Compliance
Policy and Structure
A Shared Compliance Awareness
Compliance activities form an essential foundation for Canon to become a truly excellent global corporation.
Canon Inc. strives to ensure that executives and employees share common values with regard to legal compliance and corporate ethics. We do this by promoting mainly three activities, publicizing our corporate principles and policies, building infrastructure, and providing training and education, while also pursuing increased compliance awareness and appropriate business activities.
Group companies in Japan carry out similar activities, while Group companies outside Japan conduct compliance-related activities in accordance with local laws and regulations with regional marketing headquarters taking the lead.
Canon Group Code of Conduct
In 2001, Canon updated its 1992 Canon Code of Conduct from a global perspective and introduced the revised Canon Group Code of Conduct.
The Canon Group Code of Conduct has been translated into 13 different languages, including English, French, and Chinese, facilitating its use across the entire Group.
In 2006, a collection of case studies entitled Practice! A Corporate Ethics Reader was distributed to all Group employees in Japan. The Second Edition was issued in 2008, providing a wider range of familiar examples and further promoting a deeper understanding of compliance and corporate ethics.
We also participated in the formulation of the standards outlined in the Charter of Corporate Behavior of Nippon Keidanren (Japanese Business Federation), an alliance of leading Japanese corporations, which we continue to faithfully respect.
- Reference: Charter of Corporate Behavior of Nippon Keidanren
- Reference: Outline of the Implementation Guidance for Charter of Corporate Behavior of Nippon Keidanren
Compliance Promotion System
Specific compliance policies and measures concerning Canon Inc and Group companies in Japan are determined by the Corporate Ethics and Compliance Committee. This committee is one of the management committees and is made up of Canon Inc.'s directors and executive committee officers. The compliance policies and measures determined by this committee are implemented by compliance coordinators in each of Canon Inc.'s headquarters divisions as well as at Group companies in Japan, under the supervision of the Compliance Office.
The Global Legal Affairs Coordination Committee investigates and analyzes the movement of worldwide legal regulations corresponding to Canon products and sets forth policies. In addition, the appropriate management sections formulate and carry out training programs and other measures to improve and consolidate the compliance systems in relation to specific laws and regulations, including those for security trade control, the environment and product safety.
At Group companies outside Japan, management works with the legal affairs and human resource divisions at each regional marketing headquarters to guide the construction of compliance promotion systems in accordance with local laws.
Compliance Structure
Global Legal Affairs Coordination Committee
Canon's Global Legal Affairs Coordination Committee, established in 1987, is chaired by the Group Executive in charge of the Corporate Intellectual Property and Legal Headquarters, with the Group Executives of the Environmental & Quality Headquarters, Information & Communication Systems Headquarters, and Senior General Managers of the Corporate Legal Center, and Global Logistics Management Center acting as vice-chairs. The secretariat of the Global Legal Affairs Coordination Committee is the Legal Affairs Coordination Division, which is under the direct control of the president and conducts a broad range of efforts focusing on legal matters from a company-wide perspective.
The Committee also convenes annual meetings with Group company presidents worldwide to share information regarding legal policies and countermeasures.
The Committee consists of cross-functional working groups to ensure compliance with laws and regulations worldwide. Each working group investigates and analyzes product-related regulations, issuing guidelines and white papers concerning legal and regulatory trends so that employees can be fully informed about legal issues. English-language versions of guidelines and white papers are as a rule also prepared with the aim of sharing information with Group companies worldwide.
In 2011, Canon established the Global Legal Affairs Coordination Meeting so as to enable a more cross-functional response. This meeting is attended by the legal staff from the Corporate Intellectual Property and Legal Headquarters, Environment & Quality Headquarters, Global Logistics Management Center, Corporate Legal Center, and Legal Affairs Coordination Division. It is mainly engaged in risk analysis and shares data on laws and regulations, so as to enable prompt and accurate evaluations of how such laws and regulations affect Canon's business. The establishment of this meeting resulted in a restructuring of the working groups, in which some of them were done away with.
In addition, various guidelines and white papers were updated and English-language versions issued, and investigation/analyses of legal and regulatory trends in China and other developing nations in Asia were carried out.
Canon is taking a more proactive approach based on this new structure. Important topics for us to deal with include ongoing improvements and strengthening of our trade secrets management system, the establishment and revision of policies on items such as security trade controls and international trade taxation, and investigation and analysis of legal and regulatory trends in developing countries. We also plan to formulate guidelines for matters important from a legal perspective in our increasingly important cloud business.
| PL Response Guideline 2010 |
| IT Law White Paper 2010 |
| China Law White Paper 2010 |
| Product Environmental Law White Paper 2010* |
| Trade Secrets Management Guideline 2011* |
| Guidelines for Setting Prices from Canon Inc. to Sales Subsidiaries |
| Guideline for Response to the Tax Haven Tax Code |
| Security Trade Control Guidelines |
- *Also published in English
【Principal Working Themes of the Global Legal Affairs Coordination Committee】
- Export controls
- Trade secrets management
- IT
- Environment (REACH, Waste Electrical and Electronic Equipment [WEEE], Restriction of Hazardous Substances [RoHS])
- Product liability
- International tax/anti-monopoly laws
- Regional law (United States, Europe, China)
- Disability laws
- After-sales service
- Trends in copyright law
- Smooth utilization of open-source software (OSS)
- Product safety regulations
- Product marking
- Encryption management regulations
- Establish policy for uniform labeling in measurement units
- Legal considerations associated with cloud business
Canon's Compliance Hotline and Monitoring
To prevent illegal activity at an early stage, Canon Inc. maintains a Compliance Hotline for compliance-related consultation and reporting. Employees may also contact all the corporate directors and auditors by e-mail to report compliance issues.
The Compliance Hotline maintains strict confidentiality and guarantees that there will be no penalties for users. We are also working to increase awareness of the Compliance Hotline through the Compliance Website on our Intranet in addition to conducting compliance training and putting up posters in the workplace.
Hotlines have been set up at all Group companies in Japan as well as major Group companies outside Japan. At Canon Inc., the Compliance Office constantly handles any information provided via the Hotlines. Items judged to have a serious impact on business are promptly reported to management, and also reported on at the quarterly Corporate Ethics and Compliance Committee.
Education and Awareness
Employee Compliance Awareness
Compliance Week
Since 2004, Canon Inc. and its Group companies in Japan have held Compliance Week semiannually, providing employees with the opportunity to contemplate the meaning of compliance and corporate ethics as their own problem. During Compliance Week, more than 40,000 employees take part in workplace meetings to discuss issues related to compliance.
In actual practice, this means that compliance issues specific to each workplace are identified and solutions are discussed by everyone involved, with the results checked during the next Compliance Week. Repeating this issue resolution process contributes to the cultivation of a more positive corporate culture.
We also seek deeper awareness of compliance which befits the times by bringing up current topics related to compliance and corporate ethics for discussion at the workplace.
Flow of Compliance Week Activities
Compliance Card Distribution
To reinforce the importance of demonstrating high ethical standards and a strict sense of compliance, Canon produced a portable Compliance Card in 17 languages and distributed it to all executives and employees of Group companies worldwide, including full-time, part-time and temporary employees. The card carries a reminder of the San-Ji (Three Selfs) Spirit and a test section that employees can use to check themselves and reflect on the role of compliance in their everyday activities.
Canon Inc. has also developed a mechanism to check employee behavior. Once a month employees are required to take a six-subject compliance test, which automatically appears when they start up their workplace computer.
Compliance Card
Information via the Intranet
Canon Inc. established the Compliance Website on its intranet system as a means to enhance everyday awareness of related issues and provide employees access to company regulations and a variety of compliance-related information.
We also publish the Compliance Newsletter, which is released companywide, with the goal of improving awareness of compliance. These were published semiannually in 2011 with a focus on the Compliance Week results reports. Case studies of the issues and efforts set at each workplace were reported on in the first-half newsletter, along with information about the importance of confidential information controls. The second-half newsletter reported on trends in issue-setting at workplaces, and introduced the opinions of employees.
In a separate initiative, we established the Canon Group Compliance Site for employees of Group companies in Japan. Materials such as the Canon Group Code of Conduct, Practice! A Corporate Ethics Reader and the Compliance Newsletter are posted there for access by all Group employees.
Compliance Training
Rank-Based Training
A strong sense of ownership in each employee is the basis of compliance. Rank-based training designed to foster compliance awareness has been conducted for general managers, managers and assistant managers, as well as new employees.
Canon has also conducted training for managers since 2007 for each organizational unit within Canon Inc. as well as at each Group company. Approximately 800 managers attended this training in 2011. Training for managers reaffirms the importance of compliance and the conduct expected of managers, while also providing an impetus for sharing common values.
Global Legal Affairs Seminars
Canon has held Global Legal Affairs Seminars on legal issues and regulations since 2007. These seminars explain in detail the main points and specific responses relating to guidelines and white papers issued by the Global Legal Affairs Coordination Committee. Participants are drawn from among Canon Inc. and Group company personnel in Japan working in fields relevant to the seminar theme.
Along with raising interest in legal affairs and facilitating a direct communication approach that includes opportunities for Q&A, these seminars promote a deeper understanding of compliance with major legal and regulatory frameworks around the world.
There were four sessions of the Global Legal Affairs Seminar in 2011, covering the following topics, including follow-up reviews of guidelines and white papers.
Planned topics for the 2012 seminars include trade secrets management and Guidelines for Uniform Labelling in Measurement Units (based on the International System of Units (SI)), and revision of the Canon Compliance Program for Security Trade Control Legislation. We will continue to conduct these seminars regularly to make information on laws and regulations more prominent and make our employees more knowledgeable about them.
Seminar on global product laws
| Theme | Times held |
|---|---|
| White Papers (IT Law White Paper, Product Environmental Law White Paper, China Law White Paper) | 3 (once each) |
| Explanation of Transfer Pricing Tax Code | 1 |
Drunk Driving Eradication Program
Drunk driving is a serious social problem. Taking preventive measures as a corporate entity is a social imperative. Canon conducts these efforts Group-wide so as to eliminate drunk driving, whether on business or privately.
In 2007, Canon developed the Drunk Driving Eradication Program for Group company employees across Japan who commute by car or motorcycle. We ran the program again in 2011, targeting new recruits and mid-career hires, as well as employees who have recently started to commute by car.
The program comprises lectures featuring real-life case studies, video messages from victims of drunk driving accidents and group discussions on the causes of drunk driving.
We continue to update the content of the program in response to changing laws and other social factors.
In 2011, three Group companies- Nagahama Canon, Ueno Canon Materials, and Oita Canon Materials- also conducted a similar program for managers. In the program, the elimination of drunk driving is posited as a facet of management, which leads to awareness on the part of managers and thorough guidance for their subordinates.
Canon will continue efforts to eliminate drunk driving.
Security Trade Controls
Thorough Compliance with Export Control Regulations
Countries with a high level of concern for international peace and security implement strict controls in accordance with international agreements on the export of commodities and technologies for civil use that could be diverted for use in weapons of mass destruction or conventional weaponry. Japan controls such exports through the Foreign Exchange and Foreign Trade Control Law.
To achieve full compliance with these export control regulations, Canon Inc. created a security trade control framework headed by the president in 1988. In the framework, the Foreign Trade Legal Division within the Global Logistics Management Center works as an administration division and the framework includes the general managers of all division headquarters, except for the Finance & Accounting Headquarters and Human Resources Management & Organization Headquarters.
Specifically, each related division and the Foreign Trade Legal Division, which controls export administration, double-check such issues as whether commodities and technologies for export are controlled by regulations and whether trading parties are engaged in the development of weapons of mass destruction.
We hold regular explanatory meetings for employees to make them aware of the importance of these export controls. 18 meetings were held on a variety of themes in 2011, with a total of around 1,300 participants.
Such thorough internal controls have enabled Canon to remain in compliance with the Foreign Exchange Control Law and maintain a bulk export license from Japan's Ministry of Economy, Trade and Industry continuously since 1990. This license is granted only to exporters who exercise strict controls.
We also support our Group companies worldwide in the establishment of administrative structures and management rules that match their type of business. More precisely, the Foreign Trade Legal Division dispatches representatives to offshore companies to deliver training courses, provides templates for corporate compliance programs, compiles English-language versions of guidelines, supplies educational materials for local employees, and carries out various other activities.
Guidance was provided to 46 companies within and outside Japan in 2011, 11 of which were visited by personnel for direct guidance. As a result, no infractions of export control laws took place within the Group.
We will continue to work to strengthen and expand the range of our guidance, especially for overseas Group companies, so as to keep infractions to zero for the Group.
Seminars for Preventing Serious Incidents Involving Security Trade Controls
Seminars for Preventing Serious Incidents Involving Security Trade Controls were held in October-November 2011 for general managers in R&D divisions as part of Canon's efforts toward thorough security trade control education. There were 62 participants.
These seminars presented actual case studies so as to deepen awareness of the seriousness of security trade control, owing to the fact that an infraction of these controls by a single employee could shut down all of Canon's export activities.
Redoubling Technology Transfer Controls
A variety of technologies are subject to export control regulations, not only commodities such as manufactured products and parts, but also diagrams, software, operational manuals, and other "arts" (information concerning products), which can be traded or transferred more easily than physical commodities. Due to the current proliferation of telecommunications networks, any employee can transfer technical information, so the most important issue becomes developing full awareness of technology transfer controls among all employees.
The Global Logistics Management Center therefore in 2009 issued the Technology Transfer Administrative Guidance, which covers the technology transfer regulations and the in-house technology transfer control rules in a Q&A format.
In 2010, we organized seminars using this guide as the textbook with the aim of reinforcing our technology transfer control system. It was then included as a Compliance Week theme in 2011, with lively exchanges about it at more than half of the operations at Canon Inc. and the Group companies in Japan. This confirmed the strong effectiveness of the use of Compliance Week, in which most employees participate.
We will continue to reinforce technology transfer controls know-how among the entire Group, including through the use of the educational methods described above.
