The Group has adopted a COMPANY system under which Oji Holdings undertakes the formulation of Group management strategies as well as the supervision of Group governance, while each COMPANY comprised of closely associated businesses forms the center of the Group’s business operations. This structure accelerates decision-making by each business unit and clarifies management responsibilities.
As a company with an Audit & Supervisory Board, the Company strives to strengthen the governance of the entire Group through audits of the execution of duties by Directors by Audit & Supervisory Board Members and the Audit & Supervisory Board. The Board of Directors consists of 12 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 and Chairman of the Board chairs the Board of Directors.

The Board of Directors, in view of its fiduciary responsibility and accountability toward shareholders, fulfills the following roles to enable the Company to achieve sustainable growth and enhance its corporate value over the medium to long term as well as to improve its profitability, capital efficiency, etc.

• Make important decisions concerning business execution within the scope specified in the Board of Directors Rules, such as determining the corporate principles and strategies that set out the overall direction for the Group and making investments based on these principles and strategies.
• With regard to matters that do not require a Board of Directors’ resolution, assist with rapid decision-making by determining in Group rules matters requiring deliberation by the Management Meeting and the authority of Executive Directors to execute business.
• Conduct highly effective supervision of Corporate Officers and Executive Directors from an independent and objective standpoint.
• Supervise the construction of internal control systems, the establishment of risk management systems, and the operation of these systems.

The maximum number of Directors is 15 in principle, and at least 2 of them are Independent Outside Directors. In addition, 19 Corporate Officers, 7 of whom serve concurrently as Directors, are selected (as of April 1, 2024) 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 Members (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 Directorsʼ execution of duties.
Teruo Yamazaki, an Audit & Supervisory Board Member, has experience in the finance and accounting division of the Company and its Group companies. He possesses considerable knowledge of finance and accounting.
In addition, Noriko Sekiguchi, an Outside Audit & Supervisory Board Member, as a certified public accountant, has a wealth of experience, a high degree of expertise, and a wide range of insights in corporate accounting. In addition, she has a wealth of practical experience in companies. She possesses considerable knowledge of finance and accounting.

Oji Holdings has appointed four Outside Directors and three Outside Audit & Supervisory Board Members, each of whom is designated as an Independent Officer. The Independent Officers attend Board of Directors meetings and the briefings (held basically twice a month) conducted by the officer responsible for the Corporate Governance Division regarding matters submitted to the Management Meetings and matters planned to be submitted to the Board of Directors meetings. The 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.
In FY2023, the attendance of the total of seven Independent Outside Directors and Independent Outside Audit & Supervisory Board Members at the Board of Directors meetings (16 meetings held) averaged 93.8%, and the attendance of Independent Outside Audit & Supervisory Board Members at the Audit & Supervisory Board meetings (13 meetings held) was 100%.

• *Retired as of the General Meeting of Shareholders held on June 27, 2024.

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.

• Compensation structure and levels for Directors and Corporate Officers
• Evaluation of Directors and Corporate Officers
• Analysis and evaluation of the effectiveness of the Board of Directors
• Compensation structure and levels for Advisors

• *Retired as of the General Meeting of Shareholders held on June 27, 2024.

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 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. Evaluation for bonuses takes into consideration the overall status of achievement of evaluation items concerning ESG.
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.

The Fundamental Policies on Corporate Governance of the Oji Holdings stipulate as a Director nomination policy that the Board of Directors shall comprise Directors with diverse knowledge and expertise concerning the business operated by the Group in a well-balanced manner. The Fundamental Policies also stipulate 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 deliberation among the Nomination Committee. The Board of Directors receives reporting from the Committee, deliberates, and makes decisions.

Oji Holdings has identified the skills that members of the Board of Directors should possess as described below, to ensure that the Board of Directors makes appropriate management decisions and is highly effective in the supervision of business execution to realize the Group's management strategies.

• *Items marked with “●” have particularly high relevance.

The capabilities of each Director are as follows:

• *〇 marks indicate members of the Nomination and Compensation Committee.
• *● marks indicate the abilities that each Director possesses, but the abilities in which each Director can demonstrate greater strength and expertise are listed according to his or her position in the Company below. This list is based on their positions in the Company and does not represent all of the abilities possessed by each director.
  Representative Director of the Board, and Director of the Board and Senior Executive Officer: Up to five (5)
  Director of the Board and Executive Officer: Up to three (3)
  Director of the Board (Independent Outside): Up to two (2)

The Company stipulates in its “Fundamental Policies on Corporate Governance” that the Board of Directors conducts analysis and evaluation of its effectiveness every year and takes required measures to ensure the effectiveness as a whole as well as discloses an overview of the findings.
To evaluate the effectiveness of the Board of Directors in FY2023, we conducted a survey on the roles, organization, and management of the Board of Directors for all of the Directors and Audit & Supervisory Board Members from April to May 2024. The evaluation results were analyzed by the Compensation Committee in which Independent Outside Directors participated, and deliberated by the Board of Directors based on the analysis results.
As a result, we confirmed that the Company’s Board of Directors, including its accompanying meeting bodies, has been effective. Regarding the role of the board of directors, many respondents answered that the board was able to present strategies in line with the medium-term management plan, and that the board was able to clearly present the direction of the Group through discussions on the improvement of PBR and large-scale acquisitions at board meetings. To the question of whether the Company has established an internal control and risk management system and supervised its operation, some respondents said that although the management system and its operation have been improved, the actual violation of rules and the occurrence of labor accidents have not been eradicated, and therefore the Company needs to continue strengthening its system. To the question of whether the Company has promoted constructive dialogue with stakeholders, while many appreciated the current efforts made in investor relations, others said that the board of directors has not engaged in sufficient dialogue. As for the composition of the board, while rating the current composition, which is the same as the previous year, as well-balanced, there was a shared recognition that the appointment of women and overseas personnel to internal board positions is an issue to be addressed.
In keeping with the findings, the Company will consider and take required measures to continually work on functional improvements of the Board of Directors.

The Company strategically holds shares that are expected to contribute to the sustainable growth of its business and the improvement of corporate value over the medium to long term as part of its management strategies for the purpose of business alliances and strengthening and maintenance of long-term and stable relationships with business partners. The Board of Directors examines for each individual stock every year whether the purpose of strategic shareholding is appropriate and whether the benefits and risks associated with strategic shareholding are commensurate with the capital cost to verify the appropriateness of the holding. To reduce strategic shareholding, we sell shares properly and appropriately if the rationality for holding them has diminished. In FY2023, we reduced the number of companies held for strategic shareholding, but the balance of our holding increased due to rising stock prices. Moreover, we have set a target of reducing our strategic shareholdings by ¥30 billion on a market value basis as of the end of March 2024 over the four years from FY2024 to FY2027. Please refer to the Annual Securities Report for details concerning individual stocks held for strategic shareholding.

We determine the selection of the accounting auditor, taking into consideration the following factors: the accounting auditor has established a system to maintain and improve audit quality, has independence and necessary expertise, and has a reasonable scale and overseas network that enables it to perform efficient audit services in response to the nature of the Company's business.
The Audit & Supervisory Board decides the content of the proposal for dismissal or non-reappointment of the accounting auditor to be submitted to the General Meeting of Shareholders in the event that it is deemed difficult for the accounting auditor to perform its duties properly.
The Audit & Supervisory Board shall dismiss the accounting auditor with the unanimous consent of the Corporate Auditors if the accounting auditor is deemed to fall under any of the items of Article 340, Paragraph 1 of the Companies Act.
The Audit & Supervisory Board has agreed to reappoint Deloitte Touche Tohmatsu LLC as the accounting auditor for the fiscal year 2023, which is deemed to have the necessary framework to ensure adequate accounting audits are conducted, taking into consideration the following factors for the evaluation of audit performance: 1) quality control of the audit firm, 2) audit team, 3) audit fees, etc., 4) communication with the Audit & Supervisory Board, 5) relationship with management, 6) group audits, and 7) fraud risks.
The rotation of engagement partner is operated in accordance with the Certified Public Accountants Act and other applicable regulations as follows: The engagement partner cannot be involved in the Company's auditing services for more than seven consecutive accounting periods. The lead engagement partner cannot be involved in the Company's auditing services for more than five consecutive accounting periods.