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Governance
Compliance

Basic Policies

Compliance provides a company with a foundation for operating within society. In IHI, compliance policies are based on the following.

  • ● Observing all laws, company rules, and other regulations
  • ● Acting in a fair and responsible manner as a corporate citizen

Basic Code of Conduct Guidelines

In addition to compliance with laws and regulations, our policies must also meet the demands of society.
In FY2015, IHI revamped guidelines for the Basic Code of Conduct and provided it to group employees. We are also working on creating multilingual versions of the guidelines so that all Group employees can understand the Basic Code of Conduct and reflect it in their work.

Basic Code of Conduct

 

Compliance System

Compliance Committee

In accordance with the Basic Code of Conduct for the IHI Group, a compliance committee was established to review, plan and implement important policies. The chief Compliance Officer serves as the chairman of the committee. The committee meets four times annually with the participation of divisional Compliance Officers who serve as compliance managers responsible for implementing policies.
According to the annual action plan and other decisions made by the committee, each Compliance Officer undertakes activities based on the PDCA model and in accordance with their division's particular structure. Each division implements activities among the Group companies for which it is responsible. Information on these activities is shared at the Compliance Committee to ensure steady progress throughout IHI.

Compliance Organizational Chart

As of March 31, 2016

Compliance Hotline

IHI established a Compliance Hotline to facilitate reporting of possible illegal, unethical or improper conduct and to prompt corporate responses to remedy such actions. IHI employees are welcome to seek advice from the Hotline, which is run by the Corporate Ethics Hotline, an independent, third-party organization. Hotline Cards explaining the Hotline mechanism and method of use are distributed to all employees, from senior managers to temporary staffers.
The Hotline received 333 calls in 2015, of which 125 were actually investigated. Many of these calls also were about interpersonal relations in the workplace and were addressed seriously for fast resolution.

■ Number of hotline reports

As of March 31, 2016

Promoting Compliance Awareness

Compliance Education

Compliance awareness is reinforced through compliance education, which is provided on a continuous basis at Group companies and affiliates in the form of level-specific training, e-learning programs and small group dialogue. In 2015, e-learning was provided to ensure that employees proper understood the Compliance Hotline.
Also, discussions focusing on anger management were held as a countermeasure for dealing with harassment and stress. Small group discussions were organized so that participants would be more open to talking, and past surveys on harassment were used as reference to help participants understand how anger and frustration can disrupt the workplace. Participants discussed ways to control emotions on the job and, in response to an active exchange of opinions, were motivated to review their own behavior to help make workplaces more pleasant.
Additionally, divisions educated personnel about laws and regulations applicable to their specific businesses.

Topics in FY 2015

■ Executive seminar on compliance

We must consider compliance not just from the conventional perspective of adhering to regulations, but also in responding to the demands of a global society (Sustainable Development Goals, ESG information disclosure, and others). An external expert gave a lecture to top management on recent world trends, and this seminar was also an effective opportunity for dialogue with external stakeholders.

Executive seminar

Corporate Ethics Month

October is designated by Keidanren, the Japan Business Federation, as a month for improving corporate ethics. In October 2015, IHI's president responded to the federation's initiative by sending a message to directors and employees to remind them that IHI's Basic Code of Conduct declares that IHI acts sincerely, fairly and ethically in step with social norms and international agreements. The message noted that profiteering in ways that violate social norms would not be tolerated. It also urged everyone to enhance IHI's presence and value by earning the trust of both IHI host communities and the international community at large.

Compliance Poetry Contest

To encourage employees to reflect on actions in their workplace, including one's own actions, we invited them to submit senryu, a satirical style of Japanese poetry, on the topics of compliance and CSR. More than 200 senryus were submitted, the best of which were showcased in internal publications.

Compliance Training

Outside guest speakers are retained to deliver compliance training to line managers who guide personnel in daily operations. The program has trained about 670 persons since 2006.
This year, the program was modified to help line managers:
(1) Properly understand the keys to avoiding compliance violations;
(2) Recognize the importance of creating workplaces where self-esteem is high, and;
(3) Uphold management principles.
The concept of self-esteem was incorporated into training for the first time to teach managers that feeling important, being competent and liking oneself are critical for productivity improvement and that enhancing the self-esteem of subordinates helps to prevent compliance violations.

■ Compliance Training

Position Participants
IHI Corporation executives 28
IHI group executives 23
Managers at IHI Corporation and group companies 38
Line managers 82

 

2016 Plans in FY2016

Compliance at IHI in 2015 focused on understanding what is happening in each workplace and reviewing rules to make changes as required. Managers sought out and corrected issues where rules were not being followed or restraints were not working properly. That said, some managers failed to identify problems at the source and saw no need to rectify matters. Going forward, such people must understand the need to lead by example to help solve problems.
Compliance in 2016 carried on with the policies implemented in 2015. Divisions were instructed to examine their workplaces to determine if:
• New rules were needed for daily operations;
• Established rules were observed, and;
• A system existed for third-party verifications.
When necessary, rules were to be adopted and/or modified. Managers were to observe operations down to the smallest detail concerning compliance, listen carefully to questions from subordinates, and propose and implement effective fixes to solve issues as quickly as possible.
The Construction Industry Act Liaison Conference was established in 2013 to consider problems in business divisions, propose solutions and provide guidance, and create opportunities to report and share information. With becoming increasingly global, IHI plans to create a reporting system for divisions in abroad.

Compliance Initiatives

With increasing globalization and borderless implications of corporate actions, fair international competition in terms of price and quality has become increasing necessary to secure commercial opportunities. There is a growing international awareness that corrupt acts such as illegal payoffs must be stamped out. Against a backdrop of regional conflicts and terrorist attacks around the globe, security trade controls have never been more important. In response to this environment, IHI has focused on compliance with the Competition Law, the Anti-Corruption Law and the IHI's own compliance measures for security trade control.

Competition Law Compliance

In addition to training employees on Japan's Antimonopoly Act, the U.S. Sherman Antitrust Act and the EU Competition Law, IHI is working to make its bidding process for public works projects more transparent. No fair trade law violation occurred during FY2015.

Anti-corruption Law Compliance

IHI regularly trains its employees regarding of the U.S. Foreign Corrupt Practices Act (FCPA), the U.K. 2010 Bribery Act and Japan's Unfair Competition Prevention Act. In addition, risk is monitored at both domestic and overseas sales offices throughout the IHI. Currently, IHI implements two sets of internal regulations concerning anti-corruption: a Basic Policy that reflects IHI's commitment to prevent corruption, and Operational Guidelines that set out specific procedures and concrete examples. No anti-corruption law violation occurred during FY2015.

Security Trade Control Compliance

IHI has enacted the internal regulations security trade control regulations and established Security Trade Control Committee to ensure compliance with Foreign Exchange and Foreign Trade Act and related risk-management requirements.
The committee is comprised of a chairman (representative director), secretariat (Legal Division), members from each division and sector, and examination board members. In the case of international transactions, it is responsible for internal screening, self-audits, monitoring, information sharing and raising awareness of related regulations. Going forward, IHI will continue to improve its quality management by addressing needs and challenges identified through self-auditing.

IHI Security Trade Control System

As of March 31, 2016

Topics in 2015

To ensure full compliance with laws and regulations governing competition, rules on contacting and sharing information with other companies were established. These rules went into effect across the IHI Group on October 1, 2015.

Targets in FY2016

IHI will continue enlightening employees to ensure that everyone in the IHI Group complies with all applicable laws and rules related to competition, anti-bribery and security export controls, among others.

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