Establishment of Compliance Management System

Clarion acknowledges that compliance is fundamental for a company to fulfill its social responsibility. Since fiscal 2003, the entire Group has been actively engaged in the activities under our commitment, "Clarion shall firmly establish corporate ethics on a compliance program having Corporate Philosophy as its core concept." In order to further strengthen our compliance management system, we extend to the entire Group our compliance program based on the Guiding Principles of Conducts and Behaviors, and try to attain integrity and transparency of corporate management.

Compliance Management Efforts

The compliance management initiatives since fiscal 2003, with establishment of “Guiding Principles of Conducts and Behaviors” and implementation framework as the introduction phase, have been applied to domestic and overseas subsidiaries and affiliates. Ongoing activities in fiscal 2005 included education and training for managerial-level staff with case studies of other companies and lecturing on new laws and ordinances, such as Personal Information Protection Law was conducted through exchanges of opinions with departments and surveys on awareness of compliance throughout employees.

The efforts are continuing through simultaneous audits of compliance management and information security and through priority activities at each department level in order to lower compliance related risks basing on risk assessment table in relations to applicable laws and ordinances, utilizing PDCA cycle method*.

* PDCA cycle method

This is a repetitive process for operational improvements; first making plans (P=to plan), carrying out the plan (D=to do), evaluating the results (C=to check) and carrying out further actions for improvements (A=to act).

Compliance Promotion Framework

Clarion established Compliance Committee which is chaired by the President of the Company in July 2003, at the same time drafted out “Guiding Principles of Conducts and Behaviors.” Regular meetings are held, with the CSR Promotion Office (the former Compliance Promotion Office) acting as secretariat. In these sessions, reports are made on the compliance activities on each department, and opinions regarding compliance issues are exchanged and shared by the members. Regular liaison meetings are also held with Group companies.

Guiding Principles of Conducts and Behaviors

All employees are informed of the Guiding Principles of Conducts and Behaviors via the Intranet, and it is also publicized outside the company on the home page. The principles are also printed on a card, so that all employees can carry it with them.

1. General rules (Observance of the Social Criteria)
2. Relationship with the Society
3. Relationship with Customers, Business Partners and Competitors
4. Relationships with Shareholders and Investors
5. Relationship with Employees
6. Relationships with Company and Company Properties
7. Additional Rules (Consultations / Reporting Desk)

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