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 three Independent Outside Directors) and the Audit & Supervisory Board consists of four Audit & Supervisory Board Members (including two Independent Outside Audit & Supervisory Board Members), and Susumu Yajima, Director, Representative Director and Chairman of the Board, chairs the Board of Directors. In FY2019, attendance of Independent Outside Directors and Independent Outside Audit & Supervisory Board Members at the Board of Directors meetings (15 meetings held) was 94.3% and attendance of Independent Outside Audit & Supervisory Board Members at the Audit & Supervisory Board meetings (14 meetings 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.

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 makes decisions on important items of business execution within the scope prescribed by the Board of Directors Regulations. The important items of business execution include formulation of Management Philosophy and Management Strategy which set forth the direction of the Group as a whole, and execution of investments based on the Philosophy and Strategy.
• 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, 20 Corporate Officers, 9 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, 3 of whom are Independent Outside Directors (including one female Director). As with the Directors, diversity, a high level of expertise, and a wealth of experience are required for Audit & Supervisory Board Members. Currently, there are 5 Audit & Supervisory Board Members, 3 of whom are Independent Outside Audit & Supervisory Board Members.
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 3 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 is consisting of 4 Audit & Supervisory (including 2 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. And despite the absence of financial experts, Independent Outside Audit & Supervisory Board Members are provided with the training they need to fulfill their individual roles and responsibilities when they are appointed. (Chapter2, Article 14 of the “Fundamental Policies on Corporate Governance”)

There are three Independent Outside Directors and two Independent Outside Audit & Supervisory Board Members at Oji Holdings. 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 agendas and planned Board of Directors deliberation matters. In addition, the three 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.
Audit & Supervisory Board Members and the Company’s Internal Audit Department meet once every month to exchange information on audit plans and results, and ensure cooperation between them.
Regarding Independent Directors and Independent Outside Audit & Supervisory Board Members, the content of the Holdings Management Meeting and the Group Management Meeting is reported twice a month, in principle. Through these opportunities, reports and opinions are exchanged in order to form a collaborative relationship.

• *With regard to Director Toshihisa Takata, only Board of Directors meetings held after he took office on June 27, 2019 are considered.
  In addition, Norio Henmi, Independent Outside Audit & Supervisory Board Member, retired on November 29, 2020.

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

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, 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 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 and 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 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 Nominating Committee consists of three Independent Outside Directors, the Chairman and the President, and the Board of Directors receives reporting from the Committee, deliberates and makes decisions.

The capabilities of our Directors are as follows: