Compliance

Promoting Compliance

Komatsu considers the maximization of corporate value with the pursuit of Quality and Reliability as the principle of our management. The Company believes its corporate value is the total sum of trust given to the Company by society and all stakeholders.

In order to increase this level of trust, it is important to not only improve our business performance but also to increase the integrity and transparency of our management through pursuing corporate governance (details described in “Komatsu Report”), compliance and risk management.

Frameworks for Promoting Compliance

To make certain that the entire Komatsu Group complies with the rules of the business community, Komatsu has appointed at the head office an executive officer in charge of compliance and established the Compliance Department to handle this issue exclusively. The Compliance Committee, chaired by the president and CEO, deliberates the Group's action policies and important issues while regularly reporting the state of compliance-related activities to the board of directors.

Komatsu's Worldwide Code of Business Conduct

The company has formulated Komatsu's Worldwide Code of Business Conduct (established in 1998 and revised eight times to date) as a compilation of best business practices to be observed by officers and employees of Komatsu Group companies around the globe. The code addresses items such as free and fair business practices, respect for human rights, endeavors for the global environment, the handling of information, and the establishment of an internal control structure. The text of the code has been released to the public in its entirety.

Komatsu considers CSR as a key responsibility and Komatsu's Worldwide Code of Business Conduct clearly conveys its policy of giving full weight to CSR. The pillar of Komatsu's compliance activities is based on constant repetition of the following process, outlined in the Code of Worldwide Business Conduct: (1) Formulate and revise the Code, (2) Implement the Code, (3) Determine the Code's current status, and (4) Address inadequacies.

Komatsu's Worldwide Code of Business Conduct is available at:

Process for Compliance Activities

  1. Formulate and revise the Code:
    Formulate the Code as a foundation for compliance activities and revise the Code (currently in its ninth edition) as required to reflect social change.
  2. Implement the Code:
    Implement the Code through education that corresponds to employee rank and their respective duties, and by communicating information in accordance with the Code.
  3. Determine the Code's current status:
    Determine the level at which the Code is being applied by having all business units regularly report on their use of the Code and by conducting audits and enhancing Komatsu's internal reporting system.
  4. Address inadequacies:
    Any issues identified during the above activities will be addressed in accordance with the Code and preventive measures will be implemented.

Upholding Thorough Compliance

So that employees remain continuously aware of compliance, the Group is working to cultivate their consciousness of best business practices by displaying in every Komatsu Group business unit posters listing The Five Principles of Compliance, a condensed version of Komatsu's Code of Worldwide Business Conduct. The Group engages in awareness-raising initiatives, with a page dedicated to compliance on its intranet as well as well-developed compliance-related education and training that corresponds to each employee rank and and their respective duties. The Group strives to detect risks early and implement reforms at Komatsu business units and Group companies through monitoring during financial audits and compliance and risk audits. The monitoring covers compliance in highly important areas such as safety and environmental practices.

Internal Reporting System

Komatsu has established the “Compliance Hotlines” as consultation offices both internally at Komatsu Group companies and externally at law firms to respond to consultations or reporting from Group company employees that pertain to best business practices or questionable actions. The Group actively encourages consultations and reporting through Komatsu's Worldwide Code of Business Conduct, the Five Principles of Compliance, and Group companie's workplace rules, making it clear that employees who use the system for appropriate reporting will not be treated unfairly in any way as a result of their action.

Status in FY2016

No incidents of special note occurred during 2016.

DATA

1. Number of Internal Reporting

  FY2014 FY2015 FY2016
Number of Internal Reporting
(number of serious cases)

52 (0)

68 (0)

95 (0)

2. About Komatsu's Worldwide Code of Business Conduct

Established

January 1, 1998

Last revised

April 1, 2014 (9th edition)

Languages

15 languages

Japanese, English, Chinese, Spanish, Portuguese, German, Dutch, Italian, Swedish, Indonesian, Thai, Russian, Turkish, Persian, Tamil

Distribution

Global Group employees (more than 29,000)
The Japanese and English versions are published on the Komatsu website

3. Compliance Education in FY2016

Class Learning

Approx. 1,700 people

e-Learning

Approx. 17,000 people