1. The Board of Directors set the following evaluation categories it believes are necessary for assessment of the Board's effectiveness and conducted a survey of and interviews with directors and corporate auditors.

   Evaluation categories in the questionnaire:

   1. Composition of the Board of Directors
   2. Operation of the Board of Directors
   3. Enhancement of discussions at Board of Directors meetings
   4. System supporting the Board of Directors
   5. Enhancement of relationship with shareholders and other stakeholders
   6. Other comments

2. The Board secretariat summarized the results of its assessment of directors and corporate auditors using the above questionnaire format and interviews.

3. Based on these results, the Board held discussions on each issue.

1. Summary of Scores

2. (Average score for each category)

   Note:Assessment scores are set on a scale of 1 to 5, with "1" meaning improvement necessary, "3" meaning the minimum necessary level,and "5" meaning adequate.

   1. Composition of the Board of Directors (Average score: 3.9) (Previous assessment: 4.2)
   2. Operation of the Board of Directors (Average score: 3.6) (Previous assessment: 3.1)
   3. Enhancement of discussions in the Board of Directors (Average score: 3.5) (Previous assessment: 3.4)
   4. 4. System supporting the Board of Directors (Average score: 3.9) (Previous assessment: 4.2)
   5. Enhancement of relationship with shareholders and other stakeholders (Average score: 4.1) (Previous assessment: 3.8)

3. Summary of assessment results

   ・Based on the results of the above survey and interviews, the overall assessment was that the level generally exceeds the minimum necessary standard.

   ・Regarding enhancing deliberations, many opinions were received requesting more opportunities for discussion on medium- to long-term management strategies.

   ・Concerning proposals, there were points raised regarding the need to enhance monitoring functions, such as expanding opportunities to report on the execution status of important matters and implementing comprehensive periodic reports on the execution status after board resolutions.

   ・While the provision of information to outside directors received some positive evaluation, opinions were expressed that a higher standard should be aimed for to enhance deliberations.

   ・Regarding operational aspects, while some improvements were noted, delays in distributing materials, along with insufficient content, were still recognized as ongoing challenges.

   ・Efforts to enhance dialogue opportunities with shareholders and other stakeholders, promote ESG initiatives, and expand non-financial disclosures--including the integrated report--received some recognition for improvements made.

In order to fulfill its roles and responsibilities, the Board of Directors is to be composed of directors with a good balance of sufficient knowledge, experience, and ability, while ensuring diversity, including aspects such as gender, age, and internationality, and maintaining an appropriate size.​

Policy for Appointment of Directors

In nominating candidates for the Board of Directors, the Nomination Advisory Committee, of which independent outside directors make up the majority, discusses each candidate's qualifications, taking into consideration their previous experiences, accomplishments, ability to execute tasks, and characters, regardless of social attributes such as gender, age, nationality, or race. In addition, when nominating outside director candidates, we select management professionals who have experience, accomplishments, and knowledge in their respective fields. The nomination is discussed by the Nomination Advisory Committee, taking into consideration the candidate's ability to provide opinions and judgments that will contribute to enhancement of the Company's medium- to long-term corporate value, and is then reported to the Board of Directors.

Support System for Outside Directors and Outside Corporate Auditors

There is no specific person or division in charge of the support system for outside directors and outside corporate auditors, but the Corporate Planning Division provides information, including distributing the agenda of Board of Directors meetings in advance, and the General Affairs Division assists outside auditors in the execution of their duties.
We conduct "Executive Sessions" with outside directors as individual informal meetings with executive officers to improve information sharing with outside directors. In addition, we have enhanced support for the smooth operation of the Board of Directors by introducing a cloud-based Board management tool to improve the security of confidential information and enhance overall efficiency.

Determination Process

Chaired by an outside director, the Remuneration Advisory Committee determines director compensation. The committee deliberates on monetary and non-monetary compensation for each director individually, and is committed to transparency, validity and objectivity. Furthermore, the Remuneration Advisory Committee is composed of three or more directors appointed by resolution of the Board of Directors, with more than half being outside directors and the chairperson selected from among them, ensuring a governance focused structure.

Ratio by Type of Compensation

The ratio of performance-linked compensation for directors of the Company increases the higher the position.
The ratio of base compensation, performance-based bonuses, and non-monetary compensation, etc., is shown in the table below assuming 100% of the target is achieved.
In addition, short-term incentive performance-based bonuses range from 0% to 200%, depending on the level of achievement. The percentage of long-term incentive non-monetary compensation varies from 30% to 100% depending on the level of target achievement.