Harassment Compliance in Japan: Board-Level Risk Management

Most foreign companies operating in Japan know, at least in outline, that harassment regulation has tightened in recent years. Many have responded by adding a harassment clause to their work rules and circulating a translated version of the global conduct policy. Both steps are reasonable. Neither, on its own, satisfies what Japanese law actually requires — and the gap between “we have a policy” and “we meet our statutory measures obligation” is exactly where companies discover their exposure, usually after a complaint has already been mishandled.

This is increasingly a board-level issue rather than a purely HR one. The amended Act on Comprehensive Promotion of Labor Policies — commonly referred to as the power harassment prevention law — has been in force for large employers since 2020 and was extended to small and medium-sized enterprises in 2022. It imposes specific, affirmative measures obligations on every employer in Japan, foreign-owned or not. Where those measures are absent or inadequate, the legal exposure runs to the company and, in some circumstances, to individual directors.

Why Foreign Companies in Japan Are Getting Harassment Compliance Wrong

The pattern that recurs across foreign-owned companies in Japan is not negligence. It is a reasonable-sounding assumption that turns out to be wrong: that harassment compliance is fundamentally a policy question, and that once the policy exists — prohibiting harassment, describing acceptable conduct, stating that violations will be disciplined — the company has done what the law requires.

Japan’s harassment framework is built differently. The power harassment prevention law does not simply prohibit harassment and leave enforcement to after-the-fact discipline. It imposes a measures obligation (sochi gimu) — a positive, ongoing duty to build specific infrastructure before any incident occurs. A company that has only updated its work rules has addressed the prohibition half of the obligation and left the infrastructure half untouched. That gap is invisible until a complaint actually arises, at which point the absence of a functioning consultation system, a documented investigation process, and trained managers becomes the company’s primary legal problem — often a bigger one than the underlying conduct that triggered the complaint.

For foreign companies, this also tends to be a governance gap rather than just an HR gap. In many home markets, harassment policy is treated as a settled HR administrative matter that rarely reaches the board. In Japan, the combination of a specific statutory measures obligation, employer liability exposure, and emerging case law touching on director-level duty of care means this is a topic the board needs visibility into — not because every complaint should go to the board, but because the adequacy of the underlying framework is, in a real sense, a board responsibility.

Why a Harassment Policy Alone Does Not Meet Japan’s Legal Requirements

The measures obligation under the power harassment prevention law, and the related obligations under the Act on Equal Employment Opportunity for sexual and maternity-related harassment, break down into four categories that need to function as actual operating infrastructure, not just policy language:

• Clarification of policy and communication to employees. The company’s position on harassment needs to be clearly stated and actively communicated — not just included in a work rules document that employees may never read. This generally means active distribution, training, and confirmation that employees understand both what constitutes harassment and what the consequences for violation are.
• A functioning consultation system. Employees need a designated, known channel for raising a concern, staffed by people who are actually equipped to receive a complaint appropriately — not simply “speak to your manager,” which fails immediately in any case where the manager is the subject of the complaint. A consultation system that exists on paper but that employees do not know how to access, or do not trust, does not satisfy this requirement in substance.
• Prompt and appropriate post-incident response. Once a complaint is raised, the company is expected to investigate promptly, take appropriate action against the harasser where warranted, and provide appropriate support to the complainant. There is no statutory template for what “appropriate” means in every case, but the absence of any documented investigation process, or an investigation that is conducted in a way that is visibly inadequate, is itself a measures-obligation failure independent of the underlying harassment claim.
• Privacy protection and prohibition of retaliatory treatment. The company must protect the privacy of everyone involved in a complaint and ensure that the person raising it is not disadvantaged for having done so. A workplace where it becomes known, informally, that the complainant was sidelined or their career affected after raising a concern — even without any formal retaliatory action — creates exposure independent of how the underlying complaint was resolved.

None of these four categories is satisfied by a single clause in a work rules document, however well drafted. They require operating processes that someone is responsible for maintaining, and that can be demonstrated to have actually functioned if the company’s compliance is later examined. What needs to be addressed in the work rules themselves, as distinct from the broader operational infrastructure, is covered in Work Rules (Shūgyō Kisoku) and Employment Compliance: A Comprehensive Legal Guide for Foreign Companies.

The Legal Exposure Companies Face When Complaints Are Mishandled

Where harassment occurs and the company’s response is inadequate, the legal exposure runs through two separate routes, and they are frequently both engaged at once.

Employer liability (shiyōsha sekinin) under Article 715 of the Civil Code: Where an employee commits a tort — which harassment generally constitutes — in the course of their employment, the employer can be held liable for the resulting damages alongside the individual employee. This liability attaches regardless of whether the company itself did anything wrong in the harassment incident specifically; it is a function of the employment relationship and the conduct having occurred in a work context.

Breach of the duty of care for employee safety (anzen hairyo gimu): Separately, the employer owes employees a duty to provide a safe working environment, which Japanese courts have interpreted to include protection from a hostile or harassing workplace. Where the company knew or should reasonably have known about harassing conduct and failed to take adequate preventive or corrective action, this independently exposes the company to a damages claim — on top of, or sometimes instead of, the Article 715 claim. This is where the absence of a functioning measures framework becomes directly relevant: a company that can show it had a working consultation system, investigated promptly, and acted on the findings is in a materially different position than one that cannot.

In practice, the cases that produce the most significant exposure are rarely ones where a single harassment incident occurred and the company responded reasonably. They are cases where a complaint was raised, the company’s response was visibly inadequate — delayed, superficial, dismissive, or resulted in the complainant being treated worse rather than better — and the inadequate response itself becomes the central evidence in the resulting claim. The specific procedures a company should follow once a complaint has actually been raised are addressed in Handling Harassment and Employee Complaints in Japan: A Guide for Foreign Employers.

Whether a specific company response satisfies the safety consideration duty, and the relative weight given to a functioning measures framework in any given case, are fact-specific questions that depend on the circumstances of the incident and the company’s documented response. This is an evolving area of case law and should be assessed against current precedent for any specific situation.

Where Director-Level Liability Enters the Picture

A separate and more recent layer of exposure runs to individual directors. Directors of a Japanese company owe the company a duty of care as a good manager (zenkan chUīi gimu) under the Companies Act. This is not, on its face, specific to harassment — it is the general standard against which any board-level decision or oversight failure is measured. But Japanese courts and commentators have increasingly applied this duty to the question of whether a board adequately oversaw the establishment of a compliance system, including harassment-specific measures.

The practical implication is that a director who is aware, or should reasonably be aware, that the company’s harassment measures framework is inadequate — and who does nothing to address it — may, depending on the circumstances, face a form of personal exposure that is distinct from the company’s liability under Article 715 or the safety consideration duty. Whether this threshold is reached in a specific case depends on the nature and duration of the oversight failure, what the director knew, and what action was or was not taken. This does not mean every harassment incident creates director liability; isolated misconduct by an individual employee, properly and promptly handled by the company, is a very different scenario from a board that has never turned its attention to whether the company’s compliance system functions at all.

For foreign companies, this is where the governance gap described earlier becomes a concrete personal risk for the individuals on the Japan entity’s board — including, in many cases, expatriate executives who may not have previously considered harassment compliance to be within their personal scope of responsibility, on the assumption that it sits entirely with HR or with the global parent’s policy framework.

The threshold at which director-level duty of care liability arises in connection with harassment compliance failures is an evolving area shaped by case law rather than a fixed statutory test. Whether a specific board’s level of oversight is adequate requires case-specific assessment against current precedent.

Why Applying Your Global Policy Without Japan-Specific Adaptation Creates Risk

The most common reasoning error among foreign executives running a Japan operation is treating the global conduct policy as sufficient because it is, on its face, more comprehensive than what Japanese law specifically requires. The logic feels sound: the global policy prohibits a broader range of conduct, sets a higher behavioural bar, and was drafted by experienced employment counsel. Surely a more demanding standard satisfies a less demanding one.

This reasoning misses what the Japanese measures obligation is actually asking for. It is not primarily a question of how strict the prohibited-conduct standard is. It is a question of whether specific infrastructure — a consultation channel employees in Japan actually know about and trust, an investigation process that operates under Japanese employment law and Japanese privacy expectations, management training delivered in a way Japanese employees can engage with — exists and functions in Japan specifically. A global policy administered through a head-office hotline in a different time zone, staffed by people unfamiliar with Japanese workplace norms and operating in a language some employees are not fully comfortable using for a sensitive personal complaint, does not satisfy the measures obligation merely because the underlying conduct standard is rigorous.

There is also a more specific trap that recurs in companies with a global rotation of expatriate managers: the assumption that because the parent company’s policy has been applied consistently and successfully in other markets, transplanting it into Japan without local adaptation is a sign of good governance rather than a compliance gap. The practical approach is not to choose between the global policy and a Japan-specific one, but to build the Japan-specific operational infrastructure underneath the global policy’s standards. How to reconcile a global policy framework with Japan’s work rules requirements — including where the two need to diverge and where bilingual documentation matters — is covered in Bilingual Work Rules and Employment Compliance in Japan: Managing Global and Local Standards.

What the Board Needs to Decide and Sign Off On

Given the exposure outlined above, a Japan subsidiary’s board does not need to manage harassment complaints directly, but it does need visibility into, and sign-off on, the framework that handles them. The following is the minimum set of items a board should expect to have reviewed and confirmed:

• Confirmation that a Japan-specific consultation channel exists, is known to employees, and is staffed by people equipped to receive a complaint — not just a reference to a global hotline.
• A documented investigation procedure, including who conducts investigations, expected timeframes, and how findings are recorded.
• Evidence that management training on harassment recognition and response has actually been delivered, not just scheduled, and that it is refreshed at a reasonable interval.
• A privacy and anti-retaliation protocol that is specific enough to be applied consistently, rather than a general statement of intent.
• A periodic review — at least annually — confirming that the framework above has been tested or used, and that any gaps identified through actual incidents have been addressed rather than simply noted.
• Explicit confirmation, minuted at board level, that the framework has been reviewed against current Japanese legal requirements — rather than assumed to be adequate because a global policy exists.

The act of minuting this review is not a formality. Should the adequacy of the company’s framework later be examined — whether by a court, a labour authority, or in connection with an individual director’s duty of care — a documented history of board-level attention to the issue is meaningfully different from silence on the topic in the board record.

Conclusion

Harassment compliance in Japan rewards companies that treat it as operational infrastructure rather than policy language. The measures obligation is specific about what needs to exist — a real consultation channel, a documented investigation process, trained managers, privacy and anti-retaliation protections — and it does not defer to the fact that a global policy already covers the same ground in principle.

From a corporate governance perspective, the core issue is accountability at the board level. A Japan subsidiary that has never formally confirmed its harassment compliance framework meets current Japanese legal requirements is carrying a governance gap — not only an HR one. As the legal framework evolves and courts increasingly consider the adequacy of director oversight in this area, the question is no longer whether harassment compliance is a board topic, but whether the board has left a documented record showing it took the question seriously. The companies that face the most difficult outcomes are typically not those where an isolated incident occurred. They are the ones where a complaint revealed, for the first time, that no one — HR, management, or the board — had confirmed the framework actually worked. In a well-governed Japan subsidiary, that confirmation happens before it is needed.

If you are reviewing your harassment compliance framework for Japan — or if a complaint has recently been raised and you want to understand your legal exposure — our team is available to assist. → Contact the International Business Desk