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Fundamentals of compliance

We set our code of conduct and ethics for all group employees in the Basic Principles of How to Work that were first established in 1982 by our company founder, Yo Sato. What started as a list of “things to bear in mind in daily work, based on personal experiences” he gained from the earlier days of his career underwent revisions over the years to become the thirty-four articles in use today. When our second company president, Tokuo Fujita, wrote our employee handbook “The Spirit of SATO,” he dedicated a chapter to these basic principles while adding new contents on our management policies/ideas and corporate culture.

This handbook provides an easy-to-understand account of the “right” things to do in reality-based scenarios, and is used to foster compliance awareness in our employees.


Introduced in 1976, Teiho is SATO’s very own system that lets all employees submit short, regular reports (written within a set word count) directly to the management to participate in the running of the company. Through Teiho, new ideas that employees derive from daily work or feedback they gather from interactions with customers can be incorporated quickly into decision-making at the top level. Teiho encourages input — even the negative ones — from our business front lines and customer touch points, serving as a form of monitoring to prevent any blind spots that could lead on to crises.

The Teiho system is an important pillar for building our corporate culture around compliance.

Reporting of compliance breaches

We have established whistleblowing standards/procedures for employees in Japan to report any suspected violation of laws and regulations internally or via an external platform that is managed by an independent third party. We also have in place a whistleblowing policy that allows for employees of our overseas subsidiaries to escalate their concerns via a communication channel set up by the company. These help us detect possible compliance breaches and take preventive actions early.

Internal controls

We have adopted a framework for internal control based on the basic policy that was approved by the board of directors to help us enforce our corporate values and ensure proper business operations.

For example, the execution of duties by our employees, directors and subsidiaries is being controlled by corresponding management regulations and responsibility/authorization rules, while being subject to regular audit checks by our auditor office which reports directly to the company CEO. With the support of the board of directors, we will continue to review our set of internal controls and test them regularly to add more relevance and efficiency to this framework.


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