Business ethics and legal compliance are the minimum social responsibilities that any corporation must fulfill. Under a system that closely coordinates CSR with risk management, Sharp is strongly committed to adhering to business ethics and ensuring legal compliance.

In May 2005, to make legal compliance and business ethics top priorities, Sharp revised its charter of conduct and divided it into two documents: the Sharp Group Charter of Corporate Behavior, the principles of Sharp’s corporate behavior; and the Sharp Code of Conduct, the standards of conduct for all directors and employees. These two documents apply to group companies around the world as the common standards of the Sharp Group.

Sharp believes BRM (business risk management), like CSR, is indispensable in business management because it eliminates the risk of losses and legal violations, while at the same time helping the company quickly adapt to changing business environments. That is why the company pursues both CSR and BRM activities.

Sharp holds meetings of the CSR/BRM Committee to discuss and check progress, policies, and action plans for the entire company. These meetings are attended by an Executive Vice President (Chief Officer, General Administration) and all group general managers of both the business groups and the functional groups.

To strengthen this system, in April 2008 Sharp reorganized the CSR Promotion Department, which had been responsible for promoting CSR and BRM up to that point, and the Legal Affairs Division and established a new CSR Promotion Group under the control of the Executive Managing Officer in charge of legal affairs and intellectual property.

Amid concerns that a disaster causing extensive damage, such as a major earthquake, may strike, advancing a BCM program committed to continuously improving policies to ensure the safety of employees and their families, as well as upgrading action plans for maintaining business operations and expediting recovery, has become a critical aspect of CSR/BRM.

To cope with a large-scale earthquake that can be assumed will occur in Japan, Sharp instituted earthquake preparedness training, and developed and maintained BCPs (business continuity plans), primarily for production groups, in fiscal 2007.

In fiscal 2008, Sharp will further strengthen the system to promote BCM in all production groups, and will formulate action plans, including at overseas bases, on the assumption that a new influenza pandemic will occur, an event currently of increasing concern worldwide.

In Japan, Sharp Corporation and its domestic subsidiaries have appointed a Chief of Legal Affairs at each business group and company to ensure that no laws, regulations, or social norms are violated in the course of conducting business.

To raise legal awareness and ensure compliance with the law, Sharp and its subsidiaries periodically hold wide-ranging educational programs in Japan, including job-level-specific training for directors, senior executives, managers, mid-career employees and new employees, specialized training in specific fields, and e-learning available for all employees. Sharp is also working to upgrade and expand compliance manuals and improve the convenience of access on its intranet to information on the law and company regulations.

The Group Charter of Corporate Behavior and the Code of Conduct contain provisions that strictly prohibit any form of corrupt behavior such as money extortion or bribery, and require that donations be handled in a proper manner.

Sharp Corporation prevents illegal payoffs and improper expenditures through a system of compulsory reviews by the Donation Examination Committee in Japan to assess the propriety of monetary disbursements such as donations and contributions.

Sharp Corporation and its domestic affiliated companies have a hotline for reporting problems and providing counseling services related to compliance issues. The hotline is open to employees, temporary staff, and employees of business partners, in line with the spirit of Japan’s Whistleblower Protection Act. In addition, in October 2007, Sharp in Japan set up a contact point outside the company at its legal advisor’s office.

Sharp clearly stipulates that there will be no unfavorable treatment or penalties against individuals who report compliance violations or seek consultation.