Compliance

NTN believes that earning the trust of society is essential in order for the Company to contribute to the realization of a sustainable society and to continue to be a company that is needed by society. Accordingly, we place importance on compliance in our Management Policy. We perceive compliance to include not only abiding with the laws and regulations of each country, but also observing internal regulations and social norms. In light of that, we have established the Business Code of Conduct to serve as a behavioral guideline that officers and employees should adhere to.

NTN has established Group-wide rules and regulations regarding compliance, and has set up and operates the Compliance Committee and the Fair Trade Monitoring Committee to build a system for promoting compliance centered on the activities of these two committees.
In Japan, a Compliance Promotion Activity Supervisor is appointed at each business site and subsidiary to facilitate the implementation of compliance promotion activities. With regard to antimonopoly laws, the Legal Department is responsible for overseeing legal compliance activities in Japan, including at subsidiaries. Overseas, the action plans deliberated by each committee are implemented mainly by the Administration & Internal Control Department established in the Office of the General Manager in each region. We are working to enhance compliance activities across the Group by holding regular training sessions and sharing information and exchanging opinions on important issues.

■Structure

We have established the Business Code of Conduct, consisting of 26 items, as a basic behavioral guideline that each individual officer and employee of NTN Group companies should adhere to in their business activities.
A handy card containing these items, along with the Business Code of Conduct Guidebook which provides an easy-to-understand explanation of the contents, are distributed to officers and employees. Local versions of the guidebook have also been prepared for overseas Group companies as a part of our efforts to promote compliance across the whole of the NTN Group.

• For details of the Business Code of Conduct, please refer here (PDF)

We have designated July 26 as Compliance Day. This was the date when the Japan Fair Trade Commission had conducted an on-site inspection in the past due to suspicions of cartels. On this day, activities are carried out to reaffirm the importance of compliance across the whole of the NTN Group.
On Compliance Day, the President sends out a message to Group employees both in Japan and overseas about the importance of compliance in business activities, and other initiatives are implemented to further improve awareness of compliance among employees.

We conduct the Compliance Awareness Survey on employees once a year on an ongoing basis.
In addition to evaluating the achievements of compliance-related educational and awareness-raising activities as well as the level of understanding of the Business Code of Conduct, we also check anonymously for any harassment or compliance violations that may be present in the workplace. The results of the survey are monitored over time and issues that need to be addressed are identified and utilized in future educational and awareness-raising activities.

As part of our fraud prevention activities, since fiscal year 2017, the Group has been conducting surveys on employee evaluations to find out more about the attitudes of the presidents of affiliated companies and corporate culture of these companies, in relation to compliance.
It is said that there is a high probability of occurrence of fraudulent acts in a company when the Fraud Triangle of motives/pressures, opportunities, and rationalization, is established. While advancing the development of regulations, rules, and penalties, it is also important to improve the corporate culture and environment. Therefore, NTN regularly checks for changes in the organizational culture of affiliated companies through employee evaluations.
By disclosing the results of this survey to the presidents of affiliated companies, we are utilizing these results to develop a culture of ”not being motivated to engage in fraudulent acts” by fostering awareness that they are always being observed by the Company and the Head Office. At the same time, the results of this survey are also used to build good relationships with employees.
Since fiscal year 2021, we have been conducting the survey on affiliated companies with changes of presidents or other significant events, with a view to improving the effectiveness and efficiency of the survey. In fiscal year 2024, the survey was conducted on approximately 1,900 employees from 16 companies (seven in Japan, and nine overseas).

■(Average) Percentage of employees who evaluated the attitudes of the president of the affiliated companies as “Good”

We have established a ”Helpline (Whistle-blower system)” both inside and outside the company as a contact point for handling consultations regarding actual or potential violations of laws, the Business Code of Conduct, and internal regulations, whether named or anonymous.
In accordance with the rules stipulated in the ”Helpline Management Rules” which includes confidentiality obligations and prohibiting disadvantageous treatment of whistle-bowers and investigation cooperators-the Helpline handles various types of cases such as harassment.
The Helpline is used not only as a means of reporting violations and misconducts, but also as a means of expressing questions and opinions regarding compliance with the Business Code of Conduct, maintaining good relationships between the company and its officers, employees, and business partners.
In Japan, the Helpline Management rules was revised in 2022 in accordance with the enforcement of the amended Whistleblower Protection Act. We operate the Helpline in accordance with the spirit of the law, including measures such as expanding the scope of protected persons and ensuring broader protection. In FY 2024, there were 26 internal whistle blowing cases, with a 100% consultation response rate.
Overseas as well, we are sequentially developing and operating Whistle-blower system for each region according to the needs and circumstances of each region.

We are working on raising-awareness activities about the Helpline among employees through various compliance training and inclusion in the Business Code of Conduct Guidebook, and Helpline awareness rate was 95% (FY2024 ”Compliance Awareness Survey” results). We will continue to conduct awareness activities and to provide consultation services, and we aim to create a workplace where employees can work with peace of mind by detecting misconduct early and protecting employees.

■Structure

(1) Establishing regulations and systems

In the Business Code of Conduct under ”25. Self-Restraint Regarding Entertainment and Gifts,” we clearly state that ”we will not provide bribes to domestic and foreign public officials or engage in conduct that could raise such suspicion, and we will ensure that entertainment and gift-giving with business partners remain within the bounds of social norms.” Based on this, the Legal Department, which serves as the controlling department responsible for matters related to bribery, works to develop and implement internal regulations based on anti-bribery and corruption related laws and social norms in Japan and overseas countries.
In our internal regulations, we not only prohibit bribery and corruption with domestic and foreign public officials and business partners, but also establish rules and procedures regarding the provision of property and benefits by officers and employees, and rules and procedures to prevent bribery and corruption through business partners. Moreover, since there are some countries that regulate the exchange of property and benefits between private companies, we have also established rules and procedures for the receipt of property and benefits to prevent bribery by officers and employees. To ensure fair trading and prevent conflicts of interest by officers and employees, in principle, we do not accept entertainment, gifts, and other offerings from business partners.
Overseas, we have developed and implemented country-specific internal regulations based on the relevant laws and social norms of each country, and we regularly conduct audit activities related to these regulations. The Legal Department regularly shares information and exchanges opinions with the Administration & Internal Control Departments in each region regarding their respective related initiatives, while maintaining and managing a system to prevent bribery and corruption throughout the NTN Group.

(2) Education and awareness-raising activities

For employees whose work involves bribery prevention, we conduct awareness activities on bribery- prevention, require them mandatory e-learning on basic knowledge of bribery- prevention and internal regulations and procedures, and conduct training as appropriate. In particular, we hold annual training for compliance promotion activity supervisors and representatives appointed at each business site and subsidiary, sharing information on compliance status with rules.
In addition, in ”Legal Information,” which is published and distributed monthly for the purpose of fostering legal knowledge and reducing compliance violation risks, we also regularly address violation cases and sanctions related to bribery, summaries of legal amendments, and other topics to raise awareness of bribery prevention.

[Main bribery-prevention training conducted in FY2024]

• e-learning course on the risks of bribery-related law violation for officers
• e-learning course on the risks of bribery-related law violation for employees (excluding factory workers)
• Training course for compliance promotion activity supervisors and representatives
• Tiered compliance training (conducted for newly appointed managers and new employees regardless of job type or department)
• Bribery prevention training in each overseas region

(3) Audits

We conduct regular audits to understand the actual situation and evaluate whether our bribery prevention initiative are implemented properly in accordance with related laws and internal regulations.
In Japan, we continue to conduct ”self-audits” carried out by the heads of each department under the direction of the Legal Department and ”internal audits” conducted by the Internal Audit Department once a year. In FY2024, we implemented these audits targeting all departments.
Overseas, the Administration & Internal Control Departments in each region regularly conduct self-audits and internal audits.
As a result of the audits, no serious violations were detected. We will continue to work on strengthening our bribery- prevention system.
Over the past 10 years, there have been no instances of the NTN Group being investigated by authorities in any country for violations of bribery-related laws, and there have been no related expenditures. Additionally, there have been no individuals who received disciplinary action or resigned due to violations of bribery-prevention regulations.

(2) Prevent and monitor contacts with competitors

Any officer or employee who might potentially contact competitors at an exhibition or meeting or any other event is obligated to apply for permission in advance and/or report it subsequently. This means we have in place a system with which we can identify the status of contact by officers and employees with competitors.

(3) Education and awareness-raising activities

We conduct training regularly with the aim of further enhancing the awareness of officers and employees regarding antitrust law compliance.
Additionally, on Compliance Day every year, members of the top management repeatedly appeal to all NTN Group employees, through the “Message from the President,” that ”we absolutely do not seek profits through illicit acts such as cartels.”
Going forward, we will continue to enhance the content of training and awareness activities and strive to realize fair and free competition.

[Main antitrust law compliance training results for FY2024]

• Antitrust law compliance e-learning for domestic NTN Group employees
• Training course on compliance with antimonopoly laws for the sales departments
• Training course on compliance with antimonopoly laws for the departments of head office
• Tiered antitrust law compliance training (conducted for newly appointed managers and new employees regardless of job type or department)
• Training course on compliance with antimonopoly laws in each overseas region

(4) Audits

We conduct regular audits to understand the actual situation and evaluate whether antitrust law compliance at our company is being properly implemented based on relevant laws and internal regulations.
In Japan, we continue to conduct ”self-audits” carried out by the heads of each department under the direction of the Legal Department and ”internal audits” conducted by the Management Audit Department. In fiscal year 2024, we implemented these audits targeting 30 domestic departments.
Overseas, the Administration &Internal Control Departments in each region regularly conduct self-audit instructions and internal audits.
As a result of the audits, no serious violations were detected, but we will make improvements to the matters indicated in the audits to further strengthen our antitrust law compliance system.