Compliance

Target

Materiality

Systems and actions

Organization

Nidec’s Legal & Compliance Department, working in partnership with Regional Compliance Officers of the individual regions where the Nidec Group’s business bases operate (the Americas, China, Europe, and Southeast Asia) and Compliance Managers and Promoters of individual business departments and group companies, builds and operates a global compliance system. Compliance Managers implement and operate compliance-related measures to raise the compliance awareness of the organizations under their supervision, and bear responsibility for preventing compliance violations. Compliance Promoters promote the specific compliance measures of such organizations, while serving as a liaison with the Legal & Compliance Department and Regional Compliance Officers, who provide support for individual regions’ Compliance Managers and accept whistleblowing cases.

The NIDEC Group’s global compliance system

Regulations, code of conduct, and basic policy

Nidec has in place “Nidec Group Compliance Regulations” rules for compliance-related fundamental notions, organizations, operating methods, etc. for the entire Nidec Group’s compliance, and to build a group-wide compliance system and raise the compliance awareness of all employees. In addition, we have in place a Nidec Group Compliance Code of Conduct, which is an action guideline for the company’s executives and employees, and a Nidec Compliance handbook, which explains the Code of Conduct in detail in Japanese, English, and Chinese, to ensure that all executives and employees understand it group-wide.
In addition, as a globally operating company, we make it a basic policy to comply with the RBA (Responsible Business Alliance, the former EICC).*

*RBA: A set of standards to ensure that the electronics industry’s supply chains provide a safe work environment, treat workers with respect and dignity, fulfill their environmental responsibilities, and execute their duties ethically. As an example, the “Business Integrity” part of the RBA Code of Conduct’s “Ethics” section stipulates that participating organizations “shall have a zero tolerance policy to prohibit any and all forms of bribery, corruption, extortion and embezzlement.

Prevention of Bribery and Corruption

＜Policy＞

In 2016, we instituted “Anti-Bribery Policy for the Nidec Group – Rules on Dealing with Government Officials, Suppliers, Agents and Customers,” internal rules to prevent bribery in the entire group. This Policy, which covers business transactions in general with public officers, suppliers, customers, and agents, sets forth rules on, among others: providing public officers, customers, and others with cash, gifts, meals, and business entertainment; making donations in relations to public officers’ and others’ acts in the line of duty; receiving cash gifts, meals, business entertainment, and other benefit from suppliers; and selecting agencies and agents. In particular, bribery and corruption-related risks emerge when, for example, “obtaining a permit to launch a new office or factory, “following a procedure to obtain a license, a certificate, etc.,” “clearing customs for machines and equipment, or importing/exporting them,” and “being demand to pay additional taxes, penalty fees, etc. during a tax, factory, or other inspection.” This is why we exercise utmost attention in our checking. When hiring an agent , we compare them against our applicable standards, and closely examine the candidate based on individual risk-related subjects, before obtaining approval of those with approval authority at individual organizations. We realize risks for us to be involved in bribery or corruption as a result of hiring an agent, and have risk-aversion measures in place.

＜Application and approval＞

The Anti-Bribery Policy makes it obligatory to report to, and obtain approval of, a Regional Compliance Officer any provision or reception of business entertainment that fails to meet any one of the (1) – (3) below, to ensure the proper operation of the Policy and control bribery-related risks.

1. (1)The amount of money that the counterpart (Nidec) receives must not exceed US$100 per person;
2. (2)The number of times of providing the same person with profit (or receiving profit from the same person) must not exceed twice; and
3. (3)The number of the people in the organization to provide with such an amount of money (or receive such an amount of money from the organization) on the same occasion must not exceed four.

In its M&A cases as well, the Nidec Group performs due diligence for bribery- and corruption-related risks in target companies, and confirms that such risks don’t exist prior to purchasing those companies.

＜Lectures and disseminating information＞

The Nidec Group uses its intranet site to inform all of its employees of the objectives and details of the rules, and posts on the site supplementary documents and a Q&A section to educate employees on compliance issues and raise the people’s awareness on them. Further, we hold seminars* for the Nidec Group’s executives and other employees to full educate them on compliance issues.
*The lectures include:

• - How to prevent bribery and corruption; and
• - Educate all Nidec Group employees on the Anti-Bribery Policy.

＜The UN Global Compact＞

Nidec Corporation has been a member of the United Nations Global Compact since August 2015, and upholds its ten principles in the four areas of human rights, labor standards, the environment, and anti-corruption. The problem of corruption, an issue the UN is promoting to prevent, greatly hampers sustainable development. This is why Nidec is committed to the principle, “Companies should engage in actions to prevent all forms of corruption, including extortion and bribery.”

Internal reporting system

As part of the comprehensive, group-wide compliance system, we established an internal reporting section (Nidec Global Compliance Hotline) and an external third-party hotline available for all board members, executives, and employees (including regular and part-time employees, those dispatched from outside agencies, limited-term employees and those who left Nidec Group within one year) to encourage them to report and raise issues on accounting fraud, bribery, labor safety-related cases, harassment, and other acts in violation of laws, regulations, internal rules, ethics, etc. In addition, we have in place NAVEX, an internal reporting system, operated by an outside vendor, mainly for board members, executives, and other employees of our European and US business bases. This system encourages employees to report and raise issues on accounting fraud, bribery, labor safety-related cases, harassment, and other acts in violation of laws, regulations, internal rules, ethics, etc. The hotline, in place in Japan, Americas, China, Europe, and Southeast Asia, is available in multiple languages. A Regional Compliance Officer receives while-blowing reports, and launches investigations and corrective actions in cooperation with Nidec Corporation’s Legal & Compliance Department. Whistleblowers will be notified as much as possible of the findings of the report. Reports can be submitted anonymously so that no whistleblowers will be subject to any disadvantage after reporting an incident. In resolving the issue, we will respect the reporter’s wishes as much as possible, and after confirming the facts through interviews with the relevant parties and conducting an investigation, we will strive to take appropriate measures and prevent recurrence. Furthermore, the status of internal reports from the officers and employees of our group is regularly reported to the Board of Directors’ Meeting and the Audit Committee.

Number of internal reports (including consultations)

*NAVEX has long been available for the Nidec Group’s overseas business bases, including those in Europe and the US. From this time on, we disclose the number of the internal reports that NAVEX received, as, after the April 2024 revision, the Nidec Global Compliance Hotline Regulations now stipulates that they apply to NAVEX as well.

Action on violations

If a whistleblowing or any other action reveals any violation of compliance rules by an executive or other employee, we will launch investigations to prevent its recurrence, while, based on applicable internal rules, punishing those involved in the violation based on deliberation by the Disciplinary Committee and the Board of Directors.

Number of legal violations, etc., inside and outside Japan

Education and actions

Compliance seminars

As part of its compliance promotion activities, we hold compliance seminars for our group’s executives and employees to maintain and improve the level of their compliance awareness.
In those seminars, we use the Nidec Compliance Handbook as a teaching material, and have Regional Compliance Officer as lecturers for such topics as cartel, bribery and human rights issues including harassment, and host seminars, discussions, and other activities in and outside Japan. Thus, we work to share the same level of understanding on, for example, acts that constitute compliance violations, results expected from such violations, and actions to take when in doubt.
In addition, we invite an outside lecturer once a year for a compliance seminar for board directors, executives and others.

Compliance seminars held in Japan (the total number of participants)

Risk assessment

To manage its risks, the Nidec Group regularly assesses risks based on bribery and corruption, human rights abuse, and other social issue-oriented viewpoints. In FY2023, the Nidec Group assessed geopolitical, stagnant management-related, business management-related, and other compliance-related risks in new business bases, those that newly joined the group via M&A and other Nidec Group entities, totaling in approximately 300. For anti-corruption purposes, we made risk assessment based on the Corruption Perceptions Index provided by Global Note Inc. We interviewed high-risk business bases individually for improvement activities. If any risk is identified in a risk assessment, the department in charge prepares a risk-mitigating corrective action plan based on the level of the risk, and launches a PDCA cycle.