Corporate Governance Report

There were numerous opinions to the effect that there is currently not enough time for discussions of the Group's long-term strategies and that more time should be allocated for this purpose. In response to questions about the Group's risk tolerance and preparedness, there were opinions pointing out that concrete measures to deal with these matters are an issue for the future, as well as numerous negative evaluations on the five-point scale of the questionnaire survey, suggesting that many directors and Audit & Supervisory Board members perceive that discussions on risk management have been insufficient.

・ Future approach
The Board of Directors has decided to take the following measures to secure more opportunities and time at its meetings for discussions related to long-term strategies and risks.

1) Cooperation with other advisory bodies and committees of the Board of Directors
In order to formulate medium- to long-term management strategies for the entire Group, the Board has decided to deepen cooperation with the Group Strategy Committee, which discusses medium- to long-term strategies, and with the Group Risk Management Committee, which deliberates on risks that could impair corporate value.

2) More efficient operation of Board of Directors meetings

i. Further reduction of time spent explaining proposals and other matters
The Board has decided to have its members evaluate and review the quality of presentations for explaining proposals and the allocation of time to deliberations on a specific proposal basis, and to simplify or omit explanations on the day of the meeting, depending on the proposal, to secure sufficient time is devoted to strategic discussions.

ii. Further review of Board of Directors meeting materials
In addition to specified proposals such as investments, the Board has decided to improve the content and quality of proposal materials that tend to be large in volume by having the Board of Directors' Secretariat support the preparation of Board of Directors meeting materials by working more closely with the proposing department.

iii. Review of matters submitted for discussion at Board of Directors meetings
The Board has determined that the revision of the standards for submitting matters to the Board of Directors (effective April 1, 2023), which oriented the standards toward a monitoring model, has had some effect from the perspective of more broadly delegating specific individual business execution decisions to the executive side, within the scope permitted by the current institutional design of a company with an Audit & Supervisory Board system. The Board will continue analyzing the effectiveness of the revision. It has also decided to continue comparing and considering a potential shift to a company with an audit and supervisory committee system or a company with a nominating committee, etc., system, which would enable greater transfer of the authority of the Board of Directors to the executive side.