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Social Challenge 4
Establish shared ethical standards


Why it matters

As maintaining high ethical standards with society and sharing those high ethical standards with business partners is an essential part of resolving social issues and ensuring sound corporate activities, a range of initiatives will be implemented for establishing and sharing such ethical standards.

What can be accomplished

We set high ethical standards for ourselves and share them with our business partners.

Future vision

The NTT Group is committed to contributing to the development of society by acknowledging diverse cultures, and thus we will contribute to solving social issues by connecting people, goods, and cultures, including communities, nations, and society, while promoting high ethical standards, diversity, and inclusion in fair and equitable ways, and work towards creating a better workplace through powerful and new digital technologies.

Business Activity 12・13
Establishing and thoroughly complying with ethical standards / Appropriately managing conduct risk

Our commitment

We set high ethical standards for ourselves and share them with our business partners

Our objectives


Participant rate of training of corporate ethics Policy


Cases of legal actions for anti-competitive behavior, bribery

Policies and Concepts

It is imperative to conduct business in compliance with laws and regulations in the jurisdictions where we operate, and maintain high ethical standards in order to promote sound corporate activities. Recognizing this, NTT established the "NTT Group Corporate Ethics Policy."

These standards, which apply to all officers and employees of the NTT Group, lay out the basic principles of corporate ethics and provide specific guidelines for ethical behavior. These stipulations are intended to remind everyone of their duty as members of a corporate group that bears significant responsibility to society in terms of preventing dishonesty, misconduct, and the disclosure of corporate secrets, as well as refraining from exchanging excessive favors with customers and suppliers, and ensuring that they conduct themselves according to the highest ethical standards in both private and public activities.

Organization for Implementation

NTT has a Corporate Ethics Committee with a senior executive vice president as chair. The committee meets twice a year with the aim of thoroughly promoting the NTT Group's corporate ethics and maintaining discipline. It reports to the Board of Directors twice a year, particularly concerning the status of reports made to the Corporate Ethics Help Line, and the Board of Directors discusses reported matters when necessary.

The NTT Group has Corporate Ethics Committees and corporate ethics of officers at Group companies.
We foster a corporate climate of observing laws and corporate ethics, investigate wrongful acts and scandals based on our Corporate Ethics Help Line operational rules, hold regular meetings for the compliance officers of Group companies, and work across the Group to promote compliance.


NTT Group Corporate Ethics Policy

  1. Recognizing the establishment of corporate ethics as one of its most important missions, top management shall exert i ts leadership to ensure that the spirit of these Standards is adopted throughout the Company, and shall assume full responsibility for solving any problems when any event inconsistent with that spirit occurs.
  2. Every person with subordinate employees shall not only act in a self-disciplined manner, but shall also always provide guidance and assistance to his/her subordinate staff to ensure that their conduct is in conformity with our corporate ethics.
  3. Every officer and employee of the NTT Group shall not only comply with all laws and regulations, social standards, and internal company rules whether in Japan or overseas, but officers and employees shall also hold the highest ethical philosophy within himself/herself both in public and in any private situations. Among other things, each officer and employee, as an officer or employee of a member of a Global Information Sharing Corporate Group, shall keep himself/ herself fully aware that any disclosure of customer or other internal privileged information constitutes a materially wrongful act. Also, as a member of a group of companies which holds great social responsibilities, he/she shall strictly refrain from giving or receiving from customers, business partners, and other interested parties excessive gratuities. Furthermore, when interacting with public officials and politicians, officers and employees shall not commit bribery or commit any other acts that cause the other party to violate the National Public Service Ethics Act/Code of Ethics and the Ministerial Code, or that cause suspicion that such a violation has occurred.
  4. Each NTT Group company, at the first opportunity, shall take initiatives to provide training programs in order to help its officers and employees enhance their awareness of our corporate ethics.
  5. Every officer and employee of the NTT Group shall direct his/her efforts to prevent wrongful or scandalous acts which may potentially occur as specialization and advancement of our business proceeds. Each NTT Group company shall improve its system to prevent such acts, including, for instance, the re-assignment of contract representatives who have remained with the same customers for a long period of time, and the improvement of monitoring tools to protect customer and other information.
  6. Any officer or employee who may come to know of the occurrence of any wrongful act or any scandal shall promptly report the wrongful act or scandal to his/her superior or other appropriate persons. If he/she is not able to make such a reporting, he/she may contact the Corporate Ethics Help Line (External Contact Point). It should be noted that every officer and employee who reports the occurrence of any wrongful act or scandal shall be protected so that the reporting party shall not suffer any negative consequences due to such reporting.
  7. In the event of an occurrence of any wrongful act or scandal, each NTT Group company shall be committed to the settlement of the problem by taking appropriate steps through a speedy and accurate fact finding process, and responding in a timely, suitable, and transparent manner in order to fulfill its social accountability.

Main Initiatives

Prevention of Bribery

The NTT Group Corporate Ethics Policy mandates compliance with all laws and regulations, social standards, and internal company rules whether in Japan or overseas. With regard to the prevention of bribery, we have an Anti-Bribery Handbook containing important matters to be understood and complied with by our employees. The contents of this handbook are made known to all employees in Japan and overseas through emails and other means.

In addition, NTT, NTT East, and NTT West stipulate that taking bribes is forbidden under the Act on Nippon Telegraph and Telephone Corporation, etc. (hereafter "the NTT ACT") and that breaches are punishable by law. Following the Act on Prevention of Un- just Acts by Organized Crime Groups, contributions and other types of support are only given to charitable organizations deemed suitable by the NTT Group. We have a zero tolerance approach to corruption. In fiscal 2020 no illegal conduct associated with bribery or contribution/support was confirmed within the NTT Group.


Political Contributions

As a holding company, and in compliance with Japan's Political Funds Control Law, NTT does not make political contributions, while a few Group companies make political contributions at their own discretion and in accordance with the relevant laws and regulations as well as the companies' respective codes of corporate ethics.

Compliance with Anti-Monopoly Laws

The NTT Group has adhered to the Anti-Monopoly Act to ensure its business activities align with a fair and competitive business environment. These initiatives have been effective, as evidenced by the fact that continuing from the previous fiscal year, we were not fined for violation of anti-monopoly regulations in fiscal 2021.

Request to Business Partners for Compliance and Risk Assessment

With the increased globalization and complexity of supply chains in recent years, responding appropriately to global issues, such as disasters/pandemics, environment, human rights, and security, has become an important issue. In light of this, we formulated the NTT Group Supply Chain Sustainability Promotion Guidelines in 2022 that contain detailed requirement items in the seven areas of human rights/labor, health/safety, the environment, fair trade/ethics, quality/safety, information security, and business continuity plans to guide our efforts as we work together with suppliers to create and maintain a safe and secure supply chain and achieve a sustainable society.

The guidelines also clearly and directly lay out the responsibility for suppliers to communicate the guideline details with their upstream suppliers and encourage them to comply and verify their compliance status. In addition, we have also published the NTT Group Green Procurement Standards as a supplement to our environmental guidelines and are requesting that continued efforts be made to reduce greenhouse gas emissions throughout the supply chain.

We have published these Guidelines in Japanese and English as a way of communicating to a broad range of the NTT Group's suppliers both in Japan and overseas, and we have incorporated them into supplier contracts to ensure compliance. For our key suppliers in particular, we are conducting surveys on the status of sustainable procurement. We checked activities concerning compliance in general, including their response to preventing corruption, illegal political contributions and antisocial forces, and also requested further improvements where necessary.

Value Chain Management

Policies and Concepts

In recent years, companies find themselves required to monitor the ESG risks and impact on sustainability, including consideration of human rights and mitigation of environmental impacts, of not only their own group companies but also throughout the entire value chain, from raw materials and supplies procurement to disposal and recycling. Also, we are seeking to expand the B2B2X model and global businesses under the medium-term management strategy "Your Value Partner 2025" that we established in 2018. We expect our value chain to expand further globally, requiring us to enhance our value chain management initiatives.

The NTT Group's value chain management focuses on requiring suppliers to adhere to the various guidelines under the "Procurement Policies" established by NTT. For this reason, it is important for us to build partnerships of trust with all of our suppliers. In light of this, we formulated the NTT Group Supply Chain Sustainability Promotion Guidelines in 2022 to create and maintain a safe and secure supply chain and achieve a sustainable society together with our suppliers. In addition, we have also published the NTT Group Green Procurement Standards as a supplement to our environmental guidelines, and are requesting that efforts be made to reduce greenhouse gas emissions throughout the supply chain.

Organization for Implementation

NTT's Technology Planning Department has formulated the NTT Group Supply Chain Sustainability Promotion Guidelines as a guide for promoting sustainability in the supply chain throughout the Group. In coordination with procurement divisions at each NTT Group company, we ensure that a supplier's compliance with key items within the guidelines is a basic condition of procurement and we regularly check that this condition is being met and follow-up with suppliers.

NTT Group Supply Chain Sustainability Promotion Guidelines

A number of supply chain issues have recently come to light, including serious human rights violations such as forced labor and child labor, unlawful disposal of waste, response to stricter regulations on controlling chemical substances, bribery, and other examples of malpractice.

In light of this, we formulated the NTT Group Supply Chain Sustainability Promotion Guidelines in 2022 that contain detailed requirements for suppliers in the seven areas of human rights/labor, health/safety, the environment, fair trade/ethics, quality/safety, and information security to guide our efforts as we work together with suppliers in order to conduct procurement activities in a socially responsible manner.

We have published these Guidelines in Japanese and English as a way of communicating to a broad range of the NTT Group's suppliers both in Japan and overseas, and we have incorporated them into supplier contracts to ensure compliance.

NTT Group Basic Procurement Policy

The NTT Group has created the "NTT Group Global Sustainability Charter" and is promoting initiatives aimed at achieving a "sustainable society" with both "Growth as a company" and "resolving social issues." With modern supply chains, advances in globalization mean there is a greater importance for dealing appropriately with issues such as human rights, ethics, the environment, disasters and pandemics, and security. To address issues like these, the NTT Group aims to take an independent and proactive stance in achieving a sustainable society, by enhancing mutual understanding and building relationships of trust with all suppliers that make up the supply chain, and working together with high ethical standards to develop and maintain a safe and secure supply chain that provides a range of assurances like the protection of human rights and conservation of the global environment.

To achieve this, we will conduct procurement in accordance with the following "NTT Group Basic Procurement Policy."

  1. NTT will strive to provide competitive opportunities with fairness to both domestic and foreign suppliers, and to build mutual trust and understanding.
  2. NTT will conduct economically rational procurement of competitive goods and services that meet its business needs, deciding on suppliers based on quality, price, delivery times, and stable supply in a comprehensive manner.
  3. NTT will conduct procurement in a manner that follows laws and regulations as well as social norms, and takes the environment, human rights, and other issues into account to contribute to society.

Request to Business Partners for Compliance and Risk Assessment

The NTT Group Supply Chain Sustainability Promotion Guidelines, the operational guidelines we issue to our suppliers, clearly outlines fair trade practices and business ethics (seven articles). With respect to critical suppliers, we conducted a survey on the status of sustainability procurement. We checked activities concerning compliance in general, including their response to preventing corruption, illegal political contributions and antisocial forces, and also requested further improvements where necessary.

ESG Education for Procurement Department Staff

The NTT Group implements training on ESG for staff in procurement departments to reduce the burden of procurement activities on the environment and ensure they persistently comply with the laws, regulations, and norms of society.

VA Proposal System and Supplier Awards System

NTT East and NTT West engage in VA (Value Analysis) activities in which we invite our suppliers to submit proposals for enhancing quality, safety and workability, and for contributing to environmental protection, and then we incorporate their ideas in product specifications. We award suppliers that offer particularly outstanding proposals. In addition, we participate in improvement presentations held by suppliers and work with them to make improvements based on dialogue and cooperation.

Since fiscal 2006, we consolidated contact points for a simpler proposal system and established an environment for further developing improvement activities, including adding a new scheme for VE (Value Engineering) & VA proposals from telecommunications construction companies and suppliers. We will remain active on improving our products and services.

Assessment of Social and Environmental Risks

We assess social and environmental risks by conducting the Supply Chain Sustainability Survey using the Supply Chain Sustainability Promotion Check Sheet to confirm the status of compliance with various guidelines and technical requirements. The survey targets all of the NTT Group's critical suppliers that account for at least 90% of total procurement value, supplier of non-substitutable products and supplier of important products. The survey includes 161 items covering the seven areas of human rights and labor, health and safety, the environment, fair trade and ethics, quality and safety, information security, and social contributions.

Check points for the Supply Chain Sustainability Survey

(161 items)

  1. (1)Sustainability promotion in general (4 items)
  2. (2)Human rights and labor (33 items)
  3. (3)Safety and hygiene (25 items)
  4. (4)Environment (25 items)
  5. (5)Fair trade and ethics (27 items)
  6. (6)Quality and safety (10 items)
  7. (7)Information security (15 items)
  8. (8)Business continuity plan (6 items)
  9. (9)Others (Conflict Minerals, Code of Conduct, Due Diligence, Complaint Processing Mechanism, etc.) (16 items)

For example, in the area of human rights, we also conduct monitoring of child labor and forced labor as well as compliance with the freedom of association and collective bargaining rights. We assess the responses from suppliers, and designate those with a certain percentage of low-rated responses, or those with a low rating for specific items, as high sustainability risk suppliers. We visit these designated suppliers to perform additional checks, and when corrective action is necessary, we have them prepare an improvement plan and monitor its implementation. While the survey covers critical suppliers, we seek to assess risks that exist further upstream by also including items that check whether the supplier is making efforts to educate secondary suppliers about social responsibility.
The goal of the survey is to request and receive responses from all critical suppliers.

Requests to Suppliers on Environmental and Social Concerns

We have established the following guidelines as requirements under the NTT Group Supply Chain Sustainability Promotion Guidelines and seek compliance from suppliers. We also ask all suppliers that participate in procurement, whether they are a new supplier or not, to comply with our Notes Regarding Participation in the Procurement Process, including not having any past involvement with organized crime groups or demonstration of improper conduct related to procurement.
We revised the NTT Group Guidelines for Green Procurement in April 2021, and added environmental-related requirements that suppliers should comply with. As part of environmental activities announced by the NTT Group such as the Environment and Energy Vision, this revision includes a declaration of environmentally friendly procurement (green procurement), and stipulates that all suppliers are requested to cooperate with the NTT Group's environmental activities aimed at conservation of the global environment.

In the past these guidelines applied to products procured by the NTT Group, however following this revision, these guidelines have been expanded to apply to products and services sourced by the NTT Group. It also specifies the requirements of initiatives for suppliers for reducing their environmental impact, such as reducing greenhouse gas emissions, their commitment to resource recycling, and the conservation of biodiversity.
The NTT Group will continue to implement initiatives for reducing its environmental impact throughout the entire supply chain. The "NTT Group Guidelines for Green Procurement" has also been renamed to the "NTT Group Green Procurement Standards" that covers environmental- related details in the "NTT Group Supply Chain Sustainability Promotion Guidelines" established in February 2022.

Conducting Risk Assessment for the Supply Chain

We are assessing risks from a range of perspectives as part of sustainability-related initiatives taken toward each of our suppliers. To assess risks, we perform supplier engagement activities that involve direct dialogue with each of our suppliers, in line with results obtained from the "Supply Chain Sustainability Survey," conducted to confirm the status of suppliers' compliance with various guidelines. We will continue to scrutinize the survey method, survey content, and analysis method and use the findings of these questionnaires to provide feedback and continue discussions with suppliers in order to reduce risks across the value chain of the NTT Group.

Communicating with Suppliers

The NTT Group strives to build better partnerships with each of its suppliers by mutually exchanging views and proposals through various modes of communication.

In July 2018, we started introducing a system that enables faster assessment of damage to suppliers following a major earthquake or other disaster. By exchanging information more quickly and accurately, we will continue to work with suppliers on the prompt restoration of telecommunications equipment. The NTT Group companies also engage in various forms of communication with their suppliers. Specifically, these companies inform their suppliers of their business environment and exchange views on how they can continually work together to provide a stable supply of high quality, competitive products.


Initiatives to Promote Awareness of the NTT Group Corporate Ethics Policy

At NTT, top management demonstrates that compliance requires the NTT Group to comply with laws and conduct business with everyone having strong ethics.

Also, the presidents of each NTT Group company have declared their commitment to identify risks related toil legal or illicit activities and never tolerate any form of impropriety. To ensure the effectiveness of the NTT Group Corporate Ethics Policy, we offer training sessions on corporate ethics to employees and, through a website for employees, we explain the declaration in detail and give examples of corporate ethics issues. Employees are reminded of the importance of ethics in June and December each year in an effort to raise their level of understanding. Furthermore, NTT conducts annual surveys of employees to measure their awareness, and the results are then used for awareness enhancement initiatives.

Corporate Ethics and Compliance Training

Corporate ethics training is conducted as part of continuous educational activities for all officers and employees.
This training is tailored to meet the specific compliance and corruption risks of each company throughout the NTT Group. Furthermore, training for officers is also conducted every year.

Anti-Bribery Handbook

The Anti-Bribery Handbook is a revised version of the one we produced in 2015 mainly for the purpose of deepening understanding of regulations concerning the bribing of foreign public officials. In 2021 it came to light that senior NTT Group executives had dined out with persons connected to Japanese ministries and agencies, and reflecting on these incidents, we enhanced the contents and altered the format such as increasing the number of explanations using case studies.

Competition Law Handbook

The NTT Group created a Competition Law Handbook Sustainability Report 2021 in fiscal 2019 as a tool for ensuring compliance with competition law among employees and it has been made known to all employees at NTT Group companies inside and outside of Japan.
The handbook contains the basics regarding compliance with competition law within a Q&A format, as well as specific examples that might be found within the Company's business activities, in order to instill correct knowledge and understanding of competition law compliance in employees.

Check System for Penetration of Corporate Ethics

NTT conducts an annual survey that includes NTT Group companies in order to ascertain the extent to which employees are aware of compliance. At each NTT Group company, monitoring is performed under four different functions, comprising the departments in charge of business operations, compliance and internal auditing, as well as the Audit and Supervisory Board members, to ensure neutral and multifaceted checks are being performed.

NTT checks the status of compliance audit implementation at NTT Group companies with an internal auditing department and directly confirms the status of compliance initiatives inside NTT and at NTT Group companies without an internal auditing department.

Establishment of Corporate Ethics Help Line Contact Point

To prevent illegal conduct or a scandal, each Group company has set up an internal consulting center to handle reports of improper activities. In addition, NTT has established the Corporate Ethics Help Line as an external contact point for NTT Group companies and outsources its operation to a law firm. The help line also handles consultations and reports related to human rights issues. The NTT Group Corporate Ethical Standards clearly state that people who file reports with these help lines will be protected from any disadvantage arising from the fact that they filed a report. The content of the consultations and reports are investigated and handled by the staff member in charge, and a report is submitted to the Corporate Ethics Committee of each Group company. All reports are collected at least once a year by NTT, where the response status is ascertained and reported to the Board of Directors.

In addition, since the contact point is independent from management, there is an independent reporting route to Audit & Supervisory Board members. Reports made through our Corporate Ethics Help Line (external contact point) are in principle sent directly to Audit & Supervisory Board members at the same time; reporting only to Audit & Supervisory Board members is also possible.

Number of Reports Received by the Corporate Ethics Help Line (External Contact Point)

We monitor the number of reports received by the Corporate Ethics Help Line, and publish this number in our Sustainability Report and on the NTT Group's Sustainability website. The Whistleblowing Mechanism Guidelines, revised in December 2016 by the Consumer Affairs Agency, recommend that neutral and fair third-party assessments be carried out. We had such an assessment carried out in May 2017 and received the comment that overall, a whistleblowing mechanism is in place and is being administered appropriately.

Reports to the corporate ethics help line by type of violation

Details of assessment

  • Investigation of the mechanism and operational status of the help line in order to verify its effectiveness in terms of utilization and reliability.
  • Sample survey on the establishment of regulations and responses to whistleblowers, etc.
  • Confirmation of compliance with the Whistleblowing Mechanism Guidelines.
  • Interviews with administrators and discussion about operational issues

Disciplinary Actions against Confirmed Violations

A compliance violation or breach of the NTT Group Corporate Ethical Standards is dealt with using the disciplinary measures taken in accordance with the disciplinary code established at each Group company. This includes pay cuts and work suspension, and may also be reflected in assessments (evaluations) and personnel transfers.


Business Risk Management

The NTT Group faces a rapidly changing business environment, including intensified competition in the information and telecommunications sector. In this context, NTT Group companies are exposed to an increasing amount of business risk. The NTT Group strives to minimize the impact of losses that could result from the materialization of risk by anticipating and preventing the occurrence of potential risks. As part of these efforts, NTT has formulated the NTT Group Business Risk Management Manual and has distributed it to all Group companies so that the entire Group can work together to conduct risk management. This manual contains policies for addressing various forms of risk facing the NTT Group's business operations and approaches to coordination among NTT Group companies.

In addition, each Group company has formulated its own manuals and other guidelines, which reflect its specific business operations, business environment, and other factors, and is using these materials to control business risks.

Organization for Implementation

At NTT, Risk Management Regulations are in place, which define fundamental policies concerning inhouse risk management for effective and efficient business operations. Risk management is carried out based on a continuous PDCA cycle under the leadership of the Business Risk Management Committee, chaired by the representative director and senior executive vice president, and comprised of heads of departments and offices as committee members. At the NTT Group, the representative director and senior executive vice president of NTT is assigned ultimate responsibility for risk management, while each executive officer serves as the risk officer for the business area they are placed in charge of.


Identifying Material Risks

From time to time, NTT reviews assumed risks and management policies based on changes in the social environment.

In the identification of Companywide risks, the Business Risk Management Committee leads analysis processes for the risks faced by the NTT Group are formulated and periodically implements risk analyses in accordance with these processes. In addition, after a correlation analyses on these risks, it specifies those risks with the potential to have the greatest impact as material risks, and we decide on countermeasures.

Matters pertaining to risk management are discussed at meetings of the Business Risk Management Committee. As part of risk monitoring, each department in charge reports on the status of monitoring and risk mitigation effects to the Business Risk Management Committee, while the Internal Audit Department conducts individual audits on the status of initiatives to address material risks and reports results to the Board of Directors in the subsequent fiscal year.

Among other things, risks are also identified by focusing on the perspective of conduct risk--where customers and other stakeholders suffer negative consequences as a result of actions taken by the NTT Group--by ensuring better planning and implementation of appropriate measures.


Business Activity 14
Thoroughly reinforcing corporate governance and compliance

Our commitment

We set high ethical standards for ourselves and share them with our business partners

Our objective


Cases of legal actions for anti-competitive behavior, bribery

Basic Policy

We believe that strengthening the system of corporate governance in accordance with the purposes of each principle of the "Corporate Governance Code" of the Tokyo Stock Exchange is an important management issue for maximizing corporate value while meeting the expectations of various stakeholders, including shareholders and other investors, as well as customers, business partners, and employees. Therefore, we are working to strengthen corporate governance based on our fundamental policies of ensuring sound management, executing appropriate decision-making and business activities, clarifying accountability, and maintaining thorough compliance.

NTT is implementing all the principles of the Corporate Governance Code it revised in June 2021

Overview of Corporate Governance Structure

NTT believes that an auditing system based on Audit & Supervisory Board Members, including outside independent Audit & Supervisory Board Members, is an effective means of supervising management. Accordingly, we have adopted the model of being a company with a Board of Company Auditors (Audit & Supervisory Board). In addition, through the election of outside independent Members of the Board, NTT has strengthened the function of appropriately supervising business execution. Furthermore, through its adoption of an executive officer system, NTT intends to clearly separate management-related decision- making and supervisory functions from business execution functions and improve its management flexibility.

Additionally, NTT has voluntarily established a "Nomination Committee" and a "Compensation Committee," each of which consists of five Members of the Board, including three outside independent Members of the Board, to further increase the objectivity and transparency of decisions relating to appointment and compensation.
NTT has determined that governance functions based on a Board of Corporate Auditors (Audit & Supervisory Board) are sufficiently effective to achieve this purpose.


Board Member Compensation Determination Policy and Process

Regarding the composition and level of compensation for Members of the Board of NTT under the Determination Policy, in order to secure objectivity and transparency, NTT established the Compensation Committee, comprising five Members of the Board, including three Independent Outside Members of the Board. Moreover, decisions on the ratios and calculation methods for compensation for Members of the Board, and amounts of compensation for individual Members, are delegated from the Board of Directors to the Compensation Committee. The reason for delegating these authorities to the Compensation Committee is that such committee is composed of two Representative Members of the Board and three Outside Members of the Board, and we believe that it is able to make the appropriate judgements from an outside perspective while also taking a bird's-eye view of the Company's overall performance.


Compensation of individual Members of the Board (excluding outside Members of the Board) consists of a monthly salary (base salary) and a bonus (compensation related to performance over the short term), NTT stock purchase through Board Members Shareholding Association and stock compensation (compensation related to performance over the medium to long term). The composition ratio of compensation in a case where standard business results are achieved is roughly as follows: Fixed compensation: Short-term performance-linked compensation: Medium- to long-term performance-linked compensation = 50%: 30%: 20%.

Clawbacks System

A performance-linked stock compensation system was adopted in fiscal 2021 for members of the board and officers of NTT and its major subsidiaries. A system has been established such that, in the event that an Eligible Member of the Board or Officer engages in significant illegal or inappropriate activity, or takes employment at another company in the same industry without the permission of the company, the system enables the revocation of rights to receive Company Shares under the Compensation System with respect to such person (malus clause) and the request for the return of funds corresponding to previously delivered Company Shares (clawback).



Governance Reinforcement Policy

  1. (1)The number of directors will be increased from the current 8 to 10 (the number of independent directors will be increased to 5 to make up a majority).
  2. (2)To strengthen the corporate auditor structure, add one outside full-time corporate auditor and increase the number from five to six (four or more outside corporate auditors represent the majority).
  3. (3)Implementing a policy to increase the ratio of female directors, corporate auditors and executive officers to at least 30%.
  4. (4)The Internal Control Office was reorganized into the Internal Audit Department, an organization directly connected to the president.

We are anticipating outside directors to provide a wide range of management perspectives and expert opinions, and we internal and external directors are appointed by actively considering the promotion of diversity (Gender, race, or ethnicity (Ethnicity)). As a result, more than 30% of executives are women, and we are actively promoting diversity. In addition, Article 10 (Directors and Audit & Supervisory Board Members) of the Act on Nippon Telegraph and Telephone Corporation, etc., provides that "Any person who does not have Japanese nationality may not be appointed as a director or an auditor for the Company or the Regional Companies." and therefore nationality cannot be included in the policy. Accordingly, we cannot invite foreign directors under the NTT Act. However, eight foreign directors and three foreign directors of Data and Ltd are invited as directors of the intermediate holding company (global business).

Tax Policy

Basic Policy

All directors and employees of NTT Group have declared their commitment to complying with all laws and regulations (including their spirits), social standards, and internal company rules, whether in Japan or overseas, and acting in accordance with the highest ethical standards in both private and public activities. In tax-related operations, we also strive to maintain and enhance tax compliance by setting up guidelines and educating our employees.

Governance Structure

NTT has established a basic policy of internal control systems for NTT Group to deal with various risks including tax risks which has been approved by NTT's board. We define each company's roles in tax-related operations as shown below, to the left.


Optimizing Tax costs

NTT and its consolidated subsidiaries should strive to utilize appropriately and effectively the tax relief measures with a view to maximizing shareholder value of NTT Group. NTT and its consolidated subsidiaries shall not implement any measures which may be considered or interpreted as tax evasion by regulators.

Tax Risks

When undertaking international transactions, NTT and its consolidated subsidiaries should ensure such transactions are given due consideration in advance of execution.
NTT and its consolidated subsidiaries should consult with tax advisors and seek advice as necessary.
Furthermore, we have laid out the following measures regarding transfer pricing taxation and controlled foreign companies rules.


Relationship with Tax Authorities

NTT Group aims to maintain good relationships with tax authorities through communication with them. All explanations given to tax authorities should be based on facts. NTT and its consolidated subsidiaries should work with them in a sincere and appropriate manner. If tax authorities were to notify NTT and its consolidated subsidiaries of tax adjustments, NTT and its consolidated subsidiaries should determine the cause of such issue(s) immediately, and take appropriate measures to prevent similar recurrences, unless NTT and its consolidated subsidiaries file a petition of objection or tax lawsuit.


The above amounts are based on "Country-by-Country Report" submitted to Japanese Tax Authorities, and not directly related to the Consolidated Financial Statements.

Business Activity 15
Sharing high ethical standards with business partners

Our commitment

We set high ethical standards for ourselves and share them with our business partners

Our objective


Cases of legal actions for anti-competitive behavior, bribery

Prevention of Bribery

Understanding that it is essential to comply with laws and regulations and to operate its business with high ethical standards, NTT Group prohibits all forms of corruption, including bribery, improper benefits and facilitation payments*1. In particular, with respect to the prevention of bribery, NTT Group has created a "Anti-Bribery Handbook" and distributed it to employees of Group companies, including its overseas subsidiaries, and has also posted the handbook on its internal website to ensure thorough awareness.

Furthermore, for NTT, NTT East, and NTT West, bribery is prohibited pursuant to the NTT Act, and any violations are subject to legal penalties.

  1. Facilitation payments: Small payments used only for the purpose of ensuring ordinary administrative services are processed smoothly

Began holding "NTT Group Sustainability Conferences"

In order to share superior sustainability initiatives across the NTT Group, we have held the NTT Group Sustainability Conference for the entire Group every year since fiscal 2013. This initiative takes the form of a conference setting where operating companies present their achievements of various measures implemented in line with nine challenges and 30 activities based on three themes. The best measures are commended by the President as "superior sustainability measures" at the conference. The FY2021 Sustainability Conference was the first to be held under the "NTT Group Global Sustainability Charter" established in November 2021, but as COVID-19 infections continued to spread around the world, it was held online in the same way as the previous year.

There were 98 submissions by group companies in Japan and overseas, with the Grand Prize going to six of those initiatives. A People's Choice Award was created specifically for this online conference, where employees could offer their direct support of initiatives submitted by each company. The People's Choice Award was eventually given to four initiatives as a result of voting. The voting system was particularly valuable for increasing employee awareness as it allowed them to better understand each particular initiative before submitting their vote. The award ceremony was held in June 2022 in person for the first time in two years, and proved to be extremely popular. In addition to holding the conference in the next fiscal year and beyond, we also aim to further build on sustainability awareness among employees by improving the content of initiatives and enhancing measures that involve employee participation. Details of successful examples are also released outside the company so that they can be viewed by business partners.

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Business Activity

Examples at the 9th Sustainability Conference Award

Revitalization of rural areas with AI-operated buses

The decreasing birthrate and aging population is leading to a social problem where there is a lack of transportation for the elderly. In light of this background, this initiative contributes to regional revitalization by providing AI-operated buses for more than 500,000 people in more than 50 areas around the country.


Smart fisheries industry (ICT Buoy)

We worked with fishermen in the Tohoku region to develop the "ICT Buoy" as part of reconstruction efforts in the wake of the Great East Japan earthquake, contributing to the revival of the fisheries industry with the aim of creating sustainable communities.


Supporting the treatment of stroke in Thailand by utilizing mobile services

We harnessed our technology to provide remote treatment inside emergency vehicles as a way of addressing issues in certain regions prone to traffic congestion in Bangkok, Thailand.


AI-based tuberculosis image diagnosis for 100,000 people in India

We provided image diagnoses for residents of local communities without easy access to hospitals in India (Chennai), a country with the highest number of tuberculosis patients in the world. This initiative has already helped to prevent tuberculosis in more than 100,000 people.


OriHime x sports x community development

In addition to opportunities for tuning in to sports events, we are helping to create a new way to promote corporate sports for addressing regional social issues, with initiatives like dietary education and eating together virtually with rugby players.


Development of smart city in Nagai City, Yamagata Prefecture

To address issues like aging populations and decreasing birthrates in regional areas, we combined our group-wide resources and technologies to provide a range of services like child protection systems, e-sports, and digital currencies for regional communities.