Speed and transparency in decision-making and outside oversight

「The Nomination and Compensation Advisory Committee is structured as an advisory body to the Board of Directors, with outside directors comprising a majority of its members. An outside director serves as chair, and substantive discussions including the Representative Director are intended to ensure fairness, transparency, and objectivity throughout the nomination and compensation decision-making process.」

「Effective 19 June 2026, the voluntary Nomination and Compensation Advisory Committee is scheduled to be repositioned as an advisory body to the Board of Directors rather than an advisory body to the Representative Director, and reorganized so that outside directors constitute a majority of its members to ensure fairness, transparency and objectivity.」

「As disclosed in the timely disclosure dated 23 May 2025, we plan to reorganize the Management, Nomination and Compensation Advisory Committee and establish a voluntary Nomination and Compensation Advisory Committee effective 20 June 2025, with the aim of further strengthening the fairness, transparency and objectivity of procedures relating to the nomination and compensation of management by clarifying the role of each matter submitted for consultation.」

「In view of the company’s current scale, the promotion of substantive discussions by the Board of Directors and Board of Corporate Auditors, and the need to ensure an appropriate number of outside directors, we believe that an appropriate Board composition is no more than 10 directors, including at least 1/3 independent outside directors. The Articles of Incorporation also set the upper limit at 10 directors.」

「In addition, as we determine important policies in a constantly changing business environment and sustainably fulfill our oversight function, we have identified 5 areas of expertise, knowledge and experience, namely “leadership,” “technology,” “finance,” “governance” and “sustainability,” for the Board of Directors and Board of Corporate Auditors. We believe that a composition providing balanced coverage of these skills contributes to effective management.」

「For the appointment and dismissal of directors and corporate auditors, we have established standards for the appointment and dismissal of officers and operate in accordance with those standards. In addition, to enhance transparency and fairness in the appointment and dismissal of directors, the Management, Nomination and Compensation Advisory Committee deliberates on these matters, and the Board of Directors makes the final decision with due regard to the committee’s recommendations.」

「In view of the company’s current scale, the promotion of substantive discussions by the Board of Directors and Board of Corporate Auditors, and the need to ensure an appropriate number of outside directors, we believe that an appropriate Board composition is no more than 10 directors, including at least 2 independent outside directors.」

「Under these management principles, we believe that bold management decisions, together with speed and transparency in decision-making, are necessary to maximize corporate value and achieve sustainable growth. We therefore regard establishing corporate governance as an extremely important issue. In addition to ensuring the effectiveness of our corporate governance framework, we will formulate Guidelines on Corporate Governance in accordance with the following basic principles and continue to further enhance the framework.」

「We believe that bold management decisions, together with speed and transparency in decision-making, are necessary to maximize corporate value and achieve sustainable growth. We therefore regard establishing corporate governance as an extremely important issue and will continue to further enhance our governance framework.」