The foundation of all activities: legal compliance, fair corporate activities


The Group will fully comply with all laws and regulations and conduct business fairly.

Awareness of Issues

The Group's business principle states that "the Group strictly complies with all laws and regulations, conducts fair business practices and creates unrivaled value for society and industry through the provision of key materials and technologies." Compliance with laws and regulations and fair corporate activities are the foundation of all of our activities.
We are working on the long-term development of the Group by not only legal compliance, but also the efforts of each employee to engage in their daily work with a strong sense of ethics as a code of conduct.

Ensuring Full Compliance Awareness

The Group emphasizes the importance of compliance with laws and regulations in the business principle and annual management objectives, and carries out corporate activities in full compliance with laws and regulations. In the event of promulgation of or amendments to legislation pertaining to corporate activities, the Legal Department takes the central role of issuing internal bulletins and sharing their knowledge of these changes. In addition, in order to promote understanding of important laws and regulations, we posted explanatory articles in our company newsletter, and invited outside lecturers to give lectures to our employee. In November 2022, 515 employees from the Shin-Etsu Chemical headquarters, plants and Group companies in Japan attended the Japan Fair Trade Commission/Small and Medium Enterprise Agency seminar (web seminar) to promote proper subcontracting transactions. In addition, the Company’s Legal Dept. staff attended seminars of the Fair Trade Institute, of which the corporate officer of the Company serves as a director, in an effort to further ensure fair trade.

All of the officers and employees have submitted a written oath of compliance to the company. We have also established disciplinary measures to deal with any inappropriate action that may occur. Officers and employees are stipulated to report to the "Compliance Consultation Office" if they discover a violation of laws and/or regulations. The Compliance Consultation Office is a point of contact for consultation and reporting in the event of identifying suspected violations of laws, ethics, or company regulations in the course of business, or in the event of assuming any suspected violations to happen. Any Shin-Etsu Group officer, employee, adviser, staff member, contractor, or other employee and retiree can use this. We post the “Regulations of Compliance Consulting/Reporting System” on its intranet to inform employees. In addition, in June 2022, in response to revisions to the Whistleblower Protection Act, we revised the "Compliance Consultation and Whistleblowing Regulations" and translate them into 14 languages along with the "Information on the Compliance Consultation Office," disseminating them throughout the Group. If a report is made to the Compliance Consultation Office, the department in charge of investigation will investigate the content of the report, and the company will take corrective measures as necessary after accurately grasping the facts. The confidentiality of consulters and whistleblowers will be protected, and they will not be treated unfavorably for consulting or reporting.

Employee Initiatives

Mr. MM, Auditing Department, Shin-Etsu Chemical Head office

Mr. MM,
Auditing Department,
Shin-Etsu Chemical Head office

1.Please tell us about your job.
I am involved in compliance with the internal control reporting system for financial reporting (J-SOX), as well as antitrust audits, export control audits, and audits of the status of subsidiary operations.

2.Please tell us about legal compliance and fair corporate activities -related initiatives done by the Auditing Departmaent.
The Auditing Department is engaged in various initiatives related to legal compliance and fair corporate activities.
With regard to the internal control reporting system for financial reporting under the Financial Instruments and Exchange Act, the Auditing Department, as the department responsible for evaluating the Group, conducts an evaluation of the effectiveness of the Group's internal control over financial reporting in accordance with relevant laws and internal regulations. The results were audited by our accounting auditors and it was judged to be "appropriate."
Business audits are also focused on auditing the status of compliance with antitrust laws. We pay particular attention to antitrust laws and have established our own Antimonopoly Law Compliance Guidelines. This audit confirms that the Group companies are taking actions that violate antitrust laws.
In addition, in the area of legal compliance, we conduct security export control audits for Group companies to ensure that each company's export control system is properly developed and operated. The Auditing Department attends the Company’s the Security Export Control Committee to conduct internal audits.
From the viewpoint of preventing fraud, we check whether the seals used to indicate the intention of the organization, such as company’s and department’s seal impression, are properly managed and used in the audit of the status of fraud management. At the same time, we confirm the management status of department managers’ individual seals for those who have the authority to permit payment.
In addition, we conduct auditing of the status of operations at Group companies that are not subject to J-SOX. We confirm that each of the subject companies' operations, such as cash and deposit control, purchasing, fixed assets and inventory management, and receivables preservation, are conducted under appropriate internal controls.

3. Please tell us about the details of the system and how to disseminate it within the Company about the Compliance Consultation Office.
The Compliance Consultation Office is the point of contact for consultation and reporting when a problem that is suspected of violating laws, ethics, and company regulations arises or is likely to arise in the course of business. Employees of the Group, including corporate, employees, advisors, part-time staff, and temporary staff, as well as retirees, can use this system. We posted guidance about the Compliance Consultation Office on the intranet. In August 2019, “Compliance Consultation and Reporting Rules” and “Guideline for Compliance Consultation Office” were translated into 14 languages and informed throughout the Group. In addition, in order to respond to the revision of the Whistleblower Protection Act, the Compliance Consultation and Reporting Rules were revised on June 1, 2022. We will re-disseminate the rules to the company.

4.What do you intend to focus on in the future with respect to legal compliance and fair corporate activities?
I feel that each company in the Group has a high level of awareness of compliance. By continuing to conduct steady auditing operations in the future, we hope to support each company in the Group in its commitment to legal compliance. For departments undergoing audits, periodic auditing provides an opportunity to consider compliance with laws and regulations, and we will work to make it a habit to check basic operations in business.

Initiatives Aimed at Preventing Corruption

The group declare that we will conduct fair corporate activities in the Shin-Etsu Group Business Principle and Basic Sustainability Policy. In 2015, we established the Anti-Bribery Regulations to clearly indicate that we will not be involved in any form of bribery. The scope of application of the Anti-Bribery Regulations is our officers, employees, and contract employees, and stipulates prohibition of bribery of public officials, non-public officials, etc., and disciplinary action. In addition, by submitting a "Compliance Pledge", we thoroughly prevent the provision of unfair benefits and requests to public officials, customers, and business partners in Japan and overseas.
Furthermore, by making the status of compliance with ethics in general one of the items in personnel evaluations, we are working to raise employees' awareness of legal compliance. We also conduct regular internal audits for corruption, embezzlement and bribery. For overseas group companies, we used the country-by-country corruption perception index published by Transparency International (an international non-governmental organization that tackles corruption issues) to determine the country, company size, business details, etc. Then, we conduct risk assessments related to anti-bribery and anti-corruption. In FY2022, we conducted a questionnaire survey of 36 group companies.

Supporting GCNJ's "Tokyo Principles for Strengthening Anti-Corruption Practices"

The Group's business principle includes "observing all laws and regulations as well as conducting fair corporate activities," and we are working to prevent corruption, including bribery. The Global Compact Network Japan's Tokyo Principles for Strengthening Anti-Corruption Practices correspond with the Group's current policy and initiatives for preventing corruption, so we immediately decided to support them and became a signatory in February 2018.

We will continue to make it our principle to comply with laws and regulations and carry out business activities fairly, and work to conduct business in accordance with the Tokyo Principles and our internal anti-corruption regulations.

GCNJ's "Tokyo Principles for Strengthening Anti-Corruption Practices"(only available in Japanese)

  • Anti-Corruption Collective Action

Export Control

In order to comply with export-related laws and regulations such as the Foreign Exchange and Foreign Trade Law, we have established the Security Export Control Regulations. In accordance with this regulation, we are working on the following:

  • - Classification, customer review, and transaction review when exporting products
  • - Internal audit
  • - Training officers and employees and providing instructions to Group companies

Cutting Ties with Anti-social Forces

The Group declares in its "Basic Policy on Internal Controls" that the Group shall adopt a firm attitude towards anti-social forces and shall take the measures necessary to cut itself off from any and all associations with them. In accordance with this policy, we developed internal systems under the leadership of the department in charge of managing these issues, and signed memorandums and letters of confirmation regarding the exclusion of anti-social forces with customers and suppliers. In addition, we are working closely with external specialized agencies.

Related Information

Sustainability Data