Results of the Evaluation of the Effectiveness of
the Board of Directors

As part of its efforts to reinforce its corporate governance in order to achieve sustainable growth and improve its corporate value over the medium- and long-term, the Company analyzes and evaluates the effectiveness of its Board of Directors as a whole in each fiscal year, thereby continuously promoting measures designed to improve such effectiveness.

• (1)

  Evaluation process
  The secretariat of the Board of Directors took the lead in conducting a survey on the effectiveness of the Board of Directors. Based on the survey results, the Board of Directors analyzed and evaluated its effectiveness, etc. and determined measures for improvement.

• (2)

  Evaluation method

  1)

  Questionnaire survey
  A questionnaire including several questions under each of the evaluation categories below was sent to members of the Board of Directors (including directors who are members of the Audit and Supervisory Committee).

• 2)

  Discussions at the board meeting and decisions on improvement efforts
  The secretariat of the Board of Directors compiled the survey results and findings from interviews with directors, sorted out points indicating that the Board of Directors was being operated effectively, and points regarding which efforts for improvement/enhancement were expected. It then reported the results to the Board of Directors.
  Based on the findings of this report, issues that need to be addressed to further reinforce the functions of and improve the effectiveness of the Board of Directors were identified, and efforts for improvement/enhancement were determined.

• (3)

  Executive summary of the evaluation results for the fifth business year
  Based on the findings of the questionnaire survey and interviews with directors, the Board of Directors was deemed to be operated “appropriately in general” as a whole and “its effectiveness is ensured.”
  Meanwhile, there were some constructive opinions that anticipate further improvement of the following:

  〇

  Improvement of the distribution timing and content of the materials submitted at board meetings

  〇

  Deepening of discussions on a successor development plan, officers’ remuneration, and election of officers

  〇

  Deepening of discussions on a medium-term management plan, appropriate risk-taking, and a risk management system

• (4)

  Future steps
  The Company’s Board of Directors will strive for improvement by taking action needed to further improve its effectiveness in terms of the issues identified in the evaluation of the Board of Directors.
  The Company will continuously evaluate the effectiveness of its Board of Directors to discuss further improvement of the framework of the evaluation and the evaluation method.

Evaluation of the Company’s corporate governance
by a third-party organization

The Company conducts a corporate governance survey using a third-party organization with a view toward deepening its approach to corporate governance from “formality” to “substance” and determining the direction for discussing more effective measures by gathering and analyzing data regarding what other companies place emphasis on concerning corporate governance and the progress of such initiatives, mainly those related to the operation of the Board of Directors and the formulation and implementation of management plans.