Evaluation of the Effectiveness of the Board of Directors

Since 2016, the Company has conducted an annual survey on the effectiveness of the Board of Directors targeting those participating in the Board of Directors (excluding the chairman).
Based on the results of the survey, we believe that the effectiveness of our Board of Directors has been ensured if the quantitative evaluation shows that the Board of Directors has been appropriately implemented. In addition, items that were pointed out or suggested in the qualitative evaluation and items that need to be strengthened in future corporate governance are identified as issues and items for improvement.
The following is a summary of our evaluation and analysis of the effectiveness of the Board of Directors for the fiscal year ended March 31, 2023 (106th fiscal year) based on the Corporate Governance Code (hereinafter the "CG Code") [Supplementary Principle 4-11 3] in our Corporate Governance Guidelines (hereinafter the "CG Guidelines").

Evaluation and Analysis Procedures and Quantitative Results

  1. From January up through February 2023, a questionnaire was distributed to participants in the Board of Directors to determine whether the Company's Board of Directors is effectively fulfilling its role in accordance with the policies and other requirements of Section 4 (Responsibilities of the Board) of the CG Code as stated in the CG Guidelines, and responses were obtained from all eligible participants.
  2. Based on these responses, the Representative Director & Chairman, who is the Chairperson of the Board of Directors, interviewed each internal director to confirm their content.
  3. The responses to the above questionnaire and the results of the interviews were provided to the participants of the Nominating Committee, and after ensuring a period and opportunity for consideration by the participants, the Nominating Committee made a report to the Board of Directors after careful deliberation.
  4. Upon receiving the Nominating Committee's report, the Board of Directors confirmed the results of its own evaluation and analysis of the effectiveness of the Board of Directors based on an understanding and respect for the content of the report.
    The results were as follows: 67.0% for the highest evaluation (appropriate) (66.1% in 2021), 29.1% for the next highest evaluation (appropriate with some issues) (30.3% in 2021), and 2.6% for the lowest evaluation (not appropriate with many issues) (1.7% in 2021).

Items for Which Effectiveness Has Been Ensured

  1. Based on the Mandom Mission Framework, the Board of Directors has developed, revised as needed, and disclosed the Corporate Governance Policy and CG Guidelines through constructive discussions in prior deliberations at the Executive Board and Management Council meetings.
  2. The Board of Directors formulated and disclosed appropriate Standards for the Independence of Independent Outside Executives. In addition to complying with these standards, the Board of Directors also invited persons capable of monitoring from an objective perspective of a shareholder who possess a wealth of business experience and an understanding and knowledge of management.
  3. The Board of Directors appropriately established and disclosed the "Philosophy of Balance, Diversity, and Scope of the Board of Directors" and the "Policies and Procedures Related to Appointment of Directors" after receiving advice from independent external directors and Audit & Supervisory Board members and conducting constructive discussions, and has maintained the structure of the Board of Directors in accordance with these policies.
  4. The independent external directors and audit & supervisory board members regularly (once a year) hold a meeting for exchange of opinions, which consists solely of independent external members. In addition, as appropriate, communication among independent external members should be made to exchange information and share recognition, based on an objective standpoint.

Issues and improvement items

  1. While the Nominating Committee and Compensation Committee,which are chaired by external directors,are being properly operated, it is believed that clarifying policies and procedures would result in increased transparency as well as deeper discussion with respect to personnel affairs for and the development of officers and the management team.
  2. It is believed that further reinforcing supervising functions for business execution by the management team would produce stronger linkage to actions to follow through differential analysis and reflections of progress in management plans.