Through Compliance

Basic Concept for Compliance

Based on its corporate philosophy of “Be loved by and contribute to citizens” and the CITIZEN Group Code of Conduct, the CITIZEN Group strives to think and act as a good corporate citizen at all times. Article 3 of the CITIZEN Group Code of Conduct calls for the Group to "engage in business practices that are fair, transparent, open to competition, and responsible." We also have participated in the UN Global Compact since April 2005. Through these and other means, we strive to act not only in compliance with laws and regulations but also act in line with a high level of ethics overall. In addition, as our businesses grow increasingly complex from day to day amid growing globalization, in April 2020, we formulated the new CITIZEN Group Anti-Corruption Policy, which systematically describes the Group's thinking and postures toward elimination of corruption in its various forms, including improper acts and bribery. Based on these policies, we strive to build sound relationships of trust with customers, suppliers, and other stakeholders through each and every employee in the Group maintaining a high level of compliance consciousness.

Compliance Training and Internal Audit

Employee Training

To ensure that all members of the CITIZEN Group have a shared understanding of compliance, we conduct periodic training, education, and auditing concerning subjects, such as the CITIZEN Group Code of Conduct and the CITIZEN Group Quality Code of Conduct, as we strive to raise awareness of quality compliance Group-wide.

FY 2020 Training Results

Training Content Participants (Subjects)
Compliance Training Training on the Code of Conduct,
Anti-Corruption Policy, Human Rights Policy, etc.
6,832 persons

Anti-Corruption Initiatives

The CITIZEN Group's Anti-Corruption Initiatives

In addition to establishing the CITIZEN Group Anti-Corruption Policy, which prohibits acts of corruption, including bribery, the CITIZEN Group also has established internal rules on anti-corruption and is informing all employees of the content of this policy and these rules, through e-learning. In addition, the CITIZEN Group Subcontracting Transaction Normalization Committee also takes action to raise awareness of matters, such as anti-corruption, fair transactions, and compliance with the Act against Delay in Payment of Subcontract Proceeds Etc. to Subcontractors, through training, education, and e-learning for employees in the procurement sections that serve as points of contact in doing business with suppliers, at facilities in Japan and around the world. The CITIZEN Group strives to realize “business practices that are fair, transparent, open to competition, and responsible” through ascertaining trends in society and conditions inside the Group and revising related initiatives as necessary.

Anti-Corruption Initiatives in the Supply Chain

The CITIZEN Group Anti-Corruption Policy calls for doing business with suppliers who understand and cooperate in the CITIZEN Group's initiatives based on that Policy. Specifically, for suppliers in China it holds supplier briefings along with training on the Anti-Corruption Policy, while in other countries it distributes the "Requests for Suppliers" that include requests based on the Anti-Corruption Policy.
Beginning in FY 2021, suppliers will be asked to confirm and consent to CITIZEN's rules and policies, such as the Group Code of Conduct, Human Rights Policy, and Basic Policy on Health and Safety—and including the Group Anti-Corruption Policy—when concluding new contracts and renewing existing ones.

The Compliance Hotline, an Internal Whistleblowing System

To comply with laws and regulations and to prevent, quickly identify, and eliminate improper acts,* including bribery and corruption, the CITIZEN Group has established internal whistleblowing systems, incorporating the Speak Up system, to enable any Group employees to submit reports, request consultation, and make suggestions anonymously to CITIZEN WATCH, other Group companies, and external agencies respectively. In FY 2020, we conducted a survey on awareness of the Compliance Hotline. We also strived to raise awareness of the program among employees through means, including training for officers and employees, special features in internal bulletins, and updating the specialized intranet page. Furthermore, we established the new Group Compliance Hotline Rules in reference to the internal whistleblowing guidelines established by the Consumer Affairs Agency and to the Corporate Governance Code covering matters, such as protection of user confidentiality and prohibition of disadvantageous treatment, and we formed guidelines for users and managers as part of continual efforts to make the system easier to use through standardization of the responses of those receiving calls. We are aiming to make this system even more effective through proactively communicating information on the way it protects whistleblowers, such as the fact that it is an anonymous system.
The number of whistleblowing reports in FY 2020 was 29, consisting of 17 received internally and 12 received by external contact points.
All of these reports received by the internal whistleblowing system were investigated, and appropriate responses and corrective measures were implemented based on the results of investigation. There were no cases this fiscal year of serious infringements of human rights or violations of the Anti-Corruption Policy.
In response to changing work styles due to COVID-19, we plan efforts to create working environments to enable even more thorough compliance through means, such as reflecting opinions received and developing rules concerning the new work style of remote work.

*Our approach to prevention of improper acts is established in Article 3 of the CITIZEN Group Code of Conduct, which calls for the Group to "engage in business practices that are fair, transparent, open to competition, and responsible" (fairness, transparency, openness to competition, responding to government agencies etc., export/import controls, prohibition of contact with antisocial forces, prevention of money laundering, responsible and sustainable procurement).

Intellectual Property Strategy

Intellectual Property-Related Activities

The CITIZEN Group respects the intellectual property rights of other companies and makes efforts so as not to infringe upon them. To this end, we implement constant monitoring of our own activities from the product planning phase to marketing. If there is an intellectual property right belonging to another party that may constitute a barrier, we take immediate measures to avoid infringement.
Moreover, we acquire intellectual property rights for our proprietary core technologies and peripheral technologies, and work to establish barriers to deter entry by our competitors. At the same time, we take strict measures to counter infringement by third parties.
The CITIZEN Group, in line with the intent of the intellectual property rights system, continues to promote appropriate and effective intellectual property activities.

Security Trade Controls

The CITIZEN Group has established the “CITIZEN Group Rules for Security Trade Control” to provide reliable and secure trade management within the Group. We have also established “the CITIZEN Group Security Trade Control Committee,” comprising CITIZEN WATCH and operating subsidiaries. This committee provides guidance, education, and information to Group companies and carries out audits.
CITIZEN MACHINERY, takes measures to prevent improper export of industrial machineries and their improper resale or re-export overseas in order to ensure compliance with “the Foreign Exchange and Foreign Trade Control Law.” We has continued to reinforce export controls by preventing the improper use of industrial machineries with measures such as the installation of relocation detection functions as a standard feature on all products to render equipment inoperable in the event of unauthorized relocation.

Information Security

The CITIZEN Group has established the Group Information Governance Committee to further strengthen a mechanism for promoting all activities regarding the protection of personal information, trade secrets management and information security management. Under the new system, we continue to formulate, deploy and provide training on the information security policy.
With the advancement of information technology, information and IT systems are used in diverse settings. In parallel with this, problems associated with information security have been on the increase, including the divulging of information and system halts caused by cyberattacks. Specifically, the Citizen Group Information Security Policy, which was established in November 2020, is being disseminated and alerts regarding ransomware and business email scams are being issued via the company intranet.
In FY 2020, two Group-wide drills were held on responding to a targeted email attack. We are striving to ensure a thorough understanding of the importance of information security at overseas facilities as well, while enhancing cooperation both inside and outside Japan.
Furthermore, in June 2020 we formed CITIZEN-SIRT as a computer security incident response team (CSIRT) to serve as a first responder to cyberattacks and other information security incidents. Since its membership is made up of personnel from the sections that monitor for the risk of system downtime in normal times, it is capable of responding swiftly through initial mobilization and communication and coordination with related sections in the event of an incident.
In FY 2020, CITIZEN-SIRT responded to one incident, which did not involve any serious incidents, such as information leaks or system downtime.
In the future as well, we will continue related efforts centered on CITIZEN-SIRT, including designing training based on an understanding of changing external environments related to information security and knowledge and risks related to information security within the Group, formulating business continuity plans and response guidelines for when incidents do occur, and providing periodic training and reviews to improve the response process.
For our actual information system environment, the use of a data center and cloud services strengthens our information systems against both small- and large-scale incidents, creating a safe and reliable IT infrastructure that also contributes to reductions in energy consumption and CO2 emissions.

Protection of Personal Information

The CITIZEN Group recognizes its important responsibility to protect personal information provided by customers, suppliers, and other stakeholders in its business activities. With the Group Information Governance Committee playing a central role, we strive to protect personal information based on the CITIZEN Group Information Security Policy and the CITIZEN Group Privacy Policy.
Specifically, we take the following policies into consideration when handling personal information:
  • In collecting personal information, we will specify the content and purposes of use and indicate these clearly at the time of collecting the information. We will not use the information for any other purposes.
  • We will manage and protect personal information thoroughly in accordance with internal rules, and we will take security measures to prevent incidents, such as unauthorized access and leaks.
  • We will not provide personal information to any third parties, except with the consent of the individuals concerned or as required under laws and regulations.
  • We will respond to requests from the individuals concerned by personal information regarding inquiries into and correction, cessation of use, and deletion of their personal information, unless we are unable to confirm the individual's identity or in cases, such as when doing so could violate laws or regulations.

In FY 2020, there were no cases of improper use or leakage of personal information collected.

Continued Acquisition of PrivacyMark

TOKYO BIJUTSU, a publisher of art and other books, acquired the right to use the PrivacyMark* in 2007 with a view to protecting personal information and raising the confidence level of clients. We renewed the PrivacyMark certification in March 2019 for the sixth time. Education concerning the protection of personal information is periodically conducted for all employees including part-timers, and the results of tests used to confirm the effects of the training indicate that a strong awareness concerning the protection of personal information has spread among the workforce. We are committed to bolstering information security including the handling of confidential information in the future.

* PrivacyMark
The PrivacyMark System assesses private enterprises that maintain systems for the appropriate handling of personal information, and grants use of the PrivacyMark to those that meet certain standards

Handling Anti-Social Forces

The CITIZEN Group recognizes that connections to anti-social forces significantly impairs social credibility‘ in the Group and has a grave impact on the survival.
Therefore, our fundamental policy is to take a firm stand against demands for unjust favors or the like from anti-social forces and organizations, and without exception to refrain from any relationships with anti-social forces.
In addition, we maintain and reinforce systems that block relations with anti-social forces through actions such as promoting the adoption of an article regarding the exclusion of organized crime groups in the various contracts into which Group companies enter. Furthermore, we, in a regular basis, partner with external organizations such as the police and regional companies to promote activities to eradicate anti-social forces.

Training Sessions on the Act against Delay in Payment of Subcontract Proceeds Etc. to Subcontractors

In order to ensure appropriate subcontracting transactions and prevent violations of the Act against Delay in Payment of Subcontract Proceeds Etc. to Subcontractors, the CITIZEN Group provides on-the-job training in the workplace, as well as guidebooks and e-learning programs to systematically learn the basics of the Act.
We also hold interactive seminars on the Act against Delay in Payment of Subcontract Proceeds Etc. to Subcontractors. In these seminars, participants use case studies of potential violations in the workplace as teaching materials, express their own ideas, and learn from each other using the case method.
The violations that are used as case study materials include bartering (unreasonable cost reduction), unreasonable requests for economic benefits (free storage of molds), unreasonable changes or redoing of benefits, and unreasonable returns.
The CITIZEN Group's business is supported by many business partners at every stage of the value chain. In order to truly build a win-win relationship for both the client and the recipient, we are working to improve our business methods to be desirable.