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CSR Report 2011

CSR Management

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

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, and is chaired by the president. In principle, the Board meets once a month to make decisions and report on important management issues in compliance with laws and regulations, the Articles of Incorporation, and the Board of Directors’ rules.
We appoint optimal 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, from a standpoint independent of business execution, and appointment is not based on nationality or gender.
The Board of Corporate Auditors consists of three external auditors. The auditors hold meetings of the Board of Corporate Auditors and audit the execution of directors’ duties, while attending important meetings such as the Board of Directors’ meetings. There is a dedicated organization and staff to facilitate efficient audit operations. The Board of Corporate Auditors closely cooperates with accounting firms and other parties through such means as periodically sharing information on audit plans and results, 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 49 times in fiscal 2010. The Market-In Promotions Council gathered 49 times during the year to deliberate and report on important individual matters. We also established committees, chaired by the senior executive vice president, to address management issues that require specialized expertise. These committees comprise the CSR Committee, Compliance Committee, Business Risk Management Committee, and Human Rights Awareness Committee. These councils and committees report regularly to the Board of Directors, which deliberates on and oversees their activities.

Internal Control System

In accordance with the new Companies Act enforced in May 2006, a basic policy related to the creation of a system of internal controls for the entire NTT Group has been formulated, and we are implementing these policies. Concurrently, as a member of the NTT Communications Group, the Board of Directors has resolved to implement all measures necessary to developing the system of internal controls. We are also working to upgrade and expand internal controls over financial reporting in line with the requirements of the Financial Instruments and Exchange Act, which was enacted in June 2006.

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 assess the effectiveness of the above system of internal controls, NTT Communications has established a Legal and Internal Audit Department. As a monitoring organization, this Department is responsible for regular audits and special audits of high-risk areas common to the NTT Group in keeping with the standardized auditing criteria of Nippon Telegraph and Telephone Corporation. Necessary improvements are made following assessments of the effectiveness of internal controls.
  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 development 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 internal audits of our internal organizations and group companies, primarily through the Legal and Internal Audit Department. In fiscal 2011, we worked to shift from previous audits focused on compliance with various rules and other regulations, to audits that address common management issues and individual risks arising in the course of business execution.
Through these audits, we are working to improve internal controls throughout the entire NTT Communications Group by striving to reduce risk at individual organizations and Group companies, while making business improvement proposals.

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 meets twice a year. In fiscal 2010, representatives of 25 Group companies attended these meetings. The Committee issues CSR and activity reports, and considers and implements measures aimed at promoting CSR activities.
The Committee will continue working to foster the NTT Communications Group's CSR initiatives and awareness by holding discussions on a regular basis.

Promoting CSR

Our Business Principle (OBP)

Our Business Principle (OBP)

The NTT Communications Group has formulated Our Business Principle (OBP) as a guideline for all of its business activities. As such, this guideline is shared by all employees and partner employees. OBP is a handbook that clearly states the basic principles that employees can turn to whenever they are uncertain about what constitutes correct judgment or behavior in the context of their relationships with various stakeholders. OBP thereby helps employees to remember their beginner’s spirit, reflect on personal conduct and take the correct actions.

We will continue to position OBP as the fundamental guideline for CSR activities as we promote these activities going forward.

Click here for details on Our Business Principles.

 

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.
In fiscal 2010, we worked to enhance concerted Group-wide activities by bringing CSR leaders from our 13 primary Group companies and individual organizations together mainly to discuss CSR Committee proceedings and share information about each company’s CSR activities.

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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 in fiscal 2002 and have established lines of responsibility by appointing a director, department, and officials in all business units to oversee corporate ethics. In addition, we provide annual compliance training to all employees, including those at Group companies, and other personnel. Compliance training led by lawyers is provided to management. We also actively conduct internal awareness-raising programs, including a call for compliance slogans, for which around 7,000 entries were received in fiscal 2010.
Looking ahead, based on the NTT Group Corporate Ethics Charter, we will continue to take 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.

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.
In fiscal 2010, we redesigned our risk management system. We identified 25 material risk categories and listed them under our Risk Definition Report. We adopted a system of monitoring the management status of material risks through audits, while separating risk-related operations and making them more efficient.
Furthermore, we created a system to collect accurate risk information and ensure 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.
We will continue to strengthen our systems to eliminate or minimize business risks for the entire Group.

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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/IEC 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, we established the Security Management Office under the Chief Security Officer 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.
Major initiatives in fiscal 2010:

  • In order to protect information systems from Internet security threats, we performed vulnerability assessments and extended them to Group companies on an ongoing basis.
  • We assisted overseas subsidiaries with the introduction of security management measures.
    Through these and other measures, we focused on enhancing Group-wide governance efforts to strengthen security management levels.

We will continue to monitor internal and external trends and implement all necessary information security enhancement measures.

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 with respect to handling customer information.

Third-Party Assessment and Certifications

As of March 2011, 15 Group companies, comprising 7 Group companies in Japan and 8 overseas subsidiaries, have received Information Security Management System (ISMS) certification from external organizations.
Nine companies that primarily handle personal information entrusted by customers have obtained Privacy Mark accreditation in recognition of their personal information safeguards.