Fair Operating Practices

SDGs Covered by the Vision

Performance Indicators to Monitor the Progress in Achieving the Vision and Activity Results

• *1An organization overseeing internal controls, responsible for promoting a compliance framework to ensure that all business activities of the DNP Group are carried out in an appropriate manner. Consisting of directors and corporate officers in charge of organizational units within the head office, the committee holds regular monthly meetings to formulate and determine policies and various activity implementation plans concerning the compliance framework of the entire Group. The committee is also responsible for comprehensively inspecting, reviewing and providing guidance for the framework established and operated in accordance with the implementation plans.
• *2Training provided on a continuous basis since 2003. The heads of each business division provide lectures on corporate ethics as a foundation of business and explain to their staff the issues and countermeasures relevant to the operations of their respective divisions.

Structure to Promote Management and Training

As an organization for overseeing compliance, DNP has established the Corporate Ethics Committee (Chairperson: Executive Vice President), which is composed of directors and corporate officers in charge of each division and department at the head office. Additionally, we have established a Corporate Ethics Committee in respective business units and Group companies that execute operations and undertake multifaceted corporate ethics activities in accordance with management based on the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework.

DNP considers continuity,autonomy,positivity and efficiency to be crucial in promoting compliance-related management. DNP implements various training programs for the entire Group throughout the year with the aim of fostering such an organizational culture and strengthening its management foundation.

1Personnel evaluation system

We use corporate ethics as a basis of performance evaluation and promotion decisions made under the personnel evaluation system and strive to develop human resources who live up to society’s expectations with sincerity.

2Self-examination of compliance with law and rules

DNP’s business units and Group companies use evaluation items developed by the responsible head office division to perform self-examination and self-evaluation for constant improvements. This activity has been carried out since 1997 under the motto “Protect our company by ourselves.”

3Compliance evaluation system

Implemented in 2005 by the responsible head office division as a system to evaluate DNP’s business units and Group companies using common performance indicators. This evaluation is conducted twice a year on a regular basis.

4Corporate ethics training

We provide various education and training opportunities, as we believe that a high level of awareness and a correct understanding among employees will make our efforts related to corporate ethics more effective.

5Open Door Room*3

Established in 2002 as a whistle-blower system to receive inquiries and reports on matters concerning corporate ethics. In 2015, we also established an external contact point for reporting to and consultation by lawyers, and in 2022, we revised our internal rules in accordance with the revision of the Japan’s Whistle-Blower Protection Act to provide a more secure system for reporting and consultation.

6Global Internal Whistle-blowing System*3

In 2020, we reviewed our internal whistle-blowing system and framework at our overseas bases and established the global internal whistle-blowing system as a new whistle-blowing contact point capable of multilingual responses. In this manner, we are proceeding to strengthen compliance at overseas bases by making quick and appropriate responses.

7Compliance Hotline*3

This hotline, established in 2009, receives information from suppliers and contractors on any misconduct (or possible misconduct) of DNP employees or other parties, which they have come to recognize during their transaction with the DNP Group. In 2022, the name was changed from "Supplier Hotline" to "Compliance Hotline" to clarify that the hotline is only for compliance-related reports and to accept reports not only from suppliers and contractors but also from retirees and others.

• Inquiries regarding the Compliance Hotline (Japanese site opens)(Open in a new window)

• *3The information we receive at each of these consultations and whistle-blowing contact points also encompasses problems related to human rights, labor, and graft and corruption, including bribery.
• DNP Group Anti-Bribery Policy

Initiatives to Ensure Compliance with the Law and Social Ethics

At a meeting of the Board of Directors in 2007, DNP formulated the DNP Group Code of Conduct, which specifies 10 conduct rules such as “Compliance with the laws and social ethics” to be observed by all employees in carrying out corporate activities. Subsequently as well, we have regularly reviewed the Code of Conduct in accordance with changes in the social environment while we strive to enable the code to become entrenched through opportunities such as level-specific training and the Autonomous Corporate Ethics Training provided to all Group employees in and outside Japan.
By conducting the Ethics & Compliance Survey, we increase employee awareness of the importance of compliance and analyze employees’ opinions from a management perspective. This leads us to realizations about the cultivation of a sincere corporate culture as we roll out different plans to share our ideas on corporate ethics, so that they take root and we can ensure they are thoroughly practiced. In this way, we pursue the continued improvement of our governance.
We set up the Open Door Room in 2002 as a point of contact for consultations and reporting when employees encounter misconduct or among other problems, that cannot be solved by consulting their superiors or other employees around them or solved by their own department alone. Furthermore, in 2015, we established the Open Door Room as an external contact where lawyers are available for consultation and reporting, and in 2020 we established the multilingual global internal whistle-blowing contact. In this way, we are working to ensure that the self-cleansing ability of our organization functions in an even more proper fashion across the entire DNP Group. In conjunction with the operation of these contact points, we formulated the DNP Group Open Door Room Operation Standards in consideration of the Whistle-Blower Protection Act. By doing so, we sought to create an internal whistle-blowing system under which a whistle-blower can consul at lawyer and report matters in a secure way. In FY2022, we revised the standards to enhance the system in response to the revision of the law. We also operate other contact points such as the Consultation Office where employees may consult Consultation Office staff about a range of problems and an inquiry desk for all stakeholders. Regarding the requests for consultation received by contact points and the issues that are reported, we always take proper steps, including the implementation of the necessary corrective measures, while protecting the confidentiality of the reported information and the anonymity of the whistleblower to ensure the whistleblower is not disadvantaged in any way. Across the DNP Group, we received 102 whistleblowing-related matters both in Japan and abroad in FY2023. We responded to these reports in a proper and sincere manner while taking measures as necessary to prevent recurrence.
As a result of these efforts, no serious violations were found in FY2023.

Related party transaction (RPT)

Under the regulations of the Board of Directors, DNP requires that any transactions involving competing businesses or conflicts of interest by directors be resolved by the Board of Directors. In these cases, the Board of Directors assesses the rationale, business necessity and validity of the terms of the transaction. Additionally, DNP annually collects information about related party transactions, including competing and conflicting transactions, from each director in accordance with the regulations regarding financial statements. This information is then audited by accounting auditors, ensuring that the Board of Directors can adequately supervise these matters.

Anti-Bribery Initiatives

As recent corporate activities expand beyond national and regional boundaries, regulations concerning bribery are being tightened in each country and region in order to ensure a fairer and more open competitive market. DNP has always prohibited employees from seeking profit through bribery and other dishonest means and stipulated so in the Code of Conduct. To further reinforce our efforts in this area, in 2018 we established various policies and regulations that include the DNP Group Anti-Bribery Policy, the DNP Group Anti-Bribery Regulations and the DNP Group Anti-Bribery Guidelines. In conjunction, we have externally disclosed our anti-bribery policy to express DNP’s approach and position while internally holding briefing sessions for each organization and providing e-learning education for all DNP Group employees, and through these measures, we seek to ensure an awareness and thorough understanding of this policy. In October 2021 we partly revised and enhanced this policy in light of subsequent changes in social conditions that have further clarified the anti-bribery efforts that society expects that companies implement. Executives lead the promotion of this policy and all employees comply with it to further advance our anti-bribery initiatives. Concurrently, based on the anti-bribery selfcheck sheet, we check each item, such as the existence of any applicable matters at subject business sites, application procedure results, and educational and enlightenment activity results on a yearly basis.

Dealing with Political Donations and Anti-social Forces

DNP’s basic policy is to maintain political neutrality by not making political donation, either directly or indirectly. There were no instances of any political contributions even in the past three-year period up to FY2023.To anti-social forces that negatively affect public order and sound activities of society, we also prohibit the provision of inappropriate payoffs.