Corporate Governance

Message from the Chairman of the Board

We have transitioned to a “Company with Nominating Committee, etc.” governance model pursuant to a resolution adopted at the Ordinary General Meeting of Shareholders held in June 2026. Here, I will outline the evolution of our governance structure and the effectiveness of the Board of Directors that underpins these developments.

The recent change to our governance structure was not a revision of our approach to governance that happened overnight. We have consistently taken action to establish a highly effective governance structure oriented toward a monitoring Board model. This has included ensuring that Independent Directors constituted a majority on the Board of Directors, and appointing Independent Directors/Audit & Supervisory Board Members as chairpersons and as the majority of members for the voluntarily established Nomination Committee and the Governance and Remuneration Committee. We have also made use of off-site meetings to cultivate a Board culture that encourages free and open discussion of medium- to long-term management policies, strategies, and governance. Underlying this corporate culture is the spirit of our Company Creed: Fairness, Innovation, and Harmony. A particular feature of the Board is its commitment to harmony in reconciling diverse viewpoints and incorporating differing opinions to take the Group to new heights.

A recent governance issue exemplifies the effectiveness of our Board of Directors. The Board was considering changes to the Company’s governance structure and, in the early stages, evaluated the option of transitioning to a “Company with an Audit and Supervisory Committee.” However, during in-depth discussions involving the Board of Directors and the management team, several Independent Directors expressed the view that the structure of a “Company with Nominating Committee, etc.” could be the optimal governance framework for future growth. After further deliberations incorporating a wide range of perspectives, we decided to transition to a “Company with Nominating Committee, etc.” structure. The objective was to more clearly separate execution from supervision while enabling agile decision-making and ensuring highly effective supervisory functions.

I am convinced that the process of actively exchanging opinions without boundaries between internal and external perspectives and then refining them into better conclusions demonstrates the outstanding effectiveness of our Board of Directors. The new structure following the transition includes the Nominating Committee, the Audit Committee, and the Compensation Committee. Each of these three committees is led by an Independent Director and vested with statutory authority, further enhancing management transparency and objectivity. Furthermore, the Board of Directors will place greater emphasis on setting the Group’s broad strategic direction and overseeing execution. In addition, the Board will appropriately delegate authority to Executive Officers to establish a framework that enables the management team to implement transformation more swiftly and decisively, even in a rapidly changing business environment.

The Group’s business model is complex, encompassing a wide variety of products and distribution channels, so a deep understanding of its businesses is essential to ensuring active Board discussions. I will therefore leverage the deep understanding of the nuances of business I gained through my own experience in fulfilling my responsibilities as Chairman of the Board of Directors, a role defined by oversight that is separate from that of an Executive Officer. As Chairman, I am committed to enhancing corporate value over the medium to long term. I will do so by respecting the bold decisions of the executive team, encouraging sincere and active discussions that draw upon diverse insights, and further elevating the sophistication of the Board’s supervisory functions under the new structure.

We ask our stakeholders to continue looking forward to the evolution of our corporate governance. We are counting on your unwavering support.

Approach to Corporate Governance

Transition to a “Company with Nominating Committee, etc.”

We have long regarded corporate governance as the foundation for enhancing corporate value. To that end, with the aim of further enhancing the objectivity and transparency of governance, we transitioned to a “Company with Nominating Committee, etc.” structure following a resolution at the Ordinary General Meeting of Shareholders held on June 19, 2026. This change will further strengthen the discipline governing the performance of the Executive Officers, and accelerate the execution of strategies to enhance corporate value, which is the mission of Mid-Term Management Strategy GC2027.

Corporate Governance System Features

Feature ① Further Enhancing Independence

We have established three statutory committees—the Nominating Committee, the Audit Committee, and the Compensation Committee.
As required by law, a majority of the members of each committee are Independent Directors, and, to further ensure their independence, each committee is chaired by an Independent Director.

Feature ② Decision-Making Based on Timely and Appropriate Information Sharing

Internal Directors serve as committee members to facilitate the timely and appropriate provision of information in each committee. We also value the inclusion of diverse perspectives with the goal of achieving decision-making based on thorough explanation and mutual understanding.

Feature ③ Highly Effective Audit Functions

We ensure highly effective audit functions by appointing full-time Audit Committee Members and have established the Audit Committee Office. We also maintain and enhance collaboration among the Audit Committee, the Audit Department, and the accounting auditor. Furthermore, we have established a dual reporting structure for internal audit results, in which the Audit Department reports directly to the Audit Committee at the same time as it reports to the executive team.