Corporate Governance System

Directors and Board of Directors

1. Through an optimal corporate governance system, the Board of Directors aims to realize the Company's Corporate Philosophy, carry out the monitoring functions and perform the best possible decision-making based on fair judgment. The Board of Directors makes decisions on important items such as those prescribed by law, the articles of incorporation, Board of Directors Regulations, and supervises the execution of duties by Directors.
   To augment maneuverability and flexibility in the execution of operations and maximize management dynamism, the Board of Directors delegates Directors to handle decision-making on the execution of operations other than the items described in the paragraph above.
2. Recognizing that Medium-Term Management Plans constitute a commitment to shareholders, the Board of Directors explains to shareholders the foundations for and backgrounds of such plans, the operating environment and other items, and does its best to achieve the objectives of these plans.
3. Each year, the Board of Directors analyzes and evaluates its effectiveness as a whole, taking into consideration the relevant matters, including the self-evaluations of each Director. A summary of the results is disclosed.
4. Selection criteria of Director candidates and Directors' authority, responsibilities and others are prescribed separately in the Directors Regulations formulated by the Board of Directors.
5. The Board of Directors is composed of Directors having specialist knowledge and experience from diverse backgrounds. To ensure the effective and efficient operations of the functions, the board has fewer than 20 members. The Board of Directors appoints two or more outside Directors who are independent and neutral.
6. The Company has in place a "Nomination Advisory Committee" and "Remuneration Advisory Committee" that act as advisory bodies to the Board of Directors, enhancing independence and objectivity in nominating Directors and functions related to remuneration. In addition, the Company has established a "Corporate Governance Committee", which deliberates on vision, strategies and other items pertaining to overall management, including corporate governance (Board Committees).

Audit & Supervisory Board and Audit & Supervisory Board Members

1. The Audit & Supervisory Board audits the execution of duties of Directors and Executive Officers, determines the content of proposals for submission to the General Meeting of Shareholders on the appointment or dismissal of financial auditors or against the reappointment of financial auditors, and conducts other items prescribed by financial auditing and other laws. The Audit & Supervisory Board receives in a timely and appropriate manner reports from Directors, employees and financial auditors on items necessary for auditing the execution of duties by Directors and Executive Officers. Additionally, the Audit & Supervisory Board shares necessary information with the financial auditors, Internal Audit Office and outside Directors in an effort to improve auditing quality and perform audits efficiently.
2. Having received a mandate from shareholders as independent entities to audit execution of duties of Directors and Executive Officers, Audit & Supervisory Board Members fulfill their duty to ensure healthy and sustained corporate growth and establish a high-quality corporate governance system worthy of society's trust.
3. In light of the characteristics of their full-time position, full-time Audit & Supervisory Board Members work proactively to put in place audit environments and collect information. In addition, they routinely monitor and verify the status of internal control system construction and operation.
4. Outside Audit & Supervisory Board Members express their opinions frankly, being that they are appointed as part of a legal requirement for augmenting the independence and neutrality of the audit structure and taking into consideration the reason for their appointment, and recognizing that they are expected to express their audit opinions neutrally and objectively.

CEO/CFO

Outside Directors

The Company appoints two or more outside Directors who are independent and neutral. In addition to outside Directors who meet the requirements for outside Directors as prescribed in the Companies Act, in principle outside Directors are appointed who also satisfy the Independence Standards for Outside Executives formulated by the Nomination Advisory Committee. Outside Directors take the initiative to increase the level of fairness of judgments and activities by the Board of Directors and each committee and realize the best possible level of corporate governance and fill their responsibilities.

Board Committees

The Company promotes the management function with the Board of Directors comprised of Directors who are also Executive Officers, while setting itself as the organizational structure which exercises the monitoring function centering on the independent outside Directors, Audit & Supervisory Board Members and the Audit & Supervisory Board. In addition, the establishment of voluntary committees enhances the transparency of the Board of Directors. This arrangement results in a hybrid structure that balances the operational execution function and the advisory function and the Company increases its' autonomous functionality.

The Company's system to promote initiatives related to Environmental and Social initiatives

The Company aims to succeed in contributing to creating a sustainable society. To realize that, The Company has established following committees to specify management policies, strategies, and high-priority issues from a medium- to long-term perspective, and is operating a system to promote initiatives related to Environmental and Social initiatives.