Compliance

In 1997, DENSO CORPORATION created a Business Ethics and Compliance Committee chaired by a Company director to provide oversight in that area (now integrated into the Risk Management Meeting). In addition, we have instituted committee structures, such as the Compliance Committee, and introduced compliance promotion officers, such as compliance leaders, at the regional headquarters of each region of our collective global base. In doing so, we are building global systems that promote compliance, while at the same time promoting the development of organizational structures that take differing regional characteristics into consideration, introducing and operating reporting systems, and pursuing enlightenment activities.

Furthermore, personnel in charge of legal affairs in Japan, North America, South America, Europe, China, Southeast Asia, India, and South Korea exchange information and share issues with each other on a regular basis in an effort to further establish and promote compliance.

DENSO implements various educational and enlightenment activities for employees on an ongoing basis with the aim of enhancing their overall awareness of compliance matters.

For example, in Japan, we carry out the following educational and enlightenment activities related to compliance. We also roll out activities for employees in each region of operation, centered on our regional headquarters, which are carried out in the same manner in which they are conducted at DENSO CORPORATION.

In accordance with the circumstances in each region of operation, the DENSO Group has set up internal reporting systems at its regional headquarters and each business site. These systems allow employees to report their concerns and receive consultation on matters related to legal and regulatory violations (including potential cartel activities, embezzlement, theft, bribery, conflicts of interest, and other acts of corruption as well as sexual harassment, abuse of power and other forms of harassment, and discrimination and other issues related to human rights) via email, telephone, written correspondence, or face-to-face interaction.

For example, at DENSO CORPORATION, we have established a Business Ethics Hotline that allows anonymous reporting; is independent from the normal chain of command; and is administered by outside attorneys and the Business Ethics Hotline Secretariat in accordance with Japan’s Whistleblower Protection Act.

The operational guidelines of the Business Ethics Hotline establish a confidentiality obligation for whistleblowers and prohibit the unfair treatment of whistleblowers due to the fact that they made a report or sought consultation. This, in turn, ensures that the hotline can be used with peace of mind.

Furthermore, this hotline can be used by all persons working at DENSO CORPORATION, including employees, temporary employees, and employees contracted from other companies, as well as principal suppliers.

In addition to the Business Ethics Hotline, we have set up specialized consultation services, including the Harassment Consultation Center, the Consultation Center for Employees with Disabilities, and the LGBT Consultation Center, to address human rights issues that may arise in the workplace, as well the “All Consultations Welcome Office,” which accepts reports and consultations on a broad range of issues. In the same manner as the Business Ethics Hotline, the aforementioned centers are operated under the premise of confidentiality and no unfair treatment for the reporting individual.
In accordance with our Privacy Policy, we also accept reports and consultations from outside the Company, including from local residents, via the Company website.

In fiscal 2023, the hotline received 107 reports and consultations regarding matters such as employment, labor, work environment, information management, business transactions, and accounting, all of which were addressed appropriately after staff investigated the situations and confirmed the facts. The results of such investigations are reported to the relevant officer, and the status of the consultations are disclosed via the Company intranet under the basic premise of confidentiality and anonymity.

DENSO conducts inspections to ascertain whether its compliance activities have sufficiently taken hold and to look for any potential compliance issues. Additionally, if an issue is discovered, reports are made to top management when necessary, and steps are taken to prevent a recurrence of the issue.

In each region of operation, including Japan, DENSO conducts regular audits and utilizes surveys such as compliance self-check sheets. The results of these audits and surveys are used to make improvements. For example, DENSO CORPORATION conducts a sustainability survey every year in order to gain an understanding on the extent to which compliance-related measures have taken hold and on potential compliance risks.

Sustainability survey (DENSO CORPORATION)

Question: Are you implementing the Code of Conduct for DENSO Group Associates? (percentage of respondents who answered “yes”)

In February 2010, the U.S.-based subsidiary DENSO International America was investigated by the U.S. Department of Justice. We took the matter very seriously and, since then, we have established the Antitrust Laws Compliance Committee to further reinforce our existing efforts to comply with antitrust laws. Furthermore, under the guidance and supervision of this committee, which is chaired by the chief compliance officer (CCO), we have endeavored to reinstitute strict compliance with antitrust laws across the entire DENSO Group. These efforts have included ensuring strict adherence to laws and regulations, strengthening education about relevant rules, and conducting more precise audits regarding legal compliance.

Going forward, we will further reinforce our compliance structure to meet the requirements of antitrust laws as we work to not only ensure such an incident never happens again but also to restore trust in the DENSO Group.

Corruption is not only a hindrance to legitimate business activities but also a source of concern due to its connection with the funding of antisocial forces such as terrorist and criminal organizations. As a result, many countries around the world are strengthening their regulations against acts of corruption, including the United Kingdom’s Bribery Act (UKBA), and the United States’ Foreign Corrupt Practices Act (FCPA).
In accordance with the DENSO Group Sustainability Policy, DENSO is committed to conducting sound and fair business activities with high ethical standards. For example, DENSO is committed to practicing compliance with anti-corruption laws and regulations in all regions and countries in which it conducts business activities to ensure that it does not provide benefits or advantages through illegal or improper means such as bribery, illegal political contributions or donations; through threats, extortion, or embezzlement; or by engaging in money laundering, illegal international money transfers, or the funding of antisocial forces.

In order to respond promptly to rapid changes in its businesses and in the external environment, DENSO has established the Anti-Bribery Compliance Committee. The Company is promoting anti-bribery compliance activities under the direction and supervision of the committee, which is chaired by the CCO, in anticipation of an increase in opportunities to collaborate with public authorities and officials in various countries and regions.

The Company has established the Global Anti-Bribery Policy as its basic policy for preventing bribery. Under this policy, DENSO has established internal regulations on a global basis, operates anti-bribery systems, and promotes anti-bribery awareness activities and education for employees.
We also inform suppliers of our Supplier Sustainability Guidelines, which include anti-bribery measures, and conduct self-inspections to prevent acts of bribery by our suppliers.

DENSO has established and maintains Company rules and procedures for the handling of expenses, inventory, and other matters, and ensures that all employees are aware of said rules and procedures by sharing relevant information via the Company intranet, and providing accounting compliance education along with other measures. The aim of such measures is to ensure that transactions that could lead to accounting irregularities, such as off-balance-sheet transactions, fictitious transactions or other unsound transactions, or transactions that could be mistaken as such, are not conducted, and that proper accounting procedures are performed in accordance with International Financial Reporting Standards and the laws and accounting standards of each country in which the Company operates.
Moreover, the Company creates and maintains accounting records, such as forms and account ledgers, that in reasonable detail accurately and fairly reflect all transactions and dispositions of assets.

To ensure fairness and soundness in the securities market and to secure the confidence of shareholders and investors, DENSO has established the Internal Information Committee, which is chaired by the executive vice president, and the Internal Information Review Committee, which manages the practical affairs of the Internal Information Committee to ensure the implementation of thorough measures against insider trading.
Additionally, in an effort to instill an awareness of insider trading prevention among its employees, the Company has established internal rules and bylaws regarding internal information management and standards of conduct for officers and employees concerning the trading of company shares and other securities; clearly states the prohibition of insider trading in its employee conduct guidelines; and conducts compliance-related educational activities on a regular basis, among other initiatives.

In the future, we will continue to upgrade and strengthen our structure for raising the compliance awareness of each and every employee. At the same time, we will promote cooperation with the Group to fortify and enhance programs as we work to raise the level of the compliance structure across the entire DENSO Group.