Corporate Governance

Guided by its corporate philosophy of "creating a new world of communications culture," our management policy is to maximize corporate value so as to earn a high degree of trust and recognition from shareholders and customers. To this end, we will help to achieve a vibrant and enriched society by promoting mobile multimedia through the provision of services useful to customers' lives and businesses. At the same time, we will strive to enhance and bolster its core businesses with an emphasis on promoting wider adoption of FOMA and Xi services.
We believe that maintaining effective corporate governance is crucial to continuously increasing corporate value. Aiming to achieve the goal of ensuring promptness, transparency and soundness in its business management, we have been working to establish a governance structure that allows it to both make management decisions without delay and reinforce its audit and internal controls, as well as to improve its communications with stakeholders.

We recognize that mobile phones, our core business, have come to play a vital role as social infrastructure in line with market expansion for these products. Accordingly, we have adopted a corporate governance structure consisting of Board of Directors, Audit & Supervisory Board members and an Audit & Supervisory Board. This structure reflects a desire for directors to have a key role in important business execution matters, from the standpoint of realizing consistent and stable business operations through the effective utilization of management resources. From the position of ensuring sound and effective management, this configuration also reflects the desire for a structure in which directors, serving concurrently as corporate officers responsible for business execution, mutually supervise their respective actions, while audit & supervisory board members perform audits of overall management. Similarly, we appoint outside directors and audit & supervisory board members, with a view to further enhancing monitoring and audit functions.
In addition, we have introduced the corporate officer system to clearly delineate the roles of business execution and monitoring, and to better reinforce business execution functions. This system enables speedier responsiveness to changes in the operating environment. Through initiatives of this kind, we strive constantly to boost management speed in order to realize consistent and stable business operations, as well as develop a corporate governance structure capable of bolstering both auditing and governance functions.
Also, we have transferred a portion of decision-making authority from the Board of Directors to the representative directors and corporate officers to enable agile business execution by the responsible corporate officers. Furthermore, more than half of the members of the Board of Directors are assigned the responsibility of serving concurrently as corporate officers. This effectively enhances the mutual supervision of the members of the Board of Directors, while simultaneously strengthening the management supervision function.

Our business execution and management supervision mechanisms are summarized in the figure below:

The Board of Directors consists of 13 members, including one outside director. In principle, the Board of Directors meets once a month, and extraordinary meetings are convened if necessary. In this way, decisions are made on important business matters, status reports are received as needed from Board of Directors members assigned the responsibility for business execution, and management supervision is implemented.
For decision making on important matters related to business execution, we have established the Management Committee, which includes the president and chief executive officer, senior executive vice presidents, executive vice presidents and full-time audit & supervisory board members. The Management Committee meets in principle once a week, and extraordinary meetings are convened if necessary, to enable flexible, rapid decision-making by the president and chief executive officer.

The Audit & Supervisory Board consists of five members, including three outside audit & supervisory board members. The Audit & Supervisory Board in principle meets once a month to make decisions on audit policies, plans, methods, and other important issues relating to the audit of DOCOMO. Each audit & supervisory board member, in accordance with audit policies and audit plans determined by the Audit & Supervisory Board, attends important meetings, such as meetings of the Board of Directors, and receives reports from directors, examines important documents, and conducts on-site examinations of the head office, major work sites, and major subsidiaries. In this way, audit & supervisory board members appropriately conduct audits of the status of execution of duties by the directors and report to the Audit & Supervisory Board on the status of audit implementation. Our audit & supervisory board members promote mutual understanding and information-sharing with the audit & supervisory board members of subsidiaries. Audit & supervisory board members ensure the effectiveness of audits by collaborating and exchanging information on audit plans and results with the Internal Audit Department, an independent unit established to perform internal audits of DOCOMO and its independent registered public accountants on a regular basis.

We have established an advisory board composed of experts in various fields, including an advisory board in the United States to receive advice from a global viewpoint. In this way, the objective opinions and proposals of advisory board members regarding management issues facing us are reflected in management. To ensure it receives a diverse range of advice, we invite advisory board members from various walks of life to sit on the advisory board, including prominent business leaders, university professors, commentators, and journalists.

• Period of establishment

October 2011 - September 2013 (planned)

• Board members

Motoshige Itoh	Professor, Faculty of Economics, The University of Tokyo
Shin Kikuchi	Partner, Mori Hamada & Matsumoto
Koh Koike	President and CEO, Representative Director, Oricon Inc.
Main Kohda	Novelist
Masaaki Shintaku	Special Olympics Nippon Executive Vice President
Jitsuro Terashima	Japan Research Institute CEO Tama University President
Taizo Nishimuro	Adviser to the Board Toshiba Corporation Chairman, The Japan Institute of International Affairs
Hideo Miyahara, Ph.D.	President, National Institute of Information and Communications Technology
Dr. Teruyasu Murakami	Director, Research Institute for Industrial Strategy (RIFIS)

• Period of establishment

October 2011 - September 2013

• Board members

Mr. Tom Wheeler [Chairman]	Managing Director, Core Capital Partners Former CEO, Cellular Telecommunications & Internet Association (CTIA)
Dr. Michael Katz	Professor, University of California, Berkeley Former Chief Economist, Federal Communications Commission (FCC)

• Guest for the 1st meeting

Professor Pankaj Ghemawat

Professor, IESE Business School

• Guest for the 2nd meeting

Mr. Richard J. Lynch

President, FB Associates Former CTO, Verizon Communications

• Guest for the 3rd meeting

Mr. Michael D. Gallagher

President and CEO, Entertainment Software Association (ESA) Former Assistant Secretary for Communications & Information, National Telecommunications and Information Administration (NTIA), U.S. Department of Commerce

Matters regarding the compensation of directors are determined by the Board of Directors. The compensation of directors (excluding outside directors) comprises monthly compensation as well as bonuses. Monthly compensation is paid in accordance with such factors as the importance and scope of responsibilities for each management level. Bonuses are paid in consideration of such factors as our results. To reflect results over the medium-to-long term, a portion of monthly compensation is contributed to a director stock purchase plan through the Director's Shareholders Association. The shares of DOCOMO that are purchased through the plan are held throughout the term of office.
In consultation with audit & supervisory board members, it has been decided to pay only monthly compensation to audit & supervisory board members in order to ensure a high degree of independence.The aggregate compensation paid to the directors and audit & supervisory board members during fiscal 2011 was as follows.

Position	Number	Total Compensation
Director1 (excluding outside director)	15	504 million yen
Audit & supervisory board member2 (excluding outside audit & supervisory board members)	3	60 million yen
Outside director/audit & supervisory board member3	5	69 million yen
Total	23	633 million yen

• 1 Including 3 directors who retired at the conclusion of the 20th Ordinary General Meeting of Shareholders held on June 17, 2011.
• 2 Including 1 audit & supervisory board member who retired at the conclusion of the 20th Ordinary General Meeting of Shareholders held on June 17, 2011.
• 3 Including 2 outside audit & supervisory board members who retired at the conclusion of the 20th Ordinary General Meeting of Shareholders held on June 17, 2011.

The name and reason for the appointment for 1 Outside Director and 3 Audit & Supervisory Board Members is as below.

Outside Director	Reason for the appointment
Hiroo Kusumoto	We expect his supervisory function from a standpoint independent of business execution as an outside director, based on his extensive experience and knowledge based on his long career and engagement in business pertaining to telecommunications.

Outside Audit & Supervisory Board Members	Reason for the appointment
Kyoichi Yoshizawa	We expect his auditing capability based on his experience and knowledge derived from his long years of engagement in telecommunications business.
Haruo Morosawa	We expect his auditing capability based on his professional experience and knowledge developed through his long years of service at the Board of Audit of Japan.
Eiko Tsujiyama	We expect her auditing capability based on her extensive insights on finance and accounting, developed through her years of experience as a university professor and outside director of private companies, on account of her capacity as independent registered public accountant.

Although we have not at this point established uniform standards for independence from us in appointing outside directors and outside audit & supervisory board members, based on the Securities Listing Regulations of the Tokyo Stock Exchange, we do ensure the appointment of at least one "independent" director/audit & supervisory board member. We also abide by the standards for independence set forth by the Tokyo Stock Exchange in appointing outside directors/audit & supervisory board members to be named as "independent" directors/audit & supervisory board members. We have named outside audit & supervisory board members Mr. Haruo Morosawa and Ms. Eiko Tsujiyama as "independent" directors/audit & supervisory board members under the stipulations of the Tokyo Stock Exchange.

Companies listed on the NYSE must comply with certain standards regarding corporate governance under Section 303A of the NYSE Listed Company Manual. However, listed companies that are foreign private issuers, such as NTT DOCOMO, are permitted to follow home country practice in lieu of certain provisions of Section 303A. To see the significant differences between two standards, please see the page below.

Significant Differences between Corporate Governance Practices of NTT DOCOMO and NYSE-listed U.S. companies

A summary of the Board of Directors resolutions concerning the development of systems to ensure the propriety of NTT DOCOMO's business activities (internal control systems) is set forth below.

1. In fortifying the internal control systems, we aim to achieve legal compliance, management of loss risk and appropriate and efficient business operations and consider various measures, including regulations, organizational and structural improvement, formulation of action plans, and the monitoring of activities.
2. An internal control committee will be formed as an entity overseeing efforts to have the internal control systems function more efficiently. The committee will aim to fortify internal control systems from the cross-departmental perspective; upon assessing efficacy, necessary improvements will be carried out.
3. Appropriate efforts will be made with regard to ensuring the reliability of the internal control systems, which will be involved with the financial reporting based on the U.S. Sarbanes-Oxley Act and the Financial Instruments and Exchange Act.
4. The Board of Directors will approve the basic policy on fortifying internal control systems (the Basic Policy), receive regular reports on the progress of the initiative to fortify internal control systems, and oversee and monitor the internal control systems of DOCOMO.
5. As chief executive officer, the president and representative director will oversee the efforts to build the internal control systems based on the Basic Policy approved by board members.

We institute the "NTT DOCOMO Group Code of Ethics" and compliance-related regulations and create requisite systems for ethical and legal compliance. In addition, when preparing financial statements, officers responsible for finance, audit & supervisory board members, and independent auditors hold preliminary discussions of significant accounting policies, and for disclosure of company information including financial statements in a manner that conforms with securities-related laws and regulations, matters are decided at meetings of the Board of Directors after the necessary internal procedures pursuant to in-house regulations have been completed. Also, internal audit staff conducts audits of our overall business activities to ensure conformity with laws and regulations and in-house regulations.

Information relating to the performance of duties by directors is recorded and stored in accordance with rules stipulating the methods of storage and administration of documents and administrative information.

Executive directors responsible for risk management periodically summarize information relating to risks in their organizations in accordance with rules concerning risk management, and the internal control committee made up of directors, senior vice presidents, and others identifies risks as necessary for companywide risk management, and decides management policy for identified risks to prevent risks from occurring and to take rapid countermeasures in the event that risks do occur.

The efficiency of the performance by directors of their duties is ensured by such means as decision-making rules based on internal regulations and the specification of powers relating to their duties, the formulation of medium-term management policies and business plans by the Board of Directors, and the establishment of committees composed of directors, senior vice presidents, and others.

Based on rules governing fundamental matters relating to the management of our Group companies, group companies discuss important business matters with DOCOMO or report them to DOCOMO. In addition, officers with responsibility for corporate ethics who are appointed at subsidiaries report to DOCOMO in a timely manner on the state of problems involving senior management, and DOCOMO provides necessary guidance. With respect to unusual transactions with the parent company, investigations are conducted by legal personnel and audits are conducted by audit & supervisory board members. Further, audits by internal audit personnel are directed to cover its subsidiaries, and whenever necessary they obtain and assess the results of the internal audits of those companies.

The Audit & Supervisory Board Member's Office is established as an organization dedicated to assisting the audit & supervisory board members with the performance of their duties, and specialist staff are assigned to it. We provide the Audit & Supervisory Board with advance explanations concerning matters such as appointments and transfers of these personnel and their job assignments, and pay respectful attention to the board's opinions before acting on such matters.

Directors, senior vice presidents, and employees report promptly to the audit & supervisory board members and to the Audit & Supervisory Board concerning matters prescribed by laws and regulations as well as requested matters necessary for the performance by the audit & supervisory board members of their duties.

Representative directors and the Audit & Supervisory Board hold regular meetings and develop an auditing environment necessary for enabling the audit & supervisory board members to perform their duties. In addition, the internal audit staff coordinate with the audits by the audit & supervisory board members to ensure auditing is conducted in a collaborative manner.

The corporate group led by our parent company, NIPPON TELEGRAPH AND TELEPHONE CORPORATION (NTT), operates the following main businesses: the regional communications business, the long distance and international communications business, the mobile communications business and the data communications business. As of March 31, 2012, NTT owned 66.65% of the voting rights of us and was in a position to influence our management decision-making through the exercise of majority shareholder rights. However, we have its own management responsibility and conducts operational management in accordance with its own decision-making.

Each of our employees is instructed to follow the NTT DOCOMO Group Code of Ethics. Ensuring that activities are based on high ethical standards is the foundation of our compliance management. In addition, in order to increase the effectiveness of compliance management, we have strengthened the compliance promotion system, which is centered on Compliance Promotion Committees, and are building an information consultation system pertaining to compliance with ethics and laws. In addition, all divisions have employees with responsibility for compliance promotion, and at least once a year we implement employee education and training in ethics and legal compliance. We have carried out initiatives to enhance awareness of compliance on a companywide basis, including a compliance awareness survey of every employee, the results of which were reflected in our various measures to ensure compliance.

(Open this content in a new window)Code of Ethics

In conjunction with the full-fledged implementation of Personal Information Protection Law in April 2005, we established an Information Security Department, a unit overseeing our overall information security issues, which leads and manages our activities pertaining to the protection of customers' personal information, countermeasures against possible information leakage, development of our internal information control policies, and establishment and/or revisions of internal rules and codes. We have employed various measures to ensure the security of information, for example, by thoroughly administering terminals containing personal information, providing education to employees who handle personal information, supervising contracted companies, and strengthening the checking on the level of technical security employed. We have also established controls and procedures concerning disclosure of corporate information in accordance with domestic and overseas laws and regulations, and will disclose information in a timely, appropriate and proactive way to shareholders and investors to improve transparency.

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