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Corporate Governance

Corporate Governance

Overview of Corporate Governance Systems

Basic Policy

As the holding company of the NTT Group, NTT believes that raising the effectiveness of corporate governance is an important management issue for meeting the expectations of various stakeholders, including shareholders and other investors, as well as customers, business partners, and employees, and for maximizing corporate value. Accordingly, NTT is working to strengthen corporate governance based on the purpose of the principles of the Corporate Governance Code promulgated. Based on NTT's "Your Value Partner 2025" Medium-Term Management Strategy, which was formulated and announced, in order to work together with all its partners to promote initiatives to resolve social issues in its role as "Your Value Partner," NTT will work toward ensuring sound management, executing appropriate decision-making and business activities, clarifying accountability, and maintaining thorough compliance as basic policies.

Corporate Governance System

NTT, in order to strengthen functions for appropriately supervising and auditing business execution, seeks to strengthen its auditing system by appointing several outside independent Members of the Board, and by establishing an Audit & Supervisory Board, of which outside independent Audit & Supervisory Board Members make up a majority.

In addition, NTT has established various meetings and committees as has been deemed necessary to discuss important business execution-related matters in order to ensure that appropriate decisions are made for facilitating effective Group management.

General Meeting Stakeholders

Major Committees

Committee name Overview
CSR Committee Formulates basic CSR strategy and CSR goals for the Group, formulates basic policy for CSR-related reports
Corporate Ethics Committee Establishes corporate ethics, takes thorough steps to maintain discipline
Human Rights Committee Establishes human rights education systems and responds to discrimination incidents, etc.
Technology Strategy Committee Formulates R&D vision, technology development strategy, and R&D alliance strategy
Investment Strategy Committee Formulates investment strategy related to large investment projects, etc.
Finance Strategy Committee Formulates basic strategies related to finance and policies for addressing financial issues
Business Risk Management Committee Undertakes crisis management for the handling of new business risks related to corporate management
Disclosure Committee Establishes policies for compiling yearly reports
Internal Control Committee Provides support for and monitoring of matters related to Group-wide internal control over financial reporting
Group CIO Committee Coordinates matters including Group-wide IT policy discussions and systems development for Group-wide optimization
Group CISO Committee Formulates of the Group's information security management strategies

Board of Directors

Activities and Evaluation of the Effectiveness of the Board of Directors

The Board of Directors of NTT decides important items related to the Group's management which have passed the Executive Officers Meeting, made up of the senior vice presidents and others, as well as the review of the various committees chaired by the president or a senior executive vice president and attended by the relevant senior vice presidents, while also monitoring the status of the execution of the duties of the individual Members of the Board and senior vice presidents., while also monitoring the status of the execution of the duties of the individual members of the board and senior vice presidents.

Nomination Policies and Procedure for Members of the Board

The NTT Group strives to contribute to the resolution of social issues and the realization of a safer, more secure, and more affluent society. To accomplish this goal, the Group acts as a trusted "Your Value Partner" that customers continue to select in order to provide them with new value on a global basis. NTT has established the policy of positioning human resources who share these ideals in the upper ranks of the NTT Group's management, and NTT is electing these human resources from both inside and outside the Group.

In regard to member of the board candidates, individuals are elected based on their having the broad-ranging perspective and experience, superior management skills and leadership, strong business intuition, and motivation necessary to contribute to the overall development of the NTT Group in order to facilitate the increasing of the NTT Group's corporate value.

From the perspective of strengthening the function of supervising business execution, for outside independent members of the board, NTT elects individuals who present no risk of a conflict of interest with general shareholders. In principle, NTT appoints several outside independent members of the board.

The nomination procedure for member of the board candidates involves the review of candidates by the Appointment and Compensation Committee. The candidates are then approved by the Board of Directors and presented for voting at the General Meeting of Shareholders.

Audit & Supervisory Board

Activities and Evaluation of the Effectiveness of the Audit & Supervisory Directors

Audit & Supervisory Board members attend meetings of the Board of Directors and other important meetings. In addition, Audit & Supervisory Board members meet periodically with representative members of the board and members of the board to exchange ideas and opinions and hold discussions on various topics.

Independent Members of the Board and Audit & Supervisory Board Members

Nomination Procedure for Outside Members of the Board and Outside Audit & Supervisory Board Members

From the perspectives of strengthening supervising functions for execution and guaranteeing appropriate audits of the execution of duties by members of the board, NTT has the policy of selecting individuals to serve as outside members of the board and outside Audit & Supervisory Board members who do not represent risks of conflicts of interest with general shareholders. NTT designates outside members of the board and outside Audit & Supervisory Board members who fulfill both the independence criteria stipulated by Tokyo Stock Exchange, Inc., and NTT's own independence standards as outside independent members of the board or outside independent Audit & Supervisory Board members.

Criteria for Selection and Activities of Outside Members of the Board and Audit & Supervisory Board Members

NTT, in order to strengthen functions for appropriately supervising and auditing business execution, seeks to strengthen its auditing system by appointing four outside independent members of the board. Each outside independent member of the board has a wealth of experience as operational director of an academic educational institution, as a corporate manager or as an officer of public relations and diversity promotion in the government; each has a high level of integrity and insight and, by providing advice from a wide-ranging managerial perspective, plays an important role in helping to strengthen the supervisory function for business execution.

Outside independent members of the board receive reports from the corporate auditors and Internal Control Office regarding audit plans and results, and also oversee business operations by providing input as needed.

NTT appoints three outside independent Audit & Supervisory Board members out of the five total Audit Supervisory & Board members. NTT expects each outside independent Audit & Supervisory Board member will conduct future audits based on the knowledge and insight they have gained throughout their careers.

NTT's Audit & Supervisory Board, including the outside independent Audit & Supervisory Board members, exchange opinions with NTT's accounting auditors regarding audit plans, audit results and other information. The Audit & Supervisory Board also exchanges opinions with the Internal Control Office, including information relating to internal audit results.

Internal Control

Overview of Internal Control Systems

NTT has established Basic Policies Concerning the Maintenance of Internal Control Systems for the NTT Group, which were approved via resolution by the Board of Directors. Applying these policies, the NTT Group has established an Internal Control Office, which oversees the establishment of internal control rules and frameworks. In addition, the NTT Group evaluates the effectiveness of the internal control systems based on audit reviews and uniform internal audits regarding high-risk matters affecting the entire Group. Necessary improvements will be implemented accordingly.

In regard to internal control systems for financial reporting based on the Financial Instruments and Exchange Act, the Company takes appropriate measures to ensure the reliability of its financial reporting. To facilitate these measures, tests and evaluations are performed on the implementation status of pertinent internal control systems.