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.
Compliance meeting in China (attended by representatives of 14 Group companies in China)
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
Handbook 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 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 Center 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.
Updated version of collection of case studies on compliance issues for specially assigned employees
We strive to make every employee constantly aware of compliance through numerous 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, and CRLs.
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 2011, we continued to raise compliance awareness through the use of an illustrated training manual for specially appointed employees that was created in fiscal 2010. As of August 2012, the illustrated manual had 19 episodes.
In China, Daikin employees train using a Chinese-language version of the illustrated training manual.
We have a Help-Line for Corporate Ethics in the Legal Affairs, Compliance, and Intellectual Property Center, 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 Center 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.
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 2011, the most important risks were identified as earthquakes, product liability and quality, information leaks, and the building of a system for managing global Group intellectual property rights. Management. Measures were thus taken to deal with these.
Following the Great East Japan Earthquake in March 2011, for fiscal 2011 Daikin made rebuilding of earthquake measures an important theme for its compliance and risk management. Teams were formed to discuss and create measures to deal with individual issues related to earthquakes.
For building reinforcement and tsunami measures, as well as conferring with the Central Disaster Management Council of Japan's Cabinet Office, Daikin checked on the necessity of earthquake reinforcement, as well as when and what type of reinforcement would be necessary. At locations like the chemical plant of the Yodogawa Plant and the Rinkai Factory of the Sakai Plant, we are preparing for possible flooding and liquefaction caused by a tsunami by installing emergency power sources, planning evacuation shelters, and drawing up evacuation routes.
As part of the creation of a business continuity plan (BCP), we are looking into alternative suppliers so that we can ensure stable procurement of parts and materials. By the end of fiscal 2013, we plan to have types of substitutes for the 247 main electronic components that make up our air conditioners. We have also switched to directly sourcing electronic components that we used to get from printed circuit board manufacturers. Other measures include increasing our stockpiles and bringing in satellite phones.
In fiscal 2012, we will continue to step up measures to deal with earthquakes.