Nikon 2003 Annual Report Download - page 8

sales฀and฀customer฀service฀operations฀in฀China฀in฀each฀of฀our฀
business฀segments.฀Our฀goal฀is฀to฀expand฀local฀sales฀in฀China฀
and฀raise฀our฀market฀presence฀there.
Growth฀of฀New฀Businesses
Alongside฀structural฀reforms฀and฀cost-reduction฀initiatives,฀
we฀are฀also฀proactively฀seeking฀to฀develop฀new฀businesses฀
that฀will฀develop฀into฀our฀next฀generation฀of฀earnings-gen-
erators.฀All฀our฀business฀development฀programs฀draw฀on฀
Nikon฀technology฀and฀expertise฀where฀we฀already฀lead,฀and฀
they฀also฀focus฀on฀areas฀of฀high฀growth฀potential.฀Our฀great-
est฀strength,฀which฀we฀have฀cultivated฀over฀many฀years,฀is฀in฀
optics.฀We฀will฀apply฀this฀strength฀to฀the฀field฀of฀nanotech-
nology,฀an฀area฀with฀broad฀potential฀across฀many฀industries฀
and฀one฀where฀we฀believe฀we฀can฀add฀fundamental฀value.฀
Optics฀and฀nanotechnology฀will฀be฀keywords฀as฀we฀continue฀
to฀develop฀our฀own฀approaches฀to฀growth฀areas.
Another฀new฀business฀with฀major฀promise฀is฀that฀of฀CMP฀
(Chemical฀Mechanical฀Polishing)฀system,฀which฀is฀used฀to฀
polish฀the฀multiple฀layers฀of฀conductors฀and฀dielectric฀layers฀
and฀make฀them฀uniformly฀even.฀In฀the฀year฀ended฀March฀
2003,฀we฀established฀a฀division฀to฀plan฀and฀develop฀the฀full-
scale฀launch฀of฀our฀CMP฀system฀business.฀Other฀potentially฀
high-marginly฀profitable฀businesses฀where฀demand฀is฀pro-
jected฀to฀rise฀in฀the฀future฀that฀are฀currently฀in฀the฀planning฀
and฀R&D฀stages฀include฀such฀optical฀component฀businesses฀
as฀optical฀engines฀for฀liquid- crystal฀projectors,฀micro฀electro฀
mechanical฀systems฀(MEMS)฀and฀various฀areas฀of฀bioscience.
Strengthening฀Corporate฀Governance
Building฀on฀the฀base฀provided฀by฀our฀in-house฀company฀
and฀executive฀officer฀systems,฀we฀are฀seeking฀to฀improve฀
our฀business฀management฀systems.฀We฀are฀still฀considering฀
whether฀to฀shift฀to฀a฀system฀of฀advisory฀board฀committees,฀
which฀has฀been฀designed฀as฀an฀alternative฀to฀the฀corporate฀
auditor฀system฀under฀revisions฀to฀the฀Commercial฀Code฀of฀
Japan.฀For฀the฀time฀being,฀we฀plan฀to฀keep฀the฀auditor฀sys-
tem฀and฀supplement฀it฀with฀various฀reforms฀to฀improve฀cor-
porate฀governance฀structures฀related฀to฀executive฀compensa-
tion฀issues.฀These฀moves฀include฀the฀creation฀of฀an฀Executive฀
Compensation฀Committee,฀the฀adoption฀of฀stock฀options,฀
and฀revisions฀to฀the฀remuneration฀system฀for฀directors฀and฀
executive฀officers.
We฀also฀plan฀to฀implement฀reforms฀to฀our฀personnel฀
systems฀to฀ensure฀that฀we฀remain฀globally฀competitive฀in฀the฀
current฀straitened฀business฀environment.฀We฀are฀making฀fun-
damental฀changes฀to฀the฀system฀of฀age-based฀wage฀senior-
ity฀by฀shifting฀to฀a฀performance-based฀remuneration฀system฀
for฀all฀Nikon฀Group฀employees.฀We฀are฀also฀introducing฀a฀
bonus฀system฀that฀is฀linked฀to฀the฀results฀of฀each฀business฀
unit.฀This฀major฀shift฀toward฀a฀pay-for-performance฀philoso-
phy฀will฀ensure฀that฀we฀make฀the฀most฀of฀limited฀resources,฀
thereby฀contributing฀to฀enhanced฀performance฀and฀output.
Raising฀the฀Value฀Added฀by฀the฀Nikon฀Group
Modern฀society฀will฀simply฀not฀tolerate฀corporate฀behavior฀
that฀ignores฀the฀environment.฀We฀have฀made฀consistent฀and฀
significant฀efforts฀to฀date฀to฀ensure฀that฀Nikon฀products฀and฀
business฀activities฀are฀eco-conscious.฀I฀think฀that฀individual฀
awareness฀of฀environmental฀issues฀among฀Nikon฀Group฀
employees฀is฀remarkably฀high.฀As฀an฀example฀of฀this,฀in฀the฀
year฀ended฀March฀2003,฀we฀achieved฀zero- emissions฀status฀
at฀all฀Nikon’s฀plants฀in฀Japan฀a฀full฀year฀ahead฀of฀schedule.฀
We฀intend฀to฀reinforce฀our฀various฀efforts฀to฀be฀environ-
ment-friendly฀and฀to฀orient฀our฀business฀systems฀from฀an฀
environmental฀management฀perspective.
Separately,฀we฀are฀also฀working฀to฀solidify฀the฀trust฀
placed฀in฀us฀by฀society฀by฀ensuring฀that฀our฀actions฀meet฀
the฀highest฀ethical฀standards.฀With฀the฀establishment฀of฀the฀
Compliance฀Section,฀our฀corporate฀ethics฀committee฀is฀work-
ing฀to฀ensure฀that฀the฀company฀and฀all฀employees฀uphold฀
the฀highest฀ethical฀standards,฀in฀terms฀of฀legal฀and฀regula-
tory฀compliance,฀transparency,฀and฀corporate฀fairness฀and฀
decency.
In฀closing,฀I฀want฀to฀say฀that฀our฀challenge฀is฀to฀create฀
a฀corporate฀culture฀that฀meets฀the฀challenges฀of฀a฀new฀era฀
of฀business.฀While฀we฀need฀to฀preserve฀good฀points฀such฀as฀
some฀of฀the฀more฀“conservative”฀aspects฀of฀this฀culture,฀I฀
believe฀we฀also฀need฀to฀inject฀the฀company฀with฀a฀dose฀of฀
youthful฀drive,฀intelligence฀and฀creativity.฀This฀year,฀we฀rede-
signed฀our฀brand฀symbol฀and฀redefined฀the฀value-adding฀ele-
ments฀that฀characterize฀the฀Nikon฀brand.฀We฀express฀these฀
in฀terms฀of฀three฀concepts:฀innovative฀technology;฀the฀desire฀
to฀accept฀the฀challenges฀posed฀by฀the฀future;฀and฀“a฀sense฀
of฀the฀times.”฀By฀expanding฀businesses฀in฀line฀with฀these฀
notions,฀I฀sincerely฀believe฀that฀we฀can฀contribute฀to฀society฀
and฀grow฀with฀it฀as฀a฀company฀that฀creates฀true฀value.
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