GOVERNANCE

  • Compliance

Compliance Management

Compliance Promotion Initiatives

Respect for Human Rights

Risk Management

Risk Management Structure

Response to Risks Related to Business Continuity Enhancing Information Security

Communication with Stakeholders

Materiality

Strengthening of Governance

Why It is Important

Policy

Framework

To continuously grow a company and enhance its medium- to

Sysmex considers reinforcing corporate governance to be one of its

Sysmex has adopted the system of a company with an Audit and

long-term corporate value, the strengthening of corporate

most important management issues. We aim to maximize the

Supervisory Committee to reinforce the Managing Board's audit and

governance is essential.

overall corporate value of the Group through management

supervisory function, as well as to heighten management transparency and

In addition to establishing compliance and risk management

robustness, better transparency, and improved management speed

objectivity. Furthermore, we have introduced an executive officer system to

structures to enhance our management foundations, Sysmex

and efficiency.

accelerate decision-making on business execution and respond swiftly to

believes that constructive dialogue and cooperation with its diverse

Corporate Governance

changes in the business environment.

stakeholders is an important management issue that will lead to

Policies for compliance/risk management

Additionally, Sysmex established the Internal Control Committee as an

enhancing corporate value.

organization that controls risk management activities and the Compliance

Committee as the controlling organization for compliance matters.

Sysmex Report (Corporate Governance)

Results

(fiscal 2021)

28

14

3,601

Number of internal reports

Number of unethical incidents

Number of information security trainees

Sysmex Sustainability Data Book 2022 51

Sustainability Management

Society

Materiality

Compliance

Compliance Management

Environment

Governance

External Evaluation

Performance Data / Independent

Guideline

Practitioner's Assurance

Comparison Table

GOVERNANCE

Compliance

  • Compliance Management

Compliance Promotion Initiatives

Respect for Human Rights

Risk Management

Risk Management Structure

Response to Risks Related to Business Continuity Enhancing Information Security

Communication with Stakeholders

Group Policy

Pursuing Open and Aboveboard Business Activities

Based on our Group's corporate philosophy, the "Sysmex Way", we define compliance as "the conduct of open and aboveboard business activities based on observance of laws and regulations and high ethical standards". In accordance with this definition, we have established a Global Compliance Code, in which conformance rules and behavioral guidelines for all Group executives and employees are detailed. This was provided in many languages so that all Group executives and employees would be able to understand and adhere to it.

Full text of the Global Compliance Code

Global Compliance Code (Overview)

  1. Ensuring the Safety of Our Products and Services to
    Customers
  2. Promoting Fair Dealing and Free Competition
  3. Fair and Proper Information Disclosure and Exercise of Complete Information Control
  4. Implementation of Appropriate Research and Development Activities
  5. To Respect Intellectual Property
  6. To Maintain International Peace and Safety
  7. To Conduct Proper Accounting and Appropriate Tax Payments
  8. To Respect Human Rights and to Improve Occupational Health and Safety
  9. Prohibition of Conflicts of Interest
  10. To Maintain Sound Relationships with Society
  11. To Preserve the Global Environment

Compliance Promotion Structure

At Sysmex, compliance violations are considered the most serious risk in terms of damaging social trust. Under our company's Group-wide risk management structure, we have established a Compliance Committee as an umbrella organization to promote and enhance compliance.

The Group Compliance Officer chairs the Compliance Committee, which ensures compliance throughout the Group. All Group companies have appointed their own compliance officers, with the Compliance Committee monitoring Group-wide activities. The compliance promotion structure receives checks from third parties for internal control purposes.

If there is a major compliance violation that has or could have a significant impact on a company or the Group, the compliance officer of the company involved reports, via the Compliance Committee chair, to the Internal Control Committee chair (CEO) and the Audit and Supervisory Committee members who are members of the Managing Board. Information is also disclosed regarding occurrences based on information disclosure regulations.

There were 14 unethical incidents in fiscal 2021, but none of them were deemed significant.

  • Corporate Governance Structure
  • Corporate Governance Report

Sysmex Sustainability Data Book 2022 52

Sustainability Management

Society

Environment

Governance

External Evaluation

Performance Data / Independent

Guideline

Practitioner's Assurance

Comparison Table

GOVERNANCE

Compliance

  • Compliance Management

Compliance Promotion Initiatives

Respect for Human Rights

Risk Management

Risk Management Structure

Response to Risks Related to Business Continuity Enhancing Information Security

Communication with Stakeholders

Internal Reporting System

Sysmex has established an internal reporting system for all of its Group companies. In Japan, we have set up a Group-wide internal reporting system called the "Campanula Line" to provide consultation on compliance-related issues and receive reports of violations such as bribery and human rights abuses. Efforts are made to resolve such issues quickly. The "Campanula Line" allows employees to seek consultation and file reports via e-mail, postal mail, or telephone through three routes (in-house, external, and directly to Audit and Supervisory Committee members). Anonymity can be maintained for consultations and reports via all lines. Consultations and reports on compliance issues related to senior management are accepted via the line through Audit and Supervisory Committee members. Information received through these lines is handled confidentially, and employees requesting consultation or making reports are protected from

reprisals based on the Whistleblower Protection Act. We also have consultation and reporting lines for our overseas employees that are available in their local languages.

In addition to the internal reporting systems operating locally in each region, we have set up a Global Compliance Hotline. It allows anyone working at any of our Group companies in Japan or overseas to report issues directly to Head Office. A promotion video for this system has been provided on the intranet in Japanese, English, and Chinese. We promote the early discovery of compliance violations by presenting the system to employees in training and on other occasions.

In fiscal 2021, the number of internal reports received from Japan and overseas was 28. We conducted investigations regarding these reports and dealt with each of them appropriately.

Compliance Education

Providing Continuous Education on Compliance

Sysmex views employee education and awareness activities as the foundation of promoting and ensuring compliance, and we regularly conduct education. During new employee and rank-based training, we take the opportunity to foster an understanding of the Global Compliance Code.

In fiscal 2021, we conducted global compliance training in various languages for all Group employees in order to raise Group-wide awareness of particularly important topics such as antimonopoly laws, competition laws, and cyber security.

We are expanding our educational tools to provide more detailed explanations of the Global Compliance Code on such themes as promoting fair trading and prohibitions against bribery, insider trading, and discrimination or harassment. These are applied through autonomous, planned educational and awareness efforts by individual divisions and companies.

The "Campanula Line" Internal Reporting System

Group Compliance Officer

Audit and Supervisory Committee

In-house Line

External Line (Law Firms)

In-house Line (Members of Audit

and Supervisory Committee)

E-mail,

E-mail,

E-mail,

postal mail,

Consultation

Response

postal mail,

Consultation

Response

postal mail,

Consultation

Response

telephone,

telephone

telephone

website

Sysmex Group employees and people who left Sysmex (retired within the past year)

(Full-time employees, contract employees, part-time employees, temporary employees)

  • Education regarding Fair Marketing Activities
  • Education and Training on Understanding Respect for Human Rights
  • Diversity Education

Sysmex Sustainability Data Book 2022 53

Sustainability Management

Society

Environment

Governance

External Evaluation

Performance Data / Independent

Guideline

Practitioner's Assurance

Comparison Table

Materiality

Compliance

Compliance Promotion Initiatives

GOVERNANCE

Compliance

Compliance Management

  • Compliance Promotion InitiativesRespect for Human Rights

Risk Management

Risk Management Structure

Response to Risks Related to Business Continuity Enhancing Information Security

Communication with Stakeholders

Anti-Corruption

In accordance with the spirit of the UN Global Compact, Sysmex undertakes thorough efforts to prevent bribery, in line with Principle 10, which states: "Businesses should work against corruption in all its forms, including extortion and bribery".

For risk assessments conducted periodically by the Internal Control Committee, compliance violations including acts of corruption are recognized as risks, and we are working toward their reduction. Additionally, Item 10. of the Global Compliance Code, "To Maintain Sound Relationships with Society", clearly prohibits acts of corruption, and the global anti-bribery regulations applicable to all Group companies cover topics such as specific banned activities, due diligence, the provision of education, and management systems. In these ways, we promote initiatives for Group-wide compliance.

  • Global Compliance Code
  • Overview of Anti-Bribery Regulations

Transparency in Relationships with Medical Institutions

Sysmex has increased opportunities for collaboration with medical institutions and professionals at every stage of its operations, through research and development, production, sales, and services and support. Transactions at all of these stages need to be based on a high level of ethics.

In Japan, Sysmex Corporation and Sysmex International Reagents, which are members of the Japan Association of Clinical Reagents Industries, concur with the philosophy outlined in the association's "Guidelines on Transparency of Relationships between Corporate Activities and Medical Institutions", and they disclose information related to funding provided to medical institutions.

Countries other than Japan have implemented laws which require companies to ensure transparency in their relations with medical institutions (Sunshine Acts) and regulations for the medical device industry. In compliance with these laws and regulations, the Sysmex Group reports information on funding provided to medical institutions to government authorities and industry organizations in their respective countries and regions.

  • Japan
  • U.S.
  • France
  • Belgium
  • Netherlands
  • Portugal
  • Europe
  • UAE
  • Japan Association of Clinical Reagents Industries"Guidelines on Transparency of Relationships between Corporate
    Activities and Medical Institutions" (Japanese)

Research Ethics

Implementation of Appropriate Research and Development Activities

As defined in Item 4 of the Global Compliance Code,

"Implementation of Appropriate Research and Development Activities", when carrying out research and development on gene and other themes, Sysmex protects the dignity, privacy, and human rights of trial subjects. Sysmex also complies with applicable laws and regulations in individual countries and regions to carry out its research activities in accordance with the highest ethical standards. Sysmex has adopted the "Ethics Regulations on Clinical Research and Development and Human Genome and Genetic Analysis Research", and has established a Research Ethics Examination Committee, which includes outside members including legal and scientific experts, in order to review research content. The list of committee members and deliberation results are disclosed on our website to ensure transparency.

  • Global Compliance Code
  • Group Ethics Regulations on Clinical Research and
    Development
  • Activities of the Research Ethics Examination Committee

Sysmex Sustainability Data Book 2022 54

Sustainability Management

Society

Environment

Governance

External Evaluation

Performance Data / Independent

Guideline

Practitioner's Assurance

Comparison Table

GOVERNANCE

Compliance

Compliance Management

  • Compliance Promotion Initiatives
    Respect for Human Rights

Risk Management

Risk Management Structure

Response to Risks Related to Business Continuity Enhancing Information Security

Communication with Stakeholders

Considerations for Animal Experiments

Item 4.4 of the Global Compliance Code, "Animal Experiments", states that when conducting animal experiments, we shall comply with applicable laws and regulations in each country and region related to animal protection, and we shall limit such experiments to a minimum by studying the use of alternative methods. When animal experiments are necessary, we shall take all reasonable steps to minimize the animals' pain. We conduct animal experiments in line with internal regulations that conform with public guidelines. Our Testing Control Committee rigorously deliberates testing plans to ensure their regulatory conformance.

Laws and guidelines observed by Sysmex: Act on Welfare and Management of Animals (Ministry of the Environment), Standards Relating to the Care and Management of Laboratory Animals and Relief of Pain (Ministry of the Environment), Basic Policies for the Conduct of Animal Experiments in Institutions Regulated by the Ministry of Health, Labour and Welfare (Ministry of Health, Labour and Welfare), and Guidelines for Proper Conduct of Animal Experiments (Science Council of Japan)

  • Global Compliance Code
  • Biodiversity Consideration in the Production of Raw Materials

Fair Marketing Activities

We have formulated a code of ethics for marketing in our global promotional activities, as described in Item 2 of the Global Compliance Code: "Promoting Fair Dealing and Free Competition". In fiscal 2021, we formulated our "Global Regulations for Compliance with Competition Laws" and informed all Group companies of this through training and other opportunities.

We have formulated the Sysmex Promotion Code for activities in Japan, and in fiscal 2021, held online training sessions for a total of around 900 employees based on the code at our regional headquarters in Japan and East Asia, which included a study of specific cases of misconduct. We also held training for managers and e-learning for general employees.

  • Global Compliance Code
  • Sysmex Promotion Code

Tax Strategy

Sysmex has established Item 7 of the Global Compliance Code, "To Conduct Proper Accounting and Appropriate Tax Payments", as a measure to heighten tax transparency. This section describes how, in transactions with foreign affiliated companies, we calculate appropriate transfer prices in accordance with the OECD Transfer Pricing Guidelines and the transfer pricing tax system in each country and region. The text also states that tax havens shall not be used solely for the purpose of tax avoidance or benefit.

In addition, we disclose Group payments of taxes in financial and other reports, as well as the reasons for any discrepancies from effective statutory tax rates.

  • Global Compliance Code
  • Sysmex Report (Management's Discussion and Analysis)

Tax Strategy in the United Kingdom

UK Tax Strategy

Respect for Intellectual Property

Sysmex accords third-party intellectual property rights the same level of respect as it does its own. As defined in Item 5 of the Global Compliance Code, "To Respect Intellectual Property", we will not unlawfully acquire or use any confidential business information or the proprietary assets of others. We promote a thorough understanding of these rules by all executives and employees throughout the Group. When developing new products, members of the intellectual property, R&D, and business development departments conduct and discuss global patent reviews for each new product development project.

  • Global Compliance Code
  • Intellectual Property (Japanese)

Promotion of Security Trade Control

In line with Item 6 of the Global Compliance Code, "To Maintain International Peace and Safety", we comply with the export laws and regulations of individual countries and regions, and we do not engage in transactions likely to impede the maintenance of international peace and safety. Sysmex has established the Security Trade Control Committee, which is under the direct control of the CEO, to prevent illegal exports. We have also assigned people at overseas regional headquarters to oversee security trade control, and we have established a global operational structure. Every year, we provide basic e-learning for all employees. We also provide ongoing education through various training sessions on recent world affairs and laws and regulations in order to raise awareness of security trade control.

  • Global Compliance Code

Sysmex Sustainability Data Book 2022 55

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Sysmex Corporation published this content on 24 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 October 2022 08:13:06 UTC.