A huge portion of our brand value lies in our reputation for doing the right thing. As General Counsel, I serve as a strategic partner in achieving business goals, but I also perceive myself and my legal and compliance team as the guardians of the company’s reputation. It’s not simply about preventing violations of the law, but about positioning ourselves to be able to see around corners in terms of risk to our brand, nurture internal and external transparency, and set new standards that go beyond the law and anticipate change.
Risk management: Tackling risks head on
The most important requirement to successfully assess and manage various risks is transparency: promoting frank discussion within top management, talking openly to employees, distributors, and other business partners about risks, systemic gaps, and concerns, and putting the right policies in place from the outset. We set up a global hotline to encourage internal transparency. We built an Anti-Bribery and Anti-Corruption (ABAC) system and accompanying compliance infrastructure to promote fair operating business practices through training programs, multilingual publications, and even manga to communicate every dimension of anti-bribery. We have also thoughtfully reviewed the types of risks inherent in our subsidiary and partner firms and conducted risk assessments of certain service providers and distributors to ascertain medium- or high-risk areas requiring deeper due diligence.
In addition, COVID-19 pandemic can increase the risk of compliance incidents, whether this is due to deliberate misconduct or unintentional legal violations, such as fraud risk arising from pressure over business performance, cartel risk arising from emergency alliances with other companies or bribery risk arising from the engagement of new business partners. To prevent such risks, we have secured a commitment from executive officers and organization heads that the COVID-19 pandemic will not change our basic principles of compliance.
Supply chain management: Responsible visibility across all tiers
From a CSR/SDGs perspective, simply knowing that first-tier suppliers are doing the right thing is not enough – we should also know what suppliers further down the chain are doing. That degree of knowledge requires collective visibility of all legal and compliance risks, so I proposed a cross-function working group to encourage comprehensive institution building, which enables us to holistically understand the risks in our supply chain and to address them in a risk-balanced way. Panasonic also conducts audits of specific risks areas in the supply chain.
Data privacy: Harmonizing requirements for future data-driven products
B2B and B2C data privacy risk will increase dramatically as we gain access to copious end-user data. In recent years, we have seen new data privacy regimes emerge beyond the EU’s General Data Protection Regulation (GDPR) and we have to stay ahead of those. As Panasonic places ever greater importance on software-and data-driven businesses leading up to 2030, we must reassure customers and governments that data will be used correctly as we introduce new products.
We have the chance to build new business models designed for compliance from the very start. Given our diverse global operations, Panasonic is also perfectly positioned to encourage governments to harmonize requirements.
SDGs inspire legal and compliance change
SDGs, risk management, and other elements could be brought more squarely into the decision-making process, encouraging us to reflect on the risks and disadvantages of different options. Functional reports are another great way to engage board members in SDGs-related issues.
Currently, we report to the Board once a year on risk management and twice a year on compliance.
Externally, I would like to see more thoughtful identification, discussion, and disclosure of the risks we face in our annual report or official statements to show more clearly who we are. For example, wider publication of hotline data to stakeholders would move social institution-building forward in our area of SDGs. Legal and compliance also has a significant role to play in SDGs areas such as corporate governance policies that cement Panasonic’s reputation as a trustworthy corporate citizen.
