Case Studies-Practice of Corporate Ethics:TEPCO, HITACHI, Japan TI

Practice of Corporate Ethics in TEPCO

Makino(CSR section in TEPCO)

1. History of our practice of corporation ethics and its whole picture
2. Development of our practice of corporation ethics including the evaluation system
3. Challenges for the future

1. History of our practice of corporation ethics and its whole picture

• 2002.8: the scandal of our atomic power generation
• 2002.9: published "4 promises" (3 on atomic power generation and 1 on Corporation Ethics)
• 2002.9: establishment of the committee for CSR:
• 2003.3 "the code of CSR practice"

<What was the scandal of our atomic power generation?>
The fact was brought to light that TEPCO hid the cracks on a nuclear reactor and altered the record of the test.
↓
fallen credibility and brand image

<CSR program>

• 3 missions
  
  1. To clarify the standard of CSR
  2. To establish the a system
  3. To establish a "culture not to do misconduct" and a "system for prevention from misconducts"
• Check and monitoring of business practice according to the code

2. Development of our practice of corporation ethics including evaluation system

• awareness raising, bottom-up
  ↓
  Role of the central office:1. To show the basic policies 2. To offer the tools they need
  Role of branches: Activities for CSR (education)
  Role of audit from out of company: periodic check and monitoring

1. Each worker practices honestly
2. Open atmosphere of the work place

• Tools:Case study, e-learning, Q&A handbook, easy commentary
• Basic:learning the idea and the rules, Advanced: ethical thinking

• Commitment of the top of the company
• Portal web site of the corporation ethics

★ Misconduct in the company is a kind of life style disease of daily business practice. Practice of promoting corporative ethics is a kind of health promotion of the company.

• PDCA cycle
• Check: monitoring and prize-giving

3. Challenges for the Future

• Lack of basic ability of one's task tends to cause breaking the rules
  ↓
  Daily business practice on the sound basis

Corporation Ethics in HITACHI

Syunichirou KIKO (HITACHI QA center)

1. Outline of HITACHI

• established in 1910. 400,000 employees, 932 affiliate companies including overseas (2006.3)
• Electronic companies:all kinds of electric appliances including home electric appliances, train, etc.

2. Corporation Ethics Program

Based on 8 items

<leadership of the company top>
To transmit the idea of the company top(CSR reports, website, CEO's visiting to the branches)

<Establishment of the code of ethics>
Establishment of the basic rules that a HITACHI person should keep(the business ethics handbook)
Spirit of engineering ethics(First priority setting on public safety, honest and fair conduct)
"Original Mission of HITACHI": "Wa","Makoto","frontier Spirit"

<Establishment of expert board>
Group for engineering ethics(directly attached to CEO):8 board members and the ethics leaders of the branches

<Promotion of Communitaction>
Website for mentors of the branches to share information
Meeting of the mentors in the central office once every 6 months.

<Education>

• Company-wide education
  E-learning: business ethics handbook (15 minutes), Engineering ethics (200 minutes)
  Technical training "Engineering ethics for managers"
• Branch education
  Lecture by visiting lecturer and managers: engineering ethics, basic and right way
  Technical training:
  Technical training : engineering ethics once a month/30 people
  Making of ethics cards
  Questionnaire

<Establishment of consultation section>

• report directly to the compliance section and to the boards through website.
• Making posters and accept the consultation by telephone and e-mail(nuclear section)
• opinion box

<Monitoring>

• using the employee' s answers to online case study
• emphasis on educative effects rather than the right answers
  trend of the rate of 4 right answers out of 5 questions

<Business Ethics and Public Relations>

• CSR report book

<PDCA cycle>

• evaluate the practice at the end of the financial year and reflect it to the next year plan.

4. Challenges for the Future

• Avoiding a rut.
• Don't forget the scandals in the past.

Japan TI Ethics

Kuniko Muramatsu (Japan TI Ethics Office)

Key words:ethics sharing values/ ethical culture

1. What is TI/Japan TI

TI

• Company producing Semiconductors
• Established in 1930, branches in 25 countries
• From 1960's:TI needs unified values and ethics code among the branches all over the world because TI became a global company.

Japan TI

• Established in 1968
• From development to sale
• Employees:2500(95%:Japanese)average age 40 years old

2. History of the CSR activities

3. Japan TI Ethics Program

<Know What's Right, Do What's Right>

• Know What's Right, Do What's Right
• When in doubt, ask the ethics office. Follow up is important.

<Commitment of the top of the company>

• When you debate business or ethics, chose ethics.
• CEO mentions ethics in the speech at the beginning of the year.

<Value Sharing and Communication>

• Discuss ethics in the periodical CEOs' meeting from TI branches all over the world.
• distribute the "ethics card" to all employees with ID card as a charm

<Education Program>

• Developing human recourses who can decide and act with autonomy.
• Work shop for value sharing: What do you put a high value on? What does the company put the value on?
• Education Program corresponding to the position(Training for managers)
  TI Policies: When you have questions, ask them to your boss, human resouse section, and ethics office.
  ↓
  Managers have to have an ability to answer them.
• Case Study: main, E-learning: sub
• Believe that staff can act right, and make the preventive system based on the idea that staff have misconduct
• from 1980's: internal control, cooperate governance.
  Internal control and ethics are closely connected each other.

4. Raising Ethics Culture and Challenges in the future

• Some fresh recruits chose TI because TI is a good compliance company. Some employees said "I am proud of working such ethical company." →Moral, Motivation
• The role of an ethics officer:facilitator who promote collaboration among sections for ethics
  Japan TI has only on ethics officer(Muramatsu-san). US TI has only one, too.
• Ethics Program: shown in the web(from 10 year ago) ←in order to be open to the opinion from outside of the company.

• Employment pattern is getting diversified: permanent employee 2500/part-time, or contract employee are 1000
• How can er transmit the TI ethics culture to all of the staff of various employment pattern

Study on Corporation Ethics Program/Model

KIT Kyoko Oba, Kenichi Hayase

1. Objective

2. KIT Corporation Ethics Program/Model

• Emphasis on program for engineering firms
• Believe: to be a strong company, to integrate engineering ethics, corporation ethics, and CSR activities to your daily work.

3. Main topics and Main players for Engineering Ethics/Corporation Ethics/CSR

• Engineering Ethics 1999 JABEE
  <Players>
  Engineering Schools and University /Association for Engineering/Departments of the company that has responsibility on engineering
• Corporation Ethics in 2002 revised version of the code of conduct by the Federation of Economic Organizations
  <Players>
  Companies
• CSR in 2008 ISO
  <Players>
  Companies

4. What we do in this study

<How we do them>

• Using the information from ECTM
  Using publication and website: picking up 6 elements BERC recognize as essentials for corporation ethics, and survey on the present situation of the code of ethics of companies and of leadership of manager
• Interview for Corporation
  The process they develop the code of ethics and the methodology to develop them
  Leadership of the top of the company

5. Present Situation of our Survey

• We finished surveys on publications and interview
• From interview data, we are extracting good practice cases and analyzing needs-seeds of ethics program
• Developing check sheets for organizational system and staffs' awareness

6. Check Sheet for Employee

• Find what are ethical problems in your conduct
• What is the ethical situation of your company from employees' point of view

• Extract the items to check from the past documents
  3axis:
  1) Each employee's consciousness and conduct
  2) System or policy of the organization
  3) Culture of the Organization

<Analysis of the Answers of the Check Sheet>
Analyze the relationship among 1), 2) and 3).

<Each employee's consciousness and conduct>

• Judgment putting the first priority in safety
• Public security
• Is the process of judgment is appropriate?
• Autonomous decision making as a scientist
  ←Check if the rule is so strict for each employee is as to be withered

7. EAB(Ethics Across the Business)

8. Important elements of Corporation Ethics Program

• commitment of the top of the company
• Communication
• Education
• Evaluation of the Outcome

Q&A:

1. Employment Pattern of TI(to.TI)

Q:What does TI think is the good Employment Pattern for TI according to TI values?

A(TI): We will deicide it in a part of the business strategy with keeping compliance. For the education for the regular staff, we can take enough time to transmit the culture, but we should think what is the best way to transmit it to the short-time staff. This year, we had the revision of the Equal Employment Opportunity Law between Men and Women in Japan. So we emphasized the prevention of (sexual) harassment this year. Regular staff and contract staff are having seminars together, and are learning the importance of integrality and diversity.

2. How do you share the information or good practice among the branches (to.TEPCO)

Q: You said that in TEPCO top(home office) showed the basic principles and each branch practiced. Then how can each branch know the practice in the different branches?

A. (TEPCO):Through a portal website and meeting once a month.

3. Autonomy of Engineers

Q:How do you keep or protect the autonomy of engineers in the company?

A:(Oba)It depends on companies. In some companies, each engineer has high pride as an engineer, but in others they do not. Some say that if you keep corporation ethics strictly, you will never break engineering ethics. Some say you should keep engineer mind separately from corporation logic. I think we should integrate these various opinions.

4. Prevention of Mannerism

Q: You said that you can keep the crisis awareness soon after the scandal, but you tend to fall into a rut. What kind of measures do you have for Avoidance of Ruts?

A:(TI)We are trying to use different approaches each year and deal with different themes every year. And also, top commitment is important.

A(HITACHI):We have a refresh education, which means that we try to remember our scandal when other company has it and think how we should do if the same thing would happen to us.

A.(TEPCO)same as TI's opinion.

A(Oba):It is a problem that we have to continuously experience scandals in order to keep crisis awareness. We should think about what is proper and get accustomed to doing proper things.

5. The North Wind and The Sun

Q: The newspaper said that JAL's policy is the sun, TEPCO's policy is the north wind. What do you think of it.

A(TEPCO):It is true that we try to complete rules. On the other hand, we try to continue to change the inappropriate rules.

A(HITACHI):We should keep rules. But we are trying to improve the content of the rules in order to respond to the demand in the present age. When we acquire ISO, we abandoned half of our old rules.

Q(Sato):Both of TEPCO and HITACHI are the biggest companies in Japan. I hope they will become better companies. But on the other hand I feel that it is so difficult for big companies to change the old culture or system.

A(Oba): I appraise that TEPCO opened the information of their own falsification, this time.

A(TEPCO):It is true that our basic attitude was not enough good. We are making an effort to make a workplace with an open atmosphere.

Q(Fudano):How about making a cross functional group in a company that discusses ethics and values?

A(HITACHI):It is not impossible, but I don't think it is very effective. I think that to set a consultation section and raise the culture employees use of it is more important.

A(TEPCO):Sometimes, we have cross sectional group for case study.

6. Case Method

Q:How do you choose the cases for case study.

A(HITACHI):We used to use fictive case, but now we use the case from the real cases. We choose the cases that include problems threatening public safety, health, and life.

A(TEPCO):The home office made 40 cases. We used the cases or problems from each branch and the recent scandal cases to make the case for education.

7. Ethical Practice in Daily Business

Q(Hayase):How do you use ethical thinking in daily business life?

A(HITACHI):We don't emphasize that employees should conscious about ethics in the daily business. I think employees can act ethically if they act according to the rules of the company.

A(TEPCO):We tell our employees to return back to our code of conduct that emphasizes safety, integrity, compliance, communication when in doubt. Also, some branch made original cases of their daily business life for education.

A(TI):Ethics ingrained in the common sense in the daily business. Employees will be conscious of ethics when they have dilemma. When in a dilemma, consult to his or her boss or the ethics office and think about it from carious point of view openly.

8. Who should teach ethics?

Q:Who can teach ethics most effectively in the company.

A(TEPCO):The second top of each branch has responsibility for teaching ethics in our company.

A(TI):We choose the best person for each educational opportunity. When I play a teacher role, I don't recognize as a teacher but as a facilitator to think the problem together. And generally speaking, the top's expression of their ideas on ethics is very effective. So we ask the top to have lectures sometimes.

A(Fudano): I agree with TI's opinion. I think the best person should be chosen according to the educational objectives.