Directors

Appointment policy for Outside Directors

The Company has not clearly prescribed standards or a policy concerning independence for the appointment of Outside Directors, however, at the time of selection, candidates for which independence can be secured in consideration of the independence standards of a financial instruments exchange are selected.
As a basic policy for selecting candidates for Outside Directors, decisions are made based on the assumption that the candidates possess the extensive experience and deep knowledge required of Outside Directors or exceptional knowledge in the fields of law and corporate accounting as well as the ability to express fair and objective opinions from an independent standpoint in order to improve the corporate governance of the Group.

Reasons for election of Outside Directors

Outside Directors

All Outside Directors are invited to Board of Director meetings, receive documents in advance from the Corporate Planning Department, and are provided with explanations and such in advance from the departments submitting proposals concerning particularly important proposals as necessary.
In addition, an Audit/Supervisory Committee Office has been established to support Outside Directors who are Audit/Supervisory Committee Members, and the full-time Audit/Supervisory Committee Member participates in important meetings, including the Management Meetings, and have access to important management information and are able to express their opinions.

Notification of Independent Officers（May 28, 2026 Update） [63KB]

Evaluation of effectiveness of Board of Directors

The Secretariat of the Board of Directors periodically conducts interviews on the effectiveness of the Board of Directors, which are reported to the Board of Directors and improvements are made as necessary.
Based on survey results, we will continue to promote proper operations of the Board of Directors and implement improvement measures to address the issues to enable the Board of Directors to further contribute to improvement of corporate value.

Evaluation Process

Improving Areas

Issues to Be Addressed

Director training

For Director training, we have established an environment that allows participation in internal and external seminars and training to promote acquisition of the necessary knowledge and understanding of roles and responsibilities.
In addition, Outside Directors are provided with briefings from officers and employees and opportunities for site visits that help them better understand the Group's businesses, organization, and other matters.

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Audit Committee

We are a company with an audit/supervisory committee. The committee is comprised of five members: one full-time and four part-time (all Outside Directors).

Main activities of members of Audit/Supervisory Committee

Full-time members of the Audit/Supervisory Committee attend important meetings, including Management Committee meetings and Risk Management Committee meetings, to supervise decision-making processes and the content of decisions, as well as the status of risk management and compliance. They receive reports from directors and employees on matters related to the execution of their duties, inspect important approval documents, and conduct investigations into the status of operations and assets.In addition, they hold regular meetings with the accounting auditor regarding financial results and quarterly reviews, while also maintaining ongoing communication and exchanging opinions as necessary. Full-time members also concurrently serve as part-time corporate auditors of major subsidiaries. In this capacity, they attend meetings of the board of directors of such subsidiaries, promote communication and information sharing with directors and auditors of the subsidiaries, and, as necessary, receive reports from directors and persons in charge of each department and exchange opinions with them.
Members of the Audit/Supervisory Committee attend meetings of the Board of Directors, voluntary Nomination and Compensation Committee meetings, and Business Executive Manager Meetings. They also receive reports on the activities of full-time members of the Audit/Supervisory Committee and exchange opinions. Furthermore, in coordination with the accounting auditor and the internal audit department, they hold regular meetings and exchange views with the accounting auditor, and receive reports from the internal audit department on the results of audits conducted for the Company and its major subsidiaries.

Internal Audits

The Company has prescribed the mission of internal audits as being "to enhance and preserve the value of the Group by providing risk-based and objective assurance, advice, and insight" and the definition of internal audits as being "to evaluate and improve the effectiveness of each risk management, control and governance process with a disciplined attitude and systematic methodology as internal audit specialists," and conducting internal audits of the entire group.

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Outline of the details of the decision policy

Details of Executive Compensation (fiscal 2025)

(Notes)

1. The total amount of compensation, etc., for Directors does not include the employee salary for Directors who concurrently serve asemployees.

2. Non-monetary compensation in the form of post-delivery performance-linked share-based compensation is indicated in an amount recorded as an expense for the fiscal year under review.

Incentives

The Company has introduced the following compensation system for Directors other than Audit/Supervisory Committee Members.

Performance-linked compensation system

In order to raise awareness of the need to improve the Company's performance in each fiscal year, the Company has set consolidated ordinary income as the target performance indicator for a single fiscal year, and the amount calculated in accordance with the degree of achievement of the target value is multiplied by the coefficient that corresponds to the contribution to medium- to long-term performance and then paid every month as performance-linked compensation in addition to the fixed compensation. The reason for selecting consolidated ordinary income as the performance indicator is that the Company believes it is important to improve overall profitability, including not only operating activities but also financial activities.

Stock based compensation (post-delivery performance-linked share-based compensation) system

The Company has introduced this system to provide incentives for the sustainable enhancement of the Group's corporate value and to promote further value sharing with our shareholders.

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The Company and its Group companies have established a system to ensure that its Directors and employees perform their duties efficiently and in compliance with laws and regulations while conducting business activities, and to manage any inevitable risks that may occur. Furthermore, our basic approach for an internal control system is to build a strict audit and monitoring system to ensure that these tasks are performed appropriately. See the Report on Corporate Governance submitted to the Tokyo Stock Exchange for details on our internal control system.

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The Company recognizes that having a relationship with antisocial forces is a violation of compliance, and has placed an ongoing priority on implementing measures to prevent any relationship with antisocial forces.

1. The basic matters concerning the response to antisocial forces are stipulated in the Regulations for Handling Antisocial Forces, which clearly stipulate the severance of relations with antisocial forces and establish a system to respond as an organization to unreasonable demands by antisocial forces.
2. We have designated the Risk Management Department as the department in charge of our response to unreasonable demands by antisocial forces, etc., and shall endeavor to build cooperative relationships with specialist external organizations such as the police, Tokyo Center for Removal of Criminal Organizations, and attorneys.
3. We have joined a specialized external group and work to gather information about antisocial forces while putting together a system for taking inquiries and receiving guidance in the event of an incident.
4. Contracts and other agreements entered into by the Group shall stipulate clauses that exclude antisocial forces.

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The Company holds cross-shareholdings for such purposes as maintaining and strengthening business relationships. The rationale for holding such shares is reviewed on an individual basis by examining the purpose of the holding, the status of the business relationship, and a comparison with the Company's cost of capital, among other factors.
Every year, the Board of Directors reviews the economic rationale of the major shares in question of this type from a medium- to long-term perspective to determine whether or not to keep them.
Additionally, exercising of voting rights with respect to the relevant-shareholdings is carried out based on a comprehensive consideration of whether the matter will contribute to improving our corporate value and the common benefit of the investee's shareholders.

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The Company believes that constructive dialog with its shareholders and investors contributes to its sustainable growth and improves its corporate value in the medium to long term.

1. To facilitate constructive dialog with all shareholders and investors, the officer in charge of the Finance and Accounting Department have formed a point of contact under the supervision of the Representative Director and President to respond appropriately to inquiries. The Finance and Accounting Department is in charge of the planning and execution of specific matters related to dialog with shareholders and investors and works closely with each division of the Company, including the Corporate Planning Department, and operating companies.
2. In regard to dialog and interviews with shareholders and investors, basically either the Representative Director and President or members of senior management (primarily the officer in charge of Finance and IR Department) participate in interviews directly. This is to fulfill our accountability as a listed company and to faithfully reflect the knowledge and ideas gained through constructive dialog with shareholders and investors in future management decisions. When engaging in such dialog with shareholders and investors, we do not communicate insider information (material facts that have not been made public).
3. We actively disclose IR information on our website to shareholders and investors to promote a deeper understanding of the Group's management policies, basic strategies, financial situation, etc. and will continue working on enhancing that information.

Efforts to promote meaningful General Meetings of Shareholders and facilitate the exercise of voting rights

IR activities

Efforts related to respect for the stakeholder's perspective

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