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Corporate Governance

Activities of the Board of Directors

Please see P. 35-38 A separate window will open. of the 181st Business Report for information on activities such as attendance rate of outside directors at the Board of Directors in FY2019.

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Evaluation of the Effectiveness of the Board of Directors

(Source: Corporate Governance Report (published on August 25, 2020))

The Company undertakes annual evaluations of the effectiveness of the board of directors, for the purposes of recognizing the current status, identifying any issues, and further improving the board’s functioning.

In 2020, we appointed an external evaluator, and a questionnaire and interview were conducted with all directors as follows, and a a questionnaire and interview were conducted with all directors, and a third-party evaluation was conducted based on the results of the questionnaires and interviews. Based on the third-party evaluation results, discussions were held at meetings of the Board of Directors.

Summary of Evaluation and Discussion Results

1. Results of third third-party evaluation

The survey highly evaluated the number and composition of the Board of Directors, the frequency and timing of meetings of the Board of Directors, the risk management system, and the appropriate provision of information to the 3 committees. In the interview, the number and composition of the Board of Directors, risk management system, and the provision of information to each committee were well-evaluated, and it was confirmed that the Board of Directors deliberated actively. Based on these results, we believe that the Board of Directors and committees are functioning effectively in general.

2. Future Challenges and Improvements

  • a. Consider direction for board structure, including board diversity
    Regarding the diversity of directors, there were opinions that they were biased toward specialization in capital markets and capital efficiency, and that there was a shortage of people who could understand the technology, and that it was desirable to increase the ratio of internal directors. There were also opinions that gender diversity should be considered.
    The Nominating Committee has so far decided on candidates for director based on their expertise, background, gender, and other factors. We will continue to consider candidates for director based on the results of this assessment of effectiveness.
  • b. Improving the efficiency of preparations and management of the Board of Directors
    In order to enhance discussions at meetings of the Board of Directors, there were opinions calling for improvements in materials and presentations at meetings of the Board of Directors. In addition, while evaluating the preliminary briefing activities currently conducting, there were opinions calling for further utilization.
    We continues to conduct a preliminary briefing for foreign outside directors to facilitate efficient and extensive discussions even within the limited time required for the Board of Directors, and strive to deepen directors’ understanding of the agenda and important issues before the Board of Directors meetings.
  • c. Establishment of a system for prompt coordination of risk information and other information with the Board of Directors
    The opinion was expressed that there was a gap in the quality and speed of information sharing between internal directors, audit committee members, and other outside directors.
    In order to facilitate smoother communication among directors and facilitate information sharing and exchange of opinions, the Board of Directors will consider holding meetings for directors only (not including executive officers) separately from the Board of Directors and establishing opportunities for further information sharing and exchange of opinions through free discussions, such as the establishment of informal lunch or dinner.

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