Governance

Quality and Safety Framework

1. Quality and Safety Implementation Framework and Quality and Safety Risk Management Framework

The NEC Group positions ensuring the quality and safety of its products, systems, and services, as well as preparing for the potential risks as one of the key management issues.
NEC’s CBXO is responsible for managing the NEC Group’s quality and safety. Furthermore, we are working to clarify our system of activities by defining company-wide rules and standard operating procedures, and to improve quality and safety. This effort is headed by the Business Process Transformation Division, the quality promotion organizations established at the relevant departments in each business area and at consolidated subsidiaries, and the quality/safety management officers appointed in each department and at consolidated subsidiaries.
To manage risks related to quality and safety, we have built a company-wide framework and ensure that it is thoroughly implemented. If a customer’s system or a system with significant social impact were to experience a serious issue, or a major product incident or infringement of technology laws and regulations were to occur, the matter would be promptly escalated to management. The relevant department and specialist staff would confer and reach a swift decision on the response policy such as responses to the customer, the relevant local/regional authority, and public relations measures.

2. Ensuring the Soundness of Construction Work

As a Social Value Innovator, NEC garners trust and contributes to realizing a better society by ensuring the health and safety of workers through safe construction initiatives that comply with relevant laws and regulations, such as safely installing NEC-developed products and systems.
With the mindset that health and safety are the highest priorities in all work, including health management for all NEC employees and workers involved in construction work, we contribute to building an extremely safe society that provides peace of mind, and work to ensure the safety of our installation procedures in compliance with relevant laws and regulations and the soundness of construction work.

Thought Process

To realize “Better Products, Better Services,” which is one of the Principles in our founding philosophy, we have implemented a steady stream of initiatives aimed at improving quality. These include the introduction of quality controls that broke new ground in Japan, ZD Activities¹ , the quality-operation strategy² , and Software Quality Control (SWQC).
As a Social Value Innovator, we hope that all employees will continue to improve the quality of their own work, the products they create and the services they provide, and that we will be a valued company, recognized as the provider of trusted “NEC Quality.”
Specifically, we have set up the Quality and Safety Action Policy, and we are conducting activities such as complying with product and service quality and safety laws and regulations, improving safety and reliability technologies, strengthening project management, sharing expertise learned from past failures and taking steps to prevent defects and their recurrence.

1. ZD (Zero Defects) Activities: Designed to stimulate each employee’s autonomy and passion to eliminate defects from their work through creative thinking, cost reductions, and improvements in quality and service
2. An initiative to achieve company-wide improvement in the 7 Qs denoting quality in 1) management, 2) products and services, 3) human behavior, 4) workplace environment, 5) relationships with the local community, 6) business results, and 7) corporate image

Construction work at NEC is strictly managed to ensure compliance with the Construction Industry Act, the Industrial Safety and Health Act and other laws in order to ensure that we provide customers with social value. In addition, our philosophy is to advance OH&S by establishing an OH&S culture among employees. With this in mind, we have set out the following code of conduct.

Initiatives Related to Quality and Safety

Quality Management System

At the NEC Group, we have created quality management systems that we implement to create social value in the form of safety, security, fairness and efficiency and realize high-quality products and services that satisfy customers’ demands and expectations. In addition, we aim to build quality into the process phase, and make continuous improvements to management systems to make our processes even better.
We have obtained both ISO 9001 and ISO 20000 certification in all business areas where customers require it.

1. Quality Audits

Based on an approach to internal controls with three lines of defense, business divisions are the first line, management divisions are the second line, and internal audit divisions are the third line. As part of the second line, the SCM Strategy Division regularly audits each business unit to ensure that it is operating its quality management system properly, and works to make improvements.

2. Pre-order Screening

Before embarking upon a new project, we conduct a pre-order screening, and the person in charge and specialized staff in each department identify the risks involved in executing it and check that sufficient countermeasures are in place. The screening is multifaceted, covering aspects such as technological risks and safety risks related to quality as well as the development scale and timeframe and the project framework.

3. Quality Assurance Guidelines for Machine Learning-based Artificial Intelligence

In 2019, the NEC Group formulated Guidelines for Quality Assurance of Machine Learning-based Artificial Intelligence to ensure the quality of AI systems that cannot be handled using conventional software quality assurance alone. We have applied these guidelines to the development of important AI systems. We make updates to the guidelines on a regular basis, and aim for increased sophistication with improvements to checklists related to generative AI.

Initiatives in Medical and Healthcare Fields

1. NEC Ethical Review Committee for the Life Sciences

We conduct research and development in the field of life sciences with the goal of commercialization.
When conducting proof of concept or research involving human subjects or information and data related to people, we follow guidelines issued by organizations including Japan’s Ministry of Education, Culture, Sports, Science and Technology and the NEC Ethical Review Committee for the Life Sciences, which includes external experts, deliberates on the ethical validity of the research, including the purpose of the research and consideration for the human rights and dignity of the subjects.

2. Initiatives to Ensure Transparency in Relationships with Medical Institutions

We are working to ensure the transparency and soundness of our relationships with medical institutions, with a view to gaining a broader understanding of the medical device industry’s contribution to the development of life sciences, as well as the high ethical standards that companies in that industry adhere to in conducting their corporate activities.

3. Initiatives in the Medical and Healthcare Fields

We have established a management framework and are advancing Quality Management System activities and regulatory compliance to establish and expand commercial businesses in the medical and healthcare fields.

• In 2019, we obtained a first-class medical device marketing authorization and built a management structure.
• Regarding compliance with relevant laws and regulations, we formulated advertising compliance guidelines under the Pharmaceuticals and Medical Devices Act¹ and a checklist for determining applicability, which we have incorporated into the processes of the relevant business entities.
• Continuously operated and improved processes compliant with the QMS Ministerial Ordinance and ISO 13485:2016 in QMS activities.
• Promoted compliance with laws and regulations related to medical devices in different countries (such as Japan’s Pharmaceuticals and Medical Devices Act, the EU MDR², and the UK MDR³).

1. Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices
2. EU Medical Devices Regulation 2017/745
3. UK Medical Devices Regulations 2002

Thorough Compliance for Quality and Safety

1. Compliance with Relevant Laws and Regulations

The NEC Group leverages an internal generative AI system specifically designed to support the learning of technical laws and regulations that each product should comply with. Through this initiative, we strive to comply with laws and regulations in Japan, including the Electrical Appliances and Materials Safety Act, Radio Act and Telecommunications Business Act, and with laws and regulations in various other countries related to our products for international markets.
NEC is also enforcing compliance with applicable laws, regulations and internal rules for labeling and instructions related to the quality and safety of its products and services. If violations are found or suspected, NEC will properly address the problem by following the direction of the relevant ministries and agencies. We also keep up-to-date knowledge of technical laws and regulations in advanced technology and new business domains, and check on the status of implementation of quality management systems through quality audits.

2. Ensuring Product Safety

The NEC Group complies with the product safety standards IEC 62368-1 (JIS C 62368-1), and we have also established our own Group safety standards adding unique safety measures. In addition, we also perform risk assessments to ensure product safety.
If product safety issues arise, we immediately take action in accordance with laws and regulations, and provide information on the NEC website and swiftly notify our customers.

Important Notices from NEC (Japanese language only)

Training and Awareness Related to Quality and Safety

At the NEC Group, we believe that developing personnel and improving their skills are extremely important measures for improving the quality and safety of our products, and therefore, we are implementing the following initiatives.

1. Employee Training and Development of Specialists

• NEC conducts training programs for specific jobs and fields of specialization with the aims of improving practical design and construction skills and providing basic and specialized knowledge of quality and safety management standards as well as technical standards.
• We provide rigorous education on technology laws and regulations, such as the Radio Act and the Telecommunications Business Act, which are needed for operating telecommunications businesses, and develop engineers by fostering a correct understanding of laws and regulations and a safety-oriented mindset.
• Web-based training on NEC’s approach to quality, safety, and technology laws and regulations is conducted annually for employees of the Company and consolidated subsidiaries in Japan.

2. Project Management Award

• The Project Management Award provides awards and other commendations to raise awareness of the importance of project risk management among employees of the NEC Group, and to demonstrate the significance of challenging high-risk projects, accomplishment and recovering from setbacks.
• NEC holds an annual presentation of outstanding cases and presents a Project Management Award to the organization or group that demonstrated the most beneficial project support, or the project team that tackled a difficult project and achieved a particularly outstanding result.
• NEC also recognizes that increasing awareness of award-winning cases throughout the Group helps to prevent risks from materializing in new projects through the horizontal spread of risk management best practice.

3. Increasing Awareness of Quality Through “Quality Month” Activities

• In November, which we have designated “Quality Month,” members of senior management and experts from inside and outside the Company conduct seminars and dialogues aimed at ensuring that employees are always highly conscious of quality and safety as they work.
• In fiscal year 2026, talks were held in each workplace using video materials on the topic of quality fraud and inappropriate behavior to raise awareness of creating an open and communicative work environment.

Construction Work Project Management

We strive to prevent occupational injuries and to improve health and safety standards through our Occupational Health and Safety Management System. In particular, using our construction work project management system, we have achieved 100% implementation of risk assessments and fixed-term Industrial Accident Compensation Insurance.
There were no serious occupational accidents in fiscal year 2026.