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The Company's basic compliance policy, such as codes, policies, and systems related to sustainability

Wacom strongly believes that it can contribute towards the realization of a sustainable society, by seeking for various possibilities of "Life Long Ink" which is believed to be a value to be offered to society through business activities. Wacom shall have ethical and responsible business activities based on "Wacom Code of Ethics and Business Conduct" to turn such belief into action. Also, as part of responsible procuring activities as a company which consigns approximately 99% of its production activities to suppliers, Wacom aims for continuous contributions for a better society with suppliers (partners) based on "Wacom Supplier Code of Business Conduct" for the next generation. These codes are very important for Wacom's efforts aiming for a sustainable society.

Wacom Code of Ethics and Business Conduct
Wacom Suppliers Code of Conduct
Environmental Activities
Corporate Governance

Basic Views on Corporate Governance
Outline of Corporate Governance Systems
Composition of the Board of Directors
Monitoring each Directors’ performance of the role by the Board of Directors
Composition and Activity of the Committees (the Audit Committee, the Nominating Committee and the Compensation Committee)
Policy of Nominating the member of Board of Directors and training after Nomination
Independence and Qualifications of independent Outside Directors
Policy on Determining Compensation
Evaluate the Effectiveness of the Board of Directors
Basic Views on the Internal Control System and the Progress of System Development
Audit Framework with the Internal Audit and the Audit Committee
Preconditions for ensuring the effectiveness of the Board of Directors
Cross-Shareholdings

Compliance

Basic Compliance Policy
Compliance and "Wacom Code of Ethics and Business Conduct"
Compliance Management System
Internal Reporting System (Wacom Speak-up Line)
Compliance Training
Countermeasures Against Anti-Social Forces

 

 

 

 

Wacom Code of Ethics and Business Conduct

Wacom shall establish "Wacom Code of Ethics and Business Conduct" to ensure that all directors and employees abide by these standards and guidelines to ethically and legally judge and conduct their business.

"Wacom Code of Ethics and Business Conduct" shall be applied not only to Wacom directors and employees but also to Wacom partners, suppliers which undertake Wacom's business, consultants, and others. Wacom shall also request all partners and suppliers to abide by the principles specified in it.

Contents of “Wacom Code of Ethics and Business Conduct” are as follows;

1. Compliance with the Law

Importance of Compliance with the Law

Protecting Wacom’s Assets

Preventing Insider Trading

No Involvement with Criminal Organizations or Individuals

Preventing Money Laundering

Compliance with Export and Import Controls

Anti-Corruption and Anti-Bribery Measures

Compliance with Anti-Trust Regulations

2. Work and Environment

Maintaining Equal Employment Opportunity

Preventing Harassment and Bullying

Cautions against Drugs and Alcohol Use

Health and Safety Measures

Respecting Human Rights

Taking Environmental Responsibility

3. Cautions when Representing Wacom

Avoiding Conflicts of Interest

Committing Wacom

Rules of Distribution and Acceptance of Gifts

Cautions against Unauthorized Lobbying Activities

Guidelines on using Social Media

Route for Communication and Public Statements

Outside Employment

Community Involvement and Contributions

4. Managing Information and Assets

Keeping Accurate Accounts and Records

Treating Competitive Information

Protection of Information and Intellectual Property

Protecting Data Privacy

Protecting Company Assets and Information

Guideline on using Email, Internet, Information systems

5. Implementation of the Code

Importance of “Speak up”

Guide to Wacom Speak-up Line

Process of Reports and Investigations

Commitment to No Retaliation

Serious Consequences for Not Following the Code

Waivers

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Wacom Suppliers Code of Conduct

Wacom established Wacom Suppliers Code of Conduct (the “Code of Conduct”) that conforms to the RBA Code of Conduct (Version 6.0 of the Responsible Business Alliance Code of Conduct) formulated and released by the RBA (Responsible Business Alliance). Wacom suppliers (“Suppliers”) are requested to comply with the principles set forth in this Code of Conduct.

Wacom is also encouraging our Suppliers to request their supply chain and subcontractors (including labor agents/contractors) support and implement each item indicated in this Code of Conduct.

Wacom Suppliers Code of Conduct contains following items:

A. LABOR

Suppliers are committed to uphold the human rights of workers, and to treat them with dignity and respect as understood by the international community. This applies to all workers including temporary, migrant, student, contract, direct employees, and any other type of worker.

B. HEALTH and SAFETY

Suppliers recognize that in addition to minimizing the incidence of work-related injury and illness, a safe and healthy work environment enhances the quality of products and services, consistency of production and worker retention and morale. Suppliers also recognize that ongoing worker input and education is essential to identifying and solving health and safety issues in the workplace.

C. ENVIRONMENTAL

Suppliers recognize that environmental responsibility is integral to producing world class products. In manufacturing operations, adverse effects on the community, environment and natural resources are to be minimized while safeguarding the health and safety of the public.

D. ETHICS

To meet social responsibilities and to achieve success in the marketplace, Suppliers and their agents are to uphold the highest standards of ethics.

E. MANAGEMENT SYSTEMS

Suppliers shall adopt or establish a management system whose scope is related to the content of this Code. The management system shall be designed to ensure: (a) compliance with applicable laws, regulations and customer requirements related to the supplier’s operations and products; (b) conformance with this Code; and (c) identification and mitigation of operational risks related to this Code.

Please refer to the below website for the details about Wacom Suppliers Code of Conduct.
https://www.wacom.com/en-jp/suppliers-code-of-conduct

Initiatives to promote understanding of and compliance with the Wacom Suppliers Code of Conduct

Wacom established the “Wacom Suppliers Code of Conduct” as part of its responsible procurement activities. Wacom is taking the following steps to ensure that business partners understand and comply with the Code:
For new business partners, Wacom conducts credit checks, quality and environmental management system surveys, and plant inspections. Wacom distributed the latest version of the Wacom Suppliers Code of Conduct to major suppliers to familiarize them with our ESG initiatives. It has also been distributed to approximately 50 of our major business partners together with a request for them to endorse the Code and to cooperate in its implementation.Wacom also holds an annual ceremonial banquets and suppliers meetings for major partners; these events allow us to explain our business policies and strengthen our partnerships with them.

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Environmental Activities

Wacom strives to reduce the environmental impact of its business activities and makes effort to create products and technologies thinking of the environmental sustainability. Please refer to the following webpage for the details.

https://www.wacom.com/en-jp/eco-initiatives

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Corporate Governance

Basic Views on Corporate Governance

Wacom believes that corporate governance is a foundation for sustainable growth of corporate value, to fulfill social responsibility as well as its compliance to legislation as a listed company conducting business globally, and to enhance transparency of management and reliability of disclosure, which will bring benefits to its shareholders, customers, and other stakeholders.

Therefore, Wacom believes that the most important responsibilities of every business group is to fully commit to compliance and to establish and operate an effective internal control system that should continuously enhance corporate governance.

Please refer to the following links for more information about Wacom’s Corporate Governance.

Corporate Governance Report

https://investors.wacom.com/en-jp/corporate-governance/

Annual Report

https://investors.wacom.com/en-jp/financial-disclosures-and-announcements/

Notice of Ordinary Shareholders’ Meeting

https://investors.wacom.com/en-jp/stock-information/

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Outline of Corporate Governance Systems

In June 2015, Wacom changed to a Company with Audit Committee, from a Company with Corporate Auditors.

The Board of Directors shall be operated, based on the Board of Director’s regulations, and shall have responsibility of construction and promotion of internal controls, formulation and implementation of management policies, and business plans that conform to the laws and regulations of the Articles of Incorporation. The Audit Committee shall be operated, based on the Audit Committee’s regulations, and shall monitor the decision making and business operations of the directors.

The Board of Directors shall ensure that the directors and employees abide by the laws and regulations and such other rules, establish “Wacom Code of Ethics and Business Conduct”, fulfill their duties under sound social norms, and shall ensure especially that they do not have any associations with anti-social forces and groups, which threaten social order and the sound activities of business, with a resolute attitude.

The Board of Directors shall elect the Representative Director following the advice of the Nomination Committee as the persons with the highest responsibility for executing business, and the Representative Director shall also serve concurrently as the group CEO who supervises the entire group of Wacom companies. The group CEO shall have responsibilities of planning management strategy and planning and implementing management plans for the Wacom group of companies, and on promoting and strengthening internal controls, under the policies of the Board of Directors.

Wacom shall designate/appoint a Responsible Person from each business unit to Group Management, clarifying the responsibilities for business operations and for aiming to improve efficiency. Each Responsible Person of each business unit shall support the group CEO and shall contribute on planning and implementation of management strategies and shall have responsibilities of promoting and strengthening the internal controls, along with overall responsibility of business operations of the department in charge.

Wacom shall clarify the process and authority on business settlements by means of “Delegation of Authority (DOA)” and such other regulations, and shall strive to reduce risks with checks and balances.

Wacom shall establish Internal Audit as a division under the group CEO, and Internal Audit shall monitor whether the members of Wacom and business operations are abiding by the laws, the Articles of Incorporation, rules and regulations.

Wacom shall maintain the following four committees;

■ Executive Committee

The Executive Committee is the advisory organization of the group CEO. The Executive Committee will meet regularly, and shall review the progress of business plans and the challenges of business operations and shall formulate necessary responses. The executive committee shall formulate strategies for achieving the fiscal year target, along with maintaining and promoting the medium- to long-term growth of Wacom.

■ Policy Process and Controls Committee (PPC)

The PPC is chaired by the group CEO and shall develop regulations and policies, develop business processes, and shall grasp and deliberate significant challenges on information security, J-SOX and other material challenges on internal controls, and shall implement countermeasures, according to the results, or shall implement necessary notices or instructions to the directors and employees.

■ Compliance Risk Committee (CRC)

The CRC is chaired by the group CEO and shall share risk information globally, including overseas operations, to implement countermeasures related to risk management, such as consideration and implementation of countermeasures against definite risk events, establishment of disaster response plans, and organization of emergency contact networks.

■ Human Resource Committee (HR Committee)

The HR Committee is chaired by the group CEO and shall review the evaluation and compensation of employees and investigate employees conducting any violation of the laws, the Articles of Incorporation or rules and regulations. The Committee shall properly proceed with appropriate disciplinary actions based on the employment regulations to deter recurrence.

Wacom shall establish Wacom Speak-up Line being operated by an external third party organization in each group company, as a contact point for reporting an event where directors and employees find issues and other matters related to compliance, aiming to maintaining internal control and for improving the self-purging process. Notification may be conducted anonymously, and Wacom shall ensure that such informer shall not face any discrimination for such notification.

【Schematic diagram of internal control system and risk management system】

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Composition of the Board of Directors

The nine directors of Wacom include five outside directors. These directors, appointed from inside and outside of the Company, have rich experience, deep insight, and advanced specialties. They are responsible for supervising the performance of management by examining the implementation of management policies, the establishment of execution plans and the progress of implementation.

【Position and Responsibility of Directors and important Concurrent Position】

Position

Name

Responsibility / Concurrent Position

Representative Director, President

Nobutaka Ide

Chief Executive Officer

Director

Yoichi Machida

Chief Financial Officer

Director

Sadao Yamamoto

Chief Technology Officer

Director

Yukio Usuda

In charge of Corporate Strategy

Outside Director

Ken Inazumi

CEO of Exprice Co.Ltd.

Outside Director

Mikako Inamasu

Chairman and representative director of HR Institute Co., Ltd.

Outside Director
(Audit Committee Member)

Shigeki Higashiyama

Full Time Audit Committee Member

Outside Director
(Audit Committee Member)

Takashi Kamura

Representative of Urbantry Law Office

Outside Director
(Audit Committee Member)

Osamu Hosokubo

Founder & CEO, Great Asia Capital & Consulting LLC

 

 

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Monitoring each Directors’ performance of the role by the Board of Directors

The Board of Directors have a meeting at least once every month and make prompt and appropriate decisions covering a whole range of corporate management issues.

The Board of Directors shall ensure that the directors and employees abide by the laws and regulations and such other rules; establish “Wacom Code of Ethics and Business Conduct”; fulfill their duties under sound social norms; and shall ensure especially that they do not have any association with anti-social forces and groups, which threaten social order and the sound activities of business.

The Board of Directors shall elect the Representative Director, in compliance with the Board of Directors’ regulations, as the person with the highest responsibility for executing Wacom’s business, and the Representative Director shall serve concurrently as the group CEO who supervises the entire Wacom group of companies. The group CEO shall have responsibilities on planning management strategy and planning and implementing management plans for the Wacom group, and on promoting and strengthening internal controls, as dictated by the policies of the Board of Directors.

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Composition and Activity of the Committees (the Audit Committee, the Nominating Committee and the Compensation Committee)

In June 2015, the Company changed to a Company with Audit Committee, from a Company with Corporate Auditors.

All three Audit Committee members are outside directors and each Audit Committee member attends important meetings, such as the meeting of the Board of Directors to monitor execution of duties by directors. In addition, the Audit Committee annually formulates programs and policies for audit and discusses with the group CEO.

In April 2017, the Company established the Nominating Committee, of which an outside director takes office as a chairperson, to formulate selection criteria for candidates for the Representative Director, directors of the Board of Directors and important executive managers and make proposal to the Board of Directors.

In November 2018, Wacom established the Compensation Committee, of which an outside director takes office as a chairperson, to advise and make proposals for the formulation of Compensation Policy for the Representative Director and directors of the Board of Directors, as well as the institutional design of the compensation scheme. In June 2020 the Company introduced the restricted stock compensation plan.

【Committee Composition and Chairperson】

< ◎ represents chairperson or head of the committee >

Title

Name

Board of Directors

Audit Committee
Nominating Committee Compensation Committee
Executive Committee

Representative Director, President and CEO

Nobutaka Ide

     

Director, Chief Financial Officer

Yoichi Machida

   

Director, Chief Technology Officer

Sadao Yamamoto

   

Director

Yukio Usuda

     

Outside Director

Ken Inazumi

 

Outside Director

Mikako Inamasu


 

Outside Director (Audit Committee Member)

Shigeki Higashiyama

 

Outside Director (Audit Committee Member)

Takashi Kamura



Outside Director (Audit Committee Member)

Osamu Hosokubo



 

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Policy of Nominating the member of Board of Directors and training after Nomination

The term of office for directors who are not an Audit Committee member are set as one year in order to demonstrate and realize high transparency and fairness from the management of Wacom towards its shareholders.

With regards to the Representative Director and directors of the Board of Directors, as well as executive managers, the Nominating Committee headed by an outside director sets the criteria for candidate selection and shall make a candidate proposal to the Board of Directors for Nominating.

To select a candidate, the Board of Directors comprehensively takes into account understanding and sympathy for corporate vision and strategies, leadership and the candidate’s qualification, ability of business execution and the candidate’s expertise, and job experience in a listed company or global company, regardless of nationality or gender, or whether they are internal or external.

The Board of Directors is working to give its members the opportunity to attend beneficial trainings and workshops. Also, it provides its directors and Audit Committee members with the necessary training and materials related to the contents considered required knowledge. Furthermore, it exchanges information on other companies’ information and management practices at the Board of Director level. It shall make an annual training plan in the future, aiming to improve effectiveness.

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Independence and Qualifications of independent Outside Directors

Five directors out of nine directors are outside directors and all qualify as independent outside directors, who have high experience in listed companies, professional knowledge and experience as a lawyer. All outside directors qualify for independent director and have been designated as independent director. The Company believes that these independent outside directors can contribute to medium- and long- term improvement of corporate value.

An independent outside director each serves as chairperson of the Audit Committee, the Nominating Committee, and the Compensation Committee respectively.

【 Reasons of Appointment of Outside Directors 】

Name

Member of Audit Committee

Designated as Independent Director

Reason of Appointment


Ken Inazumi


Mr. Inazumi accumulated his experience as an executive, such as CEO  of business corporations. Currently, he has been leading business execution as a Director, Senior Corporate Executive Officer of a business corporation. The Company judged that he can give advice and guidance to the executive directors of the Company with his knowledge and experience in the IT industry.

Mikako Inamasu

 

Ms. Mikako Inamasu has established and managed a consulting company and is currently the chairman and representative director of the company. Wacom judged that she can give advice to the Company with her knowledge of business administration and her experience as a business manager.

Takashi Kamura

Mr. Kamura has legal knowledge and considerable experience as a lawyer. He has been an auditor of Wacom and has been a member of the Audit Committee after the transition to the Company with Audit Committee. Wacom judged that he can carry out his duties properly with his considerable experience and knowledge as a lawyer, Wacom’s auditor, and director who is a member of the Audit Committee. He also acts as a chairperson of the Nominating Committee.

Shigeki Higashiyama

Mr. Higashiyama had been responsible for various departments such as planning and personnel affairs at a major research institution., Ltd. He also has considerable overseas work experience of as well as in a global business environment. Wacom judged that he can carry out his duties properly given his experience and considerable knowledge in management. He acts as full-time outside director as well as chairperson of the Audit Committee and the Compensation Committee

Osamu Hosokubo

Mr. Hosokubo assumed the role of President & CEO, after serving as Executive Director at an investment company, which invests in and provides business support for domestic and overseas venture companies. After retirement, he founded and assumed the role of CEO of Great Asia Capital & Consulting LLC, which conducts the same type of business. Wacom judged that he can carry out his duties properly with his experience and abundant knowledge in investment and business support for domestic and overseas companies, as well as management as outside director at operating companies.

For more details about the Standards for Independence and Qualifications of Independent Directors, please refer to the Corporate Governance Report in the following link;

https://investors.wacom.com/en-jp/corporate-governance/

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Policy on Determining Compensation

The Board of Directors’ policies and procedures in determining the compensation for the senior management and directors are as follows.

The total amount of compensation of directors shall be resolved at the General Shareholders’ Meeting.

The Compensation Committee (which is an optional committee and composed of three or more directors of which more than half are outside directors) shall prepare a draft of method for calculating individual amount of compensation for directors (excluding Audit Committee member) with reference to the surveys on director’s compensation of the other companies, which are the same size as the Company, and the survey results by an external research organization, and propose it to the Board of Directors,. The Board of Directors shall deliberate and resolve the proposal by the Compensation Committee, and delegate to the President & representative director of the Board of Directors and chairperson of the Compensation Committee to decide the individual amount of compensation for directors (excluding Audit Committee member). 

The amount of compensation for each director of the Company is composed of fixed salary, which is paid monthly as basic compensation to all directors, and short-term incentives and long-term incentives, which is paid to directors (excluding outside directors). The total amount of compensation for directors consists of 15%- 20% of long-term incentives and 80%-85% of the following allocation, 60%-75% of fixed salary, and 25%-40% of short-term incentives, of which composition ratio is defined by each position.

Short-term incentives are performance-linked compensation (bonuses) consisting of company performance and individual performance and are paid once a year at a fixed timing. The company performance portion is calculated based on the performance targets for a single year, and the individual performance portion is calculated based on the individual performance evaluation. The both portions are paid between 0%-200% depend on the achievement rate. 

Long-term incentives for directors are designed to continuously improve our corporate value and share its direction with shareholders. They are composed of performance-linked compensation and stock price-linked compensation, and the decision of whether or not to implement the program shall be made by the Board of Directors every year. The proportion of each compensation out of total long-term incentives shall be determined by the Board of Directors upon the proposal of the Compensation Committee. As for the performance-linked compensation, the Company shall set the performance evaluation period consisting of multiple fiscal years and its performance targets for the period. After the end of the period, the Company shall pay the compensation based on the payout rate linked to the extent to which the performance targets are achieved. The performance targets are resolved by the Board of Directors following the proposal of the Compensation Committee. 

As for the stock price-linked compensation, in the form of a restricted stock compensation plan, the Company shall grant monetary compensation claims to the eligible directors for the allotment of restricted stock, each fiscal year in principle, upon a resolution by the Board of Directors of the Company, and by having them make contribution in kind using all the monetary compensation claims as contributed assets, shall issue or dispose of its shares of common stock to the eligible directors and release the transfer restriction when the directors retire.  The specific timing of payments and allocation to each eligible director shall be determined by President & representative director of the Board of Directors and the chairperson of the Compensation Committee, which are delegated by the Board of Directors

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Evaluate the Effectiveness of the Board of Directors

Since 2016, Wacom has conducted self-evaluation on the effectiveness of the Board of Directors, for the purpose of identifying and solving issues while recognizing the current situation of the Board of Directors.

As pertains to the evaluation method, Wacom shall explain the aim of the evaluation and so forth to each director, while distributing questionnaires to each of them, then shall implement detailed interviews based on the opinions obtained from their replies. The result shall be reported to the Board of Directors to analyze and evaluate the effectiveness of the Board of Directors.

In 2020, evaluations were implemented not only on the Board of Directors, but also on the entire governance system, including the representative director, new management body, the chairman of the Board, the Nominating Committee, and the Compensation Committee. They achieved high marks in general, especially with the recognition of duties and missions by the directors and the Board of Directors, as well as the performance of the independent duties of the directors. It was therefore confirmed that the Board of Directors play an effective role for important decision making.

For the summary of the evaluation on the Board of Directors based on a self-evaluation, please refer to the link below:

https://investors.wacom.com/en-jp/corporate-governance/

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Basic Views on the Internal Control System and the Progress of System Development

Wacom shall develop the system to ensure the appropriateness (hereinafter referred to as the “internal control”), based on the Companies Act and the Ordinance for Enforcement of the Companies Act, as follows:

1. The system ensuring the execution of duties by directors and employees complies with the laws and regulations and the Articles of Incorporation

2. The system concerning the preservation and management of information executed by the directors

3. Regulations or other systems concerning the management of risk of loss

4. The system for ensuring that the execution of duties by directors shall be effective

5. The system for ensuring proper business actions/transactions in any entity comprised of the registered stock company that includes the parent company and subsidiaries

6. Matters relating to the directors and the employees to assist with the duties of the Board of Directors

7. Matters for being independent from the directors (excluding audit committee members) for the employees in the preceding item

8. The scheme regarding the system for the directors and employees to report to the audit committee and other issues of pertinence for the audit committee

9. Matters on policies related to the claim for fees-in-advance or reimbursement processes or debt processing that arise from the execution of duties by the audit committee members

10. The system to ensure that other audits of the Board of Directors will be effective

For more details about Wacom’s Internal Control System, please see “IV. Internal Control System” in “Corporate Governance Report”

https://investors.wacom.com/en-jp/corporate-governance/

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Audit Framework with the Internal Audit and the Audit Committee

As a division under the group CEO, the internal audit shall be in charge of Wacom's internal audits. Following instructions from the group CEO, the internal audit shall monitor the affiliated companies in an appropriate manner, shall grasp material challenges on information security, J-SOX and other material challenges related to internal control, and shall implement necessary notices/guidance/advise to improve the business of applicable departments, then report to the group CEO. Also, in cooperation with the Audit Committee, the internal audit shall implement internal audits when requested by the Audit Committee members, and shall report the results to the Audit Committee.

The Audit Committee shall implement audits, following the audit policies and program formulated by the Audit Committee. The Audit Committee members shall attend important meetings such as the meetings of the Board of Directors, and shall hear opinions about the conduct of duties directly from directors and each department's managers, in order to implement adequate audits. Furthermore, to implement audits of the Audit Committee, they shall work in cooperation with the internal audit and accounting auditors, with the exchange of information and so on. In addition, the Audit Committee shall regularly exchange opinions with the group CEO, as well as with the auditing firm which is designated as the accounting auditor.

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Preconditions for ensuring the effectiveness of the Board of Directors

Wacom set the policy to select the most suitable candidate for director based on the standard of a “person who can understand and promote corporate vision, management policy and values, and contribute to future-growth of corporate value from a long-term perspective”, regardless of nationality or gender, or whether they are internal or external.

Each of current directors has significant business experiences abroad and one of the directors and Audit Committee members is a lawyer who is familiar with corporate legal affairs.

Wacom conducts an evaluation of the effectiveness of the Board of Directors once a year in a questionnaire format, in order to improve its functioning.

Wacom designates a full-time director from one of the directors who is also an Audit Committee member, so that said person shall be able to focus time and effort on duties necessary to execute roles and responsibilities properly. If a director concurrently serves as a director or equivalently of another listed company, Wacom considers that the number of concurrent offices should be limited to the extent where the said director can ensure attendances at the Board of Directors of the Company, and shall disclose the status of concurrent offices and the number of attendances at the Board of Directors in the Notice of Ordinary Shareholders’ Meeting of the Company.

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Cross-Shareholdings

Wacom may engage in cross-shareholdings if it finds a positive synergy effect from the viewpoint of business strategy and economic rationale when it mainly looks into the possibility of meaningful opportunity to realize its future businesses. However, Wacom shall not hold shares only for the purpose of short-term dividends nor capital gains.

If Wacom engages in cross-shareholdings, it shall regularly check its business relation with the issuer and shall proceed to explore the sale of shares in case it concludes that the cross-shareholding does not contribute to the enhancement of the business relation.

Regarding the exercise of voting rights pertaining to cross-shareholdings, Wacom shall take into consideration whether each proposal will contribute to improve the corporate value of the cross-shareholding Company, and not solely based on the business relation with the issuer.

When the shareholder engaged in cross-shareholding with Wacom conveys its intention to sell the shares issued by Wacom, Wacom shall not enforce retention of the shares by changing business conditions to the detriment of the shareholder.

Wacom shall regularly check business relation with the shareholder and ensure that no unfair trade attributable to the cross-shareholding has been conducted.

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Compliance

Basic Compliance Policy

All directors and employees of Wacom (including all corporations part of the Wacom group of companies) shall be responsible for maintaining trust with the customers and partners.

Wacom's business is based on its compliance with legislation, sincerity, and publicness, and therefore Wacom and the Wacom Brand may be significantly affected if any of these are lacking. Wacom believes that the directors and employees must constantly and ethically make decisions and conduct their business in compliance with legislation.

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Compliance and "Wacom Code of Ethics and Business Conduct"

Wacom shall establish "Wacom Code of Ethics and Business Conduct" to ensure that all employees abide by these standards and guidelines to ethically and legally judge and conduct their business.

In order to request not only Wacom employees but also Wacom partners, suppliers which undertake Wacom's business, consultants, and others, to abide by the principles specified in it, Wacom shall also establish "Wacom Supplier Code of Business Conduct" to request all suppliers to abide by it.

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Compliance Management System

As a compliance management system, Wacom shall establish Internal Audit as a division under the group CEO, in order to implement internal audits and evaluate on the internal control. Internal Audit shall monitor whether the members of Wacom and business operations are abiding by the laws, the Articles of Incorporation, rules and regulations.

Furthermore, the Company shall establish the Policy Process and Controls Committee and the Compliance Risk Committee under the group CEO, aiming for full commitment to compliance.

The Policy Process and Controls Committee shall develop policy, develop business processes, and shall grasp and deliberate material challenges to information security, J-SOX and other material challenges related to internal control periodically, and shall implement countermeasures or necessary notices/guidance, according to the results.

The Compliance Risk Committee shall share risk information globally, including overseas bases, in order to take countermeasures related to risk management, such as consideration and implementation of countermeasures against concrete risk events, establishment of disaster response plans, and organization of emergency contact networks.

In addition, Wacom shall establish the Wacom Speak-up Line operated by an external third party, as explained in “Internal Reporting System” below.

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Internal Reporting System (Wacom Speak-up Line)

Wacom shall establish the Wacom Speak-up Line operated by a global external third party, as a contact point for immediate reporting or immediate notification , in the event where directors and employees of Wacom and its group companies find issues and other matters related to compliance, in order to maintain the internal control and improve the purification process.

Wacom shall establish in-house the Compliance Response Team (CRT) immediately after receiving reports or notifications through the Wacom Speak-up Line, in order to implement necessary investigations and appropriate actions, and respond to the informers. Reports or notifications may be conducted anonymously in general, and Wacom shall ensure that such informers shall not suffer any discrimination or prejudice for such reports or notifications.

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Compliance Training

Wacom holds compliance training on a regular basis for the directors and employees, to deepen their understanding about compliance, and as a guideline to ethically and legally judge and conduct their business.

In 2019, Wacom held group trainings about e-Learning related to the protection of personal information and about harassment.

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Countermeasures Against Anti-Social Forces

Wacom shall ensure the directors and employees abide by the laws and regulations and such other rules, by establishing "Wacom Code of Ethics and Business Conduct", to fulfill their duties in accordance with sound social norms, and especially ensure that they do not have any associations with anti-social forces or groups which threaten social order or the sound activities of business.

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