Compliance
Governance [Strengthening of corporate governance and compliance]
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- Basic Concepts on Compliance
- Thoroughgoing Compliance
- Promoting Compliance in Collaboration with Suppliers
- Properly Handling Reports and Accommodating Requests for Consultation via the Establishment of In-house and External Helplines (Whistleblowing System)
- Compliance Education and Training
- Legal Punishment of Employees for Corruption / Fines and Other Orders Imposed by Authorities
- Relationship with Business Partners
- Information Security
- Transparency regarding Taxes
Basic Concepts on Compliance
- The Sumitomo Rubber Group
In the Sumitomo Rubber Group, we believe that “legal compliance and the upholding of corporate ethics form the cornerstone of a company’s survival and are crucial to long-term corporate vitality and competitiveness.” To ensure that this belief is embraced by all, we formulated the “Regulations on Corporate Ethics Activities” and the “Sumitomo Rubber Group Code of Conduct” in February 2003. These principles are continually enforced, informing our efforts to develop a compliance structure for the entire Group and foster compliance awareness among employees. In addition, in 2004 we established a Compliance Consultation Office offering an in-house point of contact and have commissioned an external lawyer to serve as an external contact. Furthermore, we provide all employees with a compliance card featuring a message designed to instill compliance awareness as well as the abovementioned office’s contact information to facilitate reporting. In this way, we ensure that every employee knows about the compliance reporting line, which operates outside the regular reporting lines within the job hierarchy. We have thus developed a structure capable of ensuring the early detection of misconduct.
Structure of Compliance Initiatives
Sumitomo Rubber Group Code of Conduct
Our Code of Conduct provides all Sumitomo Rubber Group officers and employees with specific, easy-to-understand guidelines regarding the basic stance they should take and the mindset they should adopt in the course of their business activities from the aspect of legal and regulatory compliance. Moreover, our business partners in transactional relationships with the Group are expected to act in accordance with this Code of Conduct. The Code of Conduct is available in the eight languages listed below. All versions can be accessed on the Company’s corporate website.
Thoroughgoing Compliance
- The Sumitomo Rubber Group
We drive home to our employees the importance of avoiding all wrongful conduct, including corruption, through our “Corporate Code of Conduct,” which was updated in 2022. Specifically, this Code of Conduct prohibits employees from engaging in monopolistic practices, unfair competition or business dealings, or bribery while requiring the severing of any relations with anti-social forces. Furthermore, it imposes a ban on the provision of entertainment, gifts, donations or other benefits in excess of generally accepted customs as well as engagement in insider trading.
In fiscal 2022, we continued to provide compliance training covering various areas at domestic and overseas bases. In addition, we have focused on developing a structure that enables each base to autonomously implement compliance activities on its own. Going forward, we will strive to help all Group employees raise their compliance awareness.
Promoting Compliance in Collaboration with Suppliers
- The Sumitomo Rubber Group
In addition to ensuring that its Code of Conduct is understood and upheld by all employees and thereby securing strict compliance, the Sumitomo Rubber Group has formulated Procurement Guidelines that include a universal prohibition against bribery and corruption. Our suppliers and other business partners are asked to comply with these guidelines. Moreover, we have incorporated clauses aimed at preventing corruption into contracts signed by these business partners. In these and other ways, we strive to secure thoroughgoing compliance throughout our supply chain.
Furthermore, we conduct proper due diligence in a manner that aligns with conditions in each region and country when, for example, acquiring a business from other companies, executing M&A via the purchase of shares or commissioning an external agent to handle our business on behalf of the Group. Specifically, we confirm the compliance status of our counterpart or agent. When we open new transactions, we similarly conduct due diligence via, for example, the use of an external audit company, to determine the soundness of our counterpart, with the aim of mitigating the risk of compliance violations.
Properly Handling Reports and Accommodating Requests for Consultation via the Establishment of In-house and External Helplines (Whistleblowing System)
- The Sumitomo Rubber Group
In February 2004, the Sumitomo Rubber Group set up the Corporate Ethics Help Line, an internal reporting line designed to accommodate requests for consultation regarding various issues associated corporate ethics, including harassment, monopolistic practices, corruption and other misconduct.
In addition to educating employees on the importance of compliance, we guarantee that the anonymity of the whistleblowers is protected, with no detrimental treatment imposed upon them. We strive to let our employees, as well as individuals outside the Group, know about this guarantee and thus promote their use of our helpline.
Whenever a report is received, we immediately launch an investigation into the incident, conducting interviews with relevant departments and individuals to confirm the facts. Once it is determined that misconduct has occurred, we implement appropriate measures in accordance with internal rules.
In 2022, a total of 48 cases were brought to the helpline. Of these, 23 cases were associated with power harassment. We strove to properly handle these cases, responding by, for example, taking disciplinary action against the perpetrators or executing other rule-based measures as appropriate in addition to implementing training focused on the prevention of such harassment.
Number of Reports and Requests for Consultation
Corporate Ethics Help Line
As explained above, the Sumitomo Rubber Group maintains the Corporate Ethics Help Line as a contact through which it collects information regarding possible violations of laws, regulations or corporate ethics and accommodates relevant inquiries.
Officers and employees of the Sumitomo Rubber Group at home and abroad, as well as its business partners around the globe, can report to or request consultation with this helpline.
The Corporate Ethics Help Line is accessible from here.
Compliance Education and Training
- The Sumitomo Rubber Group
The Sumitomo Rubber Group provides employees with education and training on such important subjects as compliance with competition laws, the prevention of bribery and the prohibition of misconduct. Specifically, we have designated October as annual Compliance Month to help employees raise their compliance awareness. Throughout this month, we provide e-learning to all employees while, on an as-necessary basis, implanting training for new recruits and conducting grade-specific training programs. As such, we strive to ensure that all employees are well-versed in these compliance-related subjects.
In fiscal 2022, we hosted briefings on the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors and the Act against Unjustifiable Premiums and Misleading Representations. At the same time, we held similar training sessions at domestic and overseas Group companies. In this way, we engaged in ongoing activities aimed at securing proper compliance throughout the Group.
We strive to not only ensure compliance within the Group but also provide suppliers with compliance training and otherwise endeavor to enable our entire supply chain to maintain compliance.
Results of Compliance Activities
| Item | Detail / Target | Number of recipients |
|---|---|---|
| Compliance | New recruits, employees, officers and managers Sumitomo Rubber Industries, Ltd. and Group companies |
590 |
| Export control: The Foreign Exchange and Foreign Trade Act and compliance with OFAC regulations | Sumitomo Rubber Industries, Ltd. and Group companies | 67 |
| Transactions with subcontractors: The Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors | Sumitomo Rubber Industries, Ltd. and Group companies | 412 |
| Measures to prevent harassment | Group companies | 329 |
| Contracts in general | Sumitomo Rubber Industries, Ltd. and Group companies | 135 |
Legal Punishment of Employees for Corruption / Fines and Other Orders Imposed by Authorities
- The Sumitomo Rubber Group
In fiscal 2022, the number of cases in which the Sumitomo Rubber Group was subjected to fines, punishment or other legal measures, was zero.
Since 2017, no employee has been reprimanded or dismissed due to the violation of “Compliance Rules on Bribery Prevention” established by the Group.
Relationship with Business Partners
- The Sumitomo Rubber Group
The Sumitomo Rubber Group has constantly engaged in activities aimed at securing compliance. These activities encompass business operations undertaken by transactional counterparts, agents and other third parties, including a number who provide brokerage services for such undertakings as joint venture businesses. For these third parties, we host compliance training sessions to help them raise their awareness regarding the prevention of corruption. We have also updated contracts signed with them, incorporating clauses mandating the observance of the Sumitomo Rubber Group’s policy on the prevention of corruption.
With regard to suppliers, we have formulated Procurement Guidelines that include the universal prohibition of any form of bribery and corruption. A similar prohibition is included in clauses stipulated by contracts signed with suppliers as well. Thus, we promote initiatives to ensure strict compliance throughout the entire supply chain.
Information Security
- The Sumitomo Rubber Group
The Sumitomo Rubber Group is acutely aware of the importance of protecting and properly managing privacy and secret information. Accordingly, we strive to ensure the appropriate handling of this information. To date, we have formulated a “Privacy Policy,” a “Social Media Policy,” “Rules on the Protection of Privacy Information,” a “Manual on Privacy Information Protection Measures” and “Information Security Rules.” We leverage e-learning programs and in-house news postings to help employees gain deeper understanding of these policies and rules, along with other precepts regarding the protection of privacy information. Moreover, we annually confirm the status of the confidential corporate information possessed by each department in order to ensure that the importance of information management is understood by all.
In fiscal 2022, we conducted e-learning on a Companywide basis, updating employees on relevant topics, including the content of the revised Act on the Protection of Personal Information. Simultaneously, we conducted cybersecurity assessments for domestic and overseas bases and implemented additional cybersecurity measures. Looking ahead, we will continue to strengthen information security on various fronts, including aspects of infrastructure and human resources.
Transparency with Respect to Taxes
- The Sumitomo Rubber Group
In 2022, the Company disclosed its “Tax Policy” on its corporate website. Also, we are promoting global strategies for tax affairs, with the target year set at 2025.
Tax Policy
As a global enterprise that is dedicated to observing and respecting all applicable laws and regulations, engaging in fair and transparent business activities, contributing extensively to local communities and society and earning the trust and respect of our stakeholders, the Sumitomo Rubber Group (hereinafter, “our Group”) has made it its basic management policy to continue producing new value that will make our customers’ lifestyles more pleasant and attractive while pursuing the ongoing enhancement of corporate value for stakeholders. One aspect of this basic management policy is our Group’s dedication to fulfilling our tax obligations in an appropriate and ethical manner so that we may contribute to the development of the local and regional communities in which we operate.
Our Management of Tax Risks
By a resolution of our Board of Directors, our Group has established and fully implemented the necessary framework to ensure the proper execution of business of our Group. Management risks that may adversely and materially affect the business activities of the Group shall be addressed by the relevant division and/or subsidiary in advance through the analysis of said risks and the planning of countermeasures in accordance with corporate regulations concerning risk control, which stipulate risk management rules for the entire Group. Furthermore, we have also established and implemented a system of checks to ensure that our business activities are fair and honest while striving to minimize our Group’s tax risks. If necessary, advice and guidance may be sought from professionals, including our tax advisors, in analyzing and planning countermeasures against such risks.
Our Approach to Tax Planning
Our Group engages in tax planning activities that appropriately reflect economic entities and are in full accordance with OECD Guidelines as well as the relevant laws and regulations of the various countries in which we operate. Furthermore, our Group has pledged that we will neither exploit tax havens as a means of avoiding taxation nor engage in business dealings whose primary aim is the reduction of our tax burden.
Our Relationship with Tax Authorities
Our Group considers daily communication with every stakeholder to be an essential aspect of staying on top of the responsibilities of our Group. Our Group hopes to build a trust-based relationships with Tax authorities through the appropriate disclosure of all pertinent information in a timely manner and fully intends to enhance the transparency of our operations. We will also file tax returns and pay taxes on time in accordance with all relevant laws and regulations while working with Tax authorities to cooperate with official requests by promptly providing all requested information.