The Oji Group has adopted a COMPANY system under which Oji Holdings oversees the formulation of Group management strategies and Group governance and each COMPANY, made up of closely-related businesses, plays a central role in business operations. This structure accelerates decision making by each business unit and clarifies management responsibilities.
In addition, as a company with Audit & Supervisory Board, Oji Holdings reinforces Group-wide governance through audits of the execution of duties by Directors carried out by the Audit & Supervisory Board Members and the Audit & Supervisory Board.
The Board of Directors consists of twelve Directors (including four Independent Outside Directors) and the Audit & Supervisory Board consists of five Audit & Supervisory Board Members (including three Independent Outside Audit & Supervisory Board Members), and Representative Director, Chairman of the Board, chairs the Board of Directors. In FY2021, attendance of Independent Outside Directors and Independent Outside Audit & Supervisory Board Members at the Board of Directors meetings (14meetings held) was 97.7% and attendance of Independent Outside Audit & Supervisory Board Members at the Audit & Supervisory Board meetings (13meetings held) was 100%.
The Nomination Committee and Compensation Committee were established as advisory bodies to the Board of Directors.
These two committees enhance the objectivity and transparency of decision making, and the Compensation Committee analyzes the effectiveness of and deliberates on evaluations of the Board of Directors.
In April 2022, the Corporate Sustainability Division was established within Oji Holdings to clarify the Oji Group's policy on sustainability initiatives and to oversee and manage each company's initiatives. We have also established the Sustainability Committee, chaired by the Group CEO, to discuss sustainability-related risks and measures and to promote Group-wide sustainability initiatives.

Based on its fiduciary responsibility and accountability for shareholders, the Board of Directors performs the following roles to promote sustainable growth and increase medium- to long-term corporate value of the Oji Group, and to improve profitability and capital efficiency.

• The Board of Directors shall make decisions on important items of business execution within the bounds stipulated in the Board of Directors Regulations. The important items of business execution include formulation of management philosophy and management strategies which lay out the direction for the Group as a whole, and execution of investments based on these philosophy and strategies.
• The Board of Directors supports prompt and decisive decisions regarding the issues/matters not pertaining to the Board of Directors’ resolutions, by determining in the Group Regulations the issues/matters that pertain to deliberation by Management Meetings and execution authority of Executive Directors.
• The Board of Directors performs highly effective supervision of Executive Directors and Corporate Officers from an independent and objective standpoint.
• The Board of Directors engages in construction of internal control systems, development of risk management systems, and supervision of their operational status.

The maximum number of Directors is 15 in principle, and at least 2 of them are Independent Outside Directors. In addition, 17 Corporate Officers, 7 of whom serve concurrently as Directors, are selected to speed up decision-making, strengthen the business execution system, and clarify executive responsibilities.

The Board of Directors, in order to fulfill a role necessary for achieving sustainable growth of and improvement of corporate value of the Group over the medium to long term, has been organized while giving due consideration to the balance of diverse knowledge and expertise concerning the business of the Group.
There are currently 12 Directors, 4 of whom are Independent Outside Directors (including two female Directors).
The Nomination Committee, which is an advisory body to the Board of Directors, deliberates upon the selection of candidates for Directors and the appointment of Group Corporate Officers before submitting a report to the Board of Directors. Regarding candidates for Audit & Supervisory Board Members, a report is submitted to the Board of Directors after consulting the Nomination Committee and obtaining the consent of the Audit & Supervisory Board.
The Nomination Committee consists of 4 Independent Directors, the Chairman, and the President, and the Board of Directors receives the report from the Nomination Committee, deliberates, and makes decisions.

Audit & Supervisory Board Members and the Audit and Supervisory Board conduct operational audits and accounting audits from an independent and objective standpoint, based on their fiduciary responsibility for shareholders.
Audit & Supervisory Board Members and the Audit and Supervisory Board strive to actively exercise their authority through actively combining the advanced information gathering capabilities of Standing Audit & Supervisory Board Members and the strong independence of Independent Outside Audit & Supervisory Board Members while maintaining cooperation with Independent Outside Audit & Supervisory Members.
Audit & Supervisory Board Members regularly meet with the Accounting Auditor to receive explanations on plans and implementation status of audits as well as financial statement audit results, and exchange opinions.
Audit & Supervisory Board Members and the Companyʼs Internal Audit Department meet once every month to exchange information on audit plans and results, and ensure cooperation between them.

Audit & Supervisory Board is consisting of 5 Audit & Supervisory (including 3 Independent Outside Audit & Supervisory Board Members). Audit & Supervisory Board Members ensures transparency and monitors and verifies management. Audit & Supervisory Board Members attend the Board of Directors and other important meetings based on the audit plan established by the Audit & Supervisory Board to audit Directors’ execution of duties.
Nobuko Otsuka, an Audit & Supervisory Board Member, has experience in taxation, accounting and internal audit at a Taxation Bureau, a tax accountant corporation, as well as Oji Holdings Corporation, and has considerable financial and accounting knowledge.
In addition, Noriko Sekiguchi, an outside corporate auditor, is a certified public accountant with a wealth of experience, advanced expertise, and broad insight into corporate accounting, as well as extensive practical experience in the corporate sector, and has considerable knowledge of finance and accounting.

Oji Holdings has appointed four Outside Directors and three Outside Audit & Supervisory Board Members, all designated independent officers. All Independent Outside Officers attend Board of Directors meetings, and the briefings that are held twice each month in principle and are conducted by the Director responsible for the Corporate Governance Division regarding Management Meeting and planned Board of Directors deliberation matters. In addition, the four Independent Outside Directors make up the Nomination Committee and the Compensation Committee. Persons with highly specialized and wide-ranging knowledge who are able to express opinions that are independent from management and from the perspectives of various stakeholders are selected as Independent Outside Director candidates, and persons with excellent character and insight, a high level of specialization, and extensive experience are selected as Independent Outside Audit & Supervisory Board Member candidates.
Independent Outside Directors and Independent Outside Audit & Supervisory Board Members participate in Management Meetings as observers and attend briefings on matters discussed at Management Meetings and matters to be discussed at the Board of Directors twice a month, in principle. Through these opportunities, reports and opinions are exchanged in order to form a collaborative relationship.

• *Concerning Ms. Seiko Nagai’s attendance at meetings of the Board of Directors, the scope of the total number of meetings includes only those meetings of the Board of Directors held after her appointment on June 29, 2021.

• *Concerning Mr. Hidero Chimori and Ms. Noriko Sekiguchi’s attendance at meetings of the Board of Directors and the Audit & Supervisory Board, the scope of the total number of meetings includes only those meetings of the Board of Directors and the Audit & Supervisory Board held after their appointments on June 29, 2021.

The Nomination Committee deliberates and reports to the Board of Directors on the following issues/matters in order to strengthen the independence, objectivity, and accountability of functions of Directors concerning the nomination of Officers and Corporate Officers by obtaining appropriate involvement and advices from Independent Outside Directors.

• Nomination policies for candidates for Directors and Audit & Supervisory Board Members
• Appointment policies for Corporate Officers
• Nomination of Directors and Audit & Supervisory Board Members, appointment of Corporate Officers
• Dismissal of Directors, Audit & Supervisory Board Members, and Corporate Officers in cases where they do not satisfy the nomination and appointment policies
• Succession planning for the Director of the Board, President
• Appointment and dismissal of Advisors

The Compensation Committee deliberates and reports to the Board of Directors on the following issues/matters in order to strengthen the independence, objectivity, and accountability of functions of Directors concerning the compensation of Directors and Corporate Officers by obtaining appropriate involvement and advices from Independent Outside Directors.

• Remuneration system and levels for Directors and Corporate Officers
• Evaluation of Directors and Corporate Officers
• Analysis and evaluation of the effectiveness of the Board of Directors
• Remuneration system and levels for Advisors

• *Positions during FY2021.
• *Concerning Independent Outside Director Seiko Nagai’s attendance at meetings of each Committee, the scope of the total number of meetings includes only those meetings held after her appointment on June 29, 2021.

Oji Holdings has designed its compensation programs with an emphasis on the roles performed by the Director compensation program such that the Board of Directors promotes sustainable growth and increasing medium- to long-term corporate value of the company and pursues enhanced profitability and capital efficiency. The specifics of the Director compensation program and determination policies are set forth in the Fundamental Policies on Corporate Governance. Director compensation comprises base compensation that is fixed compensation, bonuses that reflect short-term performance, and stock-based compensation that reflects medium- to long-term improvement in corporate value. Determinations are made by the Board of Directors based on recommendations submitted by the Compensation Committee.
Please refer to the Annual Securities Report for details concerning performance-linked compensation including bonuses and stock-based compensation.

• *The payment ratios will fluctuate due to changes in performance-linked compensation such as bonuses and stock-based compensation.

At Oji Holdings, the Fundamental Policies on Corporate Governance stipulate as a Director nomination policy that the Board of Directors shall comprise Directors who take notices on a balance between diverse knowledge and expertise concerning the business operated by the Group, and that candidates be nominated for Directors who possess excellent character and insight and who may contribute to the sustainable growth as well as the increase of medium- to long-term corporate value of the Group. The Fundamental Policies also stipulates that candidates be appointed for Audit & Supervisory Board Members who are capable of executing the duties of Audit & Supervisory Board Members, and who possess excellent character and insight as well as high level of specialization and extensive experience.

When nominating candidates for Directors, the Nomination Committee, an advisory body to the Board of Directors, deliberates and recommends to the Board of Directors. As for the nomination of candidates for Audit & Supervisory Board Members, the Nomination Committee recommends to the Board of Directors with the consent of the Audit & Supervisory Board, following consultation with the Nomination Committee. The Board of Directors deliberates and makes decisions upon the recommendation.

Oji Holdings has identified the skills that members of the Board of Directors should possess to realize the Group’s management strategies, as described below. We place value on capabilities in the fields of “manufacturing and technologies,” “research and development,” “purchase and procurement,” and “ESG,” etc. which help promote sustainability and innovation, in addition to general management skills. The capabilities of each Director are as follows:

• *● marks indicate the abilities that each Director possesses, but the abilities in which each Director can demonstrate greater strength and expertise are listed below according to his or her position in the Company. The following list is based on their positions, and does not represent all of the abilities possessed by each Director.
  
  Representative Director of the Board: Up to four (4)
  Director of the Board and Senior Executive Officer: Up to four (4)
  Director of the Board and Executive Officer: Up to three (3)
  Director of the Board (Independent Outside): Up to two (2)

The Fundamental Policies on Corporate Governance stipulates that the Board of Directors shall conduct analysis and evaluation of the effectiveness of the Board of Directors every year, and take required measures to ensure the effectiveness of the Board of Directors as a whole as well as disclose an overview of the findings. In order to evaluate the effectiveness of the Board of Directors, we conduct a survey on the role, structure, and operation of the Board of Directors from April to May every year for all Directors and Audit & Supervisory Board Members. The evaluation findings will be analyzed by the Compensation Committee, in which Independent Outside Directors participate, and then deliberated by the Board of Directors based on the analysis results.

As a result of the analysis and evaluation of the Board of Directors of FY2021 conducted in and after April 2022, it was confirmed our Board of Directors and its subordinate meeting have continued to function well. In particular, the view was shared that the provision of management information and explanations regarding agendas to Independent Outside Officers have been improved, and that the suggestions and proposals made by Independent Outside Officers have been appropriately reflected in deliberations and resolutions. On the other hand, we identified issues that still need to be addressed, such as formulating management strategies, providing directions, etc., and decided to continue implementing the improvement measures. We will consider and take required measures to continually work on functional improvements of the Board of Directors.

The Oji Group strategically holds shares that are expected to contribute to the sustainable growth of the Group and the improvement of corporate value over the medium to long term as part of its management strategy for the purpose of business alliances and strengthening and maintenance of long-term and stable relationships with business partners. The Board of Directors specifically examines every year whether the purpose of strategic shareholding is appropriate and whether the benefits and risks associated with strategic shareholding are commensurate with the cost of capital to verify the appropriateness of the holding. We sell shares properly and appropriately if the rationality for holding them has diminished to reduce strategic shareholding.