The term “compliance” (compliance with laws and regulations) has become quite common in the business world, and not only our company, but most companies have expressed that they are giving high priority on compliance. Still, there is no end to the companies that lose the trust of their customers or consumers and suffer serious damage by a violation of laws or socially disapproved behavior if not unlawful.
This is not a problem for someone else. Over many years, our management philosophy and business practices have earned the trust of our customers, business partners and other stakeholders. That trust is a precious and irreplaceable asset that is now integral to the "Nihon Kohden" brand. Even just one compliance violation can destroy such a precious asset.
Compliance is a part of corporate social responsibility and a minimum requirement for companies to continue to exist. Even more so, we strive to create an ethical culture within our business. No violation of compliance is acceptable in Nihon Kohden Group. When faced with making a choice between unlawful act for profits and ethical choices in compliance with laws in our daily business activities, I believe we will choose compliance without question and hesitation.
Nihon Kohden Group is committed to establish and maintain a robust and effective compliance program with zero tolerance for any misconduct and violation of applicable laws and regulations. In order to enjoy perpetual growth as a company with social significance, each and every one of us must ensure compliance and act based on high ethics with good sense as a member of society.
Hirokazu Ogino,
Representative Director,
President and Chief Executive Officer,
Nihon Kohden Corporation
Nihon Kohden and all of its subsidiaries (collectively, “the Company”) are fully committed to a program of sound ethics and rigorous legal compliance. This effort helps protect the trust of our most valuable assets: our customers, business partners, and other stakeholders. Nihon Kohden’s commitment to ethical and responsible actions is embodied by its Charter of Conduct and Code of Ethics and Conduct.
The Code further requires Employees to abide by ethical standards and respect social justice. Employees are obligated to clearly explain the purpose and contents of the Code to customers, distributors, and business partners.
The Company’s Charter of Conduct sets forth guidelines by which the Company and its Employees must abide. These guidelines ensure that the Company’s business activities comply with the Company’s Management Philosophy. The Board of Director has adopted these policies, ensuring that these values are promoted from the highest levels of the Company. These policies are subject to refinement or change as the Board deems appropriate.
Nihon Kohden Charter of Conduct
- We fight disease and improve health with advanced technology, and contribute to medical care around the world by providing high quality products and services with consideration of the environment and safety, and earn the trust of customers and patients.
- We comply with applicable laws, regulations, restrictions, and Company internal and external rules as well as ethical standards, and conduct fair and legitimate business activities.
- While maintaining a sound relationship with politics and government, we engage in fair, transparent and free competition and appropriate transactions.
- We take a firm stand against anti-social forces, such as organized crime groups, that threaten the order and safety of civil society, and have no relationship with them.
- In all aspects of our business activities, we respect the human rights of all people and we do not commit unreasonable discrimination or any act which infringes on the personality and dignity of an individual.
- We communicate with the public extensively as well as shareholders, disclose corporate information properly and fairly, and carry out highly transparent management.
- We are aware of our responsibility as a corporate citizen in the international community, respect the culture and customs of each country and region, and actively carry out social contribution activities.
- We are mindful of environmental issues as a global citizen, and address those issues voluntarily and proactively to leave for our posterity a healthy global environment.
- We ensure a safe and comfortable working environment and create a fulfilling life for our employees.
The Company has a global compliance program effective in all regions in which it conducts business. In order to ensure thorough compliance, the Company has created the Compliance Organizational Framework:
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- Organizatoin Chart
Subsequent to the General Meeting of Stockholders, the Board of Directors is the highest decision-making body in the Company. The Management Council, consisting of all of the Company’s Directors and Officers, among other things, discusses all important compliance-related matters and submits them to the Board if the legal resolution is necessary.
The Compliance Committee is an organization consisting of directors, officers, and senior managers designated by the Board of Directors. The Compliance Committee ensures and enhances compliance by the followings:
(i) Establishing and amending the Company’s compliance policies;
(ii) Supervising, evaluating, assessing, reviewing, and continuously improving the compliance program of the Company;
(iii) Coping with important compliance issues; and
(iv) Studying, assessing, addressing, and implementation of responses to other compliance matters.
The Chief Compliance Officer (CCO) is responsible for management, operation, and implementation of the compliance program throughout the Company. The Divisional/Local Compliance Officers are empowered and authorized to implement, ensure, and enhance the compliance program in each division or subsidiary. The CCO carefully selects these individuals and regularly communicates with them to verify that global policies are implemented.
Nihon Kohden mandates that executives and employees report any compliance-related issues they engage in, witness, or suspect through their chain of command. If reporting through regular channels is difficult, they are required to report through the internal reporting system. The Company has established internal and external reporting channels, including a hotline operated by external lawyers. Individuals who make reports in good faith through the internal reporting system will not face any form of retaliation, sanctions, or other disadvantages.
Additionally, to alleviate any concerns on the part of the employees making reports, the Company accepts anonymous reports. In response to the revised Whistleblower Protection Act, which took effect in Japan in June 2022, the Company has established new rules to strengthen the protection of whistleblowers and further enhance its internal reporting system.
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- Internal Reporting Hotline
In response to the bribery case involving former employees of the Company that occurred in Japan in January 2021, Nihon Kohden has strengthened internal controls by reviewing the procedures for considering donations and implementing IT controls to pre-order processes.
The Company has also conducted regular monitoring through compliance awareness surveys targeting all employees. Additionally, the Company has established mutual pledge to compliance with dealers and conducted periodic questionnaires. The Company has also established a whistle-blowing channel for third-parties to ensure thorough compliance.
Every year, the Company conducts compliance training for all executives and employees at the workplace level in each division and subsidiary in Japan and overseas (approx. 5,900 participants in FY2024). Executives and employees first conduct self-study using prescribed materials to check their level of understanding. Subsequently, they read the materials and discuss them with colleagues in order to deepen their understanding of compliance.
As necessary, Local Compliance Officers in overseas subsidiaries provide additional training in accordance with local laws, regulations, and policies in each country. In addition, compliance study sessions are held in each division according to business, such as harassment, the Pharmaceutical and Medical Device Act, and sales activities. Furthermore, since FY2021, we have conducted training sessions led by external experts for all managers of branch offices and Domestic Business Operations, focusing on high-priority compliance risks.
Nihon Kohden introduced the Global Compliance Program in FY2017 and is working to ensure thorough compliance throughout the Group, including overseas sales subsidiaries. In FY2024, we held training for managers of overseas sales subsidiaries, quarterly online meetings for Local Compliance Officers, and conducted risk assessments for all overseas subsidiaries. Additionally, continuing from the previous year, we identified categories with high compliance risk for each overseas subsidiary and set action plans to mitigate these risks, jointly monitoring their progress with the headquarters and the subsidiaries.
As the role of our overseas subsidiaries has become more important under transforming into a global high-value-added company, we have worked to strengthen the organizational risk management capabilities of each company. In October 2021, we formulated the Global Business Management Policy to support risk management related to finance and accounting, personnel and labor affairs, compliance, and internal information security, with the aim of preventing occurrence and recurrence of fraud and misconduct. This Policy was first implemented in 24 overseas subsidiaries and is now applied to 26 subsidiaries of the Company. To further strengthen each company’s risk management capabilities, we not only periodically review and enhance the contents of the Policy but also review the status of risk management implementation at each subsidiary’s board of directors to ensure its effective application. We work closely with each company to ensure the Policy’s effective adoption through these initiatives.
As an ethical company widely trusted by society, contributing to the world by fighting disease and improving health with advanced technology, we hereby declare as follows:
- We comply with laws and regulations, acting with fairness and high ethical standards.
- We engage in fair and open competition and transactions, never committing any bribery or other corrupt acts.
- We respect the human rights of all people, and do not discriminate or commit any acts which infringe on the personality or dignity of an individual.
- We aim to realize a sustainable society by addressing global medical and social issues through our business and corporate activities.
- As a global citizen, we address environmental issues proactively to pass on a healthy global environment to the next generation.
