Compliance

TDK CSR REPORT 2017

Compliance
Basic Policy

Spreading Compliance Awareness

The TDK Group endeavors to gain the satisfaction, trust, and support of all stakeholders, including customers, suppliers, employees, shareholders, and local communities; to continue as an entitythat solves social issues and is useful to society; and to contributeto the development of a sustainable society. To this end, we havestated clearly in the TDK Charter of Corporate Behavior that both inJapan and in other countries we shall respect human rights, obey
related laws, international rules, and their spirit, and fulfill our social
responsibility with a high ethical sense. All members of the TDKGroup shall act in strict accordance with the standards of behavior
stipulated in the TDK Code of Conduct.
Furthermore, in order for employees to abide by the TDK Group’s
management philosophy, including the corporate motto and corporate principles, and social norms, including related laws, international rules, and their spirit, the Business Ethics & CSR Committee
thoroughly publicizes the TDK Code of Conduct, which stipulates
specific behavior guidelines, and endeavors to imbue practice ofthe corporate motto, thorough implementation of corporate ethics,
and understanding of the significance of social responsibility.

TDK provides every TDK Group employee with a copy of the TDK
Code of Conduct Handbook, which they can use as a guide for
their individual business activities, and also endeavors to spreadawareness by, for example, displaying posters.
Also, in order to deepen employees’ understanding of compliance,
TDK implements training for specific ranks and e-learning for all
employees, as well as lectures for management by responsible
directors and outside speakers. During fiscal 2016, e-learning programs were arranged for 98% of all TDK Group employees.

Help Lines
In order to prevent violations of compliance in advance and also
to detect violations as quickly as possible and deal with them, theTDK Group enables all TDK Group members to report complianceviolations. As a system contributing to the thorough permeation ofcompliance, TDK has established consultation hotlines in Ethics
Councils and an internal help line in each region.
Furthermore, in order to facilitate the speedy resolution of serious
compliance problems, third-party help lines have been set up inthe Americas, Europe, and Asia to enable employees to directly
inform the Business Ethics & CSR Committee through a third party,
such as a law office. The TDK Code of Conduct Program stipulates
the protection of informants so that they do not suffer any unfair
treatment or disadvantages.

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Lecture by an outside speaker

Compliance Strengthening Efforts
Recent years have seen increased prosecutions of competition law
in nations around the world. This is prompting numerous cases ofcompanies being taken to court by the antitrust (competition law)authorities for suspected cartel activities, with many ordered to
pay massive fines for their alleged actions. There has also been asteady stream of criminal charges filed against individual officers
and employees, damage claims from suppliers and consumers,
shareholder lawsuits, and other harsh developments.
The TDK Charter of Corporate Behavior stipulates that TDK willcomply with the laws and regulations in each and every nation
where it does business, while living up to its social responsibilities from a powerful ethical perspective. Against this backdrop,
education aimed at preventing cartel activities is provided in theform of workshops taught by outside experts, e-learning and otherprograms advanced worldwide.
Despite this stance, however, the Japan Fair Trade Commission
launched an on-site investigation at TDK related to the HDD suspension business, with the Company fully cooperating with the investigating authorities.
In October 2016, Compliance HQ was newly establishd, with regional compliance officers assigned to each region, a system deployed to promote related global activities and employee compliance programs implemented in increasingly thorough fashion.