Status of Deliberations by, and Evaluation of the Effectiveness of the Board of Directors Meeting

Main Details of Deliberations by the Board of Directors Meeting in FY2021

In addition to the regular resolutions, focused discussions are held on the following matters related to management strategy and business implementation.

・ Formulation of the 17th Medium-term Management Plan
・ Revision of the HR system
・ Revision of the executive remuneration system
・ System and strategies related to the promotion of sustainability
・ Various measures related to financial strategies
・ Updating company-wide regulations
・ Business strategies and plans including supply chain renewal, and entering into and expanding the EC field

Initiatives to Improve the Effectiveness of the Board of Directors Meeting

In order to verify whether the Board of Directors is functioning effectively to “achieve sustainable growth and enhance our orporate value over the mid- to long-term,” and to work to improve that function, the Evaluation Committee evaluates the effectiveness of the Board of Directors every year. The extracted issues and proposals for improvement are shared at Board of Directors meetings, materialized for improvement and reform, and implemented. The results are then further evaluated and checked continuously by the Evaluation Committee, chaired by an outside director through a PDCA cycle aimed at improving the Board’s function.

Evaluation Method

In the evaluation for FY2021, a self-evaluation questionnaire * with detailed questions based on the following major items was conducted for all directors and Audit & Supervisory Board members, excluding representative directors.

* Self-evaluation questionnaire:

comprising 27 items, with free format, in addition to quantitative evaluation on a 5-point scale for each question

Major items

■ Composition of the Board of Directors meetings
■ Management of deliberations of the Board of Directors meetings
■ Functions of the Board of Directors meetings
■ Operation of advisory committees

Summary of Evaluation Results (Status of the PDCA Cycle)

Summary through FY2020	・ The composition of the directors is well-balanced, including from the perspectives of diversity. ・ The evaluation results confirmed that the evaluation score for the comprehension of outside officers had improved dramatically, due to measures taken to improve the Board of Directors meeting materials and contents of explanations; the issue regarding the proceedings of the Board meetings had been resolved; and, the Board of Directors had contributed to clarification of the positioning of individual proposals within the overall strategy
	Challenges	In order for the effectiveness of the Board of Directors to further improve its function, it is necessary to have opportunities for more detailed discussions on highly strategic projects that should be focused on with a mid- to long-term perspective, such as implementing growth strategies and building the medium-term management plan. It is also essential to have discussions regarding training and succession plans from a management perspective, including the portfolio strategy, governance, and global management.
FY2021 plan PLAN	・ Further increase opportunities for discussions, in order to collect diverse and expert opinions regarding highly strategic themes, prior to resolutions of the Board of Directors meeting. ・ Actively create opportunities to utilize the skills of outside officers. Promote the managerial talent development program.
Initiatives for FY2021 DO	・ Increase opportunities to discuss growth strategies, the 17th Medium-term Management Plan, and the improvement of governance, and deepen the discussions. Specific examples: “HR system/ talent development,” “Executive remuneration,” “Company-wide regulations,” etc. ・ Create opportunities to share the experiences, knowledge, and skills of outside officers, in the form of lectures on project management and portfolio strategy development, in order to contribute to the 17th Medium-term Management Plan. Create and implement opportunities to explain the business status to newly appointed outside officers. ・ Implement and promote a managerial talent development program, with the support of an external specialized institution.
Evaluation for FY2021 CHECK	・ Active discussions of strategic themes are being held, and the skills of outside officers are adequately utilized.
	Challenges	・ It is necessary for internal and outside officers to have opportunities to effectively monitor the status of business promotion. ・ It is necessary for the Board of Directors meeting to supervise the progress status of managerial talent development, and to conduct a review to formulate an effective succession plan.
Policy on initiatives for FY2022 ACTION	・ Increase opportunities for outside officers to supervise the progress status of the 17th Medium-term Management Plan based on the portfolio, under the leadership of the head of the business unit, and for sharing information with internal executives. ・ Further enhance discussions regarding managerial human resource development and a succession plan. ・ In addition, in order to respond to changes in the outside environment, consider and implement training opportunities as necessary, by inviting external experts.