Ethics and Anticorruption Policy

TOK Group promotes fairness and justice in business activities in accordance with the laws and social norms of each country and region.

• Prohibits certain acts as unfair competitions and maintain free and fair competition.
• Prohibits abuse of a superior bargaining position and engage in fair and equal transactions.
• Does not engage in any activities that are threats to international peace and security.
• Prohibits providing or accepting gifts or entertainment beyond the scope of social norms and reasonable customary practices.
• Prohibits any act of conflict of interest.
• Strictly keeps confidential information that is obtained or acquired during the course of business.
• Prohibits unauthorized use of corporate assets.
• Appropriately protects and utilizes intellectual properties and respects third parties’ intellectual property rights.
• Discloses corporate information in a fair and timely manner.
• Accurately advertises and provides product and service information.
• Prohibits insider trading.
• Makes donations and political contributions in accordance with the laws and regulations of each country and region.
• Cuts off any relationship with anti-social groups or individuals.
• Prohibits political and other solicitations in the workplace without the Company’s permission.

Compliance Promotion System and Standards of Conduct

Compliance activities are being promoted with the participation of all employees and led by the Compliance Committee, which consists of TOK officers and undertakes awareness raising and dissemination activities at Group companies with the support of the Legal Affairs Division (Compliance Committee Secretariat).

To prevent violations of compliance, the Compliance Committee collects information about potential problems and compliance issues from each site, along with corrective actions and the planned time of correction, and monitors progress on a periodic basis. The standing Audit and Supervisory Committee member and the Internal Auditing Division as the internal audit department attend the Compliance Committee to share key points in audits, thereby improving the quality and effectiveness of audits.

In addition, the Ethics and Anticorruption Policy has been established as a subordinate policy under the CSR Policy with the aim of improving compliance awareness by each officer and employee and to clarify the values and code of conduct to be shared. This policy is also applicable to subsidiaries in Japan and overseas and is translated into the local language of each group company to be distributed to all officers and employees

Compliance Committee Diagram

※Chaired by the President and Chief Executive Officer

Initiatives for ensuring compliance with laws and regulations

To prevent compliance-related risks from emerging, all officers and employees must absorb compliance into business practices. To achieve this, the Company is working to construct a system to respond rapidly to revisions to laws and regulations in each country. TOK also conducts its own unique compliance training that considers conditions at each department and site within the Group and goes through a PDCA cycle to prevent risks from materializing.

In FY 2022/12, based on the activities in the previous fiscal year, TOK revised the Group Compliance Rules (requiring the establishment of management systems for laws and regulations at sites in Japan and overseas, and increasing the frequency of check on laws and regulations from twice annually to four times annually as the major revised points), followed by the preparation and dissemination of the list of applicable laws and regulations and the procedures for the management of laws and regulations, and the start of operation of the check on laws and regulations (four times annually). These changes led to the establishment of a continuous process for timely information collection on changing laws and incorporating the information into practice. To help employees better understand compliance, CSR training was implemented for all employees in Japan, through which the changing concepts of compliance were shared, and the importance of compliance was re-emphasized.

Internal reporting system

To identify and improve or prevent compliance risks in business activities at an early stage, the Company has an internal reporting system based on the Whistleblower Protection Act. A whistleblower may select one of three channels that respective report to the Compliance Committee Secretariat (internal), the Standing Audit and Supervisory Committee member (internal), and the legal advisor (external). Whistleblowing and consultation may be made by phone, in writing, in person, or by other means, and anonymous whistleblowing is acceptable. It is clearly stated that a whistleblower is protected from dismissal or any disadvantageous treatment because of whistleblowing unless it is conducted for an illegitimate purpose. Apart from the whistleblowing system, TOK also has an outside counseling section that can be accessed anonymously to receive complaints concerning harassment.

In FY 2022/12, this section received 15 complaints and implemented guidance and corrective training for the relevant persons. To establish a more reassuring environment for whistleblowing, TOK will further enhance the system and continue disseminating it to managers.