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Yamatake recognizes that compliance is essential in gaining the respect and trust of society, thereby ensuring the Company’s continued existence and development. Compliance requires not only that we observe the relevant laws and regulations but also that each of our officers and employees truly understand and follow sound and ethical business practices.

Business Conduct Policy

Grounded in our philosophy at the time, in 1993 the Group established and put into practice a “Business Conduct Policy” as business conduct standards for officers and employees. We revised this Business Conduct Policy in fiscal 2006, ended March 31, 2007, to correspond with the revisions made to the Group’s philosophy on the occasion of Yamatake’s 100th anniversary. The Business Conduct Policy covers six areas: the Company’s public responsibilities;
its social responsibilities; compliance with antitrust and other fair trading legislation; respect for human rights; management and use of Company property; and the promotion of environmental protection.

Business Conduct Guidelines

Based on the Business Conduct Policy, in 2000 Yamatake drew up—from both legal and ethical perspectives—the Group’s Business Conduct Guidelines, which covers all business activities. Prompted by the revisions made to the Group’s philosophy and Business Conduct Policy, we also revised our Business Conduct Guidelines in 2006 to incorporate: 1) items to accommodate the increasingly international nature of the business, 2) a more proactive stance, 3) a shift from prohibitive to declarative expressions, and 4) the perspective gained from the results of our compliance monitoring. In addition, along with expanding the scope of these new guidelines with our business partners, we have also made them public by posting them on our web site. Furthermore, we created a card-size version of the Business Conduct Policy and Business Conduct Guidelines and distributed them to Group companies and business partners. Our overseas affiliates in Europe, North America and Asia have begun preparing their own versions of these new guidelines.

Portable card-size version (above) Business Conduct Guidelines (left)

Corporate Ethics Committee

As the body charged with promoting compliance, the Group’s Corporate Ethics Committee, chaired by the officer in charge of CSR, convenes twice each year to ensure compliance on both regulatory and ethical issues.

Promoting Internal Controls

The Internal control Conduct Department is responsible for driving forward compliance-driven activities at Group companies. Specifically, the department’s functions include providing information about the revised Business Conduct Guidelines, monitoring compliance status, providing education and holding seminars on compliance-related issues, and using all types of media sources such as Company magazines to disseminate information. The department is also involved in CSR issues, social contribution, comprehensive risk management and compliance with the Financial Instruments and Exchange Law.

Compliance Manager and Leader Structure

In 2006, when the guidelines were revised, we decided to create a new structure for compliance management and leadership that was comprised of individuals with organizational responsibility at the manager level or higher from throughout the Group. This new structure, intended as a framework to ensure the coordinated and effective implementation of compliance, became fully operational in 2007. The compliance managers and leaders are responsible for extending compliance in the workplace and providing guidance (e.g., helping to disseminate the Group’s philosophy, Business Conduct Policy and Business Conduct Guidelines and educating employees about them), developing and managing solid guidelines for the workplace and uncovering and reporting various risks.

Disseminating the Business Conduct Guidelines

To disseminate the Business Conduct Guidelines, and based on a request made during fiscal 2007 from the officer in charge of CSR, the compliance managers and leaders at each workplace explained the revised guidelines, and then all employees were tested for their own knowledge of compliance. Weaknesses can be gauged from the results of these on-site meetings and self-assessment tests, allowing managers and responsible departments to reinforce the relevant areas. This information can then be used in subsequent training sessions.

Compliance Education

In fiscal 2007, we decided to offer compliance education tailored to each employment level after reviewing the objectives, content and methods used for compliance education. First, we held a seminar for Group officers on “Internal Controls and the Company” conducted by outside experts during Corporate Ethics Awareness Month. We have also provided Group training for compliance managers and leaders and other professionals on compliance education methods and matters connected with antitrust laws, on information security and on construction industry laws that are of particular importance to our industry. This training has been conducted by sending representatives from the department in charge to branches and offices throughout Japan.
As a trial, we have also conducted training using case studies in compliance. We have been conducting an online compliance training program in stages, and in fiscal 2007 we completed a round of training for Group executives, mid-level managers and regular employees. To train new employees, we provide an explanation of the Group’s philosophy, the Business Conduct Policy and the Business Conduct Guidelines as well as conduct ethical training using case studies. The presidents of our overseas affiliates, as well as the managers of our overseas offices, undergo training twice each year and others being stationed overseas receive training before going abroad.

Disseminating Information

During Corporate Ethics Awareness Month in October 2007, the president of Yamatake Corporation and the chairman of the CSR Promotion Committee respectively sent a message to employees. Additionally, web pages tailored for compliance managers and leaders were added to the “compliance web” administered by the Internal control Conduct Department, which we use as a means to distribute various types of information. The compliance web is a web site especially for posting compliance-related information, such as Corporate Ethics Awareness Month messages, details about the mission and the role of compliance managers and leaders and how the system works, training materials for the compliance managers and leaders, and self-assessment tools.

Compliance Monitoring

In February and March 2008, we conducted a compliance awareness and acceptance survey to officers and both regular and contract employees across the Group, receiving responses from nearly 90% of personnel queried. This response rate indicates that there is a growing awareness of compliance among all employees because of our compliance training, online learning programs and the encouragement from the compliance managers and leaders for employees in the workplace.

Internal Whistle-blowing System

In October 2003, we launched a “Voice of Conscience” hotline as a mechanism for internal reporting and counseling. In addition to mitigating compliance risk, the program is intended to function as a mechanism that allows employees to report transgressions and as a means to foster an ethical organizational culture. The scheme originally covered the Group, but in October 2006 it was extended to partner companies and other parties. This system for internal reporting and counseling offers conduits: an internal contact and an external contact at a neutral third-party organization.

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