NEC 2007 Annual Report Download - page 36

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The main points of the basic policy are as follows:
(i) In order to ensure that directors and employees perform their duties in compliance with laws, regulations, and
the Company’s Articles of Incorporation, NEC shall ensure a clear understanding of the NEC Group Charter of
Corporate Behavior and the NEC Group Code of Conduct, both of which were formulated to establish busi-
ness ethics standards for the NEC group and to ensure compliance with laws and regulations, the Articles of
Incorporation and internal rules. If any material violation of laws, the Articles of Incorporation or internal rules is
found, NEC shall investigate the cause of such violation and formulate and implement preventive measures. In
addition, the Company shall encourage the use of the NEC Helpline, a compliance hotline.
(ii) NEC shall properly store and manage information in accordance with laws, regulations and internal rules.
(iii) NEC shall implement risk management systems efficiently and comprehensively under a consistent, Company-
wide policy in accordance with internal rules. Operating divisions shall properly implement risk management
systems related to their operations and corporate staff divisions shall support such operating divisions’ activities.
The Company shall fully deliberate matters of particular importance from a risk management perspective as
part of its strategy to control important management risks. The internal audit division shall conduct audits of
the enterprise risk management system and the status of risk management.
(iv) In order to ensure that Directors perform their duties efficiently, the Board of Directors shall delegate substan-
tial authority to corporate officers and promote more timely decision making and flexible performance of duties.
The corporate officers shall, under the supervision of the Board of Directors, conduct business efficiently in
accordance with medium-term corporate management goals and budgets established by the Board of Directors.
(v) In order to ensure that the NEC group conducts operations appropriately, NEC shall send directors and corpo-
rate auditors to subsidiaries; share information routinely to conduct operations based on the NEC Group Char-
ter of Corporate Behavior and the NEC Group Code of Conduct; and give instructions and assistance to
subsidiaries with respect to the establishment of systems for ensuring compliance with laws, regulations and
fairness of business operations. The internal audit division shall conduct audits of subsidiaries in cooperation
with their internal audit divisions to ensure appropriate operations.
(vi) NEC shall assign full-time employees to assist corporate auditors in performing their duties. The corporate
auditors shall approve matters concerning these employees, including performance evaluations, personnel
changes and disciplinary action.
(vii) Directors and employees shall report to the corporate auditors on the status of the performance of their duties
and other matters.
(viii) In order to ensure that audits are performed effectively, the corporate auditors shall exchange information and
consult with each other on the status of audits. Furthermore, corporate auditors shall periodically receive
reports on financial audits from the independent auditors and exchange opinions with them.
Information Disclosure Structure
NEC recognizes the importance of providing timely, proper and fair disclosure to obtain a fair evaluation of its
corporate value from the capital markets. Accordingly, NEC regularly strives to ensure that internal divisions
and subsidiaries have a clear understanding of timely disclosure and other rules issued by stock exchanges,
while establishing clear lines of communication and related systems between relevant internal Head Office
divisions and subsidiaries.
Furthermore, NEC holds quarterly investors’ meetings where members of senior management announce
and explain financial results. Other actions include holding meetings to explain management strategies,
improving disclosure on NEC’s website (including simultaneous disclosures both in Japanese and English),
and enhancing investor relations activities on a global scale.
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