Establishment of our Compliance Management System 2

Clarion has extended its Compliance Program to the entire Clarion Group, covering eight domestic and 20 overseas affiliates and subsidiaries. All have formulated their own codes of conduct based on the Headquarters’ Guiding Principles of Conducts and Behaviors. The codes appear in eight languages, including English, Spanish, Chinese, and Malay. In a similar manner as the Headquarters, the subsidiaries and affiliates are executing programs to identify and address risks, which is the core of the Compliance Program.

Clarion holds regular liaison meetings with domestic affiliate to share information on various issues. We additionally try to improve the level of activities through departmental interviews and audits. Regular interviews and discussion sessions are given to senior management staff of overseas affiliates and subsidiaries every year in order to enhance understanding on the issue. Overseas activities are also stimulated by regular reports from overseas facilities and follow-ups tracking responses. In 2005, we made a circuit visit to overseas facilities and personal meetings with local staff helped to put a human face on activities.

Clarion intends to further stimulate global activities through commendation of “Best Practice Award” to overseas affiliates and through holding CSR World Conferences where all affiliates and subsidiaries throughout the world get together to report on the status of their activities and exchange views.