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The Board of Directors of NTT Communications is composed of 14 directors (as of June 30, 2006), and in principle, meets once a month to decide and report on important business matters. The board also includes one outside director to strengthen its ability to supervise the fairness with which it executes its business activities.
The Board of Statutory Auditors is composed of three outside statutory auditors. The statutory auditors are present at all important meetings, including meetings of the board of directors, and audit the execution of Company activities. The statutory auditors have their own staff and dedicated organization to provide assistance in these duties.
Theme-based councils and committees have been established as venues for discussion of important matters regarding the management of the Company and the Group, and to make decisions after due deliberation. Specifically, the Executive Council and Market-In Promotion Council have been established to assist the president in decision-making. Other committees include the CSR Committee, Compliance Committee, Business Risk Management Promotion Committee, Human Rights Awareness Promotion Committee, and Work-Life Committee.
In response to the Corporation Law, which came into effect in May 2006, NTT Communications and its main Group companies followed the NTT Group's basic policies regarding the development of a system of internal controls, and the board of directors decided to implement necessary measures at NTT Communications. The following is NTT Communications' basic philosophy regarding the development of a system regarding internal controls.
- NTT Communications will maintain a system of internal controls to ensure compliance with laws, appropriate and efficient business operations, and management of losses, including measures for the prevention and minimization of losses.
- A Legal and Internal Audit Department shall be established to monitor evaluations of the effectiveness of the development and status of operation of the above system of internal controls. Necessary improvements shall be implemented after effectiveness has been evaluated through the conduct of audits, as well as special audits of the NTT Group's shared high-risk items against audit criteria standardized by Nippon Telegraph and Telephone Corporation.
- In cooperation with Nippon Telegraph and Telephone Corporation, appropriate efforts shall be taken to ensure the credibility of the system of internal controls based on the U.S. Sarbanes-Oxley Act.
- As the chief executive officer, the president will be responsible for ensuring the establishment, maintenance, and operation of the system of internal controls.
NTT Communications' statutory auditors conduct appropriate audits of the status of the directors' execution of their duties. These auditors strive to enhance the strength of the auditing framework by maintaining close contact with accounting firms and other specialists and regularly exchanging information on audit plans and the results of audits.
In August 2005, NTT Communications established the CSR Committee, chaired by a senior executive vice president of the Company, to delineate the management framework for promoting CSR activities. Two subcommittees were also established: the Social Contribution Promotion Sub-committee and the Global Environmental Protection Promotion Sub-committee.
The CSR Committee convened three times in fiscal 2005 and two times in fiscal 2006. The committee issued CSR reports and activity performance reports, discussed basic CSR policy for the NTT Communications Group, and decided on a direction for activities. In the future, the CSR Committee will continue to hold discussions, and will work to disseminate information about the NTT Communications Group's CSR activities.
We at the NTT Communications Group recognize that in order to establish strong corporate ethics, an enterprise must approach all business operations with a strong ethical compass and not merely consent to comply with the law. We are actively driving forward a broad array of actions in compliance and corporate ethics guided by the NTT Group Corporate Ethics Charter, proclaimed in November 2002.
We are proud of our long history of vigorous efforts to establish corporate ethics. To bolster this stance still further, in November 2002 a Compliance Committee was established within NTT Communications, establishing a framework of responsibility that embraces directors, structures, and organizations tasked with responsibility for corporate ethics.
When NTT Communications established the Compliance Committee, the Company also established an NTT Communications Group Hotline. This hotline is available to employees across the Group, including those at overseas affiliates.
In addition, our parent group (the NTT Group) has established an external office staffed with attorneys for reporting and consultation, which assists in fostering free and frank communication within the Group.
The NTT Communications Group offers its employees a full menu of options on a continuous basis to learn about corporate ethics, including training programs for all employees, programs tailored to particular management grades, and external classes/lectures.
NTT Group Corporate Ethics Charter
- Recognizing the establishment of corporate ethics as one of its most important missions, top management shall exert its leadership to ensure that the spirit of this Charter is adopted throughout the Company, and shall assume full responsibility for solving any problems when any event inconsistent with that spirit occurs.
- Every person with subordinate employees shall not only act in a self-disciplined manner, but shall also always provide guidance and assistance to his/her subordinate staff to ensure that their conduct is in conformity with our corporate ethics.
- Every officer and employee of the NTT Group shall not only comply with all laws and regulations, social standards, and internal company rules whether in Japan or overseas, but officers and employees shall also hold the highest ethical philosophy within himself/herself both in public and in any private situations. Among other things, each officer and employee, as an officer or employee of a member of a Global Information Sharing Corporate Group, shall keep himself/herself fully aware that any disclosure of customer or other internal privileged information constitutes a materially wrongful act. Also, as a member of a group of companies which holds great social responsibilities, he/she shall strictly refrain from giving or receiving from customers, business partners, and other interested parties excessive gratuities.
- Each NTT Group company, at the first opportunity, shall take initiatives to provide training programs in order to help its officers and employees enhance their awareness of our corporate ethics.
- Every officer and employee of NTT Group shall direct his/her efforts to prevent wrongful or scandalous acts which may potentially occur as specialization and advancement of our business proceeds. Each NTT Group company shall improve its system to prevent such acts, including, for instance, the re-assignment of contract representatives who have remained with the same customers for a long period of time, and the improvement of monitoring tools to protect customer and other information.
- Any officer or employee who may come to know of the occurrence of any wrongful act or any scandal shall promptly report the wrongful act or scandal to his/her superior or other appropriate persons. If he/she is not able to make such a reporting, he/she may contact the “Corporate Ethics Help Line (Consulting Center).” It should be noted that every officer and employee who reports the occurrence of any wrongful act or scandal shall be protected so that the reporting party shall not suffer any negative consequences due to such reporting.
- In the event of an occurrence of any wrongful act or scandal, each NTT Group company shall be committed to the settlement of the problem by taking appropriate steps through a speedy and accurate fact finding process, and responding in a timely, suitable, and transparent manner in order to fulfill its social accountability.
NTT Communications has established the Business Risk Management Promotion Committee, headed by a senior executive vice president of NTT Communications, to enhance the management of business risks associated with the Group's corporate operations. This committee−composed of the presidents of Group companies and members of relevant divisions−studies and forms countermeasures to large-scale risks (focusing on prevention) that could affect the entire Group, including external risks such as natural disasters and terrorism and internal risks such as corruption and misconduct. Moreover, the Company has established a system where, should a major risk event actually occur, a Disaster (Accident)/Risk Response Headquarters would be established, headed by the president or a senior executive vice president depending on the situation. The headquarters would swiftly collect accurate information on risks and, based on this information, make immediate and appropriate decisions. In the future, the Company will prepare and distribute a common manual to help Group companies address risk management issues, and also plans to implement regular training sessions.
As a company that is expanding globally, NTT Communications has established the Human Rights Awareness Promotion Committee and is undertaking various initiatives to create a rich culture of human rights.
See “Comprehensive Education to Raise Human Rights Awareness” on page 31 for details on these initiatives.
NTT Communications has established a Work-Life Committee, composed of Company and employee representatives, and is undertaking various initiatives with the aim of creating workplaces that provide job satisfaction to all employees and improving employees' work-life balance.
See “Work-Life Committee” on page 30 for details on these initiatives.
Efforts to Ensure Principles Are Broadly Shared among Employees
Following the establishment of NTT Communications on July 1, 1999, we prepared a pamphlet, OBP (Our Business Principle), which clearly explained a common basic mission, values, and code of conduct. The pamphlet was distributed to all employees and our partners' employees in an attempt to disseminate these principles. OBP presents the guiding principles of our business activities and is the basis of the NTT Communications Group's efforts to promote CSR activities.