Introduction

During the five years that have elapsed since the previous Charter for Good Corporate Behavior was announced, various problems concerning corporate behavior have arisen and public distrust of corporations has intensified. At the same time, the global business environment has undergone major changes, which we list below. Having reviewed corporate behavior in view of these circumstances, Keidanren has decided to revise the Charter of 1991 in order to articulate the kind of corporate behavior that truly enriches and vitalizes civil society as we approach the twenty-first century.

First, because the socioeconomic system that sustained postwar rapid economic growth has reached its limits and has even become a factor constraining future development, concrete action for fundamental reform of the system is required.

Second, as the world becomes increasingly borderless, corporate globalization has taken on a broader dimension. It is now necessary to reassess our corporate behavior from a more global perspective.

Third, the ongoing development of a society of sophisticated information networks has generated new types of problems in corporate ethics. Innovative methods for dealing with these problems must now be found by corporate management.

Forth, the times require that corporate management actively incorporate nature conservation, preservation of the global environment, and philanthropic activities in their business strategies.

Fifth, the coming into force of the Product Liability Law and the amendments to the Commercial Code in connection with the shareholders' representative litigation system require corporations to strengthen self-responsibility and further enhance transparency.

Sixth, as deregulation proceeds, corporations must cease their reliance on government, and actively assume responsibility in their own business activities even in regard to roles hitherto considered the province of the public sector.

These changes require a reassessment of corporate behavior, including relations with consumers, users, shareholders, employees, customers and clients, local communities, and other stakeholders. Corporations, embodying the aims of this Charter for Good Corporate Behavior and resolving to coping with the change, must take the lead in this social reform.

Keidanren's member corporations agree and proclaim that they will make the spirit of the following Charter for Good Corporate Behavior the criterion of their corporate behavior.

Keidanren Charter for Good Corporate Behavior

Corporations, in addition to being economic entities engaged in the pursuit of profit through fair competition, must be useful to society as a whole. For this reason, corporations will adhere to the following ten principles; respect the letter and spirit of all laws, whether domestic or foreign, and of international rules, and behave in a socially responsible manner.

1. Corporations will develop and provide socially useful goods and services, giving full consideration to safety.

2. Corporations will engage in fair, transparent, and free competition. They will also maintain healthy and sound relations with politics and government.

3. Corporations will communicate not only with shareholders but also with society as a whole, actively and fairly disclosing corporate information.

4. Corporations recognize that coping with environmental problems is essential to corporate existence and activities and will take a voluntary and resolute approach in dealing with the tasks.

5. Corporations, as good corporate citizens, will actively undertake philanthropic activities.

6. Corporations will strive to make it possible for employees to lead relaxed and enriched lives, guaranteeing a safe and comfortable work environment and respecting employees' dignity and individuality.

7. Corporations will stand firm against antisocial forces and organizations that threaten the order and security of civil society.

8. In overseas operations, corporations will respect the cultures and customs of the hosting society and will manage themselves in a manner that contributes to local development.

9. Corporations' top executives, recognizing that it is up to them to make the spirit of the Charter a reality, will take the initiatives and set an example in seeing that all relevant parties are fully aware of the Charter and in bringing corporate systems into line with it, and will endeavor to cultivate corporate ethics.

10. When the Charter is violated, corporations' top executives will resolve the problem, endeavoring to clarify its causes and prevent its recurrence. They will promptly disclose all relevant information to the public, and will mete out stern punishment upon identifying authority and responsibility, not excluding themselves.