Fujikura Ltd.

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ESG

Governance

Compliance

Fujikura Group Code of Conduct

In order to embody the MVCV Group management philosophy, we must not only act in accordance with standards of conduct that enhance the corporate value of the Fujikura Group, but also act in a manner that does not damage the corporate value we have built up over the years.
To this end, we have established the principles of conduct that each and every employee should observe as the "Group Code of Conduct" and are promoting group-wide efforts to establish corporate ethics.

Fujikura Group Code of Conduct

1.Code of conduct for ensuring employees’ wellbeing and creating a safe, secure and pleasant work environment
 1.1 Compliance with labor laws and managing health and safety
 1.2 Respect for human rights and diversity
2.Code of conduct for ensuring each employee performs operational procedures properlyCode of conduct for ensuring each employee performs operational procedures properly
 2.1 Promotion of responsible job performance and communication
 2.2 Ensuring quality assurance
 2.3 Compliance with accounting and tax rules and establishment of an internal control system
 2.4 Corporate asset management and asset value protection
 2.5 Ensuring information security through appropriate document and data management
 2.6 Proper intellectual property management
 2.7 Thorough trade contro
3.Code of conduct for maintaining relationships with business connectionsCode of conduct for maintaining relationships with business connections
 3.1 Keeping promises to customers
 3.2 Sound relationships with customers and fair competition
 3.3 Ethics and compliance requirements for sound relationships with distributors
 3.4 Sound relationships and appropriate transactions with suppliers
4.Code of conduct for communicating with and contributing to the development of communities and societyCode of conduct for communicating with and contributing to the development of communities and society
 4.1 Contribution to and coexistence with the local community and society through business activities
 4.2 Active and appropriate communication with society
 4.3 Reduction of environmental footprint and realization of a sustainable society
5.Code of conduct for increasing shareholder value and for dialogue with investorsCode of conduct for increasing shareholder value and for dialogue with investors
 5.1 Timely and appropriate disclosure of information
 5.2 Fair and transparent decision-making
6.The basic code of conduct for compliance
 6.1 Ensuring correct action and compliance with laws and regulations and internal rules

Management Structure

Compliance with various laws and regulations by Fujikura employees and other persons engaged in Fujikura operations is overseen by the Risk Management Committee, which is chaired by the President. The Risk Management Committee met 23 times in fiscal 2020, including regular as well as extraordinary meetings. At the three meetings held in the first and second halves of the fiscal year, reports were made on legal compliance education, case studies, and other measures planned by the corporate division to identify issues and share information.

Compliance Structure Diagram

Compliance Structure Diagram

Whistleblower System

The Fujikura Group operates an Whistleblower system that stipulates protection, confidentiality and prohibition of disadvantageous treatment of whistleblowers. The purpose of this system is to detect and respond quickly to fraud / compliance, harassment, violation of work rules, etc. In Japan, in addition to the internal contact point, an external contact point has been set up by an external lawyer to receive reports from Fujikura Group employees.
In addition to the reporting contact established by each overseas subsidiary, a reporting contact has been established with an external specialized company to establish an internal reporting contact at the Fujikura Group's overseas locations.

[Number of Whistleblower Reporting and Counseling]

FY2016 FY2017 FY2018 FY2019 FY2020
26 20 37 47 41

Compliance with the Competition Law

At the meeting of the Board of Directors held on September 28, 2009, participants passed a resolution on the Fujikura Anti monopoly Act Compliance Program with a view to ensuring compliance with the law through the announcement by the President of the company's commitment to compliance and also through the provision of relevant instructions to all directors and employees as well as through the enhancement of our in-house compliance system.

Measures Taken

  • The Board of Directors resolved never to take part in cartels in the future. (Mar. 2009)
  • Established the Fujikura Anti monopoly Act Compliance Program (Sept. 2009)
  • Established banning activities that violate relevant departments (Dec. 2009)
  • Launched e-learning education, which is provided at least once a year (Feb. 2010)
  • Established a whistle blower system
  • Regularly provide education and training on anti monopoly- and competition-related laws and regulations

Implementation of Regular Audits and E-Learning

The Fujikura Group regularly conducts audits in order to confirm the internal compliance system and compliance status of the Fujikura Anti-Monopoly Compliance Program.
Fujikura established regulations on contact standards with competitors as the lower regulations of the Fujikura Anti-Monopoly Compliance Program and imposes certain limits and standards when employees have contact with competitors. As an ongoing effort every year, we conduct e-learning on Japan’s Antimonopoly Act for those targeted employees in Group. We will continue to hold such e-learning education in the future.
In FY2020, e-learning training (study and test) on antitrust law was provided to Fujikura Group subjects. A total of 3,125 employees participated in the training, for a total of 4,688 hours of training. In addition, education and training on antitrust and competition laws were provided in rank-based training programs.

Violations in FY2020

Anti-Corruption

The Fujikura Group Anti-Corruption Policy was approved by the Board of Directors and the Managing Directors Meeting and was established on April 1, 2014. After that it was revised 2nd edition on June 2020. The Fujikura Group disseminates information on this policy in the group. This policy also regulates compliance in the supply chain.

The Fujikura Group Anti-Corruption Policy

The directors, officers and employees of Fujikura Ltd. and its global subsidiary companies (hereinafter “Fujikura Group,” and when referring to the directors, officers and employees of Fujikura Group, “Fujikura Group Members”) comply with applicable laws and regulations related to the prevention of bribery in all countries and areas where Fujikura Group conducts business activities (hereinafter “Anti-Corruption Laws”; the term Anti-Corruption Laws includes, but is not limited to, each country/area’s Criminal Law, Unfair Competition Prevention Act, FCPA, Bribery Act 2010, and the like; furthermore, in addition to the relevant country/area’s laws and regulations, the term Anti-Corruption Laws also includes the situation where another country/area’s laws and regulations, are applied extraterritorially or on some other basis). In addition, Fujikura Group Members comply with the Fujikura Group Anti-Corruption Policy (hereinafter “this Policy”).
This policy was revised on June 1, 2020 to state that business entertainment and gifts should be properly handled, even when there are no violations of laws and regulations.

Education on Anti-corruption

Every year we hold at least one session of e-learning comprising learning and comprehension test in order to develop the understanding of the Fujikura Group anti-corruption policy and raise awareness about anti-corruption examples(ex. anti-bribery) among officers and employees. In Fiscal 2020, course participants in this training reached a total of 4,602 and they spent a collective 6,903 hours in training.

Assessing the risk of corruption in our business

Risk assessments will be conducted as appropriate, primarily by the Legal Office. The risk assessment is based on the external environment, including national, regional, and industry conditions; the degree of contact with public officials, etc. (licensing, customs clearance, etc., customers, etc.); the maintenance and penetration of internal rules; and the status of training.

Anti-corruption Initiatives in the Supply Chain

The Fujikura Group includes provisions on anti-corruption and exclusion of anti-social forces in the basic business agreements it concludes with suppliers for the procurement of materials and components.
On April 2, 2010, we established the Fujikura Group Procurement Division Code of Conduct in an effort to prevent fraud and corruption in procurement and we are making efforts under it to prevent a breach of duties. In addition, we have established guidelines on establishing appropriate relationships with business partners, and we promote fair and equal procurement activities through regular training provided to employees. The Fujikura Group CSR Procurement Guidelines include provisions prohibiting corruption and bribery and abuse of an advantageous position to prevent corruption, including among suppliers.

Prevention of Insider Trading

The Fujikura Group has established Rules on Management of Internal Information to clearly delineate the internal structure for compliance with rules of information disclosure designed to ensure fair and impartial markets, and to prevent insider trading by officers and employees.

Education on Preventing Insider Trading

Fujikura began providing a new e-learning course (study and testing) for officers and employees in fiscal 2020 to ensure knowledge of and strict compliance with laws and regulations on insider trading. The total number of course participants has reached 4,639 and they collectively participated in 2,830 hours of training.

Export Control

In the international community a new national surveillance capitalism has emerged in China to counter the order of the liberal capitalistic system championed by Europe and the U.S. The new order advocated by China is now affecting existing rules and a battle over the competitive superiority of these systems in terms of economic security has begun.
Economics and security (national defense) are two sides of the same coin. Economic security measures in the U.S. are being drastically revised, starting with the fiscal 2019 National Defense Authorization Act. Revisions are not limited to the U.S. Export Control Reform Act (ECRA). A wide range of existing rules are being revised from the viewpoint of security. It is necessary to have an in-depth understanding of trends in the U.S.
On the other hand, China is looking to the U.S. as a reference in establishing its legal system, and we also need to keep a close eye on the legal system that will be created in China.A movement toward revising the rules of competition from the perspective of economic security has begun in Japan as well.The need for Japanese companies to pay close attention to national government policy on trade control (export control) for security reasons has also emerged in this climate.
Fujikura officially approved the Basic Policy of the Fujikura Group for Export Control at an executive committee meeting in 2015, and clearly declares the commitment of the entire Group to security export control initiatives as a member of the international community.

Basic Policy of the Fujikura Group for Export Control (Established in October 2015)

  • We make it the basic policy of the Fujikura Group companies not to participate in transactions with a possibility of undermining maintenance of international peace and safety.
  • We comply with the laws relating to the export control which are applicable in the country or area where the group companies each does business activities.
  • In order to comply with the above-mentioned basic policy and laws, the group companies each will establish its system and rule for export control.

Export Control Management Structure

The president is the ultimate authority in charge of export control and a Corporate Governance Unit was established under this ultimate authority. The corporate officer in charge of the Corporate Governance Unit assists the CEO and supervises and guides the Export Control Office in the unit from an independent perspective. The Export Control Office manages exports from a company-wide perspective.
The corporate officer in charge of each business division is responsible for export control operations in that division, under the oversight of the Export Control Office.
The Export Control Office hosts a liaison meeting three times per year that includes export control managers from across the company. During the meeting, information on the status of export control is shared and efforts are made to raise awareness and increase knowledge among export control managers.

Export Control Management Structure

Awareness Activities Internally

Category Details
1. Internal training Fujikura is putting effort into providing e-learning courses for all employees. In FY2020, we provided a basic course on export control as an e-learning course for employees engaged in export control at Group companies in Japan and made this mandatory training. A total of 4,405 employees also took voluntary e-learning courses and open courses (e-learning in FY2020 due to COVID-19) on various topics (basic knowledge, classification decisions, transaction screening). (See “4. Group Company Guidance and Training”) A total of 129 employees took individual onsite tutoring courses (held via Web conferencing in FY2020 to prevent the spread of COVID-19).
2. Internal audits Internal audits of all divisions in Fujikura are performed through a combination of written audits and onsite audits (audits were performed via Web conferences in FY2020 to prevent the spread of COVID-19).
3. Streamlining of export control operations We aim to streamline operations by systemizing export control with the help of IT, including applicability transaction review, determination of regulated goods* and screening of problem customers.
* Determining whether goods for export or technologies for provisions (including programs) are found on lists of regulated items.
4. Expansion of export control staff Although we were not able to travel to Group companies to provide guidance and training in FY2020 due to the COVID-19 pandemic, we provided e-learning courses for Group companies in Japan and a total of 683 employees took courses.
5. Professional certification for export control employees During fiscal 2019, visits were made to six domestic Group company locations (including branches) to develop a closer relationship with each company and provide guidance and training on export control. An e-learning course was also launched for managerial level employees in overseas Group companies to give them a deeper understanding of export control. A total of 403 people took the course.

Serious Legal Violations in FY2020 (boundary: Fujikura Group)

As a result of efforts in fiscal 2020, there were no cases of serious legal violations.

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