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Fair Governance

Basic approach to corporate governance

The Kansai Paint Groupʼs mission statement within our corporate philosophy is “we leverage superior technology to contribute to our Customers and Society, in a sustainable manner, with innovative Products and Services, through a competent workforce, built on a culture of Customer Focus, Integrity and Respect to our Stakeholders.” We believe that increasing the satisfaction of our customers through the coatings business, which is the core business of the group, is the foundation and reason for the groupʼs existence, and that our commitment to contributing to society at large by enhancing the corporate value through the realization of customer satisfaction enables the group to contribute to its stakeholders including the shareholders, business partners, employees and local community. Corporate governance is regarded as an important management task in order to realize continuous improvement of corporate value. In order to ensure that the concept of ”profit and fairness,” the cornerstone of our corporate activities, is understood and acted upon by group officers and employees, we will work toward improved awareness through putting into effect various measures. We disclose our initiatives concerning all of the principles set out in the corporate governance code as prescribed by the stock exchange.

Corporate governance organization

The corporate governance organization shown below ensures management transparency and soundness. (As of July 2021)

System and initiatives for group governance
  • We have appointed a person to be in charge of each subsidiary (hereinafter, "the person in charge") in accordance with our internal rules, and ensure appropriate management is in place at each subsidiary. Under this system, for issues that require reporting as stipulated in the regulations, information is gathered by the Board of Directors and appropriate actions are taken. For issues which may have a significant impact on the management of subsidiaries, the person in charge reports to the Board of Directors. If necessary, the Board of Directors decides on policies through resolutions.
  • We have a system in place to ensure the efficiency of the execution of duties by the directors of subsidiaries by dispatching executives and staff to serve as directors of subsidiaries if necessary, and by ensuring that subsidiaries are fully informed of our policies and other matters in cooperation with the person in charge.
  • In order to ensure that the execution of duties by executives and staff at subsidiaries complies with laws and regulations and our articles of association, we strive to share and foster the corporate philosophy of the group to encourage executives and staff at subsidiaries to act with high ethical standards and strive to establish a trustworthy management system.
  • In order to ensure the legality, appropriateness, and efficiency of the operations of subsidiaries and to support the establishment of internal controls, the Internal Auditing Department conducts regular internal audits of subsidiaries in cooperation with the relevant departments, and reports the results to the President and Representative Director, auditors, and Board of Directors of the Company as needed.
  • The auditors conduct regular audits of consolidated subsidiaries, and cooperate with auditors at each subsidiary if present. In addition, for major related companies, we dispatch executives and employees as necessary to serve as directors or auditors of the subsidiaries to ensure the appropriateness of their operations.
  • The auditors monitor and verify the status of the establishment and operation of internal control systems with respect to systems for ensuring the appropriateness of the operations of subsidiaries.
Systems and initiatives related to risk management

We established the Crisis Management Committee under the supervision of the Corporate Governance Committee, and have put in place a system for cross-organizational crisis management by preparing various regulations and manuals in order to properly respond to crises and prevent potential business continuity risks. In the current environment caused by the COVID-19 pandemic, we established the Committee for COVID-19 countermeasures based on this committee structure. In cooperation with our subsidiaries, we formulated and implemented a response manual based on expert knowledge, and promoted improvements to working environments and other initiatives in order to continue our business activities, with the safety of our employees and their families and the maintenance of customer trust as our top priorities. In addition, in order to implement our growth strategyand continue to increase our corporate value in an increasingly uncertain business environment, we are improving the accuracy of our prediction and forecasting of possible management risks, and are developing a system to enhance our resilience to constantly respond to changes.

Efforts to ensure compliance

In order to fulfill our social responsibility as a company as well as to comply with laws and regulations, we have established the Kansai Paint Corporate Behavioral Drivers and the Kansai Paint Corporate Code of Behavior as the guiding principles for our corporate activities based on the principle of "profit and fairness." Through various systems and initiatives, we are working to promote awareness of compliance and foster a sound corporate culture.

Internal reporting system

We have established hotlines for internal reporting as a function for the prevention and early detection of misconduct, violations of laws and regulations, and other inappropriate incidents. In addition to an internal hotline, we have also set up an external hotline. This hotline enables employees to make reports directly to the Compliance Promotion Committee, guaranteeing the anonymity of whistleblowers and protecting them from disadvantageous treatment. With regard to overseas subsidiaries, we are developing systems to ensure optimal and effective group governance, while taking into account the laws, regulations, and the business environment of the country/region concerned.

Distribution of a corporate ethics handbook

We distribute a corporate ethics handbook and continuously provide compliance education to improve employee awareness.

Compliance training

During training for new employees and managers, we conduct a series of training sessions on overall compliance, as well as other training covering such things as competition laws and the prevention of corruption for members of the Business Division or those being posted overseas. In regard to insider trading in particular, we hold drives four times a year through our intranet to raise awareness and to deepen understanding.

Prevention of dealings with antisocial forces

We clearly state in the Kansai Paint Corporate Behavioral Drivers and Kansai Paint Corporate Code of Behavior that we will not form any kind of relationship with antisocial forces. We inform our employees of the need to be resolute in refusing to accept unreasonable demands, as well as our internal hotline and contact points where they will help you deal with the problems systematically.

Prevention of corruption/bribery

We have established the following items in our Corporate Code of Behavior. Note that we have experienced no cases of bribery or other legal violations in the past.

Code of behavior concerning compliance with the Anti-monopoly Law

This code of behavior prohibits acts of all kinds which conflict with the Anti-monopoly Law. It also states that we shall comply with not only this law in Japan but also the equivalent laws of other countries.

Code of behavior concerning dealings with business partners and other related parties

This code of behavior contains stipulations on how we conduct ourselves in line with commonly-accepted norms and social practices, declaring that we shall not engage in acts which are in conflict with laws and regulations on bribery, etc., such as refraining from giving gifts or entertaining staff from government offices or similar public organizations. It also states how we shall conduct ourselves in the same manner overseas, acting with an understanding of local customs, laws, regulations, etc.