Structure
Investigations of Compliance Violations and Response Systems
Compliance Framework
At MC, the Compliance Committee and the Compliance Officer systems play important roles in the implementation of compliance programs. As an advisory body to the Chief Compliance Officer, the Compliance Committee reports on and discusses major compliance incidents that occur within the MC Group, leading to the regulation and communication of appropriate measures. The Committee is led by the Chief Compliance Officer, who is appointed by the President, and meetings are held twice a year, in principle. Matters reported to and discussed at the Compliance Committee are reported to the Executive Committee and the Board of Directors once a year. The Chief Compliance Officer is in charge of all compliance matters of the entire MC Group, and is responsible for planning and implementing compliance programs. The Chief Compliance Officer also has the authority to conduct necessary investigations in the event of a breach or potential breach of compliance, and can also order the suspension or change of business activities to prevent or remedy a breach or potential breach. In addition, MC has senior executives in the corporate section and in each Business Group at the Head Office as Compliance Officers. Each Compliance Officer has the authority to implement compliance programs in a manner tailored to the characteristics of each section and Group. Under the supervision of the Chief Compliance Officer, each Compliance Officer, who is a management executive, implements various measures to prevent recurrence of violations, and is responsible for improving ethical conduct and preventing bribery and corruption.
Response Systems for Individual Cases
Officers and employees of MC are required to report to or consult with their superiors/managers or other personnel relevant to the matter, including compliance personnel, if they become aware of a breach or potential breach of compliance. The managers of organizational bodies must in turn report to or consult with the Compliance Officer of their section or Group, who is then required to report to the Chief Compliance Officer. Furthermore, cases of violations and the status of resolutions reported to the Chief Compliance Officer, including those of Group companies, are also reported to Audit & Supervisory Committee Members. The relevant Compliance Officer must conduct necessary investigations of the reported or consulted matter with the due care of not infringing the human rights and dignity of concerned parties, and will formulate and implement necessary preventive measures and remedies. The result of the investigations and preventive measures/remedies implemented by the Compliance Officer is reported to the Chief Compliance Officer and used to plan and implement compliance programs for the entire MC Group as lessons learned from the matters.
In addition, MC has a dedicated organization within the Legal Department called the "Administration Office for the Compliance Committee" which supports the Chief Compliance Officer in handling compliance cases, and both plans and implements MC Group compliance programs in cooperation with each Compliance Officer and the relevant departments.
Internal Rules and Regulations
MC’s core philosophy is the Three Corporate Principles. Beneath this are the Corporate Standards of Conduct, which govern MC as a company, and the Code of Conduct for Executives and Employees, which applies to each executive and employee. The Code of Conduct's basic philosophy is expressed as follows: "In conducting business, MC executives and employees shall comply with laws and regulations, international agreements, and internal rules, observe business manners, and act responsibly in accordance with social norms." At MC, compliance is not limited to simply complying with laws. It is also based on the principle that any action that violates social norms, even if it is not illegal, should not be conducted.
In order to promote the Code of Conduct internally, MC has also printed it in the Pocket Employee Handbook, and published it for officers and employees’ reference. In addition to the specific points to uphold, instructions on how to access the Meyasubako (Compliance Mail Box and Helpline) for consultation on compliance issues are also listed so that officers and employees may look it up whenever necessary. Furthermore, an e-learning program that included case studies related to the Code of Conduct is conducted every year. At the end of the e-learning program, all officers and employees submit a written pledge saying that they will comply with the Code.
Mitsubishi Corporation Internal Rules and Regulations
In order to have an effective compliance program in place and to ensure accessibility to MC's compliance philosophy and rules, MC has established various compliance-related internal regulations under the Three Corporate Principles, the Corporate Standards of Conduct and the Code of Conduct. These internal regulations are reviewed every year to reflect amendments to the laws and regulations and changes in the business environment and other conditions surrounding the MC Group.
Major internal rules and regulations relating to compliance are listed below:
- Basic Rules for the Organization and Implementation of Compliance
- Standard for Internal Reporting
- Security Trade Control Rules and Regulations
- Standard for Sanction Management
- Trade Procedure Management Standards
- Standard for the Prevention of Cartels
- Standard for Transaction Pursuant to the Law on the Prevention of Delays in the Payment of Subconstracting Charges
- Standards for the Prevention of Unfair Stock Trading
- Code of Prohibition against Improper Payments or Other Types of Benefits
- Standard for Entertainment
- Standard for the Management of Antique Trading
- Permission Approval and Notification Management Standards
- Standard for the Management of Chemical Substances
- Consumer Products Import and Sales Standards
Monitoring System
Monitoring of Individual Cases
All reports regarding the facts, causes and preventive measures and remedies of each compliance incident are shared with the Administration Office for the Compliance Committee, and are used for conducting case analyses and risk assessment, and planning compliance programs and measures.
Employee Awareness Survey
We see employee engagement as the most important factor in our efforts to develop a dynamic spirited, and vibrant talent pool and organization through human resource policies linked to our management strategies. In line with this philosophy, we began to conduct a yearly Employee Awareness Survey in FY2022 with the aim of regularly monitoring and enhancing our organizational culture, including the culture of compliance. One of the Group’s KPIs is the maintenance of positive response rates of at least 65% for both the employee engagement rate and employee enablement rate in the Employee Awareness Survey. Employees receive feedback about the survey results so that they can use this information to make improvements in their own organizations. At the management level, we analyze and discuss these survey results, identify issues that need to be addressed on a companywide level, and reflect our findings in policies. For example, in FY2023 we took steps to raise productivity by improving business process efficiency through Groupwide business process reforms based on our analysis of the results of the Employee Awareness Survey. The aim of these reforms is to create business environments in which our human resources can focus on value creation activities.
Responses to Risk Factors by Each Business
MC conducts periodic self-assessments of the compliance risks to which special attention should be given for each of its businesses and subsidiaries, such as risks relating to anti-trust violations, bribery and corruption, and occupational health and safety, taking into consideration industry, product, and regional characteristics. Compliance Officers of each Business Group analyze risk factors that require special attention related to their Business Group and implement risk response measures. Each subsidiary also appoints a person responsible for compliance matters (i.e. Compliance Officer of subsidiaries), who analyzes risk factors related to respective business areas, and implements risk response measures.
PDCA Cycle
Utilizing the PDCA cycle, MC implements necessary measures, such as conducting various seminars and adopting regulations, to address the compliance risks identified from the results of the various surveys, reports and monitoring, as well as taking into consideration the opinions of the Compliance Officer of each Business Group. The results are further monitored, and an analysis of the results is reflected in the further identification and evaluation of risks. The aim is to improve the awareness and knowledge of compliance among all officers and employees by repeatedly and rigorously educating and training them.