P.51 Corporate Governance (Board of Directors)

51 02. Foundations for Accelerating Transformation

Corporate Governance

Corporate Governance Structure

Our Board of Directors now includes eight independent Outside Directors̶constituting a majority of the 15-member Board of Directors̶with a wealth of experience and a high degree of specialized knowledge and expertise in different fields. This structure enables more well-informed decision-making by the Board and further strengthens its supervision of management. We have also kept in place the Nomination and Remuneration Advisory Committee, an advisory body to the Board of Directors. The majority of the Committeeʼs members are Outside Directors, and it is chaired by an Outside Director. This structure enhances the independence, objectivity, and transparency of the Board related to the nomination and remuneration of senior management. To strengthen supervision from an external perspective, three of the five members of the Audit & Supervisory Committee are independent Outside Directors. The Committee also includes one person with corporate management experience, one legal expert, and one accounting specialist, ensuring a multifaceted audit framework. Furthermore, Directors serving as Audit & Supervisory Committee Members are allowed to attend all key internal meetings, giving them access to all essential information required for effective audits. As a result, we believe we have established a highly effective and robust corporate governance framework.

Organizational Chart (Company with an Audit & Supervisory Committee)

• Internal
• Outside
• General Meeting of Shareholders
• Appointment/Dismissal Determination of remuneration (limits)
• Authority to state opinions
• Appointment/Dismissal Determination of remuneration (limits)
• Audit/Supervision
• Appointment/Dismissal
• Nomination and Remuneration Advisory Committee
• Board of Directors
• Audit & Supervisory Committee
• (Collaboration)
• Committee Chairperson
• Chairperson: Chairman of the Board of Directors (Non-executive Director)
• Accounting Auditors
• Report
• Report
• Chairman of the Board of Directors
• President and Chief Executive Officer
• Accounting audits
• Audit &
• Assistance
• Supervisory Committee
• Administration Dept.
• Report
• Appointment/Dismissal/Supervision
• Report
• Audit
• (Collaboration)
• Report
• Management Council
• President and Chief Executive Officer
• Report
• (Audit Group) Internal Audit Department
• (Collaboration)
• Submission of agenda items
• Internal audits
• Business Groups
• Offices in Japan/overseas
• Corporate Groups
• Group companies

Business Execution System

• Corporate Strategy Promotion Committee
• Global Innovation & Portfolio Committee
• Company Investment Committee
• Internal Control Committee
• Compliance Committee
• Corporate Sustainability Committee
• Corporate Communication Committee
• IT Strategy Committee
• Outside Directors on the Board 53.3 ％ （8 of 15 members）
• Female Directors on the Board 20 ％ （3 of 15 members）

Board of Directors

Enhancing deliberations through effective agenda setting

The Board of Directors engages in careful discussions to determine the key management themes that should be prioritized for deliberation over the coming year, a process known as “agenda setting.” As part of the agenda-setting process for the first year following our transition to a Company with an Audit & Supervisory Committee, we reorganized the Board agenda around the four monitoring themes shown below. This was intended to further strengthen the Boardʼs monitoring function and facilitate more effective and efficient discussions focused on matters of strategic importance from a broader, company-wide perspective. Compared with the previous year, a greater proportion of Board discussion time was devoted to company-wide management, stakeholder engagement, and internal control and risk management. This enabled the Board to engage in more in-depth discussions on a broad range of key company-wide management issues aimed at further strengthening its monitoring function. For individual business matters, our revision of the approval criteria expanded the authority delegated to management for decision-making. As a result, both the number of agenda items and the total discussion time decreased year on year, while the average discussion time per agenda item increased. This enabled the Board to devote more focused discussions to major business transactions, including the full acquisition of SCSK, the acquisition of a U.S. aircraft leasing company, and the divestiture of the Ambatovy nickel project.

Main topics discussed by the Board in FY2025

• * p.40 For details, see the “Sustainability Management” section