Management and Management Policy and Corporate Governance
FDK Group will contribute to the further advancement of the electronics industry byOrganizational The
developing and providing electronic components and batteries, and will fulﬁll its social
responsibilities as a good corporate citizen.
Structure
The FDK Group s Management Policy
The FDK Group s mission is to help build an aﬄuent electronic society by developing and providing electronic components and batteries
that satisfy our customers. To this end, the FDK Group combines the strengths of the material, circuit, and high-density mounting technologies we have developed over the years with the commitment and dedication of all Group employees. As a result, we are able to oﬀer highquality and high-value products to our customers throughout the world and are recognized as a key device supplier of advanced electronicproducts. At the same time, we contribute to technological advancement and environmental conservation.
The FDK Group will strive to establish a stable business foundation through the appropriate response to changes in its business environment and by promoting production innovation initiatives for the more eﬃcient use of corporate resources. In addition, we will increase ourcorporate value even further by conducting fair business activities in compliance with relevant laws and regulations.

Corporate Governance
The FDK Group commits itself to strengthening its corporate governance to ensure prompt and appropriate decision-making as well as
highly transparent and eﬃcient management.

FDK s Basic Thinking about
Corporate Governance
The FDK Group believes that good corporate governance enhances
the soundness and transparency of a company and increases thevalue for its shareholders. We, therefore, revise our organizational
structure as necessary to strengthen our management and implement
necessary measures.
In addition, the Group commits itself to proactively disclosing its
corporate information to ensure fair and transparent business
management. For example, our ﬁnancial information is available
on our website.

Corporate Governance Structure
Shareholders' Meeting
Appointment and Dismissal

Board of Auditors

Corporate
Auditing
Department

Board of Directors
President & CEO

Management
Council
Corporate Vice
Presidents

09

Social & Environmental Report 2008

Accounting
Auditors

Corporate Governance Measures
The FDK Group separates management supervising functions andbusiness operations. Since June of 2002, a corporate vice president
system has been in place. Currently, the Group s Board of Directors
consists of six directors, including one external member. The small
size of the Board ensures prompt decision-making. The Board ofDirectors meets once each month to make important management
decisions and monitor business performance. The corporate vicepresident system involves ﬁve director-corporate vice presidents
and ﬁve corporate vice presidents.
The Management Council meets on a monthly basis to decide onmatters related to business operations. When discussing importantbusiness matters that require Board decisions, a Management
Council meeting is held, as a rule, one week before the relevant
Board meeting to facilitate the decision-making process.
The Board of Auditors consists of four corporate auditors, of which
three are external corporate auditors stipulated in Article 2,
Paragraph 16 of the Corporate Law. The corporate auditors areresponsible for ensuring compliance. To this end they not only
attend meetings of the Board of Directors, Management Counciland committees, but also monitor the directors performance ofduties by asking them about sales developments. The Board ofAuditors meets every three months as a rule, at which time
individual auditors report the results of their audits.
Accounting auditors, corporate auditors, and the Corporate Auditing Department maintain close communication by exchanging
information and opinions, as necessary, in order to allow foreﬀective and eﬃcient audits.

Internal Control System
The FDK Group initiated the Operational Reform Promotion
Project in May of 2007. With the launch of the project, we started
an initiative for the establishment of an internal control system,with particular emphasis on achieving compliance with the Financial Instruments and Exchange Law (J-SOX), which applies topublic companies from the business year starting on April 1, 2008
and after.

Compliance
We have established the FDK Corporate Code of Conduct to clarify our code of conduct. In accordance with these guidelines, we strive tofulﬁll our social responsibilities and comply with relevant laws and regulations.

FDK Corporate Code of Conduct

1.Customer Satisfaction●We supply safe and high quality products andservices for the needs of customers.

2.Environmental consciousness
We promote resource saving, energy saving andmake an ongoing eﬀort to protect the globalenvironment.
3.Contribute to Society●

We, as good corporate citizen, actively contributeto society.

●We will be fully aware of the culture and customsof every country in the world with the global
perspective and respect human rights.

4.Fair Trade
We have sensible course of business behavior,●

We communicate widely with society and discloseand conduct fair and free competition.
corporate information justly and timely.

During their respective training sessions, new employees and new
executives are provided with a brieﬁng on laws and regulations
closely related to their everyday operations, such as internal regulations, the Product Liability Law, the Antitrust Law and the Private
Information Protection Law. In addition, brieﬁng sessions are heldat individual sites to ensure that all employees have a good understanding of the laws and regulations that are of particular importance. In FY2007, domestic
sites were provided withbrieﬁngs about export control (for the strengtheningof security trade control),the Act against Delay inPayment of Subcontract
Proceeds, Etc. to Subcon
tractors, and the Authorized
Exporters Program.
Briefing Session on Export Control

Internal Reporting System
To prevent any violation of laws and regulations or of the company s internal rules and code of ethics and to recognize such
violations at an early stage, the FDK Group established the Internal Reporting System in April of 2006. Under this system, pointsof contact are available to receive reports and provide consultations. The contacts are designed to address questions about thecode of ethics, receive reports from and provide consultations forindividuals who cannot use the normal channels. The Internal
Reporter Protection Regulation is also in place to maintain thesecrecy of reporters and to protect them against any adverse
consequences that may result from their reports.

Internal Reporting System

5.Compliance with law●

We act with sense of ethnics and comply with theSite Report●●In-House Training

Environmental Activities Report●

To increase our employees awareness of compliance and corporateethics, the FDK Group provides a range of compliance-related
information via the intranet. Such information includes explanations about laws, regulations and internal rules, as well as cases ofviolation.

Social Activities Report

FDK Corporate Code of Conduct●Using the IntranetManagement andOrganizational Structure

Established in 2000 as a basic code of conduct for all employees,
the FDK Corporate Code of Conduct clearly states our obligationof compliance and basic policy for business activities with a viewto gaining the trust of consumers and business partners. The
Code of Conduct is easily accessible to all employees in order thatthey may increase their awareness and compliance. It can beviewed on the company s intranet as well as on the bulletin boards
located at all workplaces and on the portable calendar distributed
to all employees every year.
In July of 2008, the FDK Corporate Code of Conduct was revised
to provide FDK Group employees with even clearer action
criteria.

Compliance Education

All FDK Group Employees
Including loan employees, contract employees and dispatched workers

laws and social codes.
●We take a resolute attitude against antisocial
forces and have no relationship with such forces.

Reporting andConsultation

Feedback on a
Case-by-Case
Basis

Reporting andConsultation

External Contact
Law Firm

Feedback on a
Case-by-Case
BasisInternal Contact
Anonymous Reporting

Legal Division

Social & Environmental Report 2008

10Management Policy and Corporate GovernanceRisk Management
The FDK Group promotes initiatives for the prevention and minimization of risks. We are strengthening our crisis management system
not only for domestic sites, but throughout the entire Group, including overseas locations.

Risk Management System
The FDK Group identiﬁes possible business risks and assigns
diﬀerent departments to evaluate and analyze individual risks inorder to strengthen our risk management system.
FDK has an organization that is dedicated to minimizing the impactof serious risks, such as natural disasters and epidemics, on the Group.
The Risk Management Department, headed by the President,collects and analyzes relevant information and quickly formulates
responses.
The KOSAI PLANT, located in a region at risk of being damaged
in the event of a Tokai earthquake, is working out a business continuity plan (BCP) and working to ensure the proper implementationof business continuity management. The aim is to ensure the uninterrupted supply of needed products or early recovery in theevent of an emergency.
To safeguard our operations outside Japan, we gather travel information and on-the-spot information from the Overseas Security Information Center of the Foreign Aﬀairs Ministry and external risk
management consultants, and swiftly communicate such information to relevant overseas sites.

Response to Natural Disasters
In FY2007, the KOSAI PLANT, located in a region at risk of being
damaged in the event of a Tokai earthquake, introduced the Earthquake Early Warning System. In the event of an earthquake, P-waves
or initial small tremors are followed by S-waves or main tremors.
The system detects the P-waves and issues a warning based on
the estimated magnitude and focus of the earthquake. Damage canbe minimized by making most of the valuable short space of time
between the warning and the arrival of the main tremors.
In FY2006, the Employee Safety Conﬁrmation System, an inhouse development, was deployed to group companies in Japan. In
the event of massive disaster such as an earthquake or tsunami,
this system uses the e-mail and web functions of cell phones toconﬁrm the safety of employees.
In an emergency, the FDK Group will oﬀer support to the local
communities hit by the disaster. We are ready to provide drybatteries manufactured by the Group, dispatch the in-house ﬁreﬁghting brigade, and/or take part in rescue activities.

Protection of Intellectual Properties
In order to keep its unique leadership in the industry, the FDK Group focuses on creating and protecting intellectual properties. Startingin FY2007, our activities in this area consist of three pillars: ① strategic and eﬃcient patenting, ② improvement of skills of inventors andmembers of the Intellectual Property Division, and ③ innovation of the operations of the Intellectual Property Division.

Intellectual Property Control System

Respect to Patents Held by Others

The Intellectual Property Division, an organization within theTechnology R&D Group, works out plans for intellectual property
activities within the entire Group, while the Patent Promotion
Committee controls and manages them. Patent Promotion SubCommittees organized at the level of section, group, and project
hold patent promotion meetings to identify and discuss new areas
for inventions.

Infringement of a third party patent could cause serious losses. To
avoid this, the FDK Group implements appropriate measures, suchas reliable patent surveys, while developing new products. Inaddition, the Patent Promotion Committee meets regularly to discussand report patent infringements.

11Social & Environmental Report 2008

Coordinating
OfficePatent Promotion Committeeof Intellectual(DirectorProperty Division )Members of the Patent Promotion Committee(Directors)
Patent Promotion
Sub-Committee

Patent Promotion
Sub-Committee

・Section ・Section
・Group ・Group・Project ・Project・Section ・Section
・Group ・Group・Project ・ProjectIntellectual Property Division

For eﬃcient acquisition of blocking patents, the Intellectual Property Division works closely with the Technology R&D Group.
Investigating prior arts, making decisions on patentability, andreviewing written opinions against notiﬁcation of reasons forrefusal are all intended to ensure seamless patent applications. To
develop strong patents, we also focus on human resource development programs such as in-house education.

Chairman of the Patent Promotion Committee(Director Responsible for Patent Matters)
Technology R&D GroupIntellectual Property Strategy

Intellectual Property Control System