishment of policies and common company-wide rules for Denka, and the implementation of various compliance trainings for the Denka Group.
In addition, the Internal Control Department, Human Resources Strategy Department, Intellectual Property Department, Environment & Safety Department, Quality Assurance Department, and related departments are grouped together in each specialized area.
We are responsible for ensuring compliance at all levels.
Established October 2019 / Revised July 2023
In order to enable all officers and employees of the Denka Group at home and abroad to act in accordance with the Denka Group Ethics Policy, Denka has established the "Denka Group Standards of Business Conduct" as an action guideline based on international standards that further clarifies and embodies the provisions of theDenka Group Ethics Policy. Provisions set forth in the Denka Group Ethics Policy include the following.
Section 1 Basic Rules of Compliance
Section 2 Protection of Environment and Health & Safety
Section 3 Compliance with Antitrust Laws
Section 4 Export Contorls and Economic Sanctions
Section 5 Prohimbition of Insider Trading
Section 6 Protection of Personal Data
Section 7 Maintaining and Improvement of Product Quality
Section 8 Confidential Information and Intellectual Property Rights
Section 9 Anti-Money Laundering
Section 10 Anti-Corruption and Gifts & Entertainment
Section 11 Political Activities and Political Contributions
Section 12 Respecting Local Society -International Operations Policy-
Section 13 Respecting Human rights in workplace and supply chain
Section 14 Speaking-up and reporting concerns
The basic rules set forth in Section 1 include not only the purpose for which the standards of conduct were established, but also the standards of conduct for matters that tend to be breeding grounds for misconduct by officers and employees, such as the purpose for which corporate assets are protected and used, accurate records, correct reporting, cooperation in audits and investigations, and the standards of conduct when the interests of the company conflict with those of individuals. The “Standards of Business Conduct” have been prepared in both Japanese, English and Chinese are not only distributed to executives and employees of Denka and its Group companies in the form of a booklet,but are also made available on the Intranet.
Japanese
EnglishHaving identified more than dozen legal fields closely associated with the Group business operations, Denka utilizes a legal hazard map designed to assess the magnitude of compliance risks affecting the Group. Employing this map, we formulate the Denka Global Compliance Program, a Groupwide plan for providing compliance education in an effective manner. Moreover, we continuously work to enhance our compliance structures via, for example, the development and review of Group Policies and other in-house rules applicable to all Group members as well as Denka’s Companywide rules.
Based on the "Legal Hazard Map," the Legal Department provides training on general compliance as stipulated in the "Standards of Business Conduct," and on labor laws, harassment prevention, information security, including the protection of personal and confidential information, compliance with competition law, and security export controls, etc. to officers and employees of Denka Group companies at home and abroad through group training programs, webinars, and E-learning systems.
Training at Malaysian subsidary
Denka has formulated and revised its Basic Information Security Policy, the Denka Group ICT Governance Policy, the Denka Group Information Security Policy, the Denka Group ICT System Usage Policy, and the Denka Group Secrecy Policy as group policies related to information security and ICT governance in accordance with ISO 27001, the international standard for information security. These policies were implemented in April 2021. We will systematically conduct training for officers and employees of the Denka Group on each of our information security polices and strive to ensure full awareness of these policies.
Systematic diagram of our information management regulations
Our basic BCP policies are as follows: Even in the event of a crisi...
We consider compliance not only to comply with laws and regulations, the ...
The "Denka Group Ethics Policy" establishes the code of conduct that offi...
Established October 2019 / Revised July 2023 In order to enable all offi...
Having identified more than dozen legal fields closely associated with th...
Based on the "Legal Hazard Map," the Legal Department provides training o...
Denka has formulated and revised its Basic Information Security Policy, t...
In order to further ensure compliance-focused management across the entir...
In order for Denka Group to conduct fair and equitable transactions with ...
Measures to Prevent Corruption The Denka Group Ethics Policy prohibits...
Regarding security export control that prohibits the export of products a...
In order to maintain the fairness of securities transactions and trust in...
Strengthening Groupwide ICT Governance We have been promoting operat...
[Basic Policy] Respect the intellectual property rights of ourselv...
With the aim of accurately satisfying requests from customers and utilizi...