Corporate Social Responsibility

Transcription

1 Corporate Social Responsibility Note: For details of the Dentsu Group Charter of Corporate Conduct and information on the Group s CSR activities, refer to the CSR Report on the Dentsu website: Dentsu s commitment to corporate social responsibility (CSR) extends beyond legal compliance, workplace safety and hygiene, protection of human rights, social contribution, and environmental protection. We believe that CSR also means undertaking independent initiatives to create value in ways that reflect economic, environmental and social needs, addressing the interests of all stakeholders. Informed by our employees insights into society, we aim to stimulate the economy and contribute to sustainable global development and improvement, all the while honing our competitive edge and enhancing our reputation for trustworthiness. In October 2004, we drew up the Dentsu Group Charter of Corporate Conduct as a standard for the entire Dentsu Group. Furthermore, in January 2005 we established the CSR Activities Office to spearhead Groupwide CSR initiatives. 1. Contributing to Society through Communications The Dentsu Group creates value in its work through the power of communications, by forging stronger ties with societies worldwide. These community ties extend beyond business to engender new experiences and skills within the Group. For these reasons, we believe that the Group s activities provide significant contributions to society. In October 2003, we established the Corporate Philanthropy Department with the objective of better utilizing our communications skills to benefit society. We are involved in a variety of initiatives to achieve this goal. UNESCO s World Terakoya Movement (Kururimpa) Kururimpa, which refers to characters designed by a Dentsu Group creator, is part of the World Terakoya Movement of the National Federation of UNESCO Associations in Japan. The Asia-focused World Terakoya Movement is designed to provide literacy education and create self-supporting communities. We hold regular charity exhibitions and workshops in Japan and overseas in order to promote the Kururimpa message. Kururimpa characters, which change completely when turned upside down, are used to convey the message that there are many ways to look at things. Funds raised through this project have been used to establish two terakoya (private and voluntarily run schools) in India. We are Presenting soccer balls in Cambodia also expanding our activities in cooperation with the Japan Football Association to include the donation of soccer balls to children throughout Asia. Eco Communication for the Revitalization of Mt. Fuji Every year, many Dentsu employees climb Mt. Fuji as part of their training activities. We have adopted two approaches to the environmental problems faced today by Mt. Fuji. Our first approach is to enable Dentsu Group volunteers to commune with the natural splendor of Mt. Fuji by training them as ecotour instructors. As of March 31, 2007, 18 Dentsu Group employee volunteers served as Eco-Tour Instructors for Mt. Fuji. In order to encourage eco-tourism among university students, we initiated the Applied Training Course for Environmental Restoration of Mt. Fuji in cooperation with the Volunteer Center at Waseda University. The nonprofit organization (NPO), Valid Utilization of the Mt. Fuji Weather Station, was permitted to use the Mt. Fuji Weather Station by the Japan Meteorological Agency in June In commemoration of the event, Dentsu held the World Eco-Science Network Conference for summit researchers. Through this conference, we were able to support a network of researchers that record measurements and watch out for global environmental changes. Eco tours by Dentsu instructors Key to Communicating: Seminars to Enhance NPO Communication Skills Dentsu uses its advertising communication expertise to help 26

2 NPOs hone their skills in this area. In one initiative, we compiled Keys to Communicating, an easy-to-understand handbook with helpful hints for NPO staff. Dentsu advertising creators use this book as a text when giving seminars. We have conducted 18 seminars since 2005 and have distributed more than 5,000 copies of Keys to Communicating. this media literacy program by providing a course in conjunction with Tokyo Gakugei University to teach children basic media literacy by creating advertisements. Designed under the themes of understanding, communicating and enjoying advertising, the program helps foster an enhanced understanding of advertising, encourage an awareness of the rules and techniques of communications, and play a role in advancing interpersonal communications among children. Skill enhancement seminar in session Project to Promote Advertising Education in China Through the Dentsu Japan China Project, we have begun a series of Dentsu Advertising Lectures at six universities in Beijing and Shanghai to promote education in advertising. This project is now in its 10th year. Beginning with mainland Chinese universities, the project includes study trips by Chinese university professors to Dentsu s headquarters, as well as commissioned research. In August 2007, seminars in Changchun and Shenzhen were attended by 450 professors and students specializing in advertising at 253 universities. In 2006, Dentsu received an award from the Ministry of Education of the People s Republic of China commemorating ten years since the start of the project. This is the first award received by a Japanese company from China s Ministry of Education. 2. Taking the Initiative on Environmental Issues Dentsu Eco Program and ISO Environmental initiatives have become an intrinsic element of the Dentsu Group s CSR commitment. In May 2005, the Dentsu Eco Program culminated in the international ISO environmental management system certification of all Dentsu s domestic branch offices. To further demonstrate our commitment to environmental issues, we extended the Eco Program s sphere of application to include all Group companies. As of June 2006, all 49 (47 after mergers) Dentsu Group companies have received the ISO certification. In December 2007, six additional Group companies are slated to receive the ISO certification. Our environmental policies are described in detail in the CSR Report on our website. In 2007, we held our third Environmental Slogan Campaign, designed to raise environmental awareness among Group employees and their families. We incorporated the winning slogan into posters and stickers promoting a host of awareness activities. Going forward, we plan to incorporate these considerations actively into our communication proposals in an effort to improve our planet s environment.. Advertising Media Literacy among Elementary School Students This project is designed to help children develop the skills to more readily comprehend the information disseminated by the media. The project is focused on Japan, a society increasingly inundated with information. In 2007, we began A course at the Advertising Elementary School Other Activities We believe environmental issues should be addressed by the advertising industry as a whole. For this reason, we participate in the Environmental Advertising Subcommittee, set up within the Advertising Issues Research Committee of the Japan Advertising Agencies Association (JAAA). We also participate in the ISO Environmental Labeling Domestic Subcommittee and the Ministry of the Environment Environmental Communication Awards Television Environmental Commercial Division Judging Committee. Specifically, we are active in providing information and extending and implementing proposals to enhance awareness of environmental issues. Within the JAAA Environmental Advertising Subcommittee, we joined The Seiyu Co., Ltd., in creating A Hint for the Popularization of Green Merchandise, 27

3 in which in-store tests are conducted to compare communications for the promotion of green products. This program in Mie and other prefectures received the 4th Japan Environmental Management Award from the Japan Sustainable Management Award s Environmental Value Creation Division. 3. Respect for Human Rights As a responsible corporate citizen, the Dentsu Group considers it essential for every employee to have the deepest respect for human rights and properly understand human rights issues. To this end, we have established three principles: (1) we have zero tolerance for discriminatory language in advertising or communications activities, (2) respect for human rights must serve as the basis for social existence and be paramount to communications and (3) the objective of human rights education is to effect proper judgment between freedom of expression and discrimination. Consequently, in 1987 we established the Educational Committee on Human Rights in order to provide education for our employees and to pursue activities related to human rights. At the same time we created a specialized department to consider the relationship between advertising expressions and human rights. We believe that promoting activities that incorporate a human rights perspective enriches advertising communications, and we have extended these initiatives throughout the Dentsu Group. Part of our responsibility is to be actively aware of these issues by exchanging information with human rights organizations and training our personnel. We share our information throughout the advertising industry via human rights awareness activities, seminars and other events held by the JAAA. We are also dedicated to promoting respect for human rights locally by conducting seminars in compliance with requests from local governments, research and educational associations and corporations. As part of our inhouse educational activities, Dentsu solicits human rights slogans from employees and their families in order to produce Posters on display at a human rights event human rights posters for competition, an activity that has continued for many years. Local governments often ask to use these posters, which are exhibited at events promoting human rights in various parts of Japan. 4. Compliance Promotion System Dentsu has established the Corporate Ethics Committee to ensure corporate conduct that is fair and impartial and respects applicable laws and regulations. The committee also deliberates corporate conduct related to compliance and risk management. The committee consists of Company Directors, Executive Officers and Corporate Auditors, and is responsible for deliberating a full range of groupwide issues related to corporate conduct and ethics. At its corporate headquarters, Dentsu has established the Compliance Promotion Office, which is responsible for the establishment and operation of compliance promotion systems, evaluating claims of improper conduct, and operating D-EAR, the Dentsu Group s internal reporting and proposal system. ISO International Information Security Management Certification Extremely sophisticated information security management is essential to the Dentsu Group and its business partners, who handle important information as part of their operations. In March 2007, all 55 companies in the Dentsu Group received international Information Security Management System (ISMS) certification under the ISO/IEC27001:2005 and JISQ27001:2006 standards. The Dentsu Group will continue to maintain stringent standards for information security management. D-EAR Internal Reporting and Proposal System and Harassment Consulting Hotline Dentsu has established an internal reporting and proposal system D-EAR to extend lines of reporting throughout the Group. In addition to communicating suggestions on operational improvements, the system is designed to encourage employees to come forward with information related to improper conduct and legal violations. D-EAR is now in place at 41 Dentsu Group companies in Japan, and three companies operate independent internal reporting systems. We have also established a hotline at Dentsu headquarters, branches and domestic Group companies in order to field complaints of sexual or hierarchy harassment. Issues can be relayed via this hotline to outside counselors if necessary. 28

4 Corporate Governance 1. Basic Policy on Corporate Governance The Dentsu Group places a high priority on compliance and building a management system that responds swiftly to changes in the business environment. Dentsu is a Company with Corporate Auditors. Although we have considered the Company with Committees structure of corporate governance, which features a high degree of explanation to shareholders and other investors, we have not opted for such a structure at this stage. We believe Dentsu s current corporate governance system is sufficient to ensure prompt decision making and effective internal controls. The chart below outlines the Company s corporate governance system. 2. Overview of Corporate Institutions Dentsu is a Company with a Board of Corporate Auditors and has introduced an executive officer system for the execution of business. Dentsu s Articles of Incorporation specify the term of office for Directors as one year and specifies the number of Directors as 20 or fewer. In addition to the Board of Directors, principal decision-making bodies include the Board of Senior Managing Directors and several important committees. 3. Basic Policy on Creating an Internal Control System The internal control system exists to encourage voluntary control by Directors, Executive Officers and employees. The system is designed to ensure that the Company meets its social responsibilities as A Partner in Creating Value. To ensure that Directors, Executive Officers and employees comply with all laws, regulations and the Articles of Incorporation during the course of their duties and to prevent the formation of any relationships outside the accepted code of conduct, we have established the Dentsu Group Charter of Corporate Conduct to define the sphere of common activities. The Corporate Ethics Committee, chaired by the Vice President, is charged with creating, operating and improving the internal control system. System of Compliance for Directors and Executive Officers Directors and Executive Officers must perform their duties appropriately, in accordance with the Board of Directors; the Board of Senior Managing Directors; and Executive Officer bylaws, regulations, the Articles of Incorporation and other internal policies. If a Director or an Executive Officer discovers a violation, or in the event of any other serious compliancerelated occurrence, this information will be reported without delay to the Board of Directors or at the meeting of full-time Directors, as well as to the Corporate Auditors. Systems to Ensure the Execution of Business by Directors and Executive Officers The Board of Directors meets on a monthly basis so that Directors can perform their business tasks efficiently. In addition, a meeting of full-time Directors is held twice a month to deliberate important matters of management policy or strategy, followed by decision-making on actionable tasks. Separately, various committees whose membership is primarily Directors and Executive Officers convene to resolve or deliberate matters within the scope of authority that has been vested in them. Meetings of the Board of Directors, the General Meeting of Shareholders Appointment Appointment Appointment Independent Auditors Corporate Auditors / Board of Corporate Auditors Conducting of audits Board of Directors Appointment / Supervision Corporate Auditors Office Conducting of audits Representative Directors Internal Audit Division Conducting of internal audits Conducting of audits Executive Officers and Headquarters 29

5 Board of Senior Managing Directors and other committees are also held as necessary, in addition to regularly scheduled meetings. Items resolved by the Board of Directors, the Board of Senior Managing Directors and the committees are quickly delegated to individual Directors and Managing Directors and transmitted to all employees via the corporate structure, and promptly reflected in the execution of duties. Urgent items are posted on the internal electronic bulletin system for rapid dissemination. Information Management and Storage System for Directors and Executive Officers Information concerning the execution of business duties by Directors and Executive Officers is stored and managed appropriately, in accordance with the Company s documentation management regulations and information management guidelines. Risk Management System Dentsu conducts internal risk surveys to determine those that are significant and creates a structure to minimize these risks and prevent the propagation of damages in the event that risks become reality. We have established a Companywide system to prevent risks from happening or emerging. The risk management system defines a risk structure that assigns personnel in each department, and we have created a plan that outlines specific measures to pre-empt important risks. Based on the Corporate Ethics Committee, Dentsu has designated the Internal Control Promotion Project Team as its risk management department, creating and enhancing the risk management system, based on instruction from the Corporate Ethics Committee and the Internal Control Promotion Project Team. Employee Compliance System The departments reporting to the Corporate Ethics Committee create internal policies and manuals and conduct training to enhance the Company s compliance system. The Internal Audit Office, which reports directly to the President, also conducts internal audits. In the event of a breach of law or other internal compliance issue, the D-EAR internal reporting and proposal system is used for internal reporting. If Auditors request opinions on or measures to improve the Dentsu employee compliance system, Directors and Executive Officers respond without delay and make any necessary improvements. Internal Structure to Support the Outside Auditors and their Independent Status Positioned as the internal structure to support outside Auditors, Dentsu s Corporate Auditors Office reports directly to the auditors committee, maintaining its independence from the Company s Directors and Executive Officers. System of Reporting to Corporate Auditors and Improving Audit Effectiveness Policies are in place to define items that Directors and Executive Officers must report to Corporate Auditors. Directors, Executive Officers and employees swiftly report to the Corporate Auditors information that impacts the operations or the operating performance of the Company. In the event that Corporate Auditors request reports other than those indicated above, regulations have been established that require Directors, Executive Officers and employees to provide such reports without delay. To enhance audit effectiveness, any such requests may be communicated through the Internal Audit Division or the Independent Auditors. Internal Control System for the Dentsu Group, including Subsidiaries As they are positioned within the scope of operations of the corporate group, subsidiaries establish their own policies based on the Dentsu Group Charter of Corporate Conduct. The Company also creates, operates and improves its internal control systems to ensure proper internal and external transactions in all corporate Group companies. System to Ensure the Appropriateness of Financial Reporting Under the auspices of the Corporate Ethics Committee, the Internal Control Promotion Project Team creates effective internal controls to ensure appropriate financial reporting. 4. Internal Audits and Audits by Corporate Auditors In principle, the Board of Corporate Auditors meets monthly to establish audit policies and allocate responsibilities. Auditors audit the execution of duties by Directors and Executive Officers based on the audit plan. Specifically, these audits emphasize groupwide internal control, compliance and risk management systems. The Corporate Auditors Office, staffed by four employees, is in place to assist Corporate Auditors in their duties. Separately, the 20-member Internal Audit Division exists to conduct internal audits. In accordance with an annual audit plan, this division conducts internal audits of 30

6 Dentsu s Composition of Sales and Income Net Sales by Industry (Fiscal Year Ended March 31, 2007) By industry, the information/communications, beverages/cigarettes and finance/insurance sectors constitute a high percentage of net sales. Dentsu s diverse client portfolio ensures a stable profit base. Net Sales by Business Category (Fiscal Year Ended March 31, 2007) Dentsu offers a diverse range of services, spanning marketing promotion, creative, sports and other content businesses. Others 24.6% Information/Communications 15.1% Others 1.6% Content Services 6.9% Marketing/Promotion 10.8% Television Time 22.3 Beverages/Cigarettes 9.9% Transportation/Leisure 4.3% Pharmaceuticals/ Medical Supplies 4.7% Distribution/Retailing 4.9% Foodstuffs 5.4% Home Electric Appliances/AV Equipment 6.8% Finance/Insurance 8.5% Automobiles/Related Products 8.1% Cosmetics/Toiletries 7.6% Creative 11.7% OOH Media 2.7% Interactive Media 1.3% Radio 1.5% Magazines 4.6% Newspapers 12.1% Television Spots 24.4% Highly Regarded Creative Skills Dentsu s abundant creativity and carefully constructed organizational strengths, as well as its powers of expression and persuasion, are widely regarded in Japan and overseas. Ratings in Japan Comparison of awards received at the 2005 ACC CM Festival*. Overseas Ratings Gunn Report s Most Awarded Agency Rankings (2006) Others 30% ADK 6% Hakuhodo 14% Dentsu 50% * Sponsored by the All Japan Radio & Television Commercial Confederation (ACC), established in 1961, this festival is regarded as the most authoritative contest in Japan for commercials. Ranking Advertising Agency 1 DDB London 2 TBWA/Paris 3 Abbott Mead Vickers.BBDO (London) 4 Crispin Porter + Bogusky (Miami) 5 Dentsu (Tokyo & Osaka) 6 Wieden + Kennedy (London) 7 JWT (London) 8 AlmapBBDO (Sao Paulo) 9 Creative Juice/G1 (Bangkok) 10 Young & Rubicam (Buenos Aires) Robust Financial Base Dentsu has a strong financial base, currently holding the highest Standard & Poor s ranking of any advertising agency in the world. Long-Term Short-Term Standard & Poor s (S&P) AA A1 Rating & Investment Information (R&I) AA a1 (As of March 31, 2007) 3

7 each division within the Company, as well as of affiliated companies in Japan and overseas. The Board of Corporate Auditors liaises with Corporate Auditors, the Internal Audit Division and Independent Auditors, requesting reports on audit methods and results, as appropriate. Mainly the standing Corporate Auditors meet with these bodies on a regular basis to exchange information. Dentsu has also established a Group Companies Auditors Office, which dispatches Corporate Auditors to major Group companies. 5. Independent Auditor Dentsu has an audit contract with Deloitte Touche Tohmatsu, an audit corporation that performs auditing services for the Dentsu Group. No special-interest relationships exist between Dentsu and either the audit corporation or the personnel who conduct business on behalf of the audit corporation. During the fiscal year under review, these duties were performed by the certified public accountants indicated below, and the auditing tasks were conducted by and assisted by the people indicated below. Certified public accountants involved in the execution of duties Representative partners performing duties: Takashi Nagata, Tsutomu Hirose, Takashi Sedo Personnel assisting with accounting audits Six certified public accountants, nine accounting assistants and one other person 6. Relations with Outside Directors and Outside Auditors Dentsu has both outside Directors and outside Auditors. As of June 28, 2007, two of the Company s 16 Directors were outside Directors, and three of the five Corporate Auditors were outside Auditors. The two outside Directors are either representative Directors and Presidents of principal shareholders or Senior Officers and Presidents of companies that conduct business transactions with Dentsu. However, no outside Directors or outside Auditors are members of Dentsu or any Dentsu Group company. The Company has liability limitations agreements in place with its outside Directors and outside Auditors, as prescribed by Article 423, Item 1, of Japan s Company Law. These agreements limit the liability for damages of each of these officers to either 10 million or the minimum amount specified by law, whichever is greater. 7. Executive Compensation During the period under review, the executive compensation paid by Dentsu to Directors and Corporate Auditors was as follows. Compensation for Directors: 1,253 million (of which, 11 million goes to outside directors) Compensation for Corporate Auditors: 117 million (of which, 43 million goes to outside auditors) At the General Ordinary Meeting of Shareholders held in June 2007, a resolution was passed to abolish retirement payments to Directors and Corporate Auditors. In accordance with this resolution, future compensation is to be determined as follows. To encourage the link between compensation to Directors and further increases in corporate value and in consideration of their accountability and relation to operating performance, compensation to Directors is to be divided into two components. One component of compensation is monthly, and the other is a bonus tied to operating performance. If operating performance is typical, the performance-linked portion will account for approximately one-third of overall compensation. The fixed monthly compensation shall be determined within the limits of compensation approved by the General Ordinary Meeting of Shareholders. The index used to determine the portion of compensation that is tied to operating performance will include the degree to which financial targets for consolidated gross profit and consolidated operating income have been reached. Specific amounts are to be determined at the General Ordinary Meeting of Shareholders held after the conclusion of the fiscal year. Compensation to outside Directors, however, will consist of only the monthly compensation for the execution of their duties. The compensation to each Director will be determined by resolution of the Board of Directors. Compensation to Corporate Auditors will consist solely of a fixed monthly amount in exchange for the execution of their duties. The gross amount of this monthly compensation will be determined within the limits of compensation approved by the General Ordinary Meeting of Shareholders. Compensation to individual Corporate Auditors will be determined through deliberation of the Corporate Auditors. 8. Compensation to Independent Auditors During the period under review, the Company s compensation to Independent Auditors was as follows. Compensation in accordance with Section 1, Article 1, of the Certified Public Accountants Law: 55 million Compensation other than that indicated above: 24 million 31