Management

The Furukawa Electric Group Basic CSR Policy

Each of the companies that make up the Furukawa Electric Group undertakes CSR activities in accordance with the following basic Group policy.

Basic Policy
We fully recognize the responsibilities of the Furukawa Electric Group to society and will strive to maintain and improveon solid, friendly relationships with all of our stakeholders and contribute to the sustainable development of society
through corporate, environmental and social activities.

We carry out all of our activities in line with the above policy, striking a balance between corporate, environmental andsocial contribution activities.
As a basic philosophy underpinning our CSR activities, we have also prepared a set of Furukawa Electric Group Action
Guidelines.

Furukawa Electric Group Action Guidelines
The officials and employees of the Furukawa Electric Group will perform their duties in accordance with the following action
guidelines.
We, the Company officials and employees of the Furukawa Electric Group, will:(1) Fully recognize the responsibilities of the Furukawa Group to society and strive to maintain and improve on solid, friendly relationships with all of our stakeholders and contribute to the sustainable development of society through corporate,environmental and social activities.
(2) Aim to create a company that is useful to society by developing products designed to aid the development of society
and by providing reliable products and services.
(3) Comply with domestic and international laws and regulations and act in accordance with internal regulations and otherrules such as social norms and ethics.
(4) Properly display and adequately disclose financial statements and other corporate information.
(5) Deal with antisocial groups in a resolute manner.
(6) Strive to act with consideration for the protection of the global environment.
(7) Respect human rights, cultures and traditions as a member of the international community.
(8) Create a company whose employees feel motivated, comfortable and fulfilled.
(9) Continuously strive to undertake social contribution activities based around the core aims of nurturing future generations, promoting sport and culture and living in harmony with local communities, as well as business-related activities, inorder to maintain and strengthen community ties built up over centuries and create a better tomorrow for future generations.

Our CSR Code of Conduct meanwhile acts as a set of standards for specific conduct.

CSR Code of Conduct(1) Compliance with legislation and restrictions(2) Reliable, safe and environmentally friendly products and services(3) Fair competition(4)	Compliance with overseas business and international trade legislationand restrictions(5)	Information management and adequate disclosure(6)	Respect for health, safety, human rights and the rights of others(7)	Executive and employee duties

5

Corporate Governance

Board of Directors and Board of Corporate AuditorsThe Board of Directors holds regularboard meetings each month and extraordinar y board meetings as and whennecessary to speed up decision making.
There is also a support structure in placeenabling outside directors and auditors toattend meetings provided that they have asufficiently in-depth understanding of theissues being discussed, with the opinionsof outside officials respected as part ofthe decision making process. It is throughmeasures such as these that we ensurethat the Board of Directors is able to suf-ficiently function in an operational monitoring and supervisory capacity as thecore of our corporate governance operations. We have also set up a CSR and Risk
Management Committee under the supervision of the Board of Directors, consisting of the Chairman, President, Company
Presidents and Chief Officers. This acts asa framework for the promotion of CSR andrisk management activities from an overall
groupwide perspective.
We place great impor tance on thefunction performed by our Corporate

Auditors and Board of Corporate
Auditors, which are independent of theBoard of Directors, and have incorporated the establishment of a Board ofAuditors into the institutional designof the Company itself. Based on close
collaboration between our Corporate
Auditors, Accounting Auditors and theCSR Division, which acts as our auditing
department, including sharing information and exchanging opinions, we continue to make every effort to strengthen
our auditing capabilities.

are run by the Company Presidents andoperations 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 theBoard of Directors on a quarterly basis.

Operational Performance
Our operational structure is based ona company system and a chief officer
system. Under the supervision of thePresident, who is responsible for overall
operational performance, operations
Corporate Governance Organization Chart
Shareholders’ Meeting
Monitoring and Supervision

Appoints

Appoints

Board of Directors

Audits accounts

Accounting
Auditors
Board ofCorporate Auditors Submit reports

12 Directors(including three outside directors)
Submits proposals and reports

CSR and Risk Management Committee
Chairman, President, Chief Officers, Company Presidents

Submits reports,
attends meetings Four Corporate Auditors
and audits(including two outside auditors)t4DSFFOSFQPSUTSFMBUJOHUPCVTJOFTTt&YBNJOFTTUBUVTPGPQFSBUJPOTBOEBTTFUTSpecial Committees$FOUSBM$PNNJUUFFGPS&OWJSPONFOUBM.BOBHFNFOU
Central Compliance Committeeetc.

Monitors

Business Operation

Appoints

Collaboration
between auditst%FDJTJPOPGDSJUJDBMNBUUFSSFMBUJOHUP
business operationt4VQFSWJTFTCVTJOFTTPQFSBUJPOt4DSFFOSFQPSUTSFMBUJOH
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operations and assets

Appoints

Chairman & CEO
President & COOAdvises

Submit reports

Direction

Internal Audits(CSR Division)Chief Officers

Management Committee
Chairman, President, Chief Officers, Company Presidents
Provide support and guidanceBusinessoperations

Company Presidents

Furukawa-Sky Aluminum Corporation

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Light Metals Company

Affiliate Companies

Other Affiliate companies

6Management

CSR Management

CSR Promotion Framework
To strengthen and improve our CSR
activities, the Furukawa Electric Groupestablished a CSR Division, headed bya Chief Social Responsibilit y Of f icer
(CSRO). The CSR Division consists of anAuditing Department, an Export Security
Administration Department, a Safety andEnvironment Promotion Department
and an Administration Department. In

addition to stepping up all-round monitoring of corporate activities from thestandpoint of CSR, encompassing areasfrom internal control, compliance and risk
management to safety, environmental
protection and social contribution, andundertaking CSR activities on a standardized basis, we now have the frameworkin place to be able to take any necessary

action should problems arise, for example investigating allegations and thecauses of problems, instituting remedialor preventive measures and releasingstatements, to deal with all eventualities
quickly and appropriately.

CSR Promotion Framework

Board of DirectorsPresident

CSR and Risk Management Committee

CSRO

CSR Division

Compliance Committee
Central Committee for Environmental Management
Central Safety and Health Committee
Central Quality Control Committee

Basic CSR Policy

In-housecompanies

In addition to our CSR activities, theFurukawa Electric Group has also set up
a Quality Promotion Department under
the supervision of our Chief Production
Officer (CPO). We are undertaking quality
control activities for all of our products,
which represent the foundations of our7

Domestic affiliatecompanies

International affiliatecompanies

social responsibilities as a manufacturer.
Elsewhere, we are putting in place thenecessary framework in response to theso-called Japanese SOX Act, revolving
primarily around an established projectteam, and are making every effort toenhance our corporate value throughthe establishment of a comprehensive
internal control system, including steps
such as striving to maintain and improve
the reliability of financial reporting on agroupwide basis.

ComplianceCompliance
The Furukawa Electric Group definescompliance as “going beyond simply
abiding by laws and regulations by actingin accordance with the values and ethics
required of the Company and its employees as responsible members of society.”
Work ing to the Furuk awa Elec tric

Group Action Guidelines as our basic
philosophy on ethical and legal compliance, we continue to promote in-house
education, inspections to prevent any
infringements on the law and a range ofother compliance-related activities. We
have put together a Central Compliance

Committee, chaired by the Chief SocialResponsibility Officer (CSRO), to organize
the promotion of compliance activities,
with subordinate compliance committees also in place at individual works andbranches around the country.

Compliance Education
Having compiled a set of CSR Codeof Conduct and CSR Code of Conduct
Manual containing additional explanations, both based on our Furukawa
Electric Group Action Guidelines, we combined the publications with a message
from the President into a booklet called
the CSR Compliance Handbook, which we

distribute to all officials and employees aspart of our ongoing educational schemes
targeting compliance in the workplace.
We also organize compliance training for
newly appointed directors, management
staff and new recruits.

CSR Compliance Handbook

Internal Reporting System
To enable early detection of compliance violations and corrective action,
we operate a system whereby company
officials and employees can file anonymous reports directly with the Central
Compliance Commit tee (namely, aninternal reporting system). Using a proprietary system developed by Furukawa

Electric, the system includes features suchas the ability to receive reports whereby
the reporting party remains anonymous
whilst still exchanging emails betweenthe reporting party and the Company,
including feedback to the reporting partyon the Company's response to the matter.
We have also set up an external report-ing system via an outside organization.
The findings of investigations into reported matters and details of the Company’s
response are reported to the Board ofDirectors as appropriate.

and monitors progress accordingly in aneffort to minimize risks.
In fiscal 2007 we started to formulatea business contingency plan (BCP) to be
implemented in the event of a large-scale
natural disaster or similar event and put
in place an initial response framework,

including the introduction of a system toconfirm the safety of all employees. Overthe course of fiscal 2008, we will continue
to expand our large scale natural disaster BCP and start working on plans in
response to an outbreak of a new strain ofinfluenza.

Risk Management
The CSR and Risk Management
Committee runs risk assessments every
year to identify any potential risks. Allrisks facing the Group are then assigned
an order of priority. The CSR and Risk
Management Committee devises
response plans for major groupwide risks8