Evaluation of the Board of Directors

Evaluation of the effectiveness of the Board of Directors in FY2025

[Summary of the results of the analysis and evaluation of the effectiveness of the Board of Directors as a whole]

The Company conducts self-assessments and analyses of the effectiveness of the Board of Directors with the aim of enhancing the Board’s effectiveness.

In conducting the self-assessments and analyses, the Company followed the process described below with advice from an external organization. In December 2025, a questionnaire survey was conducted for all Directors and Audit & Supervisory Board Members who serve on the Board. To ensure anonymity, respondents submitted their responses directly to the external organization.

Based on the aggregated results provided by the external organization, the Board of Directors conducted an analysis, discussion, and evaluation at its regular meeting in May 2026. A summary of the results is presented below.

1. Achievements in FY2025 based on the issues set in FY2024

Challenge	Achievements
Fiscal year 2025 is the final year of the Medium-Term Management Plan 2025 and the year in which the next Medium-Term Management Plan will be formulated. The Board of Directors will leverage the Group Management Strategy Meeting, attended by all directors and auditors, as a forum for discussion. Through these discussions, the Board will oversee efforts to achieve the targets of the current plan and hold robust discussions on the formulation of the next Medium-Term Management Plan.	As described below, we further strengthened the foundation to enable more in-depth and robust discussions. In addition, based on the “Main Opinions” shown in “2. Evaluation Results for FY2025” below, we concluded that substantive discussions were conducted. (1) Enhancing the environment for richer discussions Tablets were provided to Directors, Audit & Supervisory Board Members, and other relevant personnel. We made an online archive of materials available for the Board of Directors, the Group Management Strategy Meeting, the Monthly Management Execution Meeting, and other meetings. We also provided on-demand access to recordings for individuals who were unable to attend meetings such as the Group Management Strategy Meeting. We introduced a web-based executive officer training program provided by an external organization, enabling each Director and Audit & Supervisory Board Member to select and take courses from a broad range of topics based on their individual needs. We continued to reflect discussion content in the minutes of Board meetings, thereby improving information sharing. (2) Support structure We maintained a structure under which outside officers participate in the Group Management Strategy Meeting and the Monthly Management Execution Meeting. (3) Agenda Setting We continued to receive reports on quarterly business issues. In addition to the monthly business reports, each responsible officer presented reports on their respective departments, including the Technical, Research and Development, Raw Materials, and Logistics/Sales Planning divisions, as well as on key initiatives such as Biomass Materials Business Promotion, SX Promotion, and Packaging Business Promotion. In the monthly business reports, progress toward the targets of the Medium-Term Management Plan was clearly reported. Each quarter, the Head of the Planning Headquarters provided a summary report on progress under the Medium-Term Management Plan, which served as the basis for deeper discussions on key issues and future strategies. In preparation for the introduction of a capital-efficiency management framework, each division launched improvement initiatives by establishing KPIs and monitoring progress. Progress was reported to the Board of Directors on a quarterly basis.

Challenge

Achievements

Fiscal year 2025 is the final year of the Medium-Term Management Plan 2025 and the year in which the next Medium-Term Management Plan will be formulated. The Board of Directors will leverage the Group Management Strategy Meeting, attended by all directors and auditors, as a forum for discussion. Through these discussions, the Board will oversee efforts to achieve the targets of the current plan and hold robust discussions on the formulation of the next Medium-Term Management Plan.

As described below, we further strengthened the foundation to enable more in-depth and robust discussions. In addition, based on the “Main Opinions” shown in “2. Evaluation Results for FY2025” below, we concluded that substantive discussions were conducted.

(1) Enhancing the environment for richer discussions

Tablets were provided to Directors, Audit & Supervisory Board Members, and other relevant personnel. We made an online archive of materials available for the Board of Directors, the Group Management Strategy Meeting, the Monthly Management Execution Meeting, and other meetings. We also provided on-demand access to recordings for individuals who were unable to attend meetings such as the Group Management Strategy Meeting.

We introduced a web-based executive officer training program provided by an external organization, enabling each Director and Audit & Supervisory Board Member to select and take courses from a broad range of topics based on their individual needs.

We continued to reflect discussion content in the minutes of Board meetings, thereby improving information sharing.

(2) Support structure

We maintained a structure under which outside officers participate in the Group Management Strategy Meeting and the Monthly Management Execution Meeting.

(3) Agenda Setting

We continued to receive reports on quarterly business issues. In addition to the monthly business reports, each responsible officer presented reports on their respective departments, including the Technical, Research and Development, Raw Materials, and Logistics/Sales Planning divisions, as well as on key initiatives such as Biomass Materials Business Promotion, SX Promotion, and Packaging Business Promotion.

In the monthly business reports, progress toward the targets of the Medium-Term Management Plan was clearly reported. Each quarter, the Head of the Planning Headquarters provided a summary report on progress under the Medium-Term Management Plan, which served as the basis for deeper discussions on key issues and future strategies.

In preparation for the introduction of a capital-efficiency management framework, each division launched improvement initiatives by establishing KPIs and monitoring progress. Progress was reported to the Board of Directors on a quarterly basis.

2. Evaluation results for FY2025

In addition to the composition, operation, discussions, support structure, training, and the operation of the Nomination and Compensation Advisory Committee, we conducted surveys regarding the performance of outside directors, the performance of inside directors, and our own efforts. As a result of our analysis—comparing the survey results provided by external organizations with those of other companies—we obtained an overall positive evaluation and were able to confirm the understanding that the effectiveness of the Board of Directors as a whole is ensured.

Among the opinions shared at the Board of Directors were the following:

item	Main opinions
Board of Directors Discussions	With respect to management strategy and management plans, specific comments have been raised under appropriate discussions, such as evaluations, retrospectives, and instructions to identify and address underlying causes, and the mechanisms for maintaining and improving are functioning. There has been an increase in discussions from the perspectives of medium- to long-term initiatives and improving capital efficiency, resulting in qualitative improvements and deeper deliberations. Information on the business environment has been sufficiently provided, and the number of discussions, as well as their timing, have been adequate.
Performance of Outside Directors	Since the outside directors each possess diverse experiences and expertise with their own unique strengths, useful questions and advice are being provided from a variety of perspectives. The outside directors have deep expertise across a wide range of areas, and their comments and suggestions have significantly contributed to improving the effectiveness of the Board of Directors.
Performance of Inside Directors	With regard to questions raised by the outside directors, there have been more instances in which the chair seeks input from the inside directors. This is an excellent initiative that helps the inside directors actively engage in discussions.
Support system	The information-sharing framework for directors has been established to a considerably high level compared with other companies. For agenda items that needed to be examined in particular, opportunities were created to provide explanations by addressing them repeatedly, as necessary, several times. This was very helpful in improving understanding of the agenda items. Enhancing information provision to outside directors is a growing trend, but it is unlikely that many companies have adopted such an open approach. Making it possible to watch on demand even when one was unable to attend was very helpful.

3. Challenges for FY2026

Over the period of the Medium-Term Management Plan 2025 (FY2021-FY2025), our Group advanced a transition in its business structure from the graphic paper business to the life-related business. In FY2022, we faced a particularly challenging business environment, including a sharp rise in raw materials and fuel prices, but by implementing measures to improve profitability, we were ultimately able to strengthen the Company’s corporate fundamentals.

As the Board of Directors, we have successively introduced and continuously implemented initiatives to strengthen its oversight functions, including expanding Board reporting such as the start of quarterly business issue reports, enhancing opportunities for exchanges of opinions between outside directors and the Representative Director, ensuring the thorough inclusion of progress rates against the targets of the Medium-Term Management Plan in the monthly business report materials, and initiating a quarterly summary report by the Head of the Planning Headquarters on the status of Medium-Term Management Plan promotion.

In addition, all Directors and Audit & Supervisory Board Members attend not only Board meetings but also the Monthly Management Execution Meetings, which are intended to share monthly financial results information, and the Group Management Strategy Meetings, where discussions are held on important matters concerning the Group, such as management strategies by business area. By establishing an information-sharing framework for Directors and Audit & Supervisory Board Members, we have put in place a foundation that enables in-depth discussions.

In FY2026, the Company’s new long-term vision and the first year of the Medium-Term Management Plan will begin. While fulfilling the monitoring function toward achieving the targets set out in the Medium-Term Management Plan, we will further enhance discussions on long-term strategies aimed at increasing corporate value.

４. Initiatives and Results of the Previous Year

Year of initiative	assignment	Initiative results
2016	Advance distribution of materials for the Board of Directors meeting	To facilitate discussion, we distributed as many materials as possible one week before the event.
2016	Review of agenda items for the Board of Directors	We have begun operations based on the Board of Directors Rules (revised in April 2016) that comply with the Corporate Governance Code.
2017	Enhancement of matters to be reported to the Board of Directors	The Board of Directors will ensure regular opportunities to discuss the progress of the medium-term management plan.
2017	Ensuring opportunities for executive training	Executive training is conducted annually.
2018	Improved board reporting	Regarding performance reports, we devised ways to present materials and report them.
2019	Strengthening support for outside directors	We have strengthened our provision of information by providing more detailed explanations in advance, reflecting discussions in the minutes of board meetings, and providing more information.
2020	Expanding the items to be reported to the Board of Directors	The Board of Directors has expanded its discussions from a medium- to long-term perspective.
2021	Enhancing reporting items, ensuring deliberation time, and making materials easier to understand	Quarterly business task reports have begun.
2022	Follow up on important matters, expand discussions, and increase opportunities for exchanges of opinions between outside directors and the representative director	Strengthened follow-up by reporting to the Board of Directors on the progress of important projects. Ensured opportunities for the President and Outside Directors to exchange opinions at the Personnel and Remuneration Advisory Committee.
2023	Toward achieving the Medium-Term Management Plan 2025, we will further deepen discussions on progress, challenges, and future strategies.	The progress rate against the mid-term management plan targets was included in the monthly business report materials. Every quarter, the General Manager of the Planning Division gave a summary report on the progress of the mid-term management plan, and important issues and future strategies were discussed in more depth.
2024	To strengthen the “three cycles” that form our Group’s business model and achieve the 2030 Vision, we will assess the current situation, identify progress, and hold discussions on the long-term direction for each theme of our initiatives.	For each business and each priority issue, based on a goal-achievement scenario, KPIs, and hurdle rates organized by the executive side, the Board of Directors discussed the long-term direction for each business and related initiatives.

Investor Relations