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)

• The Nomination Committee shall determine the content of the proposals to be submitted to the General Meetings of Shareholders related to the nomination and dismissal of Directors.
• The Nomination Committee shall determine the “Requirements for the Independence and Neutrality of Outside Directors” in order to appoint independent and neutral Outside Directors based on the recognition that it is the fact that Outside Directors hold a majority of the Board representation that supports the effectiveness of the Company’s corporate governance.
• The Nomination Committee shall select Director candidates with diverse backgrounds in order for the Board to meet the various expectations of stakeholders and to fully perform its oversight function.
• The Nomination Committee shall establish the basic policies, rules, procedures, etc., necessary for the execution of its duties.
• The Nomination Committee shall report on the status of execution of its duties to the Board.

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

• The Audit Committee shall audit the execution of the Directors’ and Corporate Officers’ duties, prepare audit reports, and conduct accounting audits and other matters required by laws and regulations.
• The Audit Committee shall determine the contents of proposals related to the election, dismissal and non-reappointment of the Accounting Auditors to be submitted to the General Meeting of Shareholders.
• The Audit Committee shall confirm that the Accounting Auditors’ independence is assured and the quality control of audits is managed systematically, and shall make efforts to collect relevant information regarding an audit corporation other than the Company’s Accounting Auditors.
• The Audit Committee shall endeavor to achieve efficient and higher quality auditing, e.g., (i) by receiving timely and appropriate reports from the officers and employees of the Company and the ENW Entities and the Accounting Auditors of the Company related to the execution of their duties, (ii) by conducting relevant research on the status of the business and assets of the Company and the ENW Entities and (iii) by sharing necessary information with the Accounting Auditors and internal audit department.
• The Audit Committee shall establish the basic policies, rules, procedures, etc., necessary for the execution of its duties.
• The Management Audit Department executes its duties based on the resolutions of the Audit Committee and the instructions of the members of the Audit Committee, and its independence from the Corporate Officers regarding work instructions and orders, personnel evaluations, etc. shall be secured in order to ensure the objectivity of audits.
• The Audit Committee shall report on the status of execution of its duties to the Board.

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

• The Compensation Committee shall determine both the policies for deciding the compensation of Directors and Corporate Officers, and their individual compensation, with fairness and transparency.
• The Compensation Committee shall determine the remuneration of Directors, to appropriately compensate them for their performance of management oversight, and the remuneration of Corporate Officers, to provide them with strong motivation for their responsibilities of business execution and which takes into consideration the level of achievement measured against their performance benchmark(s).
• When deciding the compensation of the Directors and Corporate Officers, the Compensation Committee shall make decisions after making active use of external research data in order to ensure the objectivity of its decisions and deliberating the appropriateness of the decision-making process on compensation.
• The Compensation Committee shall establish the basic policies, rules, procedures, etc. necessary for the execution of its duties.
• The Compensation Committee shall report on the status of execution of its duties to the Board.

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.