Materiality 4
Establishing a sound management foundation

Basic Ideas and Visions

Establishing a sound management foundation is essential for the sustainable growth of a company. In order to increase corporate value over the long-term, Hitachi High-Tech Group will strive to improve the effectiveness of corporate governance and aim to be a company that is trusted and needed by society.

Action Targets

1. Realize sound governance

We will strive to improve the effectiveness of corporate governance by bolstering the effectiveness of the Board of Directors and strengthening and enhancing internal controls. In addition, we will endeavor to achieve sustainable growth and increase society’s trust in us by implementing initiatives such as compliance risk prevention measures and conducting education, and fostering a corporate culture that is open and compliant with laws.

Specific Actions

Improve corporate governance by increasing the effectiveness of Group companies' Board of Directors and reviewing the Group's overall system of rules

2. Ensure product safety

Providing customers with safety and peace of mind is a corporate social responsibility. By providing products that comply with laws and regulations and by working to eliminate product accidents, the Group aims to provide highly-safe products and thereby enhance competitiveness and increase the level of trust from society.

Specific Actions

Firmly instill a safety-first mentality through activities to further enhance product safety

1. Implement S>>Q>D>C^*1
2. Pick out and remove product safety accident risks and product-related legal violation risks

• ^*1 S: Safety, Q: Quality, D: Delivery, C: Cost

3. Realize a CSR-based supply chain

By encouraging business operations with a strong awareness of corporate social responsibility, not only for the Group, but also for our partners and the entire supply chain, we aim to reduce environmental and human rights risks in the supply chain.

Specific Actions

1. Hold briefings for business partners (2 times/year)
2. Self-evaluations of new business partner using checklists

Action Plan

• ^*2 Activities have been changed to reflect the fact that the company became a wholly owned subsidiary of Hitachi, Ltd. in May 2020.

FY2020 Initiative Results

1. Realize sound governance

Strengthen governance and compliance for the Group as a whole

• In FY2020, we changed our activities in response to becoming a wholly owned subsidiary of Hitachi, Ltd. in May 2020, and worked to strengthen our governance as a member of the Hitachi Group.
• In line with the Hitachi Group's unified policy, we changed our organizational structure to a company with an Audit & Supervisory Board in July 2020. In addition, we introduced a decision-making framework (internal policies, etc.) that complies with Hitachi Group standards, and worked to disseminate it to our Group companies, thereby improving our governance system as a member of the Hitachi Group.
• We have implemented continuous compliance education at all levels, from newly hired employees to management personnel. In addition to furthering their understanding of the Hitachi High-Tech Group's conceptual approach to compliance, its compliance structure, its internal reporting system, and so on. We also conducted individual training programs in response to requests from Group companies to foster compliance awareness throughout the Group.
• Hitachi High-Tech Group has taken steps to enhance the company's self-purification function by establishing internal reporting (whistleblowing) hotlines with the aim of detecting statutory and ethical violations at the earliest stage and addressing them. The hotlines can be used by regular employees, temporary agency workers, casual workers, and fixed-term employees in Japan and overseas. In FY2020, in response to the revised Whistleblower Protection Act, we further strengthened our efforts by requiring those involved in the whistleblowing hotlines to pledge in writing that they will not treat whistleblowers disadvantageously and will not leak relevant information inside or outside the company.

2. Ensure product safety

Visualize the risks in each part of the product life cycle

• We seek to enhance product quality and reduce product safety risks by conducting checks of the design, development, and quality assurance divisions during new product development based on the checklist for increasing the comprehensiveness of our risk assessments. In this way, we take steps to increase the visualization of risks in each part of the product life cycle. In FY2020, even amid the coronavirus disaster, audits and improvement activities continued remotely with the use of video conferencing systems. In addition, we endeavored to improve check items to prevent accidents from occurring.
• There were zero serious product safety accidents in FY2020.

Lectures on product safety held

• We hold lecture sessions on product safety with outside instructors twice each year to raise the skill level of engineers in our design, quality assurance, and other product technology divisions. In FY2020, we used video conferencing systems to implement sessions remotely at each site.

3. Realize a CSR-based supply chain

Reduce environmental and human right risks in entire supply chain by collaborating with our partners (suppliers) using online tools

• We regularly communicate with our partners to encourage understanding of efforts for CSR and to reduce environmental and human right risks. In FY2020, we held three briefings in total as planned during online tools due to the coronavirus disaster, covering topics including overall CSR. The events were also archived so that partners who could not attend the event could view it.

• We promote to prevent CSR-related accidents from occurring among our partners, and to ensure that parts and materials procured from our partners comply with environmental regulations such as revised RoHS Directive and REACH Regulation. In FY2020, we made progress in responding to the revision of the Toxic Substances Control Act (TSCA)^*3 in the United States. Furthermore, in FY2020, there were no CSR-related accidents.

• ^*3 TSCA: A regulation administered by the U.S. Environmental Protection Agency (EPA). It aims to prevent the risks posed by harmful chemicals to human health and the environment.

• With the aim of reducing CO2 emissions in the supply chain, we manage and share data on Scope 2 CO2 emissions (indirect emissions associated with the use of electricity and heat supplied by power companies and so forth) by individual partners in collaboration with our partners. By visualizing the environmental impact of the supply chain, we are able to deepen understanding among our partners.

Link

• Corporate Governance
• Compliance
• Product Responsibility
• Collaboration with Our Partners (Suppliers)

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