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.

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 FY2017, 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 the awareness that they are always being observed by the Company and the Head Office. At the same time, the results of the survey are also used to build good relationships with employees.
Since FY2021, 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 FY2023, the survey was conducted on approximately 650 employees of 11 companies (two in Japan and nine overseas).

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

The “Helpline” (Whistle-blower System) has been established within and outside the Company as a contact point for providing consultation services, whether named or anonymous, widely in relation to violations, or possible breach, of laws, the Business Code of Conduct, and internal regulations.
The Helpline Management Regulations stipulates that investigations must be conducted in compliance with rules such as ensuring confidentiality and prohibiting disadvantageous treatment to whistle-blowers and others supporting the investigation. In line with this, Helpline responds to consultations on various types of cases such as harassment. Helpline serves not only as a tool for reporting on misconduct, but also as a means for raising questions and expressing opinions about the Business Code of Conduct. In addition, it is used as a way of maintaining good relationships between the Company and officers, employees, and business partners. In Japan, the Helpline Management Regulations was revised in 2022 with the enforcement of the amended Whistleblower Protection Act, and we operate Helpline in accordance with the purposes of this Act, such as expanding the scope of persons eligible for protection and strengthening protection measures. In FY2023, there were 21 internal whistle-blowing cases, and consultation response rate was 100%. Overseas, internal whistle-blower systems are progressively being developed and operated in ways that are adapted to the needs and circumstances of each region.

We are working to spread awareness of the Helpline among employees through various compliance training courses and inclusion of the relevant information in the Business Code of Conduct Guidebook. According to the Compliance Awareness Survey in FY2023, Helpline awareness rate was 93.8%. Going forward, we will continue to conduct activities to raise awareness and to provide consultation services. As a company that detects misconduct early and protects employees, we will also work to create a workplace where employees can work with peace of mind.

■Structure

(1) Establishing regulations and systems

Within NTN, the Legal Department which is in charge of bribery-related matters plays a central role in the establishment and operation of internal regulations that are based on bribery-related laws and social norms in Japan and overseas. The internal regulations not only prohibit bribery of domestic and foreign public officials and business partners, but also prescribe rules and procedures related to the provision of property and benefits by officers and employees, as well as rules and procedures to prevent bribery through business partners. In view that there are countries which regulate the exchange of property and benefits between private companies, we have also established rules and procedures regarding the receipt of property and benefits, in order to prevent the acceptance of bribery by our officers and employees, ensure fair transactions, and prevent conflicts of interest among officers and employees. In principle, NTN’s officers and employees do not accept entertainment or gifts from business partners.
Overseas, we have established and are operating local versions of internal regulations that take into account the relevant laws and social norms of each country, and we conduct the related audit activities where necessary. The Legal Department regularly shares information and exchanges opinions with the Administration & Internal Control Departments of each overseas region on the relevant initiatives on both sides, while maintaining and managing the system to prevent bribery across the entire Group.

(2) Educational and awareness-raising activities

We work to raise awareness of bribery prevention among employees whose work involves bribery prevention, and require them to attend e-learning courses on basic knowledge of bribery prevention as well as the internal regulations and procedures. Training is also conducted where necessary. In particular, training courses are held every year for compliance activity supervisors and representatives who have been appointed at each business site and subsidiary, during which information on rule compliance is shared with the participants.
In addition, in NTN’s “Legal Information,” which is published and disseminated monthly with the aim of fostering legal knowledge and reducing the risk of compliance violations, examples of bribery-related violations, details of the penalties meted out, overview of legal reforms, and other information are covered regularly as a part of our efforts to raise awareness of bribery prevention.

[Main bribery-prevention training courses conducted in FY2023]

• 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
• Compliance training course for newly appointed managers and new employees
• Bribery prevention training course in each overseas region

(3) Audits

We conduct periodic audits to understand the situation and evaluate if our bribery prevention initiatives are implemented properly in accordance with the relevant laws and our internal regulations.
In Japan, the heads of each department conduct self-audits under the direction of the Legal Department, and the Internal Audit Department conducts internal audits once a year on an ongoing basis. In FY2023, all departments were covered in the scope of the audits.
Overseas as well, the Administration & Internal Control Department of each region periodically conducts internal audits and issues directions for the implementation of self-audits.
No serious violations were found in the audits. Going forward, we will continue to strengthen our bribery prevention system.
Over the past decade, the Group has not been charged by authorities in any country for violating bribery-related laws, nor incurred any expenses related to such violations. Furthermore, no employee has been subjected to disciplinary action or been dismissed as a result of violating regulations related to bribery prevention.

(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 on an ongoing basis for the purpose of raising awareness of compliance with antimonopoly laws among officers and employees. On Compliance Day every year, members of the top management repeatedly appeal to all NTN Group employees, through the “Message from the President,” on never seeking profits through wrongful acts, such as cartels.
Going forward, we will continue to enhance the contents of training and other activities, and to realize fair and free competition by educating officers and employees.

[Main training courses related to compliance with antimonopoly laws, conducted in FY2023]

• Training course for officers on compliance with antimonopoly laws
• Training course for the sales departments on compliance with antimonopoly laws
• Level-based training course on compliance with antimonopoly laws (conducted for newly appointed managers and new employees regardless of job type and department)
• Training course on compliance with antimonopoly laws in each overseas region

(4) Audit

We conduct periodic audits to understand the situation and evaluate if our compliance with antimonopoly laws is implemented properly in accordance with the relevant laws and our internal regulations.
In Japan, the heads of each department conduct self-audits under the direction of the Legal Department, and the Internal Audit Department conducts internal audits once a year on an ongoing basis. In FY2023, 19 departments in Japan were covered in the scope of the audits.
Overseas as well, the Administration & Internal Control Department of each region periodically conducts internal audits and issues directions for the implementation of self-audits.
No serious violations were found in the audits. Going forward, we will continue to work on improving the matters pointed out in the audits in order to further strengthen our system for compliance with antimonopoly laws.