The IHI Group promotes compliance in accordance with the Basic Rules of Compliance for IHI Group.
The purpose of this initiative is not only to adhere to laws and regulations but also to meet the expectations of society, by understanding the evolving values of society and the demands placed upon us.
Additionally, the IHI Group believes that achieving sustainable growth together with society and our customers requires responding to stakeholder expectations and earning their trust. Based on this philosophy, we have outlined the principles we must practice in the Basic Code of Conduct for the IHI Group.
Furthermore, following the misconduct in the Civil Aero Engine Maintenance Business in 2019, we established the IHI Group Code of Action, which provides guidance for how executives and employees of the IHI Group should make decisions and take actions in their daily work to uphold the Basic Code of Conduct for the IHI Group. The IHI Group also designated May 10th as “Compliance Day” and has been conducting various activities, including distributing messages from top management and carrying out other initiatives.
Toward Reforming Organizational Culture
The IHI Group announced misconduct related to the fuel consumption rates for marine and land-based engines at IHI Power Systems in April 2024, and improper actions concerning the snow removal performance of road snowplows at Niigata Transys in July 2024. Additionally, in March 2025, it was determined by the Japan Fair Trade Commission that IHI Transport Machinery had engaged in activities violating the Antimonopoly Act.
In light of these incidents, the IHI Group is committed to thoroughly implementing measures to prevent violations of laws and misconduct. These measures include establishing systems, organizations and personnel structures to prevent misconduct, and reforming the corporate culture.
Policies
Basic Code of Conduct for the IHI Group
We, the IHI Group, are committed to implementing what is necessary to meet the expectations and gain the trust of not only our customers, business partners, shareholders and colleagues, but also the local and international communities, while maintaining an awareness of global issues. By doing so, we aim to enhance our existential value as we move forward into the future and realize our Group’s management philosophies of “Contribute to the development of society through technology” and “Human resources are our single most valuable asset.”
Fundamental and Universal Principles of the Entire IHI Group
Respect for the rule of law and ethical conduct
We strictly observe laws and ordinances based on a clear understanding of their meaning. We also act sincerely and fairly and in accordance with high ethical standards so that we do not violate social rules or international norms.
Respect for human rights
We fully recognize the importance of, and always strive to respect, human rights during our business activities.
Promotion of mutual understanding
In order to promote mutual understanding with those around us, we strive to disseminate information on our business activities, explain the effects of these activities on the surrounding environment, and engage in an exchange of opinions with our broader communities on a daily basis.
Responsibilities toward People, Society, and the Environment
Responsibilities toward people connected with the IHI Group via our products and services
We establish relationships of mutual trust with the people with whom we are involved in the course of our business, help solve social issues in a variety of fields by using our abilities to the utmost, and develop and provide products and services to assure more comfortable lives for people around the world.
We pay full attention to the safety of the products and services we develop and provide and constantly strive to raise the quality level of our products and services by confirming whether they satisfy customers and users.
We deal appropriately with other parties in our business transactions and seek profit fairly, while at the same time we strive to establish fair and mutually-productive relationships with our customers and business partners.
Responsibilities toward those with whom we work
We strive to respect mutually the character and individuality of all people with whom we work and maintain a safe, supportive, and comfortable environment in which we can work easily.
Responsibilities toward local and international communities
With an awareness that each one of us is a member of society, we actively take part in initiatives to solve the problems faced by society.
No matter the region of the world where we conduct our business, we understand the value of the culture unique to each region and strive to meet the expectations of people living there.
We take a resolute attitude against organizations and forces that threaten social order and safety.
Responsibilities toward the global environment
Based on our recognition that the global environment provides the foundation for the existence of all societies and cultures, we take care so as not harm that which also will be needed by future generations and strive to protect, and reduce the burdens on, the global environment, not only in the course of our provision of products and services but also in all other aspects of our business activities.
Roles and Responsibilities of Senior Management
Roles of Senior Management
Senior Management recognizes that their role is to ensure the realization of this Code of Conduct and takes the initiative to demonstrate leadership in order to put the purposes of this Code of Conduct into practice.
Senior Management ensures that this Code of Conduct is known to all people with whom they work and constantly strives to establish, maintain, and improve effective internal systems and to enhance our corporate value.
Responsibilities of Senior Management
If a violation of this Code of Conduct occurs, Senior Management will strive to take the initiative to solve the problem, discover its cause, and prevent the recurrence of similar violations. They also will promptly disclose accurate information to society, clarify the responsibilities and scope of the authority of the persons involved, and impartially take disciplinary action even upon themselves.
IHI Group Code of Action
In order to comply with this Code of Conduct, we establish “IHI Group Code of Action” as the code prescribing how directors, officers, and employees of the IHI Group should make decision and take action in their daily work.
IHI Group Code of Action
We truly understand and will comply with any and all applicable rules.
We do not engage in any wrongdoing.
We respect human rights.
We make safety and quality for our customers a top priority.
We enter into fair and legitimate transactions.
We never impair the safety of ourselves or our colleagues.
We strictly manage and control information.
If we discover an issue, we report it immediately.
The IHI Group defines “compliance” as employees and others practicing the following behavior in the course of their work in accordance with the Basic Code of Conduct for the IHI Group.
Strictly observe all laws, internal rules, and other regulations
Act in a fair and responsible manner as business people
Governance
Compliance Committee
The IHI Group has established the Compliance Committee under the Risk Management Conference, which is chaired by the CEO and operates in accordance with the IHI Group Basic Rules on Risk Management.
The Compliance Committee is composed of the Group Compliance Officer as its chairperson and persons responsible for compliance implementation and promotion from each division as its members. It deliberates and formulates key policies related to compliance, including the prevention of competition law and anti-corruption law violations, and promotes other compliance activities. At the beginning of each fiscal year, the committee reports the previous fiscal year’s performance and the plans for the current fiscal year to the Management Committee.
The decisions made by the Compliance Committee are disseminated to each division through its members and incorporated into compliance activities tailored to the business structure.
The corporate divisions plan and implement compliance activities for the IHI Group in line with the policies determined by the Compliance Committee. They also monitor the compliance activities of each division and provide necessary guidance and support as needed.
Compliance matters deemed particularly important to management are reported to and discussed by the Board of Directors.
Compliance Structure
Compliance Committee
Chairperson
Officer in charge of Group Compliance
Members
Persons responsible for compliance implementation and promotion
Secretariat
Legal Division
Number of meetings convened in FY2024
2
Risk Management
Risk Management Activities for FY2024
Following the revelation of a series of misconducts, the IHI Group encouraged employees to voluntarily report any potential improper activities through a CEO message addressed to all employees, aiming to identify and address any other potential misconducts at an early stage.
Additionally, the Internal Audit Division and the Legal Division, with the involvement of an external consultant, conducted a joint audit with a focus on cartels and bid-rigging. The audit included risk assessment for potential violations of antitrust laws, taking into account the market environment of each product and service. On-site inspections were carried out for products and services identified as high-risk.
Compliance Hotline
The IHI Group operates a Compliance Hotline under the supervision of the Legal Division in accordance with the Basic Rules of Compliance Hotline for the IHI Group. This hotline serves as an internal reporting mechanism aimed at identifying and addressing potential or actual violations of laws, internal or external rules, at an early stage or before they occur to ensure appropriate corrective measures are taken. The rules prohibit any disadvantageous treatment, harassment, or similar actions against whistleblowers, and individuals who violate this prohibition are subject to disciplinary action in accordance with applicable employment regulations. Reports can also be made anonymously. The content of reports, as well as information obtained through investigations, is protected to prevent any leaks.
The IHI Group provides information on how to use the hotline and its operational policies on the IHI Group’s internal website accessible to group employees. Additionally, the hotline is promoted through compliance-related training programs within the IHI Group.
IHI Group officers, employees, and temporary staff can use this hotline to report issues or consult with an external specialized organization without going through their respective departments.
The hotline is not only available in Japan, but is also operated overseas. Reports are accepted in the primary languages used in each country or region.
Furthermore, in order to monitor compliance-related risks and enable concrete responses, we evaluate the number and content of reports received, as well as their correlations with employee awareness surveys. This evaluation supports the identification of risk trends and the development of countermeasures by each department.
Framework of the Compliance Hotline
Quality & Compliance Training
The IHI Group extended quality & compliance training for all officers and employees* at least once a year to all Group companies beginning in fiscal 2019. The aim of this training is to instill and establish the IHI Group Code of Action as well as its IHI Group Quality Declaration. Training content also touches on the Basic Code of Conduct for the IHI Group.
From fiscal 2020, the Group has been conducting quality compliance education program with the aim of deepening understanding of quality issues. Case studies are employed to teach the mechanisms and underlying causes of quality-related compliance issues, as well as what should be done to prevent their occurrence.
In fiscal 2024, following the discovery of the quality issues, the Group conducted special training for all managers at the affiliated companies in question. In addition, workshops were held for all employees with the aim of instilling and establishing a deeper awareness of quality issues.
The IHI Group distributes a monthly “Compliance Newsletter” to employees through Compliance Managers, providing relevant compliance topics to enhance employee awareness of compliance. In addition, articles titled “Legal Topics,” which explain recent compliance issues that have gained attention in society, are distributed approximately three times a year via email and made available on the IHI Group’s internal website.
Metrics and Targets
Number of Compliance Hotline Reports
(Unit: Reports, Scope: IHI and affiliated companies)
Item
FY2021
FY2022
FY2023
FY2024
Reports
263
286
314
246
Of which, the number of compliance violations recognized
─
─
─
9
Corruption, bribery
─
─
─
0
Discrimination, harassment
─
─
─
9
Customer privacy data
─
─
─
0
Conflict of interest
─
─
─
0
Money laundering, insider trading
─
─
─
0
Number of Compliance Training Participants*
(Unit: People)
Item
Scope
FY2021
FY2022
FY2023
FY2024
Quality & Compliance Training
Japan
IHI and subsidiary companies in Japan
26,243
25,870
25,379
26,566
Overseas
Subsidiary companies overseas
4,938
5,334
5,072
5,923
Officer training
IHI and subsidiary companies in Japan
─
─
─
─
Training for line managers
Subsidiary companies overseas
─
─
─
─
e-learning
Japan
21,659
21,635
21,798
21,028
Overseas
─
─
─
─
Participants include officers, employees, temporary employees, re-hired employees, advisors and contract employees, part-time employees, and fixed-term employees.
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