Section 3: Ensuring Appropriate Information Disclosure and Transparency

The Company discloses its corporate philosophy as well as its business strategies, plans, and purpose on its website and in investor briefing materials.

ii.

The Company describes its basic views and policy on corporate governance under Section 1: Basic Views of Chapter 1: Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information of the Company’s Corporate Governance Report.

iii.

The Board of Directors and the Audit and Supervisory Committee have the authority over the remuneration of directors. This authority extends to deliberating and determining the amount of a basic remuneration and a performance-linked bonus for each director. The remuneration of directors who are not members of the Audit and Supervisory Committee is determined solely by the Board of Directors, whereas the remuneration of the Audit and Supervisory Committee members is determined by deliberation among the members of the Committee.
How to determine the policy for determining the remuneration for each individual is set forth in the rules concerning the remuneration of directors, resolved by the Board of Directors. The Board of Directors receives reports that are deliberated by the Nomination and Remuneration Committee based on the policy for determining the remuneration and within the range of the total amount resolved by the General Meeting of Shareholders, so the Board of Directors believes that the content of the decision is in line with the said policy.
The policy for determining the percentage of the amount of remuneration for each individual shall be decided based on the reports that are deliberated by the Nomination and Remuneration Committee, comprehensively taking into account the role and contribution status of each director as well as business performance.
The basic remuneration is determined based on the amount established for each director position, with the Company’s business performance, relative weight against employee salaries, and remuneration levels at other companies taken into consideration. However, if it is not appropriate to pay remuneration calculated in such a manner due to a significant decline in the Company’s business performance or other factors, the Company reserves the right to reduce the amount of basic remuneration.

iv.

The Nomination and Remuneration Committee deliberates and reports to the Board of Directors on director candidates who are not members of the Audit and Supervisory Committee after an extensive scrutiny of their knowledge, experience, and ability necessary to manage the Company’s business divisions and day-to-day operations. The Board of Directors then nominates the director candidates.
The Nomination and Remuneration Committee deliberates and reports to the Board of Directors on director candidates who are members of the Audit and Supervisory Committee after an extensive scrutiny of their experience, expertise in corporate financing and accounting, practical knowledge on the Company’s businesses, and general knowledge on corporate management necessary to audit and oversee the performance of duties by directors who are not members of the Audit and Supervisory Committee. The Board of Directors then nominates the director candidates.

v.

The Company submits a list of candidates nominated by the Board of Directors under the procedures described in the preceding item to a general meeting of shareholders for approval.
The Company describes in a supporting document, included in Notices of Convocation for General Meetings of Shareholders, brief career histories of candidates for Directors who are not members of the Audit and Supervisory Committee and the reasons for their nomination, as well as those of candidates for Directors who are members of the Audit Supervisory Committee.

The Company’s Audit and Supervisory Committee has established standards to evaluate an external accounting auditor of record. The committee monitors and evaluates the accounting auditor’s performance of its duties based on audits conducted by the auditor as well as audit reports submitted by the auditor.

ii.

The Audit and Supervisory Committee verifies the impartiality and professional qualifications of an external accounting auditor of record through meetings with the accounting auditor and based on audits conducted by the auditor.

Members of the Audit and Supervisory Committee and the Internal Audit Office meet with an external accounting auditor of record to discuss and agree on an audit schedule in order to give the accounting auditor sufficient time to prepare for and conduct audits.

ii.

The Audit and Supervisory Committee and the Internal Audit Office allow an external accounting auditor of record to interview the President and CEO and Directors of the Company if the auditor requests to do so.

iii.

The Audit and Supervisory Committee and the Internal Audit Office exchange information and views with an external accounting auditor of record to have a common understanding of issues subject to audits.

iv.

If an external accounting auditor of record uncovers fraudulence in the Company’s accounting practices or records and calls for corrective actions or if the accounting auditor identifies irregularities or problems in the Company’s accounting practices or records, the Audit and Supervisory Committee will work with relevant divisions and departments to take corrective actions.