Corporate Governance

We recognize that appropriate and timely information disclosure to the shareholders and investors, and active dialogues with them are essential for sustainable growth and medium- to long-term enhancement of our corporate value. In accordance with the disclosure rules established by laws, regulations and stock exchanges, we disclose our financial and non-financial information appropriately. We also take initiative in the provision of information not designated therein to ensure the transparency of management. Regarding the dialogues with shareholders and investors, we fully feedback the results into the company, and make use of them in our management strategies and business operations, to further fulfill the dialogues in the future.

Based on the Corporate Governance Code established by Tokyo Stock Exchange, we have established Corporate Governance Guideline on which we should rely in our corporate activities. We will review the Guideline as necessary to fulfill the governance.

• Corporate Governance Guideline (Japanese)［PDF：625 KB］
• Corporate Governance Report (Japanese)［PDF：105 KB］

Based on the recognition that internal controls serve as the foundation of corporate governance, Directors establish, maintain, and evaluate an appropriate internal control system, conduct ongoing inspections and make improvements to the system, and periodically review their basic policy for internal controls. Given that internal controls ensure and maintain the reliability of compliance, appropriate risk management, and financial reports, we also pay sufficient attention to the effectiveness and efficiency of operations. The establishment of this system enables the Board of Directors to make decisions on appropriate information and subsequently, the execution of business.

• Principles of Internal Control System

In order to further enhance the effectiveness of the Board of Directors, the Company regularly evaluates and analyzes the effectiveness of the Board. In FY2025, a questionnaire survey was conducted for all Directors and Audit & Supervisory Board members. Based on the results of the survey, the Board of Directors reviewed, discussed and assessed its effectiveness at the regular meeting of the Board of Directors in January 2026.

This year's survey methodology, summary of evaluation results, and future issues and initiatives are as follows.

1. Methodology

2. Summary of Evaluation Results

The responses to the questionnaire indicated that, as in the previous fiscal year, the Board of Directors received generally positive evaluations regarding the scale, composition and its operational performance. It was confirmed that the Board of Directors is fulfilling its role in decision-making and supervision related to the business execution and that 81% of the questionnaire items showed an improvement compared with last year, confirming that initiatives aimed at enhancing the effectiveness are producing results.

With regard to the "In-depth discussions on succession planning" that was planned in the last year, we reviewed our approach to providing information —for example, by thoroughly scrutinizing information on potential successors in advance and sharing it with the Nomination and Remuneration Advisory Committee— with a view to enriching the discussion.

On the other hand, with regard to "Expanding and deepening discussions on medium- to long-term management and risk strategies", although we have implemented efforts such as establishing discussion forums at unofficial meetings of the Board of Directors and received positive feedback, it was pointed out that continued efforts are required. It was also noted that continued efforts are required with regard to "Further improvement of understanding of the Company through the provision of information and experience".

3. Addressing Future Issues and Issues

We have been working to improve the effectiveness of our deliberations for some time, but this year's effectiveness evaluation concluded that there is room for improvement in the following items. In order to further improve the functions of the Board of Directors and stimulate discussions, we will share recognition and work to make improvements.

(1) Strengthening risk monitoring function

Outside Directors have expressed their views that there is room for improvement in the timing and frequency of the reports on business risks to the Board of Directors. In light of these comments, we will strive to ensure that report to the Board of Directors are made at an earlier and more appropriate stage, and we will work to strengthen our system to enable more thorough deliberations.

(2) Enriching discussions on corporate strategy and dialogue with external stakeholders

Outside Directors have expressed views that, in addition to further enriching discussions at the Board of Directors regarding management strategy, our long-term vision and business model transformation, the Company should actively communicate our corporate strategy to external stakeholders. In light of these comments, we will ensure that more time is allocated to discussions on corporate strategy through the efficient operation on the Board of Directors and the establishment of discussion forum at unofficial meetings of the Board of Directors. Furthermore, by having management take a proactive role in IR activities, we will communicate our corporate strategy and strive to deepen dialogue with stakeholders.

• Board of Directors & Executive Officers

• We appoint Directors who have profound knowledge and results concerning the business operations, who are able to make appropriate decisions for the improvement of the company value based on the viewpoints of diverse stakeholders, and who have high ethical standards and fair-minded personality.
• We appoint Outside Directors who, in addition to the similar criteria to the above, have expertness in different fields from ours and ample knowledge concerning the overall management.
• We, keeping the similar criteria to the above in mind, appoint Audit & Supervisory Board Members who are able to properly audit the performance of duties and business operations of Directors.
• The knowledge held by respective Directors and Audit & Supervisory Board Members and their reasons for appointment are as shown in the following Table.
• The Company provide Directors and Audit & Supervisory Board Members with opportunities of training necessary for performing their roles and responsibilities. When Outside Directors or Outside Audit & Supervisory Board Members newly take their office, we provide them with necessary explanation and information on general circumstances and business issues of the Company, including its business operations, finance and organization.

The remunerations of Directors (excluding Outside Directors) should be appropriate, fair and well-balanced to further enhance the respective Directors’ motivation for the maximization of the Company’s corporate values. The remuneration system is as shown below:

The table below shows actual remuneration for FY2025.

*The above numbers and the remuneration amounts include 2 Board of Directors who retired at the Annual General Meeting of Shareholders of June 26, 2025.
Regarding the remunerations of officers, as the performance-linked remunerations are based on the net profit of the previous year, we consider that the addition of a factor that reflects the medium- to long-term performance to the remuneration system should be discussed.