Analysis and evaluation of effectiveness of the Board of Directors

A questionnaire for all Members of the Board of Directors and interviews with Outside Directors were conducted and the analysis and evaluation was conducted through multiple discussions in the Board of Directors, making reference to the results of the questionnaire and interviews.
Through conducting the questionnaire and interviews, various confirmations were carried out regarding the composition of the Board of Directors, agenda items submitted to meetings, status of deliberation, personal participation of Director, and other matters regarding the operation of the Board of Directors. The implementation, tallying, analysis, etc. of the questionnaire was carried out by a third party.

With use of the analysis and reports of the questionnaire results and interview content, the Board of Directors of the Company has been assessed to be functioning with sufficient overall effectiveness in consideration of its duties and obligations.
Proposals have been sufficiently submitted to the Board of Directors, and in particular, the evaluation showed that an atmosphere that enables Directors to speak out freely and openly is being cultivated and broadminded and constructive discussions and exchanges of opinion are taking place. In addition, the evaluation showed that there was certain improvement in discussions on business risks and materials for the Board of Directors meetings.
On the other hand, it was recognized that mainly for the following points, there are some challenges and problems, and that more improvements are expected, and further efforts are needed in the future.

• Improvement of reporting on ESG-related initiatives
  The outline of discussions at the committee that promotes sustainability (CSR Management Committee) is reported to the Board of Directors twice a year. This year, in addition to this, efforts to stimulate discussions, such as providing explanations to Outside Directors, have produced results, and we will continue our efforts to further enhance and stimulate discussions.
• Enhancement of discussions on risk approach
  There was certain improvement in the discussions on business risks, but we aim to enhance the reports and discussions with a more bird’s eye view approach.
• Improvement of reporting and discussions on internal control systems, and expansion of discussion time
• Further improvement of the quality of discussions
  • Review of contents and methods of reporting, expansion of discussion time on portfolio strategies and risks
  • Continue efforts to improve materials for the Board of Directors meetings, etc.

Based on the results of these evaluations and challenges to be considered, the Company will mainly take the following actions in the fiscal year under review.

• Enhancement and stimulation of ESG-related discussions
• Addition of agenda items related to risk management
• Enhancement of reporting on internal control systems
• Improvement of time utilization in Board of Directors meetings
• Establishing opportunities for Outside Directors and management to exchange opinions and share views outside of Board of Directors meetings

The Company will continue working to further improve the effectiveness of the Board of Directors.