Governance

Corruption Prevention Initiatives / Compliance

Casio Group Code of Conduct

Casio established the Casio Group Code of Conduct to make explicit its expectations that all executives and employees follow international norms, laws and ordinances applicable in each country and region, as well as all company rules, and also act with high ethical standards and good sense in their day-to-day work. On June 1, 2013, Casio revised the code, in order to better meet the expectations of the international community and capture trends in the social environment including the issuance of ISO 26000, the international guidance standard on social responsibility, in November 2010; Casio having joined the UN Global Compact in December 2010; and Casio having adopted the UN’s Guiding Principles on Business and Human Rights in June 2011. Since then, Casio has been working to ensure everyone is fully aware of the revised code, group-wide. Here are the three main revisions to the Code of Conduct.

  1. Points concerning issues of high concern to the international community such as human rights, supply chain management, and anti-corruption were revised
  2. The respective roles of executives and employees were clearly stipulated
  3. Content was improved to indicate common policies that apply to the worldwide group.

Also, on November 1, 2016, Code of Conduct provisions for “respect for human rights” were partially revised. This was based on changes to international norms concerning human rights that affect the Casio Group, including enforcement of the UK’s Modern Slavery Act in 2015.

The revised Code of Conduct was prepared in Japanese, English, and Chinese, and is translated into other employee languages as necessary. Education on the new code is carried out across the entire group, with the aim of further deepening understanding of its content. Along with this education, a compliance questionnaire is conducted once every two years. The results and identified issues then are shared group-wide to promote continued improvement.

Provisions of the Casio Group Code of Conduct

Ⅰ. General Provisions

  1. Purpose
  2. Scope
  3. Compliance

Ⅱ. Code of Conduct

  1. Enabling Value Creation

    1-1. Provision of Products and Services Beneficial to Society

  2. Fulfilling Our Corporate Social Responsibilities

    2-1. Respect for Human Rights
    2-2. Environmental Conservation
    2-3. Sound Initiatives across the Entire Supply Chain
    2-4. Harmony with Society

  3. Building Customer Trust

    3-1. Provision of Safety and Peace of Mind to Customers.

  4. Establishing Sound Workplaces

    4-1. Establishment of Employee-friendly Workplace Environments.

  5. Ensuring Correct Actions

    5-1. Compliance with Laws
    5-2. Prohibition of Bribery and Restrictions on Business Entertainment and Gift-giving
    5-3. Fair Competition and Transactions
    5-4. Prohibition of Insider Trading
    5-5. Thorough Security Trade Control
    5-6. Prohibition of Involvement with Anti-social Forces
    5-7. Separation of Personal Affairs from Business
    5-8. Information Protection
    5-9. Protection and Utilization of Intellectual Properties.

  6. Building a Relationship of Trust with Society

    6-1. Promotion of Communication with Society

Ⅲ. Maintenance

  1. Establishment, Revision and Abolishment of this Code of Conduct
  2. Reporting of Violations
  3. Handling Violations

Casio Group Code of Conduct

Compliance Risk Management

Based on its Basic Risk Management Policies, Casio has built a system for efficient management of risks, with an emphasis on compliance risk.

To build this system, Casio identified 70 laws relating to its businesses and listed measures being taken to comply with each law. Casio determined priorities based on the possibility of a risk materializing and its potential impact on company management. Casio then planned and implemented individual measures and developed an overall management system.
In the risk management process at Casio, departments responsible for certain risks develop measures in a planned way to avoid and reduce these risks. The Risk Management Secretariat performs comprehensive management through the use of plan-do-check-act (PDCA) cycles. The Internal Audit Department also audits this entire mechanism. Accordingly, as of the end of fiscal 2011, it was confirmed that the relevant departments had the necessary measures in place for management of all risks, and an overview of the entire situation was obtained.
Moreover, in 2019, Casio’s Internal Control Committee conducted compliance risk management to strengthen internal controls. Given the sharp changes in the environment, fiscal 2021, the Committee is currently working to take stock of risks facing the Group worldwide. This includes identifying and analyzing risks, and reinforcing the Casio Group’s compliance risk management system.

Education and Awareness Raising

Casio regularly provides educational programs on sustainability to group employees worldwide. The objectives are to promote and instill understanding of the corporate creed and sustainability and to ensure awareness of and compliance with the Casio Code of Conduct.
In fiscal 2020, Casio held lectures and workshops on the SDGs for new hires. It also held lectures and workshops for about 100 sustainability leaders selected from each division at Casio Computer Co., Ltd. and from Group companies in Japan.
Casio will continue to improve the sustainability literacy of employees while promoting the corporate creed, through group-wide education and awareness raising activities.

Whistleblower Hotline

As a way to ensure compliance, including respect for human rights, and to maintain sound governance, Casio set up a Whistleblower Hotline in April 2006. The hotline has been functioning with neutrality and fairness across all of its internal and external contact points.
Operating on a basis of impartiality, the hotline follows up on all whistleblower reports and consultations, and takes resolute measures against any improper behavior discovered. Effort is put into preventing issues before they grow into real problems.

The contractor operating the external contact point of the Whistleblower Hotline was changed in April 2015. Now Casio employees can utilize online whistleblower consultation and report filing in English and Chinese, and telephone consultation and reporting is also available in English. This has given employees at group companies outside Japan better access to the hotline. To ensure even greater hotline awareness, Casio will strive to further increase group-wide understanding of the system in fiscal 2016, using a special intranet site with information on whistleblower protection in Japanese, English, and Chinese.
In addition to internal hotlines, in fiscal 2018, an external whistleblower hotline was established exclusively for suppliers in October 2017.

In May 2019, the Internet-based external whistleblower hotline was overhauled to comply with Europe’s GDPR and to enable whistleblowers to interact directly with the Whistleblower Hotline Office on a half-anonymous basis (actual name given to external whistleblower hotline but anonymous to the company).

In fiscal 2020, seven issues were reported to the Hotline. Of these, three concerned harassment, three were reports of violations of internal rules, and one was a report of a privacy violation. All of the reports were addressed properly, and the issues resolved.

Fiscal 2020 cases reported to Whistleblower Hotline

Breakdown of whistleblower report Harassment Internal rule violation Privacy violation
No. of cases 3 3 1

Whistleblower Hotline

Figure: Whistleblower Hotlin

Export Control

Export control, or security trade control, aims to maintain international peace and security. It involves regulations on the export of goods and technology that could be diverted for the development of weapons of mass destruction or other weaponry. The regulations are designed to prevent such goods and technology from reaching countries and regions of concern or terrorist organizations.

In 1987, the Export Control Security Program of Casio Computer Co., Ltd. (a compliance program) was established in order to make sure proper measures are taken to ensure the security of exports. The program has since been continually updated along with changes in the Japanese Export Control Regulation.
Casio has appointed employees responsible for export control in relevant departments as part of an internal system to ensure observance of the program.

As the Exporter Compliance Standards took effect in April 2010, Casio has been striving to maintain and manage its system by conducting voluntary annual audits while ensuring thorough legal compliance, in response to the revision of applicable laws and regulations. Efforts include the strengthening of training activities at group companies in Japan.

Casio has also established a management system for complying not only with Japanese export laws but also with US Export Administration Regulations. The company is working to improve global export management, including the implementation of export management training in fiscal 2013, at group companies in the UK and Germany, and in fiscal 2014 at a group company in the US.

In June 2019, Casio brought in a lecturer from the Japan Machinery Center for Trade and Investment for a session on “managing exports to guarantee safety” at the Hamura R&D Center. Fifty-four employees working in fields related to exports from the Development Headquarters, Global Marketing Headquarters, CS Headquarters, Business & Technology Development Center and Yamagata Casio, a Group company, attended. They not only learned the basics, but also grew their understanding of non-applicability case studies and other companies’ case studies.

Under today’s increasingly sophisticated trade situation, Casio always collects the latest information and strives to ensure safe export control.

Fair Competition and Trading

For any responsible company, engaging in fair competition and transactions is essential. Casio is strengthening its compliance system to ensure that employees have an accurate understanding of Japan’s Act on Prohibition of Private Monopolization and Maintenance of Fair Trade and Act against Unjustifiable Premiums and Misleading Representations, and comply with these laws thoroughly. (Casio Group Code of Conduct: 5-3. Fair Competition and Transactions)

Initiatives for Compliance with Competition Laws (Anti-monopoly Laws) in Each Country

In fiscal 2020, Casio established the Competition Law Compliance Program for Group companies in and outside Japan. Casio is working to prevent risks by carrying out training as part of its global compliance system and conducting compliance surveys, among other initiatives.

Initiatives for Compliance with Advertising Laws

In order to prevent inappropriate descriptions and labeling as well as excessive premium giveaways, Casio provides guidance via a consultation desk staffed by experts. It also offers ongoing education for employees and employs opinions from customers as feedback to ensure that product descriptions and labeling are all proper.

Sales departments at Casio have distributed a Sales Compliance Card to their employees as a tool to promote fair competition and trade. These employees are required to carry the card. In addition to the Charter of Creativity for Casio and excerpts from the Casio Group Code of Conduct, the card contains a compliance test, as well as contact information for a consultation service, and the number for the Whistleblower Hotline. Whenever a salesperson is in doubt over a course of action during daily sales activities, he or she can use this card as a guide to quickly perform a self-assessment or consult with a knowledgeable expert.
In addition, a dedicated department conducts internal inspections to make sure that no unfair trade or action violating Japan’s Antitrust Act and other laws are being taken and that product labeling and information would not cause misunderstanding on the part of customers, as part of regular monitoring.

Casio Sales Compliance Card (revised version)

Figure: Casio Sales Compliance Card (revised version)

Subcontract Act Compliance Initiatives

Casio has established a Compliance Committee on Japan's Act against Delay in Payment of Subcontract Proceeds, Etc., to Subcontractors (Subcontract Act) which includes group companies, and is striving to ensure all transactions comply with the law. Under the annual basic plan of the Committee, each group company in Japan drafts its own action plan, and maintains proper transactions with subcontractors based on the use of PDCA cycles. In particular, employees that deal directly with suppliers and outsourcers are provided with the necessary knowledge through in-house seminars and classes sponsored by the relevant government authorities
In fiscal 2020, 3,557 Casio employees attended in-house seminars, and 49 people also participated in classes sponsored by the Japan Fair Trade Commission and by the Small and Medium Enterprise Agency. This training helped to raise compliance awareness and provided employees with the knowledge they need.
Various efforts were made to encourage understanding, such as conducting training sessions with original teaching materials prepared to suit the unique transaction conditions of various group companies.
The Compliance Committee also obtains the latest information from government websites and email notification services, and sends the information directly to committee members. The news is also posted on the committee's website, and shared with the entire group.
In offices where subcontract transactions are handled, independent audits are carried out on an ongoing basis. Casio confirms that proper, compliant transactions are executed, by inspecting the document record of the entire series of transactions from ordering to payment.
Casio will continue to promote understanding of the Subcontract Act among its employees, and work to strengthen its system for even better compliance.
The company will strive to promote even sounder transactions and create value with suppliers, based on revisions to the Subcontract Act compliance standards in fiscal 2017, along with the revised Act on the Promotion of Subcontracting Small and Medium-sized Enterprises and its standards, and will take all necessary steps to address the consumption tax hike in Japan, which went into effect in fiscal 2020.

In fiscal 2020, Casio received no warnings or fines under the Subcontract Act.

Corruption Prevention Initiatives

Based on ISO 26000, the international guidance standard for social responsibility, from 2012 to 2013 Casio took stock of the main CSR challenges facing each group company in and outside Japan, assessing and analyzing the status of their initiatives. The issue that rose to the surface as a challenge warranting priority attention alongside respect for human rights was fair business practices—in other words, corruption prevention initiatives.
The Casio Group Code of Conduct prohibits bribery including restrictions on illegal and improper business entertainment and gift-giving. Still, in light of recent developments including the ongoing globalization of business, the tightening of regulations, and more robust efforts to detect bribery, there is a need to further strengthen the handling of bribery risks throughout the Casio Group. Accordingly, Casio issued the Casio Guidance on the Prohibition of Bribery (for the Casio Group) in July 2014 and the Manual on the Prohibition of Bribery (for Casio Computer Co., Ltd.) in October 2014.
The Casio Guidance on the Prohibition of Bribery articulates the Group’s basic stance and philosophy on the prohibition of bribery, including the prohibition of facilitation payments. The Manual on the Prohibition of Bribery specifies the structure and mechanisms for the prevention of bribery, including the designation of persons responsible for compliance, education and training, auditing, and the Whistleblower Hotline, as well as specific rules such as a limit on the monetary amount of business entertainment and gift-giving. Additionally, Casio headquarters encourages each site to produce local rules and manuals in an effort to strengthen the mechanisms for the prohibition of bribery throughout the group.

In fiscal 2021, Casio’s Internal Control Committee is taking stock of compliance risks, and the secretariat will analyze any issues identified, provide feedback on the results to the Group companies, and encourage improvements.

Tax Affairs

The Casio Group Code of Conduct stipulates that all officers and employees in the Casio Group must comply with international norms, applicable laws in each country and region, and company rules in their daily activities as the Casio Group engages in its global business.
This also applies to tax affairs. The Group strives to maintain its tax compliance by paying taxes appropriately in compliance with each country's tax laws, including transfer pricing taxation and anti-tax haven measures, as well as international rules and other statues.

Casio Computer Co., Ltd. transitioned to a “Company with an Audit & Supervisory Committee” structure in June 2019. This separation of oversight and execution will strengthen corporate governance functions. The Company is also working to build an execution system that ensures a prompt, flexible response to changes in the business environment and helps to raise corporate value. Casio promotes compliance by regularly providing education to ensure understanding of and familiarity with the Casio Code of Conduct. However, in fiscal 2020, Casio Electronics Co., Ltd. (a subsidiary in the UK) was inspected by the UK’s Competition and Market’s Authority, and the company was assessed a fine for violating competition law. In addition, in fiscal 2020, it was discovered that a former employee of Casio Europe GmbH (a German subsidiary) had fraudulently transferred money. The Casio Group takes these incidents very seriously, and in addition to once again improving its compliance measures, the Group will further strengthen its internal management system and do its utmost to prevent any recurrence.