IR Corporate Governance

The Company regards the maximization of shareholder value and the importance of compliance as fundamental principles of corporate governance and places a high priority on protecting shareholder rights. The Company also recognizes the importance of meeting the expectations and maintaining the trust of society while achieving sustainable growth and development and is therefore committed to continuously strengthening its corporate governance framework.

具More specifically, the Company considers it essential to establish an effective internal control system, develop an appropriate risk management framework, strengthen its compliance system, and enhance the systems for properly auditing and overseeing these functions.

As a general policy, the Company does not enter into transactions with related parties. When considering such a transaction, the Board of Directors reviews and makes decisions in accordance with the Company’s Related-Party Transaction Management Regulations. The Board carefully examines the business rationale and necessity of the transaction, as well as the fairness and appropriateness of its terms, to ensure that the interests of minority shareholders are not adversely affected.

The Company has adopted the organizational structure of a Company with an Audit & Supervisory Board.

The Company believes that separating business execution from the function of auditing Directors enables both functions to exercise effective checks and balances and helps ensure transparency in management. By adopting a Company with an Audit & Supervisory Board structure, the Company seeks to further enhance its corporate governance framework and strengthen the confidence of external stakeholders.

The Company also believes that the diversity and appropriate size of the Board of Directors should be determined in consideration of the Company’s circumstances and the broader social and business environment.

Given the Company’s current size, adopting the structure of a Company with Three Committees, which would generally require a larger Board of Directors, could result in less efficient business operations.

The Company’s Board of Directors currently consists of four Directors, including one Outside Director, which the Company considers to be an appropriately balanced composition. Each Director possesses extensive knowledge of the Company’s business, together with relevant knowledge, experience, and expertise in areas including finance and accounting, risk management, and compliance. The Company therefore believes that the Board of Directors has an appropriately balanced composition.