Board Evaluation

All directors and members of the Audit & Supervisory Board analyzed and evaluated the effectiveness of the Board of Directors, and resolved the evaluation results at a meeting of the Board of Directors. The assessment results from the Board meeting held from January to December 2021 are as set forth below.

Analysis and Evaluation Method

Evaluation method This evaluation was conducted via a written survey, with each of the respondents
identified. Following a discussion using the aggregated results, the Board of
Directors, evaluated its effectiveness, clarified issues and adopted measures for
the future.
Assessment items
  1. Roles and responsibilities of the Board of Directors
  2. Fulfilling the function of external directors
  3. Composition of the Board of Directors
  4. Operation of the Board of Directors
  5. Contributions of individual Directors and members of the Audit & Supervisory Board
  6. Dialogue with shareholders
Evaluation period From January to December 2021

Evaluation Results

According to the evaluation results for January to December 2021, the average self-evaluation of all directors and members of the Audit & Supervisory Board was generally good in all six areas, indicating that the Board of Directors is operating effectively. By category, "operation of the Board of Directors" was most highly evaluated as in the previous year. This was followed by "contributions of individual directors and members of the Audit & Supervisory Board." However, in the "roles and responsibilities of the Board of Directors" category, items related to the building and monitoring of the Digital Transformation (DX) promotion structure and "dialogue with shareholders" received relatively low valuations compared with other items.

Issue

Each member of the Board of Directors needs to be more conscious of external perspectives in fulfilling their duties, so as to improve the quality of dialogue with shareholders and investors to achieve higher corporate value of the Group.

Measures

Through the following measures, we will improve the way of constructive dialogue with shareholders and investors and the quality of dialogue.

  1. We will select a wide range of suitable directors/officers for dialogue with shareholders and investors, taking into account their areas of expertise and the businesses they are in charge of. We have decided to enhance the structure for having the results of dialogues with shareholders and investors shared by all members of the Board of Directors, have the Board of Directors committed more strongly to IR and SR activities.
  2. Each member of the Board of Directors has a correct understanding of shareholders' and investors' requests and expectations of the Group and the Group's current situation before identifying issues to provide his/her own recommendations and deepen discussion at the Board of Directors meeting, based on his/her expertise, knowledge, experience, background, etc.
  3. The Board of Directors request specific committees to report important themes to be discussed by the Board, discuss them in consideration of the expectations of shareholders and investors, and determine future directions.

Items related to the building and monitoring of the DX promotion structure also received relatively low valuations compared with other items in the previous evaluation results. In response, we have built a structure under which the DX Committee in charge of supervising the DX of the entire Group checks the progress and achievements from initiatives on a timely basis, has begun to have external directors attend DX Committee meetings as observers to understand facts about the activities, has begun to hold a workshop regularly for all members of the Board of Directors, and has taken other initiatives. Because a DX promotion structure is essential as a foundation for the future development of the Kurita Group, we regard it as a continuing issue and decided to strengthen supervision by the Board of Directors further.