We recognize our responsibility, as a pharmaceutical company involved in the manufacture of pharmaceuticals that affect the people’s lives. As a part of our compliance system, we have established the "ONO Group Code of Conduct" to ensure that our actions are in compliance with laws and regulations and are based on a strong sense of ethics. Our compliance system is comprised of the “ONO Group Code of Conduct” which has been established as a basic guideline that should be followed in our corporate activities based on our corporate philosophy, and the “Compliance Global Policy” which has been established as the concept and management system for promoting our compliance system. We have also formulated "ONO Pharmaceutical Code of Practice," in line with the Japan Pharmaceutical Manufacturer's Association (JPMA) Code of Practice, which sets forth action standards for promotion activities, and we act in strict compliance with this code.

In putting the compliance system into practice, we adequately inform our employees to ensure transparency, prevent fraud and corruption, and to be constantly aware of domestic and international social conditions.
In addition, social demands for compliance have increased in recent years. In our company, we are increasing awareness of compliance, now more than ever. Our aim is to cultivate a company culture where every employee considers compliance as their own issue and to prevent compliance violations. As part of this effort, we included "fairness and honesty" as competencies into the performance evaluation criteria for all positions and levels to enhance employee awareness. Furthermore, our Internal Audit Department conducts internal audits every year on the status of compliance with internal rules regulations.

For details, please refer to the Corporate Philosophy / ONO Group Code of Conduct, Compliance Global Policy, and ONO Pharmaceutical Code of Practice below.

Compliance Promotion System

To strengthen our compliance system, we have appointed an Executive Officer as the Officer in Charge of Compliance and established the Group Compliance Committee. The committee examines and deliberates on compliance-related issues, plans and promotes training and other programs, and takes up and discusses matters reported by subsidiaries. It also works with the Internal Audit Department to check the status of initiatives at each business site, and with the Risk Management Committee, which promotes enterprise risk management (ERM), to manage compliance risks. In response to serious compliance violations in FY2020, we have established an Assessment Office within the Risk & Compliance Management Department to enhance compliance. This office functions as an internal awareness-raising entity to prevent compliance violations and as a consultation point for employees' questions and concerns regarding compliance matters. Additionally, we have appointed Compliance Promotion Lead in each division who are in charge of operations for compliance, as well as Compliance Managers in all departments who act as the point of contact in the workplace for consultations regarding compliance matters. This system is designed to coordinate with the Risk Manager, who is in charge of managing the overall risks of the organization, and to promptly take measures in response to consultation matters that arise within the organization. Information on consultation matters is also shared with the Risk & Compliance Management Department, which provides advice to Compliance Managers. We require our group companies to establish systems and regulations to prevent compliance violations.

• The Compliance Manager is the primary point of contact within the business site for feedback from the frontline that is not or cannot be raised through the usual channels (via superiors).

Reporting System

We have established internal and external points of contact for reporting to prevent the occurrence and recurrence of compliance violations, including harassment, to secure an appropriate work environment, and to minimize loss and the erosion of public trust by taking swift action and measures in the event of a violation (see the chart below). The external contact point, "ONO Group Compliance Hotline," is available 24 hours a day and can be used by all officers and employees of our group, as well as external parties, in multiple languages. Additionally, we have established a system that enables direct reporting and consultation with management, including the Representative Director, President & COO, the Officer in Charge of Compliance, and the Audit & Supervisory Board Member. Reports received by the points of contact are immediately reported to the Risk & Compliance Management Department, which conducts an investigation to confirm the facts. As a result of the investigation, if the existence of misconduct, etc. is revealed, corrective actions, recurrence prevention measures and other necessary measures are promptly taken, and disciplinary action or other measures are strictly enforced. Efforts are made to notify the whistleblower of these developments as appropriate. When using the points of contact for reporting, the name of the whistleblower, the content they provide, and other privacy-related matters are strictly prohibited from being disclosed to parties other than those required for the investigation, and anonymous reports are also accepted. In addition, the whistleblower who uses these points of contact is protected by law and is not subject to any disadvantageous treatment on the grounds of whistleblowing. These matters are also clearly stated in the Whistleblowing Policy, which were newly established based on the Amended Whistleblower Protection Act that came into effect from FY2022. We also conduct training and other programs to ensure that our employees are aware of these reporting systems. We will continue to raise awareness on the significance and importance of reporting, as well as the protection of persons who report and consult, in order to establish a system that allows people to report without hesitation.

Management of Compliance Risks

The Risk & Compliance Management Department, which operates the PDCA cycle for compliance risk management, holds hearings twice a year with all of our divisions, supervisory departments, and other departments in order to visualize risks. In addition to the compliance risks identified by the Risk Manager and the Compliance Promotion Lead in charge of risk management in relevant departments, the results of these hearings are used to assess how frequently risks occur and the degree of their impact. The Risk & Compliance Management Department then discusses countermeasures with the Compliance Promotion Lead and the Risk Manager and monitors their progress after repeated examinations.

Compliance Education

To maintain and improve awareness of compliance, it is important to continuously conduct training and awareness-raising activities for officers and all employees (including part-time and contract employees). We use e-learning to conduct a 100-question compliance test twice a year for officers and all employees. In addition, we have designated the two-month period from November to December as the ONO Group's "Compliance Promotion Enhancement Month," and we are strengthening our compliance initiatives under a common group slogan. In response to cases of serious compliance violations in FY2020, starting from FY2021, we have been conducting education and training each year on the prevention of bribery for officers and all employees in order to thoroughly prevent a recurrence. In addition, aside from conducting annual training for all employees regarding harassment, we also conduct training for newly appointed managers and are shoring up our efforts to create a comfortable work environment. Training related to the Guidelines on Activities to Provide Sales Information is based on compliance issues that have actually been confirmed, and in addition to holding regular training sessions, if problems do arise, we promptly conduct training to prevent their recurrence. We also promote risk-based training programs on other compliance-related themes.

Response to Violations and Corrective Actions

The Risk & Compliance Management Department investigates any violations that occur. As a result, those who are found to have violated compliance are subject to disciplinary action, including termination of employment. We are also working to prevent recurrences by strengthening our compliance management system and thoroughly raising employee awareness through training, etc. Please refer to the ESG data for the number of violations.

Ethical Considerations in Research and Development

We always give consideration to ethical treatment in various stages of research and development.
For research using human-derived samples (blood, tissue, cells, genes, etc.), we have established internal ethical rules based on the basic guidelines issued by the Japanese government. We have also established the Ethics Committee for Medical and Health Research Involving Human Subjects, as an advisory body comprising members from inside and outside the company, to ensure that such research is conducted only after the Committee conducts strict assessment of its ethical and scientific validity. We also recognize that the use of human embryonic stem cells (ES cells) for research purposes raises bioethical concerns because human ES cells are derived by destroying human embryos, which are the emerging potential of human life, and they have the potential to differentiate into any type of human cell. We believe that we should carefully consider the use of human ES cells for research purposes at the internal Ethics Committee based on relevant laws and regulations and guidelines.
For research using laboratory animals, we have established the Institutional Animal Care and Use Committee. The Committee reviews submitted animal experimentation plans in advance to determine whether they have been prepared based on the principles of the 3Rs-Replacement (use of alternative methods), Reduction (reducing the number of test animals) and Refinement (alleviation of pain)-to ensure that animal experiments are carried out appropriately, with respect for the lives of animals and taking into consideration animal welfare. In addition, we conduct self-inspections and assessments of the implementation status of animal experiments. In recognition of these initiatives, we have acquired third-party certification from the Japan Pharmaceutical Information Center.
We ensure that clinical trials, which are essential for verifying the safety and efficacy of pharmaceuticals under development, are carried out in a highly ethical manner, with particular attention to the rights, safety and welfare of study subjects. Clinical trials are a long process. We ascertain the true value of a new drug step-by-step by taking all necessary and appropriate procedures that comply with Japan’s "Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices（Pharmaceutical and Medical Device Act）" and other related legislation, as well as the global standards specified based on the spirit of the Declaration of Helsinki. In the past, many drug-induced injury cases occurred due to inadequate safety monitoring of pharmaceutical products. We regularly provide education on drug-induced injuries to all employees so that they will never forget patients’ pain, the drug-induced toxicity, and the grave responsibility of a pharmaceutical company.

For more information, see the web pages below:

Fair and Transparent Business Activities

To contribute to healthcare and people’s health around the world through continuous new drug creation and provision of a stable supply of our products, we need to cooperate with research and medical institutions and engage in collaborative activities such as support for patient organizations to help patients overcome disease and pain. To enhance the fairness and transparency of these cooperation and collaborative activities, it is important to ensure transparent relationships with our partners. We therefore disclose information on the costs of our assistance to medical institutions and patient organizations in accordance with our transparency guidelines, which were developed in line with the relevant guidelines of the Japan Pharmaceutical Manufacturers Association (JPMA).

Regarding tax compliance, we have established the Tax Global Policy, in strict accordance with which all tax-related management are undertaken under the responsibility of the officer in charge of accounting. For details, refer to the “Tax Global Policy,” “Country-by-Country Report (Condensed),” “Business Description and Information on Subsidiaries and Associates,” and “Notes to Consolidated Financial Statements (Income taxes)” below.

We have also established the Anti-Bribery and Corruption Global Policy and the Anti-Bribery and Corruption Policy. We endeavor to ensure strict implementation of the policy and regulations. Furthermore, we support Transparency International’s Business Principles for Countering Bribery, an international anti-bribery standard.
As for research receiving public fund as research funding, we have formulated the Regulations on Publicly Funded Research, in compliance with the relevant guidelines established by the Japanese government, to ensure further appropriate implementation and management of research projects.

For the details of our system for preventing bribery and corruption, refer to the Anti-Bribery and Corruption Global Policy (hereinafter the "Global Policy") below.

For more information, see the web pages below: