Evaluation of the Effectiveness of the Board of Directors

The Company has evaluated the effectiveness of the Board of Directors annually since fiscal 2015.

In fiscal 2018 and fiscal 2021, the Company utilized external evaluation.

Purpose, Method and Process of Evaluation of Effectiveness

The Company has evaluated the effectiveness of the Board of Directors with the aim of enhancing the effectiveness of the Board of Directors for strengthening corporate governance of the Company: specifically, recognizing any differences between the ideal status of the roles and duties, etc. of the Board of Directors of the Company that are set forth in the Basic Policy on Corporate Governance and the actual circumstances; regularly and repeatedly engaging in agenda-finding and improvement activities; and thereby continuously improving the functions of the Board of Directors. In fiscal 2022, the Company conducted a questionnaire for all the Directors and Audit & Supervisory Board Members from February to March 2023. Opinions were exchanged at the meeting of the Board of Directors held in April 2023 regarding the results of the analysis of the responses to the questionnaire.

Topics to Be Evaluated

The questionnaire (anonymous) is conducted to seek answers to quantitative evaluation on four scales for each topic and also opinions freely entered in comment boxes. The major topics of the questionnaire were as follows:

  1. Composition of the Board of Directors
  2. Roles and duties of the Board of Directors
  3. Status of the operations of the Board of Directors
  4. Functions of the Nomination and Compensation Committee
  5. Support system for Outside Directors and Outside Audit & Supervisory Board Members
  6. Roles and responsibilities of Independent Outside Directors
  7. Roles and responsibilities of Audit & Supervisory Board Members/Response to what is pointed out by Audit & Supervisory Board Members at the meeting of the Board of Directors
  8. Relationship with stakeholders/examination of issues of sustainability
  9. Related party transactions
  10. Review on strategic shareholdings
  11. Provision of training
  12. Efforts made for the agendas identified in the previous fiscal year

Results of Evaluation

Based on the report of the quantitative analysis of answers to the questionnaire (including the comparative analysis with the numerical values of the evaluation results in the past) and all the opinions entered in the comment boxes, opinions were exchanged at the meeting of the Board of Directors in April of 2023. As a result, it was confirmed that there was no major problem to be pointed out with respect to the operation of the Board of Directors in fiscal 2022 and the effectiveness of the Board of Directors of the Company had been secured in general. In addition, it was agreed that appropriate progress was seen as to the efforts for the major agendas of fiscal 2022 ((i) Effective supervision of the management through more efficient and effective monitoring of material items, (ii) Constructive discussions regarding agendas to be addressed in the medium- to long- term, and (iii) Deepening of discussion regarding issues related to sustainability).

Major Agendas to Be Addressed in fiscal 2023

The following agendas have been identified as major agendas to be addressed in fiscal 2023 as a result of the evaluation of the effectiveness of the Board of Directors for fiscal 2022.

  • Effective supervision of the implementation of matters resolved
  • Constructive discussions regarding agendas to be addressed in the medium- to long-term
  • Deepening of discussion regarding issues related to sustainability

The Board of Directors of the Company is determined to further enhance its functions, while addressing these agendas.