Times are not what they used to be. Nowadays, change has become more rapid and greater than our forecasts and has unknown consequences more and more. In such a drastically changing business environment, risk management to prevent crisis such as corporate misdoings before they happen and, when they do happen, to minimize the damage, is absolutely necessary in order to maintain sustainability for companies of all sizes and types. Crisis management is an important element of the internal control system under both the Corporation Law and the Financial Instruments and Exchange Law. This is not only a requirement for large companies and listed companies.
Some risks surrounding companies are external such as natural disasters, wars and terrorism, and also, recently, some risks intrinsic in business are coming to the surface, and violation of law in managing business and misdoings that could threaten public safety, life and property are appearing one after another. Many of them are discovered by whistle-blowers. The Whistleblower Protection Act now in force is expected to increase such enthusiasm. The blowback of consumer and mass media against corporate misdoings has become more severe, and the equity markets have become responsive to it. Companies not only destroy their images and brands by their misdoings, but also are pushed into fateful crises instantly through mishandling of such misdoings and lapse into a downward spiral in many cases. Executive officers are exposed to not only the possibility to come near the end of their rope in the company but also criminal responsibility or civil liability for huge amounts of damages (the statute of limitation is 10 years). Judicial rulings and actions by supervisory authorities have become stricter and it is said that society has moved to an after-the-fact regulation society.
When a critical situation such as scandal occurs or is revealed in a company, it is difficult to respond to the situation by itself. Prompt and appropriate responses have to be made in cooperation with lawyers and other outside experts. Our firm has been providing advice and support to our clients in responding to a variety of corporate misdoings including violation of the Financial Instruments and Exchange Act, such as accounting fraud and insider trading; violation of the Anti-Monopoly Act, such as bid-rigging and cartels; violation of the Unfair Competition Prevention Act, such as leakage of trade secrets; violation of the Act against Unjustifiable Premiums and Misleading Representations, such as false labeling; violation of the Copyright Act, such as unauthorized copies; violation of environment-related laws; and violation of the Penal Code, such as embezzlement by an employee. Specifically, our firm provides various services such as advice on policies and system improvement for addressing misdoings; conducting internal investigations and formulating preventive measures; communicating with supervisory authorities; handling investigations by investigating authorities; making external announcements, such as timely disclosure; and responding to mass media, etc. On the other hand, always having our sights on corporate social responsibility (CSR), we support clients in enriching and enhancing their compliance systems and working actively on whistle-blower systems, etc., and are sustaining our efforts to proactively deal with the changing times.