Compliance
Thorough Compliance
As the economy becomes more global and corporate activities become more borderless, business activities spanning across countries and regions withdifferent administrative and economic systems, trading practices and values are picking up. Globally shared initiatives and guidance are increasingly
important in terms of conducting proper international business and preparing for all types of risks that could potentially hinder business activities.
Hitachi promotes business globalization in accordance with "Basics and Ethics," and has established its own set of rules concerning important business practices,such as preventing bribery, ensuring fair competition and establishing tax compliance, that are compliant with widely recognized and approved international
standards. We are also working to ensure thorough awareness and practice of these rules throughout the entire Group. We will respond appropriately to thedemands of society while reviewing and updating these rules as needed based on an awareness that required corporate behavior and interpretations of standards
and regulations continue to evolve due to ongoing global discussion concerning compliance.

Our Basic Policy and Promotion System

Compliance Reporting System

We established the Hitachi Group Codes of Conduct as a standard ofHitachi, Ltd. has instituted a Compliance Reporting System allowingbehavior for the entire Group and have translated them from Japanese

reports to be made to the compliance section or directly to external

into 13 different languages, including English and Chinese, sharing

lawyers to prevent illegal and unethical behavior, to promptly address

them with employees throughout the world. Hitachi also works toinfractions, and to enhance our ability to self-regulate. This system canfoster a sound corporate culture in terms of awareness of corporate

be used not only by employees within the Hitachi Group but also byethics and compliance and conducts related employee surveys

temporary staff and business partners, such as suppliers andthroughout the Group annually.

distributors. In fiscal 2018, we received 462 reports from all GroupIn 2016, Hitachi reconstituted its rules and guidelines related tocompanies in Japan and around the world. In addition, we havematters such as compliance with competition law and the prevention ofimplemented the Channel to the Board of Directors system to allow alltransactions with antisocial groups, corruption and bribery, repackaging

Hitachi, Ltd. employees to directly report problems anonymously orthem into the Hitachi Global Compliance Program (HGCP), a system ofunder their real names to Hitachi directors in cases where they see any

regulations falling under the Hitachi Group Codes of Conduct. We areillegality or extreme inappropriateness in business conduct by division

seamlessly implementing these rules at all business sites within Japan.

heads, executive officers, or other management personnel.

Strengthening Our Global Compliance FrameworkResponse to Technical Intern Training Program Issues

To implement the HGCP, we have appointed a senior executive as theIn 2018, the Organization for Technical Intern Training conductedhead of risk management for the entire Hitachi Group, to supervise

on-site inspections at Hitachi, Ltd. and 10 Group companies. These

management-level risk management executives from business units andinspections identified violations of the Act on Proper Technical Intern

key Group companies. Under this system, policies and measures are

Training and Protection of Technical Intern Trainees, and the relevant

shared through the Compliance Management Conference, composed ofcompanies were provided with recommendations for improvement

these risk management executives. Each executive is assisted by aregarding intern training. Additionally, in September 2019, Hitachi, Ltd.

compliance manager who implements practical support measures.

received an order for improvement from Immigration Services Agency

We also support Group companies outside Japan and have appointedof Japan and Ministry of Health, Labour and Welfare, regarding thecompliance heads in 11 regions, responsible for implementing education

construction of its systems for carrying out proper technical internand sharing information as well as arranging consultation services withtraining according to authorized plans. Companies that received

outside attorneys.

recommendations or orders for improvement have already taken

Issues in the promotion of compliance measures are clarified throughcorrective measures. We have taken strict measures to ensure that noindividual dialogue with business units and key Group companies, whilefurther violations will take place throughout the entire Group, such as

the internal audit section regularly conducts Group-wide reviews to verify

constructing Group-wide policies, guidelines, and check systems forthat each area of compliance is being appropriately operated. In cases

technical intern training, and we continue to strive to carry out

where these reviews identify necessary improvements, corrective

appropriate technical intern training in accordance with relevant lawsmeasures are swiftly implemented.

and the aims of the Technical Intern Training Program.

Hitachi, Ltd. also convenes an Advisory Committee of outside experts togain new insights into compliance and apply them proactively in its own
efforts.

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A Business Foundation that Supports Sustainable Growth

Primary Initiatives

Eliminating violations of competition laws is among our top priorities

Policies for Preventing Bribery and Corrupt Practices

for regaining trust, and so Hitachi will continue its efforts to prevent thePreventing bribery and corrupt practices is a big challenge for arecurrence of any such incident.

company today. In 2008 Hitachi established rules against bribery andcorruption for the HGCP along with guidelines indicating specificTax Compliance Initiatives

spending thresholds for entertainment, gifts, and other arrangements

To ensure risk management for taxation in response to globalization,

provided to public officials. We have striven to ensure strict compliance

Hitachi follows relevant tax-related regulations applicable to the Group

with these rules. In 2016 we introduced a policy banning facilitation

as a whole as well as rules for transfer pricing management. We also

payments, which had not been explicitly regulated, along with revisions

manage transfer pricing in accordance with the OECD Transfer Pricing

including clarification of due diligence procedures for business

Guidelines and the laws and regulations on transfer pricing in eachpartners.

country or region where Group companies are located.

Preventing Violations of Competition Law

Violations of Laws and Regulations

Hitachi engages in business based on the principles of conformance

In fiscal 2018, there were no incidents in which Hitachi violated or waswith the law and business ethics and fair and open competition, while

penalized under laws or regulations regarding bribery or corrupt

at the same time ensuring that we comply with the HGCP’s rules

practices and competition.

concerning competition law and other related business standards andguidelines. In 2017, to enhance awareness of ethical principles andpractices globally, we created a global version of our standards
regarding contact with competitors based on the standards originallyprepared for use in Japan. We have been providing a collection of casestudies for workplace discussion to Group companies since 2012, andin 2018 we added case studies about competition law in threelanguages, Japanese, English, and Chinese, to raise employee
awareness.

Quality Assurance
Thorough Implementation of Quality Assurance
Providing products and services that our customers can use with confidence, along with meeting the requirements and quality standards of our customers inorder to achieve this, are important values shared by all our employees and codified in the Hitachi Group Codes of Conduct. To ensure that quality andreliability are maintained, we are strengthening our quality assurance activities from the perspectives of organization and management, technology, andhuman resources in every process—from planning and development to design, manufacturing, delivery, and maintenance.

Quality Assurance Initiatives
Maintaining the values of “Harmony”, “Sincerity”, and “Pioneering Spirit“that comprise the Hitachi Founding Spirit, as well as adhering to“Basics and Ethics” and “Putting Right and Wrong before Profits andbut also thoroughly discussing the process, framework, and motivating
factors leading up to occurrence, along with ways to prevent
reoccurrence, in order to improve our product reliability and customer
satisfaction.

Losses”, we place great emphasis on “Sincerity” in quality assurance
activities as part of earning trust in our products.

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Framework for Quality Assurance

One integral aspect of this is our unique and longstanding practice ofTo ensure full control over quality governance, we have separated theochibo hiroi which means “gleaning” in English and involves learning

quality assurance division from the manufacturing division in every

from failure to further develop our technologies. When an incident

business unit (BU) and Group company, creating a framework foroccurs, our executive officers take the lead in examining things fromactivity in which our customers’ safety and trust are the top priorities.

the customer’s perspective, not only investigating the technical causes

Since fiscal 2018, in order to strengthen this framework further, weHitachi Integrated Report 2019