Global Compliance

• Promoting Thorough Compliance Globally
• Initiatives in Asia and Oceania Region

Panasonic will work to achieve a paradigm shift for further growth by accelerating a shift from an overconcentration on existing business fields to new fields such as energy, and from Japan-centric operations to a full globally-oriented approach. These efforts will be guided by our new midterm management plan, Green Transformation 2012, or GT12. With business expanding in this way, compliance rooted in our management philosophy will become more important than ever before. It therefore will be equally important to totally ensure that this mindset penetrates every level of the organization. At the same time, fine-tuned compliance activities that take into account differences in national and regional laws and their application and diversity in cultures and languages will also be needed. Panasonic takes the viewpoint “Think Globally, Act Locally” seriously, and we will carry out initiatives for promoting compliance in this spirit.

Compliance Awareness Month is held every fall. During the month we take up compliance issues pertinent to the entire group and promote compliance promotion activities on major issues relevant to specific business fields or specific regions.

Risk assessments are also held every year at all group companies. Based on the results, we identify areas related to antitrust laws and security export control administration laws where non-compliance would have a material impact on the group as a whole and work to rigorously ensure compliance in those areas on a priority basis.

It goes without saying that people are the leading actors in any business activity. The level of a company's compliance is determined by the awareness and knowledge of its employees. We hold fast to the view that ignorance of the law is no excuse for non-compliance. Efforts are made to raise the awareness of employees and improve their levels of knowledge regarding compliance by strengthening and enhancing training programs that utilize the Internet and other tools.

Compliance promotion initiatives are evaluated for their effectiveness through our Compliance Awareness Survey and Compliance Comprehension Test, which are conducted globally during Compliance Awareness Month. Highly tailored programs are then implemented for the various issues that are identified.

Panasonic intends to strengthen business activities in emerging markets going forward. We believe it is important that in creating and growing new businesses in these markets we simultaneously pursue compliance in line with each country's circumstances as a part of business activities. This section introduces compliance initiatives with a focus on Asia and Oceania, including emerging markets such as India, Vietnam and Indonesia, prioritized markets undergoing rapid growth.

During fiscal 2010's Compliance Awareness Month, Ikuo Miyamoto, Managing Executive Officer at Panasonic Corporation and President of Panasonic Asia Pacific Pte. Ltd. (PA), the regional headquarters of Asia and Oceania, conveyed to PA's employees that executing its midterm growth strategy must be premised on compliance and that compliance will be prioritized over achieving the company's business plan.

Panasonic has some 80 affiliates in Asia and Oceania and the countries are highly diverse in terms of law, culture and language, so rigorously pursuing compliance at every level of the organization tends to be more difficult than in other regions. This fact also increases the risk that each country's laws will not be properly understood and that non-compliance will occur without realizing it. In order to address these concerns, the region is promoting compliance with the following two objectives.

i) Build a strong management framework for rigorous compliance at every level of the organization
ii) Deepen legal knowledge and raise compliance awareness in each and every employee

Efforts to achieve these two objectives are focused on the following four action areas. Taking the first letter of each action area, PA has dubbed the initiative 'GEAR.'

1) Governance -- Strengthen governance
2) Equipping -- Assign legal staff
3) Awareness -- Raise awareness of laws, regulations and company policies
4) Reviewing -- Verify the results of initiatives

As in other regions, preventing cartel activities is one of the most important issues in Asia and Oceania. To this end, PA has supplemented the Panasonic Group's global policy on cartel prevention by issuing the Legal Policy on Fair Competition and Cartel Prevention for the Asia and Oceania region in October 2009 in an effort to fully comply with antitrust law.

A session for focused debate on compliance was established at the managing directors' (of the affiliates in the region) meeting held regularly every year. A legal network conference for the region is also held regularly. In fiscal 2010, legal conferences were also regularly held in Singapore, Malaysia and Thailand. In fiscal 2011, the company plans to hold periodic legal conferences in India and Vietnam as well and administer compliance programs in accordance with local conditions and business characteristics.

Entities under PA are assigning legal staff, who are also responsible for promoting compliance at their respective companies, and conducting education and awareness-raising activities related to antitrust law, security export control, copyrights and other laws and regulations.

Legal staff from global headquarters also participate in the aforementioned managing directors' meetings and legal network conferences. They share information on antitrust law, security export control and other compliance policies with the management and legal staff from approximately 30 group companies representing the region. A compliance training program is also being developed for employees other than legal staff.

At legal conferences in Singapore, Malaysia and Thailand as well, legal staff from the region's various countries furthered their understanding of global legal policies with the help of global headquarters and PA and underwent compliance training, tailored to local business characteristics, on a number of legal issues, including contracts, labor problems and corporate governance.

As a training tool, Singapore and Malaysia editions of the Legal Guidebook for Organizational Managers were issued. Plans call for the guidebook to be gradually expanded to include other countries and regions.

In addition, for employees, PA created its own Legal Compliance Guide by modifying global headquarters' Compliance Guidebook to match the laws of each country in its region. All employees in the region have online access to the guide.

PA is also involved in campaigns to ensure rigorous compliance. In September 2009, it conducted the 1st Fair Competition and Cartel Prevention Promotion Campaign and distributed educational tools in the different languages used in the countries of the region to fully ensure strict compliance with antitrust law by all employees. In fiscal 2011, PA will continue the campaign while also conducting other initiatives related to compliance, including the 1st Copyright Compliance Campaign.

In order to verify the results of the initiatives outlined above, PA conducts a survey using our Compliance Awareness Survey while adding items specific to Asia and Oceania. Survey results are analyzed, conveyed to affiliate management and used to improve compliance activities on an ongoing basis.

PA has also established a hotline specifically for the region. Employees can use the hotline for consultation or to report an issue. Issues are handled quickly while coordinating with global headquarters.

PA will continue strengthening the group's compliance network and ‘GEAR’ up its compliance initiatives so that we will continue to be trusted and respected by society.