A Comment on the OMRON Group's Sustainability Report 2007 Iwao Taka, Ph.D.
Professor, International School of Economics and Business Administration, Reitaku University
Visiting Professor, Graduate School of Management, Kyoto University

Regarding the previous year's report, I commented on three points requiring improvement. First, the difficult-to-understand "FY2005-06 Policies and Results" table. Second, the relatively scarce mention of negative information. Third, limited information regarding the prevention of bribery involving foreign public officials. I had to point out these issues simply because OMRON commands leadership in terms of CSR performance. For that reason I expected even further improvements in CSR activities from OMRON. I felt that this year's report had satisfied my expectations by responding at a reasonable level to what I pointed out.

As for the first point, the 2007 report mentions that OMRON is now in the process of internal coordination to embed CSR targets and specific measures to be taken into OMRON's three-year plan covering fiscal 2008 to fiscal 2010. Currently, OMRON is in the second stage (fiscal 2005-07) of its Grand Design. Because OMRON did not specify its final destinations (final target levels) in the initial year of the second stage, the overview of CSR activities and policies remained general again this year. Against this backdrop, OMRON is now working to clearly specify long-term CSR goals and formulate strategies aiming at the start of the third stage in fiscal 2008.

Let me remind you that this problem, as mentioned above, is a format-wise problem; it does not mean that no particular CSR achievements were made during the second stage. In fact, OMRON stationed a CSR manager at each internal business company and also established a new Corporate Strategic Planning Headquarters under the direct control of the President. A specialized CSR organization was also founded at OMRON in China as part of its drive to build a global CSR management system.

I had the impression that OMRON made considerable improvements for the second and third points. A company cannot avoid becoming extremely conscious about releasing negative information. Nonetheless, OMRON talked on legal violation risk in China in the report and positioned it among the key CSR issues for the company. OMRON also took problems related to violations of customs-related laws (infringement of customs procedures, etc.), unfair benefits to be offered (unaccountable payments for foreign governmental officials, etc.), and operations falling outside each organization's scope of business (sales activities at a representative office, etc.) as examples and is trying to directly face these challenges. I particularly appreciate this point. Why? Because to me, the fact that OMRON mentioned these important challenges is a clear indication of OMRON's sincere commitment to facing these challenges and that the company is actually delivering productive results.

If I mention one point that requires improvement, that point would be how much of what is written in the report sticks to the facts and to what extent it is actually promoted. This is hardly visible. For example, although the report introduces CSR procurement, there is no way for us to know how much it has been disseminated through suppliers. A question of how to give assurance concerning the information included in the report will become an important issue that requires future consideration.

As for this year's report, under the assumption that all included information conforms to facts, I would like to mention three OMRON strong points.

The first point is proactive promotion of communications with stakeholders on a global level so as to strengthen their understanding of OMRON's core value of "working for the benefit of society". Above all, what deserves special mention is the efforts of top executives toward deepening mutual understanding with local staff by visiting overseas worksites and communicating with employees with different languages and cultural backgrounds.

The second strong point is its commitment to diversity, for which OMRON is far ahead of others. Over many years, OMRON has remained committed to promoting employment of and support for persons with disabilities. The outcome of their efforts in this area has already reached a praiseworthy level. OMRON, without becoming complacent with this success, is determined to aim for even higher goals.

The final point is the company's strong consciousness about CSR for a global company. In the past, "do as the Romans do" was the generally accepted way of thinking within any company. But that kind of management attitude is becoming outdated.

What is demanded of a sustainable global company is to adopt global standards and act consistently in conformance with them. With an acute sense to detect changes taking place around us, OMRON is working to formulate and implement new global CSR strategies by incorporating arguments about the international social responsibility standard (ISO 26000) in advance. A message from top executives of "Aiming to become a corporate group that is valued highly by future generations" reflects OMRON's proactive efforts to adopt global standards and the strong determination of top executives to meet these standards.