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Message from the President

We are working as one
to fulfill our corporate social
responsibility and contribute to
the sustainable growth of
society as a "Value Partner."

September 2016
President and Chief Executive Officer,
Representative Member of the Board

Hiroo Unoura

We are working as one to fulfill our corporate social responsibility and contribute to the sustainable growth of society as a  " Value Partner. "

Revising the NTT Group CSR Charter

Around the world, there are increasingly active developments regarding the realization of a sustainable society, such as the UN General Assembly’s adoption of sustainable development goals (SDGs) in September 2015. To date, the NTT Group has contributed to the resolution of social issues through the use of ICT, and I believe that this role will be ever more important for NTT in the future. Meanwhile, the NTT Group has been expanding and shifting the domains of its business activities toward global businesses and B2B2X, and to address these changes we revised part of the NTT Group CSR Charter in May 2016. We will continue to do our utmost to contribute to the creation of a prosperous and sustainable society with vibrant communication by upholding the NTT Group CSR Charter as our basic guidelines. As a “Value Partner” for customers, we will work to further expand B2B2X businesses and collaboration. In this way, we will strive to contribute to the resolution of social issues and to increase corporate value.

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From “Competition” to “Collaboration”

In the past, telecommunications operators provided infrastructure and services in a single package. Currently, a diverse range of players are providing services that utilize telecommunications, including over-the-top (OTT) enterprises that provide SNS and other upper-layer services. The market is reaching the point at which telecommunications operators can no longer provide all services on their own. In response to these changes in the market environment, the NTT Group has targeted sustained growth by changing its business model from “competition” to “collaboration.” On that basis, we are taking on the challenge of opening up new markets and creating new services.

In advancing collaboration, the Tokyo 2020 Olympic and Paralympic Games* will present business opportunities in a range of areas in the sports business field. Such opportunities will include the so-called smartification of stadiums, video services that provide new forms of entertainment, e-commerce offered in cooperation with local regions, and Big Data analysis and strategy formulation that leverage the Internet of Things (IoT). Overseas, these businesses have already started to expand markets, and we believe that the time is right to expand these businesses in Japan as well. We have already begun the smartification of the NACK5 Stadium Omiya, the home stadium of the Omiya Ardija in the J1 League. In accordance with a basic agreement with the J.League concluded in July 2016, we will support the J.League’s smartification initiatives at all stadiums in Japan.

In addition, I believe that the NTT Group can also make a significant contribution to the vitalization of local economies initiatives that are being aggressively advanced by the Japanese government. Our focus on these initiatives will create business models that will resolve social issues for the next generation. Municipalities face a range of problems, such as declining and aging populations, sluggish regional economies, and deteriorating infrastructure. Targeting the resolution of these social problems, NTT has concluded comprehensive partnership agreements with Fukuoka City and Sapporo City. We are considering ways to achieve the vitalization of local economies by utilizing the NTT Group’s resources and knowledge in such areas as telecommunications and information systems and regional development. These initiatives will extend to such fields as tourism, disaster damage prevention, and transportation.

In this way, we will work with municipalities and partners in a range of industries to build new business models and create high-value-added services that will revitalize the Japanese economy. Our domestic business results are posting a favorable recovery, and our global business is also recording steady expansion. I believe that now is the time for the NTT Group to take decisive steps targeting sustained growth.

* NTT, NTT East, NTT West, NTT Communications, and NTT DOCOMO are Gold Partners (telecommunications services) for the Tokyo 2020 Olympic and Paralympic Games.

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Realizing Sustained Growth through the Resolution of Social Issues

In regard to the vitalization of local economies initiatives discussed above, I will discuss in more detail the types of social issues that the NTT Group will strive to resolve and the businesses that the Group will develop. In particular, to achieve the vitalization of local economies, I believe that it will be necessary to advance the utilization of Japanese-style IoT, Big Data, and AI in a way that shares data throughout society. This undertaking will involve the use of Big Data from IoT initiatives to collect information from a variety of fields, such as transportation, medical services, the environment, agriculture, manufacturing, and education. This data will be used as a public resource to resolve a range of social issues. For example, by combining transportation and medical services data, it will be possible to shorten the time required to convey patients in emergency situations. Also, by combining environmental (energy) and manufacturing data, it might be possible to control electricity consumption during peak periods. In Europe and the United States, progress is being made with initiatives utilizing IoT and Big Data, known as Industry 4.0 and the Industrial Internet. Under these European and U.S. style initiatives, the Big Data is kept within companies or industries. However, in Japan, if Big Data is used by society as a whole, it will be possible to fully leverage the potential of Big Data and to link it to the development of regional-style businesses.

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Governance that Supports Sustained Gains in Corporate Value

I believe that the effective functioning of corporate governance is indispensable for sustained gains in corporate value. Accordingly, NTT is working to bolster the effective functioning of corporate governance based on its fundamental policies of ensuring sound management, conducting appropriate decision-making and business activities, clarifying accountability, and maintaining thorough compliance. I will introduce initiatives that we have implemented to address several points.

From the perspective of securing sound management, in order to strengthen functions for appropriately supervising business execution, NTT has appointed two outside independent Members of the Board and established the Audit & Supervisory Board, of which outside independent Audit & Supervisory Board Members make up a majority. In addition, in 2005 NTT voluntarily established the Appointment and Compensation Committee, which consists of two outside independent Members of the Board and two internal Members of the Board, to further increase the objectivity and transparency of decisions relating to appointment and compensation of corporate officers. Moreover, outside independent Members of the Board, Representative Members of the Board, and Audit & Supervisory Board Members meet to exchange opinions. At these meetings, discussions on a wide range of themes are held to enhance the functioning of corporate governance, such as the effectiveness of the Board of Directors and the state of Group management.

The Company believes that accountability is one of its important responsibilities. To date, NTT has implemented management with an emphasis on communication with the markets. I strive to meet with investors as often as possible, and we held NTT IR Day with the participation of Members of the Board as well as top executives from the operating companies. In these ways, executives are proactively exchanging opinions with investors and working to deepen investors’ understanding. In addition, we strive to reflect the opinions of investors in our management.

Furthermore, a rigorous approach to compliance is also indispensable in achieving sustained gains in corporate value. The NTT Group recognizes that its most important mission is to conduct business in compliance with laws and regulations and in accordance with high ethical standards. Accordingly, I continually ask the presidents of Group companies to take a rigorous approach to compliance, and the presidents of Group companies work to promote compliance within their own organizations. The NTT Group Corporate Ethics Charter sets forth conduct guidelines for all corporate officers and employees. By implementing Groupwide initiatives to strengthen compliance, we are creating a work environment in which there is zero tolerance f or wrongdoing.

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Look Forward to Sustained Increases in Corporate Value for the NTT Group

ICT continues to advance on a daily basis. The Internet has changed people’s lifestyles, and cloud services have substantially increased companies’ productivity. In the same way, IoT, Big Data, and AI technologies will likely foster further significant changes around the world. The NTT Group is aware of its role as an enterprise with responsibility for ICT, and we will work to create new businesses and services and to achieve sustained gains in corporate value through collaboration with a variety of partners around the world as the “Value Partner” that customers continue to select.

I would like to ask for your ongoing support of the NTT Group in the years ahead.

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