Messages from Management

Strengthening compliance andenhancing corporate value
Masao YoshidaPresident

A firm commitment to compliance
The Furukawa Electric Group celebrated its 125thanniversary this year. Our philosophy of living up to theexpectation and trust invested in us by society, with fairness
and integrity, as declared in the Furukawa Electric Group
Philosophy formulated in August 2007, has represented
the backbone of the Group for well over a century. Yet
despite this legacy, a regrettable series of complianceviolations occurred over the course of the previous fiscalyear, including the cancellation of our JIS mark certification
for wrought copper products at Osaka Works, a ceaseand-desist order for violating the Antimonopoly Act inrelation to cross-linked polyethylene foam, and an onsite
inspection in June this year by the Fair Trade Commissionin connection with optical fiber cables. I would like totake this opportunity to once again express our sincere
apologies for having caused significant distress andconcern among all our stakeholders, including shareholders
and customers. We intend to implement a group-wide effort
to strengthen compliance and ensure that such incidents
will never be repeated. On July 29, we set up a third-party
investigation committee on the antimonopoly act violation
issue, primarily comprising outside experts with a fair andneutral perspective to thoroughly determine the causes andconsider measures for preventing any recurrence. We areresolved to use this crisis as an opportunity to eradicate
antimonopoly act violations and reform our corporate culture
and constitution by breaking away from past businesspractices. We intend to effect a complete transformation—arebirth of Furukawa Electric as an enterprise that thrives onthe unique added value of our products and services.

Capitalizing on the power of materials
to differentiate products and strengthen
manufacturing capabilities
As a result of the worldwide recession triggered by thecollapse of a U.S. financial institution in 2008, the Furukawa
Electric Group finds itself in a severe management
environment with the urgent need to bolster our financialperformance. Under these circumstances, we will review
5 Furukawa Electric Group CSR Report 2009

our conventional business model to fundamentally reinforce
compliance and strive to offer products and services thatare genuinely valued by society. To this end, we will pursue
our transmission infrastructure business, primarily in thehigh-growth regions of BRICs and ASEAN, and discern
customer needs in relation to the key concepts of theenvironment, energy conservation and cost reduction. We
will also seek to fully leverage our expertise in materials
cultivated by the Group over the years to differentiate ourproducts, thoroughly eliminate waste, and reduce costs
by strengthening our manufacturing capabilities to further
reinforce our foundational capabilities for responding to thedramatic changes taking place today.

Enhancing comprehensive initiatives for theenvironment
Electricity used at our Nikko Works is primarily generated
by a hydroelectric power station owned by Furukawa
Electric, and we are therefore able to manufacture ourcopper strips and aluminum memory disk products with
low CO2 emission levels. The Furukawa Electric Group ispursuing comprehensive environmental initiatives, from theuse of responsible energy sources and the development ofenvironmentally sound products that utilize our competence
in materials, to measures for reducing environmental impact
throughout the design, production and distribution process,Team Minus 6% activities at our offices, and actions toprotect local ecosystems.
In 2008, we participated in a government-sponsoredpilot program on emissions trading to increase ourown knowledge base. We also reviewed our programs
and systems and added environmental targets to theperformance assessment of business segments, introduced
a program to ensure achievement of those targets, andestablished an “e-friendly” logo system, through which alogo is displayed on products that meet given standards ateach stage of materials procurement, manufacturing, use,distribution and disposal. We will seek further progress infiscal 2009 through measures such as developing our own
methods for assessing environmental performance.

Consistent social contribution rooted in thelocal community
With respect to social contribution, we uphold theFurukawa Electric Group’s Action Guidelines on Social
Contribution to contribute to society not only through ourbusiness operations but also through activities for achievinga sustainable society by utilizing the human resources andbusiness sites of the Furukawa Electric Group to strengthen
the bonds with society we have cultivated for over acentury. This requires the development of a system thatencourages the participation of many employees, such as
the establishing of a corporate culture of social contribution

as well as considering new measures including educational
activities, work-leave programs and citation programs. In
fiscal 2009, we will seek to further enhance our system inaddition to the ongoing social contribution activities rooted
in the local community that are being undertaken at eachworks.
Our goal is to develop our business by placing high value
on communication with all our stakeholders, includingcustomers, employees, shareholders and residents of local
communities. We look forward to receiving your honest
feedback on all these initiatives.

Expanding our CSR activities and enhancing
communication with stakeholders
Tetsuya Sato
Director, Member of the Board, Chief Social Responsibility Officer

Renewal of the CSR Report
In fiscal 2008, we requested a third-party opinion from
Mariko Kawaguchi, General Manager of the Management
Strategy Research Department at Daiwa Institute ofResearch Ltd., to evaluate and provide advice for our CSR
Report. We have been seeking to creatively transform theformat of our report from one that had traditionally focusedon explaining in-house systems and programs and sharing
the results of in-house targets into one that adopts thestakeholders’ perspective and includes content that iseasier to understand and more familiar to readers while
also communicating the unique character of the Furukawa
Electric Group and its concrete activities. While many tasksremain, we hope to further enhance this report over timethrough dedicated efforts that incorporate a broad rangeof comments from our stakeholders, including third-partyopinions.

Expanding our CSR activities
As addressed in the President’s Message, our response
to compliance issues became an urgent task following
events in the past fiscal year. Since the establishment ofthe CSR Division in 2007, we have sought to develop
our system of compliance and internal control and toimprove our programs. The results, however, indicate
these programs were not functioning adequately in somerespects. After earnestly reflecting on this situation, weintend to conduct a full-fledged effort to ensure compliancewith renewed conviction. We will endeavor to establish athorough awareness across the Company on the needto maintain clarity on our internal ethical framework andpractices as well as the evolution of societal expectations
by continuously reviewing our activities and steadfastly
pursuing improvement.
This report features an article on our environmental
initiatives. We have also established a new “e-friendly” logo
system, set up a committee to promote reductions in CO2emissions and launched a life cycle assessment (LCA)
initiative for quantitatively assessing our environmental
impact. In addition, we are conducting a sustained effort
to establish CSR Procurement Guidelines for suppliers,
develop countermeasures against the new strain of
influenza virus and formulate business contingency plans(BCP) for the eventuality of a major earthquake.
We intend to enhance and expand our CSR activities
based on the concept that corporate value is determinedby the balance between the three aspects of economics,
environmental protection and social contribution.
Furukawa Electric Group CSR Report 20096