Selection Standards and Appointment and Dismissal Procedures for Directors and Audit & Supervisory Board Members

1. Selection Standards for Directors and Audit & Supervisory Board Members

The Company’s Directors and Audit & Supervisory Board Members must satisfy the conditions listed below, in addition to meeting criteria that includes satisfying statutory requirements and those of the Articles of Incorporation, exhibiting no behavior that would be grounds for disqualification as stipulated in the Directors/Audit & Supervisory Board Members Regulations, and having no current or prior involvement with anti-social forces.

“Prerequisites” for All Directors and Audit & Supervisory Board Members
  1. All such individuals must exhibit outstanding character, knowledge and insight, while maintaining high regard for regulatory compliance and ethical standards.
  2. All such individuals must maintain objectivity in making decisions, perceptiveness and foresight.
“Common requirements” for Outside Directors and Outside Audit & Supervisory Board Members in particular
  1. Such individuals must have a high degree of knowledge along with extensive practical experience and experience serving in a leadership role in one or more fields such as corporate management, internal control, compliance, finance and accounting, financing, legal affairs, government, crisis management and education.
  2. Such individuals must possess the capacity to gain an overall understanding of the entire Group, and to ascertain the essential issues and risks thereof, and should be capable of being counted on for making constructive contributions during deliberations of meetings of the Board of Directors and other such forums in a candid and active manner.
Requirements for Outside Directors in particular Requirements for Outside Audit & Supervisory Board Members in particular
  1. Such individuals must be those who can be counted on for objective business oversight and managerial decisions from a practical point of view based on extensive experience in corporate management and specialized fields, and for providing advice and support to facilitate sustainable growth of the Company.
  1. Such individuals must be appointed with the aim of heightening the neutrality and independence of the audit framework, and must be individuals capable of expressing an objective audit opinion from a neutral standpoint.
Requirements for Inside Directors in particular Requirements for Inside Audit & Supervisory Board Members in particular
  1. Such individuals must be well-informed regarding industry trends and relevant regulations affecting the Group and the business model of the Group, and must have extensive practical experience in respective specialized fields.
  2. Such individuals must be counted on to conduct business, with a capacity to manage organizations drawing on a Company-wide perspective.
  1. Such individuals must be well-informed regarding the organization, business pursuits and operating processes of the Group, and must be capable of performing highly effective audits involving the proper collection of information from within the Group.

(Note)Each of the above requirements are applicable to candidates for the positions of Director, Audit & Supervisory Board Member, Outside Director, Inside Director (meaning a Director who is not an Outside Director), Outside Audit & Supervisory Board Member, Inside Audit & Supervisory Board Member (meaning an Audit & Supervisory Board Member who is not an Outside Audit & Supervisory Board Member).

2. Procedures

  1. (1)The appointment and dismissal of Directors and Audit & Supervisory Board Members shall be subject to resolution by a General Meeting of Shareholders.
  2. (2)Candidates for Directors who are submitted to a General Meeting of Shareholders shall be determined by the Board of Directors. The Board of Directors shall select candidates for Directors through deliberations of the Nomination and Compensation Committee, considering the above selection standards and policy for the composition of the Board of Directors.
  3. (3)Candidates for Audit & Supervisory Board Members who are submitted to a General Meeting of Shareholders shall be determined by the Board of Directors. The Board of Directors shall select candidates for Audit & Supervisory Board Members through deliberations of the Nomination and Compensation Committee, considering the above selection standards and policy for composition of the Audit & Supervisory Board, and consent of the Audit & Supervisory Board thereafter.
  4. (4)If any Director or Audit & Supervisory Board Member does not meet the abovementioned qualifications during his/her term, or is considered to engage in any misconduct or conduct that damages the Company’s credibility, or is judged ineligible to be a Director or Audit & Supervisory Board Member, the Company shall take prescribed measures, including dismissal according to laws and regulations. A proposal for the dismissal of a Director shall be determined by the Board of Directors through deliberation of the Nomination and Compensation Committee.

3. Policy for the composition of the Board of Directors/Audit & Supervisory Board

  1. (1)Diversity of the members of the Board of Directors and Audit & Supervisory Board shall be taken into consideration, respectively, for the appointment of Directors and Audit & Supervisory Board members.
  2. (2)The Board of Directors shall help the Board of Directors function properly as a whole by leveraging the respective Directors’ diverse experience and knowledge, and ensure that the Board of Directors can discharge its fiduciary responsibility overall.
  3. (3)At least one Audit & Supervisory Board Member shall be a person who has sufficient knowledge about financial and accounting matters.

4. Reason for appointment

Outside Directors

NameReason for appointment
Tsunehiro WatabeMr. Watabe possesses expertise based on a wealth of experience and an extensive personal network stemming from his position as director at banks and foreign-affiliated financial institutions. We have selected him as an independent director, believing he will provide advice and recommendations regarding general TechnoPro Group business operations, as well as appropriate oversight. In our judgment, Mr. Watabe fulfills our “Independence Standards for Outside Directors/Audit & Supervisory Board Members” and has no potential conflicts of interest with general shareholders. Accordingly, we have designated Mr. Watabe as an independent director.
Kazuhiko YamadaMr. Yamada possesses a wealth of experience and extensive expertise as an attorney in the fields of corporate acquisitions, corporate restructuring, equity practice, corporate law, and laws concerning financial instruments. We have selected him as an independent director, believing he will provide advice and recommendations regarding general TechnoPro Group business operations, as well as appropriate oversight. In our judgment, Mr. Yamada fulfills our “Independence Standards for Outside Directors/Audit & Supervisory Board Members” and has no potential conflicts of interest with general shareholders. Accordingly, we have designated Mr. Yamada as an independent director.
Harumi SakamotoMs. Sakamoto possesses a wealth of experience and extensive expertise as a government administrator involved in policies of the Ministry of Economy, Trade and Industry and as an executive of various corporations and organizations. We have selected her as an independent director,believing she will provide advice and recommendations regarding general TechnoPro Group business operations, as well as appropriate oversight. In our judgment, Ms. Sakamoto fulfills our “Independence Standards for Outside Directors/Audit & Supervisory Board Members” and has no potential conflicts of interest with general shareholders. Accordingly, we have designated Ms. Sakamoto as an independent director.

Outside Audit & Supervisory Board Members

NameReason for appointment
Mitsutoshi TakaoMr. Takao possesses expertise in finance, accounting, and general business administration, as well as extensive experience as a manager in major corporations. We have selected him as a full-time independent outside member of the Audit & Supervisory Board, believing he will provide supervision, conduct audits, and offer advice from an objective perspective. In our judgment, Mr. Takao fulfills our “Independence Standards for Outside Directors/Audit & Supervisory Board Members” and has no potential conflicts of interest with general shareholders. Accordingly, we have designated Mr. Takao as an independent audit & supervisory board member.
Akira MikamiMr. Mikami possesses extensive expertise and practical experience with respect to internal controls, internal audits, and risk management, as well as an international perspective developed during his service at major trading companies and a wealth of experience as a full-time member of the Audit & Supervisory Boards at publicly traded companies. We have selected him as an independent outside member of the Audit & Supervisory Board, believing he will provide supervision, conduct audits, and offer advice from an objective perspective. In our judgment, Mr. Mikami fulfills our “Independence Standards for Outside Directors/Audit & Supervisory Board Members” and has no potential conflicts of interest with general shareholders. Accordingly, we have designated Mr. Mikami as an independent audit & supervisory board member.
Rumiko TanabeMs. Rumiko Tanabe possesses wide-ranging knowledge in finance, accounts, overall audit, corporate governance, etc., accumulated through her experience in financial accounting operations in listed enterprises and auditing subsidiaries in addition to her professional expertise as a certified public accountant. We have selected her as an independent outside member of the Audit & Supervisory Board, believing she will provide supervision, conduct audits, and offer advice from an objective perspective. In our judgment, Ms. Tanabe fulfills our “Independence Standards for Outside Directors/Audit & Supervisory Board Members” and has no potential conflicts of interest with general shareholders. Accordingly, we have designated Ms. Tanabe as an independent Audit & Supervisory Board member.
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