Management Structure

Identifying tasks and promoting our CSR activities based on The Kao Way

As to the corporate philosophy that forms the basis of our business activities, Kao reviewed its previous “Kao Management Principles” from a global point of view. In October 2004, we formulated the “Kao Way” to manifest Kao’s unique corporate culture and its spirit of enterprise. For Kao, CSR is simply to act based on the Kao Way.

Previously, each division was engaged in its own CSR activities. To integrate such divisional efforts into overall group engagement and develop our efforts even further, the CSR Committee and CSR Department were established in July 2004. At meetings of the Committee, chaired by the President & CEO, CSR challenges for the entire company are discussed and the divisions can then tackle such challenges.

We are enhancing and reinforcing the four fundamental structures for our CSR activities: 1) corporate governance structure, 2) compliance structure, 3) quality assurance structure, and 4) responsible care (RC) activity promotion structure. Our aim is to promote communications with stakeholders and global environment conservation activities. Meanwhile, we still have major challenges concerning the global implementation of our CSR activities, the introduction of the activities into the supply chain and the full utilization of our employees’ diverse capabilities. We are in the process of examining specific measures to identify the most effective approaches.

Considering that the participation in international CSR frameworks is indispensable for our effort to implement our CSR activities rigorously on a global scale, in April 2005 we committed to participating in the UN Global Compact,* a representative of such frameworks. In addition to the Kao Way and the Kao Business Conduct Guidelines, our business principle, we will make the Global Compact another operational framework to help further promote our CSR activities.

* Proposed for the first time by United Nations Secretary-General Kofi Annan at the World Economic Forum (Davos Conference) on January 31, 1999. The Global Compact represents a basic framework for achieving corporate social responsibilities on a global scale and centers on the ten principles (under human rights, labor, the environment, and anti-corruption) derived from the Universal Declaration of Human Rights, ILO’s fundamental principles, and the Rio Declaration on the Environment and Development.

The CSR Committee is under the direct control of the Board of Directors. The position of Chairman of the Committee is assumed by the President & CEO, and the Vice Chairman of the Committee, by the Senior Executive Vice President. The Committee comprises persons in charge of the Relevant divisions and CSR Department.