Corporate GovernanceFurukawa Electric raises its management efficiency through timely decision-making. At the same time, westrive to maintain sound management by building and upgrading our internal control systems.

Management

continue to strengthen our auditing capabilities based on close
collaboration between our Corporate Auditors, Accounting
Auditors and the CSR Division, which acts as our auditing
department.

Board of Directors and Board ofCorporate Auditors
Board of Directors
To accelerate decision-making, Furukawa Electric convenes
extraordinary board meetings as necessary in addition tothe regular monthly board meetings. To facilitate the effectivefunctioning of the Board of Directors in monitoring operational
performance, we have established a support structure toensure outside directors sufficiently understand all issues,and that their opinions are respected as part of the decisionmaking process. We have also set up a CSR and Risk
Management Committee under the supervision of the Boardof Directors, consisting of the chairman, president, company
presidents and chief officers, which acts as a framework for
the Group-wide promotion of CSR and risk management
activities. In order to secure management transparency, theCompensation Committee, whose members include outsidedirectors, was established in May 2010. This committee
formulates compensation policies and related matters for
directors and executives officers while also determining
individual compensation and other benefits.

Operational Performance
Our operational structure is based on a company system and achief officer system. Under the supervision of the president, who
is responsible for overall operational performance, operations
are run by company presidents, and operations relating tomatters such as Group-wide strategies, resource allocation andadministration are handled by the relevant chief officer. Details
are then reported back to the Board of Directors on a quarterlybasis.

Internal Control
Our Group internal control system is implemented withthe understanding that internal control maintains andenhances the efficiency of operational performance, ensurescompliance, manages risk and information, and oversees
affiliated companies. Concerning Internal Control Reports as
mandated under the Financial Instruments and Exchange Act,
enforced during fiscal 2009, the Group J-SOX Committee
and the CSR Division are responsible for maintaining andenhancing the credibility of Furukawa Electric’s financial
reports.

Board of Corporate AuditorsFurukawa Electric has incorporated the establishment of a
Board of Auditors into the institutional design of the Company
itself. We place great importance on the function performedby our Corporate Auditors and Board of Corporate Auditors,
which are independent of the Board of Directors. And we
Corporate governance organization chart

Shareholders’ Meeting
Appoint

Monitoring andSupervision

Audit accounts

12 Directors(including 3 outside directors)

Submit proposals
and reports

Submit reports,
attend meetings
and audit
Delegate

CSR and Risk Management Committee
Chairman, President, Chief Officers, Company Presidents
Special CommitteesCentral Committee for Environmental Management
Central Compliance Committee, etc.
MonitorAppoint

Appoint

Board of Directors

Accounting Auditors

Board of Corporate Auditors

Submit reports

5 Corporate Auditors(including 3 outside auditors)

Compensation Committee•Decide on critical matters relating
to business operations•Supervise business operations

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

Appoint

Business Operations

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

Submit reports

Internal Audit (CSR Division)

Instruct

Chief Officers
CSO (Chief Strategy Officer)
CPO (Chief Production Officer)
CFO (Chief Financial Officer) CSRO (Chief Social Responsibility Officer)
CMO (Chief Marketing 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 2010

Other affiliated companies

CSR Management
Management

The Furukawa Electric Group is bolstering its monitoring of all corporate activities by establishing aspecialized division for promoting CSR activities and appointing an officer to supervise its operations.

CSR Promotion Framework
The Furukawa El0ectric Group established the CSR Division asa specialized unit for promoting CSR activities and appointed
a Chief Social Responsibility Officer (CSRO) to supervise its
operations. The CSR Division consists of an Internal Auditing
Department, an Administration Office on Security Trade
Control, a Safety and Environment Promotion Department andan Administration Department. We are stepping up all-roundmonitoring of corporate activities from the standpoint of CSR,
encompassing areas from internal control, compliance and risk
management to safety, environmental protection and socialcontributions, and undertaking CSR activities on a standardizedbasis. In addition, we maintain a framework for taking any
necessary action should problems arise.

CSR Basic Policy
We fully recognize the responsibilities of theFurukawa Electric Group to society and will
strive to maintain and improve on solid, friendly
relationships with all of our stakeholders andcontribute to the sustainable development ofsociety through corporate, environmental andsocial activities.

CSR promotion framework
Board of Directors
Submit proposals and reports

CSR and Risk Management Committee
Central Committee forEnvironmental Management

Compliance Committee
Central Safety andHealth Committee

President

Central Quality Control Committee

CSRO
Collaborate

In-house companies

Collaborate

Collaborate

CSR Division

Central Disaster Prevention and BusinessContinuity Management Promotion Committee

OtherChief Officers

CPO
Quality Promotion
Department

Each corporate division

PromoteMonitor

Domestic affiliate companies

International affiliate companies

Risk Management
Risk Management
The CSR and Risk Management Committee conducts risk
assessments targeting the Company’s general managers andaffiliated company representatives in Japan and abroad inorder to identify any potential risks.
As a countermeasure against the new influenza virus,
steps were taken to educate employees and their families
about response standards with respect to the onset of thedisease. Similar initiatives were promoted for bases locatedin countries with less developed medical facilities. Peaking inNovember 2009, the number of influenza patients has steadily
declined. In April 2010, the Company ceased implementing
countermeasures. During this period, there were no instancesof works or department closure.
Information security has also been positioned as a highpriority risk. As a measure against counterfeit goods and theleakage of intangible assets at Group companies overseas,

ongoing follow up activities are conducted. The Group has
also commenced another review of confidential proprietarybusiness information management practices following
revisions to the Unfair Competition Prevention Act.

Business Contingency Plan
The Group is implementing its business continuity plan(BCP) focusing on disaster prevention. Seismic surveys werecompleted at all Group domestic offices by the end of 2009.
The Central Disaster Prevention and Business Continuity
Management Promotion Committee was also establishedto promote disaster prevention and business continuity
management (BCM) activities across the Group as a wholefrom fiscal 2010. In addition to advancing BCM activities
for existing BCPs, the committee is supporting efforts toformulate new BCPs where BCPs are yet to be implemented.

Furukawa Electric Group CSR Report 201014

Management

CSR Management

Compliance
Strengthening Compliance
Furukawa Electric was issued with cease and desist as wellas administrative surcharge payment orders by the Japan Fair
Trade Commission as a result of acts in violation of the AntiMonopoly Act in relation to transactions regarding cross-linked
high-foaming polyethylene sheets and optical fiber cable andrelated products in March 2009 and May 2010, respectively.
We deeply regret the concern that these incidents havecaused for our customers, shareholders and all related parties.
The Company established a third-party investigationcommittee on violations of the Anti-Monopoly Act on July29, 2009 as one step in regaining the trust of society. The
committee, comprised of outside experts to ensure a fairand neutral perspective, was responsible for systematicallydetermining the causes of violations and considering
measures for prevention. The report compiled by thecommittee was issued on December 10, 2009. Aroundthe same time as the establishment of the committee,
Furukawa Electric commissioned outside counsel to conduct
a thorough investigation into any instance of a cartel within
the Group or similar violation of the Anti-Monopoly Act. The

Measures Being Improved and Developed for theFurther Enhancement of Compliance1.Strengthening compliance systems and frontline
frontline awareness•Appointment of an officer to oversee and promotecompliance at each department•Implementation of expanded education and training
activities•Implementation of compliance-checking activities ineach department (confirmation through check sheets,

mandate of the investigation was to ensure that there was norecurrence of activities at issue in the past and to suspend
any and all questionable acts. Moving forward, Furukawa
Electric is determined to eradicate Anti-Monopoly Act
violations and to restore public trust in the Group.

Compliance Awareness Survey
Furukawa Electric conducted a compliance awarenesssurvey covering approximately 5,800 employees. Targeting
the Company and certain of its affiliated companies, thegoals of the survey were to quantitatively measure the level ofcompliance awareness and understanding while promoting
increased attention and care. Drawing from the results of thesurvey, steps will be taken to promote increased dialogue with
employees, upgrade and expand education and to promote
the further spread of compliance at the frontline.

Internal Reporting System
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) and established two
points of contact, one internal and one external. Sufficient
care is taken to ensure whistleblowers are not subject to any
negative impact as a result of filing an internal report.

Compliance Education
Furukawa Electric conducts wide-ranging collective as well as
onsite training including education based on rank, from new
recruits to directors.
Major compliance seminars organized in fiscal 2009
Name of seminar

Participants

Rank-based seminarsetc.)

Study meetings for directors

Above executive officer

2.Strengthening controls in sales divisions•Strengthening of controls relating to pricing processes•Review of the activities of various associations andindustry organizations as well as participants

Training for newly appointed
managers

Newly appointed managers

Training for newly appointed
managers and assistant managers

Newly appointed managers and assistant managers

Training for Furukawa Electric Group
directors

Newly appointed directors at affiliated companies

Training for Furukawa Electric Groupmanagers

Newly appointed managers at affiliated companies

3.Reinforcing monitoring functions•Audit of the status of compliance with the AntiMonopoly Act by the internal auditing department•Strengthening of the advice and instructions fromexternal professionals (lawyers)
4.Other•Establishment of an internal inquiry desk relating to theAnti-Monopoly Act•Consideration of periodic personnel rotation withinsales and other departments

15 Furukawa Electric Group CSR Report 2010

Others
1. Lectures on the Anti-Monopoly Act
2. Intellectual property-related
legislation

General managers, section chiefs, managers,
responsible employees in planning and management,
sales and head office departments

3. Compliance briefings at eachlocation

Business division managers, general managers, unit
chiefs, managers

4. Lectures on the Act against
Delay in Payment of Subcontract
Proceeds, Etc. to Subcontractors ateach location

Materials, production and other divisions