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CSR Report 2010

CSR Management

Corporate Governance

Basic Stance

NTT Communications considers strengthening our corporate governance and ensuring transparent and sound management to be essential to increase our corporate value while fulfilling our public role as a provider of communications services.

Corporate governance structure

Corporate governance structure

Corporate governance structure

We aim to strengthen corporate governance by drawing on the Board of Directors and Board of Corporate Auditors.
The Board of Directors has 15 members, one of whom is an outside director. In principle, the Board meets once a month to make decisions and report on important management issues.
We appoint internal board candidates based on their character and professional experience, regardless of gender or nationality. The principal requirements for external directors are demonstrated supervisory experience and skills throughout their careers, and appointment is not based on the conduct of business operations.
The Board of Corporate Auditors consists of three external auditors. The auditors assess the activities of the Board of Directors. The Board of Corporate Auditors periodically shares information on audit plans and results with accounting firms and is working to strengthen the audit structure. We abolished our directors' retirement benefits program in 2006. The remuneration of internal directors was replaced with a system closely linked to business performance. The remunerations of external directors and corporate auditors are not related to business performance.
We established the Executive Council under the Board of Directors to discuss important management issues for NTT Communications and Group companies and aid in accelerating decision-making by the president on operating issues. The Executive Council met 47 times in fiscal 2009. The Market-In Promotions Council gathered 47 times during the year to deliberate and report on important individual matters.
We also established committees, chaired by the senior executive vice president, to deliberate individual issues outlined in the management strategies of NTT Communications Group companies. These councils and committees report regularly to the Board of Directors, which deliberates on and oversees their activities.

Internal Control System

In order to ensure proper business operations, the NTT Communications' Board of Directors has determined a “Basic Approach to the Internal Control System” and devised the necessary measures to be employed by the system. We are bolstering internal control systems for financial reporting in line with Financial Instruments and Exchange Law requirements.

Basic Approach to Internal Control System

  1. NTT Communications will maintain a system of internal controls, including measures for the prevention and minimization of losses, to ensure compliance with applicable laws, appropriate risk management, and proper and efficient business operations.
  2. To maintain and effectively assess the above system of internal controls, NTT Communications has established a Legal and Internal Audit Department. This Department is responsible for regular audits and special audits of high-risk areas common to the NTT Group in keeping with the auditing criteria of Nippon Telegraph and Telephone Corporation.
  3. NTT Communications will cooperate with Nippon Telegraph and Telephone Corporation and take appropriate measures to ensure the reliability of its system of internal controls based on the US Public Company Accounting Reform and Investor Protection Act of 2002 (Sarbanes-Oxley Act) Sections 302 (disclosure controls) and 404 (internal control over financial reporting) and Japan's Financial Instruments and Exchange Law.
  4. As the chief executive officer, the president will be responsible for ensuring the establishment, maintenance, and operation of the system of internal controls.
  5. We will take steps needed to comply with the Nippon Telegraph and Telephone Corporation's basic policy related to the creation of a system of internal controls.

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Internal Audit

Throughout the year, we conduct standardized audits on our internal organizations and group companies, primarily through the Legal and Internal Audit Department.
Through these audits and other improvement measures, we are working to improve internal controls throughout the entire NTT Communications Group by verifying the establishment and operation of internal controls at individual organizations and group companies.

CSR Committee

The NTT Communications Group has established the CSR Committee in order to promote CSR initiatives. The Committee aims to establish a structure to implement management initiatives from economic, environmental, and social perspectives. We maintain the Social Contribution Sub-committee and the Global Environmental Protection Sub-committee under the CSR Committee.
The CSR Committee met twice in fiscal 2009, with representatives of 22 Group companies attending. The Committee issued CSR and activity reports and resolved on fiscal 2009 activities after discussing issues that it should address.
The Committee will continue working to foster the NTT Communications Group's CSR initiatives and awareness.

Fostering CSR awareness

Our Business Principle (OBP)

OBP(Our Business Principle)

To promote CSR initiatives and foster employee consciousness of CSR throughout the entire NTT Communications Group, we distribute the “Our Business Principles” booklet and card to all NTT Communications employees that clarify the principles that must be shared to enhance understanding of the Group.
This publication has been an important guideline since we began operations. It defines three key CSR policies outlining how we will go about achieving our responsibilities toward society. As such, we will continue to make fundamental use of Our Business Principles in the implementation of our CSR activities.

Click here for details on Our Business Principles.

CSR Seminar

The CSR Division holds CSR seminars for executives every year. In fiscal 2009, participation in the seminar was extended to the Senior Manager of each business unit with the objective of deepening understanding of CSR management.
The 3rd Annual CSR Seminar in January 2010 was attended by the heads of the corporate planning and administrative divisions of each organization and the presidents of Group companies, in addition to officials and organization leaders, with participation totaling fifty-five. This was the first time we invited external management. The discussion centered on the ways in which ICT companies can contribute to a sustainable society from a management perspective. The NTT Communications Group envisions companies playing an active role and contributing to the global economy: we are working hard toward developing new roles for ICT and creating energy-efficient social models.

Record of Achievements for CSR-Related Training in Fiscal 2009
Target Group Training Type Occasions Total Participants
Executives Training for senior management 1 55
CSR leaders Meeting of Administrative Managers 2 70
Routine Office Environmental Working Group meetings 11 380
New Recruits Classroom Lectures 1 215

(Compiled from 13 NTT Communications Group companies in Japan)

CSR Leaders Meeting

Beginning in fiscal 2009, CSR leaders from individual organizations as well as Group companies came together to hold the CSR Leaders Meeting with the objective of strengthening group initiatives.
Seventy CSR leaders from individual organizations and twelve Group companies in Japan gathered for the first CSR Leaders Meeting held in November 2009.
Activities were initiated to help promote CSR by sharing information such as the makeup of CSR Committees and the CSR activities held within each company. We are now making every effort to strengthen Group initiatives.

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Compliance

Corporate Ethics Framework

For the NTT Communications Group, compliance goes well beyond merely adhering to laws and ordinances. Therefore, we are striving to establish a high level of corporate ethical standards so we can fulfill our social obligations.
For this reason, we set up the Compliance Committee and have appointed a director, department, and officials in all business units to oversee corporate ethics. Based on the NTT Group Corporate Ethics Charter, we are taking various initiatives to create an environment that enables everyone, from senior executives to all Group employees, to carry out their work duties with high ethical standards.

Click here for details of the NTT Group Corporate Ethics Charter.

Educating employees on legal risks

Legal Risk Management Handbook

In August 2009, we began publishing a legal e-newsletter that focuses on explaining and interpreting revisions to laws and ordinances that affects our business. This newsletter was implemented as an effective means of educating employees on the underlying legal risks that affect business activities, and to help every employee improve their knowledge of the law.
Furthermore, as of fiscal 2008, we introduced a new policy to regularly distribute the “Legal Risk Management Handbook”, which details particular points of concern about the law, most specifically for sales representatives. This handbook describes the various legal risks that could occur during a business deal, from start to finish, and what to do in such situations, and also includes a Q & A section about contracts and the like. We hope to reduce legal risks to a strict minimum by our movement as; “Legal Section in Action”.

Consultation Hotline

We established the NTT Communications Group Hotline, which Group employees in all countries can access.
The NTT Group operates an external consultation and reporting liaison desk, staffed with legal experts. These organizations are part of our commitment to a transparent corporate culture.

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Business Risk Management

Business Risk Management

We established the Business Risk Management Committee to better oversee and cope with major business risk factors capable of impacting the operation of the entire company.
The Committee meets twice a year to assess and formulate policies with members of relevant divisions to safeguard against significant Group risks, among which are such external factors as natural disasters and terrorism, and internal risks, notably dishonesty and scandals.
We created a system to swiftly collect risk information and ensure fast and proper decision-making in response to major risks. If such events occur, we inaugurate the Disaster (Accident)/Risk Response Headquarters, which the president or a senior executive vice president may head depending on the situation.
Several new initiatives were introduced in fiscal 2009: Group companies gathered together to form the Business Risk Management Committee, measures against the H1N1 flu were implemented, a Tamiflu distribution system for overseas workers was established, and risk management workshops were organized. In addition, we conducted our annual disaster training exercise in November by simulating the need to return home on foot should no other means of transportation be available in an emergency situation. A total of 159 people, 65 of whom were from Group companies, participated in the event. Care was taken to support and share know-how so that each company could perform the exercise independently.
We will continue to strengthen our systems to eliminate or minimize business risks for the entire Group.

Handouts

Handouts

In August 2006, NTT Communications commenced distribution of handouts to all of its regular and temporary employees to be carried at all times in case of an emergency. An improved version of this basic handout, which explains what to do in an emergency, was distributed in March 2010. At NTT Communications, we are committed to the safety of all our employees, whether they are regular workers or not.

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Information Security

Security Declaration

Because we believe that adhering to strict security management standards will lead to security improvements that will benefit our customers, we have set up the NTT Communications Security Declaration and use it as the basic guideline in conducting our business.

NTT Communications Security Declaration

Our most important mission, in addition to protecting information that is vital to our customers and providing services they know are safe, is contributing to an enhancement of our customers' security systems.
We regard security as our top priority in providing services to our customers, and we pledge to work with them to achieve optimum security systems.
We will do our utmost to ensure security in all phases of the value chain from technology and service development to establishment and operation.
Furthermore, as Internet professionals, each one of us will raise our capabilities to respond to security-related issues.

Three Resolutions

  1. We regard security as our top priority in providing services to our customers, and we will do our utmost to enhance their security.
  2. As an IT partner entrusted with our customers' vital information, we will work with them at all times to ensure their security.
  3. Business partners and contract employees are also important supporting members of NTT Communications. We will therefore collectively strive to ensure our own security.

Click here for details on our Security Declaration and Information Protection Policy.

Information Security Management Structure

We have established uniform information security management benchmarks and policies in Japan and abroad, in keeping with the requirements of ISO 27001, the international standard for information security management systems. We regularly monitor compliance and take any necessary corrective action as part of ongoing governance efforts to improve our security management levels.
Specifically, the Chief Security Officer established the Security Management Office to:
(1) Formulate rules and standards and educate all employees
(2) Plan and apply company-wide information security policies
(3) Monitor compliance with information security regulations and take any necessary corrective action
(4) Ensure unified responses to information security incidents
Specially assigned officials in each business unit manage information security based on company-wide policies.
Major initiatives in fiscal 2009:
・ Work areas were separated according to the degree of importance of information kept in each area, with installation of surveillance cameras at entrances and exits, and installation of an antipassback system in areas housing important information to prevent successive use of one ID card to pass through any portal in the same direction.
・ In order to protect information systems from Internet security threats, we performed vulnerability assessments to reduce the amount of vulnerable information hidden in the system to “0”.
We will continue to monitor internal and external trends and implement all necessary information security enhancement measures.

Information Security Management Structure

Click here for details on our Security Declaration and Information Protection Policy. Close Up

Policies to Protect Customers' Information and Privacy

We comply with the Ministry of Internal Affairs and Communications' guidelines on managing personal information. We conduct regular audits to ensure that vendors handling such information adhere strictly to our security standards.

Third-Party Assessment and Certifications

Seven Group companies have received Information Security Management System certification from external organizations.
Nine have obtained Privacy Mark accreditation in recognition of their personal information safeguards.

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