Nikon 2011 Annual Report Download - page 31

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29Annual Report 2011Nikon Corporation
fierce competition in the market. However, in the event of
further employment mobility for whatever reason, there is
a possibility that these key personnel will leave, and their
knowledge and expertise will flow outside the Company.
To minimize the impact of such a loss of knowledge and
expertise, the Company encourages the passing along,
standardization and sharing of proprietary technologies
and skills internally. In overseas locations as well, retaining
exceptional local personnel is important, but there is a
strong possibility of personnel loss in regions with high
labor mobility.
In the Nikon Group’s business technical innovation is
rapid, and long-term education and training is essential to
personnel development. Difficulties in replacing lost key
personnel could have a negative impact on the future
growth, earnings and financial position of the Nikon Group.
11. Information Leaks
The Nikon Group possesses technical data and other
important information, corporate data on its trading partners
and personal information on many customers and other
related persons. The Company strictly limits external access
to this information and has raised the security level for data
storage. Internal regulations on the handling of information
have been established, and the Company conducts employee
training. However, a leak of technical data or other confidential
corporate information could be detrimental to the corporate
value of the Group. Further, should there be a leak of
corporate data or personal information, not only would it be
detrimental to the trust in the Group, but there is a possibility
that trading partners, customers, employees or other related
parties affected by the leak would demand damages. In
such circumstances it would be necessary to take various
actions to regain trust, provide compensation of affected
companies or individuals, and implement measures to
prevent a reoccurrence, which would require considerable
expenditures. This could have a negative impact on the
earnings and financial position of the Nikon Group.
12. Defects in Products or Services
The Nikon Group has established advanced quality assurance
systems at its Group companies in Japan and overseas,
as well as at the companies with which it contracts for
production, and provides its customers with products and
services with sophisticated functions and high reliability.
However, should customers incur loss as a result of a
defect in a product or service, the Company could sustain
considerable costs for repair, liability indemnity, recalls or
the disposal of products or other items. The loss of trust in
the Nikon brand could also lead to diminishment of customer
enthusiasm to purchase the Group’s products and services.
This could have a negative impact on the earnings and
financial position of the Nikon Group.
Financial Section