2. BUSINESS OPERATION POLICY |
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(1) Basic Business Operation Policy In a business environment marked by rapid and dramatic changes in market structure, Nippon Telegraph and Telephone Corporation (NTT) and its affiliates (NTT Group or the Group) are actively engaged in the reform of the Group's business structure. Specific initiatives include: (1) active development of fiber-optic and other services as appropriate for the ubiquitous broadband era; (2) creation of new basic technologies utilizing R&D and the steady introduction of the fruits of R&D efforts to business operations; (3) promoting the international development of mobile multi-media communications businesses and IP network businesses; (4) continuous advance of overall Group structural reform through comprehensive management rationalization and expansion into new business domains; and (5) full utilization of the advantages of the holding company system to achieve the above objectives. (2) Basic Principle concerning Profit Allocation NTT believes it is critically important to reinforce its financial standing and to serve the best interests of its shareholders over the long run. As such, NTT has adopted as its basic principle the payment of appropriate dividends while acting to secure necessary levels of internal reserves. Such internal reserves will be utilized to reinforce NTT's financial standing. (3) Basic Principle and Policies concerning Reduction of Minimum Trading Lots for Shares The reduction of minimum trading lots for shares is believed to expand the scope of investors. NTT will decide on this matter while taking into account such factors as shareholder composition, liquidity, and the cost of such measures. (4) Basic Approach to Corporate Governance and Status of Corporate Governance Policy Implementation NTT recognizes corporate governance as an important management issue in our practical implementation of shareholder-oriented management. We are striving to enhance our corporate governance, centered around our Board of Directors and Board of Auditors system. NTT has formed a Board of Directors with 12 members, including two outside directors. In principle, this Board of Directors meets once per month to make decisions and report on important management issues. Our Board of Auditors is comprised of four members, including two outside members. Members of the Board of Auditors attend Board of Directors and other important management meetings, implement appropriate auditing of NTT's works, and have a full-time organization and staff for these purposes. Moreover, given the huge influence of the NTT Group on society at large, NTT recognizes that we must not only strictly observe all laws and regulations, but also conduct our business with the highest sense of ethics. Accordingly we have drafted an "NTT Group Corporate Ethics Charter," arranged a reporting system and consultation window to address Group companies' ethics, and are otherwise continuously engaged in expanding and strengthening educational activities and internal checks to firmly establish and vigorously advance NTT Group's ethical practices. NTT is also working to increase our corporate transparency by releasing information, as appropriate, on an ongoing basis. NTT will continue to improve and expand the content of the materials released to the public and the procedures used for these releases, giving due consideration to both Japanese and foreign laws. |
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