Management

Corporate GovernanceFurukawa Electric raises its management efficiency through timely decision-making to quickly respond to changes inthe business environment and markets, thereby also improving its performance. At the same time, we strive to maintainsound management by building and upgrading our internal control systems.

Division, which acts as our auditing department, including
sharing information and exchanging opinions.

Board of Directors and Board ofCorporate Auditors

Operational Performance

Board of Directors
To accelerate decision-making, Furukawa Electric exercises
flexibility by convening extraordinary board meetings asnecessary in addition to the regular monthly board meetings.
And to facilitate the effective functioning of the Board of Directors
in monitoring operational performance as the cornerstone ofcorporate governance, we have established a support structure
to ensure outside directors sufficiently understand the issues
being discussed, and the opinions of outside directors arerespected as part of the decision-making process. We havealso set up a CSR and Risk Management Committee under
the supervision of the Board of Directors, consisting of theChairman, President, Company Presidents and Chief Officers.
This acts as a framework for the promotion of CSR and risk
management activities from an overall groupwide perspective.

Furukawa Electric’s operational structure is based on acompany system and a chief officer system. Under thesupervision of the President, who is responsible for overall
operational performance, operations are run by the Company
Presidents, and operations relating to matters such asgroupwide strategies, resource allocation and administration
are handled by the relevant Chief Officer. Details of suchoperations are then reported back to the Board of Directors
on a quarterly basis.

Internal Control
The internal control system of Furukawa Electric and its
Group companies has been established and implemented
with the understanding that the objectives of internal control
are to maintain and enhance the efficiency of operational
performance, ensure compliance, manage risk and information,and oversee Group companies. With respect to the Internal
Control Reports as mandated under the Financial Instruments
and Exchange Act, which went into effect during the fiscal year
ended March 2009, the Group J-SOX Committee and the CSR
Division are responsible for maintaining and enhancing thecredibility of Furukawa Electric’s financial reports.

Board of Corporate Auditors
Furukawa Electric has incorporated the establishmentof a Board of Auditors into the institutional design of theCompany itself. We place great importance on the function
performed by our Corporate Auditors and Board of Corporate
Auditors, which are independent of the Board of Directors.
And we continue to make every effort to strengthen ourauditing capabilities based on close collaboration between
our Corporate Auditors, Accounting Auditors and the CSR
Corporate governance organization chart

Shareholders’ Meeting
Appoint

Monitoring andSupervision

Appoint

Board of Directors

Submit proposals
and reports

Appoint

Audit account

12 Directors(including 3 outside directors)
Submit reports,attend meetings
and audit

CSR and Risk Management Committee

Board of Corporate Auditors

Submit reports

4 Corporate Auditors(including 2 outside auditors)

AccountingAuditors

Chairman, President, Chief Officers, Company Presidents
Special Committees
Central Committee for Environmental Management
Central Compliance Committee, etc.

• Decide on critical matters relating tobusiness operations• Supervise business operations

Collaboration
between audits• Screen reports relating to business• Screen status of operations and assets• Screen reports relatingto accounting• Examine status ofoperations and assets

MonitorAppoint

Business Operations

ChairmanPresident
AdviseManagement Committee
Chairman, President, Chief Officers, Company Presidents

Submit reports

Internal Audit (CSR Division)

Direction

Chief Officers
CSO (Chief Strategy Officer)
CFO (Chief Financial Officer)
CMO (Chief Marketing Officer)

CPO (Chief Production Officer)
CSRO (Chief Social Responsibility Officer)
CTO (Chief Technology Officer)
Provide support and guidanceBusiness
operations

Company Presidents

Furukawa-Sky Aluminum Corporation

Telecommunications Company, Energy and Industrial Products Company, Metals Company, Electronics and Automotive Systems Company

Light Metals Company

Affiliate Companies

13 Furukawa Electric Group CSR Report 2009

Other affiliated companies

Management

CSR Management
The Furukawa Electric Group is bolstering its monitoring of all corporate activities by establishing a specialized divisionfor promoting CSR activities and appointing an officer to supervise its operations.

CSR Promotion Framework
The Furukawa Electric Group established the CSR Division
as a specialized unit for strengthening and improving CSR
activities and appointed a Chief Social Responsibility Officer(CSRO) to supervise its operations. The CSR Divisionconsists of an Internal Auditing Department, an Administration
Office on Security Trade Control, a Safety and Environment
Promotion Department and an Administration Department.
We are stepping up all-round monitoring of corporate
activities from the standpoint of CSR, encompassing areasfrom internal control, compliance and risk management tosafety, environmental protection and social contributions,and undertaking CSR activities on a standardized basis. Inaddition, we maintain a framework for taking any necessary
action should problems arise, for example investigating
allegations and the causes of problems, instituting remedial or
preventive measures and releasing statements, to deal with alleventualities quickly and appropriately.

CSR Basic Policy
We fully recognize the responsibilities of theFurukawa Electric Group to society and will strive tomaintain and improve on solid, friendly relationships
with all of our stakeholders and contribute to
the sustainable development of society throughcorporate, environmental and social activities.

CSR promotion framework
Board of Directors
Submit proposals and reports

CSR and Risk Management Committee

President

Compliance Committee
CSRO
Central Committee forEnvironmental Management

Collaboration

CPO
Collaboration

CSR Division

Quality Promotion
Department

Other Chief Officers
CollaborationEach corporate
divisionCentral Safety and Health Committee
Collaboration

Central Quality Control Committee

In-house companies

Promotion
Monitoring

Domestic affiliate companies

International affiliate companies

Furukawa Electric Group CSR Report 200914

Management

CSR Management

Compliance
Promotion of ComplianceInternal Reporting System

The Furukawa Electric Group defines compliance as “goingbeyond simply abiding by laws and regulations by actingin accordance with the values and ethics required of theCompany and its employees as responsible members ofsociety.” We continue to promote in-house education andinspections to prevent any violations of the law as well asa range of other compliance-related activities within theframework of the Furukawa Electric Group Action Guideline as
our basic philosophy on ethical and legal compliance, which isexpressed more concretely in the CSR Code of Conduct.
Several serious compliance incidents occurred in fiscal
2008, including the cancellation of our JIS mark certification
for wrought copper products at Osaka Works and a violationof the Antimonopoly Act in relation to cross-linked polyethylene
foam. In response to these incidents, we held compliancebriefings for employees above the managerial level at our head
office, branches and works, and distributed a message fromthe President titled, “Promotion of Compliance Management.”
We also instituted a compliance pledge to be signed by all
Furukawa Electric employees at or above the level of directors,
general managers and managers as well as executive officers
at affiliated companies. In fiscal 2009, we plan to improve ourcompliance training, expand the scope of the compliancepledge and conduct an employee survey.

To enable early detection of compliance violations andcorrective measures, we operate a system whereby company
officials and employees can either openly or anonymously
file reports directly with the Central Compliance Committee(namely, an internal reporting system.) Sufficient care is taken
to ensure whistleblowers are not subject to any negative
impact as a result of filing an internal report.

Compliance Education
We provide education based on rank, from new recruits
to directors, and conduct training in the workplace using
the CSR Compliance Handbook to establish a thoroughawareness of compliance among all employees.
Major compliance seminars organized in fiscal 2008
Name of seminar
Rank-based seminars
Study meetings for directors
Training for newly appointed managers
Training for newly appointed managers andassistant managers
Training for Furukawa Electric Group directors
Training for Furukawa Electric Group managers
OthersFurukawa City Campus Compliance seminars
Compliance briefings

Participants
Above Executive Officer
Newly appointed managers
Newly appointed managers and assistant managers
Directors at affiliated companies
Managers at affiliated companies
General managers, section chiefs, managers,
responsible employees in planning and management,
sales and head office departments
Business division managers, general managers, unit
chiefs, managers

Risk Management
Risk Management

Business Contingency Plan

Each year, the CSR and Risk Management Committee
conducts risk assessments targeting general managers atFurukawa Electric Co., Ltd. and representatives of affiliatedcompanies both in Japan and abroad in order to identify any
potential risks.
The CSR and Risk Management Committee devises
response plans for major groupwide risks and monitors
progress accordingly in an effort to minimize risks.
The following four issues were identified in fiscal 2008as major risks for Furukawa Electric, and concrete actions
undertaken by related departments to address these issues
were monitored.

Fully recognizing the social responsibility of the Group, we
formulated a business contingency plan (BCP) based on
our BCP policy described below, assuming an intensity
6 (Japanese scale) epicentral earthquake hit the Tokyo
metropolitan area, to minimize the impact of unforeseeable
risks and to ensure the continuation of business operations.
Starting with the current fiscal year, we plan to upgrade ourBCP to include additional risks, such as the pandemic influenza
virus, and make the transition into a business continuity
management (BCM) phase by applying the PDCA cycle.

Basic Policy on BCM
Major risks for Furukawa Electric in fiscal 2008
(1) Natural disasters, such as
earthquake damage andinfectious disease(2) Quality control

15 Furukawa Electric Group CSR Report 2009(3) Information security(4) Governance overaffiliated companies

1. Priority on human lives
2. Prevention of the expansion of damage
3. Continuation and early resumption of key operations
4. Contribution to the local community
5. Implementation of business continuation management