INVESTORSFY2022 Assessment of Board Effectiveness

[Summary of Results of Analysis and Evaluation of the Effectiveness of the Board of Directors as a Whole]

In order for the Board of Directors to conduct its own analysis and evaluation of the effectiveness of the Board of Directors, the Board of Directors Secretariat conducts a questionnaire survey of Board members regarding the operation of the Board of Directors and discussions at Board meetings, the results of which are reported to the Board of Directors. The Board of Directors analyzes and evaluates the effectiveness of the Board of Directors through deliberation of the contents of reports, etc., and works to improve the effectiveness of the Board of Directors based on the results of such analysis and evaluation. A summary of the results of the analysis and evaluation in FY2022 is as follows.

1. Questionnaire Items

The items of the questionnaire for FY2022 are as follows. Each survey question is rated on a 4-point scale, with a free response column for each item.

(1)Composition of the Board of Directors
1. ①Is the number of Board members adequate?
2. ②Is the composition of the Board of Directors (including from the perspective of diversity) appropriate?
(2)Agenda Items for the Board of Directors
1. ①With regard to matters to be resolved by the Board of Directors, is the scope of agenda items appropriate (from the perspective of flexible business execution, are matters that should be delegated to the President or heads of each Division appropriately delegated)?
2. ②With respect to matters reported to the Board of Directors, are matters of sufficient scope and content reported from the perspective of effective supervision of the President and heads of each Division, etc.?
(3)Operation of the Board of Directors
1. ①Is the time allotted for deliberation of each agenda item at Board meetings adequate?
2. ②Is the frequency of Board meetings appropriate?
3. ③Is communication regarding the convening of Board meetings accurate and smooth?
4. ④Is the timing of the provision of Board meeting materials appropriate?
5. ⑤Do the Board meeting materials cover all necessary information?
6. ⑥Are Board meeting materials and explanations at Board meetings clear and easy to understand (e.g., summarization, expressions and terminology, volume, etc.)?
7. ⑦Is the atmosphere of Board meetings appropriate (is it an environment where it is easy to speak up and lively discussion is possible?)
8. ⑧Are the statements in the minutes of Board meetings appropriate?
(4)Training for Directors and Corporate Auditors
1. ①Are sufficient training opportunities, mediation, and financial support provided for directors and corporate auditors to acquire, update, and improve the knowledge, skills, and information required of them?
(5)Board Discussions
1. ①Does the Board of Directors engage in appropriate discussions, taking into account medium and long-term perspectives?
(6) Effectiveness of the Personnel Remuneration Advisory Committee (responses by committee members only)
1. ①Is the composition agendas and operational structure of the Personnel Remuneration Advisory Committee appropriate?
(7)Support for Outside Directors (responses by Outside Directors only)
1. ①Is there sufficient prior explanation of agenda items to be discussed in advance of holding Board meetings?
2. ②Is information related to the management, finance, and risk management of the Company and the Group, as well as industry information, provided in a timely manner?
3. ③Is the content and volume of the Company's and the Group's management, financial, and risk management information and industry information provided appropriate?
4. ④Is sufficient information provided regarding the management issues and compliance problems facing the Company and the Group?
(8)Other comments on the status of corporate governance initiatives (free text)

End of document

2. Results of efforts in FY2022 based on tasks set in FY2021

Tasks	Results
1. Follow-up on important matters	Progress reports on matters resolved by the Board of Directors are provided in a manner appropriate to individual cases, including reports to the Board of Directors and individual explanations to directors and corporate auditors.
2. Expand discussions to oversee the progress of the vision and the medium-term business plan and to encourage measures to achieve the goals	Clarified a system to steadily promote countermeasures by establishing a person responsible for business execution and reporting lines for particularly important management issues, thereby increasing the speed of information gathering and decision-making. Designated a Chief Officer who is responsible for cross-functional coordination among the Raw Materials, Technology, R&D, and Logistics departments across the Group, and provides regular reports to the Board of Directors on a quarterly basis. Ensure that directors and corporate auditors have opportunities to attend the Group Management Strategy Meeting and the Management Executive Meeting, where monthly reports are made, and share information without concealment, before discussing it at Board meetings.
3. Expand opportunities for exchange of opinions between outside directors and representative directors	At the Personnel Remuneration Advisory Committee meetings, the President explained to outside directors the policies for achieving the Medium-Term Business Plan 2025 and ensured that outside directors will have the opportunity to ask questions and express their opinions.

3. FY2022 Evaluation Results and FY2023 Tasks

(1)FY2022 Evaluation Results

Items	Key Opinions
Scope and content of reported items	Further increase opportunities to review the progress of matters discussed at Board meetings and verify the comparison of forecasts and actual results.
Discussions from a medium to long-term perspective, etc.	The progress and responses of each Division, subsidiary, and major project will be explained with a clearer awareness of the long-term vision and the medium-term business plan. Expand opportunities for the Board of Directors to discuss risk assumptions, impact assessments, etc.

(2)Tasks for FY2023
Even in the midst of a severely changing business environment, the Board of Directors will further discuss progress, issues, and future strategies to achieve the goals of the Medium-Term Business Plan 2025.

4. Initiatives and results of previous years

Year of Initiatives	Tasks	Results of Initiatives
2016	Advance distribution of Board meeting materials	Materials were distributed, to the extent possible, one week prior to the meeting date to facilitate discussion.
2016	Review of content of agenda items for Board meetings	Operations based on the Rules of the Board of Directors (amended in April 2016) in compliance with the Corporate Governance Code have been initiated.
2017	Enhancement of items reported to the Board of Directors	Ensure regular opportunities for the Board of Directors to discuss the progress of the medium-term business plan.
2017	Ensure training opportunities for board members	Training for board members is conducted annually.
2018	Improve Board of Directors reporting	Regarding the performance report, the presentation of materials and the method of reporting were devised.
2019	Strengthen support for outside directors	Enhanced prior explanations, reflected content of discussions in Board meeting minutes, and strengthened the provision of information.
2020	Expansion of items reported to the Board of Directors	Expanded discussion from a medium to long-term perspective at Board meetings.
2021	Enhancement of reporting items, ensuring more time for deliberation, and improving the clarity of materials	Quarterly business issue reports were initiated.