Risk Management and Compliance

Risk Management / Risk Management System

The risk management system of Pigeon is headed by the Global Head Office (GHO) Risk Management Committee. Governed by the Rules for Risk Management, which systematically stipulate the Group’s risk-management responses, the GHO Risk Management Committee is chaired by the director for GHO, under the supervision of the president and CEO. Directly below the GHO Risk Management Committee are the Risk Management Committees of each business segment, which are chaired by the head of operations in each segment. This framework enables information about risk to be collected across our entiregroup, provides necessary controls and empowers each segment to respond rapidly to risk issues.
At least once a year, the GHO Risk Management Committee reports to the Board of Directors regarding the Group’s risk-management activities during normal times and when incidents occur, as described below.

[At Normal Times]
The GHO Risk Management Committee systematically collects, analyzes and evaluates the risk information it gathers from throughout the group, centered on the risk information it collects from each business segment (Japan Business, China Business, Singapore Business and Lansinoh Business). On its own or through the respective business segments, the GHO Risk Management Committee then examines and implements response measures.
The Risk Management Committees of each business segment collect, analyze and evaluate risk information from their respective business segments and the Group companies under them. These Committees then examine and implement response measures.
We classify risk into four categories: Business risk, financial risk, hazard risk and compliance risk. The Group collects, analyzes and evaluates this risk information and examines and implements response measures.

[When Incidents Occur]
In the event that the Group is confronted with a crisis, such as a disaster or other major incident, the Risk Management Committee (here and hereinafter, “Risk Management Committee” refers to either the GHO Risk Management Committee or the Risk Management Committee of the appropriate segment) convenes and takes steps to minimize damage and effect recovery, based on the Rules for Risk Management and the Business Continuity Plan (BCP).
Information on consultations and reporting through the internal whistle-blowing system are also collected and sent to the GHO Risk Management Committee. The Risk Management Committee or a department nominated by the Risk Management Committee responds as necessary based on the details of the consultations and reporting.

Risk Management Organization Chart

Compliance

Corporate Ethics Code

The “Pigeon Way” is the cornerstone of all activities. It embodies our “heart and soul” and sets the grounds for our actions to stream from this core. On this basis, we have established a basic policy on compliance called the “corporate ethics code.” The corporate ethics code has two components: corporate ethics guidelines, which comprise the ethical sensibility we must hold to continue to earn the trust and support of society, and a code of conduct, which comprises guidelines that spell out how each employee embodies the corporate ethics guidelines in business activities. The corporate ethics guidelines declare that every Pigeon Group employee must comply strictly with laws, regulations and social norms, in both letter and spirit, acting in good faith and with a high sense of ethics. The corporate ethics guidelines enable us to earn the trust and support of stakeholders. As the corporate ethics guidelines indicate, we believe it is vital to convey to all Group employees Pigeon’s business philosophy and the sense of values of its management. Our representative directors president and all other executives lead by example in rigorously promoting our spirit of ethics and compliance.

Compliance Education

With the Legal Department playing a pivotal role, we ensure that all Group employees are knowledgeable about compliance. We carry out e-learning on the topic and provides corporate-ethics training sessions to thoroughly inform Group companies both in Japan and overseas about the corporate ethics code. To ensure understanding of compliance issues that can arise in the course of everyday business, as well as approaches to compliance and methods of responding, the Group circulates a “Pigeon Compliance Communication” newsletter to all employees once a month. Topics covered in the newsletter include laws related to Pigeon’s operations, such as the Antitrust Act and the Act against Unjustifiable Premiums and Misleading Representations, and an overview of harassment and other compliance issues.
In addition, to gauge and improve employees’ awareness and knowledge of compliance, Pigeon regularly asks employees to respond to a questionnaire survey called the “Compliance Self-Checks.” Results of the survey are used to improve compliance measures.
The GHO Risk Management Committee collects information about compliance education and the Compliance Self-Checks, including details and results, and reports the information to the Board of Directors every year.

Responses When Compliance Violations are Detected or Perceived

When a real or suspected compliance violation is detected or perceived, the Risk Management Committee gathers information and examines the facts about the matter. The GHO Risk Management Committee then makes arrangements to enable the response necessary to resolve the problem in a timely manner.

Internal Whistle-blowing System

The internal whistle-blowing system consists of two channels for reporting compliance violations. Speak Up offices are provided for use within the Pigeon Group. The Pigeon Partners Line is for the use of persons outside of the Group, including business partners.
When problems are discovered within the Group or outside it, the GHO Risk Management Committee considers appropriate responses as necessary and examines the facts, taking every precaution to protect whistleblowers and consultants. In this way the GHO Risk Management Committee makes arrangements to enable the response necessary to resolve the problem in a timely manner. If necessary, the advice of a legal adviser may be sought, to weigh the legal propriety of responses.
Each year, the GHO Risk Management Committee reports to the Board of Directors regarding the matters reported through the in-house whistle-blowing system, the results of the Committee’s responses and related information.

Speak Up (In-house Whistle-blowing System)

We have established Speak Up so that any Pigeon Group employee who suspects that a violation of corporate ethics, etc. (compliance violation) may occur or is occurring in the course of business activities can report the issue to a Speak Up office or seek consultation about the issue there. Pigeon personnel are advised about Speak Up and how to use it through compliance education.
In FY2020 the Speak Up office received 3 reports of compliance violations.

[Contact Points]
The following three lines are available as contact points.
1) In-house contact point (to the Legal Department)
2) In-house contact point (to the Audit & Supervisory Board members)
3) Outside contact point (to a legal adviser)

[What to Report / Seek Consultation About]
Appropriate subjects to report or seek consultation about include bribery/corruption, fraudulent accounting, payoffs, embezzlement, information leaks and other serious violations of the law, as well as violations of corporate ethics, actions likely to damage the good name of the Pigeon Group, or other actions commensurate with the above.

[Protection of Whistleblowers]
Whistleblowing is handled based on the Pigeon Group in-house regulations, which protect whistleblower confidentiality and prohibit the handling of reporting and consultation in ways disadvantageous to whistleblowers.

The Pigeon Partners Line (Contact point for the use of business partners to report or seek consultation on compliance)

We have established the Pigeon Partners Line so that any business partner or other person who suspects that a Pigeon Group employee, in the course of business activities with the Pigeon Group, may commit or is committing a violation of corporate ethics, etc. (compliance violation), or has caused suspicion even if the act was not a violation, can use it to report or seek consultation about the issue.
Two contact points are available: An in-house contact point (to the Legal Department) and an outside contact point (to a legal adviser). Our in-house regulations protect whistleblower confidentiality and prohibit the handling of reporting and consultation in ways disadvantageous to whistleblowers or their companies (our business partners).
In FY2020 the Pigeon Partners Line received zero reports of compliance violations.

Information Security Measures

In delivering products, services and information to customers, we position information security and protection of personal information as issues of vital importance. The Group has established a framework by which the Risk Management Committee deliberates to consider attendant risks and devise countermeasures for each such issue and implement them through the information security sector, legal sector or other sectors with jurisdiction. In this way we areworking to strengthen its management of information security and personal information.
In July 2005, our framework for protection of personal information was certified with the Privacy Mark. The Privacy Mark system is operated by the Japan Information Processing Development Corporation (now the Japan Institute for Promotion of Digital Economy and Community (JIPDEC)). The Privacy Mark accorded Pigeon certifies that Pigeon is an operator that handles personal information appropriately in accordance with JIS Q 15001:1999, “Requirements for compliance programs for personal information protection,” now JIS Q 15001: 2006, “Personal information protection management systems.” JIPDEC renewed Pigeon’s certification in 2007, 2009, 2011, 2013, 2015, 2017 and 2019.