Criteria for the Appointment of Director Candidates and the Independence Standards for Outside Directors

Criteria for Appointment of Director Candidates

The policy for nominating director candidates is established in the Corporate Governance Policy as the "Criteria for Appointment of Director Candidates."

Selection Criteria for Director Candidates Who Are Not Audit and Supervisory Committee Members

When appointing director candidates who are not Audit and Supervisory Committee members, the nomination committee will deliberate on the candidates' qualifications and suitability based on the following appointment criteria, and report to the board of directors.

Having trustworthiness, dignity, and a sense of ethics
Being rich in the spirit of law abidance
Possessing objective judgment ability in management, as well as having superior foresight and insight.
There are no conflicts of interest or business relationships that could influence management decisions in our company's main business areas, and the individual has organizational management experience in the fields of industry, government, and academia, or possesses expertise in areas such as technology, accounting, or legal affairs.
Regarding candidates for outside directors, they should have achievements and insights in their respective fields of origin, be able to secure sufficient time to fulfill their duties as directors who are not audit and supervisory committee members, and possess the qualifications to perform duties as a member of any of the committees, which serve as advisory bodies to the board of directors.
In addition, from the perspective of establishing a corporate governance structure that ensures transparency, soundness, and efficiency as a listed company, the candidates should possess the qualifications required of directors who are not Audit and Supervisory Committee members.
Candidates for outside directors must satisfy the requirements for outside directors as stipulated in the Companies Act and the independence criteria for outside directors established by the company, and must be recognized as capable of performing their duties from an independent and objective perspective.

Selection criteria for director candidates who are audit and supervisory committee members

When appointing director candidates who are Audit and Supervisory Committee members, the Nomination Committee deliberates on the candidates' qualifications and suitability based on the following appointment criteria and submits its recommendations to the Board of Directors.

Having trustworthiness, dignity, and a sense of ethics
Being rich in the spirit of law abidance
Possessing objective judgment ability in management, as well as having superior foresight and insight.
There are no conflicts of interest or business relationships that could influence management decisions in our company's main business areas, and the individual has organizational management experience in the fields of industry, government, and academia, or possesses expertise in areas such as technology, accounting, or legal affairs.
Regarding candidates for outside directors, they should have achievements and insights in their respective fields of origin, be able to secure sufficient time to fulfill their duties as directors who are not Audit and Supervisory committee members, and possess the qualifications to perform duties as a member of any of the committees, which serve as advisory bodies to the Board of Directors.
In addition, from the perspective of establishing a corporate governance structure that ensures transparency, soundness, and efficiency as a listed company, the candidates should possess the qualifications required of directors who are not Audit and Supervisory Committee members.
Candidates for outside directors must satisfy the requirements for outside directors as stipulated in the Companies Act and the independence criteria for outside officers established by the company, and must be recognized as capable of performing their duties from an independent and objective perspective.

*Our company shall dismiss a director after a comprehensive judgment by the Board of Directors based on the deliberations of the nomination committee if the director no longer meets the above criteria, violates laws or the company's articles of incorporation, or causes significant losses to our corporate group.

Criteria for Independence of Outside Directors

In addition to the requirements stipulated under the Companies Act, our company has established its own "Outside Director Independence Standards" within the Corporate Governance Policy, based on which independent external directors are appointed.
Furthermore, standards for the independence of external directors have been set, and if an external director falls under any of the following categories, that person is considered not to have sufficient independence from our company.

Our company and its subsidiaries (hereinafter collectively referred to as the "Group").
Business managers whose main business partners are our group, or business managers for whom our group is a major business partner (a major business partner refers to a sales or purchasing destination of our group's products, where either party accounts for more than 2% of the consolidated net sales in the fiscal year).
Consultants, accounting experts, and legal experts who receive large amounts of money or other assets from our company group in addition to their executive remuneration (if the recipients of such assets are organizations such as corporations or associations, this refers to the members belonging to those organizations). A large amount means receiving money or financial benefits of 10 million yen or more per year, excluding executive remuneration.
Certified public accountants belonging to the audit firm that serves as the accounting auditor of our company group, or persons who are employees, partners, staff, or workers of the audit firm.
Major shareholders who own more than 10% of our voting rights
A person who has received donations, loans, etc. totaling more than 10 million yen annually from our group (if the recipient of such donations or loans is a corporation, cooperative, or other organization, this refers to the members belonging to that organization).
Executives of other companies who have mutual appointments as outside directors.
Those who have fallen under any of (2) to (7) in the past year
In cases where a person falls under categories (1) to (8) and is considered an important person, their close relatives (spouse, relatives within the second degree of kinship, or cohabiting relatives) are regarded as important persons. Important persons refer to directors excluding outside directors, executive officers, trustees, and senior managers at the level of department manager or above.