Corporate Governance｜Toyo Seikan Group Holdings, Ltd.

Our Perspective on Corporate Governance

We believe that the enhancement of corporate governance under the Group’s management philosophy, including its management policy, creed, and vision, is one of the most important management issues in improving our corporate value and continuing development and evolution while contributing to the society through our business activities. Based on this point of view, Toyo Seikan Group Holdings (the “Company”) has formulated the “Basic Corporate Governance Policy” to continuously address this issue.

Since the market reorganization of the Tokyo Stock Exchange implemented on April 4, 2022, the Corporate Governance Code for the prime market has been applied to the Toyo Seikan Group. In light of the significance of this fact, we will further enhance our corporate governance to achieve continuous growth and increase corporate value.

Structures of Outside Directors and Auditors

The Company’s Board of Directors (the “Board”) is composed of nine Directors, of whom four are independent outside Directors, representing more than one-third of the Board. The Board generally meets once a month and holds extraordinary meetings as necessary to make important decisions on management matters. There were 13 board meetings in fiscal 2021 (ended March 2022). The term of office for Directors is set at one year in order to clarify Directors’ management responsibility and to flexibly establish a management framework that can promptly respond to changes in business environment. The Audit and Supervisory Board is composed of five auditors, of whom three are independent outside auditors. The Audit and Supervisory Board generally meets once a month and holds extraordinary meetings as needed. There were 16 meetings of the Audit and Supervisory Board in fiscal 2021.

In addition to active discussions at the Board meetings, these outside Directors and outside Audit and Supervisory Board Members conduct monitoring on management from an objective, outsider’s perspective, which allows the Company to ensure that surveillance function regarding its management structure works effectively.

Executive Structure

The Company has introduced an operating officer system to ensure management efficiency and flexibility as well as to distinguish and clarify responsibilities for decision-making/supervision and business execution. It conducts on a monthly basis the Management Strategy Meeting, which consists of full-time Directors, Heads in charge of key organizational functions, and Executive Officers. The Company also holds twice a month in principle the Executive Management Meeting, which is attended by full-time Directors, Heads in charge of key organizational functions, Executive Officers, and Presidents of major group companies.

The Company provides its directors and officers with training opportunities as needed to support them in acquiring and continuously updating necessary knowledge for appropriate performance of their duties.

The Company has also established the Governance Committee, a voluntarily established consultative body consisting of the representative director and the four independent outside directors. The committee is designed for more objective, transparent and timely decision-making of the Board of Directors regarding such issues as the appointment of representative directors and director and auditor candidates and the remuneration of directors and officers. In fiscal 2021, the committee held a total of six meetings.

Governance Committee

* This chart is scrolled

Objectives of the Committee	In order for the Board of Directors to function in a timely, objective and transparent manner, we have established the Governance Committee to make suggestions to the Board on the following matters: ・Election and dismissal of representative directors ・Appointment of director candidates ・Appointment of auditor candidates ・Amendment to the remuneration scheme for directors and officers and determination of the remuneration amount ・Formulation and implementation of president succession plans The Governance Committee comprises of outside directors and representative directors. The outside directors account for a majority of the members, ensuring the committee’s independency.
Members of the Committee	Chairman: Ichio Otsuka, President and Representative Director Other members: Kei Asatsuma, Outside Director Hiroshi Suzuki, Outside Director Mami Taniguchi, Outside Director Toshikazu Koike, Outside Director

Objectives of the Committee

In order for the Board of Directors to function in a timely, objective and transparent manner, we have established the Governance Committee to make suggestions to the Board on the following matters:

・Election and dismissal of representative directors
・Appointment of director candidates
・Appointment of auditor candidates
・Amendment to the remuneration scheme for directors and officers and determination of the remuneration amount
・Formulation and implementation of president succession plans

The Governance Committee comprises of outside directors and representative directors. The outside directors account for a majority of the members, ensuring the committee’s independency.

Members of the Committee

Chairman:
Ichio Otsuka, President and Representative Director

Other members:
Kei Asatsuma, Outside Director
Hiroshi Suzuki, Outside Director
Mami Taniguchi, Outside Director
Toshikazu Koike, Outside Director

(As of June 24, 2022)

Structure of Internal Control System Operation

The Company and other group companies operate their internal control systems. The Company has set up the Internal Audit Office, which operates directly under the President, to ensure that corporate activities comply with laws and regulations and improve the efficiency of management. The status of development and operation of the systems and law compliance is checked through periodic internal audits conducted by the Internal Audit Office, and if necessary, improvement measures will be taken based on the audit results.

Corporate Governance Structure

*This chart is scrolled