Corporate Governance
The KOSÉ Group, in line with its Behavioral Charter that serves as the core of its Action Guidelines, is committed to the belief of its founders in having a “mind to follow the right path.” Our medium- to long-term vision defines “Thorough implementation of corporate governance” as one of the key issues for our business foundation, "growth to a strong corporate structure." The KOSÉ Group strives to become a company that is trusted and supported by customers and the public at large through implementing self-governance, acting based on judgment in good faith and use of common sense, and respecting the rights of all persons concerned.
Establishment of the Corporate Governance System
KOSÉ Group Action Guidelines and code of conduct
The KOSÉ Group defines its Behavioral Charter and Code of Conduct (shown below), in the KOSÉ Group Action Guidelines. The Guidelines stipulate that employees are required to comply with laws and regulations, observe social norms, and make decisions and take actions in good faith and through the use of common sense at all times. They also encourage employees to make efforts to ensure they will continue to be trusted by the public.The Guidelines are made available to officers and employees via a groupware, and they are used as a training material for new employees in Japan. They are also available as a booklet in four languages (English, Chinese (simplified and traditional), Korean and Thai) for distribution to local employees in overseas offices.
KOSÉ Group Action Guidelines（PDF: 519KB English）
KOSÉ Group Principle of Conduct
1. We pledge to observe the following standards in our relationship with customers and business partners
- 1) We will emphasize customer-oriented operations, to get closer to our customers.
- 2) We will provide safe, high-quality products.
- 3) We will provide appropriate information and services.
- 4) We will properly select our business partners, and engage in fair and ethical transactions and responsible procurement and purchasing.
2. We promise to behave as follows, in compliance with laws and regulations, in our relationships with society
- 1) As a company, we will be accountable to society in general.
- 2) We will provide thorough and appropriate management and protection of the company’s information and our customers’ personal information.
- 3) We will consider the conservation of the environment and contribute to a sustainable society, in accordance with the KOSÉ Basic Environmental Policy
- 4) We will constantly maintain dialogue and coordination with society, and actively engage in solving social issues
- 5) We will make appropriate use of intellectual property, and will strive to protect KOSÉ’s intellectual property rights.
- 6) We will maintain a healthy, honest relationship with political and administrative entities.
- 7) We will not engage in antisocial behavior. We will adopt a resolute attitude toward antisocial forces.
- 8) We will respect the customs and cultures of every country or region, and comply with their laws and regulations.
3. We promise to behave as follows in internal company relationships and relationships with employees
- 1) We will not engage in corrupt actions.
- 2) We will comply with internal regulations and rules.
- 3) We will strive to maintain a healthy workplace environment at all times, and never engage in any act that leads to discrimination.
4. Managers will strive to ensure that the KOSÉ Group Action Policy is known to all members of the Group
- 1) Managers will understand their function to realize the spirit of this Code of Conduct, take the lead in setting a good example for others, and strive to ensure that it is known to all members of the KOSÉ Group.
- 2) The Compliance Committee will be established to continually collect internal and external opinions, deepen communications, and develop effective internal systems.
Risk management and compliance education
“Compliance” in the KOSÉ Group means not only compliance with laws and regulations, but also acting in accordance with social ethics with ‘a mind to follow what is right’.The scope of this compliance includes adherence to the ethical behavior set forth in the “KOSÉ Group Action Guidelines.”
The KOSÉ Group has established a "Risk Management and Compliance Committee" as well as a Risk Management Promotion Committee (Personal Information Protection Management Committee) and a Compliance Promotion Committee as the subordinate organizations to execute various activities. As part of these activities, we conduct regular compliance training and other activities to continuously educate employees. In addition, we have established social media policies and are working to utilize social media with an eye to risks associated with it.
Promoting Risk Management
To ensure business continuity and stable growth going forward, the Group has established the Risk Management
Promotion Committee as a cross-divisional Company-wide organization to conduct qualitative analysis and evaluation
to comprehensively identify risks, and to take necessary countermeasures for those risks that may have a substantial
impact. Specifically, each year we select risk items using a questionnaire sent to persons in charge of affiliated
companies and departments, and prioritize them along two evaluation axes: impact on business performance and other
factors if the risk materializes; and likelihood of the risk materializing. The risks selected through the risk
assessment are aggregated by risk category: strategy risk, business/financial risk, political/economic risk,
accident/disaster risk, personnel/labor risk, or legal violation/indemnification risk. The Group has established and
operates a system to monitor the current status and progress of each of its risk countermeasures on a regular basis.
In addition, risk management briefing sessions are held annually for directors, managers, and supervisors as a forum for sharing information on the changes in laws, regulations and environment. With a goal of establishing company-wide risk management compliance maintenance activities, activities to drive awareness are held continually with the use of recent cases.
Compliance Training
Training for All Employees (including temporary and part-time employees)
Since 2008, every year, trainings that focus on the important issue of compliance is given to KOSÉ Group employees through the use of e-learning or through handing out learning materials. Participation is managed strictly and all employees are urged to take part in them.All employees are encouraged to make decisions and take actions in good faith and through the use of common sense in every possible scenario that may occur in daily work including, but not limited to, information leakage, presents from clients, patronage to foreign officials, preventing any form of harassment, and others.
- FY 2017 "Vol.10 Learn by Case Studies! Compliance Basics"
- FY 2018 "Vol.11 Compliance Basics + Compliance Awareness Survey"
- FY 2019 "Vol.12 Lean from Harassment Cases – Responding to the Latest Legislation"
- FY 2020 "Vol.13 Protect Organizations and Individuals: Measures against Social Media Risks in the Smartphone Era"
- FY 2022 "Vol. 14 Learning about the Revised Code of Conduct"
- FY 2023 "Vol. 15 Learn by Case Studies! Measures against Workplace Harassment”
Since 2017, we provide new employees with training in accordance with the “KOSÉ Group Action Guidelines”. In particular, managers are trained on specific examples of harassment, which is important for their position, in training for new managers.(22employees took the course in 2022.) We also conduct training to prevent corruption when formulating the KOSÉ Group Global Bribery Prevention Guidelines.
Training for Beauty Staff
Since FY 2014, a training page entitled “Let’s Aim to become Compliance Beauties!” is published in the EMB Textbook that is issued 6 times a year as a training handout for Beauty Staff. Relevant cases that a Beauty Staff who engages with customers in many occasions must know are disseminated in the form of a four-panel manga.
Trainings for participants based on their groups
Newly-hired employees, newly-appointed managers, and managers of group companies take part in a compliance training specifically designed for their group every year. Topics including introduction to compliance, information security, and harassment are delivered to each participant based on the participants’ needs. One-on-one trainings are provided to employees who are newly-assigned overseas as a part of risk management in a global business environment to ensure that they understand and comply with the country’s or region’s laws and regulations.
Posting of Compliance Awareness Poster
Every year, we create compliance awareness posters, distribute, and post them at each of group companies in Japan.
In addition, the same information is also posted on the screen savers of personal PCs in order to raise awareness of the issue.
Social Media Policy (in the products and beauty information website)
Activities for Corruption and Bribery Prevention
Basic policy
To remain honest, fair, impartial and trusted by society, the Group defines corruption as “the use of entrusted power, whether monetary or otherwise, for personal gain” and works to prevent all forms of corruption, including bribery, facilitation payments, fraud, extortion, collusion, money laundering, excessive entertainment and gift giving, collusion, embezzlement, falsification, breach of trust and concealment. The KOSÉ Group Action Guidelines, Basic Policy on Procurement, and the KOSÉ Group Global Anti-Bribery Guidelines set forth basic rules for relationships with customers, business partners, government agencies, and other entities, and we are working to ensure that all employees are fully aware of these rules. In addition, the Board of Directors has adopted a resolution on action guidelines against corruption in general. The Risk Management and Compliance Committee reports any corruption issues to the Board of Directors.
Number of Compliance Violations, etc.: Sustainability Data
Dealing with Clients
- When selecting consignees, the selection is made from multiple candidates in accordance with the law through a fair evaluation. The KOSÉ Group’s will not take advantage nor impose the KOSÉ Group’s position for personal interests.
- Exchange of presents with clients is prohibited with the exception of cases within bounds of socially accepted norms.
- Deals with corporations or individuals that are deemed to have a special relationship with The KOSÉ Group will not be honored except for sales agreements.
- For new transactions, agreements are entered following the Basic Policy on Procurement.
Basic Policy on Procurement (Material Procurement Information)
Appointment of Business Partners (Distributor, Agent, etc.)
When appointing a business partner (distributor, agent, etc. collectively “Business Partners”), in accordance with the “KOSÉ Group Global Bribery Prevention Guidelines” and the “KOSÉ Group Global Bribery Prevention Manual”, the following items are subject to prior scrutiny, the appropriateness of services and compensation is examined, and the approval of the responsible person is obtained.
- Business Partner Integrity (background of the referral, relationship with public officials, past involvement in bribery, recipients of business partner remuneration, etc.)
- Business Partner Competency (performance history, expertise, substance, ease of communication, etc.)
- Terms of the consignment agreement with the business partner (details of the consignment, the amount of money to be paid for the consigned business, whether or not receipt is required by the business partner, whether or not there is a provision prohibiting bribery, the contract period, etc.)
We will also strive to include anti-corruption and anti-bribery clauses in our contracts with our business partners.
Dealing with Public Officials
The KOSÉ Group established the KOSÉ Group Code of Conduct and KOSÉ Group Global Bribery Prevention Guidelines, conducts its operations within their bounds, and does not allow bribery to public officials and people in equivalent positions. We prohibit unlawful donations and promises of money, presents, services and other profits (including facilitation and payment) to public officials to gain deals and unfair profits, and continue to work to prevent corruption and establish and maintain fair business practices. We also conduct detailed audits and investigations in selecting distributors and agents and require prior agreement to our standards.
*Facilitation and payment refers to small amount payments made to public officials in order to facilitate the processing involved in government services where they do not have discretion.
Corruption risk assessment in business
Risk Management Promotion Committee conducts overall risk assessment by business function every year, and a risk analysis for bribery and corruption including collusion with business partners is performed in the process.
Establishment of Compliance Help Desk
We have established a “Compliance Help Desk” and “Harassment Help Desk” to detect possible illegal activities (including all forms of corruption, including bribery) and violations of internal rules, including human rights issues such as bullying and harassment that may be taking place within the Group, and employees and officers can submit reports (consultations) by email or telephone. We also have a direct line to outside attorneys. These services are made known to employees through the “KOSÉ Group Code of Conduct” e-learning training provided to newly hired employees, compliance awareness posters displayed on a regular basis, and the “Let’s Aim to Become a Compliance Expert,” a compliance education material for beauty consultants. It is also made available all the time via a groupware.
All information given through Help Desks are handled in a way that ensures that the informant is not put at risk including the anonymity. With advice from external attorneys, the Compliance Promotion Committee acts on this information fairly and sincerely, works to get the facts early and resolve issues promptly.
The "Compliance Help Desk" has been made known to overseas Group companies, too, and is available to receive reports.
We have also established a separate contact point to receive compliance-related consultations and reports from our business partners.
Number of Calls to Compliance Consultation Desks: Sustainability data
Tax transparency
1.In the KOSÉ Group, the Board of Directors is responsible for overseeing tax risks, and the risks are under the control of the Accounting Department which is headed by the director in charge of Accounting Department.
2.The Board of Corporate Auditors regularly evaluates tax-related matters through reports from the internal audit department and the accounting auditor.
3.KOSÉ Group will comply with the applicable tax laws in each country and will make appropriate declarations and payments with respect to their spirit. In addition, we do not conduct transactions solely for tax avoidance without business purpose or economic reality.
4.KOSÉ Group will work with tax authorities in each country sincerely to ensure that the Company’s business is accurately understood and to build sound relationships so that proper taxation can be made.
5.KOSÉ Group will promote appropriate tax treatment, including the elimination of potential double taxation, in compliance with laws and regulations.We will work to optimize tax expenses.
6.We do not employ artificial tax treatments that have no economic substance.
7.In accordance with the OECD Transfer Pricing Guidelines and the laws and regulations of each country, we define the Group’s transfer pricing policy and set inter-group transaction prices based on this policy and the arm's length principle (ALP).
8.We do not intentionally use tax havens for the purpose of tax avoidance.
Basic Policy on Intellectual Property
The KOSÉ Group considers intellectual property an important management resource, and has formulated the KOSÉ Group
Code of Conduct and established a dedicated department for its management. Intellectual property includes the
results of technological development, various designs, and naming. The proper protection, acquisition, management,
and utilization of these assets serve as the foundation of our global business activity.
Since intellectual property is essential to cultivating our brand, representing our most important asset, we have been working to protect our brand by implementing counterfeit-measures based on intellectual property rights in Japan and overseas.
Inventors and creators of intellectual property are compensated based on various standards stipulated in the employee invention system. KOSÉ aims to inspire further creation of intellectual property by implementing measures that enhances motivation, including awards presented by the President & CEO.
In addition, KOSÉ promotes open innovation with an emphasis on cutting-edge technology in hoping to create new values that cannot be achieved by the Group alone.
On the other hand, we conduct training on intellectual property according to each department and job duties on an annual basis. The training promotes respect for other people’s intellectual property rights and ensures clearance from the early stage of development to prevent troubles related to intellectual property.
Information security
Personal Information Protection and Management System
With the increased adoption of information technology, it has become increasingly important to protect personal information. Recognizing that the protection of personal information is an important risk management issue, we updated the Management Regulations for Personal Information Protection, which were developed in 2005, to take account of current conditions. More specifically, we have strengthened the management system by creating a new position of Personal Information Manager, prepared a personal data register, revised the management manual and the reporting route for reporting security breaches concerning personal information, and placed emphasis on ensuring the implementation of the revised regulations. We are making sure that all employees are fully informed of and will implement appropriate management of personal information.
Handling of Personal Information (in the Products and Beauty Website)
Appropriate Disclosure of Information to Investors
Financial Results Briefing
A Financial Results Briefing is held twice a year for institutional investors and analysts. We are also focusing our efforts in IR activities to gain the understanding and trust of shareholders and investors through proper information disclosure by holding activities such as IR seminars for females.