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Risk Management and Compliance
Risk Management and Compliance Policies
At Toshiba, throughout our worldwide operations, we strive to ensure compliance with laws and regulations, social and ethical norms, and internal rules. Giving top priority to human life and safety and to compliance in everything we do underpins our commitment to promoting business activities through fair competition and serving the interests of customers to the best of our ability.
We consider thorough adherence to the Toshiba Group Standards of Conduct (SOC), which embody the Basic Commitment of Toshiba Group, to be the foundation of our compliance. Thus we are working toward the SOC becoming an integral part of the entire Toshiba Group.
Risk Management and Compliance Management Structure
In order to ensure thorough risk compliance management at Toshiba, a board member is assigned the responsibility of overseeing risk compliance.
If a serious noncompliance incident occurs, we swiftly consider how to deal with it and take the necessary action in the risk compliance system.
Furthermore, we endeavor to reinforce risk compliance management by closely examining ways to prevent SOC violations and the recurrence of similar incidences through cooperation among the relevant divisions.
Risk Management and Compliance Management Structure
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- CPL is an abbreviation combining CL (contractual liability) and PL (product liability)
Response to Compliance Violations
In the event of a major noncompliance incident, Toshiba investigates all facts to identify the cause of the violation, treats the facts seriously, and handles such violations rigorously by imposing appropriate disciplinary sanctions on the offenders or implementing other such measures. It makes every effort to prevent recurrence and discloses information in a proper and timely manner as necessary.
In FY2011, we conducted a survey to check whether there were any inappropriate business dealings similar to the dishonest act committed by a Group company employee. At the same time, we are implementing Group-wide initiatives to prevent the recurrence of similar incidents, including the provision of e-learning.
Whistleblower System
In January 2000, Toshiba established a whistleblower system to collect internal information on SOC violations, particularly those concerning laws and regulations, and to deal with wrongdoing through a self-rectification system. Under this system, an employee can report an incident and seek advice. In April 2006, Toshiba also set up a supplier whistleblower system to receive reports from suppliers and business partners to prevent SOC violations by employees in charge of procurement and order placements for construction and other works.
By putting in place systems to receive reports from inside and outside the company, Toshiba anticipates that the system will play a role in deterring SOC violations in addition to self-rectification. Toshiba Group companies have also introduced a similar whistleblower system.
Toshiba’s Whistleblower System
Compliance Situation Inspection and Audit
The Legal Affairs Division periodically communicates with the Corporate Audit Division in order to confirm the state of implementation with respect to the various compliance measures. Based on the actual state of implementation, steps are taken to enhance the effectiveness of management audits and the audit results are reflected in compliance measures.
Every year Toshiba conducts an intranet-based employee survey on the Toshiba Group Standards of Conduct(SOC). The results are used in formulating measures for enhancing awareness on compliance.
Risk Management and Compliance Education
Booklets on Toshiba Group Standards of Conduct in various languages
Trainer education for subsidiaries in Asian countries
With a view to ensuring compliance with the SOC, Toshiba Group provides various education programs such as education based on the needs of different organizational levels and job functions, as well as seminars on compliance topics for top executives. We also provide e-learning for all employees on a continual basis.
For overseas subsidiaries, we have developed e-learning materials in English with a view to preventing serious SOC violations such as the formation of cartels and bribery. We offer such e-learning to our subsidiaries in Europe, the United States, and Asia. In China, we have developed a collection of risk compliance examples based on local circumstances and distributed these materials for compliance education in Toshiba Group companies in China.
We also provide education appropriate to the characteristics of individual regions to prevent the recurrence of similar SOC violations in each region (as in the past). Thus we have been promoting initiatives that suit the circumstances of individual regions.
Developing various measures to promote rigorous compliance
In light of global regulatory trends, Toshiba has been making rigorous efforts to prevent cartelization and bribery. In FY2011, the Company continued to step up its initiatives to ensure thorough compliance.
Specifically, the initiatives involve Toshiba Group companies worldwide performing self-audits based on two Toshiba- developed guidelines: one on antitrust and the other on anti-bribery. Through these audits, Toshiba Group aims to identify compliance levels at the companies concerned and to provide thorough compliance education.
Furthermore, in order to prevent bribery in accordance with the UK Bribery Act (enforced in July 2011), which stipulates the prohibition of bribery to private citizens as well as public officials, Toshiba established new anti-bribery guidelines by drastically revising its old guidelines on bribery to foreign public officials and requested Toshiba Group companies worldwide to adopt the new guidelines. At the same time, we also educated trainers in Japan as well as in Europe, the United States, and Asia with the aim of promoting the adoption and observance of these guidelines. Toshiba promotes rigorous compliance with business-related laws and regulations by providing education, effectively utilizing databases that contain relevant information, and performing periodic self-audits.
In addition, Toshiba’s compliance initiatives are objectively evaluated by outside lawyers once a year. We make improvements to reduce risks pointed out by third parties in order to continue to enhance our compliance structure.
Developing measures to continue breaking relationships with anti-social groups
In order to end relations with anti-social groups, Toshiba has made an explicit statement to that effect in the Toshiba Group Standards of Conduct and has also taken various actions, including adding a clause to standard contracts to prohibit relationships with gang groups. In support of the recent enforcement of the Organized Crime Control Ordinances by local governments across Japan, Toshiba will consult with its legal advisors to request that all Toshiba Group companies review their contract clauses and thoroughly investigate the backgrounds of their business partners.
Fostering a compliance-oriented culture through workplace meetings
Meeting at which participants actively exchange opinions
Toshiba Group places the highest priority on “life, safety, and compliance” as part of its CSR management. Each workplace holds meetings to raise the awareness of each and every employee with regard to compliance matters, so as to make compliance an integral part of the corporate culture.
These meetings aim to prevent SOC violations by encouraging managers and employees to discuss various problems that are likely to arise in the workplace and to share their thoughts with each other in order to create a work environment where they can easily seek advice on all kinds of problems.
In FY2011, meetings were held on topics concerning compliances such as braking relationship with anti-social groups and bribery as well as other topics such as employee etiquette.
In addition, having created a database to compile information about the implementation status of the meetings as well as by soliciting the frank opinions of employees via their workplace managers, we are now able to monitor the level of compliance awareness at each workplace and to develop new measures in the future.
Political Contributions
The Toshiba Group Standards of Conduct stipulates that Toshiba Group shall not provide inappropriate benefits or favors to any politician or political organization.
In the case of offering political contribution, procedures in accordance with internal rules are followed as well as compliance with the Political Funds Control Law in case of Japan is strictly ensured.
Business Continuity Plan (BCP)
Failure to respond appropriately to large-scale disasters such as earthquakes, typhoons, and floods could result in the long-term closure of operations, triggering significant financial losses, ultimately affecting our stakeholders.
Toshiba implements measures to ensure the safety of employees and their families, support recovery of devastated areas, and maintain business sites and factories. In addition, Toshiba continually updates its Business Continuity Plan(BCP)covering those businesses that have large social and economic impacts in order to minimize any interruption in the supply of goods and services in the event of natural or other disasters such as an influenza pandemic.
In FY2010, Toshiba reinforced the BCP and safety measures concerning its headquarters in Tokyo.
Reviewing the BCP and disaster strategies based on experience of the Great East Japan Earthquake
The Great East Japan Earthquake was the largest earthquake and tsunami ever recorded in Japan’s history and caused unprecedented damage.
Iwate Toshiba Electronics Co., Ltd., Toshiba’s semiconductor manufacturing subsidiary located in Kitakami City, Iwate Prefecture, stopped operations immediately after the Earthquake. However, the company partly restarted production in mid-April and is now back in full operation. In order to minimize the effects on customers, we manufactured some of the company’s products at our Oita Operations, Himeji Operations - Semiconductor, and Kaga Toshiba Electronics Corp.
Based on the experience of the Great Earthquake, Toshiba Group has reviewed its assumptions about damage in the BCP that the Group has been developing company-wide since 2007. We are currently working to protect the safety of employees at individual business sites while also implementing measures to ensure business continuity.
Developing measures to provide a stable supply of parts based on BCP procurement guidelines
Many of our suppliers, including parts manufacturers, suffered damage from the Earthquake, especially companies in affected areas in the Tohoku region.
Since immediately after the Earthquake, we have made every effort to minimize the effects of material supply shortages on production by using every available means to secure supplies, including taking an inventory of all supplies (including stock in trade), manufacturing parts at sites other than suppliers’ plants, and implementing emergency measures to use alternative products.
At the same time, we brought together Toshiba Group’s collective efforts to support affected suppliers in restoring their production lines as soon as possible.
Based on the experience of the Great East Japan Earthquake and the floods that occurred in Thailand in September 2011, the Procurement Division newly established BCP procurement guidelines in order to clarify the procedures for risk assessment during normal times, in addition to rules and basic operations required in the event of an emergency. We have also incorporated the BCP in the Toshiba Group Procurement Policy, which was revised in May 2012, and explicitly specified what cooperation is required from suppliers in order to minimize the effects of disasters on production and to facilitate quick disaster recovery.
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