Corporate Governance

System

1. Board of Directors
   The Board of Directors holds a regular meeting each month in principle and extraordinary meetings as needed. It makes decisions on basic management policies and important strategies. It is also defined as an organization that supervises business execution by Directors and Operating Officers.
2. Audit & Supervisory Board
   It holds a regular meeting each month in principle and extraordinary meetings as needed. In accordance with audit plans, Audit & Supervisory Board Members attend Board of Directors’ meetings and other important meetings, view significant documents and materials, visit and inspect principal facilities, and receive reports from Directors and other personnel on the execution of duties to audit the legality and appropriateness of the Directors’ execution of their duties.
3. Nomination and Compensation Committee
   It is chaired by an Outside Director, and a majority of its members must be Outside Directors. The content of its deliberations are reported to the Board of Directors. Deliberations on remuneration for officers are joined by an Outside Audit & Supervisory Board Member as an observer
4. Corporate Planning Conference
   It is attended by Inside Directors, Full-Time Audit & Supervisory Board Members, Operating Officers, presidents of subsidiaries based in Japan and the heads of relevant departments. It holds at least one meeting each month in principle. It makes advance deliberations on important business execution matters for which resolutions are set to be made at meetings of the Board of Directors. It also monitors the overall state of progress in the management plan and manages day-to-day actions such as solutions to problems.
5. Regulation Committee
   It is attended by Operating Officers and presidents of subsidiaries based in Japan.It discusses the creation of regulations and detailed rules as needed and delivers reports on important regulations to the Board of Directors.
6. Internal Control Committee
   It is chaired by the Director and the Executive General Manager of the Corporate Planning Division and attended by Inside Directors, Operating Officers, presidents of subsidiaries based in Japan and heads of relevant departments. It holds at least one meeting each month in principle. It provides overall control and supervision of matters related to riskmanagement and compliance in the whole Group.
7. Audits by auditors, internal audits, accounting audits
   The Audit Department conducts internal audits to ensure that each department's operations are properly executed in accordance with internal regulations.Audit & Supervisory Board Members collaborate with the internal audit department, sharing information, and conducting an auditor's audit.We have appointed KPMG AZSA LLC as our accounting auditor under the Companies Act and as our audit firm for audits under the Financial Instruments and Exchange Act.Audit & Supervisory Board Members, the Audit Department and the Accounting Auditor hold reporting sessions regularly or as needed to exchange information and cooperate with each other.

System Chart

Reasons for Adopting the System

However, in order to stabilize the management base and increase management transparency, the Company appoints outside directors to attend monthly Board of Directors meetings and provide appropriate opinions and advice from an independent standpoint regarding the Board's decision-making. However, in order to stabilize the management base and increase management transparency, the Company appoints outside directors to attend monthly meetings of the Board of Directors and provide appropriate opinions and advice from an independent standpoint regarding the decision-making of the Board of Directors.
In addition, from the perspective of management oversight, the Company is working to enhance the independence of its outside corporate auditors, thereby creating a system to fairly and objectively oversee the Company's social responsibilities as a corporation.
The two outside auditors each have a wealth of experience and insight regarding legal affairs, finance and accounting, etc. They attend monthly meetings of the Board of Directors to monitor management, including day-to-day conditions.
Therefore, in light of the nature of our business and the size of our company, we have adopted the current governance system centered on outside directors and outside corporate auditors.