CSR / Environment

Compliance

Compliance

Fiscal 2018 Objectives Fiscal 2018 Achievements Self-Evaluation
  • Enhance global compliance
  • Respond to international privacy protection, including GDPR
  • Conducted bribery and corruption-related survey of subsidiaries and affiliated companies in Southeast Asia, Oceania, and the Middle East
  • Released the Sharp Global Website Privacy Policy and Cookie Policy on Sharp Corporation’s official global website
★★
Priority Objectives for Fiscal 2019
  • Continue global compliance enhancement
  • Self-evaluation: ★★★ Achieved more than targeted / ★★ Achieved as targeted / ★ Achieved to some extent

System to Promote Compliance

Sharp defines compliance as “observing social codes of conduct and company regulations, including laws and corporate ethics.” Accordingly, Sharp is pursuing management practices that give priority to compliance.

The person most responsible for leading compliance at Sharp is the general manager of the Corporate Strategic Planning and Control Group. This person is in charge of formulating basic policies for compliance and making sure these policies are firmly established within the company. Meanwhile, the person responsible for leading compliance for the entire Sharp Group is the general manager of the President’s Office. This person is in charge of devising concrete measures for compliance and thoroughly implementing them. As well as affirming the implementation status of compliance measures, he or she draws up corrective measures where necessary and makes sure they are thoroughly executed.

Under these two general managers, the general managers of the business units are responsible for compliance within their respective organizations. The business unit general managers are also responsible for guiding and supervising compliance measures at subsidiaries and affiliated companies (hereafter, “affiliates”) under their business units.

Promoting compliance at each affiliate is the responsibility of the affiliate president.

Among the laws and regulations that pertain to business execution, some are considered to be critically important and capable of affecting the entire Sharp Group. For each of these material categories of laws and regulations, the company sets up a dedicated legal department. The aim is to achieve thorough compliance with these laws and regulations. Each legal department fully understands the content of the critically important law and studies the effects it could have on the business of the entire Sharp Group and on operations shared by different departments. It then reviews—as needed—business operations and processes, revises company regulations, formulates or revises routine operation standards, communicates these changes, and provides guidance and supervision to executives and employees.

In the event a compliance-related risk is actualized, Sharp will implement an emergency response in accordance with the Basic Rules for Compliance and the Rules for Business Risk Management, and take comprehensive corrective measures and prevent recurrence.

Compliance Training

As a means of promoting compliance, the Sharp Group has formulated the Sharp Group Compliance Guidebook, which states defined standards for matters to be observed, matters which are prohibited, and actions to be taken for all executives and employees, and publishes and disseminates this throughout the company. The Guidebook was revised in April 2019 to reflect the latest revisions to laws and regulations.

Sharp also periodically carries out compliance training (including e-learning) on the Sharp Code of Conduct and material categories of laws and regulations (such as competition laws, anticorruption, and personal information protection).

Consultation Hotline for Compliance Issues

Sharp Corporation and its affiliated companies in Japan have set up a hotline to provide counseling services for problems in the workplace, such as compliance issues. The company has also set up a competition law hotline, which serves as a contact point specifically for issues related to competition laws. These hotlines have been set up both inside the company and externally (via an outside law firm providing legal counsel). In line with the spirit of Japan’s Whistleblower Protection Act, they are available via e-mail, phone, and other means for employees and temporary staff, as well as employees of business partners*, to make a report or request a consultation. Sharp also has a consultation service dedicated to addressing workplace harassment (which includes sexual harassment, pregnancy discrimination, and abuse of authority).

In fiscal 2018, the compliance hotline received 55 reports and requests for consultation. For each of these, the relevant departments investigated the facts of the matter and issued as necessary corrective action orders. If the people who made the reports or requested the consultation have provided a means of contacting them, they are informed of the results. There were no serious legal or compliance-related violations in fiscal 2018. Also, the competition law hotline received no reports or requests for consultations in fiscal 2018.

The hotline is operated in line with the clear stipulation of both the Sharp Code of Conduct and the rules governing hotline service operation that the privacy of individuals contacting the hotline will be strictly protected and that those persons will suffer no unfavorable treatment or penalties.

Similar reporting and consultation services have been set up at Sharp’s major overseas bases. In fiscal 2018 there were 85 reports and consultation requests received. Action to swiftly address these issues is being taken.

  • Only the compliance hotline is available for use by employees of business partners.

Preventing Corruption in All Forms and Dealing Properly with Donations

The Sharp Group Charter of Corporate Behavior and the Sharp Code of Conduct contain provisions that strictly prohibit any form of corrupt behavior, such as extortion or direct or indirect bribes of money, goods, or services. The Group Charter and Code of Conduct also stipulate that donations must be handled in a proper manner.

In March 2015, Sharp instituted rules of conduct governing both executives and employees, with a view to preventing corrupt practices such as bribery. By setting up a clear system of checks, the company is working to prevent acts of bribery. Particular attention is paid to the employment of third parties such as agents and consultants, providing or exchanging gifts or entertainment to government employees, and participation in associations, with defined issues for relevant departments to confirm. Sharp sets up a consulting department for providing internal approval for each issue above. In order to further augment this checking system and clarify the targets for checking, a partial revision of the relevant rules was undertaken in August 2018. Also, in order to ascertain the risk of bribery and corruption among overseas affiliates and institute a more effective checking system, a survey of affiliates in Southeast Asia, Oceania, and the Middle East was carried out in November 2018 to gauge the operational status of these companies’ in-house rules regarding bribery and corruption, as well as to determine the degree to which these companies do business and interact with public officials and public corporations. Additionally, to raise awareness among employees in Japan and overseas, Sharp has created and published an in-house guidebook and training materials to ensure compliance with Japan’s Unfair Competition Prevention Act and other relevant laws. And with the US taking a more proactive stance on punishing foreign companies in recent years, Sharp has also invited US attorneys to come and conduct a training session on the US Foreign Corrupt Practices Act (FCPA), which included how it affects the entire Sharp Group. No violations occurred in fiscal 2018.

In Japan, Sharp prevents illegal payoffs and improper expenditures through a system of compulsory reviews that check legality, reasonableness, and transparency. In place since December 2008, this system serves to assess the propriety of monetary disbursements such as donations and contributions made by Sharp Corporation and its affiliated companies.

The Sharp Code of Conduct states, “Regarding political donations, we will observe all applicable laws and regulations and we will ensure transparency and proceed in strict conformance with internal company rules when making such donations in line with the company policy to build a healthy and responsible relationship with politics and government.” Based on this policy, any political donations abide by relevant laws and follow the necessary internal procedures.

In March 2014, Sharp further tightened the assessment criteria to ensure fairer reviews. In fiscal 2018, there were 29 cases of such reviews.

Management of Personal Information

Domestic Response

In order to thoroughly ensure that personal information is appropriately managed and to prevent incidents of data leakage, Sharp Corporation provides e-learning training once a year to all employees in Japan about the protection of personal information. In addition, training seminars are conducted at each business site for employees who handle personal information as part of their job duties.

To ensure the effectiveness of Sharp’s efforts to protect personal information, processes that require approval from the department specialized in personal information protection are incorporated into Sharp’s internal approval system regarding the handling of personal information. This contributes to consistently appropriate management of personal information obtainment, consignment, and provision to third parties by relevant departments. Also, following approval, the handling status—e.g., obtainment, storage, management, usage, deletion—of each customer’s personal information is to be recorded in Sharp’s own management database and updated as needed so that it can be checked and reviewed on an ongoing basis.

Appropriate handling of personal information is further ensured through the management of database audits of all departments that obtain customers’ personal information, checking the handling status against what is recorded in the management database. Moreover, on-site audits are also performed for specific departments that must follow even more stringent handling requirements.

Global Response

It has been one year since the General Data Protection Regulation (GDPR) went into effect in the EU. In that time, the number of GDPR violation-related enforcement measures by government authorities has steadily grown. In response, Sharp is carefully monitoring the status of their implementation, drawing up various privacy policies, and revising internal rules.

Additionally, Sharp is watching global trends, such as the possible “no-deal” departure of the UK from the EU, the consumer privacy act set to come into force in California in January 2020, and the various personal information protection laws being enacted throughout Asia, including China’s cyber-security law. Sharp is thus gathering and analyzing information to be incorporated into its global personal information handling-related compliance policies.

Compliance with Competition Laws

In order to comply with Japan’s Act on Prohibition of Private Monopolization and Maintenance of Fair Trade, as well as with equivalent overseas laws and treaties enacted to protect the interests of consumers by maintaining and promoting free and fair markets (hereafter, “competition laws”), Sharp has created an Antimonopoly Act Compliance Manual (Action Guidelines). These guidelines stipulate basic compliance matters that employees must adhere to in their duties with regard to cartels. To raise awareness amongst employees, Sharp has prepared a guidebook summarizing the key points of competition laws for each field of business, and it carries out periodic internal training. Sharp also raises awareness internally of case studies relating to competition laws from within Japan and internationally as well as information on major revisions to the laws. Sharp prevents actualization of competition law-related risks in transactions with business partners by reviewing all contracts and consulting with its legal department when approving new contracts.

Sharp maintains the effectiveness of the compliance program by confirming the circumstances of matters such as transactions and contacts with competitors in each field based on the reports from the business departments to the legal department. This enables Sharp to more effectively prevent the actualization of competition law risks (such as cartel activities or bid-rigging).

No violations occurred in fiscal 2018.

Exclusion of Antisocial Forces

Fundamental Stance on the Exclusion of Antisocial Forces

As a matter of basic policy, Sharp prevents or excludes any association with antisocial forces without exception, and deals with them in a resolute manner. It has established specific guidelines in the Sharp Group Charter of Corporate Behavior under the section entitled “Practice of Fair and Open Management,” as well as clearly stipulated in the Sharp Code of Conduct that Sharp shall seek to exclude antisocial forces by being “cooperative in the maintenance of social order, and will not engage in antisocial activity.”

Activities Aimed at Excluding Antisocial Forces

Sharp Corporation has established Rules for Excluding Antisocial Forces, which serve as the basis for Sharp’s effort to prevent antisocial transactions, as well as Sharp’s preparation and updating, as needed, of such resources as manuals for dealing with antisocial forces.

In order to facilitate its handling of antisocial forces, Sharp maintains a system of prompt communication and cooperation with the police, legal advisors, and other external experts, from whom it regularly obtains information, which is then thoroughly disseminated and managed amongst the Sharp Group. Sharp also works to raise employee awareness by conducting once-a-year compliance training, which includes how to deal with antisocial forces.

In addition, Sharp Corporation and its affiliated companies in Japan take other steps to exclude antisocial forces, such as including a stipulation of antisocial forces exclusion in all basic agreements for ongoing transactions and concluding memorandums containing the equivalent stipulation with existing suppliers.

Appropriate Advertising and Promotion, Representation-Related Law Compliance

In order to fulfill its corporate social responsibilities to customers and all stakeholders in the provision of correct information useful for selecting products and services, Sharp prioritizes appropriate advertising and promotion activities. It also complies with product and service representation-related laws, such as the Act against Unjustifiable Premiums and Misleading Representations, Pharmaceutical and Medical Device Act*1, and Fair Competition Code. Sharp positions compliance with these laws as a control item within its Rules of Business Risk Management. The following preventative measures are undertaken.

Systems and Rules for Preventing Legal Violations

With regard to product and service representation within Japan, Sharp follows internal rules, which stipulate the basic approach to representation and a practical system for checking appropriate representations.

  1. A dedicated supervisor is appointed to work with departments involved in the production of representations and to perform a final check prior to the publication of brochures and mass advertising
  2. A senior committee is established to make decisions about any questionable representations (Representation Review Committee and Sharp Fair Representation Council)
  3. An expert external advisor is appointed to provide objective guidance and advice on representation-related problems and matters for consultation
  4. Operations are carried out in line with the Manufacturing Labeling Standards*2

Also, Fair Expression Guidelines, which follow the same approach as used in Japan have been stipulated for overseas markets and are used in conjunction with local laws to determine what is appropriate.

  • *1 Act on Securing Quality, Efficacy, and Safety of Products Including Pharmaceuticals and Medical Devices
  • *2 Voluntary industry standards for product representation formulated by the Home Electric Appliances Fair Trade Conference and recognized by the Consumer Affairs Agency and Japan Fair Trade Commission

Fostering Awareness via Upskilling Support for Relevant Personnel

Representation Review Framework

Regular in-house training related to the Premiums and Representations Act, Pharmaceutical and Medical Device Act, and Fair Competition Code is provided to departments involved in the production of representations. Additionally, Sharp actively participates in outside seminars led by public institutions and then uses in-house training to provide feedback on the most recent trends.

Further, Sharp uses the “Fair Representation” page on its intranet to ensure the thorough dissemination of in-house standards and rules for performing checks, which are based on in-house specifications and manuals. The intranet page also provides information, such as the latest trends connected with the Premiums and Representations Act.