Strengthening of the Business Foundation

Corporate GovernanceCompliance

JT Group Compliance Management

The Board of Directors—which is tasked with developing the JT

We at the JT Group define “compliance” as “Actions for the

JT Group is committed to growing in a sound and sustain-

Group’s management strategy, making decisions on important

shared JT Group Mission, based on the values and ethics

ness Manual in place, the JT Group strives to prevent andable way. While it is paramount that high ethical standards

issues, and supervising all the group’s operations—meets once a

we must hold in order to become better corporate employ-

reduce risks. In the event of an emergency and a disaster, JT is

be upheld and responsible management be practiced, themonth in principle and on more occasions, if necessary, to make deci-ees and citizens.” In FY 2011, the “Principles of Conduct”

ready to set up a crisis management task force headed by the

JT Group believes that highly transparent management

sions regarding the matters specified by laws and regulations andand the “Guidelines for Conduct,” both of which were set in

President and supervised by the Corporate Strategy Divisionand effective communication with all stakeholders on infor-

other important issues, supervise business execution, and receive

2000, were integrated into the “JT Group Code of Conduct”

and a local emergency response headquarters in disaster-

mation and decision making regarding management willreports from the directors on its status. The chairman, meanwhile, isto further improve the JT Group’s compliance and maintainstricken areas, and to make prompt and proper responses

lead to superior corporate governance.

With the Risk Management Guidelines and Disaster Prepared-

The JT Group,committed to supervising management as a non-executive director.

its system and to help employees practice compliance. At

through close cooperation between the relevant departments

therefore, will continue to place a premium on strengthen-In order to keep pace with the rapidly changing business environ-the same time, the Compliance Committee was reshuffled,and divisions.

ing of corporate governance.

ment and optimize the group’s management, the JT Group adopted

with external experts constituting more than half of the

The Disaster Preparedness Manual was revised in FY 2011 tomembers, to strengthen corporate governance.

better deal with disasters. Specifically, key items such as initial

Efforts have been underway to downsize the board of

the Executive Officer System, under which executive officers

directors, separate the decision-making process from theappointed by the Board of Directors execute business in their respec-

business management process through an Executive Offi-

tive areas of responsibility, in accordance with a group-wide businessstrategy decided by the board, by exercising the authority delegatedto them.

management processes. At the same time, an advisory

JT utilizes the Audit Board System, under which four auditorscommittee comprised of outside experts is in place, where(including three outside auditors), in their capacity as an independent

they advise the management from a broad perspective

agent with a mandate from shareholders, examine the performance

regarding how the company should operate over the mid toof duties by directors and executive officers in order to ensure soundlong-term, and other issues of similar importance.

and sustainable growth and maintain high levels of accountability

Board of Directors
Compliance Committee

Advice and Improvement
vementCompliance
Promotion Department*

Cooperation

ReportCompliance Office

appropriate environment for audits by allocating sufficient staff to theInternal Control System

Auditor’s Office as an organization supporting the auditors in per-

The JT Group has been maintaining and improving a sys-forming their duties, with the allocation reviewed as needed in con-tion system for employees, disaster relief programs, and business continuity were reviewed on the basis of lessons learned
from the Great East Japan Earthquake, and measures to deal
with disasters on holidays and at night were also revised. Eachdivision’s business continuity plan will also be reviewed, andCompliance Issues Regarding
the Code of Conduct

revised as necessary, in view of the nature of its business.

Tobacco Business
Headquarters

PharmaceuticalBusiness Division

Food BusinessCorporateand society by minimizing disaster damage, ensure the safety ofGroup Companies

Group Companies

Group Companies

Group Companies

The JT Group strives to meet the expectations of consumers
its employees, and resume business operations quickly.

* A General Term for the Corporate and Other Departments Supervising theCode of Conduct

Strengthening Information Security

tem to optimize its operations by increasing the credibility

sultation with the auditors.

The “Information Security Policy” helps the JT Group toof compliance and its financial reports, managing risks, andWhen directors and executive officers detect any matter that may

protect from threats, by ensuring safe and proper use of its

conducting internal audits. We will continue these efforts

cause substantial damage to the company, they are due to report it towhile reviewing and revising the current system as neces-the Audit Board.

The JT Group develops the Compliance Implementation Plan

The “Information Security Handbook,” posted on thesary and will strive to maintain and enhance our corporate

Auditors are entitled to attend not only meetings of the Board of

every year to continuously improve the quality of its operations.

intranet and available to all JT Group employees, provides

Directors but also other important meetings, and they usually attend

Accordingly, October is designated as “Compliance Promotion

a set of guidelines and rules on information security.

meetings of the Executive Committee.

Month” to practice compliance, where workshop meetings are

In addition, e-learning programs are offered every year toheld and JT Group Compliance Survey is conducted for all em-

improve employees’ awareness on information security.

ployees, while seminars such as those for e-learning are offered

Corporate Governance System

to managers. In addition, a variety of level-specific seminars are

General Meeting of Shareholders
Selection or dismissalof members

Selection or
dismissal ofmembers

Selection or dismissal of members

Board of Directors
ReportAdvisory Committee

Lawyers

AdviceOperational Review
and Business
Assurance DivisionInternal audit
Group audit

Audit Board
Compensation
Advisory Panel

Compliance Office

Executive Committee
Executive Officers
Departments
Group Companies

Accounting audit / Operating audit

Consultation and Reporting Systemphase of operations is not only a legal requirement but alsoa social responsibility. Based on this recognition, the JT

Compliance consultation and reporting counters are inGroup establishes systems, regulations, safety control

place both in and outside the company, while consultations

measures, and other relevant programs which reflect theand reports received are properly dealt with according tocontents of the statement. At the same time, in-house train-

relevant laws and internal regulations. The consultation anding is offered to employees to raise awareness of personal

reporting system is being improved and properly managed

information protection.

to prevent problems from arising and improve the com-

Privacy Statementpany’s ability to govern itself.

CSR Report 2012

JT issues a statement about the protection of personal
information. Protecting personal information in every

Compliance Committee

President & CEO
Report /ProposalAuditor’s OfficeProtection of Personal Information

URL

www.jt.com/privacy

CSR Report 2012

Towards Harmonious Relationships
with Local Communities

Advice(to Representative
Directors)

Supervisionof the performance

Accounting
audit

Review of the policy and the rule
relating to compensation for board
members and executive officers
Introduction of compliance-related mattersheld to raise awareness of compliance among employees andhelp them practice it on a day-to-day basis.

Accounting audit / Operating audit

Audit report

Independent
Auditors

information assets.

Approaches to Protecting
the Global Environment

systems so as to ensure appropriate business execution.

Compliance Implementation Activities

Strengthening of
the Business Foundationcer System, and introduce outside directors to accelerate
and improve the group’s decision-making and businessactions by employees, the chain of command, a safety confirmaCompliance Promotion System

Supply Chain Management

Based on the framework of solid corporate governance, theand transparency. To this end, efforts are underway to develop an

25

Risk Management System

Appropriate Manufacturing Process
and Consumer Services

Directors, Board of Directors /Auditors, Board of Auditors

Basic Concept of Corporate GovernanceRisk Management

26

Strengthening of
the Business Foundation

Human Resources Management

Human Resources Development

JT is recruiting motivated individuals to ensure sustainable

JT is upgrading its training and educational programs to

Based on the recognition that “the growth through practice

growth.

help each employee grow as a professional.

JT believes that each employee’s respect for human rightsof the JT Group Way by each individual JT Group employee

In recruiting new graduates, for example, we focus on their

For example, many employees participate in optional pro-and others’ individualities and personalities leads to creat-

drives the growth of the JT Group in a changing businessmotivation and abilities regardless of their gender, nation-

grams to acquire basic knowledge and skills necessary foring and maintaining a fair working environment. The Basicenvironment,” four basic principles are in place.

ality, or educational background, while disseminating

their jobs, such as those for marketing, financial account-

Policy on Human Rights Education is thus in place to main-

1) Providing all employees of the JT Group companies with

ample information on JT through the website, job semi-ing, logical thinking, and inventive and communication

tain fairness in recruitment and treatment, based on an international perspective for human rights.

opportunities to grow and develop in their careers

skills. These programs are open to all employees, regard-

In addition to recruiting new graduates in spring, a systemless of their departments, jobs, and ages.

To raise awareness of human rights among employees,3) Treating all employees of JT Group companies fairly

is in place for recruitment in summer and for foreign-

There are also level-specific programs for learning profes-

moreover, learning materials are posted on the intranet and4) Respecting the diversity, while seeking talents widely

student recruitment to employ a variety of individuals withsional knowledge and skills, while each department has its

e-learning programs are offered regularly.

We respect fundamental human rights as we respect eachdifferent backgrounds.

own job-specific programs designed for learning special-

employee as an individual, under a universal principle of

We also recruit mid-career professionals, providing themties.

not discriminating against employees on account of gender,

with opportunities to leverage their experience and knowl-race, nationality, creed, handicap, employment status, etc.

edge.

Career Development Support Programs
Career development support programs include career in-Management Focusing on Employee Growth
based on the concept that “employees contribute to thecompany through their work and the company treats themsis is on definition of the significance and nature of eachjob, specialties, qualification-based salary, fair treatment
based on the performance-based appra-

Off
er
i

th
ow
gr

self-sustained development, while efforts

112

121

R&D personnel

56

54

44

provide employees with opportunities to review and deter-

34

38

36

mine their career paths from a mid to long-term perspec-Mid-career personnel(main career track, R&D personnel)
Job separation rate(within three years of employment)*

92

55

─

tive.

2.0%

2.0%

1.2%

Human Resources Development

can improve and make the most of their abilities, while en-

nt of

th

lo
emp

ro w

ge

t

he

tm e

pos

iti o n a n d e

oy
m pl

e

Establishment of a Fair Merit System and Enhancement of the Organizational Strength

FY 2010concerned. The system provides employees who aim forself-sustained growth with opportunities to advance their

Human Rights Education
3. Fair recruitment and appointment of persons incharge of fair recruitment and human rights education
4. Implementation of human rights educational seminars
5. Promotion of human rights education at JT Group
companies
6. Others
1) Respect for human rights in accordance with theglobalization of business2) Communication with labor unions
3) Response to fake dowa (antidiscrimination) activities, etc.
4) Collection and sharing of information, etc.

careers.

Mobilizing and Developing Global Human Resources
While the JT Group’s workforce consists of employees with
spect one another’s cultures and values.

Better Labor-Management Relationship
It is imperative that employees and employers share a com-

JT and Japan Tobacco International (JTI, which spear-

mon view of the business environment and trends to en-

Managers, meanwhile, play a vital role in practicing aheads JT’s overseas tobacco business), therefore, jointly

sure the JT Group’s sustainable growth. Based on a labor-

fair merit system and helping employees achieve self-

launched the “JT/JTI Talent Partnership Program,” to ex-

management consultation system established between the

FY 2011sustained development. In order to practice a fair appraisal,change human resources and develop global talents who

two parties, JT and its employees respect each other, being

each department and section holds appraisers’ meetings

can leverage new ideas emerging from synergies among a

engaged in good-faith discussion to deal with management
issues such as business plans and financial management.

As of the end of March 2012 (number of employed workers)

FY 2009

who are qualified can apply once a year for jobs they aspireover 100 different nationalities, it is imperative that they re-esNumber of JT Employees

Male

7,973

7,948

7,933

Female

988

980

1,003

Total

hancing fair treatment of all employees.

’g

Tr

le n
ot

es

C h alea

ment, JT provides employees with workplaces where theyyethese into practice.

CompanyWork

In addition, the Career Challenge System is in place to help
employees develop their career plans, where employees

2. Establishment of the Committee of the Promotion ofvariety of talents. One such program is the biannual program “JT/JTI Exchange Academy,” where JT/JTI employ-

Although the Great East Japan Earthquake dealt a severe

At the same time, managers are being trained and edu-

ees from all over the world are engaged in group discus-

blow to the JT Group’s business, a group-wide cooperation

8,961

8,928

8,936

Average age

42.8

43.0

43.4

cated to enhance the organizational strength, while training

sions and make presentations in English to deepen mutual

system was established to continue operations and restore

Average service years

21.6

21.7

21.9

programs are offered to newly appointed managers to haveunderstanding beyond language and cultural barriers.

damaged production facilities. At the same time, emer-

1

Consolidated number of employees*

49,66548,472

48,529them obtain knowledge and skills required for manage-gency labor-management meetings were held to change

Number of Employees of Overseas
Consolidated Group Companies*2

27,76827,014

27,139ment of human resources and organizations, with a variety

work schedules to maintain product supply and ramp up

of programs such as follow-up trainings implemented to

production, while support is being provided to disaster-enhance the organizational power.

stricken areas.

*1 Number of employees of JT and its consolidated subsidiaries*2 Number of Employees of Group Companies Headquartered Abroad

CSR Report 2012

CSR Report 2012

Towards Harmonious Relationships
with Local Communities

to standardize appraisal practices and improve appraisal
skills.

Approaches to Protecting
the Global Environment

Employees

agement training designed for employees who are at stages in their careers to decide their paths. These programs

Technical college and high school graduates

With emphasis on a transparent human resources manage-

are underway to put

Number of
employees

104

to, with their applications examined by the departments

ition and com
pos
pa
of
ny
ng
ributiotnnCo

port for employees’(including those with
graduate school degrees)

Main career track* Based on the percentage of new graduates who have not left a job
within three years of employment as of April 1st each year

Basic Principle

isal system, and sup-University graduatesterviews conducted annually by managers and career man-

1. Respect for human rights and ban of discrimination

Strengthening of
the Business Foundation

fairly, thereby growing together.” Specifically, the empha-

Recruitment

JT has a human resources management system that is

FY 2010 FY 2011 FY 2012

Basic Policy on Human Rights Education

Supply Chain Management

nars, and internship programs.

2) Setting transparent rules and standards

Recruitment Results

27

Respect for Human Rights

Appropriate Manufacturing Process
and Consumer Services

Recruitment of Next-Generation Human Resources

Human Resources Management Policy

28

Strengthening of
the Business Foundation

One of JT’s management priorities is to create competitive

culture in which a variety of individuals with different backgrounds and perspectives (regardless of gender, age, nationality and handicap) make the most of their abilities,

Child-care leave

is committed to creating an environment and a corporate

thereby contributing to future growth.

creating an ideal working environment for female employees, while providing them with opportunities at various departments at home and abroad to exhibit their talents andabilities. In fact, a female executive is in office, with thenumber of female managers increasing.

FY 2011

29

37

38

Male

1

1

2

Female

28

36

36

96.6

91.9

100

40

47

56

To Eliminate On-The-Job Accidents

6

12

16

JT set up its unique Industrial Accident Prevention Five-Year

0

1

3

Plan to eliminate on-the-job accidents, setting goals for reduc-

0

1

2

ing the number of on-the-job accident casualties, and maintain-

Breakdown
Percentage of those who took childcare leave and returned to work (%)*2
Number of employees who opted
for short-time work
Number of employees who took
leave to care for a sick child
Number of employees who tookfamily-care leave
Number of employees who opted
for short-time work

*1 Number of employees who took child-care leave in respective fiscal years*2 Calculated with “the number of employees who took child-care leave inrespective fiscal years” as a denominator and “the number of those who
returned to work within three years (including those who are scheduled toreturn to work)” as a numerator

Leveraging the System to Continue
Working While Raising Children
I have a son in the first grade and a three-year-old daughter. I took child-Work-Life Balance
JT believes that all employees are entitled to achieve aaccordance with the JT Occupational Safety and Health Basic
Policy, which was set in 2002, as ensuring the safety and healthof employees is an integral part of its operations.

ing and promoting employee mental and physical health. Specific measures include proper maintenance and managementof the occupational safety and health control system, on-thejob accident prevention measures, mental health enhancement, health hazard (occupational diseases, etc.) prevention
measures and prevention of occupational traffic accidents.
Total Lost Time Incidents at JT’s Factories
FY 2007

care leave twice until they turned one year old. When I returned to work,
I enrolled myself in a short-time working program, where I went to work
an hour later and got away from it an hour earlier than usual. When my

FY 2008

FY 2009

FY 2010

FY 2011

Number of victims

6

3

3

5

4

Frequency rate*1

1.48

0.75

0.77

1.38

1.13

0.406

0.029

0.027

0.064

0.012

with high motivation and a sense of fulfillment. A variety ofson started elementary school, meanwhile, I switched to another short-efforts are thus underway to help employees continue

time working program, where I got away from work an hour earlier. My

Severity rate*2

working with a sense of security and do what they ought toboss and colleagues were supportive enough to help me deal with emer-*1 Occupational accident frequency rate = (Number of occupational accident
victims / Number of person-hours) × 1,000,000*2 Occupational accident severity rate = (Work-days lost / Number of
person-hours) × 1,000

do as a member of their family, when faced with life events
such as raising children and caring for someone sick or the

gencies, business trips, and meetings. In fact, they
were more concerned than I was when I got a callfrom a nursery because my child had a fever.

elderly in the family. JT was certified by the Ministry ofHowever, I’m amazed at how fast kids can grow.

Health, Labour and Welfare for the second time in July 2010

It’s not easy to work every day while cherishing

as a company taking measures to nurture the next genera-

the time you spend with your kids, but thanks totion and for its efforts to create an environment friendly to

Health Management of Employees
Recognizing that each employee needs to stay healthy bothJT’s well-established system, I’m quite satisfied
with my work-life balance.

Compliance Officephysically and mentally to ensure continuous high perfor-

Tomoko Hayano

mance, JT properly manages the health of employees, station-

In addition, all employees are en-ing full-time medical personnel (12 physicians and 35 public

Re-Employment System

health nurses) at 11 locations nationwide. In addition to legal

teers, be hospitalized for bone mar-With the minimum age for receiving the public pension

medical examinations, additional examinations are conducted

row transplantation, and participate

raised, JT adopted a re-employment system to provide em-annually for those who are 35 years of age and older to preventin the Japan Overseas Cooperationployees with more options for employment, extending

lifestyle-related diseases, with industrial physicians and healththeir retirement age to 65.

nurses communicating the results to each employee.

Employment of Persons with Disabilities

Approaches to Mental Health

Efforts are underway to create better workplaces for em-

Recognizing the importance of employees’ mental health, JT

FY 2011ployees with disabilities. To help them make the most of

focuses on preventing mental illness. In addition to a counter

1,650

their capabilities, for instance, they are assigned duties forwhere specialists and counselors offer counseling services, ex-which they are qualified, while facilities and installations

ternal specialized institutions listen to employees’ problems ei-

are being improved, with due consideration given to thether by phone or face to face. Workshops and seminars are also

Volunteers (JOCV), thus encouraged
to contribute to society.

Next Generation Certification Mark (known by thenickname “Kurumin”)

Working Hours and Major Systems in PlaceFY 2009

Annual Working Hours

1,643

FY 2010

1,640

Overtime hours (hours/month)

18.3

18.7

18.7

Holidays
Administrative leave

15.9

16.0

15.7

Number of paid holidays used (days)
Percentage of paid holidays used (%)

85.8

83.8

80.0

Volunteer leave (persons)

2

19

121

JOCV leave (persons)

0

0

0

CSR Report 2012

convenience of commuting to and from their workplaces.

held regularly for managers on “care by lines” and for employ-

The percentage of employees with disabilities in the total

ees on “self-care” in line with the Guidelines for Mental Healthworkforce stood at 2.52% as of the end of March 2012, well

Promotion at the Workplace established by the Ministry ofabove the legal employment rate of 1.8%.

Health, Labour and Welfare.

*1 Lost time injury rate: The number of lost time injuries per 200,000
working hours.
*2 Rate of vehicle accidents: The number of vehicle accidents per
million kilometers.

Workshop at the sales and marketing departments

CSR Report 2012

Towards Harmonious Relationships
with Local Communities

titled to take leave to act as volun-

Japan Tobacco International (JTI), the core of JT Group’s international tobacco business, employs about 24,000
people worldwide.
JTI is committed to providing a safe and healthy workplace and aims to eliminate all occupational injuries andillnesses. To achieve these commitments, JTI has embedded the Safety Change Program in manufacturing operations and the Defensive Driving Program in sales and marketing operations.
The Safety Change Program is a comprehensive program
based on two principles: providing a safe working environment; and ensuring people consistently work in a safe
way. In 2011, the key focus area for JTI was to provide inhouse factory based technical training. Furthermore,‘Safety Leaders’ training was provided to the management
teams in several factories. In-line with JTI’s EHS Plan, a pilot Safety Change Program was launched in the CIS Region (broadly Eastern Europe, including Russia and Kazakhstan). Following a successful implementation, the Program
will be extended to other JTI markets. The results of the
trainings are now showing, with JTI’s lost time injury (LTI)
rate*1 falling by 27% between 2010 and 2011. Since 2003,
across JTI, the LTI rate has decreased by over 70%. Taking
the manufacturing part of the company, the LTI rate has
fallen by 90%.
The greatest safety risk faced by any JTI employee occurs
while driving. A Defensive Driving Program was implemented in 2004, to minimize the risks of this activity. The
program continued in 2011, with 2 train-the-trainer sessions providing 27 qualified Fleet Safety Trainers for JTI.
The results of the program are clear, with a reduction in therate of vehicle accidents*2 by 48% since 2003. However,there was a small increase in the rate of vehicle accidents
in 2011 compared to 2010.

Approaches to Protecting
the Global Environment

those who are raising children.

29

JT has been improving its safety and health control system inStrengthening of
the Business Foundation

work-life balance and fully exhibit their talents and abilities

JTI’s EHS Measures

FY 2010Supply Chain Management

As part of its program to encourage diversification, JT is

Family-careleave

Opportunities for Female Employees to Work Actively

Creating Workplaces Where Employees
Feel Gratified and Rewarded

FY 2009
Number of employees
who took child-care leave*1

human resources, placing a premium on their diversity. JT

Unit: Persons

Appropriate Manufacturing Process
and Consumer Services

Child-Care and Family-Care Leave Taken

Driving Diversity

30