Kao AI Governance Policy

Kao is actively promoting the use of digital technologies including AI to enhance our competitiveness in global markets across business activities such as improving products and services, enhancing business productivity, and improving employee efficiency.

We believe that thinking, creating value from scratch, and engaging directly with consumers and the Genba^* to discern what truly matters are things that only humans can do. AI is not meant to replace these abilities, but to serve as a partner that brings out and expands human strengths. Among emerging technologies, AI is rapidly being adopted worldwide but AI outputs can contain inaccuracies and social biases by the training data. With current technology, it is difficult to eliminate these risks completely or automatically, and appropriate governance is necessary to use this technology safely.

Against this background, we have formulated the “Kao AI Governance Policy” to serve as guidance for us in promoting the safe, ethical, and responsible use of AI.

* In Japanese, Genba means the actual spot or on-site. At Kao, we believe that the deepest knowledge, best ideas and smartest decisions can be found in the Genba, both externally and internally.

Based on our corporate philosophy, the “Kao Way” and its fundamental value of “walking the right path”, Kao places ethical conduct and compliance with laws at the center of its use of advanced technologies including AI, and continuously strengthens governance centered on appropriate internal control systems. To address the risks posed by complex and unpredictable changes inherent in AI, we will address this through an appropriate AI governance framework including human involvement.

Kao recognizes that AI outputs may include unintended errors or discriminatory outcomes, and that the use of outputs involving bias or discriminatory content may contribute to the perpetuation of discrimination in society. We will monitor each stage of AI development including AI design, data collection and preprocessing, training, and additional training, to ensure ethical and fair outcomes. In using AI, we will follow the “Kao Human Rights Policy”, respect fundamental human rights including diversity, and refrain from uses that may be unfair or raise human rights concerns. We will endeavor to prevent individuals or groups from being unjustly discriminated against by AI. In the event that a human rights violation attributable to AI occurs, we will promptly address the matter and pursue an appropriate response in accordance with the “Kao Human Rights Policy” and through appropriate procedures.

Kao recognizes that external services used by the company may have used information owned by third parties to train AI, and that AI outputs may bear similarities to training sources. With today’s technology, service users cannot fully eliminate these possibilities. We place importance on compliance and the protection of rights, and will strive to minimize the above risks as much as possible by following laws, regulations, and governmental guidelines related to AI, and by implementing processes such as human verification of output results.

Kao will manage and restrict access to, use of, storage of, and AI training involving privacy-related information within AI systems, in compliance with applicable laws and internal regulations governing personal information protection and privacy. When AI systems handle personal information, we will apply strict security measures and take governance actions to ensure its appropriateness.

When using or providing AI services, Kao will follow internal information security policies and regulations, address vulnerabilities in AI services, and implement security measures designed to protect AI systems from malicious external attacks, striving to maintain reliable AI service use and provision. Even when using external AI services, we will use them only after following internal procedures designed to provide a safe environment. After the commencement of AI service use, we will ensure that such services remain continuously updated and enabling swift responses to AI security-related challenges.

Kao believes that appropriate collaboration between AI and humans through digital technologies is beneficial for stakeholders and employees but also understands that current AI technologies make it difficult to automatically eliminate potential biases or verify the accuracy of results. Therefore, by implementing appropriate checks by both humans and digital systems, we will promote safe and beneficial AI use. To foster co-creation and generate new value through ongoing trials with external partners, we expect our business partners, including suppliers, to comply with legal and ethical standards related to AI use and to ensure that the rights and interests of third parties are not infringed. In addition, we ensure that accountability for AI-generated outcomes remains with us and our human decision-makers, and AI systems are not used for autonomous decision-making without appropriate human oversight.

Kao aims to make AI decision-making explainable and will work to ensure transparency and quality when using or providing AI services. When we commission external service providers to develop, train, or improve AI models, or when we use AI related services, we expect our partner companies to act in accordance with this policy so that the factors underlying AI driven decisions can be explained to a reasonable extent.