Governance and Risk ManagementCompliance

Compliance Structure of Tokyo Century Group

Based on the awareness that thorough adherence to compliance is essential to the continued existence of a company, Tokyo Century Group strives to ensure the establishment of a system of management which will be trusted by society at large and in which all officers, managers, and employees act based on a just and high sense of ethics.

In Tokyo Century Group, the President & CEO of Tokyo Century Corporation heads the compliance of the entire Group as the Chief Compliance Executive Officer, and the Compliance Office plays a role in exercising, promoting, educating and reviewing compliance matters, such as human rights, anti-corruption including bribery across the entire Group in accordance with compliance programs under the supervision of the Chief Compliance Officer (CCO) who is appointed by the President & CEO.
At each organizational group, such as divisions and branch offices, the head of each group acts as the Compliance Officer (CO) to take responsibilities for promoting compliance awareness of each own group, including handling compliance matters and carrying out compliance trainings in collaboration with the Compliance Office.
At our consolidated subsidiaries, the President or an officer equivalent to president acts as head of compliance, in order to take control of building, maintaining and managing the compliance of each subsidiary through the instructions, guidance and advices from CCO. As for non-consolidated group affiliates, the Compliance Office gives guidance and advices on compliance structural management in a timely manner.

We report and review the Group’s compliance structure and operation as well as identified compliance violations at the Management Meeting and the Board of Directors every half year for review, including its effectiveness. Based on the results of the review, we make and implement compliance promotion plans. Apart from this, we oblige all the officers and employees to submit a compliance pledge once every year in order to comply with our compliance regulations.
In fiscal 2020, there was no major compliance violation, including human-rights violations deserving of public announcement.

Internal Reporting System

At Tokyo Century Group, in the aim of early detection and resolution of risks, organizational self-cleansing improvement and enhancement of its compliance management, we have established an internal reporting system “Consultation/Whistle-Blowing System”, whereby officers and employees who become aware of acts of compliance violations being conducted or about to be conducted are obliged to directly report such matters without the intervention of their superiors.

(1) Outline of the Internal Reporting System

We have established three reporting routes as reporting desk: the in-house Compliance Office; the corporate lawyer’s office which is familiar with this field outside the company; and full-time corporate auditors in order to ensure independence and allow reporting persons to choose any route among them.
Reports can be sent by any way, such as by email, telephone, verbally or written form to the contacts which are stated in the Group’s Compliance Handbook that were distributed to all officers and employees as well as posted on the Company’s intranet.

Matters subject to reporting vary in a wide range, such as violation of the Anti-Monopoly Act or corruption, such as bribery that impedes fair competition, violation of the Financial Instruments and Exchange Act that undermines profits of investors and others, harassment, human-rights violations, violation of any laws concerning business operations, or misconduct which is against corporate ethics or internal rules.
In addition, the reporting system also covers the consultation when there is any doubt about compliance in terms of business execution.

All officers and employees are eligible to report such matters through this reporting system, including directors, officers, permanent employees, contractors, temporary staff, seconded employees, part-time staff and retired employees, even by remaining anonymous.
We strictly prohibit disadvantageous handling, such as disciplinary action, retaliation and others to the reporters for raising concerns by the Company, and secure anonymity of the reporter and keeping confidentiality concerning the report.

(2) Implementing Survey on Reported Matters

Receiving a report, the reported matters are discussed with the CCO to take necessary actions and promptly conduct a survey to find out the facts.
On that occasion, we impose confidentiality obligation on personnel involved in the survey and personnel subject to a survey, and prohibit unfair treatment of the personnel subject to the survey as same as the reporters to prompt them to cooperate in the survey.

Survey results are reported to the CCO, and if the survey results reveal a compliance violation, recurrence protection measures and other necessary measures and remedial measures for human-rights violation are implemented, while working on to correct the compliance violation and prevent expansion of losses.
Critical compliance violations are reported to the Chief Compliance Executive Officer of Tokyo Century Group (President & CEO of Tokyo Century Corporation), and the Corporate Auditors.

Compliance Structure of Tokyo Century Group

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Compliance Handbooks

Tokyo Century Group distributes our Compliance Handbook to all officers, managers, and employees while providing it on our corporate portal at all times. The Compliance Handbook includes information on internal regulations such as our management philosophy, scope of corporate activities, and compliance management regulations, as well as information on matters, such as human rights, anti-corruption including bribery such as prohibitions against respect for human rights and harassment. The Group also strives to improve the compliance mindset at our local subsidiaries overseas and has created an English and Chinese edition of the handbook for these companies.

Compliance Handbooks

Compliance Education

Aiming to ensure the thorough dissemination of a compliance-oriented mindset, Tokyo Century Group provides systematic and continuous compliance education through such means as rank-based training from new hires to newly appointed managers; e-learned-based training to all officers, managers, and employees, (including contractors and temporary staff); and compliance training at workplace conducted by compliance officers (the head of divisions and branch offices).

Targets
(Training Methods)
Major Subjects No. of
Training
Per Year
New employees
(rank-based training)
  • Meaning and nature of compliance
  • Impact by compliance violations
  • Deep understanding of compliance mindset
  • Points when practicing compliance
  • Details and purposes of the internal reporting system
  • Importance of information security measures and defense against cyberattack
  • Management systems, rules and important points for information security

and others

1
New head of divisions and branch offices
(rank-based training)

Roles and responsibilities of the head of divisions and branches concerning risk management and compliance

  • Organizational risk and compliance management system and its promotion
  • Handling of crisis, incident and accident
  • Business continuity measures (BCP)
  • Information security and information management (personal information, insider information and others)
  • Prevention of bribery and corruption (severance of antisocial organizations, prevention of money laundering and provision of funds for terrorism, offering entertainment to public officials, political funds control and others)
  • Initiatives for environment-related businesses

and others

1
All officers and employees
(e-learning)
  • Internal reporting system
  • Prohibition of harassment (sexual harassment, power harassment, harassment for pregnancy, childbirth, childcare leave, family care leave and others, and remote harassment)
  • Points to note on entertainment and the exchange of gifts to people working at private companies, domestic public officials, overseas public officials and others
  • Severing transactions with antisocial organizations
  • Prevention of money laundering and provision of funds for terrorism
  • Appropriate management of personal information, My Number (social security and tax number), information assets, and insider information
  • Attendance management (work hours, work from home, annual paid leave and others)
  • Fraud triangle
  • Appropriate use of works
  • Prohibition of misuse of subsidies from the government and local governments
  • Compliance with the Antimonopoly Act
  • Self checking for basic behaviors pertaining to the corporate code of conduct, guidelines for our action

and others

2
Employees at each division and branch office
(Training conducted by compliance officers/the head of each division or branch office at workplace)
  • Internal reporting system (details, purposes, and appropriate use)
  • Prohibition of harassment—relevant laws and regulations and prevention principle, basic stance for occurrence prevention and others
  • Prohibition of excessive entertainment and exchange of gifts
  • Prevention of money laundering and provision of funds for terrorism
  • Personal Information Protection Law
  • Insider trading regulations
  • Antimonopoly Act
  • Intellectual property rights
  • Political funds control
  • Trends of and lessons from companies that violated compliance

and others

About 4
Employees at overseas bases(Training for assignees /training conducted by the head of compliance (base head)/e-learning)
  • Training for overseas assignees (systems of regulations related to compliance and risk management at overseas bases, management system, various institutions including the internal reporting system, features of assigned bases and others)
As needed
  • Training conducted by the head of compliance (base head) at workplace (internal reporting system, prohibition of harassment, prevention of bribery and corruption, severance of antisocial organizations, prevention of money laundering and provision of funds for terrorism, and offering entertainment to public officials), personal information protection, information security, insider trading regulations, fraud triangle and others)
4 or more
  • E-leaning (same as above)
As needed

Anti-Corruption Efforts

At Tokyo Century Group, we take an initiative to avoid anti-corruption through endeavoring to engage in fair, equitable and transparent transactions in any of our operating activities.

Tokyo Century Group prohibits offering entertainment, cash or any other benefits to domestic or overseas public officials in purpose of obtaining illicit profit, rewarding them for granting of favors or obtaining unfair business advantage either in direct or indirect through agents, consultants or any other third parties.

Tokyo Century Group carefully and appropriately undertakes businesses, especially in international businesses or business overseas, and strictly complies with the laws of Japan and local laws and regulations with regards to entertainment and the exchange of gifts to foreign public officials.
Our “Guidelines on Offering Entertainment to Public Officials” are available in Japanese, English, and Chinese to ensure awareness and disseminate among officers and all employees including national staff at Tokyo Century’s overseas subsidiaries.

Furthermore, in order to contributing to realizing a safe society and conducting healthy economic activities, the Group has set out and implemented various measures, including identification confirmation before concluding agreements with business partners to prevent money laundering and financing of terrorism that may foster organized crime.

Our commitment to anti-corruption efforts are specified in our compliance handbook in Japanese, English and Chinese while including them in in-house trainings, primarily e-learning and others from time to time, in order to fully spread to all managements and employees group-wide.

At Tokyo Century Group, we report anti-corruption efforts at management meeting and board of directors for review as part of its compliance structure and operation.

In fiscal 2020, there was no fine imposed on Tokyo Century and was no employee dismissed or disciplined for corruption.

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