Approach to Compliance

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Basic Policy

We have established the Otsuka Group Global Code of Business Ethics and 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. Furthermore, we have formulated the Otsuka Group Global Anti-Corruption Policy, which expresses our stance against corruption at all sites worldwide; the Otsuka Group Global Conflict of Interest Policy, aimed at maintaining objectivity in business; and the Otsuka Group Global Privacy Policy, which defines our stance and guiding principles on privacy protection. These policies form the basis for conducting our business with high ethical standards.

Otsuka Group Global Anti-Corruption Policy

The Otsuka Group Global Anti-Corruption Policy embodies and reiterates our steadfast commitment to conducting business with integrity and in compliance with all relevant anti-corruption laws. This Policy outlines how to prevent, detect and deter violations of anti-corruption laws. It sets forth our global minimum standards regarding the prevention of corruption and applies to all our worldwide business operations.

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.

Compliance Promotion System

To instill compliance at group companies, the Otsuka group conducts universal training based on the content of the Global Code of Business Ethics, the Global Anti-Corruption Policy, and the Global Conflict of Interest Policy. Training materials, which are available in Japanese, English, Chinese, and Indonesian, are distributed to each operating company, and officers, employees, contract employees, and dispatched employees at each operating company attend related training at least once annually and submit a signed declaration to observe the regulations. The levels of understanding of compliance and its penetration among employees are evaluated through a test during training, awareness surveys, and other measures, and the results of training and the status of submission of declaration forms are regularly reported at meetings of the Board of Directors. Each operating company has also established related regulations in accordance with the laws of its country and conducts legal compliance. In addition, the operational status of the internal reporting systems and internal audits at major group companies is regularly reported at meetings of the Board of Directors of Otsuka Holdings.

System for Dealing with Individual Cases

Persons with knowledge of instances of or concerns about any non-compliance issues are required to consult with and report to their immediate supervisor, the Legal Affairs or Human Resources department, or the relevant department in charge of compliance. Reprisals against reporting parties are strictly prohibited. Each group company has also established an internal whistleblowing hotline and a system to allow reporting and consultation on potential compliance violations without the reporting party suffering any reprisal or other negative repercussions. In addition, the Internal Audit Department regularly audits group companies in Japan and overseas to monitor countermeasures for any matters of concern that have been discovered and their implementation status.
As necessary depending on the nature of the potential violation, the relevant department in charge of compliance acts as secretariat and forms an investigative team that includes external experts such as lawyers, certified public accountants, and data forensics vendors to investigate 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 a serious violation are reported to the chair of the Risk Management Committee to execute a response and measures to prevent recurrence in accordance with the circumstances, and each case is used in planning and implementing group-wide compliance measures.

Monitoring

As a holding company whose role is to maximize the Otsuka group's corporate value, Otsuka Holdings has established a system to ensure 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, affiliated companies report to Otsuka Holdings as necessary regarding items specified in the Affiliated Company Management Regulations, and obtain approval on relevant important items.
Examples of overseas initiatives include the appointment of compliance officers at each group company in Asia and the holding of regular meetings for sharing the status of progress in each country. The director in charge of compliance also visits companies to gather information and offer suggestions on how improvements may be made.
In addition, an Internal Audit Department under the direct authority of the president has been established. It 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 its affiliated companies. The department submits its audit reports to the president, directors, and Audit & Supervisory Board members. In cases where it finds the need for improvements, the department issues improvement advisories. It then follows up to check the implementation status of measures and ascertain that the execution of duties has been suitably improved. In addition, the department shares information with Audit & Supervisory Board members and the accounting auditor and coordinates a unified stance.

Whistleblowing Hotline

  • Internal Whistleblowing Hotline
    At Otsuka Holdings and domestic and overseas group companies, we have established internal reporting systems within the group (including for human rights issues) and at the offices of an attorney that can be accessed safely and anonymously. 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. Information about whistleblowers and their reports is strictly managed in order to prevent any negative repercussions. 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.
  • 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.

Due Diligence

Each group company has established a due diligence policy and conducts due diligence for new business partners as needed to evaluate corruption-related risk.

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