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Hitachi believes that promoting sound and highly transparent management is essential to achieving sustainable growth of corporate value. To this end, we take the strengthening of corporate governance to be one of our most material management issues.
We are working to develop and further strengthen our corporate governance system by such means as thoroughly separating management oversight from execution and establishing a system for prompt business execution.
Hitachi, Ltd. adopted its current committee system in 2003 and has established an Audit Committee, Compensation Committee, and Nominating Committee. Independent directors chair these committees and comprise the majority of the members. The company has also created a system that enables sufficient exercise of supervisory functions by separating the execution and supervision of business management.
With the globalization of the economy, overarching regulations and differences in governmental and economic frameworks, the importance of building a culture based on ethics, honesty and integrity are key.
Today more than ever, corporations are called upon to be ethical, fair and transparent in the way they do business. This obligation is rightly front and center in the minds of Hitachi’s stakeholders.
Additionally, with stricter regulations in countries and regions around the world regarding important business practices such as bribery prevention and adherence to competition laws, Hitachi has formulated in-house regulations in line with international standards and is sharing these regulations and enforcing strict compliance with them throughout the Group.
The Hitachi Group Codes of Conduct (including the Hitachi Group Code of Ethics and Compliance) spell out decision-making procedures and actions for all Hitachi Group executives and employees. To promote compliance, the Hitachi Group Head of Ethics and Compliance leads the One Hitachi Compliance Program, a program for global compliance initiatives. We work together with the Ethics and Compliance representatives, located in group companies around the globe, to streamline business ethics standards to drive efficiencies and the effectiveness of the One Hitachi Compliance Program.
Social issues, including rapid advancements in digitalization and complex changes in political and economic situations occurring worldwide, along with environmental issues, including climate change, resource depletion, and major disasters, are bringing changes to the business environment that are difficult to predict. Hitachi monitors and analyzes this business environment, conducts risk management in terms of both responding to risks that should be anticipated and opportunities for further growth in light of social issues, Hitachi’s competitive advantage and management resources, and strives to create revenue opportunities while controlling risks.
In April 2022, a Risk Management Meeting that deliberates important matters related to Hitachi management was established within the Senior Executive Committee. Chaired by the CEO with the Chief Risk Management Officer (CRMO) as vice chair, the meeting discusses and makes decisions on important matters relating to companywide risks. By centrally managing the various risks faced by Hitachi, which has operations around the world, we are working to achieve a solid management foundation that is linked to growth strategy.
To increase preparedness for major disasters and other risks across the entire Group worldwide, we have issued the Hitachi Group Guidelines for Developing Business Continuity Plans. We are strengthening our measures against COVID-19 and natural disasters as part of Pandemic and Natural Disaster BCPs, and the procurement divisions in business units and key Group companies in Japan have created procurement BCPs to minimize the impact of disasters that may occur.
Even as the development of IoT creates new value, cyberattacks are growing increasingly sophisticated and widening in focus from traditional IT to encompass the IoT/OT field as well. The risks for corporations include leaks of information, operational stoppages, and even direct disruption to business, making information security one of the most critical issues companies face. Hitachi, in expanding its Social Innovation Business worldwide, has highlighted the importance of working to ensure cybersecurity as a key management issue and is engaged in information security governance efforts.
Also, amid rapidly expanding data use with the development of digital technologies, privacy risks are increasing as well. In working to provide a safe and secure social infrastructure system, Hitachi is prioritizing personal information protection efforts in order to realize the secure management of personal information entrusted to us by our customers, personal information related to business operations, and more.
Hitachi has established Information Security Policy to foster cybersecurity risk management. The Information Security Committee is chaired by the Chief Information Security Officer (CISO), who is the C-level executive with ultimate authority and responsibility regarding the handling of information security and personal privacy issues. The committee determines relevant policies and measures, while the information security heads at each Hitachi business unit and Group company promote workplace awareness and oversee the implementation of measures.