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

In 1998, Sharp established standards of conduct to guide all employees to fulfill Sharp's business philosophy and business creed. In May 2005, to make legal compliance and business ethics top priorities and to boost Sharp's CSR performance, the standards of conduct were revised and divided 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 prevents violations of laws and lowers the risk of loss 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 a Corporate Senior Executive Vice President (Chief General Administration Officer), all group general managers, and all general managers of the functional groups. Sharp has also established the CSR Promotion Department under the supervision of the Corporate Senior Executive Vice President (Chief General Administration Officer) in order to plan and implement CSR/BRM measures for the entire Sharp Group.

R-CATS* are small-group activities in which all employees address and solve common issues in their everyday work from the viewpoint of CSR. R-CATS activities are conducted in all Sharp departments, from production and quality to product planning and technical, right down to sales, procurement, and administration.

*R-CATS:Revolution - Creative Action Teams.

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

Sharp prevents illegal payoffs and expenditures through a system of compulsory examinations by the Donation Examination Committee in Japan on the adequacy of monetary donations and support and other cases of expenditure.

In Japan, Sharp Corporation and its domestic subsidiaries have appointed a Chief of Legal Affairs at each business group and company to prevent violations of laws or regulations in the course of business. To raise legal awareness and ensure compliance with the law, Sharp and its subsidiaries have continued to carry out wide-ranging educational programs in Japan.

In fiscal 2006, Sharp expanded the scope of job-level-specific training, and newly provided training to directors and management of business groups in addition to managers and new employees. In fiscal 2007, Sharp will also provide training to mid-career employees, and will continue to promote activities to ensure strict legal compliance at both domestic and overseas bases.

Sharp Corporation and its domestic subsidiaries have established a hotline for reporting compliance problems and receiving consultation. The hotline is open to employees, temporary staff, and employees of business partners who work at Sharp business sites. However, in line with the spirit of the Japanese law to protect those who disclose information for public interest, since April 2006, Sharp has opened this hotline to employees of business partners who work outside Sharp sites.

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