Kansai Electric Power Group Overview

Value Creation Story

Medium-term Management Plan

Business Overview

Foundation to Support Value Creation

Financial and Corporate Information

ComplianceKansai Electric Power Group Integrated Report 2023

* See page 117 for details regarding risk management.
Board of Directors
PeriodicallyreportingCompliance Promotion Headquarters

Internal Control Board

Organizational
Climate Reform
Committee

Reporting

Nominating Committee

Compensation Committee

President

Division/Office

In order to radically strengthen our system of observing laws
and regulations, the Group has decided to rebuild its
compliance system by utilizing external human resources, andwe established a Compliance Committee and an Office ofCompliance Promotion in April 2020.
Aiming to strengthen supervisory functions related tocompliance, the Compliance Committee is organized directly
under the Board of Directors as a committee independent
from the President and other executive officers. The majorityof the committee members, including the chairperson, arefrom outside the Company. (See page 103.)
In July 2023, for centrally promoting compliance and risk
management throughout the Group, the Compliance
Promotion Headquarters was newly set up by integratingcompliance on wheeling service guidelines, risk management,internal control, and other functions into the Office ofCompliance Promotion. At the same time, the position of Chief
Compliance Officer (CCO) was established as the officer withultimate responsibility for compliance promotion. Additionally,the Internal Control Board was set up to deliberate internal
controls, including risk management, for the entire Group*. In
addition, aiming to enhance the effectiveness of internal
controls at operating divisions, including front lines, each
operating division now has an Internal Control and Compliance
Officer to step up cooperation with corporate divisions.
The Compliance Promotion Headquarters is composed ofstaff members with legal knowledge as well as diverse workexperience. In addition to formulating and implementing theGroup’s compliance promotion plans and responding toproblematic events, the Headquarters provides training forcompliance, encourages compliance with laws andregulations in cooperation with corporate divisions, andconducts interviews and provides guidance on efforts madeby each operating division, etc.
The Headquarters reports on and brings up compliancerelated events for discussion to the Compliance Committee.
With the guidance, advice and supervision of the Compliance
Committee, the President and other executive officers aresubsequently able to act and take concrete measures.

Internal Control andCompliance Officer■ Compliance system

Audit Committee

Guidance,advice andsupervision

Compliance
Committee■ Efforts to promote compliance

The Group assesses compliance risks every year and selects
compliance risk items to be addressed. For those risks, wedevelop and implement concrete preventive measures as acompliance promotion plan every fiscal year.
For fiscal 2023, major items for promoting compliance thatshould be recognized and worked on by the entire Group are“rebuilding a mechanism to ensure compliance with laws andregulations, with an appropriate competitive environment
and an organization to execute them,” “further heightening
sensitivity to compliance risks,” “creating a workplace where itis easier for employees to speak out and where complianceissues are tackled on an organizational basis,” and “carryingout flexible compliance promotion activities tailored to theworkplace.”
Going forward, we will steadily implement this plan andadd new initiatives as needed.

・・・
ReportingOutsidemembers(The majority ofmembers, including
the CommitteeChairperson)

Insidemembers

Compliance Promotion Plan for fiscal 2023 • As of May 31, 2023

(President, etc.)<Reference> Compliance Committee meetings held in
fiscal 2022
Meetings of the Compliance Committee are held regularly ona quarterly basis, and will also be held swiftly and flexibly
when a particularly problematic event arises.
A total of 10 meetings were held in fiscal 2022, focusing on
investigation reports on problematic events related tocompliance, as well as the deliberation of a compliancepromotion plan and compliance-related training.

1. R ebuilding a mechanism to ensure compliance withlaws and regulations, with an appropriate competitiveenvironment and an organization to execute them<Strengthening internal control and risk management
systems and mechanisms>
We will create mechanisms and rules to promote compliance,
fundamentally strengthen risk management and internal
controls groupwide, and rebuild the organization to centrally
execute and promote them.

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Kansai Electric Power Group Overview

Value Creation Story

Medium-term Management Plan

Business Overview

Foundation to Support Value Creation

Financial and Corporate Information

Compliance2. Further heightening sensitivity to compliance risks<Provision of training>
Effective compliance training that goes beyond theacquisition of knowledge to truly ensure and practicecompliance in routine work is provided across the Group,including education for directors and employees at our groupcompanies.
<Implementation of awareness-raising activities>
We will raise employees’ awareness of compliance throughcommunication between outside members of theCompliance Committee and employees, introduction ofinternal and external case studies, and other measures.
<Ingraining compliance awareness into routine work>
We will ensure that everyone is familiar with laws, regulations,and internal rules, so both superiors and subordinates
understand the risks of problematic events related tocompliance that may occur during routine work and share
their awareness.
3. Creating a workplace where it is easier for employees
to speak out and where compliance issues are tackled
on an organizational basis<Initiatives to create a workplace with high psychologicalsafety>
We will create a workplace with high “psychological safety”
where subordinates feel free to consult with their superiors
and express their opinions, enhancing communication
between them.
<Initiatives to encourage employee opinions>
We will promote communication between the compliancepromotion manager and the compliance promotion staff at

Kansai Electric Power Group Integrated Report 2023

each site, and will also enhance communication between thehead office and the workplaces.
<Initiatives to promote and utilize whistleblowing>
We will create a system to lower the psychological hurdle forwhistleblowing by introducing an internal leniency systemand by other means, carrying out awareness-raising activities
toward better understanding and increased use of ourwhistleblowing system.
4. Carrying out flexible compliance promotion activities
tailored to the workplace<Sharing workplace initiatives>
To boost compliance activities at each base, informationexchange meetings will be held among divisions and groupcompanies according to the category and description ofbusiness, number of employees, work arrangements, etc.
<Awareness-raising activities on rules regarding gifts andhospitality>
We will promote employees’ understanding of the purpose of
these rules through communication with each division,
enhanced Q&A sessions, etc. and consider revising theRegulations on Handling of Gifts and Hospitality to makethem easier to understand.
<Appropriate review of internal rules, etc.>
We will urge periodic reviews (simplification, abolition, etc.) ofinternal rules and business operations that do not correspondwith actual business situations, as they can result in a decline
in normative consciousness and other undesirable outcomes.

■ Compliance Hotline

The Kansai Electric Power Group Code of Conduct stipulates
how to report to and consult with the hotline when feelingdoubt or discomfort related to compliance.
Our Compliance Hotline has been set up for consultationwhen people have doubts related to compliance in theirworkplaces, and in regard to various legal violations andimproper work conduct. This hotline is available not only toofficers and employees of our group companies andcontractors but also to those retired or resigned from theabove. The hotline is designed to prevent, detect early, andcorrect inappropriate behavior in terms of compliance. If
required, a lawyer specializing in the field relevant to eachissue will respond, and they can request the Compliance
Committee or Audit Committee to take effective measures attheir own discretion.
We are working to create an environment offering a more
approachable service that can accept anonymous
consultations and that allocates female consultants, forexample, and are strictly prohibiting detrimental treatment ofconsulters due to having received consultation. Paying close
attention to protecting the confidentiality of consulters, we
disclose consulters’ names only to the minimum parties
required for fact-finding and taking action, and impose
confidentiality obligations on them. In addition, we proceedwith a fact-finding survey while confirming the intention ofeach consulter.
Considering the importance of using the hotline, withintranet, posters, leaflets, and various educational tools, we arecontinuously informing and encouraging each of our divisions
and group companies to use the hotline.

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Kansai Electric Power Group Overview

Value Creation Story

Medium-term Management Plan

Business Overview

Foundation to Support Value Creation

Financial and Corporate Information

Compliance■ Responding to compliance violations

Kansai Electric Power Group Compliance Hotline
Kansai Electric Power Group
employees and others
ReportConsultation

InternalHotline(Kansai Electric Power Company Desk/
Kansai Transmission and Distribution Desk)

Consultation

External Hotline
Communication/Instruction
on content of consultation

Report of outcome

Consultation (Compliance Promotion Headquarters, Kansai Electric Power Company/Secretariat Compliance Promotion Division, Kansai Transmission and Distribution)• Instruct investigation and response to the contentof the consultation. Cooperate and provide support
for the investigation and response as appropriate.
• If necessary, the Consultation Secretariat conducts
an investigation for itself.

Report(outside lawyer desk)If necessary, a lawyer specializing in thefield relevant to the consultation
details responds.

Lawyer’s officeReport of outcome
ReportAudit Committee
Members

Consultation concerning group companies
Office responsible for compliance in group companies
Compliance Committee or responsible executive in group companies
Note: Our group companies also establish and operate hotlines.

Enhancement and improvement of the consultation desk,
including introduction of an internal leniency system
Based on the Business Improvement Plan formulated in May
2023, we will further promote the use of the consultation deskby, for example, informing employees of the post-consultation
process to lower their resistance toward using the system, andalso introduce an internal leniency system. The internalleniency system allows consideration of lessening severity of
the final disciplinary action for employees who voluntarily
report compliance violations to the company. We will
enhance and improve our consultation desk to detect legal
violations and inappropriate business operations at an earlystage and take measures as an organization.

Number of cases
handled by theCompliance Hotline

83
Fiscal 2022 84

Other violations oflaws, rules, etc.
%

Harassment%

30

39

FY 2022
Breakdown

Fiscal 2021

Information
management

7%<Examples of awareness-raising tools>

Kansai Electric Power Group Integrated Report 2023

Labormanagement, etc.

24%

Based on our business improvement plan formulated in fiscal
2019, the Company and Kansai Transmission and Distribution,
Inc. have established a reporting system when a problematic
event occurs, and stipulated the reporting rules for executives
and employees in our internal rules.
In the relevant divisions, should respective division heads
become aware of any information on major violations of laws
and regulations (including omission of procedures stipulated
by laws and regulations) or fraud and other compliance-related
issues that affect the Company’s and the Kansai Transmission
and Distribution’s credibility with the external stakeholders,
they shall immediately report these matters to the Chief
Compliance Officer (CCO). The CCO shall take appropriate
measures and report on these matters to the Compliance
Committee to receive guidance, advice and supervision.
When executives become aware of an event that causes oris likely to cause a compliance issue, they shall report it to theoutside members of the Compliance Committee and theChairperson of the Board of Directors. In the same situation,
employees shall report to their superiors. If it is judged
appropriate based on the details of the report, employees canreport to the Compliance Hotline set up inside and outside
the Company, instead of reporting to their superiors. When areport is received, the Hotline shall investigate and take action
in cooperation with relevant divisions and related parties asnecessary. If the investigation reveals a violation of laws andregulations, the relevant divisions and related parties shallpromptly take corrective and preventive measures, and if
necessary, report to the relevant administrative agency andannounce the issue to the news media. The CCO shall also
follow up with related divisions and parties as necessary, andcheck whether the corrective and recurrence prevention
measures are functioning sufficiently, as well as checking if114

Kansai Electric Power Group Overview

Value Creation Story

Medium-term Management Plan

Business Overview

Foundation to Support Value Creation

Financial and Corporate Information

Compliance
any compliance issue has reoccurred. If a compliance issue has
reoccurred, the CCO can discuss necessary measures withrelevant divisions as well as other related divisions.

Examples of actions taken in past events of violation<Unmet work experience requirements for construction
management technical certification exam>
On June 18, 2021, a report to the Compliance Hotline revealed
that some employees in our group companies had taken
construction management technical certification exams andobtained certification without satisfying the prescribed work
experience requirements. Based on guidance and advice fromthe Compliance Committee, a third-party committee wasestablished on July 30, 2021 for the purpose of conducting an
objective and thorough investigation, inquiring into thecause, and providing recommendations on recurrence
prevention measures.
The third-party committee investigated 3,372 current
employees and 704 retired employees from 15 companies,
including the Kansai Electric Power Company, as to thefollowing three matters.
①	Unmet work experience requirements for eligibility toreceive the technical certification exam
②	Existence and extent of properties where a person who
did not satisfy work experience requirements was assigned
as a chief engineer or supervisory engineer on site basedon certification that was determined to be inadequate③	The quality of construction work at properties where aperson who did not satisfy work experience requirements
was assigned as a chief engineer or supervisory engineer
on site based on certification that was determined to beinadequate

Kansai Electric Power Group Integrated Report 2023

Results from the investigation by the third-party
committee and the subsequently formulated recurrence
prevention measures were announced on December 20, 2022.

■

Compliance promotion in accordance with thecharacteristics of each division/group company
Promoting compliance in each company divisionand group company

By having each division and group company actively facilitate
the functioning of PDCA cycles and promote compliance, weseek to have the idea that “compliance is a foundation ofbusiness” permeate and become established throughout theentire Group.
Specifically, each division has created their own“compliance promotion plans” and is striving to implement,
evaluate and improve their promotion efforts. When doing so,they are considering the Company’s basic policies and major
themes, the business and work characteristics of theirdivisions, and compliance risks that could occur in the future
along with changes in the business environment,
unacceptable incidents that occurred in the past both insideand outside the Company, and other factors.
Furthermore, considering our basic policies and major
themes, each of our group companies is promoting
compliance based on the characteristics and sizes of theirbusinesses, as well as other real conditions.

Efforts to prevent overseas bribery
The Group is globally operating business in Asia, North
America, Europe, and many other regions, and we believe thatcomplying with local legislation and rules is a major premisefor global business expansion.
In particular, as tightening of bribery regulations has
become a global trend, we have established internal rules toprevent bribery of foreign public officials, etc., and clarified
prohibited items such as gift-giving and entertainment withwrongful intentions as well as items to be observed. At thesame time, we are continuously informing divisions involved
in international transactions, including the International
Business and Cooperation Division, through training and othermeans. We will continue to strive to prevent inappropriate
bribery through these efforts.

Supporting the efforts of each division and groupcompany
In addition to leading the promotion of efforts of the Group asa whole, the Compliance Promotion Headquarters is
supporting the efforts of each division and group company.

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Kansai Electric Power Group Overview

Value Creation Story

Medium-term Management PlanBusiness Overview

Foundation to Support Value Creation

Financial and Corporate Information

Compliance■ Results of a questionnaire for all employees regarding compliance awareness, etc.

The Company and Kansai Transmission and Distribution, Inc. conduct a “Sustainability questionnaire for all employees (conductedevery year since fiscal 2006)” which includes a survey on compliance awareness. Utilizing the results of the survey, we will continue towork on correcting our corporate structure and fostering a sound organizational climate that emphasizes compliance.

Q

You always act with an awareness of compliance.

QYou feel that the management has a strong sense ofintegrity and is taking the lead in reform of your company.

(%)

(%)
100

96.9

96.8

98.0

80

97.4

70.0

70

62.7

90
60

80

56.8

50
2019

Q

72.1

2020

2021

2019

2022

You are doing your job with a sense of mission.

Q

2020

2021

2022

You find your job rewarding and are proud of it.

(%)

(%)

90

100

90

88.9

88.9

90.2

90.4

80

80

75.8

76.2

2019

2020

83.8

83.0

2021

2022

70706020192020

2021

Survey period: November 7 to November 25, 2022
Respondents: All employees of the Kansai Electric Power Co., Inc. andKansai Transmission and Distribution, Inc.
Number of respondents: 16,614 [Response rate: 89.7%]

Kansai Electric Power Group Integrated Report 2023

2022

[How to read charts]
The graph of secular change shows the transition of the total value of the percentages of “Strongly agree” and“Moderately agree” in all responses.

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