Approach to Compliance


Basic Policy

The Otsuka group seeks to earn the trust of stakeholders and to achieve sustained growth by contributing to people’s health worldwide, acting in good faith and with the highest level of ethics in accordance with the corporate philosophy: “Otsuka-people creating new products for better health worldwide.” That commitment is encapsulated in the Otsuka Group Global Code of Business Ethics, which outlines the standards of behavior expected of everyone involved in our work. This is reinforced with a range of global policies that reflect our behavioral standards in core areas. Regular training helps ensure that our compliance stance is thoroughly embedded.

Otsuka Group Global Code of Business Ethics

The Otsuka Group Global Code of Business Ethics is consistently applied at all of our worldwide business operations and serves as the group’s ethical foundation in pursuing our corporate philosophy. We openly convey information about our stance on related initiatives on our website in the form of a message from the president of Otsuka Holdings. The content of this code of ethics will be reviewed, as required, in light of changes to the social environment, and revisions will be made following resolutions by the Board of Directors.

Otsuka Group Global Anti-Corruption Policy

The Otsuka Group Global Anti-Corruption Policy expresses and reinforces our strong commitment to conducting business with integrity and in compliance with all anticorruption laws. We have clearly defined the ethical standards to be upheld as the global anticorruption standard for employees. This policy outlines how to prevent, detect, and deter violations of anticorruption laws. It sets out our global minimum standards regarding the prevention of corruption and applies this to all our worldwide business operations.
In addition, the Board of Directors monitors the operation of the policy, which includes regulations on bribery, and decides on key revisions and amendments.

Otsuka Group Global Conflict of Interest Policy

The Otsuka group recognizes conflicts of interest between the group and individual employees as a matter that could impact the integrity of the organization, and one that has a great bearing on the group's future. Based on this thinking, we formulated the Otsuka Group Global Conflict of Interest Policy to prevent such conflicts and we are working to instill the policy at a global level.

Otsuka Group Global Privacy Policy

In recent years, many countries have enacted privacy protection legislation, such as the European Union's General Data Protection Regulation (GDPR) implemented in May 2018. The Otsuka group is working to strengthen privacy protection. In addition to formulating the Otsuka Group Global Privacy Policy to define our stance and guiding principles on privacy protection, we establish related rules and review management systems in accordance with the laws and regulations related to privacy protection in each country.

Otsuka Group Global Anti-Fraud Policy

Corporate scandals and other misconduct not only cause short-term loss, such as penalties for violating laws and regulations, but they have a major medium- to long-term impact on management. This impact could include damage to our brand image, as well as lower corporate value and compensation to shareholders. We are keenly aware of the importance of taking a strict antifraud approach as part of our business risk management. The Otsuka Group Global Anti-Fraud Policy was established to clarify our stance and basic policy on fraud prevention as a global company. We are implementing initiatives and working to raise awareness of this topic among executive officers and employees throughout the group.
(Basic Policy)
・Fraud is never tolerated
・Misconduct and questionable behavior must be reported without fear of discrimination or retaliation
・Sincere reports will cause no disadvantage
・Training and awareness will be conducted on the risk of fraudulent activities

Compliance Promotion System

As a holding company whose role is to maximize the group’s corporate value, Otsuka Holdings has established a system for appropriate business operations from the perspective of the group as a whole. We have established a system for facilitating cooperation in the Otsuka group. Under this system, group companies report to Otsuka Holdings as necessary regarding items specified in the Affiliated Company Management Regulations, and obtain approval on relevant important items. The Board of Directors has built a group-wide risk management system, which includes the establishment of the Risk Management Committee (chaired by the President and Representative Director), and oversees the system’s operation. The Risk Management Committee and the Board of Directors receive regular reports on compliance and risk management action plans and results from the Internal Control Department. These reports and plans form the basis for discussion of issues and additional measures.
To instill thorough compliance at group companies, the Otsuka group conducts universal training providing to all employees of worldwide subsidiaries based on policies such as the Otsuka Group Global Code of Business Ethics, the Otsuka Group Global Anti-Corruption Policy and the Otsuka Group Global Policy for Conflict of Interest. Training materials (available in English, French, Chinese, Korean, Indonesian, and other languages) are distributed to group companies, and executives and employees (including contract and temporary employees) attend related training at least once annually. Depth and breadth of compliance understanding among employees is evaluated through a test during training, awareness surveys, and other measures. Trainees are required to submit a signed declaration that they will observe the regulations, and the results of training and the status of submission of declaration forms are regularly reported at meetings of the Board of Directors. The operational status of the internal reporting systems and internal audits at group companies is likewise reported. Other examples of initiatives include the appointment of compliance officers at overseas group companies and regular meetings for sharing the status of progress in each country. In Asia, for instance, the director in charge of compliance visits companies to gather information and offer suggestions on how improvements can be made.

Monitoring System

The Company’s Internal Audit Department reports directly to the president. The department conducts regular audits based on the Internal Audit Rules to verify that operations are being executed appropriately and efficiently with regard to the assets and business in general of Otsuka Holdings and Otsuka group companies. Audit reports are submitted to the president, directors, and Audit & Supervisory Board members. Where there is need for improvement, the department recommends remedial actions and later confirms their implementation, thereby contributing to the optimization of business execution. The department also shares information and works in cooperation with Audit & Supervisory Board members and the accounting auditor.
The Otsuka group operates an crisis management system that enables a swift, cohesive response if a risk event demanding an urgent response occurs in or outside Japan. When a critical or time-sensitive event does occur, the group company immediately shares information with the main operating companies and Otsuka Holdings, and the relevant departments mount a coordinated response to mitigate impact. Otsuka Holdings maintains and updates regulations, manuals, and other documentation setting out fundamental approaches to risk management and response, and enhances group-wide readiness through regular training and exercises.

Whistleblowing Hotline

Internal Whistleblowing Hotline

At Otsuka group, we have established internal reporting systems within each group of companies. Through this hotline, we work to ensure that any improper acts, including acts of bribery, as well as violations of policies, laws and regulations, can be quickly uncovered and corrected. Rules for accepting reports extend beyond full-time employees to include contract, dispatched, and part-time employees. Hotlines have also been set up outside the Company, such as at a law office, with anonymous reporting allowing whistleblowers to make a report with peace of mind and without fear of reprisal. Information on whistleblowers and their reports is strictly managed in order to prevent any repercussions. No information will be shared with anyone except those who must know in order to provide an effective response, given the necessity of conducting an investigation and taking corrective action. Information on the operational status of the internal reporting systems at major group companies is regularly reported at meetings of the Board of Directors of Otsuka Holdings.

Formulation of Otsuka Group Global Speak-Up Policy

The Otsuka group has established the Otsuka Group Global Speak-up Policy with the aim of clarifying the basic principles of the internal reporting system and enhancing its effectiveness so that employees can speak up when they become aware of fraudulent or wrong behavior or actions that go against the group’s values, policies, and processes, or any other suspect behavior.
(Basic Principles)
・People have the right and obligation to report in good faith
・Information will be strictly managed
・Anonymous reports will be accepted
・Reporters will not suffer any repercussions
・Investigations as well as corrective and preventive actions must be carried out

External Inquiries and External Whistleblowing Hotline

Otsuka Holdings and its major group companies have established a whistleblowing hotline that accepts inquiries and opinions from external stakeholders and general customers. Furthermore, certain channels of the hotline also accept anonymous consultations and reports.

System for Dealing with Individual Cases

People with knowledge of infractions or concerns about any noncompliance issues are required to consult with and report to their immediate supervisor, the Legal Affairs or Human Resources department, or the department in charge of compliance. Reprisals against reporting parties are strictly prohibited.
Depending on the nature of the violation, the Compliance Department, or the Human Resources & General Affairs Department are in charge as the secretariat and form an investigative team that includes external experts, such as lawyers, certified public accountants, and data forensics experts. These investigative parties examine the facts, while managing the protection of personal information and ensuring that there are no acts of reprisal against the whistleblower. Cases determined to be serious violations are reported to the chair of the Risk Management Committee and the Board of Directors to respond and take the initiative to prevent a reoccurrence given the circumstances, and all cases are used in planning and implementing group-wide compliance.

Anticorruption Measures for Business Partners

All group companies have established a due diligence policy, and we conduct due diligence for business partners, as needed, to evaluate risks from corruption, violations of human rights, abuse of privacy, and other issues.