Corporate Governance

In pursuit of sound and efficient management, we are working to strengthen our corporate governance while putting into practice the principles of The FUJITSU Way.

Our Basic Stance on Corporate Governance

We believe that pursuing management efficiency while effectively managing business risks is essential to achieving sustainable improvement in corporate value. Recognizing that stronger corporate governance is vital to realizing this goal, we have been active in appointing outside directors to help ensure sound and transparent management. At the same time, by separating management oversight and operational execution functions, we have promoted faster decision-making while further clarifying management responsibilities. The clear separation of these functions is designed to further improve management transparency and efficiency.

Corporate Governance Framework

The Board of Directors is responsible for management oversight, supervising the business execution functions of the Management Council, an executive organ under its authority.

The Management Council deliberates upon fundamental policies and strategy regarding business management, as well as makes decisions on important matters regarding operational execution. Issues discussed by the Management Council and a summary of its discussions are reported to the Board of Directors, which makes decisions on items of particular importance. In principle, the Management Council meets three times a month, but meetings may be convened whenever necessary.

The auditing function is carried out by statutory auditors (Board of Statutory Auditors), who review the Board of Directors as well as operational execution functions, and attend important meetings, including meetings of the Board of Directors as well as the Management Council.

In addition, the Corporate Internal Audit Division has been established to serve as an internal audit group. This division audits the internal affairs of the company and its affiliates, proposes improvements in their business practices, and regularly reports its audit findings to the Management Council.

There is no nominating committee or compensation committee.

Enhancing Corporate Governance

Basic Stance

Comprising our mission, values, and code of conduct, The FUJITSU Way is the core set of principles guiding the corporate and individual actions of the Fujitsu Group. We pursue the sound and efficient execution of our business activities by striving to accelerate the penetration and implementation of The FUJITSU Way and to promote structures and procedures to ensure propriety throughout the Group in our business dealings.

Implementation

To accelerate the penetration and implementation of The FUJITSU Way, in July 2004 we established The FUJITSU Way Promotion Council, as a body reporting directly to the Management Council, and a Compliance Committee. In addition, we realigned the Risk Management Committee and Environmental Committee, which had both previously operated independently, under The FUJITSU Way Promotion Council.

To promote risk management, The FUJITSU Way Promotion Council continuously monitors the implementation of risk prevention measures by working to raise awareness of risks and by gathering information on specific risks, including potential ones. Moreover, in anticipation of the enactment of Japan's Financial Instruments and Exchange Law, in the second half of fiscal 2005 we launched a project to construct an internal control system that will ensure the validity and credibility of our financial reports. Along with establishing a promotion organization dedicated to this endeavor, we have been working to extend it across the Group, including domestic and overseas subsidiaries, accumulating know-how and cultivating personnel. The goals of the project also include achieving greater efficiency through the pursuit of business process reforms across the Group.

The functions of the committees aligned under The FUJITSU Way Promotion Council are as follows:

• Compliance Committee
  This committee is responsible for promoting structures and systems to ensure strict compliance with external as well as internal rules, regulations and norms of behavior. To support these efforts, we have operated a "help line" system since September 2004 to serve as a confidential liaison point for receiving reports from employees and providing guidance to them on matters of conduct.
• Risk Management Committee
  This committee works to obtain information regarding specific incidences of risk and to mitigate their impact on customers and the Fujitsu Group. Serious issues are reported to the Management Council or Board of Directors for discussion and response. In this way, risk issues and countermeasures are disseminated throughout the Fujitsu Group, strengthening our overall risk management posture.
• Environmental Committee
  This committee is responsible for promoting and strengthening the environmental protection activities of the Fujitsu Group, which are based on The Fujitsu Group Environmental Policy and The Fujitsu Group Environmental Protection Program.

We are taking into consideration the opinions of our accounting auditors as we implement the project to construct an internal control system that will ensure the validity and reliability of our financial reports.

We are committed to strengthening corporate governance and will promote the continuous implementation of measures to bolster compliance and risk management. For further details, please see the "Fujitsu Limited Corporate Governance Report" at the URL below.