Social Responsibility of DENSO

Compliance

Basic stance

We believe that key actions to earn the trust and understanding of society are DENSO’s observance of all applicable national and regional laws and all Group employees’ fair and faithful conduct with the highest ethical standards. We see compliance as not only the observance of laws but also a responsibility to meet the expectations of stakeholders. In this sense, we consider it to be the cornerstone of all conduct.

Together with the declaration of CSR management in 2006, which developed out of this approach, we adopted the Code of Conduct for DENSO Group Associates, which is used as the yardstick against which employees measure their behavior to meet stakeholders’ expectations in their daily conduct. The Code resulted from a complete revision of the previous Code of Conduct enacted in 1997. The new Code is based primarily on the principle of legal compliance. The document is a simple one, designed so that even new employees can understand and put its provisions into practice. Furthermore, for an understanding of the Code to permeate each employee’s awareness, it includes a self-review sheet that every employee uses to reflect on his or her daily behavior.

While developing the Code of Conduct for DENSO Group Associates, we consulted the United Nations Universal Declaration of Human Rights, United Nations Global Compact, OECD Guidelines for Multinational Enterprises and the Charter of Corporate Behavior formulated by Nippon Keidanren (Japan Business Federation). Since the Code was adopted, all executives and employees reflect on their daily conduct each year, and we strive to steadily improve employee’s CSR awareness and conduct.

In an effort to ensure thorough compliance, domestic Group companies share the Code of Conduct for DENSO Group Associates. Correspondingly, overseas Group companies use a regional version of the Code of Conduct for DENSO Group Associates formulated by their regional headquarters in accordance with national and regional laws and customs.

*Scope: The Code applies to all executives and employees (including contract employees, temporary employees, part-time employees and all other employed individuals) at DENSO Corporation, domestic companies subject to our managerial consolidation rules and companies in which DENSO is the largest shareholder.
DENSO Group Declaration of Corporate Behavior and Code of Conduct for DENSO Group Associates

Promotion structure

DENSO sees thorough compliance as an important part of our internal control system, and in 1997 DENSO Corporation created a Business Ethics and Compliance Committee chaired by a director to provide oversight in that area. The committee works to develop frameworks in each country and region to contribute to law-abiding structures and pursue related activities. In 2003, DENSO Corporation established an internal whistle-blowing system in the form of the Business Ethics Hotline, which places employees in contact with external lawyers and the Legal Department. In fiscal 2007, the Company appointed compliance leaders (who also serve as CSR leaders) to spearhead initiatives in each workplace as part of its education and enlightenment activities. Domestic Group companies use promotion structures based on DENSO Corporation’s system.

For overseas Group companies, regional headquarters develop organizational systems, introduce and operate reporting systems, and pursue enlightenment activities that take into consideration the characteristics of their country and region. In North America, Group companies are working to prevent unlawful conduct by assigning compliance officers to each operating base and administering a 24-hour helpline (reporting system) and audit system. The status of these activities is regularly reported to base managers and used in efforts to prevent recurrences and improve activities. In Europe and China, Group companies started a compliance program that includes a helpline that is appropriate to the circumstances endemic to each country.

In addition, regional headquarters employees responsible for legal affairs in Japan, North America, Europe, China and Southeast Asia meet regularly to hold a Global Legal Conference. The gatherings seek to ensure and maintain compliance by sharing information and issues.

Education and enlightenment

Ongoing education and enlightenment activities are important tools for improving employees’ awareness of compliance issues. DENSO Corporation began providing compliance education by employee level in 2002 and introduced education and enlightenment activities led by compliance leaders by workplace in 2006 (including contract, temporary and other employees). In fiscal 2009, a total of 1,600 employees participated in educational programs by employment level. Furthermore, we offered e-learning courses for about 23,000 employees who have their own computers (including temporary employees) from fiscal 2009 in an effort to enhance respective employees’ awareness. About 21,000 workers participated in the program, which we plan to offer twice a year in the future.

Legal Department initiatives include raising employees’ awareness by means of the Business Ethics Newsletter and information pages on the corporate intranet, as well as holding group legal education classes and visiting local sites to provide legal education. Overseas, we are working to share and raise awareness of the most up-to-date legal information by publishing the quarterly bulletin Legal News in English and Japanese in locations such as North America and China. Additionally, we began holding a series of Business Ethics Lectures given by attorneys in fiscal 2007 to provide an opportunity for employees to reaffirm the importance of compliance and learn about external trends. In fiscal 2009, about 400 executives, department managers, domestic Group company presidents and compliance leaders attended lectures (and 90% of attendees replied that their awareness was heightened). Going forward, our focus is on bringing this information not only to managers but also to all employees in an effort to strengthen compliance.

Internal whistle-blowing system

DENSO Corporation’s internal whistle-blowing system provides an effective means of preventing and promptly addressing improper and illegal behavior. The system (in the form of the Business Ethics Hotline), which allows anonymous reporting, is independent from the normal chain of command at the Company and is administered by outside attorneys and the Legal Department in accordance with Japan’s Whistleblower Protection Act. We passed out cards listing the hotline number and expanded the scope of the program in May 2006 to include principal suppliers (300 companies). In fiscal 2009, the hotline received 188 reports and requests for advice in areas such as employment, labor, work environment, information management, business transactions and accounting, all of which were addressed after staff investigated the situation and confirmed the facts.

●Number of consultation calls to hotline

●Overall procedure for business ethics activities

Activity reviews and improvements

Since 2003, we have set aside each October as DENSO Group Business Ethics Month. We organize awareness-raising activities such as a Business Ethics Lecture and conduct an annual Business Ethics Survey to assess awareness of policies and latent risks. Results of the fiscal 2009 survey (which targeted about 4,000 workers, including temporary employees) indicated that there was a certain amount of disinterest regarding the conduct of others and that awareness of the whistle-blowing system was low compared with awareness of the code of conduct. On the other hand, there was an increase in the number of respondents who thought that it was easy to consult with superiors at work, while results also indicated that there had been a steady improvement in communication in the workplace. In fiscal 2010, we will address issues by conducting meetings at each workplace, enhancing e-learning training and continuing to promote the whistleblowing system.

●Result of fiscal 2009 Business Ethics Survey