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Corporate Governance

Compliance

Group Conduct Guidelines

The Group Conduct Guidelines set forth the basic premises to observe as a basic framework for corporate ethics compliance for all Group companies as well as each and every one of their executives and employees in the worldwide expansion of the Daikin Group.

Believing that violation of the Group Conduct Guidelines constitutes a form of risk, we strive to achieve compliance and risk management throughout the entire Daikin Group.

Items of the Group Conduct Guidelines

  1. Providing Safe, High Quality Products and Services
    We shall make every effort to ensure the safety and quality of our products and services from the standpoint of our customers. Should a problem occur regarding safety, we shall immediately take appropriate action.
  2. Free Competition and Fair Trading
    We shall observe all applicable laws and regulations relating to fair competition and fair trade of each country and region, including antimonopoly laws. Furthermore, we shall conduct fair sales and procurement activities based on proper corporate ethics and in accordance with sound business practices and social norms.
  3. Observing Trade Control Laws
    We shall not participate in any transactions that may undermine the maintenance of global peace and security and world order. We shall always act in compliance with all applicable export- and import-related laws and regulations of each country and region, as well as the Daikin Group Security Trade Control Policy, which relates to foreign trade control.
  4. Respect and Protection of Intellectual Property Rights
    Recognizing that intellectual property rights are important company assets, we shall strive to protect and maintain our intellectual property rights and effectively utilize them. Furthermore, we shall respect and make every effort not to infringe upon the intellectual property rights of other companies.
  5. Proper Management and Utilization of Information
    We shall properly manage and effectively utilize the confidential information of our company, the confidential information obtained from other companies, and the personal information of our customers and employees and shall not obtain any information through improper means. We shall thoroughly execute IT security management for our computer systems and the data-resources saved on them.
  6. Prohibition of Insider Trading
    To maintain the trust of the securities market, we shall not use non-public information about the Daikin Group or other companies to buy or sell stocks or other securities (insider trading).
  7. Timely and Appropriate Disclosure of Corporate Information
    Aiming to be an "open company" with high transparency and earn the respect of society, we shall actively convey corporate information in a timely fashion not only to shareholders and investors but also to a wide spectrum of society, and engage in two-way communication.
  8. Preservation of the Global Environment
    We shall observe all applicable environmental laws and regulations of each country and region and practice initiatives that preserve the global environment in all aspects of our business operations, including product development, manufacturing, sales, distribution, and services. Also, each and every one of us shall deepen our knowledge of environmental issues, reduce the environmental load in the workplace and at home, and strive toward biodiversity conservation.
  9. Ensuring the Safety of Operations
    We shall take all possible precautions for safe operations and act with a mindset of "Safety First" to ensure the safety of the workplace and further gain the trust of people in the regions we serve.
  10. Respect for Human Rights and Diversity in the Workplace and Observance of Labor Laws
    We shall respect the human rights of each and every employee and shall not engage in conduct that discriminates on the basis of nationality, race, ethnicity, religion, color of skin, age, gender, sexual orientation, or disability. Diversity in individual values is enthusiastically accepted, and we shall work to make the unique talents and abilities of each and every person the driving force of the organization. We shall also observe both the letter and spirit of all labor laws and regulations of each country and region, and under no circumstances shall we sanction the labor of underage employees, minors who do not meet the minimum legal age requirements (child labor), or labor performed under compulsion or against a person’s will (forced labor).
  11. Protection of Company Assets
    We shall properly manage the tangible and intangible assets of our company to protect and utilize effectively these assets.
  12. Proper Handling of Accounting Procedures
    We shall comply with all accounting standards and tax laws of each country and region as well as internal company rules in properly performing accounting procedures.
  13. Practicing Moderation in Entertainment and Gift Exchanges
    We shall exercise moderation and perform within the acceptable range of social norms and obey the laws and regulations of each country and region in regards to entertainment, the exchange of presents, and invitations relating to the development of our global business. In particular, we shall not entertain, provide gifts of monetary value to, or extend invitations to public officials in Japan or abroad that violate the applicable laws and regulations in each respective country and region.
  14. Maintaining a Firm Attitude against Anti-social Activities
    We shall take a firm attitude against anti-social force or organization that threatens the safety and order of the citizens of society.
  15. Relationship with Society
    We aim to be a good corporate citizen that is trusted by society and we shall do our best to act with humility and modesty while at the same time having self-awareness and taking pride in our actions. Moreover, we shall participate in social contribution activities centered on environmental conservation, education support, and cooperation with the local community.
  16. Observing Each Category of Industry Law and Regulation
    We shall accurately comprehend and observe all business laws and regulations of each country and region applicable to our business activities.
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Management Structure

Conducting Integrated Group-Wide 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 toward solving a variety of issues. Matters deliberated upon at these meetings are reported to Daikin executives twice a year.

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 carry out compliance education and training, thus fostering an atmosphere of compliance and ensuring thorough measures to deal with risk.

Building Compliance and Risk Management Systems for Overseas Group Companies

Compliance meeting in China (Suzhou)Compliance meeting in China (Suzhou)

Modeled on Daikin Industries, Ltd. 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.

In addition, Corporate Ethics and Risk Management Committee members of Daikin Industries, Ltd. 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, Ltd. 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. Moreover 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 daily triple checks to ensure everyone is following laws and company rules and manuals. We also have 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 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.

The members of the legal department tour overseas group companies to lead efforts such as the creation of the Handbook for Corporate Ethics and the conducting of self assessments.

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Education

Focus on Educating Employees Toward 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 sales, 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.

Moreover, to raise employees' compliance awareness, training is supplemented by sessions with individual division heads and managers, who repeatedly remind workplace employees about the importance of compliance from their own experience.

Since fiscal 2012, Daikin's Compliance Caravan made up of representatives from the legal department, various Daikin divisions, and group companies has been touring branches around Japan to explain the assumed risks and key points of compliance. This training includes 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.

In fiscal 2014, the members of legal department toured overseas group companies to explain and educate employees on the Daikin Group’s anti-bribe guidelines.  

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Major Legal Violations in the Daikin Group in Fiscal 2016

The Daikin Group makes it a rule to publicly announce all instances of major legal violations related to business operations.

There were no cases of business-related major legal violations in fiscal 2016.

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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 department, where employees can give opinions or receive consultation on all corporate ethics matters. Through the help-line, all advice sought and opinions expressed are kept strictly confidential, and reported matters are dealt with promptly and appropriately. No retribution is taken against either those persons reporting problems and seeking advice, or those persons helping investigate the reported matters.

The legal 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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