NEC 2008 Annual Report Download - page 35

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system and level of compensation for directors and corporate officers from an objective perspective. The
Compensation Committee reports the results of its deliberations to the Board of Directors.
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NEC has adopted the corporate auditor system and established the Board of Corporate Auditors pursuant to
the Company Law of Japan. Five Corporate Auditors, three of whom are Outside Corporate Auditors, audit
the Directors’ performance of duties. Furthermore, the Board of Corporate Auditors decides on audit policies
and other matters, and receives status reports on audits from each Corporate Auditor and on other matters.
The Corporate Auditors are stepping up cooperation with the Accounting Auditors, such as by receiving brief-
ings on financial audits covering status reports on their audits and audit plans, and exchanging opinions on
their audits.
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NEC has established the Corporate Auditing Bureau as an internal auditing division reporting directly to
the president of NEC. This bureau mainly consists of corporate staff members with expertise in internal
auditing. The Corporate Auditing Bureau performs audits of the NEC group in cooperation with the internal
auditing sections of NEC subsidiaries to ensure legal, appropriate and efficient execution of business
activities, and identifies issues and proposes improvements. The Corporate Auditing Bureau is taking steps
to strengthen cooperation with the Corporate Auditors. These steps include reporting and exchanging
opinions on audit results regularly or as necessary with the Corporate Auditors, and reporting on the status
of “NEC Helpline,” a compliance hotline for employees and contractors to discuss or report issues con-
cerning possible breaches of corporate ethics or compliance.
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In fiscal 2008, the independent audit of NEC was performed by Ernst & Young ShinNihon.
In light of the expiry of the term of office of the above Accounting Auditors upon the close of the Ordinary
General Meeting of Shareholders held in June 2008, and its number of consecutive years in office as Account-
ing Auditors, KPMG AZSA & Co. was newly elected as NEC’s Accounting Auditors at this meeting.
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NEC’s Board of Directors has formulated a “Basic Policy on Implementation of Internal Control Systems”
for ensuring the properness of corporate business operations.
The main points of this basic policy are as follows:
NEC shall endeavor to establish and operate its internal control systems more effectively, through con-
tinuous evaluation of the implementation of the internal control systems under this policy as well as taking
measures necessary for its improvement, and conducting consistent reviews of this basic policy in response
to changes in the business environment.
(1) In order to ensure that Directors and employees perform their duties in compliance with laws, regula-
tions, and the Company’s Articles of Incorporation, Directors and corporate officers shall take the lead
in practicing and striving to make known the “NEC Group Charter of Corporate Behavior” and the “NEC
Group Code of Conduct,” both of which were adopted to establish business 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, NEC shall encourage the use of the NEC Helpline, a compliance hotline.