Management System

The FDK Group believes thorough compliance to laws and regulations as well as social
norms, management transparency, better supervision functions, and greater awarenessabout corporate ethics founded in the basic CSR policies in addition to becoming a
corporate group trusted by society will help continually increase corporate value.

Corporate Governance

Governance

HumanRights

Labor
Practices

Environment

Fair Trade

ConsumerIssuesCommunity

Internal Control

Complying withthe Law

Board of Directors

Basic Concept

The FDK Board of Directors is composed of four directors (excluding directors

Basic Concept

Basic ConceptFDK Group conducts reviews of the management system as

who are Audit and Supervisory Committee members) and three directors who are

As a means to fulfill corporate social responsibilities, FDK GroupFDK Group established the FDK Group Corporate Conduct Guidelines

necessary for each measure based on the general principles of theAudit and Supervisory Committee members. Board of Directors meetings are held

approved the Basic Policy for Establishing an Internal Controlin 2000 as the standard of conduct for each and every employee. FDKCorporate Governance Code stipulated by the Financial Instruments

once every month to determine important management matters and deliberate theSystem at the Board of Directors meeting by recognizing theGroup strives to earn trust from consumers, customers and suppliers by

Exchange as well as establishes organizations and introduces otherprogress status of performance and investigate the measures.

necessity of strengthening corporate governance to maintainclarifying the policy that states, FDK Group acts with a sense of ethics

a sound and strong relationship with FDK stakeholders fromand complies with the laws and social codes , in FDK Action Guidelines.

employees to suppliers and local communities while ensuring theFDK encourages awareness and action of each individual by displaying

The FDK Audit and Supervisory Committee is composed of three directors, including two outside

appropriateness of operations and reliability of financial reporting

and allowing every employee to confirm our Action Guidelines on eachwork site while also publishing them on FDK intranet.

necessary measures because it believes strengthening corporate

Audit and Supervisory Committee

governance improves the soundness and transparency of thecompany and improves the value for FDK shareholders.
FDK strives to heighten fairness and transparency withdirectors, with meetings held once a month and whenever else a meeting is deemed appropriate

in addition to realizing management that complies with relevant

broad disclosure of information such as the provision of financial

to monitor and audit the appropriateness and validity of management. Furthermore, each Audit andlaws and the Articles of Incorporation.

information via the Internet while working to quickly release

Supervisory Committee member attends the Board of Directors meetings to share objective andmanagement information.

fair insight about overall management and each matter while also auditing the appropriateness andvalidity of business operations of the directors according to the auditing policies formulated by theMoreover, FDK has introduced a corporate officer system

Audit and Supervisory Committee.

composed of two directors and corporate executive officers as well

FDK has established an Audit and Supervisory Committee Office with the purpose to facilitate

as nine corporate officers to operate businesses that separate thehigh-quality auditing and supervision as well as to contribute to the strengthening of governanceauditing of management and the business operating system.

Conducting Education
Comply with the Corporate Governance CodeLaw, the Product Liability Act, Antimonopoly Law, and Personal Information

endeavored to improve items for compliance.

Protection Law in stratified training for new employees and new managers
to bring about understanding. In addition, FDK conduct various compliancebilateral informational exchange and sharing of opinions between the Audit and Supervisory
Committee, Audit and Supervisory Office, Accounting Auditors, and the Auditing Department.
■ Corporate Governance Framework
Shareholders Meeting

Directives

Nomination/DismissalLink

Audit and Supervisory Committee
Audit and Supervisory Committee Members(1) Director Training
FDK held training for corporate officers as well as directors once this year with

As of April 1, 2018

Nomination/
Dismissal

Enhancing and Strengthening General Principle 4:
Responsibilities of the Board of Directors in the Corporate
Governance Code▼FDK aims to improve the effectiveness and efficiency of auditing with close links that include

Auditing/
Supervision

Board of Directors
Nomination/
Dismissal/
Auditing

Auditing
Reporting

Audit and Supervisory Committee OfficeNomination/
Dismissal
ReportingAccounting Auditors

internal regulations to the Foreign Exchange and Foreign Trade ControlFDK released a corporate governance report in June 2018. In FY2017, FDK

through smooth informational sharing with outside directors who are Audit and Supervisory
Committee members.

FDK Group explains laws and regulations closely related to work fromtraining for all of the employees. FDK also holds trainings annually at eachbusiness site related to export management and subcontracting transactions.
FDK conducted e-Learning related to cartels, collusion, and corruption
for all of its employees in FY2017.
In addition, FDK strives to raise awareness about laws and regulationsthe objective to reaffirm expert knowledge and learn things outside of thatby providing employees a broad range of information about complianceexpertise in an effort to increase the expertise and knowledge of FDK directors.

that includes information about amendments to laws and regulations,(2) Evaluation of performance of Board of Directors

and an introduction of examples about violations using the intranet. FDK

FDK dug deeper into the heart of challenges in an effort to take action

communicated information 17 times in FY2017 on topics that included theto strengthen supervising functions through discussions based on the

Antimonopoly Law and the Specified Commercial Transaction Act.

assessment results with third-party institutes in addition to evaluation
methods through conventional questionnaires.

LinkAuditing

Link
President & CEO
Department for Internal Auditing(Auditing Department)

Auditing

ReportingManagement Meetings(Decisions about Business Operations)

Directives/SupervisionCorporate Officers
Each Department and Group Company
Director Training

13

FDK GROUP CSR REPORT 2018

Group training

FDK GROUP CSR REPORT 201814

Management System
HumanRights

Labor
Practice

Environment

ConsumerIssues

Community

Risk Management

3. Status of Occupational Accidents■ Chart of Risk Management Process

1. Risk & Compliance Committee

The business operations of the FDK Group must comply with a wide range

Three occupational accidents occurred in FY2017 (four in the previous fiscal▼

Complying with Laws and Regulations Related to Business Operations

Fair Trade▼

Governanceof laws, regulations and standards. In addition to this broad compliance,year). The occurrence rate and severity rate of occupational accidents ofFDK has established a Risk & Compliance Committee as the highest decision-understanding culture and customs and clearly responding to social trends

FDK has continued better than the level of the national and the electronic

making body related to risk management and compliance in accordance withare part of comprehensive compliance from an ethical perspective. FDK

equipment industry average.

the Basic Policy for Establishing an Internal Control System to prevent the■ Changes in the Annual Occurrence Rate

manifestation of risks for certain losses in the execution of business by the FDK

as Health and Safety Committee, Environmental Management Committee,
Contained Chemical Substance Management Committee, Export Management

1.59

Committee and Product Safety Promotion Committee in an effort to operate its
businesses in compliance with all laws and regulations.

Actions for Health Safety and Safety Activities, Number ofIncidents, and Measures Against Occupational Accidents▼1. Health and Safety Policy

safety activities for the purpose of eliminating all occupational accidents. FDK

1.63

1.66

The Risk & Compliance Committee grasps the state of risk management
processes and other matters in addition to facilitating ongoing improvements.
0.54

0.00

0.51

0.41

0.41

0.00

0.00

0.25

0.24

0.24

0.25

2012

2013

2014

2015

20162017

FDKAll Industries

also earning trust as a company and operating business smoothly. These

Make decisions
on policy,processes andother matters

Respond to
manifested risks
Rapidly escalate response
Quickly respond through multiple
departments to minimize impact● Formulate and execute measure
to prevent recurrence●Measures●Investigate and execute
reduction measures,such as avoidance andmeasures to prevent risks
before they happen● Investigate and implement
migration and retention

Monitoring, reviewing, and continually improving

Internal Reporting System

Electronic Equipment Industry

Occurrence rate: Death or injury due to occupational accidents per a total of one million hours of operation.
Calculated as death or injury/total number of operation hours × 1,000,000

Put processes
into practice

Facilitate ongoingimprovements■ Changes in Annual Severity Rate

FDK has established an Internal Reporting Desk and Supplier
Compliance Desk to receive reports and consultations about internal rulebreaches and actions that violate laws or regulations.
The Internal Reporting Desk,

0.15

Supplier Compliance Desk, and theInternal Reporting Regulations guarantee anonymity of anyone whoactions have strengthened mental health efforts.
0.100.10Monitor andrevise processes

0.10

0.10

0.090.09▼

3. Risk Management Process

0.03
0.02

0.00

2012

0.01
0.00
FDK

2013

0.01
0.00

2014

0.00
0.00

All Industries

2015

reporting an issue. Any issue discovered as a result of investigation into
report in FY2017 which was addressed appropriately.

0.05
0.05

0.01

reports a violation in addition to ensuring no harm is done as a result ofa report is immediately addressed with reform measures. There was one

0.07

0.00
2016

0.02
2017

Electronic Equipment Industry

Severity rate: Number of days lost due to occupational accidents per a total of one thousand hours of operation.
Calculated as total number of days lost/total number of operation hours × 1,000
Health Seminars

Identify risks
Assess/evaluate risks

0.45

0.39

also values measures for the mental health of employees from perspectives
that not only consider the happiness of the employees and their family but●●

2. Risk Management Framework

throughout the FDK Group, makes decisions about and puts into practice policies,

Every employee participates in building a safe and comfortable workplace bysystematizing and continually developing independent occupational health and

1.61

1.00

FDK aims to improve and ensure the safety and health of its employees
under the basic principle that occupational accidents must not happen.

1.66

1.58

1.50

0.50

●Group, properly respond to any manifested risks, and prevent any recurrence.

2.00

▼

has also put in place dedicated organizations for each field of compliance suchAssessment(1) Each department identifies, evaluates and verifies potential risks inherent to■ Internal Reporting Systemits business activities.

Users(2) Each department clarifies the priority of response to each risk and determines

All Employees of the FDK Group
Transfers, contract and part-time employees,
temporary employees, etc.
[Internal Reporting Desk]

risk control policies (avoidance, reduction, migration and retention of risks).
(3) Each department executes measures to prevent risks before they happen inaccordance with the decided policies.

Employees of FDK Group Suppliers[Supplier Compliance Desk]

Each department rapidly escalates response in the event any risks domanifest. Any issues are resolved as quickly as possible to minimize the impact▼

2. Occupational Safety Promotion Systemthrough an appropriate response in cooperation with each relevant department

The FDK Group holds the Central Health and Safety Committee madeand the Risk & Compliance Committee Secretariat as well as working to identify

up of the president, chairman of the labor union, and other members every

the underlying causes in addition to formulating and executing plans to prevent

quarter as a supervisory function of the Health and Safety Committees

recurrence.

at each business site to share information about activities at each businesssite while formulating Group-wide activity plans.
The On-Site Health and Safety Committees are held jointly by laborand management at each business site every month to conduct healthand safety measures appropriate for that business site. In addition, somebusiness sites have been certified under the OHSAS18001 international
occupational health and safety assessment.

15

FDK GROUP CSR REPORT 2018

FDK checks the progress of execution during each of these steps andmakes improvements as necessary.

Reporting/Consultation

Reporting/Consultation

External Point of Contact

Internal Point of Contact

Law Firm

Compliance related Dept.

Contact in a form the person who reports an issue cannot be identified

Examples of Crisis (Manifested Risks)
1 Natural disasters/accidents
2 Product trouble
3 Corporate attacks/compliance breaches
4 Informational security trouble
5 Environmental issues, etc.

FDK GROUP CSR REPORT 201816