Basic Policy

• Basic Policy
• Promotion Structure
• Compliance
• Risk Management
• Global Information and IT Security
• Internal Audit
• Whistleblower System
• Dealing with Violations
• Participation in Business and Industry Associations

In a basic policy for the establishment of an internal control system, compliance and risk management in the OMRON Group is defined as follows:

Promotion Structure

• Basic Policy
• Promotion Structure
• Compliance
• Risk Management
• Global Information and IT Security
• Internal Audit
• Whistleblower System
• Dealing with Violations
• Participation in Business and Industry Associations

Establishment of global promotion structure

The OMRON Group integrates compliance and risk management.
Under the internal control system, the framework for integrated risk management is summarized in the OMRON Group Rules (OGR) for Integrated Risk Management, which clarify the position within Group management. The Senior General Manager of the Global Risk Management and Legal HQ (GRL Manager) is a person in charge of the promotion. In addition, approximately 150 risk managers have been appointed at the head office divisions, business companies, overseas regional management, and group companies worldwide to allow management and front-line employees to work together in pursuing global activities.

The three main activities of the Corporate Ethics and Risk Management Committee are as follows:

• Timely identification of environmental changes and impact assessment, sharing of information among relevant parties
• Conduct global risk analysis to identify important risks and establish appropriate responses
• Establish crisis response measures when a risk is identified

Specifically, promotion structure is as follows: Under the participation and supervision of Directors and Audit & Supervisory Board Members, the Corporate Ethics and Risk Management Committee is held four times a year in principle, which is chaired by the GRL Manager and comprised of key risk managers. The status of the integrated risk management activities is reported to the Executive Council and the Board of Directors, being continuously evaluated and monitored.

Compliance

• Basic Policy
• Promotion Structure
• Compliance
• Risk Management
• Global Information and IT Security
• Internal Audit
• Whistleblower System
• Dealing with Violations
• Participation in Business and Industry Associations

Group-wide Management Policies and Rules

The OMRON Group has established the OMRON Group Management Policy and OMRON Group Rules (OGR) as the foundation to realize fair and transparent management.

The OMRON Group Management Policy sets forth the policies for organizational management in the OMRON Group based on our corporate philosophy, so that employees with diverse values can think and act autonomously under a global sense of unity.
The OGR has been structured based on the "rules for managing Omron Group Rules." In addition to risk management, the OGR has been established for major functions such as accounting and funding, human resources, information security and quality assurance. It is reviewed annually to reflect changes in the environment as needed and appropriate.

Group Code of Conduct

The OMRON Group considers corporate ethics and compliance to be one of its most important issues. In order to practice Socially Responsible Corporate Management, we have established the OMRON Group Rules for Ethical Conduct, which provide specific guidelines of conduct for directors and employees, in 25 languages.

• OMRON Group Sustainable Conduct Policies and OMRON Group Rules for Ethical Conduct

We regard education and awareness-raising activities for directors and employees as the basis for promoting and ensuring corporate ethics and compliance, and we provide ongoing education through new employee training, position-based training, and other opportunities. In the employee performance appraisal process, we integrate ethical aspects such as compliance to OMRON Group Rules for Ethical conduct. We require employees to practice our corporate philosophy and assess how they act with integrity and trust. We give them feedback on evaluation results, and link the evaluations with their remuneration.

Global corporate ethics month

In addition to establishing the Corporate Ethics and Risk Management Committee as an organization to promote corporate ethics and compliance, we have designated October of each year as Corporate Ethics Month to educate employees on strict adherence to corporate ethics and compliance. We distribute top management messages to directors and employees on a global level, disseminate the OMRON Group Rules, which are the Group's common management foundation, provide compliance and risk education on the top themes such as cartel prevention, anti-bribery, greenwashing and AI, and raise awareness of the Whistleblower Hotline.

Efforts to prevent of anti-competitive behavior and bribery

The OMRON Group Rules of Ethical Conduct stipulate fair trade and compliance with laws and regulations, and in particular prohibit cartels and other anti-competitive behavior, as well as bribery of public officials and others in and outside of Japan. It also prohibits entertainment and gift-giving in excess of moderation, even with business partners and related parties. In fiscal 2024, there were no cases of legal actions against anti-competitive behaviors, bribery-related violations, or sanctions.

Efforts to prevent insider trading

The Information Disclosure Executive Committee convened regular meetings in order to ensure the accuracy, timeliness and completeness of disclosures, while trainings were held for the prevention of insider trading.
In fiscal 2024, there were no insider trading-related cases that we received legal actions or violations, or sanctions.

Risk Management

• Basic Policy
• Promotion Structure
• Compliance
• Risk Management
• Global Information and IT Security
• Internal Audit
• Whistleblower System
• Dealing with Violations
• Participation in Business and Industry Associations

Integrated Risk Management to Support Global Business Activities

The OMRON Group has been undertaking integrated risk management under a common group framework. It is necessary to increase our risk sensitivity, and identify and take action before risks become apparent in order to respond quickly to changes as the speed of environmental changes surrounding management and business increases and the degree of uncertainty rises.

We aim for active risk management where management and front-line employees work together to solve problems caused by environmental changes that cannot be handled only by front-line employees. We will work to improve the quality of this activity while implementing the PDCA cycle globally.

We consider the development of a system that enables front-line employees to make risk decisions efficiently, effectively and swiftly to also be an important theme in seeking to achieve “SF2030”, while following the OMRON Principles and rules.

Risks surrounding management and businesses, and risk analysis

Based on the OMRON Group Rules for Integrated Risk Management, the OMRON Group identifies and analyzes risks related to the Group from a global perspective every year, and designates important risks at the Executive Council.

At its quarterly meetings, the Corporate Ethics and Risk Management Committee discuss and share important risks that are arising, changes in the environment, and the status of risk measures, while conducting Group-wide risk assessment, to systematically promoted its risk management initiatives.

In “SF2030,” the OMRON Group aims to solve social issues that arise in the transition to a new social and economic system.
To this end, we are committed to creating value for society in our business domains and addressing sustainability issues as part of our business plan. We consider the key factors that must be addressed in the execution of these efforts to be risks.
In operating our group, we have identified the following two significant Group risks. S Rank: Risks of utmost importance to the operation of the Group, which may jeopardize its survival or bring severe social liability, A Rank: Risks that impede the achievement of important group goals. In order to keep these risks at an acceptable level without actualizing them, we monitor environmental changes and the status of implementation of measures.

Overview of businesses and other risks

Themes of significant Group risks based on the OMRON Group’s risk analysis conducted at the end of fiscal 2024 are presented in the table below. We will pay particular attention to risks associated with the implementation of NEXT2025 and group governance and compliance risks that may arise as we seek to accelerate business operations and improve profitability.

For risk categories which the group focuses most on, we specify risk scenarios and response measures in Annual Securities Report, ‘Risks of Business, etc.’ section.

• Risks of Business, etc.

Risk reporting and crisis management

In case of crisis, if at all, we pursue “bad news first” rule by immediately reporting such risk to the appropriate level according to our Integrated Risk Management Rules. We have a central monitoring system in place to keep track of risks reported, and set up crisis management headquarters according to risk severeness to take necessary measures, in order to make sure to prevent recurrence.

Raising risk sensitivity based on lessons of the past

The ideal structure for us at the OMRON Group is the one in which our front lines and management work together to solve issues arising from changes in the environment that cannot be addressed by those on the front lines alone. Accordingly, we have created the OMRON Risk Book – Risk Scenario 100 - a business risk casebook aimed at using previous case examples to look forward, and have been sharing with the management as an awareness-raising tool. The Group members who have never experienced the cases on their own learn from the lessons, and this is how we raise our risk sensitivity on a daily basis.

Global Information and IT Security

• Basic Policy
• Promotion Structure
• Compliance
• Risk Management
• Global Information and IT Security
• Internal Audit
• Whistleblower System
• Dealing with Violations
• Participation in Business and Industry Associations

Promotion structure

For IT systems and information security risks, the Cybersecurity Executive Officer organizes the Group under the supervision of the Cybersecurity Director of the Board. The Executive Officer leads each of Head Office Administrative Division Managers, who are responsible for controlling and managing three categories: information security; product security; compliance with laws and regulations, and risk management.
In addition, the Board of Directors sets "risk responses in times of uncertainty" as one of its focus themes, with "strengthening cybersecurity" as a key supervision aspect. This is how the Board monitors and supervises the cybersecurity issues and measures to realize stronger cybersecurity.

Regarding information security, the head of Global Business Process and IT Innovation HQ - the Managing Executive Officer, Senior General Manager of the HQ - serves as the Group Information Security Officer, supervising the overall status of information security management in the OMRON Group. Underneath, Information Security Responsible Department is responsible for grasping the overall status of information security management in the OMRON Group and planning and promoting the overall measures necessary for the OMRON Group.

For product security, as part of product quality assurance, the Product Security Department has been established. The Department is under the supervisory of the head of Global Procurement, Quality and Logistics HQ, who is the Managing Executive Officer, Senior General Manager of the HQ.

Similarly, regarding compliance with laws and regulations, and risk management, the head of Global Risk Management and Legal HQ - the Executive Officer, Senior General Manager of the HQ – is responsible for the issues. Under the Officer, the affiliated departments monitor the latest trends in laws and regulations of each country, to promote necessary measures.

For cross-sectional issues, the Cybersecurity Integration Conference is held as necessary to solve the issues. The Conference is chaired by the Cybersecurity Executive Officer, and is supervised by the Cybersecurity Director.

At the OMRON Group, should we have cybersecurity beaches in and out of Japan, we report the cases to the CSIRT (Computer Security Incident Response Team) located in Japan.
In fiscal 2023, there were no serious incidents that affected our business.

Protection of personal information

The OMRON Group Rules for Ethical Conduct stipulate the appropriate protection and management of information. We have established the OMRON Group Rules Concerning Personal Information, and have established management measures for the acquisition, use, and disposal of information according to its rank of importance. We are also promoting necessary measures by keeping abreast of trends in laws and regulations in various countries concerning the protection of personal information and the status of the OMRON Group.
In fiscal 2024, there were no incidents or accidents related to personal information that required public disclosure, following the guidance from regulatory authorities, or violations of laws or regulations.

• Dealing with Violations

Internal Audit

• Basic Policy
• Promotion Structure
• Compliance
• Risk Management
• Global Information and IT Security
• Internal Audit
• Whistleblower System
• Dealing with Violations
• Participation in Business and Industry Associations

In order to ensure the sound and efficient organizational operations, the OMRON Group's Global Internal Auditing HQ (GIA) conducts regular internal audits based on the Basic Policy for the Maintenance of Internal Control Systems.

Internal audits include regular departmental audits as well as theme audits.
In selecting audit themes, we first list the measures and monitoring activities for the Group’s significant risks by the Corporate Ethics & Risk Management Committee. By doing so, we visualize the remaining group-wide risks, and select significant risks from among them. Theme audits categories include export management and protection of personal information, with focus on the status of governance at the headquarters.

• Internal Controls

Whistleblower System

• Basic Policy
• Promotion Structure
• Compliance
• Risk Management
• Global Information and IT Security
• Internal Audit
• Whistleblower System
• Dealing with Violations
• Participation in Business and Industry Associations

Global operation of a Whistleblower Hotline that ensures fairness and protection for whistleblowers

The OMRON Group has a whistleblowing system in place to monitor if corporate ethics and compliance are working.
We accept reports of any conduct that violates or may violate the OMRON Group Rules of Ethical Conduct, employment regulations, or laws and ordinances. Our internal rules require strict confidentiality and prohibit retaliatory action as a result of reporting or maintaining secrecy. Information about the Whistleblower Hotline is disseminated through the intranet and internal training programs.

The Group has established not only internal reporting channels, but also external hotlines operated by outside law firms, as well as web-based reporting systems, tailored to our major sites in and out of Japan.
We accept reports from a wide range of stakeholders, including Group officers, employees, temporary staff, and their families, as well as retirees, suppliers, and contractors working on our premises.

Reporting and consultation status

We at the OMRON Group consider the number of whistleblowing cases to be one of the indicators of the effectiveness of the whistleblower system, and regard it as appropriate to have a certain number of reported cases. The number of reports were down during fiscal 2019 and 2020, due to the impact of COVID-19 pandemic, and saw increase in the following year, to record-high of 106 reports in fiscal 2024, same as the fiscal 2023.
The most frequent reports were related to labor management such as taking leave, work style, retirement, followed by power harassment. In addition, various reports such as conflicts of interest, information security, and fair business dealings were reported.
To respond to such reports, we have been reviewing the operations with problems and vulnerabilities, giving guidance and stronger control over overly controlling managers, and taking disciplinary measures for serious incidents to improve and prevent recurrence.

Number and breakdown of reports received in fiscal 2024

Dealing with Violations

• Basic Policy
• Promotion Structure
• Compliance
• Risk Management
• Global Information and IT Security
• Internal Audit
• Whistleblower System
• Dealing with Violations
• Participation in Business and Industry Associations

When any conduct is found to be in violation of the OMRON Group Rules of Ethical Conduct, employment regulations, internal rules, or laws and regulations, the Company takes disciplinary actions and other strict measures, in accordance with the employment regulations and other rules established by each company at the OMRON Group. Violations are integrated into personnel appraisal, and are linked to employee remuneration.

Participation in Business and Industry Associations

• Basic Policy
• Promotion Structure
• Compliance
• Risk Management
• Global Information and IT Security
• Internal Audit
• Whistleblower System
• Dealing with Violations
• Participation in Business and Industry Associations

By proposing solutions through participations in various business and industry associations, OMRON contributes to achieving a sustainable society.