Board Evaluation for Fiscal 2025

The Company utilizes Board of Directors evaluations to enable the Board and individual directors to assess their current status and identify challenges, and we are continuously striving to improve the Board’s functions and effectiveness.

Regarding the evaluation content and items related to the overall effectiveness of the Board of Directors, we have established evaluation criteria - including items for directors to evaluate themselves - for the evaluation of the Board as a whole, referencing the principles and supplementary principles associated with Basic Principle 4 [Roles and Responsibilities of the Board of Directors] of the Corporate Governance Code. We conduct a Board of Directors evaluation every fiscal year, implement improvement measures for issues identified in this evaluation, and confirm the current status and progress of improvements from the previous fiscal year in the following fiscal year’s Board of Directors evaluation.

All Directors and Audit & Supervisory Board Members conduct self-evaluations by selecting ratings and providing free-form comments, and the analysis and content of these evaluations are reported to the Board of Directors.

In the self-evaluation conducted this time, a significant number of candid opinions were expressed through the selection of evaluation criteria and free-form comments. Based on these, we have identified issues and areas for improvement that will lead to enhanced functionality and effectiveness of the Board of Directors.

FY2025 Board of Directors Evaluation Results

In the FY2025 Board of Directors Evaluation, the results indicated that our Board of Directors is functioning effectively in terms of its role, responsibilities, operations, and composition, and that the Nomination Committee and Compensation Committee - which serve as advisory bodies to the Board - are functioning appropriately, thereby ensuring the overall effectiveness of the Board.

Furthermore, regarding items (1) through (3) below, which were identified as areas for further improvement in the previous year’s evaluation, we have implemented the following measures and confirmed that improvements are underway.

• At Board of Directors meetings, opinion exchange sessions between Directors and Audit & supervisory board members, and briefings for Directors and Audit & supervisory board members, we focused our discussions on the medium-term management plan, business strategy, globalization, and risk management.

• As in the past, we continued to create opportunities for discussion, including in settings other than the Board of Directors (such as meetings for the exchange of views among Directors and Audit & supervisory board members, briefings for Directors and Audit & supervisory board members, briefings for Outside Directors and Outside Audit & supervisory board members, and meetings of Outside Directors and Outside Audit & supervisory board members).
• We reviewed the items to be reported to the Board of Directors to create more time for discussion and enhance the quality of those discussions.

• Following a resolution at the Ordinary General Meeting of Shareholders held in June 2025, the Company’s first female Internal Director and first foreign national Internal Director assumed office. Additionally, the founder and CEO of a global M&A advisory firm and the founder and CEO of an investment fund management company were appointed as Outside Directors.
• The Board of Directors selected a candidate for director of foreign nationality.

Key Initiatives for Fiscal Year 2026

In the FY2025 Board of Directors evaluation, while it was confirmed that progress had been made on the areas identified for further improvement in the previous year’s evaluation, the need for continued improvement was highlighted regarding “further strengthening of the Board’s decision-making and supervisory functions,” “further strengthening of the Board’s monitoring and risk management functions,“ Board operations aimed at further enriching and deepening discussions within the Board.”

To further improve the functions and effectiveness of the Board of Directors, The Company will implement the following priority measures during the fiscal year 2026 Board of Directors.

• (1) Further strengthening the Board of Directors’ decision-making and oversight functions
• (2) Further strengthening of the Board of Directors’ monitoring and risk management functions
• (3) Board management aimed at further enriching and deepening discussions within the Board
• (4) Continuous review of corporate governance structures appropriate for the Company
• Furthermore, the Company plans to continue conducting annual Board of Directors evaluations and to periodically commission evaluations by third-party organizations. 

Reference: Board of Directors Evaluation Methodology

With regard to the content and items for evaluating the overall effectiveness of the Board of Directors, the Company has established evaluation criteria - including items for directors to evaluate themselves - by referring to the principles and supplementary principles associated with Basic Principle 4 [Roles and Responsibilities of the Board of Directors] of the Corporate Governance Code.

The major categories of evaluation items are as follows:

• (1) Roles and Responsibilities of the Board of Directors
• (2) Operation of the Board of Directors
• (3) Composition of the Board of Directors
• (4) Functions of the Nomination Committee and Compensation Committee
• (5) Issues and matters for improvement regarding effectiveness of the Board
• (6) Measures to Address and Improve Issues Identified in the Previous Year’s Board Evaluation
• (7) Corporate Governance in General