Chapter II: CORPORATE STRATEGY

Our principles:

We recognize that we must integrate our business values and operations to meet the expectations of our stakeholders. They include customers, employees, regulators, investors, suppliers, the community and the environment.

• We recognize that our social, economic and environmental responsibilities to these stakeholders are integral to our business. We aim to demonstrate these responsibilities through our actions and within our corporate policies.
• We take seriously all feedback that we receive from our stakeholders and, where possible, maintain open dialogue to ensure that we fulfill the requirements outlined within this policy.
• We shall be open and honest in communicating our strategies, targets, performance and governance to our stakeholders in our continual commitment to sustainable development.
• The Managing Director is responsible for the implementation of this policy and will make the necessary resources available to realize our corporate responsibilities. The responsibility for our performance to this policy rests with all employees throughout the company.

Our partnership focus:

• We shall strive to improve our environmental performance through implementation of our Sustainable Development and Environmental policies
• We shall ensure a high level of business performance while minimizing and effectively managing risk
• Through effective partnerships, we shall continue our initiatives on water efficiency, safe recreational use of water, education and environmental improvement within the community
• We shall encourage dialogue with local communities for mutual benefit
• We will register and resolve customer complaints in accordance with our published standards of service
• We shall support and encourage our employees to help local community organizations and activities in our region
• We shall operate an equal opportunities policy for all present and potential future employees
• We will offer our employees clear and fairs terms of employment and provide resources to enable their continual development
• We shall maintain a clear and fair employee remuneration policy and shall maintain forums for employee consultation and business involvement
• We shall provide safeguards to ensure that all employees are treated with respect and without sexual, physical or mental harassment
• We shall provide, and strive to maintain, a clean, healthy and safe working environment
• We shall uphold the values of honesty, partnership and fairness in our relationships with stakeholders
• Our contracts will clearly set out the agreed terms, conditions and the basis of our relationship
• We will operate in a way that safeguards against unfair business practices

We shall encourage suppliers and contractors to adopt responsible business policies and practices for mutual benefit.

Carrying Out Business with “Sincerity and Creativity”

Sharp believes that CSR is fully realized when every employee is inspired at all times and in all business activities to live and act by its ideals of “Sincerity and Creativity”.
Successful fulfillment of CSR objectives is not just a task assigned to any single division; it forms the aim and essence of Sharp’s management itself, and it is a responsibility shared by management equally with each and every staff member throughout the entire corporation

A Systematic Approach to Promoting CSR Across the Entire Group

To actively promote CSR across the entire Group‚ Sharp established a CSR Promotion Department in October 2003 under the aegis of the Management Planning Board‚ which oversees the business management of Sharp Corporation, as well as of its domestic and overseas affiliates. In the past‚ divisions observed laws and regulations and carried out environmental protection efforts independently. Now‚ with a department dedicated to promoting CSR‚ Sharp is in a position to ensure consistent CSR efforts throughout the company. In fiscal 2004‚ Sharp focused on implementing in-house policies for the company-wide introduction and propagation of CSR values‚ thus effectively heightening awareness of them throughout the entire Sharp Group in Japan.
Hereafter‚ Sharp will shift efforts toward fulfilling CSR at its overseas bases

Educating and Distributing Information to All Employees

Recognizing that successful implementation of CSR depends on the thinking of all its employees, our company is developing policies that will stimulate the growth of a permanent CSR mindset throughout the corporation.

Sharp also periodically measures the degree of awareness and comprehension of CSR within the company. It identifies issues related to CSR promotion policies‚ and outlines measures to improve CSR awareness.

(1) CSR training and information meetings

Since fiscal 2002‚ division managers have been participating in compliance training‚ which Sharp enhanced in fiscal 2004 and held as CSR training. It also holds successive information meetings and training sessions regionally for overseas base managers and administrative representatives.
In fiscal 2005‚ Sharp plans to complement the content of its CSR training for division managers. It also plans to begin an e-learning program for CSR‚ thereby strengthening the knowledge and understanding of its employees with regard to CSR and Sharp’s efforts toward its fulfillment.

(2) In-house e-mail newsletter for Sharp directors and employees

As of June 2004‚ all directors and employees of the domestic Sharp Group receive a monthly e-mail newsletter‚ which features case examples of current CRS efforts.
Sharp acknowledges that‚ in the future‚ it will be necessary to hold company-wide campaigns in addition to the newsletters to raise CSR awareness further.

  

Topic Outline No.1 What's CSR? Explanation of CSR, Sharp's ideas about CSR, and what the company is doing about it. No.2 CSR and environmental protection efforts The importance of environmental protection in CSR, and what individuals can do to protect the environment. No.3 A look at the Environmental Report (1) Introduction to topics introduced in the Environmental Report 2004, Sharp's basic stance on the environment, and the corporate vision. No.4 A look at the Environmental Report (2) No.5 Sharp ranked 6th in list of most admired companies! In its July 26 edition, the influential magazine Nikkei Business ranked Sharp 6th among the 100 most admired companies in the area of CSR in Japan. The rankings, however, showed that Sharp must still improve its ratings for disclosure of its social factors, and the company will use this as a basis for improving its rankings even further. No.6 Learn from CSR case studies A focus on the importance of CSR through a look at examples of actual CSR efforts (for example, requests from business partners for improved CSR). No.7 Importance of quality and compliance A focus on the importance of quality, a key element of social responsibility, and on efforts to abide by laws and regulations. No.8 Prepare for business risk An introduction to Sharp's thoughts on business risk management, and on what must be done at all times and during emergencies. No.9 Start of the Kyoto Protocol and related Sharp efforts A look at Sharp's efforts to reduce greenhouse gases and enforce its corporate vision. No.10 Prepare for the Personal Information Security Act What Sharp as a whole, individual divisions, and individual employees must do in response to the Personal Information Protection Act in Japan.

3) Survey on CSR awareness

To measure the growth in CSR consciousness resulting from in-house initiation measures‚ Sharp carried out a survey in April 2004‚ which will measure the degree of CSR awareness among employees once every six months. According to a recent survey‚ the number of employees who understand the significance of CSR is increasing‚ showing that Sharp’s efforts to spread CSR thinking has progressed over the past year.
Our company will continue to publicize CSR information until the value and awareness of CSR have become deeply ingrained in the minds of all employees.

Business Risk Management (BRM) and CSR

To support continued growth of an enterprise‚ business risk management (BRM) that excludes risks and optimizes operating conditions is indispensable in business management.
In the past‚ the persons in charge of operations considered the business risks of their respective fields and advanced business development separately. However‚ beginning in fiscal 2001‚ Sharp established a BRM Committee (re-established as the CSR/BRM Committee in November 2003) to systematically study business risks of the entire Group. Recognizing that a certain amount of business risk is unavoidable in the course of conducting business‚ BRM has been established as a permanent management activity to optimize business risk conditions by minimizing‚ avoiding‚ or suppressing risks within manageable limits.
In practicing BRM‚ Sharp first identified all conceivable risks of the entire Group and divided them into five categories in a "Specific Risk Control Manual‚" which itemized more than 100 concrete risk items.
Our company then appointed a representative to monitor each risk item‚ set out countermeasures in concrete terms for each item‚ and communicated this information company-wide.
Sharp reviews the Specific Risk Control Manual from time to time‚ adding new specific risks as needed to promote consistency when coping with changes in society. As a result‚ Sharp retains control over known risks

Structuring a PDCA cycle of CSR

To truly establish CSR values in-house and not just raise its awareness‚ the application of CSR in one’s daily work is essential. For that reason our company began to study how all business groups could apply CSR to their daily tasks. In late FY 2004 work started on the compilation of themes and action plans designed to fully realize CSR.
Sharp also set up a follow-up PDCA cycle‚ which confirms the progress of its action plans and identifies problem areas. PDCA stands for "plan‚ do‚ check‚ and action"‚ and by repeating this cycle‚ Sharp continuously improves its efforts.
As it implemented the PDCA cycle‚ Sharp discovered that the progress of its business groups varied greatly‚ and therefore required all of them to set CSR strategy objectives and a PDCA cycle to be added to all business performance evaluations.