System of Corporate Governance

The Company has a management structure in which the Board of Directors has the function of making management decisions and supervising business execution, thereby enabling appropriate management decisions and prompt business execution. The Company has adopted a company-with-audit-committee system to realize prompt and decisive management decision-making and execution under the appropriate supervision of the Board of Directors by enabling the Board of Directors to broadly delegate its authority for business execution decisions to the Directors.

Board of directors

In principle, the Company's Board of Directors holds an ordinary meeting on the second business day following the third Monday of each month, and extraordinary meetings are held as necessary to make important management decisions.
The term of office of directors who are not members of the Audit Committee is set at one year in order to improve the efficiency of decision-making, to reflect management policies in business activities promptly, to promptly respond to changes in the business environment, and to clarify management responsibility in each fiscal year.

Major items resolved and reported at Board of Directors meetings

Attendance at Board of Directors' Meetings and Audit & Supervisory Board Meetings and Shareholdings

Board Diversity

With the aim of enhancing corporate value, the Company's directors are selected from among candidates with diverse and specialized knowledge and experience in management, legal and compliance, finance and accounting, M&A and finance, IT business, global, governance, human resources and organization, etc. The Company's Board of Directors consists of four directors (including two outside and independent directors and one foreign national) and three directors who are Audit & Supervisory Committee members (including two outside and independent directors and one foreign national). As a Board of Directors, we believe that the diversity of personnel and the balance of knowledge, experience, and abilities are well considered and at a level that maintains a high level of decision-making ability. The reasons for the appointment of outside directors are disclosed in the Notice of Convocation of the General Meeting of Shareholders.

Corporate Officer

The Company's business execution system consists of the President and Representative Director who is appointed by the board of directors, the director in charge of finance, and the executive officers who share responsibility for the execution of business. The Group Management Meeting is chaired by the Group CEO and attended by the Group CFO, Group COO, Group CBO, Group CRO, Group CPO, Group CCO, Group CIO, Group CSO, Group CHRO, and Group CLO, with the aim of achieving sustainable growth and increasing corporate value through group management. The meeting serves to discuss important issues related to business execution and report on their respective responsibilities. In addition, all members of the Group Management Meeting participate in the boards of directors of each major group company and strive to understand the status of business execution and manage risks at each company. 

Optional Committees

The Company has established a voluntary Remuneration Advisory Committee to include an objective perspective in the remuneration decision-making process and to strengthen the oversight function of the Board of Directors. As of the submission date of this Annual Securities Report, the members of the Remuneration Advisory Committee are as follows. 
Outside Independent Director (Audit Committee Member): Chie Goto (Chairman of the Remuneration Advisory Committee) 
Outside Independent Director: Tatsuya Kamoi 
President & Representative Director, Group CEO: Tetsuji Morikawa 

Please note that pursuant to a resolution of the Board of Directors held on July 23, 2025, the system has been changed to establish a Nomination and Remuneration Advisory Committee in place of the Remuneration Advisory Committee.

With the resolution of the 26th Ordinary General Meeting of Shareholders held on September 27, 2022, the Group changed from a company with a board of auditors to a company with an Audit Committee in order to further enhance corporate governance by strengthening the supervisory function of each director by the Board of Directors. 
Through the corporate governance system, the Company ensures speedy and efficient decision-making while properly monitoring and auditing the execution of duties by directors to ensure management transparency. 
The Company has also adopted sound corporate governance by incorporating outside opinions through the appointment of several outside directors and the establishment of a Remuneration Advisory Committee whose members include members of the Audit Committee..

Independence of Outside Directors

The following independence criteria have been established for independent outside directors, based on the independence criteria stipulated by the Companies Act and financial instruments exchanges, and with a focus on ensuring the independence of those who serve as independent outside directors in terms of their substance. At Board of Directors meetings, outside directors actively provide opinions and advice from an objective and neutral standpoint, contributing sufficiently to constructive deliberations. Outside directors and outside Audit Committee members are considered to be independent if, as a result of an investigation to the extent reasonably possible by the Company, it is determined that none of the following items applies to them.

(1) A person who is currently and has been for the past 10 years an officer (executive director, executive officer, operating officer, employee, staff) of the Group or any of its subsidiaries or affiliates, 
(2) A person who directly or indirectly holds 10% or more of the total voting rights of the Company or a person who executes the business of such a person, 
(3) A person for whom the Group is a major transaction partner (Note 1), or a person who is a major transaction partner of the Group (Note 1), or an executive officer thereof, 
(4) A person who, as a consultant, lawyer, certified public accountant, tax accountant, or other professional service provider, receives a large amount of money (Note 2) or other financial profits other than remuneration for directors (and other officers) from the Group, or an executive officer thereof, 
(5) A person who receives an annual donation or grant of more than ¥15 million from the Group, or a person who executes the business of such a person, 
(6) A person who belongs to an auditing firm that is the Group's accounting auditor, 
(7) An executive officer of a company that has appointed an executive officer of the Group as its officers, 
(8) Applicants who have met 2 through 7 above in the past three years, 
(9) Spouse or relative up to the second degree of kinship of a person falling under 1-8 above. 

The Company has designated Outside Directors Jon Robertson and Tatsuya Kamoi, and Outside Audit Committee Members Chie Goto and Makoto Nakano as independent officers as stipulated by the Tokyo Stock Exchange and has notified the Exchange of such designation.

Develop human resources for next generation leaders

The Group's board of directors has positioned development of next-generation leaders as our highest priority and will establish a new department specializing in leader development from July 2025. Viewing the cultivation of talent who will lead future management as an essential investment for sustainable growth, the Group will continuously provide optimal opportunities for growth to selected personnel. 

The Company has adopted an audit committee system. The Audit Committee consists of three members: one director who is a full-time audit committee member and two directors who are outside audit committee members.
In accordance with the audit policy and work assignments determined by the Audit Committee, the Audit Committee Members communicate with directors, etc., attend meetings of the board of directors and other important meetings, inspect important approval documents, etc., and examine the status of operations and assets at the head office and major business offices. They also communicate and exchange information with directors and others of subsidiaries, confirm business reports from subsidiaries, and confirm the status and results of audits from the accounting auditors. 

Internal audits at the Company are conducted by three internal audit staff members of the Internal Audit Department, who monitor the Company's business activities from a fair standpoint, make improvements and provide guidance to contribute to proper business execution and appropriate disclosure of financial information, and report to the President and Director, Finance based on the audit results. In addition, the Company shares internal audit plans and internal audit reports with the accounting auditors and the Audit Committee. 

The Company has entered into an audit contract with Deloitte Touche Tohmatsu LLC to ensure the accuracy of financial figures and to strengthen information disclosure by establishing an appropriate financial reporting system.