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Sustainability > Daikin's CSR > CSR Management > Compliance and Risk Management

Compliance and Risk Management

Management Structure

Conducting Integrated Group-Wide Promotion of Compliance and Risk Management

The Daikin Group has a unified system for the promotion of compliance and risk management.

The Corporate Ethics and Risk Management Committee is the organ for leading group-wide corporate ethics activities. It is headed by the Officer in Charge of Compliance and Corporate Ethics and made up of general managers and presidents of major Group companies in Japan. As a rule, this committee meets twice a year to discuss and work towards solving a variety of issues.

Monthly meetings are held by compliance and risk management leaders (CRLs), who are appointed in each division and major Group company in Japan. The goal of the CRLs is to follow the state of compliance and risk management activities, share information, and ensure that measures are in place to prevent non-compliance and unnecessary risks.

Building Compliance and Risk Management Systems for Overseas Group Companies

Compliance meeting in IndiaCompliance meeting in India

Modeled on Daikin Industries in Japan, a compliance and risk management system has been built for each country and world region to match particular local needs.

Each of these systems has compliance committees and Corporate Ethics Handbooks, and they conduct regular self assessments and risk management checks.

As well, Corporate Ethics and Risk Management Committee members of Daikin Industries regularly visit overseas Group companies to join compliance committee meetings, where they confirm the state of compliance and risk management, and share information. This process enables Daikin Industries and its overseas companies to share and implement each other's best practices.

Corporate Ethics and Risk Management

Corporate Ethics and Risk Management

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Compliance and Risk Management Efforts

Handbook for Corporate Ethics, and Regular Self Assessments

Handbook for Corporate EthicsHandbook for Corporate Ethics

Daikin's Handbook for Corporate Ethics summarizes employee rules for action and behavior to ensure compliance in Japan. As well, employees in Japan have been given compliance cards and are urged to carry these with them at all times to ensure that they always follow rules and ethics.

In the area of legal compliance, compliance and risk management leaders (CRLs) in each division head efforts to gather the latest legal information and check to see if laws are reflected in company rules and manuals. There are also monthly daily triple checks to ensure everyone is following laws and company rules and manuals. In 1995, we introduced self assessments, a Daikin initiative, which are conducted once a year in all divisions and Group companies to ensure soundness in both legal compliance and risk matters. Based on the results of these self assessments, the Legal Affairs, Compliance and Intellectual Property Department conducts legal audits in divisions and Group companies, while the Internal Auditing Department confirms legal compliance through audits.

In the area of risk management, all divisions conduct risk management checks along with self assessments. If any major risks are identified by these checks, measures are drawn up to reduce such risks.

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Education

Educating Employees Towards Thorough Compliance

We strive to make every employee constantly aware of compliance through a special emphasis on educational activities. We constantly improve these through better compliance education tools and improved ways to relay the importance of compliance.

For example, employees who are studying look at case studies related to legal matters in specific areas, such as management, production, and procurement. Education is also divided by employee category, with courses for directors, new employees, newly appointed managers, CRLs, and other kinds of employees.

And to raise employees' compliance awareness, training is supplemented by sessions with individual division heads and managers, who tour workplaces to talk about the importance of compliance from their own experience.

In fiscal 2012, Daikin's Compliance Caravan made up of representatives from the Legal Department and Service Department toured six service bases in Japan to explain the assumed risks and key points of compliance and to lead training that included active dialogue on case studies relevant to Daikin business.

Every two months, employees receive an email newsletter called Daikin Compliance News, which uses familiar case studies to raise employee awareness of the importance of compliance.

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Help-Line

Help-Line for Corporate Ethics Offers Counseling and Gathers Opinions

We have a Help-Line for Corporate Ethics in the Legal Affairs, Compliance and Intellectual Property Department, where employees can give opinions or receive consultation on all corporate ethics matters. The names of all employees who call are kept confidential.

The Legal Affairs, Compliance and Intellectual Property Department investigates all queries and opinions to the Help-Line, and works with related company divisions to decide on measures to prevent the reoccurrence of problems. This makes for the smooth creation of measures and the solution of problems.

To ensure that the help-line is well publicized, the help-line's contact information is provided on the compliance card that all employees carry with them at all times.

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Risk and Measures

Identifying the Most Important Risks, then Formulating and Implementing Measures

With the Daikin Group expanding rapidly around the globe, we have introduced company-wide, cross-organizational risk management in order to quickly get an overall picture of risks from a global point of view and reduce the risks.

All divisions carry out annual risk assessments in which they determine important risks and create measures to deal with them. Based on the results of these assessments, the most important company-wide risks are determined, with measures proposed and implemented to deal with them in order to reduce risk.

In fiscal 2012, there were seven important risks identified, including earthquakes, the building of a system for managing global Group intellectual property rights, dealing with bylaws on the elimination of crime syndicates, and information leaks. Measures were thus taken to deal with these.

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Preparing for Earthquakes

Revamping Earthquake Preparations Based on Government Estimates

Daikin has made earthquake risk measures a key company-wide theme and we are formulating measures via task-specific teams.

Based on estimates made by the Central Disaster Management Council of Japan's Cabinet Office, we are revising standards for earthquake reinforcement and flooding measures at our plants as part of proposed disaster preparation plans. We are progressing with factory earthquake reinforcement measures and chemical plant flooding measures based on these plans.

We are also creating a business continuity plan (BCP) that includes concrete measures to eliminate risk and we are putting this plan into action. Group companies are all proceeding with their own BCPs.

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