Social Requirements
● Ensuring management transparency ● Continually enhancing corporate ethics ● Strengthening supervisory functions
The FDK Approach
● Strengthening corporate governance ● Ensure Compliance ● Continuously operating an internal control system
Highlights of Management System

Initiatives supporting Management System
Strengthening Corporate Governance
Basic Concept
FDK Group reviews measures and the management system as nec¬ essary based on the general principles of the Corporate Governance Code stipulated by the Financial Instruments Exchange as well as executes organizational reforms and other measures because it be¬ lieves strengthening corporate governance improves the soundness and transparency of the company and improves the value for FDK shareholders. We strive for rapid informational disclosure about man¬ agement while also providing financial information via the Internet. Moreover, FDK has introduced a corporate officer system composed of two directors and corporate executive officers as well as five corporate officers to operate businesses that separate auditing and business execution functions of management. In addition, three of our seven directors, who include Audit and Supervisory Committee members, are outside directors as stipulated by Article 2.15 of the Companies Act.
Board of Directors
The FDK Board of Directors is composed of four directors (excluding directors who are Audit and Supervisory Committee members) and three directors who are Audit and Supervisory Committee members. Board of Directors meetings are held once every month to determine important management matters and deliberate the progress status of performance and investigate the measures.
Audit and Supervisory Committee
The FDK Audit and Supervisory Committee is composed of three direc- tors, including two outside directors, with meetings held once a month and whenever else a meeting is deemed appropriate to monitor and audit the appropriateness and validity of management. Furthermore, each Audit and Supervisory Committee member attends the Board of Directors meetings to share objective and fair insight about overall management and each matter while also auditing the appropriateness and validity of business operations of the directors according to the auditing policies formulated by the Audit and Supervisory Committee. FDK has established an Audit and Supervisory Committee Office with the purpose to facilitate high-quality auditing and supervision as well as to contribute to the strengthening of governance through smooth informational sharing with outside directors who are Audit and Super- visory Committee members.
Building an Internal Control System
Basic Concept
As a means to fulfill corporate social responsibilities, the FDK Group approved the Basic Policy for Establishing an Internal Control Sys- tem at the Board of Directors meeting by recognizing the necessi- ty of strengthening corporate governance to maintain a sound and strong relationship with FDK stakeholders from customers to suppli¬ ers, shareholders, employees and local communities while ensuring the appropriateness of operations and reliability of financial reporting in addition to realizing management that complies with relevant laws and the Articles of Incorporation. The pursuit of management efficien¬ cy and control of the risks arising in business activities are essential to improve the corporate value of the FDK Group. Therefore, we promote ongoing efforts through the systems below.
Systems to Ensure the Appropriateness of Operations
The FDK Group continually promotes the following systems: 1. Systems to ensure directors and employees perform their duties in accordance with laws, regulations and the Articles of Incorporation 2. Systems to store and manage information related to the perfor- mance of duties by directors
Ensure Compliance
Basic Concept
FDK Group established the "FDK Group Corporate Conduct Guidelines" as the standard of conduct for each and every employee. FDK Group strives to earn trust from consumers, customers and suppliers by clar- 3. Regulations and other systems to manage risks of loss 4. Systems to ensure directors of FDK and subsidiary companies effi- ciently execute business 5. Systems to ensure the appropriateness of operations of the cor- porate group comprising the FDK Corporation and its subsidiary companies 6. Systems to ensure the appropriateness of auditing functions by Audit and Supervisory Committee members
(1) Directorship training
FDK holds training for directors as well as corporate officers with the objective of teaching knowledge both in and outside the scope of their expertise in an effort to increase the expertise and knowledge of its directors. (2) Board of Directors performance evaluation FDK holds discussions based on survey questionnaire evaluation methods and the results of third-party analysis of questionnaires. In doing so, the Board of Directors can discuss any issues while continu- ally working to strengthen its supervisory functions. ifying the policy that states, "FDK Group acts with a sense of ethics and complies with the laws and social codes", in FDK Action Guidelines. We publish these Action Guidelines on the intranet as well as external- ly on the FDK homepage.
About Education
The FDK Group explains laws and regulations closely related to its work from internal regulations to the Foreign Exchange Act, the Prod¬ uct Liability Act, Antimonopoly Act, and Personal Information Protection Law in various stratified training programs, such as new and mid-level employee training as well as new manager training, to bring about understanding in every person. In addition to the above, FDK continually conducts various com¬ pliance training (including e-learning) for all of the employees. FDK also conducts training annually at each business site related to ex¬ port management and subcontracting transactions. Furthermore, FDK strives to raise awareness about laws and regulations by providing employees a broad range of information about compliance that in¬ cludes information about amendments to laws and regulations, and an introduction of examples about violations using the intranet.
Complying with Laws and Regulations Related to Business
Operations
The business operations of the FDK Group must comply with a wide range of laws and regulations. In addition to this broad compliance, understanding culture and customs and clearly responding to social trends are part of comprehensive compliance from an ethical perspec¬ tive. FDK has also put in place dedicated organizations for each field of compliance such as "Health and Safety Committee", "Environmental Management Committee", "Product Chemical Substances Manage- ment Committee", "Export Management Committee" and "Product Safety Promotion Committee" in an effort to operate its businesses in compliance with all laws and regulations.
Occupational Health and Safety Activities
▶ 1. About the FDK Group Health and Safety Policy
Basic Philosophy
We respect and value the life and dignity of every individual as a ba- sic philosophy. The foundation of FDK health and safety ensures the health and safety of every employee. The FDK Group aims to eliminate all occupational accidents and illness through a safety first mentality, a safe and comfortable workplace, and active initiatives to cultivate healthy minds and bodies.
Basic Policy
FDK aims to improve and ensure the safety and health of its employees under the basic principle that occupational accidents must not happen. Every employee participates in building a safe and comfortable workplace by systematizing and continually developing independent occupational health and safety activities for the purpose of eliminating all occupation- al accidents. FDK also places importance on employee mental health measures not just from the perspective of employees and their families, but also in terms of earning trust as a company and operating business smoothly. These actions have strengthened our mental health efforts.
▷ 2. Occupational Health and Safety Promotion System
The FDK Group holds quarterly meetings of the Central Health and Safety Committee, which includes the president and the chairman of the labor union, as a supervisory function for the Health and Safe- ty Committees at each business site. The central committee shares information about activities at each business site while formulating
Group-wide activity plans.
On-site Safety and Health Committee meetings are held jointly by labor and management at each business site every month to execute activities according to health and safety action plans. Some business sites have acquired the OHSAS 18001 and ISO 45001 certifications for occupational health and safety management. We take advantage of these management systems in an effort to realize a framework with an even higher-level of occupational health and safety.
▶ 3. Status of Occupational Accidents
A total of seven occupational health and safety accidents occurred in FY 2019—five on business sites in Japan and two on business sites overseas (excluding traffic accidents). The occurrence rate was 0.52 with a severity rate of 0.00 for occupational accidents on business sites in Japan. *Occurrence rate: (Number of deaths or injuries/total hours of opera- tion x 1,000,000) Severity rate: (Number of days lost/total operation hours   x   1,000) FDK promptly reports any occupational accidents that occur on its intranet and shares information across organizational boundaries in ongoing efforts to prevent similar occupational accidents.
▶ 4. Occupational health and safety education
The entire FDK Group always strives to raise awareness about health and safety by providing occupational health and safety education to new employees in addition to stratified occupational health and safety training.
Risk Management Initiatives
▶ 1.   Basic Concepts of Risk Management
The FDK Group aims to improve sustainable corporate value and make contributions to customers, local communities, and all other stake¬ holders through its global business activities. To achieve these goals, we properly identify any potential risks re- sulting from our business activities and prioritize important issues re- quiring a response. Therefore, the FDK Group has established, practic- es, and continually improves a Group-wide risk management system founded in the FDK Group Corporate Conduct Guidelines and FUJITSU Way. Our Board of Directors drafted a Basic Policy for Establishing an Internal Control System to define rules and systems that pursue man- agement efficiency and control risks resulting from business activities. We also share this basic policy with our shareholders.
▶ 2. Risk Management Process
Each department takes the following steps. Identify, evaluate and ver- ify potential risks inherent to business activities. Clarify the priority of response for each risk and determine risk control policies (avoidance, mitigation, migration and retention of risks). Execute measures in each department to prevent risks before they manifest in accordance with decided policies. Each department rapidly escalates response in the event any risks do manifest. Any issues are resolved as quickly as possible to minimize the impact through an appropriate response in cooperation with each relevant department and the Risk & Compliance Committee Secretariat as well as working to identify the underlying causes in addition to formulating and executing plans to prevent re- currence.
Internal Reporting System
The FDK Group has put in place the proper reporting and consultation systems for compliance violations to quickly discover and take correc- tive actions of any such improprieties as well as use as a resource to strengthen honest and fair management in compliance with the law. FDK has established an Internal Reporting Desk and Supplier Com¬ pliance Desk. The "Internal Reporting Desk", "Supplier Compliance Desk", and the "Internal Reporting Regulations" guarantee anonymity of anyone who reports a violation in addition to ensuring no harm is done as a result of reporting an issue. Any issue discovered as a result of investigation into a report is immediately addressed with reform measures. There were five reports in FY2019 which were addressed appropriately.