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, 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 businesses ; and (5) full utilization of the advantages of the holding company structure 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 stable dividends with due regard to overall operating trend and financial situations while acting to secure necessary levels of internal reserves. While utilizing its internal reserves for strengthening its financial standing, NTT intends to repurchase its own shares in order to implement a capital policy that takes into account supply and demand conditions of NTT's shares. (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 its practical implementation of shareholder-oriented management. NTT is striving to enhance its corporate governance, centered around its 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. NTT's Board of Auditors is comprised of five members, including two outside members (the number of members was increased from four to five at the June 2003 general shareholders meeting). 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 Japanese society at large, NTT recognizes that it must not only strictly observe all laws and regulations, but also conduct its business with the highest sense of ethics. Accordingly, NTT has drafted an "NTT Group Corporate Ethics Charter," instituted a reporting and consultation system to address Group companies' ethics, and is otherwise continuously engaged in expanding and strengthening educational activities and internal checks to firmly establish and vigorously advance the NTT Group's ethical practices. NTT has established a Disclosure Committee to enhance its corporate transparency and to improve the content of the materials released to the public. |
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