Fuji Xerox believes that the company's raison d'etre is to contribute to a wide range of stakeholders, including society, customers, shareholders and employees. In 1998, we established corporate principles entitled “Mission Statement” and “Shared Values” as guidelines for corporate management and guiding principles for decision-making.
The basic policy is to manage the company while increasing the transparency and degree of information disclosed and adopting external opinions in order to realize the corporate principles. Under this policy, we are tackling the enhancement of corporate governance.

Since its establishment, Fuji Xerox has utilized an outside director system. In 1999, in order to allow the Board of Directors to devote itself to decision-making on basic management policies and the supervision of operations, we revamped our management structure and introduced a corporate officer system. To ensure efficient and effective management, we established the Executive Nomination & Compensation Committee under the Board of Directors. The committee chairperson is an outside director with no financial interest in Fuji Xerox. The Corporate Executive Committee was also established, comprised of corporate officers at the senior vice president level and higher, to ensure swift decisions on everyday operations. We also reduced the terms of office for directors and corporate officers in June 2002 from two years to one, thus establishing a system that enables us respond more quickly to changes in the business environment.

Fuji Xerox has employed an outside corporate auditor system since its establishment. To maintain constructive, cooperative relationships between the directors/corporate officers and corporate auditors, the representative director & president entered into and “agreement on audits by corporate auditors” with the corporate auditors to ensure the independence of the latter's position and authority.

Meetings of the Board of Corporate Auditors are attended by corporate auditors, the President, representatives from the audit corporation, managers from the Internal Audit & Analysis Department, Director of Finance, the Executive Vice President in charge of accounting, and others. Fuji Xerox believes that attendance by officers and managers ensures closer cooperation among audits made by the corporate auditors, the audit corporation, and internal auditors, and allows the three parties to share the problems identified from their respective perspectives, thereby improving the quality of corporate governance.

Under the direct control of the president, the Internal Audit & Analysis Department is responsible for supervising internal audits of Fuji Xerox's business activities from an independent standpoint. The department examines and evaluates business implementation and its management in all of the company's business domains from the perspective of compliance, operational efficiency, and effectiveness, as well as the reliability of financial reports. Based on these examinations and evaluations, the Internal Audit & Analysis Department expresses its opinions to support the achievement of the company's business objectives by establishing and improving internal controls.

Such kinds of initiatives leaded by the establishment of internal control system are not only to meet the legal requirement but also the initiatives for general risk management of our whole business which lead to improvement of our corporate value.
Given the situation that we have almost completed the framework of our corresponding system to the legal requirement by last year, we will continue further initiatives for improvement of our business effectiveness and optimization other than the corresponding system in the future. It is also an important task for us to consolidate the internal control system of our business on site and raise the employees' awareness of the importance of the internal control.