Corporate Governance

The Company’s Board of Directors is composed of eleven (11) Directors, eight (8) of which are Directors who are not Audit & Supervisory Committee Members and three Directors who are Audit & Supervisory Committee Members, including five independent Outside Directors. The Board decides on the important business policies of the Group, and supervises and receives reports on the business execution, in accordance with the Rules of the Board of Directors. To enable expedited decision-making, the authority regarding decisions on execution of important operations is delegated to the Directors as necessary.
In FY2023, the Board of Directors met 17 times and made necessary resolutions and received reports on the status of business execution. Major agenda items in FY2023 included progress of the 2023 Medium-Term Management Plan and discussions for the next medium-term management plan, M&As and post-investment monitoring, internal controls, Board effectiveness evaluation, procurement difficulties and geopolitical risks, and discussions on sustainability initiative.

The Company’s Audit & Supervisory Committee is composed of three (3) Directors who are Audit & Supervisory Committee Members, including two independent Outside Directors. The Company ensures that the Audit & Supervisory Committee with a full-time committee member and a chairperson therein. The chairperson who is a full-time committee member presides over its meetings. The Audit & Supervisory Committee works closely with the Company’s Internal Audit Department positioned thereunder and the accounting auditor to conduct audits based on the committee’s annual corporate audit plan in accordance with the audit policy and the assignment of duties determined thereby. 
The Audit & Supervisor Committee Members meet once per month in principle to  deliberate on the status and results of audits.
The two Outside Directors who are Audit & Supervisory Committee Members apply their extensive knowledge and experience in audits and supervisions of the Company’s management to ensure legitimacy and adequacy. 
Mr. Keiichi Kato, Outside Director, is an attorney-at-law who possesses extensive experience regarding corporate legal affairs and Ms. Yukako Ikukawa, Outside Director and Certified Public Tax Accountant, possess considerable expertise in finance and accounting. Their experience and expertise contribute to the effectiveness of audits and enhance the Board’s supervision in enhancing legitimacy and adequacy in the Company’s management. 
Moreover, the Company assigns two employees to assist in the execution of duties of the Audit & Supervisory Committee for further effective auditing.

The Audit & Supervisory Committee and the Company’s accounting auditors work closely to enhance the efficiency and effectiveness of audits. In addition to regular meetings held several times a year, they meet as required to ensure appropriateness and credibility in their execution of duties. This is achieved through such measures as briefing, consultation or inquiries, and confirmation on matters that require special attention, regarding the annual audit plans and site audit plans (including audits of consolidated subsidiaries) prepared at the beginning of each fiscal year.

Further, Audit & Supervisory Committee works closely with the Internal Audit Department positioned thereunder to enhance efficiency and effectiveness of the audits. Each time the Internal Audit Department conducts an audit pursuant to the annual audit plan, Audit & Supervisory Committee Members receive the copies of the audit notification from the Internal Audit Department and confirm such matters as schedule, subject, purpose, method and other matters of the relevant audit stated therein. After completion of the audit, Audit & Supervisory Committee Members receive an internal audit report concerning matters pointed out and the status of improvement, upon which they discuss and exchange opinions with the Internal Audit Department personnel.
In addition, the general manager of the Internal Audit Department reports to the committee quarterly on results of internal audits and other important matters for discussion, reports to the President & Representative Director on a monthly basis, and meet with the accounting auditor regularly and as necessary for discussion.

The Company has established a Nomination Advisory Committee to ensure transparency and objectivity concerning the nomination of directors. As required by the Board of Directors, the Nomination Advisory Committee deliberates on the nomination of candidates for Directors and Executive Officers, the selection of senior management executives, and the planning for their successors.
In FY2023, the committee met seven (7) times to deliberate on matters including appointment process for Directors, election and interviews of candidates for Directors and Executive Officers, succession planning, and revision of the Company's Executive Officer System.

Remuneration for Directors is designed in such a manner that values can be shared with the shareholders and the level is appropriate for their duties. Due consideration is given to incentives for continued improvement of corporate performance and securing of talented human resources.

• ・Remuneration for Directors who are not Audit & Supervisory Committee Members consists of fixed compensation (“Fixed Compensation”), short-term performance-based bonuses (“Bonuses”) and mid- to long-term performance-based stock compensation (“Stock Compensation”). Bonuses or Stock Compensation may not be paid to Directors who serve as executive directors of the Company's subsidiaries, considering the remuneration paid by such subsidiaries and their responsibilities in the Company.
• ・Remuneration for Outside Directors consists of monthly Fixed Compensation, considering their supervisory roles and independency.
• ・No retirement benefits are paid to any Director.

• 1.The remuneration for Directors who are not Audit & Supervisory Committee Members for FY2023 includes the remuneration paid to two Directors who retired at the conclusion of the 77th Ordinary General Meeting of Shareholders held on June 23, 2023.
• 2.The amounts paid to Directors who are not Audit & Supervisory Committee Members do not include employee salary portions for Directors who have concurrent responsibilities as employees.
• 3.Performance-based Stock Compensation for FY2023 are paid to five executive Directors who are not Audit & Supervisory Committee Members (excluding Outside Directors). Bonuses have not been paid to one (1) Director concurrently serving as a director of subsidiaries, considering the remuneration paid by such subsidiaries and their responsibilities in the Company. The amount of performance-based Stock Compensation refers to grant allowance for the current fiscal year.

Policy for Training of Directors

It is the Company’s basic policy to appropriately provide Directors with training as are necessary and on a regular basis for them to fulfill their respective roles and responsibilities. Directors acquire, update, and develop necessary knowledge through in-house training and/or seminars by Tokyo Stock Exchange and other workshops given by outside professionals such as lawyers and other subject matter experts, as necessary. Opportunities such as factory tours and on-site visits in the Company and its subsidiaries are also given for them to refine their knowledge and understanding towards the Group’s business, finance, and structures.

Corporate Governance Report

Evaluation on Effectiveness of the Board of Directors

The Company has conducted an annual analysis and evaluation of the effectiveness of its Board of Directors based on its Corporate Governance Guidelines since fiscal year 2015, thereby endeavors to strengthen the function of the Board of Directors as a whole.

Summary of Results of Evaluation on Effectiveness of the Board of Directors

Related Links

• Shareholder's Meeting

• Management Policies

• Financial Information

• Sustainability

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