Risk Management and Compliance System

Our Approach to Risk Management and Risk Management System

As stipulated in the Fuyo Lease Group risk management regulations, we have established a risk management system at our locations across the globe in order to manage risks based on their particular risk characteristics and importance.

Risks to be managed are categorized into credit, market (such as interest rate fluctuation risk), liquidity (such as cash flow risk), administrative, system, legal, human, reputation, and other risks. Each type of risk is managed by a designated department.

The Board of Directors and the Executive Committee receive updates on risk management, discuss risk management policies according to the characteristics and importance of each risk, and evaluate the effectiveness of risk management. The Asset and Liability Management (ALM) Committee meets on a regular basis to appropriately manage and control market and liquidity risks. These efforts enable us to continually improve our risk management system.

For risk events that may affect the Group’s business, the Group has sought to comprehensively identify risks facing each Group business considering the scale and characteristics of the identified risks while making sure to include risks in each business domain, such as economic downturns, market fluctuations, and downturns in individual markets.

In addition, as a risk governance system for the entire group, we have established a "Three-Line Defense System" based on risk management by each business unit (first line), risk management by the risk control department and the department in charge of risk (second line), and verification by the internal audit department (third line).

The designated risk management division formulates a basic policy for managing risks identified as targets, and conducts an appropriate analysis, evaluation and measurement of risks according to the size and characteristics of the relevant business and risk profiles. In addition, the designated risk management division monitors the status of risks held from an independent perspective, reports the results of monitoring to the Executive Committee, etc., and implements supervision of sales and marketing divisions with an approach geared to the situation.

Moreover, the risk control division has established integrated risk management systems to promote risk management by comprehensively identifying and evaluating risks by risk category, and to control risks within the scope of management capabilities.

Risk Management System

Risk Management Training

In order to foster a corporate culture that enables risk prevention and that can take appropriate measures against risks, the Fuyo Lease Group regularly conducts training that includes content related to risk management. For example, in the leasing industry, legal risks are expected to be high, so training is conducted for new employees on regulatory laws and regulations. We focus on training using case studies and other methods so that each employee can deepen their understanding of possible risks in their work and take appropriate measures.

Our Approach to Compliance and Compliance System

At the Fuyo Lease Group, ensuring compliance is a fundamental principle of management. We work to strengthen and enhance our compliance system, which enables us to operate with integrity and fairness by conforming to relevant social norms, while complying with laws and regulations.

We promote compliance throughout the Group by stipulating various regulations, procedures, and manuals, conducting compliance education, and enhancing the whistleblower system on the basis of the Fuyo Lease Group's Code of Corporate Conduct. In order to maintain and further improve our compliance systems, we implement and carry out compliance programs every fiscal year. Issues associated with the compliance programs are discussed at the Compliance Committee and the Executive Committee before being submitted to the Board of Directors for approval. Findings and progress of the programs are reported to the Board of Directors on a semi-annual basis.

The core of group compliance system is the Compliance Committee chaired by the Chief Compliance Officer and vice chaired by the Group Legal and Compliance Division Officer. The heads of relevant planning and administrative departments, the heads of relevant departments of domestic and overseas subsidiaries serve as full-time committee members, and outside lawyers serve as outside members. To verify the effectiveness of the compliance system for the entire group, the Compliance Committee meets every three months to deliberate and report on the formulation and progress of the Group's compliance program, whether or not compliance problems have occurred and how to deal with them, and trends in the enactment, revision, or abolition of major laws and regulations. In addition, at least once every three years the internal audit division conducts audits on the status of compliance with laws, regulations, and rules stipulated in the Fuyo Lease Group Basic Compliance Policy, fair business practices, risk management, and management of information assets, among other items, and the findings are used to consider improvements and other measures to further strengthen the compliance system.

We will continue our group-wide activities including management and implementation of compliance measures and compliance education, and streamlining our compliance systems across the Group to improve their effectiveness.

Fuyo Lease Group Basic Compliance Policy

The Fuyo Lease Group has formulated the Fuyo Lease Group Basic Compliance Policy, which specifies the basic policies and position of the entire group as well as behavioral guidelines for the employees of the Group.

We conduct training programs and offer e-learning courses to all employees to enhance the effectiveness of the this Basic Policy. These programs and courses ensure that all employees are aware of the Basic Compliance Policy, and evaluation of the training is regularly reviewed.

Fuyo Lease Group bases its business management on the approach of CSV (Creating Shared Value), and aims for building a sustainable society and at the same time achieving the Group’s continuous growth through its business undertakings.
For realization of these aims, it is essential to engage in compliant practices supporting sound corporate management with our mission, vision and values. Fuyo Lease Group has established this Fuyo Lease Group Basic Compliance Policy as guidelines for conduct to be observed by its directors, officers and employees.

1. Compliance with Laws and Rules

  • (1)
    Fuyo Lease Group regards compliance as one of the most important management issues, will strictly comply with all laws and rules, and will engage in business honestly and fairly, without deviation from social norms.
  • (2)
    Fuyo Lease Group will not only comply with international rules and the local laws of countries and regions in which Fuyo Lease Group conducts business, but will also respect the customs and cultures of such countries and regions.

2. Respect for Human Rights

Recognizing the risk that Fuyo Lease Group’s business activities may have an adverse effect on human rights, Fuyo Lease Group will, through its business activities and in accordance with the Fuyo Lease Group Human Rights Policy, contribute to the realization of a society in which human rights are respected.

3. Commitment to Environmental Issues

Recognizing that environmental issues are not only community issues but also global issues, Fuyo Lease Group will be actively committed to the realization of a sustainable society, in accordance with the Fuyo Lease Group Environmental Policy.

4. Fair Business Activities

  • (1)
    Fuyo Lease Group will always strive to deal honestly with its customers, and will make efforts to engage in transactions in compliance with established rules and procedures and under appropriate terms and conditions.
  • (2)
    Fuyo Lease Group will engage in fair and transparent transactions with all of its customers based upon the principle of free competition and in compliance with antitrust laws and other relevant laws.
  • (3)
    Fuyo Lease Group’s directors, officers and employees will behave in a way that their own interests do not undermine the company’s or its customers’ interests, and will not use corporate assets for their own private purposes.

5. Risk Management

With full awareness of their respective roles and responsibilities, Fuyo Lease Group’s operating divisions, corporate functions divisions and internal audit division will exercise appropriate management of and control over anticipated risks which Fuyo Lease Group may face in its activities.

6. Management of Information Assets and Respect for Intellectual Property Rights

  • (1)
    In recognition of the importance of information assets, Fuyo Lease Group will strictly manage such assets.
    Fuyo Lease Group will obtain information from outside sources by legitimate means, and will not divulge to any other persons any personal and / or nonpublic information of its customers which may become known to it in the course of business or Fuyo Lease Group’s own confidential information.
    Any information which may be obtained by Fuyo Lease Group will be used solely for its business purposes, and not for insider trading or other private benefits.
  • (2)
    Fuyo Lease Group will respect intellectual property rights including patent rights and copyrights, and will not infringe any other persons’ intellectual property rights.

7. Appropriate Disclosure of Information

Fuyo Lease Group will continuously strive to improve transparency in the management of its business by fairly, timely and appropriately disclosing information.

8. Avoidance of Relations with Anti-Social Forces

  • (1)
    Fuyo Lease Group will avoid any relations with anti-social forces which threaten social order or safety.
  • (2)
    Fuyo Lease Group will not be involved in any way in terrorism, money laundering or any other organized crime.

9. Political Involvement; Government Relations

  • (1)
    The conduct of Fuyo Lease Group in political involvement and government relations will be sound and normal.
  • (2)
    Fuyo Lease Group will not be involved in any way in bribery or corruption.

Whistleblower Hotline

The Fuyo Lease Group operates whistleblower hotlines.

In addition to the in-house compliance hotline, we provide a consultation service desk through a cooperating law firm. These services are available on a regular basis and guidance to these services is always posted on the company's intranet bulletin board. Concerned individuals can immediately seek consultation or report whenever they detect any violations of the law, the Basic Compliance Policy and other corporate regulations, harassment cases, misconduct in information management or other potential infringements. The whistleblower systems accept anonymous reports to protect whistleblowers.

Compliance Officers* as well as persons in charge of compliance are appointed as consultants within their departments and group companies to handle individual cases. In the event of non-compliance or a suspected violation, compliance personnel such as compliance officers are responsible for taking appropriate measures and conducting investigations and reports in accordance with instructions and orders from Fuyo Lease's Group Legal and Compliance Division and the heads of the compliance departments of the relevant group companies as per the Compliance Manual.

  • *
    A compliance officer is appointed for each department or company to raise compliance awareness and ensure compliance.

Furthermore, Fuyo Lease has appointed full-time corporate auditors as a contact point for receiving whistleblower reports from group companies, and we have also set up a contact point at affiliated law firms for whistleblowing from employees of overseas subsidiaries.

In fiscal 2022, 10 reports were received through the hotline. In each case, investigations are promptly conducted, such as confirming the facts with the parties concerned with due care to protect whistleblowers against detrimental treatment and taking appropriate measures. All cases have been resolved, and measures put in place to prevent recurrences.

Prohibition of Corruption and Bribery

The implementation of fair and transparent transactions based on the principle of free competition is clearly stated in section 4. Fair Business Practices and Chapter 9, Relations with Politics and Governments of the Fuyo Lease Group Basic Compliance Policy. We prohibit corruption, including bribery, and any actions that could be suspected of being corrupt, and facilitation payments are no exception. The Management Committee and Board of Directors of Fuyo Lease oversee these policies and their management status and receive periodic reports from the Compliance Committee.

In order to prevent corruption and bribery and bring about its early detection, the Company implements compliance audits in addition to identifying businesses, intermediaries and business partners that are high risk in the flow of its operations and avoiding involvement with them. In business audits, risks regarding the identification and prevention of corruption and bribery are appropriately evaluated based on confirmation of items such as proper use of entertainment expenses and the existence of a long-term employees in the sales department. Furthermore, for cases that are considered to be particularly high risk, we confirm that the compliance officer has further evaluated the appropriateness, and we are thoroughly preventing corruption and bribery.

We inform all Group employees about the Basic Compliance Policy and the prohibition of corruption and bribery, and encourage them to report to and seek consultation with the Whistleblower Hotline whenever they have any suspicions. Support is also available anonymously.

Furthermore, the Basic Compliance Policy strictly prohibits the forging of collusive ties with political and administrative authorities and business partners, and the private use of the company's assets. In fiscal 2022, no infringements related to corruption were found in the Group. Additionally, no employees were dismissed or subjected to disciplinary action due to corruption.

In fiscal 2022, the Company made no political donations.

Compliance Training

The Fuyo Lease Group emphasizes employee training programs that are designed to ensure compliance. Our training programs include workplace compliance training and e-learning on insider trading regulations for all Group employees, as well as group training conducted by external instructors for directors, heads of departments, offices and branch offices, presidents of Group companies, and departmental compliance officers. *

Compliance Training (fiscal 2022)

Group training and workplace training

Participant Subject # of session
New recruit Introduction to compliance, Fuyo Lease Group Basic Compliance Policy, exclusion of anti-social forces 1
1st year employee (Generalist track) Confidential information management, Personal information protection, Prevention of harassment, Insider trading regulations 1
5th year employee (Generalist track) Response to accidents and troubles 1
Newly appointed head of department / branch office Required compliance understanding of managers 1
Newly appointed assistant manager / section chief Prevention of power harassment, sexual and maternity harassment 2
All employees (Including contract and dispatch employees and part-time workers) Prevention of power harassment 1
Directors and head of department / office / branch office Prevention of harassment (sexual, power, discrimination related to pregnancy) 1


Participant Subject # of session
Directors, head of department / office / branch office, compliance officer, entry level Regulation for Insider Trading (e-learning material of the Japan Exchange Group) 2
All employees (Including contract and dispatch employees and part-time workers) General issues on compliance 1

Prevention of Money Laundering

The Fuyo Lease Group is striving to prevent money laundering and funding of terrorism.
Fuyo Lease complies with laws and guidelines together with a thorough due diligence of its business partners in accordance with its Policy for the Prevention of Money Laundering. In addition, we have established a system to prevent money laundering and funding of terrorism not only in Japan but also in transactions outside Japan.

Furthermore, we continuously strive to promote understanding by way of training for all group employees and by inviting outside experts to train the compliance and legal staff of each group company.

Prevention of Insider Trading

At the request of the Tokyo Stock Exchange, Fuyo Lease has joined the J-IRISS*, which aims to prevent unfair trading and to maintain the transparency and impartiality of the market.

  • *
    J-IRISS (Japan-Insider Registration & Identification Support System): A system operated by the Japan Securities Dealers Association by which listed companies register information on their officers and securities firms periodically compare this information on officers with their customer information with the aim of checking for unfair trading before it happens and eliminating it as much as possible.