Sharp seeks to further strengthen the system for business processes, as well as ensure sound and transparent management practices and firmly uphold the propriety of operational activities. Sharp has introduced the executive officer system to work toward faster, more efficient decision-making, looking ahead to expanding the scale of business in the future, and has also established and is promoting an internal control system. Thus, Sharp is enhancing and expanding the governance system for the Sharp Group as a whole.

In an effort to further strengthen manufacturing and technological competency, Sharp is committed to making speedy managerial decisions and to enhancing the quality of management.

Sharp’s business activities are clearly bounded by the development, manufacture, and sales of products and devices. Each area is highly specialized, yet there is strong interrelation between them. When all directors who are each deeply versed in these business areas consult with one another, they can make speedy and unerring decisions. Sharp also believes that clarifying the managerial responsibilities of each director enhances reciprocal supervisory functions.

In June 2008, Sharp introduced an executive officer system to build an organization that can execute business processes responsively and effectively.

In addition, in July 2006, Sharp established the Advisory Board to obtain a wide range of opinions and proposals from knowledgeable outside experts from various fields to assist in management decisions.

Sharp intends to further strengthen its current Director/Corporate Auditor system, which allows management and R&D and manufacturing divisions to work closely on expanding business, to enhance corporate governance.

Based on Japan’s Companies Act and the Financial Instruments and Exchange Act, which went into effect in May 2006, and September 2007, respectively, the Sharp Group is improving its internal control system to ensure effective governance of the entire group.

In May 2006, the Board of Directors passed a resolution to adopt a Basic Policy for Internal Control, as well as established the Internal Control Committee as an advisory panel to the Board of Directors. Through these actions, Sharp is advancing measures such as developing relevant documentation, conducting self audits and documenting compliance by subsidiaries in Japan and overseas and by Sharp business groups, implementing internal control audits by the Internal Audit Division, and introducing an IT system to provide operational support for internal control activities.

Also, the Financial Instruments and Exchange Act requires submission of internal control reports beginning in fiscal 2008. Accordingly, Sharp will implement internal control assessments and put appropriate information disclosure into practice this fiscal year.