Risk Management

Establishment of corporate ethics and promotion of legal compliance management

Based on our management philosophy, we broadly declare both inside and outside Kumagai Gumi that we establish corporate ethics and strongly promote legal compliance management. As a good corporate citizen, we conduct corporate activities while always basing our behavior on continuing to exist as a company that has high value to customers, shareholders, local society, and all individuals related to the business activities of Kumagai Gumi (stakeholders).

Kumagai Gumi Guidelines for Action

We have enacted a "Kumagai Gumi Guidelines for Action" as the basis for our actions.
The main contents are as follows.
● Compliance with laws and social norms
● Harmonization with Society (Environmental Conservation/Social Contribution)
● Respect for Human Rights and Equality

Fundamental concepts of compliance

In order for Kumagai Gumi to continue earning the appreciation and trust of customers and society, we believe that all of our officers and employees must take responsibility for their daily actions, comply with laws, social sensibilities, and corporate ethics, and maintain an awareness of compliance.

Compliance System

The compliance system of Kumagai Gumi mainly consists of three internal functions: a governance function via each department at the headquarters and branches, a support function via the administrative head office and other specialized departments, and an auditing function via the Audit Office.
Specifically, departments at headquarters and branches fulfill the governance function by complying with laws based on thorough implementation of advance judgment. The administrative head office and other specialized departments fulfill the support function by providing legal support for the governance function. The Audit Office conducts audits by performing after-the-fact audits of conditions for the above functions. Through this system, Kumagai Gumi strives to discover legal violations at an early stage, to prevent violations in advance, and to prevent reoccurrence.
Additionally, as an organization independent from management, the Legal Compliance Audit Committee conducts periodic assessment from an outside perspective and then issues warnings to management regarding any trouble that may exist.


Legal Compliance Audit Committee

Kumagai Gumi established the Legal Compliance Audit Committee in June 2002. Meetings are held annually in order to strengthen the compliance system of Kumagai Gumi and group companies.
The Committee is composed of internal members (full-time auditor, executive in charge of disciplinary measures, director of business planning department, head of Audit Office), as well as outside members such as former judges and public prosecutors.
By using an objective and expert perspective, the Committee monitors and provides guidance for the execution of duties. As necessary, the Committee issues corrective warnings to management meetings, etc. Also, the Committee accepts non-disclosed/anonymous provision of information and consultation from main associated companies and group companies of Kumagai Gumi. Through these activities, the Committee strives to prevent misconduct and illegal activities in advance.

Initiatives for Legal Compliance

Internal reporting system

As part of our compliance management, the Kumagai Gumi Group has introduced an internal reporting system.
We have established a contact point for reporting violations of compliance by our company and our group companies. The contact point is used for managements, employees and business partners. Inquiries have also been set up so that reporting violations of compliance can be received from outside the company.

In addition, the system ensures its effectiveness by enabling anonymous reporting.
We prohibit disadvantageous measures for whistleblowers on the basis of their reports.
In cases where managements, employees, etc. involved in compliance violations cooperate in early detection and resolution of problems, such as voluntary internal reporting, the disciplinary punishment of such persons may be reduced or waived.
Upon receiving a report, we will conduct an investigation under the conditions that will ensure that the whistleblower will not suffer any disadvantage.

If necessary, the department in charge will prepare and implement measures to prevent a recurrence, and then report the plan to the Compliance Audit Committee, which includes external lawyers.

Submission of a written oath by all employees

In order to raise awareness among all employees toward thorough legal compliance, executives and employees of Kumagai Gumi and group companies submit a "Written Oath on Legal Compliance" every year (100% submission rate among applicable executives/employees).

Compliance Program

In order to ensure thorough legal compliance management, we formulated the Compliance Program in October 2004 and are implementing the Program.
The Compliance Program is a revision of compliance-related regulations, manuals, educational material, etc., created by Kumagai Gumi thus far. Furthermore, the Program also includes and integrates internal regulations, behavioral rules, etc., for strengthening legal compliance.

Holding Compliance Training

In order to increase fundamental knowledge on legal compliance, we held internal training from October 2017 to March 2018. Training themes included the Antimonopoly Act and bribery. In addition to employees of Kumagai Gumi, training was also held for group company employees from the perspective of strengthening the group compliance system.

Legal Compliance Awareness Month

Kumagai Gumi has designated October of every year as "Legal Compliance Awareness Month." During this month, we further enhance actions for legal compliance.
Today, behaving in compliance with related laws is essential for a company to continue to exist and grow. Held every year, Legal Compliance Awareness Month is one milestone in efforts to steadily implement Kumagai Gumi's management philosophy of "We strive to be a responsible corporate citizen, recognized for our business integrity and social awareness." During the month, each employee reconfirms their understanding toward legal compliance. We also establish behavioral standards based on legal compliance.

System for prevention of collusion and prevention of bribery, etc.

Kumagai Gumi's Compliance Rules of Conduct stipulate that, in the receipt of orders for construction work, acts that violate criminal law, antitrust law, or other law, or that impair fairness and impartiality in bidding, are prohibited. Through means including training and the collection of pledges, we ensure that employees are not involved in violations, and have built a structure to prevent the occurrence of violations through an internal reporting system.

Prevention of insider trading

The Kumagai Gumi Group complies with the Financial Instruments and Exchange Act and related laws and regulations, and has established Internal Regulations on the Prevention of Insider Trading to enhance the effectiveness of compliance. Based on these regulations, we have established an Insider Information Management Committee to perform information management across the company.

System for Excluding Anti-social Forces

At Kumagai Gumi, we pledge to stand resolutely against antisocial forces in the “Kumagai Gumi's Code of Conduct.” Furthermore, the Compliance Program contains a chapter entitled "Handling of Anti-social Forces." This chapter raises employee awareness by explaining specific response method after receiving an unfair request.
Moreover, in an effort to exclude antisocial forces, items on the exclusion of organized crime are included in the "Agreement on Subcontracting of Specialized Construction"” and "Terms and Conditions for Business Contracts on the Sale of Equipment, etc." used during business with cooperating vendors.

Status of legal suits and violations of laws

As of the end of March 2021, our company is involved in five civil cases in Japan.
In FY2020, no serious legal violations (including administrative sanctions, administrative measures, etc.)
occurred that involved measures such as suspension of designated bidding at a national level.

Information security

Kumagai Gumi established its Information Security Policy in 2007, and takes concrete measures to protect information assets from unauthorized access, leakage, falsification, loss, disaster, and other threats. We have also appointed an Information Security Officer and established an Information Security Committee.

Protection of Private Information

In addition to enacting fundamental rules (Fundamental Philosophy, Policy on the Protection of Private Information, Personal Information Protection Rules, etc.), we list required items on the Kumagai Gumi website and take action for appropriate handling/protection of private information for shareholders, employees, and other individuals related to Kumagai Gumi.
We have also created a manual on responding to the Private Information Protection Law. The manual is distributed to all employees in order to raise awareness for the importance of protection of personal information among all executives/employees. Furthermore, we continually improve the management system and mechanisms for the protection of private information.


Business Continuity Plan (BCP)

Kumagai Gumi has formulated a business continuity plan (BCP) that enables the continuation of main work (recovery support, infrastructure restoration work, etc.) for customers and local residents in the event of a large-scale disaster. We have constructed a system for fast and broad implementation of the plan. We have also established a permanent Risk Management Committee for maintaining/enhancing the effectiveness of our BCP.
The Committee uses a PDCA cycle to formulate annual plans, etc., for BCP activities. It also seeks to cooperate with branches, group companies, and associated companies through training plans and education. As a company that is trusted by customers during emergencies and a construction company that contributes to society, Kumagai Gumi works to continually revise and improve the BCP.

Operation of the Safety Confirmation Contact System

We operate a Safety Confirmation Contact System based on our business continuity plan. The system enables us to confirm the safety of employees, the most important element when establishing a support system. We have implemented a system for confirming the safety of group company employees, and have developed a system for business continuity as the Kumagai Gumi Group.