In June 2015, we shifted to a company with audit and supervisory committee and established a Board of Directors, Audit and Supervisory Committee, and Financial Auditor.
The Company has improved the effectiveness of auditing and supervision through auditing by Directors who are Audit and Supervisory Committee Members with voting rights on the Board of Directors, and further strengthened the supervisory function of the Board of Directors.
Furthermore, the management participation of five External Directors, including three Directors who are Audit and Supervisory Committee Members, enhances the supervisory function of the Board of Directors with respect to business execution and ensures the appropriateness and transparency of the decision-making process.
With regard to the Board of Directors, by holding meetings at least once a month, we are always striving to share management issues and have established a system that enables us to take action to resolve issues as soon as possible. We are also working to build a more advanced governance system by appointing diverse human resources as Directors, including foreign nationals and physicians, to incorporate multifaceted perspectives and utilize AI, IoT, and other technologies.
Moreover, in addition to appointing Directors to be responsible for the business in each segment of Mitsuuroko Group, and giving them the authority and responsibility to establish a legal compliance system and a risk management system for each Group company, the head of Finance & Control also promotes and manages these systems across the Group.

The Company aims to improve corporate value to all stakeholders and achieve sustainable growth. We maintain a basic corporate governance approach to construct an optimized management structure and perform appropriate company operations.
We have composed a balanced Board of Directors by electing diverse human resources based on their knowledge, experience, and capabilities as we aim to accelerate decision-making, strengthen the supervisory function of management, and secure the transparency of company actions.
The Company expects that each Director will excel particularly in the following fields and skills.

Policy on determining the remuneration for Officers

At the Board of Directors meeting held on January 20, 2021, the Company passed a resolution for a policy on determining the remuneration, etc. for each individual Director (excluding Directors who are Audit and Supervisory Committee Members; the same shall apply hereinafter).
In addition, the Board of Directors has confirmed that the method of determining the remuneration, etc. as well as the amounts determined for each individual Director in the current fiscal year are consistent with the aforementioned policy, and are therefore judged to be in line with the policy.
The contents of the policy on determining the remuneration, etc. for each individual Director are as follows.

Basic policy

The basic policy of the Company is to determine the remuneration of Directors such that it is suitable and appropriate in light of Directors’ roles and responsibilities, taking into consideration the business performance of the Company. Specifically, remuneration for Executive Directors consists of basic remuneration and a “Board Benefit Trust (BBT),” which is a form of performance-linked stock remuneration. Remuneration for External Directors, who are primarily responsible for supervisory functions, consists solely of basic remuneration in light of their duties.

Policy on determining basic remuneration (monetary remuneration)

Basic remuneration for the Company’s Directors consists of fixed monthly remuneration and is determined after comprehensively taking into consideration such factors as remuneration levels at other companies, the business performance of the Company, and the levels of employee salaries, in addition to the positions, responsibilities, etc., of Directors.

Policy on determining performance-linked remuneration, etc. and non-monetary remuneration, etc.

At the 107th Ordinary General Meeting of Shareholders held on June 28, 2016, a resolution was adopted in relation to a “Board Benefit Trust (BBT)” as a form of performance-linked stock remuneration for Directors (excluding External Directors and Directors who are Audit and Supervisory Committee Members; hereinafter, referred to as the “Eligible Directors” in this and the following paragraph) (furthermore, the trust established based on this plan is hereinafter referred to as the “Trust”).
As set forth in the resolution, Eligible Directors are granted several points for each fiscal year, determined after taking into consideration their position, the degree of achievement of business performance targets (the degree of achievement of the target for profit before income taxes on the consolidated statement of income), and other factors, in accordance with the Officer Share Benefit Regulations (the maximum total number of points granted to Eligible Directors per fiscal year shall be 100,000 points). Furthermore, when granting the Company’s shares, etc., the points granted to Eligible Directors are converted at a rate of one share of the Company’s common stock per point (however, in the event of a share split, gratis allotment of shares, consolidation of shares, etc., in relation to the Company’s shares, the conversion ratio shall be reasonably adjusted according to the ratio thereof, etc.). The number of points for the Eligible Directors to be used as the basis for the granting of the Company’s shares, etc., is calculated by aggregating the points granted to the Eligible Directors through the time of their retirement and then multiplying the result by a predetermined coefficient set for each reason for retirement (hereinafter, the points thus calculated are referred to as the “confirmed number of points”).
If an Eligible Director retires and satisfies the beneficiary requirements set forth in the Officer Share Benefit Regulations, he or she will be granted a number of the Company’s shares corresponding to the “confirmed number of points” from the Trust after their retirement, when he or she completes the prescribed beneficiary confirmation procedures; provided, however, that in cases when the requirements provided for in the Officer Share Benefit Regulations are satisfied, the Eligible Director in question shall be paid cash equivalent to the market value of a certain percentage of the Company’s shares, in place of the granting of those shares of the Company. The amount of remuneration, etc., to be received by Eligible Directors shall be based on the amount obtained by multiplying the total number of points granted to each Eligible Director by the book value per share of the Company held in the Trust, at the time the points are granted (however, in the event of a share split, gratis allotment of shares, consolidation of shares, etc., in relation to the Company’s shares, the conversion ratio shall be reasonably adjusted according to the ratio thereof, etc.). In addition, if deemed appropriate, this amount shall be added to any money paid in accordance with the provisions of the Officer Share Benefit Regulations.

Policy on determining the ratio of the amount of basic remuneration (monetary remuneration), performance-linked remuneration, etc., or non-monetary remuneration, etc., for the amount of individual remuneration, etc., for each Director

In addition to basic remuneration, Executive Directors receive performance-linked stock remuneration (BBT), classified as performance-linked remuneration, etc., and non-monetary remuneration, etc. However, the ratio of basic remuneration, performance-linked remuneration, and non-monetary remuneration is not set in advance given the nature of performance-linked stock remuneration (BBT), such as the fact that, as described in “Policy on determining performance-linked remuneration, etc. and non-monetary remuneration, etc.” above, a number of points (a maximum of 100,000 points per fiscal year) are granted to Eligible Directors in accordance with the Officer Share Benefit Regulations for each fiscal year, taking into consideration their positions, the degree of achievement of business performance targets, and other factors, and a number of the Company’s shares, etc., that is equivalent to the confirmed number of points at the time of retirement is granted, as well as the fact that this plan was introduced in place of the payment of retirement benefits. However, basic remuneration shall be the principal remuneration for Executive Directors. Remuneration for External Directors consists solely of basic remuneration, as described in the “Basic policy” in the previous page.

Matters concerning the determination of the contents of remuneration, etc. for individual Directors

Of remuneration, etc., for individual Directors, decisions concerning the specific amount of basic remuneration are delegated to the Representative Director and President, based on a resolution of the Board of Directors. This authority covers the setting of payment standards according to positions, responsibilities, etc., and the amount of basic remuneration for each individual based on such standards. To ensure that the Representative Director and President appropriately exercise this authority, the Representative Director shall make decisions concerning the establishment of payment standards in accordance with positions, responsibilities, etc., after consulting with and receiving reports from independent External Directors.
Furthermore, the specific content of performance-linked stock remuneration (BBT) for individual Executive Directors is determined in accordance with the Officer Share Benefit Regulations.

Total amount of remuneration, etc. for FY2022

Evaluation of the effectiveness of the Board of Directors

The Company has conducted self-evaluations of the effectiveness of the Board of Directors in the form of questionnaires to Directors. The Company endeavors to ensure objectivity by seeking advice from attorneys and other experts as appropriate in relation to the preparation of the questionnaire and the analysis of evaluation results.

Summary of evaluation results for FY2022

According to the results of the questionnaire, the Board of Directors of the Company in FY2022 was evaluated to be effective.
The details are as follows.
The Company will work to improve these points in the future.