Election and dismissal of Directors and Executive Officers

Nominating Directors and election and dismissal of Executive Officers

Directors are elected at the General Meetings of Shareholders based on nominations of the Nominating Committee. We, in order to secure the effectiveness of the Board of Directors, have adopted a policy of nominating candidate Directors with diverse experiences, achievements, high levels of insight, high levels of expertise, etc., regardless of nationality or gender, whether from Japan or overseas, or from within or outside the Group, in the Nominating Committee, whose majority members are Independent Directors.
Executive Officers are elected by resolution of the Board of Directors. The policy for the elected and dismissal of Executive Officers at our Company is as follows.

Nomination of Directors

Corporate Governance Policies
Article 20 (Director Appointment and Qualification Standards)

1. The Company, in order to secure the effectiveness of the Board of Directors, has adopted the policy of nominating candidate Directors with diverse experience, achievements, high levels of insight, and high levels of expertise, etc., regardless of nationality, gender, whether from Japan or overseas, or from within or outside the Group, etc.

2. The Company nominates personnel that meet the following as candidate Directors.

   (1) Directors have the qualifications to appropriately perform their duty of loyalty and duty of care, and to contribute to the sustainable growth of the Group and MSV in the medium to long term.

   (2) Outside Directors, in addition to (1) above, have high levels of insight and extensive experience in the fields of corporate management, accounting, and legal affairs, etc., have qualifications to monitor the execution of business of Executive Officers from an independent and objective perspective as a general rule, and in addition, meet the “Independence Criteria for Outside Director” (Annex 1) prescribed by the Board of Directors. In addition, the term of office shall also be taken into consideration.

   (3) Directors concurrently serving as Executive Officer, in addition to (1) above, have the abilities required to be conversant with the business of the Group and for the appropriate execution of the business management of the Group.

Executive Officers election policies

Corporate Governance Policies
Article 31 (Policies and Procedures for the Election and Dismissal of Executive Officers)

1. The Company shall use the following as criteria for the election of the Executive Officers and the appointment of the Representative Executive Officers.

   (Executive Officer)

   A person who has the diverse experience, performance, high level of insight, and high level of expertise, etc., worthy of the Executive Officer, who will contribute to the achievement of the sustainable growth and MSV in the medium to long term of the Group, regardless of nationality, gender, whether from Japan or overseas, or from within or outside the Group.

   (Representative Executive Officer)

   A person who has a wealth of experience and achievements in corporate management, who will demonstrate high levels of ability worthy of the Representative Executive Officer and President and will contribute to the achievement of the sustainable growth and MSV in the medium to long term of the Group.

2. The Board of Directors, pursuant to the policies of the preceding Paragraph, and based on the deliberations and reports of the Nominating Committee, shall elect and dismiss Executive Officers, and shall appoint and remove the Representative Executive Officers.

3. The Board of Directors, in the case of an Executive Officer or Representative Executive Officer and President falling applicable under any of the following and being able to objectively determine that removal or dismissal would be appropriate, shall dismiss or remove him/her, upon sufficient deliberations at the Board of Directors, based on the reports of the Nominating Committee.

   (1) In the event of having violated a law or ordinance or the Articles of Incorporation, etc., and it being able to be recognized that significant damage has been caused to the shareholder value of the Group;

   (2) In the event of significant impediment having occurred to the execution of their duties;

   (3) In the event of it being realized that the requirements of the selection standards are not met.

Succession Plan for Directors and Executive Officers

Identifying future management talent and an environment where people can upgrade their skills (strengthening human capital, selections and dismissals)

We recognize that our highest priority is to strengthen the Group’s human capital as the globalization of operations and drastic changes in business environment continue. We do not use a one-size-fits-all approach for the recruitment and development of future management talent. Instead, we are finding talented people and maintaining an environment for their advancement, with respect for the autonomy of every PCG based on mutual trust between the Co-Presidents and the heads of PCGs. The Co- Presidents are taking actions to strengthen the Group’s human capital, such as by monitoring and evaluating the status of the Group’s human capital through continual communication with the heads of PCGs, as well as by submitting reports periodically to the Compensation and Nominating Committees. The Nominating Committee determines the status of the Group’s human capital and evaluations of key management personnel based on reports from the Co-Presidents. The Committee also closely cooperates with other committees and the meeting of Independent Directors, communicates with key management personnel, and strengthens the network of connections with external experts in various fields. Through multifaceted and fair evaluations of the Executive Officers including the Co-Presidents based on these activities, the Nominating Committee examines people who have the skills to become future management personnel to achieve MSV. Committee members also determine responses to requests for consultations from the Board of Directors to enable appropriate decisions about selections and dismissals of key management personnel.

Process of strengthening human capital and selections and dismissals of Executive Officers