1. Basic Philosophy
The Furukawa Electric Group strives to enhance its performance by promptly responding to changes in the business environment and the market through efficient management based on prompt decision making. At the same time, we ensure sound management by developing and establishing an internal control system. We uphold the basic policy of seeking to expand and develop our operations on a sustainable basis and to raise corporate value through these efforts.
We not only pursue complete compliance across the Group but also provide society with excellent products and technologies that enrich people's lives while maintaining harmony with the earth's environment. We fulfill our corporate social responsibility to develop solid relationships with all stakeholders, including shareholders, business partners, local communities and employees and to remain a company that is valued by society.
2. Management Organization
Furukawa Electric has adopted the organizational structure of a Company with Auditors and emphasizes the functions of a system of Auditors and Board of Auditors that is independent from the Board of Directors. We are also taking various steps in managing the Board of Directors to strengthen the monitoring and supervising of operational execution and to accelerate decision making.
Board of Directors
To ensure the Board of Directors effectively carries out the functions of monitoring and supervising operational execution, the cornerstone of corporate governance, we have appointed two Outside Directors out of the total of eleven directors and provided a system of support for Outside Directors and Outside Auditors so that they can attend their respective meetings with a full understanding of the agenda.
Furthermore, while paying due consideration to the statements of Outside Directors and Outside Auditors, special meetings of the Board of Directors are held as required in addition to the regular bimonthly meetings to enable faster decision making on important operational execution.
Board of Auditors
The Board of Auditors consists of four Auditors including two Outside Auditors. Audits are carried out according to the audit policies and plans determined by the Board of Directors and audit results are regularly reported to the President.
In addition, CSR Division was set up in February 2007 to undertake internal audits. The Office monitors and examines the control and operation system for all business activities as well as the state of operational execution from the viewpoints of legal compliance and efficiency. Based on the results of these activities, the Board of Auditors provides the company and Group companies with information and advice or recommendations for improvement and rationalization.
Auditors, accounting auditors and the CSR Division strive to enhance auditing functions through the active exchange of information/opinions and cooperation.
Corporate governance organization chart
3. Reinforcing Internal Controls
Furukawa Electric establishes, develops and operates its internal controls based on the following five principles:
1)Efficient Execution of Responsibilities
After setting concrete management goals for the Medium-Term Management Plan and over the course of the fiscal year, the President, Company Presidents and Chief Officers execute their responsibilities toward achieving these goals and regularly report their progress to the Board of Directors.
2)Compliance System
Upholding the basic philosophy of compliance with ethics and prevailing laws as laid out in the Furukawa Electric Group Action Guidelines, we promote compliance activities including in-house education and efforts to prevent legal violations through our Compliance Committee, which is chaired by the President. We also have an Internal Reporting System for the early detection and correction of compliance violations.
3)Risk Management System
We have established a system in which the Risk Management Committee, composed of the President, Company Presidents and Chief Officers, conducts an overall review of the risks associated with the business operations of the Furukawa Electric Group and determines effective methods for evaluating and managing these risks.
4)Information Management System
We appropriately manage and store records and documents related to important decisions, in compliance with prevailing laws and internal rules. With respect to other information related to our operations, the Information Security Committee establishes uniform standards and operates an information management system.
5)Group Company Management
Based on rules for controlling Group management, we have assigned the supervision of Group Companies to Company Presidents and Chief Officers, who seek to understand the status of management at each company and provide appropriate guidance.
4. Takeover Defense Measures
Following the approval by the 188th ordinary general meeting of shareholders held on June 29, 2010, Furukawa Electric Co., Ltd. (the "Company") has renewed its countermeasures (takeover defense) against large-scale purchases of the Company’s shares. The term of this takeover defense will expire in three years at the conclusion of the ordinary general meeting of shareholders to be held in June 2013.
These measures were introduced under the "Basic policy concerning persons who control the financial and operational policies of the Company" (Note 1) adapted at the Board of Directors meeting held on March 9, 2007, to prevent an inappropriate party from controlling the company.
To manage the takeover defense, the Company has set out certain rules (the Large-Scale Purchase Rules (Note 1)) that stipulate the provision of information and other related matters when large-scale purchases are conducted. These rules are intended to provide the necessary time and information for shareholders to make an informed decision before negotiating with the purchaser when large-scale purchases of the company's shares are conducted.
(note1)For further details, please refer to the: 
"Notice of Renewal of Countermeasure (Takeover Defense) Against Large-Scale Purchases of the Company’s Shares,"(PDF 154KB)the news release published on the Company’s website on April 8, 2010.
If Adobe Reader is not installed on your computer, use this link to download the software.