Compliance

The Brother Group considers compliance with laws and ethics is indispensable for upholding the foundation of its CSR management and avoiding various risks. To ensure compliance on a group basis, we set up our standards for employee behavior based on one of the Codes of Practice of the Brother Group Global Charter, Ethics and Morality; and the Brother Group Principles of Social Responsibility, which clearly define our corporate social responsibility and guide us to fulfill it.
Brother Industries, Ltd. (BIL) formed the Compliance Committee and set up the Employee Hotline for Compliance Issues to prevent violations, to act quickly against them, and to take preventive steps. Respective group companies, including those outside Japan, also have their own Compliance Committees and hotline desks to take such actions.
Critical issues are to be reported not only to the Compliance Committees of respective group companies but also to BIL's Compliance Committee, and thereby the whole Brother Group is able to work together to address such issues.

Compliance promotion structure

With the aim of raising employees' awareness of compliance and ethics, we issued the Compliance Handbook (handbook). This handbook is distributed to employees in BIL and group companies in Japan.
The handbook, composed of compliance codes of conduct, case examples, and quiz-based learning sections, encourages employees to think and learn on their own. We also distribute the Compliance Card, which helps employees decide what action to take when they dither over it in their daily life.

In Japan, we provide employees with group training programs (orientation for new employees, periodic basic training, and a seminar for those who will be on an oversea assignment) and online training courses via our e-learning system. Outside Japan, meanwhile, we check the situation of education at our manufacturing facilities in China, Vietnam, the Philippines and so forth, and strive to reinforce education activities based on the check results.
In accordance with the recent trends of laws and regulations, we also look into laws and regulations and promote education and enlightenment activities for respective group companies in order to ensure compliance with each country's bribery prevention laws, antimonopoly laws, etc.

In the "Brother Group Principles of Social Responsibility" and the "Brother Group Anti-Corruption Global Policy," Brother Group employees are prohibited from engaging in corruption or bribery. Such policies are communicated to all Brother Group employees by posting on the external Brother Industries, Ltd. ("BIL") internet site and on the Brother Group intranet site.

In Japan, we engage in anti-corruption by distributing a compliance handbook that introduces specific examples of bribery and entertainment to all of Brother Group companies in Japan and provide compliance trainings for new hires and employees who are assigned overseas in BIL, as well as some of the other Brother Group subsidiaries in Japan.

Also, Brother International Corporation (U.S.A.)("BIC(USA)"), our sales subsidiary in the United States, conducts online anti-bribery training sessions introducing examples of anti-bribery red flags for employees in the Americas.
Furthermore, BIC(USA) communicates its strong anti-corruption policy externally through inclusion of anti-corruption language in international contracts with third parties such as new business partners, contractors, and agents.
As for third party due diligence, BIC(USA) conducts screening for potential and new business partners that purchase from, sell to, or otherwise act on its behalf if those business partners are located outside of the United States, or are in the United States but act on its behalf outside of the United States. The due diligence screening is based on risk-scoring criteria that reflects anti-corruption, adverse media, political exposure, and other high-risk factors. Potential new business partners that are determined to have a high-risk profile after the initial review must complete a compliance questionnaire after a mandatory viewing of an anti-corruption video.
All business partners are continuously monitored on an ongoing basis, and BIC(USA) is alerted if any problems or risks are detected by the due diligence screening software. Based on the results of the initial or ongoing due diligence screening, BIC(USA) makes a determination about whether to conduct new or continued business with each respective business partner and whether any additional diligence and/or mitigating controls are needed.

In fiscal year 2018, there were 0 (zero) employees who were fired or terminated for corrupt practices in Japan.
The cost of fines or penalties related to corruption in Japan was 0 (zero) yen.
In BIL, the total amount of political contributions made was also 0 (zero) yen.