Corporate Governance

To increase corporate value over the medium to long term, the Company has established a corporate governance system based on a company with an audit and supervisory committee.

●Directors

(1)Strengthening Supervisory Functions
The Board of Directors, which includes Independent Outside Directors, and the Audit & Supervisory Committee, the majority of whose members are independent outside directors, will strengthen the supervisory function over business execution.

(2)Ensuring Management Transparency
The Company ensures management transparency by appointing more than one-third of its directors as independent outside directors and by having the Nomination and Compensation Committee, a majority of whose members are independent outside directors, report to the Board of Directors on the nomination and compensation of officers.

The status of the Company's directors is as follows.

The Company discloses a skill matrix that lists each director's knowledge, experience, and abilities, as well as a combination of the director's skills etc. in a manner appropriate to the business environment and business characteristics, along with policies and procedures for the election of directors. Candidates for Directors who are not Audit & Supervisory Committee Members are determined by the Board of Directors based on a report by the Nomination and Compensation Committee, the majority of whose members are Independent Outside Directors.

Candidates for Directors who are Audit & Supervisory Committee Members are determined by the Board of Directors, with the consent of the Audit & Supervisory Committee, based on a report by the Nomination and Compensation Committee, the majority of whose members are Independent Outside Directors.

The skills matrix for the directors is as follows:

The company's corporate governance structure is as follows.

The Company's business execution and monitoring systems are as follows:

(1)Board of Directors
Board of Directors makes decisions on important matters of business execution stipulated by the Board of Directors regulation and matters required by laws and regulations, while continuously supervises the status of business execution. In addition, the Company employs multiple independent outside directors who are experts in diverse fields to strengthen the supervisory function of business execution and develop an effective system through appropriate advice. In principle, the Board of Directors meets once a month on a regular basis, and extraordinary meetings are held as necessary.
In addition, the Board of Directors delegates part of the authority to execute management to the Management Committee, which is chaired by the CEO and is composed of executive officers who supervise each division, in accordance with the Group Approval Authority and Related Company Management Rules. The Board of Directors consists of 10 members, including 5 internal directors and 5 outside directors.

Representative Director, Chairman, President and CEO : Masahiro Koezuka (Chairperson)
Internal Directors : Yutaka Yoneyama, Koichi Otsuki, Noriaki Kubo and Hisato Yoshida
Outside Directors : Masatoshi Suzuki, Sachiko Kasano, Yasuyoshi Ichikawa, Morimasa Ikemoto, and Noriko Yoneda

(2)Audit & Supervisory Committee
The Audit & Supervisory Committee conducts audits on the legality and appropriateness of the execution of duties by directors, ensures the soundness of the Company, and acts in the common interest of shareholders with a view to sustainable enhancement of corporate value. One full-time Audit & Supervisory Committee Member is elected to enhance the effectiveness of the audit and supervisory functions by attending important meetings and strengthening cooperation with the Accounting Auditor and Internal Audit Department. An Outside Director chairs the Committee. In principle, the Audit & Supervisory Committee meets once a month, and extraordinary meetings are held as necessary.
The Audit & Supervisory Committee consists of three Directors, of which three are outside directors.

Outside Directors : Yasuyoshi Ichikawa (Chairperson), Morimasa Ikemoto (Full-time), and Noriko Yoneda

(3)Nomination and Compensation Committee
The Nomination and Compensation Committee, which is composed of members elected from among the directors by resolution of the Board of Directors, is established as a voluntary advisory body to the Board of Directors with the aim of improving transparency regarding election and compensation of directors who are not Audit and Supervisory Committee Members and executive officers, and election of directors who are Audit and Supervisory Committee Members. The Nomination and Compensation Committee is consulted by the Board of Directors and makes recommendations on the election and compensation of directors who are not Audit and Supervisory Committee Members and executive officers, and the election of Directors who are Audit and Supervisory Committee Members. The Committee formulates election criteria and policies for the personnel of directors and executive officers, and policies for the compensation of directors who are not Audit and Supervisory Committee Members and executive officers and deliberates compensation levels. To adopt independent perspectives, an Outside Director chairs the Committee and two-thirds of the Committee members are Outside Directors.

Outside Directors : Masatoshi Suzuki (Chairperson) and Sachiko Kasano
Representative Director, Chairman, President and CEO : Masahiro Koezuka

(4)Outside Directors Meeting
The Outside Board of Directors' group meeting is held every month to gather and share information necessary for Outside Directors' management decision-making and to exchange opinions including their ideas and necessity of discussion for the Board of Directors. The meeting is chaired by a Lead Independent Outside Directors. The Outside Directors' Meeting is composed of all outside directors, and the representative director participates as necessary.

Outside Directors : Masatoshi Suzuki (Chairperson), Sachiko Kasano, Yasuyoshi Ichikawa, Morimasa Ikemoto, and Noriko Yoneda
Representative Director, Chairman, President and CEO : Masahiro Koezuka

(5)Lead Independent Outside Director
Our company selects the Lead Independent Outside Director from among the Independent Outside Directors. The role of the Lead Independent Outside Director is to act as a liaison between the management and the Independent Outside Directors and to facilitate dialogue between them. In addition, the Outside Directors Meeting is convened to determine the agenda of the meeting when necessary, and serves as the chairman of the meeting, and the results of the deliberations are communicated to the management or the Board of Directors to encourage discussion.

(6)Management Committee
The Management Committee deliberates and makes decisions on important matters relating to the execution of the Group's business and on important matters to be submitted to the Board of Directors, as determined by the Board of Directors regarding the transfer of authority. In principle, the Management Committee meets once a week.

The Committee consists of the Representative Director, Chairman, President and CEO, executive officers, and organizational heads appointed by the CEO.

(7)Risk and Compliance Committee
The Risk and Compliance Committee discusses to identify, analyze and take measures for risks including information security, compliance and disasters. Business risks, such as those relating to the business environment, strategy, finance, labor management and supply chain, are deliberated by the Management Committee. The Risk and Compliance Committee meets quarterly.

The Committee consists of the chairperson (Representative Director, Chairman, President and CEO), committee members (executive officers) and organizational heads appointed by the CEO.