Corporate Governance

Our basic approach


Honda strives to enhance corporate governance as one of the most important tasks for its management, based on the Company’s basic principle, in order to strengthen the trust of our shareholders/investors, customers and society; encourage timely, decisive and risk considered decision-making; seek sustainable growth and the enhancement of corporate value over the mid- to long-term; and become “a company that society wants to exist”.


Honda Code of Conduct

In order to earn the trust of customers and society and grow sustainably, companies must not only comply with laws and regulations but go beyond those legal structures by practicing ethical corporate conduct.

Recognizing this, in 2003 Honda formulated the Honda Conduct Guidelines for the Honda Group, which have been shared throughout the Group, including subsidiaries in Japan and overseas.

In light of the rising importance of compliance for Honda as it expands business operations globally, the Honda Conduct Guidelines were revised on April 1, 2016, outlining the behaviors to be practiced by people working at Honda around the world. The guidelines were renamed the Honda Code of Conduct at the same time.

The Company works to instill the Honda Code of Conduct in each and every associate through actions such as the distribution of leaflets, posting of information on its intranet and through training. Each of Honda’s departments and subsidiaries regularly checks the status of activities to ensure awareness of the Code, and, reports to the Compliance Committee.

Compliance Committee

To strengthen compliance within the Honda Group, Honda has established a Compliance Committee, headed by a Compliance Officer designated by the Board of Directors, and composed of officers appointed by the Compliance Officer and the Executive Council.
The Committee sets compliance policies and makes decisions on any follow-up policies regarding important compliance matters, issues guidance on improvement to relevant departments and performs oversight to ensure the appropriate management of the Business Ethics Improvement Proposal Line. For matters of compliance that are of particular importance, the Committee formulates policy, proposes this to the Executive Council and issues reports to the Audit and Supervisory Committee.

The Compliance Committee met three times in FY2018 to report on the establishment and operating status of an internal control system and status of activities to raise awareness of the Honda Code of Conduct, among other things. There were no major violations of laws or regulations in FY2018.

Business Ethics Improvement Proposal Line

In 2003, Honda established the Business Ethics Improvement Proposal Line as a mechanism for addressing issues involving corporate ethics in cases of actions that violate laws or internal rules. This allows the Company to accept suggestions and provide consultation, from a fair and neutral standpoint, for associates who face barriers in improving or resolving issues in the workplace for reasons such as difficulties in consulting with superiors.

In addition to cases of clear violation of laws or internal rules, this hotline provides consultation and responds to inquiries about the details of internal rules when questionable actions have occurred, and also engages in fact checking related to such cases. Suggestions are accepted by email, letter, telephone or fax from all subsidiaries and suppliers in Japan and overseas, as well as from the parent company. Anonymous suggestions are also accepted for the protection of submitters.

In October 2013 Honda also added a point of contact within an external law office to facilitate the submission of suggestions. In addition, local points of contact for suggestions have been added in all Regional Operations and some subsidiaries have set up their own points of contact.

In FY2018, 386 suggestions and consultations were handled by the Business Ethics Improvement Proposal Line (including points of contact outside the Company). Among these, 155 concerned the parent company, 208 concerned subsidiaries and 23 concerned other matters. Following investigations, disciplinary action was taken in eight cases involving subsidiaries, and one of these eight cases resulted in punitive dismissal.
No suggestions involved violations of the Honda Policy on the Prevention of Bribery.

In order to raise internal awareness of the points of contact, Honda provides notice on our intranet, distributes information cards the size of business cards to all associates, including fixed term employees and temporary workers, and displays information posters in each workplace. These tools also make it clear that the associates submitting suggestions will be protected at the same time. In addition, Honda observes how well these points of contact are recognized through associate surveys conducted once every three years for all associates. For departments found in these surveys to have low recognition of the points of contact, the Company makes additional efforts to increase their awareness.

Initiatives to Prevent Bribery

The Honda Code of Conduct requires compliance with laws and regulations and prohibits the bribing of politicians and civil servants. The Honda Code of Conduct, revised in 2016, states that “as an independent corporate entity, Honda maintains appropriate relationships with political entities (political organizations and politicians) and administrative entities (governmental agencies and government officials)” and “will interact with political and administrative entities in an appropriate manner in compliance with laws, regulations and company policies and will not offer politicians or government officials entertainment or gifts (both monetary and non-monetary) that are prohibited by laws, regulations and company policies.”

In 2014, Honda also established the Honda Policy on the Prevention of Bribery, which stipulates basic policy, and the Honda Guideline for the Prevention of Bribery, which stipulates compliance items and prohibited items, with a focus on prevention of bribery.

In addition to raising awareness by integrating bribery prevention-related knowledge into Honda’s level-specific training programs, it is also incorporating e-learning-based training for its associates in management positions in departments that face a higher risk of bribery. With regard to its subsidiaries, Honda has launched training programs, matched to conditions in each company, aimed at raising awareness.

Initiatives for the Prevention of Anti-Competitive Behavior

As a company engaged in business globally, Honda takes great care in its daily business activities to comply with competition laws in the countries where it operates.

The Honda Code of Conduct states that “Honda will engage in free and open competition with competitors to maintain its stance as a company trusted by customers and society” and that each employee “will comply with competition laws (antitrust laws)” to ensure compliance with competition laws.

As a part of its measures to strengthen compliance, Honda incorporates programs on the topic of anti-competitive behavior in level-specific training at the time of personnel promotions, and in pre-assignment training for persons stationed overseas. Honda also publishes awareness-raising content concerning anti-competitive behavior on the Company’s intranet for its associates.

Rules on Conflict Minerals

The final rule for disclosure on conflict minerals adopted by the U.S. Securities and Exchange Commission (SEC) mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) requires corporations to confirm that the purchase and use of conflict minerals from the Democratic Republic of the Congo and adjoining countries are contributing neither to the funding of armed groups nor to the abuse of human rights in that region.

Honda’s policy is to aim to be free from conflict minerals which contribute to the funding of armed groups or human rights infringement. To achieve this goal and to help resolve the global problem of conflict minerals, the Company is actively engaged with domestic and international industry organizations and its suppliers.

As a member of the Automotive Industry Action Group (AIAG), Honda North America Inc., Honda’s U.S. subsidiary, participates in the smelter audit program promoted by the Responsible Minerals Initiative (RMI). Honda will continue to take action globally through collaboration with industry organizations.

With its suppliers, Honda shares the Honda Supplier CSR Guidelines that summarize what is expected of them with regard to CSR activities, including how to deal with conflict minerals, and is encouraging procurement in line with the guidelines.

Since 2013, Honda has surveyed its suppliers worldwide concerning the use of conflict minerals. In FY2018, Honda received responses from more than 7,000 suppliers. In addition to reporting survey results to the SEC, the Company also makes them publicly available on its website. (Please refer to the link below.)

In the event that the survey reveals any minerals of concern, regardless of source country, Honda works together with its suppliers to take appropriate measures. The Company is also working to improve the accuracy of its survey, requesting further investigation when survey responses are insufficient.

Risk Management

Establishing an Effective Risk Management Structure

Honda formulated the Honda Global Risk Management Policy, with Group subsidiaries included in its scope of application.

The Honda Global Risk Management Policy aims at driving the Company’s sustainable growth and stabilizing management based on the Honda Philosophy and targets all risks with the potential to impact operations on a global scale. Each organization is building its own independent risk management structure and is responsible for promoting its own independent risk management activities in accordance with the basic policies of these regulations.

In addition, Honda is creating a framework for risk management activities and is taking follow-up measures to support implementation, with efforts centered around a Risk Management Officer elected by the Board of Directors.

As main initiatives, Honda undertakes “risk analysis” for evaluating potential risk in terms of impact and frequency. When a crisis occurs, the Company establishes a Global Emergency Headquarters for crisis response proportionate to the anticipated magnitude of impact.

Risk Analysis

After experiencing the Great East Japan Earthquake and major flooding in Thailand, Honda has since October 2013 begun identifying priority risks from the bottom up for each of its Regional and Business Operations. The purpose is to identify potential risks and implement the necessary countermeasures, thereby foreseeing risks and minimizing the impact.

As for specific procedures, for the 91 risk items identified by the Honda Group, such as economic crisis, economic recession, exchange rate and interest rate fluctuations, climate change and energy issues, Honda performs risk assessment by calculating the potential magnitude of impact and the frequency of occurrence using common evaluation criteria. Based on the results of the assessment, the Executive Officer of each of the Business Operations chooses the risks most relevant to its business operations in the next fiscal year. In addition, information regarding risk management measures is shared at the management meeting every year with monitoring of progress.

In FY2017, along with identifying priority risks from the bottom up, the Company started identifying risks that need a company-wide response (company-wide priority risks) by using a materiality matrix (⇒ p. 16), and from a long-term perspective based on our visions and strategies. In the future as well, Honda will establish the process for identifying and responding to these long-term strategic risks as it works to strengthen its company-wide risk response capabilities.

Crisis response

Honda’s Kumamoto Factory and dealers were substantially damaged as a result of a series of large earthquakes that hit Kumamoto and other parts of Kyushu in April 2016. In response to the emergency, Honda set up a Global Emergency Headquarters and made all out company-wide efforts for recovery of not just the Kumamoto Factory but also suppliers and regional communities.

In FY2017, Honda implemented a verification of its crisis response for the Kumamoto earthquakes, and the issues that became evident were reflected in the Global Emergency Headquarters Manual and the manual was revised.

In FY2018, Honda implemented drills using the revised manual and confirmed the manual’s effectiveness.

Honda is striving to improve its crisis response capabilities through drills by the Global Emergency Headquarters while newly establishing venues (group leader meetings) for discussions concerning crises during ordinary times. By doing so, Honda is working to create a culture that enables effective cooperation when a crisis occurs.

Also with regard to disaster drills, besides ensuring the safety of human life and procedures to account for its associates, from FY2017 Honda has continuously held training from a business continuity planning (BCP) viewpoint on procedures to share information for the purpose of identifying the impact on business at an earlier stage.

Information Management

To ensure the protection of the personal information of our customers, associates and others, the proper handling of company information, and in response to the increase in the handling of high-level, confidential information globally such as 3D data, Honda formulated the Global Confidentiality Policy (GCP). The Company also established the Global Confidentiality Committee in FY2015 and created a committee to promote regional information management with the Chief Officer of the Human Resources and Corporate Governance Operations as its chairperson. This enables measures such as regulations to be established and monitoring of the status of confidential information management promoting information management on a global scale. At a meeting of the Global Confidentiality Committee held in FY2018, Honda confirmed that the establishment of an information management system has been completed in each region and determined the confidentiality action policies and initiatives for the next three years starting from FY2019. Activities have been already initiated under these policies and initiatives.

In addition to the already implemented Global Privacy Policy (GPP) and the Electronic Conferencing Policy, Global Document Management Regulations were decided at a Global Confidentiality Committee meeting held in December 2016 and the formulation of all GCP-related regulations has been completed.

In Japan, we promote initiatives to strengthen information management throughout the year, led by the Japan Confidentiality Committee.

The Global Confidentiality Committee and Japan Confidentiality Committee are collaborating in responding to cyberattacks that have become increasingly sophisticated and complex in recent years and are implementing initiatives for strengthening information security.

Protection of Personal Information

In each department subject to Honda’s personal information management policy, the Company appoints persons to handle information, supervise information and manage information and requires all of them to receive training on the protection of personal information.

Also, restrictions are placed on access to digital data containing personal information and an access log is kept. Personal information in print form is stored with rigorous security, including in cabinets with locks. The Company conducts a review of personal information at least once each year and any unnecessary personal information is deleted.

In Japan, Honda formulated a new Specific Personal Information Management Policy in November 2015 in response to the enactment of the Japanese “My Number Act.” Honda has also made an appropriate response to the Amended Act on the Protection of Personal Information, which took full effect in May 2017.

In FY2018, no complaints were filed with Honda globally concerning any leak of personal information.