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Evaluation of the Effectiveness of the Board of Directors

Basic Policy

The Company evaluates the effectiveness of the Board of Directors with the purpose of identifying issues and points to be improved of the Board of Directors, etc. and evolving the Board of Directors into a more effective one. The Company conducts annual questionnaire surveys and interviews with all directors and Audit & Supervisory Board members to evaluate and analyze the Board of Directors, the Nominating & Remuneration Advisory Committee, and the Audit & Supervisory Board. The secretariat of the Board of Directors summarizes, analyses, and identifies issues. The identified issues and opinions are reported to the Board of Directors, and all members of the Board of Directors discuss how to respond to the issues.
In addition, third-party organizations regularly check and evaluate the effectiveness of these assessments to ensure transparency and objectivity.

Implementation Results in Fiscal 2020

The survey focused on the diversity of members of the Board of Directors, the composition of skills and experiences that the Board believes should be strengthened, the deliberations and functions of the Board of Directors, the content of deliberations on materials distributed, the opportunities for discussions outside the Board of Directors, the strengthening of cooperation with Audit & Supervisory Board members, the secretariat structure, and matters related to our overall governance.
As a result, although no significant challenges were identified regarding the effectiveness of the Board of Directors, several issues were identified as follows. The Board of Directors will discuss these issues, make improvements, and monitor the status of improvements in the following year and beyond.

Implementation Results in Fiscal 2020

Implementation of the Fiscal 2021 Evaluation

The Company has an evaluation period that starts after the ordinary general meeting of shareholders and continues until the ordinary general meeting of shareholders in the following year and is currently conducting an evaluation for fiscal 2021. We plan to inform you of the results of the implementation around July.

Ongoing Initiatives: Developing Succession Plans for the CEO, External Directors, and External Audit & Supervisory Board Members

Evaluations of the effectiveness of the Board of Directors have shown that the development of succession plans for the CEO is a task that should be continuously addressed by the Board of Directors and the Nomination & Remuneration Advisory Committee.
The Company considers that the selection of succession candidates for the President and CEO and the development of the succession plan requires the cooperation of the incumbent and the Nomination & Remuneration Advisory Committee.
The President and CEO and the Nomination & Remuneration Advisory Committee formulate the succession plan based on the Company’s business environment upon sufficient discussions regarding the qualities required of a President and CEO from a medium-to-long-term perspective and policies for the selection of a successor and his or her training, etc. The progress of the formulated succession plan is regularly reported to the Nomination & Remuneration Advisory Committee, which monitors its status of implementation.
Furthermore, evaluations of the effectiveness of the Board of Directors have highlighted the need for developing succession plans for external directors and external Audit & Supervisory Board members, who play an essential role in monitoring the Company’s management. The Company believes that the development of succession plans, which should include oversight on various conditions pertaining to term of office and clear criteria for successor candidates, is an issue that should be constantly on the agenda of the Nomination & Remuneration Advisory Committee rather than something only addressed prior to the succession event.

 

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