Governance Report
The Sunstar Group undertook a management and employee buyout of all shares in 2007, delisting the company and marking the transition to a system whereby all managers and employees assume collective responsibility for the company’s governance. Our global operations are also led by this spirit.
In addition, we have continued to develop the strengths that we have retained since the days of our foundation, enabling us to remain a healthy organization. We have expanded our global business to achieve a balanced and diversified portfolio, encompassing the Consumer Business Group and the Industrial Business Group, with operations spanning Europe, the Americas, Asia, and Japan. This is coupled with solid management principles, such as maintaining a high equity ratio and continued strengthening of the internal and external audit functions to monitor operations.
Across all regions, our managers and employees openly share information about business results and the status of operations through our internal portal site every month. Once a year, we hold a general meeting with managers, employees and shareholder representatives, an opportunity to share and discuss detailed information about the business situation. This content is also published on our internal portal site together with annual reports, enabling all managers and employees in our global Group to unite as they work towards achieving our Long-Term Vision.
Corporate Governance
Organizational design for appropriate management audits
The major companies of Sunstar Group in Switzerland, Singapore, the U.S. and Japan have Boards of Directors that fulfill the supervisory functions of management. In addition, the holding company has outside directors and both the Consumer and Industrial business companies in Japan have corporate auditors, and external auditors are also appointed to supplement the supervisory functions of management.
With the aim of making important policy decisions and reporting on important matters beyond the corporate framework, we have established Group Executive Committee composed of key corporate officers for each business area. To ensure transparent and wise decision-making, prompt reporting, and information sharing, the Group Executive Committee‘s roles and responsibilities are continually reviewed and shared within the group. Decision-making mechanisms including rules regarding authority levels at each group company have been put in place. The Internal Audit Department conducts internal audits from the perspective of legal compliance, effectiveness and efficiency of internal controls and reports regularly to the Board of Directors.
In addition, various committees and rules across corporate and departmental boundaries for the coordination of actions have been established to address individual business risks, and there are procedures to respond promptly when a serious incident occurs. Currently, there is an information security committee, an environmental committee, as well as compliance liaison group and rules for setting up an emergency task force in the event of a crisis with a focus on the Group companies in Japan.
Corporate governance structure
Major Initiatives
Group operation manual (Global)
As part of risk control management based on our global group risk analysis, the global group decision-making structure was reviewed in 2021. The Executive Committee, consisting of directors of the major Group companies, has been established as a body for decision making on important matters affecting the entire group for the purpose of good management. In addition to this, we have revised our Group operation manual to facilitate more transparent, wise, prompt, and swift decision-making. Based on this manual, we are also in the process of revising the internal rules of decision-making authority at the corporate level in each country.
Risk Management
The Sunstar Group established the GRC Department (including Internal Audit, Risk Management, ESG) at its group headquarters with the aim of managing risks and opportunities systematically. As an organization that is under the direct control of the group’s Board of Directors, it issues regular reports and works to construct systems capable of reflecting these in the group’s business strategies.
Our risk management system consists of the following:
- Risk policies
- Risk management action plans and
- Risk management toolkits.
Using these toolkits, we regularly hold workshops and individual interviews within various business departments and regions, extract, classify and assess the various risks and opportunities across the group, and display these using heat maps and other tools so we can always understand their urgency, importance and the state of progress. These are reported to top management and discussed in order to find risk mitigation measures.
Major Initiatives
Implementation and update of risk assessments (Global)
Mid-Term Risk Map of Sunstar Group
Compliance
The Sunstar Code of Conduct, the foundation of our compliance activities, is distributed to executives and employees across the global Sunstar Group. They are required to follow the code.
The Sunstar Code of Conduct is a series of standards outlining the basic requirements that all our executives and employees must adhere to in the course of their work. Our Code of Conduct is much more than just a set of company rules and procedures for work. It provides a broad overview of how employees should approach their work and human relations. In addition, it is also our main point of reference for standards on how we should conduct ourselves in our work – a pledge made by the company, executives and employees everywhere to act according to the highest ethical standards. This booklet, which we have issued in nine different languages, contains a variety of sections covering everything from our corporate philosophy and expectations for directors to our responsibilities towards employees, clients and consumers, financial and work obligations, the environment, health and safety and others. Our Code of Conduct has helped us build a corporate culture in which each and every executive and employee takes compliance very seriously.
Major Initiatives
Appointment of person in charge of compliance initiative (Japan)
We have appointed compliance penetration personnel for each department. They work with the Compliance Secretariat to identify and resolve compliance issues and conduct legal workshops in their respective departments.
Compliance manual distribution and training implementation (Global)
All employees and executives are provided with a compliance manual with information on the laws they need to comply with, along with details of past issues that need to be avoided. It is used as a basis for employees to make decisions about their work and prevent future compliance violations. They are also enrolled in compliance training—first when joining the company, at certain key points in their career, and upon promotion to management positions. In 2021, a survey about compliance issues was conducted among employees. As a result, some issues were identified such as lack of legal knowledge (e.g. the Act on the Protection of Personal Information, Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors, Act on Prohibition of Private Monopolization, and Maintenance of Fair Trade); lack of awareness regarding matters such as treatment of confidential information, personal information, labor-related laws, and regulations and company rules; harassment; and internal communication rules. In response to this, the compliance manual was updated, and more information was added on issues that have become social problems in recent years such as harassment related to pregnancy. We also updated our educational videos. In addition, we took appropriate actions and disciplinary measures with regard to harassment cases and held in-house seminars to prevent re-occurrence. We are also conducting various training courses on harassment prevention and data privacy protection at group companies in each country outside of Japan and work to raise employee awareness on an ongoing basis.
Establishment of a whistleblowing system (Japan, Europe, USA, Singapore)
In Japan, internal and external employee consultation services have been put in place as part of a whistleblowing system which enables employees to talk and provide information to someone without having to go through their supervisors if they suspect there has been a violation of laws or internal/external rules or are unsure how to make a fair judgment in the course of their daily work or internal activities. This confidentiality system ensures that whistleblowers do not suffer from unfair treatment at work because of disclosing information. A whistleblowing system has also been introduced in Europe and USA, and Singapore joined in 2023.
Tax Transparency
The Sunstar Group believes that the payment of taxes is one of the social responsibilities that companies should fulfill. As such, each of the companies in our group complies with the taxation laws of the respective countries.