Nomination of candidates for Members of the Board of Directors

Criteria for selection

The Company appoints as senior management people who have the knowledge, experience, and qualities to contribute to business execution, taking into consideration the business content, scale, and management environment, etc., of the Company. Also, personnel with knowledge, experience, and qualities that can contribute to enabling the Board of Directors to function (determination of basic management principles and important business execution, as well as supervision of execution of duties of Members of the Board of Directors) are selected as candidates for Members of the Board of Directors based on the policy for composition of the Board of Directors prescribed in the preceding paragraph.

Criteria for selection of Outside Directors
In addition to the above, the Company makes sure to satisfy the independence standards set by the Tokyo Stock Exchange as well as by the Company. The Company also considers that by its criteria for selection, adequate time can be secured for the execution of duties as a member of the Board, and that attendance at the meetings of the Board of Directors can be expected to be over 75%.
Criteria for selection of Members of the Board of Directors who are Audit and Supervisory Committee Members
In addition to the above, the Company selects personnel with a wealth of knowledge and experience regarding management administration and business operations who have qualities that can contribute to improvement in the soundness and transparency of management and audit the business execution of Members of the Board of Directors from a fair and objective standpoint. A majority of the candidates for Members of the Board of Directors who are Audit and Supervisory Committee Members nominated by the Company are Outside Directors.

Nomination procedures

With the intent of improving the independence, objectivity, and accountability of the functions of the Board of Directors regarding the nomination of Members of the Board of Directors, including President and Representative Director (CEO), the Company established a Nomination Advisory Committee as an advisory organ of the Board of Directors.
The committee considers the following agenda items, and reports its findings to the Board of Directors.

Criteria for selection of candidates for Members of the Board of Directors
Criteria for Independence of Outside Directors
Nomination of candidates for Members of the Board of Directors
Nomination of candidates for Representative Directors and executive Members of the Board of Directors

In addition to the above, the Committee considers and supervises succession plans for the President and Representative Director (CEO) as well as supervises the selection of Vice Presidents.
President and Representative Director reports on the succession plan for CEO to the Committee once a year. Independent Outside Directors, who are the Nomination Committee Members, appropriately exercise their supervisory functions by being involved in the process of succession plan through verification and recommendation. This enhances the objectivity of proposal of a candidate for CEO by execution and ensures the independence and objectivity of the selection of CEO by the Board of Directors.

To deliberate on the nomination of candidate Members of the Board of Directors, the skill matrix is employed. The Company regularly reviews the skill items that indicate the particular fields in which Members of the Board of Directors should demonstrate their roles, and the knowledge, experience and viewpoints that become preconditions for the above in light of the Company’s strategy and situations.

Regarding the Skill Matrix, refer to
Link: Bord of Directors Page

Nomination Advisory Committee

Role

The Nomination Advisory Committee considers criteria for selection of candidates for Members of the Board of Directors, independence standards for Independent Outside Directors, nomination of Members of the Board of Directors, nomination of candidates for Representative Directors and executive Members of the Board of Directors, and succession plans for the President and Representative Director, and reports its findings to the Board of Directors. The committee also considers the skill matrix of the Board of Directors and other key issues from the perspective of human resources so that the Board of Directors can continue to perform its functions, and supervises the appointment of Vice Presidents.

Composition

The members are selected by the Board of Directors from among its Members and Independent Outside Directors comprise the majority of the committee members in order to ensure the independence of the committee. Furthermore, the chairperson is an Independent Outside Director.
The Nomination Advisory Committee is currently made up of the following four Directors, three of whom are Independent Outside Directors. It is chaired by Takashi Nishijima, who is Independent Outside Director.

Name	Position
Takashi Nishijima ◎	Outside Director
Masanori Minamide	Executive Deputy President and Representative Director
Yuko Yasuda	Outside Director
Takatoshi Yamamoto	Outside Director (Audit and Supervisory Committee Member)

(Notes)

◎ after the name means the person is the chairperson.

Activities

Activities of the Committee held during FY 2024 were as follows.

Main contents of discussion	Period
Determination of activity plans for the Committee for the 89th term	September
Consideration of skill matrix and skills	September
Board succession	April, September, December, and February
Succession plans for the President and Representative Director	December
Determination of 360-degree evaluation of the President and Representative Director, and evaluation of the President and Representative Director for FY2024 (jointly with the Remuneration Advisory Committee)	June, December, January, and February
Report on the nomination of Members of the Board of Directors, and Representative Directors and executive Members of the Board of Directors	February

(Notes)

The 89th term refers to the period starting from the 88th Ordinary General Meeting of Shareholders held on June 27, 2024 until the 89th Ordinary General Meeting of Shareholders held on June 27, 2025.
In June, December, January and February, a joint meeting for the Nomination Advisory Committee and the Remuneration Advisory Committee was held in addition to the meeting of the Nomination Advisory Committee.
For information on the number of meetings and attendance rates, refer to
Link: ESG Data colliction Page

Criteria for Independence of Outside Directors

Summary of the Criteria for Independence of Outside Directors

The person does not fall under any of the following categories.

(1) In the past 10 years, the person was an executive of the Company or a company that was a subsidiary within the past three years.
(2)The person is currently a major shareholder or was an executive of the major shareholder in the past three years.
- (*)Major shareholder refers to one who holds 10% or more of the total number of the voting rights of the Company.
(3)In the past three years, the person was an executive of a company, etc. that was a material client or supplier within the past three years with the Company Group.
- (*)Material client or supplier refers to one with which the Company has transactions of 2% or more of consolidated revenue of the Company or of the client or supplier.
- (*)The Company group refers to the Company and its current subsidiaries. The same shall apply hereinafter.
(4)In the past three years, the person was an executive of an organization (e.g., public interest incorporated foundation, public interest incorporated association, and nonprofit organization) that has received within the past three years a donation or grant of over 10.00 million yen per annum from the Company Group.
(5)In the past three years, the person was an executive of a company or a subsidiary of that company that within the past three years employed a Member of the Board of Directors, Statutory Auditor (regardless of full-time or part-time) or Executive Officer of the Company group.
(6)The person was a material consultant, etc. of the Company group within the past three years.
- (*)Material consultant refers to an expert, such as consultant, lawyer and certified public accountant, who earns over 10.00 million yen per annum other than director remuneration from the Company group in the case of an individual or earns money or property that exceed 2% of the total revenue of the organization other than director remuneration from the Company group in the case that the person belongs to an organization.
(7)The person was an executive of the Independent Auditor of the Company in the past three years.
(8)The person is a relative of the following persons.
- [1]The person falls under (1) above and is a director or an employee in the position corresponding to General Manager or higher.
- [2]The person falls under (3) above and is a director or an employee in the position corresponding to General Manager or higher.
- [3]The person falls under (6) above.
- (*)“Relative” refers to the spouse or a relative within the second degree of kinship, etc.
(9)The person has stayed in office as Outside Director of the Company for over 10 years in total.
(10)The person carries the risk of creating a constant substantial conflict of interest between the Company’s general shareholders as a whole for reasons other than those considered in (1) to (9) above.

Independent officer notification form_May 2025 (Japanese) (PDF: 89KB)