Board of Directors and Committees

Board of Directors (11 directors, 7 outside directors, 4 internal directors, Chair: Outside director, for a term of one year)

• Through developing good corporate governance, the Board shall fulfill its oversight functions, take the best possible decisions by exercising fair judgment and aim to realize the Corporate Concept.
• The Board shall determine the material matters required by law, the Articles of Incorporation and the Rules of the Board, including basic management policies, the appointment and dismissal of Corporate Officers and surplus dividends.
• In order to accelerate the speed and increase the flexibility of business execution and to enhance the vitality of management, the Board shall delegate the decision-making function on business execution, except for items provided for in the preceding clause, to the Corporate Officers.
• The Board will make efforts to apply a multi-dimensional risk management approach to the business execution by the Corporate Officers, and will oversee the system design and operation of internal control measures by the Corporate Officers.
• The Board shall oversee the execution of duties by the Directors and Corporate Officers on the basis of reports from the Nomination Committee, Audit Committee, the Compensation Committee and the Corporate Officers.
• The Board will strive to realize the Corporate Concept, to increase the Company's corporate value and to enhance the long-term interests of the shareholders. It shall have the duty of judging fairly any conduct that may damage these goals and of taking appropriate action
• In order for the Representative Corporate Officer and CEO to be appointed by the Board, all of the Directors shall share information related to the succession plan for the future Representative Corporate Officer and CEO.
• The Board, together with the Nomination, Audit and Compensation Committees, shall not violate or interfere with their respective authorities when executing their duties and shall maintain mutual understanding.
• The Board and the Corporate Officers shall maintain mutual understanding while fulfilling their respective responsibilities of executing duties.

• Directors

Nomination Committee (3 members, 3 outside directors, Chair: Outside director, a term of one year)

• Determine the content of the proposals related to the selection or retirement of directors made to the General Meeting of Shareholders.
• Based on the awareness that the viability of the Company’s corporate governance system is supported by the presence of outside directors who constitute a majority of the Board of Directors, establish the “Requirements for the Independence and Neutrality of Outside Directors” for the selection of independent and neutral outside directors.
• Decide on director candidates with diverse backgrounds to enable the Board of Directors to meet the expectations of various stakeholders as well as demonstrate oversight functions.
• Establish basic policies, rules, and procedures necessary for the execution of duties by the Nomination Committee.

Audit Committee (5 members, 3 outside directors, 2 inside directors, Chair: Outside director, a term of one year)

• Conduct audits in accordance with laws and regulations, the Articles of Incorporation, and rules established by the Board of Directors and the Audit Committee.
• Primarily conduct the following audits and create audit reports.
  ①Audits of the execution of duties by directors and corporate officers
  ②Audits of business reports and annexed detailed statements
  ③Accounting audits of financial statements (including confirmation of the appropriateness of audit methods and results by monitoring and verifying the activities of the Accounting Auditor)
  ④Audits of the status of the maintenance and operation of internal controls conducted by corporate officers in accordance with the rules adopted by the Board of Directors
  ⑤Audits of the adequacy of internal audit activities performed by the internal audit departments
  ⑥Audits of the status of business, operations, and assets of Group companies other than the Company (audits of the corporate officers in charge)
• Determine proposals related to the selection, dismissal, and non-reappointment of accounting auditors to be submitted to the General Meeting of Shareholders. In addition, give consent to the amount of compensation and other conditions for the Accounting Auditor.
• Conduct audits in accordance with the audit plan established for each fiscal year by directing the Management Audit Department, an organization independent of corporate officers.

Compensation Committee (3 members, 3 outside directors, Chair: Outside director, for a term of one year)

• Determine the policy related to deciding the content of the compensation, etc., of directors and corporate officers and the content of the compensation, etc., for each individual with fairness and transparency.
• Determine the compensation, etc., of directors so that the contents are suitable to motivate them to fully carry out their management oversight function, which is their duty, in order to improve the common interests of stakeholders and increase long-term corporate value.
• Determine the compensation, etc., of corporate officers to be competitive, fully reflecting the importance of the duties and weight of responsibility of corporate officers, to enhance the acceptability of the compensation as management compensation, and to strongly motivate corporate officers to improve the medium- to long-term corporate value of the Company, realize social good, and contribute to the sustainability of society.
• Actively utilize outside research data, etc., as well as examine the adequacy of the process for determining compensation, etc., in order to ensure objectivity in the compensation, etc., of directors and corporate officers.
• Establish basic policies, rules, procedures, etc., necessary for the execution of the duties of the Compensation Committee.

hhc Governance Committee (7 members, 7 outside directors, for a term of one year)

• The hhc Governance Committee shall be composed of all of the Outside Directors.
• The hhc Governance Committee shall engage in proactive dialogue with the Company’s stakeholders and use the insights gained to enhance discussions by the Board.
• The hhc Governance Committee shall share information about the succession plan for a future Representative Corporate Officer and CEO proposed by the Representative Corporate Officer and CEO, and provide relevant advice. The hhc Governance Committee shall reasonably ensure impartiality in the selection of the CEO by the Board by having Outside Directors take part in the process.
• The hhc Governance Committee shall evaluate the effectiveness of the supervision function of the management of the Board every year. If there are issues related to the operation of the Board, etc., the hhc Governance Committee may make proposals to the Board for addressing such issues.
• The hhc Governance Committee is held to discuss a broad range of matters related to the Company’s corporate governance and business, and thereby strive for continued enhancement of corporate governance.
• The matters discussed at the hhc Governance Committee shall be reported to the Board or notified to the Corporate Officers as necessary.