The JSR Group has been endeavoring, by building up and maintaining good relationships with all our stakeholders, to become a trustworthy and indispensable corporate citizen.
We have been vigorously executing our Code of Conduct in order to fulfill "Our Responsibility to our Stakeholders", an essential part of our Management Policies, as well as to ensure compliance with relevant laws and regulations during the course of our business.
2. JSR Group Principles of Corporate Ethics
The JSR Group is advancing corporate ethics activities in an integrated manner at all Group companies, both in Japan and other countries. To achieve this, we have formulated the JSR Group Principles of Corporate Ethics as a concrete guideline for globally-shared corporate ethics that reflects our "Essential Elements". The principles serve as a Code of Conduct that all directors and employees (full-time, contract, part-time, and temporary employees as well as employees on short-term contracts) of JSR companies should comply with to develop our corporate activities while fulfilling the management policies spelled out in "Our Responsibility to our Stakeholders”.
The JSR Group shall never require directors and employees of Group companies to violate this Code of Conduct. Additionally, the JSR Group shall not disadvantage any director or employee who refuses to execute an order to violate the Code of Conduct because of that refusal.
3. Advancement Structure
The Corporate Ethics Committee of JSR is responsible for advancing Group-wide activities, such as promotion of corporate ethics activities, monitoring and enhancing legal compliance, and promotion of respecting and safeguarding human rights.
4. Corporate Ethics Activities
The JSR Group has been pursuing the following 3 major corporate ethics activities:
(1) Publication and Education of JSR Group Principles of Corporate Ethics
The JSR Group formulated the JSR Group Principles of Corporate Ethics to serve as a globally-shared Code of Ethics. By preparing English, Simplified and Traditional Chinese, Korean and Thai versions in addition to the Japanese version, we are ensuring that directors and employees at all Group companies can become acquainted with the JSR Group Principles of Corporate Ethics in their native language or in a language in which they are proficient.
Moreover, each year we provide an e-learning program on the Principles of Corporate Ethics for all employees of JSR Group companies in Japan. We incorporate the themes of confidential information management, prevention of abuse of power, and prevention of data falsification into the program. We also conduct corporate ethics training for each stratum, such as new recruits and newly promoted managers. With regard to harassment education, we conduct management training on bullying and harassment reports and the handling of actual cases for high-ranking and managerial positions.
JSR Group Principles of Corporate Ethics (Revised on Jan. 1, 2021)
(2) Corporate Ethics Awareness Survey
The JSR Group works to grasp and improve corporate ethics-related issues by conducting annual surveys on corporate ethics awareness that target the directors and employees of JSR Group companies in Japan and other countries. The results are reported at the Corporate Ethics Committee and then to an Officers Committee. They are subsequently fed back to employees as a post in a summarized form on the company intranet, together with a message from the assigned officer explaining issues and other matters gleaned from the results. Some overseas Group companies also strive to build awareness of corporate ethics and legal compliance among their employees, including their locally hired employees, using methods that are appropriate for the local culture.
(3) Hotline (Internal Reporting Channels)
1) Hotline for Employees
The JSR Group has introduced a system of internal reporting channels called the "Corporate Ethics Hotline". The "internal hotline" is connected to the Corporate Ethics Committee in JSR or the relevant Group company. The "external hotline" is set up to connect to two contact points. One is a designated independent attorney. The other is an independent and specialized outside organization capable of handling communication in 16 languages, including Japanese, English, Chinese, Korean, Thai, and Indonesian. This system is designed to facilitate use even by overseas employees. Reports made to the external hotline are also simultaneously reported to full-time auditors, and independence from management is ensured. We encourage our employees to use these hotlines through promotions via internal newsletters and other media. We strive to build trust in the hotlines by ensuring confidentiality and prohibiting unfair treatment of hotline users.
We also hold yearly meetings between the corporate ethics officers of domestic Group companies and JSR's Corporate Ethics Committee for the purposes of getting all Group companies in Japan on the same page and tackling ethics-related issues. Furthermore, we post and display guides for accessing the hotlines on the company intranet and online internal newsletters to make the hotlines easier to use.
State of Use of JSR Group’s Hotline (Number of Reports)
For each report that comes in, the office of the Corporate Ethics Committee in the company concerned asks the relevant department to ascertain the facts. The office then discusses and decides on responses based on the department's findings, and later follows up on the results. If the reporter desires feedback, the contact point that initially received the report contacts him/her with the results as well as the responses taken.
Twenty-six reports were received during FY2020. Of them, fourteen involved abuse of power.
2) Suppliers' Hotline
JSR employs at its Procurement Department a "Suppliers' Hotline", an external reporting channel for business partners, namely suppliers and services providers, with whom domestic Group companies do regular business. It receives reports from business partners to quickly discover and resolve violations of the law as well as actual and possible violations of corporate ethics in business transactions. Hotline services are entrusted to the same outside organization employed for the employees' hotline. Efforts are being made toward improving reliability, by thoroughly enforcing strict secrecy of reports and prohibiting handling of reports that would be disadvantageous to those reporting something.
Since its introduction in FY2014, there have been no reports made using the Suppliers’ Hotline.
5. Legal Compliance Measures
Every JSR Group member defines legal compliance regulations that form the basis of its legal compliance. Each company then uses the regulations to solidify its compliance through regular review and improvement as well as legal training to increase awareness of laws and regulations and instill commitment to compliance. JSR Group establishes specific systems and executes other priority approaches to ensure compliance with laws and regulations that are particularly relevant to the execution of business.
1) Approach to Preventing Bribery and Unfair Competition
JSR has formulated "Policy for Bribery Prevention", “Rules on Complying with Anti-Corruption Laws” and “Standards for Gift-Giving and Entertaining” that specify necessary items for all executives and employees to comply with the Unfair Competition Prevention Act in Japan, Foreign Corrupt Practices Act in the U.S., Bribery Act in the U.K. and other anti-corruption laws when performing their tasks, based on the JSR Group Principles of Corporate Ethics and laws and regulations that require compliance. With regard to due diligence of third parties, such as an important proxy, in preventing bribery, JSR has specified “Due Diligence Guideline for Proxies, etc.”. In line with this, JSR strives to reduce the risk of bribery by conducting surveys through self-checks and external databases.
In addition, JSR has also formulated “Rules on Antimonopoly Law” (Japan), “Rules on Complying with U.S. Antitrust Laws”, “Rules on Complying with the EU’s Antitrust Laws and “Rules on Complying with Korean Fair Trade Laws” that specify items necessary for complying with each country’s antimonopoly (antitrust) laws.
Participation in global incentives
JSR participates in the Corruption Prevention subcommittee of the Global Compact Network Japan (GCNJ), a local network for the UN’s “Global Compact”. In this subcommittee, various activities are carried out, such as lectures with invited experts, exchange of information related to measures for preventing corruption among participating companies, etc. Through these activities, JSR explores, examines and implements effective and ideal corruption prevention measures that are suitable for the JSR Group.
Corruption prevention measures have a strong compliance system advancement aspect of complying with relevant laws of each country. At the same time, the foundation of such measures is closely linked to global social issues related to human rights, labor and the environment. In addition to continuing to implement effective corruption prevention measures, JSR searches for ideal forms of such measures.
2) Approach to Taxes (Philosophy)
The JSR Group understands that carrying out appropriate tax payments and tax management that follows relevant laws and regulations of each country fulfills an important role in the economic and social development of each country and is linked to supporting and earning the trust of all stakeholders.
The JSR Group is engaged in taxes by supporting the following philosophy as provided by the Chief Financial Officer (CFO).
“JSR Group will comply with the taxation laws of each country in which it does business, including regarding transfer pricing and tax havens.”
(1) Reviewing and Improving Legal Compliance
Based on legal compliance regulations, the JSR Group designates laws and regulations that are important in the execution of business as Overall Significant Laws and Legal Regulations. Each year, the Group regularly verifies its compliance by self-checking whether the business operations of all Group companies conform with the Overall Significant Laws and Legal Regulations. The regular sharing of information on cases of non-compliance within the JSR Group is useful in preventing legal violations and quickly detecting and improving non-compliant situations. It also helps improve awareness of compliance.
(2) Training and Increasing Awareness
1) Compliance Handbook
The Group is thoroughly publicizing important points that demand legal compliance among employees in Japan, South Korea, and China by issuing Japanese, Korean, and Chinese versions of JSR's Compliance Handbook. The Chinese version is issued to not only Group companies in China but also JSR departments and Group companies that sell products, supply samples, or otherwise engage in business dealings with Chinese enterprises. Through it, we are working to ensure thorough understanding and practice of legal compliance in China.
We revised the Compliance Handbook's Japanese version in FY2017 and redistributed to employees in April 2018. The revision covered contents pertaining to recent cases of data falsification and fabrication at other companies and revisions of related laws.
2) Seminars and E-Learning
We hold periodic seminars and provided e-learning programs for directors and employees of all JSR companies as part of legal education to ensure full organizational knowledge of laws demanding compliance. The main seminars held in FY2020 were as follows.
- January: Seminar on Antitrust Act in Japan
- March: Export Control seminar
We provide e-learning on the Antitrust Act in Japan, export control, anticorruption-related laws, and corporate ethics.
We also provide legal education that has been customized to meet the requirements of individual departments and Group members. This includes individualized education for employees being sent to new assignments (training on the Antitrust Act in Japan, anticorruption laws, etc.). We also hold chemical substances seminars at various locations in Japan and, as part of them, provide education on domestic laws (Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc. in Japan, Industrial Safety and Health Act in Japan, Poisonous and Deleterious Substances Control Act in Japan, etc.) and foreign laws.
6. Protection of Personal Information
Furthermore, for Group companies that handle personal data covered by the EU's General Data Protection Regulation (GDPR), we are providing support for the development and operation of a GDPR compliance system to be applied to the acquisition, processing, and transfer of covered personal data.
7. Approaches toward Information Security
JSR Group adopted an Information Security Policy and is working to implement appropriate information management by informing all personnel of the policy.
Information Security Policy
- The JSR Group, by complying with laws and regulations and by observing other social norms relating to the handling of information, will protect information that belongs to the JSR Group, its customers, business partners and other third parties.
- The JSR Group strives to develop and actively use its information assets for the efficient execution of its business. The Group's officers and employees will only use these information assets for the purposes of their work and within the scope of their authority.
- The JSR Group improves organizations and systems, provides education on information security, thoroughly disseminates this policy and related regulations, and implements measures to ensure information security.
- The JSR Group implements appropriate human, organizational, and technological measures and works to prevent unauthorized access to information assets from outside the company, as well as leaks, falsification, loss, theft and destruction of information assets.
- If an information security-related problem occurs, the JSR Group will promptly identify the cause and take measures to minimize damage and prevent recurrences.
- The JSR Group periodically assesses and reviews its information security measures to respond appropriately to changes in external environments.
The JSR Group is continually working together with external experts to increase our level of security and protect corporate information assets from cyber-attacks. In FY2014, we issued an Information Security handbook to raise employee sensitivity to information leakage risks and to help ensure that employees are aware of and follow rules regarding information security. We also conduct targeted attack drills using fake viruses to raise prevention awareness. In addition, we are engaged in raising awareness of the content in the Information Security handbook through e-learning and workplace meetings.
Additionally, we established a new Cyber Security Management Office in August 2019 to strengthen our information security management (including that of Group companies) and improve employee training and enlightenment as well as employees' ability to respond to incidents.
Information security handbook