Corporate governance structure

Board of Directors

The Board of Directors is comprised of seven members: three internal directors, one external director, and three external directors who also serve as Audit and Supervisory Committee members. Of these members, one is a female director, contributing to a more diverse Board composition. In addition to regular Board of Directors meetings which are held once per month in principle, extraordinary Board of Directors meetings are held as necessary. The Daiseki Group holds Board of Directors meetings more frequently with the aim of facilitating prompt and accurate decision-making and efficient organizational management of the Group as a whole.
In addition, an executive officer system has been introduced for more efficient and accelerated execution of duties as well as clearer responsibility by separating the execution function from decision making and supervisory functions of management, aiming at establishing an agile and efficient management system. Board of Directors functions as the management decision making and supervisory body, while Management Meeting serves as the business executing body based on the decision making of Board of Directors. Board of Directors decides terms stipulated by the laws, regulations, or the articles of incorporation, important matters of Daiseki and our Group companies.

Management Meeting

The Diseki Group separates management decision making and execution of duties: Board of Directors functions as the management decision making and supervisory body, while Management Meeting serves as the business executing body based on the decision making of Board of Directors. Directors, executive officers, business site managers, and directors of consolidated subsidiaries attend monthly Management Meeting. Management Meeting is responsible for setting targets and budgets by business divisions, monthly and quarterly performance management, and implementation of improvement measures. Striving to establish internal control, Headquarters of Business Generalization and Planning and Management Headquarters provide instructions and requests in the fields of compliance, respectively in the Management Meeting.

Audit and Supervisory Committee

Held on a monthly basis in general, Audit and Supervisory Committee consists of three external directors with no mutual interest with the Daiseki Group. Audit and Supervisory Committee is responsible for reporting, consultation, and resolution of important matters related to audit and other related activities.

Appointment and Compensation Committee（2021～）

Appointment and Compensation Committee, an optional advisory body of directors aiming at enhancing independency, objectivity, and accountability of the function of Board of Directors in terms of appointment, dismissal, and compensation of directors, has been established. Appointment and Compensation Committee, whose majority of members consist of independent external directors, enhances objectivity and equity in processes to determine appointment, dismissal, and compensation of directors by discussing appointment and compensation of directors as well as by providing the discussion results and relevant advice and recommendation to Board of Directors.

Accounting Audit

Daiseki has entered an audit contract with Azusa Audit Corporations, a KPMG Japan member firm, to have accounting audits and internal control report audits conducted based on the company law and the Financial Instruments and Exchange Act.

Internal Audit

Consisting of two dedicated staff members, Audit Office under the direct supervision of the President and Representative Director audits the effectiveness of internal control and operational efficiency, etc. on a regular basis based on the audit plan, and reports the results to the President and Representative Director. Audit and Supervisory Committee and Audit Office mutually report their audit methods, states of internal control, and audit result, as well as exchange information as appropriate, engaging in enhancement of the audit function to conduct effective operational audit in cooperation with the accounting auditor.

Corporate Governance Report

For details of Daiseki's corporate governance, refer to "Corporate Governance Report" submitted to Tokyo Stock Exchange.
Corporate Governance Report（PDF：166KB）

Effectiveness evaluation of Board of Directors

Effectiveness evaluation of Board of Directors held in FY2023 was conducted, and its results were reported and discussed at Board of Directors. The evaluation results are as follows.

Task implemented

●Evaluation subject: Board of Directors held in September 2021 through September 2022

●Person in charge of evaluation: All Directors

●Overview

Items to be evaluated

●Composition and operation of the Board of Directors
●Management strategy and business strategy
●Discussions at the Board of Directors
●Operation of the Board of Directors
●Dialogue with external directors
●Effectiveness of governance system and the Board of Directors

Analysis and evaluation results

●Questionnaire results: Generally positive

●Effectiveness of Board of Directors: Confirm that it is generally secured

Measures to realize effectiveness

●Three items pointed out as improvement was required were as follow.

●Considering strengthening the governance system as a company listed on the Prime Market by increasing the ratio of external directors to over half
●Considering an initiative to hold broader discussions than before by including external directors with corporate management experience in the Board of Directors
●Considering increasing the time spent discussing Group governance

Directors skill matrix (as of May 25, 2023)

Name	Title	Age	Gender	Term of office	Committee		C	B	O	G	SA	M	F	S	T	H
Name	Title	Age	Gender	Term of office	A	Audit	C	B	O	G	SA	M	F	S	T	H
Tetsuya Yamamoto	Representative Director	58	Men	28	〇		●	●					●	●	●
Yasuo Ito	Representative Director	50	Men	13	〇		●		●	●	●
Koji Amano	Directors	62	Men	20				●			●					●
Mitsuru Okada	Independent External Directors	66	Men	-			●		●	●
Norikazu Sahashi	Independent External Directors	64	Men	7	〇	〇		●				●		●
Nobukatsu Mizuno	Independent External Directors	70	Men	5	〇	〇			●			●	●
Mitsuyo Kako	Independent External Directors	69	Women	3	〇	〇			●			●				●

Note:: A: Appointment, Reward Committee C: Corporate management B: Business knowledge O: Operation strategy G: Global SA: Sales marketing
M: Management risk F: Financial accounting S: Sustainability T: Technology innovation H: Human resource, education, diversity

Compensation for executives

	FY2023
	Directors （Excluding Audit and Supervisory Committee members）	External Directors （Audit and Supervisory Committee members）
Executives（people）	5	3
Compensation amount （Millions of yen）	147	6