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Summary of Corporate Governance

Basic Approach

In accordance with the basic mission of the Teijin Group to continually increase its corporate value, the Group is working to strengthen corporate governance to fulfill its responsibilities to various stakeholders.The Group is striving to establish and strengthen an effective corporate governance system based on the principles of improving transparency, ensuring fairness, speeding up decision-making, and ensuring the objectivity of monitoring and supervision through a Board of Directors and Corporate Officer System in which at least half of the members are Independent Outside Directors, an Audit & Supervisory Committee in which the majority of members are Independent Outside Directors, and a Nomination Advisory Committee and Compensation Advisory Committee in which the majority of members are Independent Outside Directors.
On June 25, 2025, the Company transitioned to a Company with an Audit & Supervisory Committee, thereby enabling faster management-related decision-making, more substantive discussions on key management issues by the Board of Directors, and the strengthening of supervisory functions.

Status of Compliance with the Japan's Corporate Governance Code

The Company complies all Principles of the Corporate Governance Code. Please refer to Corporate Governance Report for details.

Cross-Shareholdings

(1) Basic Policy Concerning Cross-Shareholdings

The Company holds shares of issuing companies that it has determined to be instrumental in increasing its corporate value over the medium to long term, with the objective of maintaining and strengthening transactions, promoting business alliances with them and so on.
Each year, the Board of Directors reviews whether or not it is appropriate to hold shares based on an examination of the holding purpose and rationality for each individual stock from a medium- to long-term perspective.
In these reviews, the Board of Directors takes into account a comprehensive range of factors, such as the significance from a management strategy standpoint and business relationships, in addition to comparing dividends, transaction amounts, and other quantitative impacts against the cost of capital.
Based on the results of these reviews, the Company proceeded with the sale of the shares deemed to have diminished significance. During this fiscal year, the Company sold all shares of one (1) specific investment stock and part of the shares of another specific investment stock. The total sale value amounted to 0.5 billion yen.
The Company will continue discussions with the companies the shares of which the Company currently holds, and in principle, will endeavor to sell all of the shares of the listed companies.
In addition, whenever the shareholders of cross-shareholdings indicate their intention, such as intention to dispose of their shares of the Company, the Company handles the matter appropriately without interfering with disposal of such shares.

  1. *The selling price is the amount of the listed shares sold by the Company (non-consolidated basis)

(2) Standards for the Exercise of Voting Rights Related to Cross-Shareholdings

In exercising the voting rights related to the shares that the Company has decided to hold, the Company reviews each proposal from the perspective of its increasing corporate value and shareholder value of the issuing companies over the medium to long term and determines whether to vote for or against.
For proposals that may have a significant impact on the corporate value of the investee companies, the Company collects and examines information with particular attention paid.

Major Initiatives for Strengthening Governance

1999
  • Reduced the number of directors from 24 to 9
  • Appointed three independent outside statutory auditors
    (a majority of the Board of Statutory Auditors)
  • Introduced the corporate officer system
    (accelerating decision-making for execution of business and clarifying system of responsibility)
  • Established the Advisory Board
2003
  • Appointed three Independent Outside Directors
2012
  • Appointed four Independent Outside Directors
2015
  • Established Nomination Advisory Committee and Compensation Advisory Committee
2021
  • Ensured that an Independent Outside Director will always chair the Board of Directors
  • Revised the officer compensation system
    (introducing Restricted Stock and Performance Share Units)
  • Discontinued the Honorary Advisor system* and the Advisor/Special Advisor system
    1. *Applicable from the current Senior Advisor
2022
  • Revised the structure and functions of the Advisory Board
    (the role of chair is now held by the Independent Outside Director who chairs the Board of Directors while the nomination and compensation advisory functions of all directors, including the CEO and Chairperson, were consolidated into a single function in the form of the Nomination Advisory Committee or the Compensation Advisory Committee)
2023
  • Revised the composition of the Board of Directors (raised the ratio of Independent Outside Directors on the Board to 50%)
2024
  • Revised the composition of the Board of Directors (increased the proportion of Independent Outside Directors to 57%)
2025
  • Transitioned to a Company with an Audit & Supervisory Committee
  • Changed the outside advisor system

Organization Structure: A Company with an Audit & Supervisory Committee

Board of Directors

The Board of Directors meets once a month, in principle, and deliberates and determines/approves important matters, such as Groupwide management policies and plans, as well as any other items required by laws, regulations and the Company's Articles of Incorporation. It also oversees Directors'performance of their duties. As well as setting the agenda items for Board of Directors meetings in accordance with the Regulations for the Board of Directors, to expedite decision-making and clarify accountability of business execution, it has introduced a corporate officer system that properly delegates authority to Corporate Officers for important matters related to the business execution of the Teijin Group (individual short- and medium-term plans and individual important matters with respect to each business and functional operation).
The Company's Articles of Incorporation set the maximum number of directors at 12, including a maximum of five Directors who are Audit & Supervisory Committee Members. The Company also stipulates that, in principle, at least half of all Directors shall be Independent Outside Directors. The Company's Board of Directors is currently composed of 11 members (four women), including six Independent Outside Directors who satisfy the requirements for Independent Directors specified by the Company. Of the Directors, six are Directors who are not Audit & Supervisory Committee Members, including three Independent Outside Directors, and their term of office is stipulated as one year in the Articles of Incorporation. Meanwhile, five are Directors who are Audit & Supervisory Committee Members, including three Independent Outside Directors, and their term of office is stipulated as two years in the Articles of Incorporation. As a part of the separation of oversight and supervision from business execution, in principle, the chairperson of the Board of Directors is selected from among the Directors who are not Audit & Supervisory Committee Members.

Main Topics and Matters Deliberated

Management/business strategy
  • Review of Long-term Vision and the new medium-term management plan, strategy
  • Monitoring the progress of Medium-Term Management Plan 2024-2025
  • Sustainability policy
  • Initiatives related to human capital/intellectual property
  • Priority strategic business investment projects
  • Progress monitoring of priority investment projects, etc.
  • FY2026 short-term management plans, etc.
Corporate governance
  • Evaluation of the effectiveness of the Board of Directors
  • Internal control system operation evaluation result report and basic policy on internal control system
  • Revisions to the Corporate Governance Guide
  • Submission of the corporate governance report
  • Status of cross-shareholdings
  • Risk Management Committee achievements in FY2025, plans for FY2026
  • Audit & Supervisory Committee audit plans and regular activity reports, etc.
Earnings/IR/Shareholders'meeting
  • Earnings results and forecasts
  • Dividends from surplus
  • Status of stakeholder communication activities
  • Summary of the annual meeting of shareholders, etc.
Appointment and compensation of
directors and officers
  • Assuming and leaving office of Teijin Group Corporate Officers (Chief Officers*) and duties assigned to each
  • Compensation schemes and compensation amounts for Directors and Teijin Group Corporate Officers, etc.
  1. *Chief Officers: Corporate officers of the Teijin Group who serve as core members essential for deliberating the overall business strategies, etc., of the Group

Skill Matrix of Board Members

In accordance with medium-term management plan and management issues, a skills matrix based on "Reasons for Selecting Skills" was formulated. The "Skills Expected of Directors and Audit & Supervisory Committee Members in Fulfilling Their Roles and Responsibilities" are defined from the various kinds of knowledge, experience, and abilities possessed by Board members, with the aim of ensuring that the Board of Directors and Audit & Supervisory Committee have a good overall balance.
We are also working to increase gender and other diversity. With four female directors (Reiko Kusunose, Tomoko Torii, Tamie Minami, and Yaeko Takeoka), women now make up 36% of the Board of Directors. Tamie Minami is a foreign national.

Reasons for Selecting Skill Items

Category Skill items Reasons for selecting skill items
Management/Reform Management of a (listed) company
  • In order to identify opportunities and risks in management of a listed company given its management environment and to increase its corporate value, we believe appropriate decision-making and supervision from a comprehensive perspective are important.
Restructuring of business/
Internal reform
  • In order to implement portfolio reforms, we believe it is useful to have experience and knowledge of leading change management, such as business restructuring and internal reforms.
Function/Foundation Production/Technology/Quality/
Intellectual Property/DX
  • We believe initiatives related to production innovation, quality management and reliability assurance, research and development, intellectual property and DX will become increasingly important as the foundation of competitiveness and profitability improvement.
Management of a global organization
  • We believe knowledge in management of a global organization, which involves different values and complexities, will become useful in maximizing organizational abilities and managing risks.
Human capital/DE&I
  • As initiatives to transform corporate culture through the promotion of the Teijin Group's Purpose and initiatives related to human capital to increase the effectiveness of management strategies, we believe it is essential to "ensure that the right people are assigned to the right positions in order to put into practice the strategies" and implement "measures to ensure that human resources can demonstrate their capabilities fully," in order to increase the corporate value.
Finance/Accounting/IR
  • We believe financial strategy, capital policy and communication with capital markets are important in order to build a strong financial foundation that supports portfolio reforms and sustainable growth.
Risk management/Legal affairs
  • In order to maintain and increase the corporate value, we believe it is essential to appropriately address risks that are becoming more complex and sophisticated by gathering and analyzing information.
Sustainability
  • We believe it is important to pursue the enhancement of corporate value from the perspective of sustainability, based on the Teijin Group's Purpose of "Pioneering solutions together for a healthy planet."

Skill Matrix

Directors (Corporate Officer, Independent Outside Director)

  Corporate Officer Indepnendent Outside Director
Akimoto
Uchikawa		 Naohiko
Moriyama		 Yuji
Nakahara		 Masaaki
Tsuya		 Reiko
Kusunose		 Toichi
Maeda
Management/
Reform		 Management of
a (listed) company		 ● ● ●
Restructuring of business/
Internal reforms		 ● ● ● ● ● ●
Functions/
Fundation		 Production/Technology/
Quality/IP/DX		 ● ● ● ●
Management of
global organizations		 ● ● ● ● ●
Human capital/DE&I ●
Finances/Accounting/IR ● ●
Risk management/
Legal affairs		 ● ●
Sustainability ● ● ● ●
  1. *This table lists skills that members are expected to contribute in fulfilling their roles and responsibilities on the Board of Directors and the Audit&Supervisory Committee. It does not list all of their skills. Functions/Foundation show around two items.

Directors (Full-time Audit & Supervisory Committee Member, Independent Outside Director/ Audit & Supervisory Committee Member)

  Full-time Audit & Supervisory Committee Member Independent Outside Director/Audit & Supervisory Committee Member
Tomoko
Torii		 Naoki
Hamashima		 Koichi
Tsuji		 Tamie
Minami		 Yaeko
Takeoka
Management/
Reform		 Management of
a (listed) company
Restructuring of business/
Internal reforms		 ●
Functions/
Fundation		 Production/Technology/
Quality/IP/DX		 ● ●
Management of
global organizations		 ● ●
Human capital/DE&I ● ●
Finances/Accounting/IR ● ●
Risk management/Legal affairs ● ●
Sustainability
  1. *This table lists skills that members are expected to contribute in fulfilling their roles and responsibilities on the Board of Directors and the Audit&Supervisory Committee. It does not list all of their skills. Functions/Foundation show around two items.

Status of Activities of Board of Directors

Name Position at the Company Term of appointment Expected role Attendance at Board of Directors, Board of Statutory Auditors, and Audit&Supervisory Committee meetings (FY2025)
Corporate Officer Akimoto Uchikawa President and CEO,
Representative Directorof the Board		 5 years Lead initiatives for business restructuring and improving profitability, drive structural reforms that include the cutting of fixed costs at underperforming businesses, divest non-core businesses and work on strategic business integrations, and accelerate structural transformations aimed at strengthening the profit base (realizing Medium-term Management Plan 2026-2028) Board of Directors
13/13 times
Naohiko Moriyama Senior Executive Officer,
Representative Directorof the Board		 5 years Lead the formulation, promotion, and reform of growth strategies for the Company, establish the direction for business portfolio transformation and sustainable growth, respond strategically to various obstacles that arise during the promotion of the medium-term management plan Board of Directors
13/13 times
Yuji Nakahara Executive Officer,
Member of the Board		 1 year Create new growth opportunities, enhance the added value of specialty materials, and work to accelerate the transformation of the business model and establish sustainable competitive advantages Board of Directors
9/9 times*1
Independent Outside
Director		 Masaaki Tsuya Director 4 years Experience as CEO and chairperson of a listed company, abundant business experience, decision-making based on exceptional insight, supervision of business execution, advice to management Board of Directors
13/13 times
Reiko Kusunose Director 2 years Experience in corporate transformation at companies that have undergone management integration and global organizational management, as well as decision-making, supervision of business execution, and advice to management based on broad knowledge and deep insights from a DE&I viewpoint Board of Directors
13/13 times
Toichi Maeda Director 1 year Experience as president and chairperson of a listed company, abundant business experience, decision-making based on exceptional insight, supervision of business execution, advice to management Board of Directors
9/9 times*1
Full-time Audit & Supervisory Committee Member Tomoko Torii Director (Full-time Audit & Supervisory Committee Member) 2 years Audit, supervise, and advise on decision-making and business execution based on abundant work experience in the healthcare business, grounded in a solid knowledge of science and technology, and strong understanding of the Company's business activities and corporate culture Board of Directors
13/13 times
(4 times as Statutory Autitor)*2
Audit & Supervisory Committee
13/13 times
Board of Statutory Auditors
3/3 times
Naoki Hamashima Director (Full-time Audit & Supervisory Committee Member) - Demonstrate his experience and insights in both accounting and finance and business management, as well as his deep understanding of the Company's business structure, use his familiarity with the perspectives of a broad range of stakeholders as a base from which to audit, supervise, and advise on decision-making and business execution Appointed in June 2026
Independent Outside
Audit & Supervisory Committee Member		 Koichi Tsuji Director (Audit & Supervisory Committee Member) 3 years Audit, supervise, and advise on business execution based on deep insight gained from experience as a certified public accountant or corporate manager, as well as knowledge of risk management Board of Directors
13/13 times
(4 times as Statutory Auditor)*2
Audit & Supervisory Committee
13/13 times
Board of Statutory Auditors
3/3 times
Tamie Minami Director (Audit &Supervisory Committee Member) 3 years Audit, supervise, and advise decision-making and business execution based on experience in healthcare and industrial materials business and as a manager in multiple geographical regions in a global company, and marketing knowledge Board of Directors
12/13 times
Audit &Supervisory Committee
13/13 times
Yaeko Takeoka Director (Audit & Supervisory Committee Member) 1 year Audit, supervise, and advise on decision-making and business execution based on deep insight into corporate legal affairs (e.g., intellectual property rights, compliance), a management perspective cultivated through extensive experience as an outside director, and knowledge of the Company's internal auditing system Board of Directors
9/9 times*1
Audit &Supervisory Committee
13/13 times
  1. *1 Attendance is from date of appointment in June 2025 to March 2026
  2. *2Attendance as a Statutory Auditor was from April 2025 to June 2025, and as a Director (Audit & Supervisory Committee Member) from their appointment in June 2025 to March 2026

Evaluation of Board of Directors' Effectiveness

To further ensure the effectiveness and enhance the functions of the Board of Directors, the effectiveness of the Board of Directors is comprehensively analyzed and evaluated every year.

Effectiveness Evaluation Methods in FY2025

Summary of Effectiveness Evaluation Results

It was found that there was no issue with the current corporate governance system and its implementation, and that the Company's Board of Directors was generally functioning properly and its effectiveness had been verified. In addition, it was confirmed that the transition to a Company with an Audit & Supervisory Committee has been carried out appropriately, and that initiatives aimed at establishing a monitoring board are progressing steadily, as demonstrated by the promotion of open and active discussions under the strong leadership of the Chairperson of the Board of Directors, as well as efforts by the respective chairpersons of the Audit &Supervisory Committee, the Nomination Advisory Committee, and the Compensation Advisory Committee to enhance information sharing. On the other hand, it was also confirmed that discussions and initiatives necessary for the realization of a monitoring board remain to be addressed.

Results of Measures Implemented in FY2025 to Further Enhance the Effectiveness of the Board of Directors

Responses to issues identified in the effectiveness evaluation of the Board of Directors for FY2024

Issues Responses
Deepening of discussions on key issues
  • At the beginning of the fiscal year, the Company identified and prioritized key issues, and organized key points for consideration
  • An annual agenda and schedule were formulated to deepen discussions
Reorganization of the management execution system and enhancement of its functions
  • Corporate functions strengthened various initiatives involving global collaboration with corresponding functions at Teijin Group companies
  • A decision was made to establish the position of "Group President," responsible for optimizing operations for each business domain in order to achieve the new medium-term management plan
Development of management personnel (strengthening expertise and cultivating the next generation)
  • The Company established the new position of Chief Digital Officer, and recruited highly specialized external talent
  • Independent Outside Directors also participated in the next-generation management team development program

Other initiatives

Items Specific content
Transitioned to a Company with an Audit & Supervisory Committee
  • The Company has transitioned to a Company with an Audit & Supervisory Committee to enable faster management-related decision-making, more substantive discussions on key management issues by the Board of Directors, and the strengthening of supervisory functions
    • ⇒Made steady progress in initiatives to shift to a monitoring board model
Secured opportunities for consultation and information sharing
  • In addition to meetings of the Board of Directors, the Company arranged regular meetings among Directors to discuss direction and share information
    • ⇒Facilitated the sharing of matters and perspectives that serve as the basis for deliberations at meetings of the Board of Directors
Regular activity reports from the Audit & Supervisory Committee
  • Introduced a framework under which the activities of the Audit & Supervisory Committee are reported to the Board of Directors once every two months
    • ⇒ Strengthening the supervisory function of the Board of Directors through the early sharing of important audit-related information

Issues Identified in the Board of Directors Effectiveness Evaluation in FY2025 and Future Initiatives

Based on the effectiveness evaluation implemented in FY2025, the Board of Directors has discussed and decided to further advance its efforts to address the following issues in FY2026. Efforts to improve the effectiveness of the Board of Directors and further strengthen corporate governance will continue.

Issues Responses
Establish key deliberation topics and enhance the effectiveness of deliberations in light of the transition to a monitoring board model
  • Set up an annual agenda and review it as necessary in response to changes in the business environment
  • Enhance information provided prior to meetings and clarify key issues to serve as the basis for improving the quality of discussions and decision-making by the Board of Directors
  • Establish appropriate allocation of roles through the expanded use of delegation of authority from the Board of Directors to executive management
Oversee development of a framework to enhance the effectiveness of consolidated group management

Oversee the status of consideration and implementation of the following

  • Strengthening the monitoring, support, and advisory functions of the second line of defense (risk management, compliance, etc.), which plays an important role in identifying and managing material risks
  • Accelerating consideration of a strengthening of the global internal auditing framework, and, based on such considerations, enhancing the foundational elements such as organizational structure, auditing methodologies, manuals, and personnel placement and training
Appropriately follow up on the progress and underlying assumptions of the new medium-term management plan
  • Monitor the milestones of the new medium-term management plan and the underlying assumptions
  • Oversee the consideration and implementation status of countermeasures by the execution side to enable issues to be identified in a timely manner following changes in the business environment or deviations from plan
Enhancement of information provision that contributes to supervision by the Board of Directors and the Audit & Supervisory Committee
  • Expand opportunities for direct discussion of important business execution between business heads/functional heads and Directors
  • Enhance information sharing among the Audit & Supervisory Committee, the Nomination Advisory Committee, and the Compensation Advisory Committee
  • Establish a Corporate Secretary function to strengthen the framework for providing information to Independent Outside Directors as well as for communication, coordination, and support of their activities

Audit & Supervisory Committee

The Audit & Supervisory Committee comprises five Directors who are Audit & Supervisory Committee Members, including three women. Three of the five members meet the requirements of Independent Outside Directors as defined by the Company. In addition, independence is further enhanced by appointing an outside Audit & Supervisory Committee Member as chairperson. The Audit & Supervisory Committee is composed of members who possess expertise in areas such as law, finance, and accounting, and they audit the execution of duties by Directors based on their specialist knowledge.

FY2025 Activities

On June 25, 2025, the Company transitioned to a company with an Audit & Supervisory Committee, with the supervisory function of the Board of Directors strengthened by giving Audit & Supervisory Committee Members Board of Directors voting rights as Directors, and through other measures. Following the transition, the Company has created mechanisms to ensure the smooth operation of the auditing framework by the Audit & Supervisory Committee, with the aim of strengthening the organizational auditing framework.
Under these conditions, audits in FY2025 on the key audit matters below were conducted with a focus on the following basic policies: (1) Focusing audits on the integrity of corporate activities; (2) Emphasizing preventive audits using a risk approach; (3) Enhancing the understanding of the actual situation through on-site audits; and (4) Cooperating appropriately with Accounting Auditors and internal audits.

Key audit matters
  • Monitoring of progress of improvement plans for businesses and group companies with issues, and of the process of formulating the next medium-term management plan
  • Monitoring of response to new management structures following the transition to a company with an Audit & Supervisory Committee, strengthening of group internal control systems, including those of overseas locations, and of the internal auditing function
  • Response to changes in laws and regulations, stricter regulations, and social demands such as respect for human rights, and establishment and operation of compliance and internal control systems
  • Respond to changes in accounting systems, etc., measures to prevent ESH-related accidents, establishment and operation of production facilities and management systems
  • Development of IT platforms and direction of DX promotion, as well as continuous response to information security risks

Main activities included attending meetings of the Board of Directors and other important meetings, viewing important approvals and other documents, investigating the state of business and assets at the head office and major factories, visiting important group companies, and conducting interviews and other meetings with the CEO, Directors who are not Audit & Supervisory Committee Members, main Corporate Officers, and general managers of the corporate staff departments to confirm whether there were any internal control issues.
The issues identified through such activities and the details of investigations conducted by the Audit & Supervisory Committee are provided to the Board of Directors in the form of reports and recommendations on a regular basis, and Directors who are not Audit & Supervisory Committee Members share their perceptions and engage in discussions to open the way to improvements to the Company's initiatives concerning internal control. In addition, the Audit & Supervisory Committee confirms the appropriateness of the deliberation process and discussions conducted by the Nomination Advisory Committee and the Compensation Advisory Committee in relation to the appointment and compensation, etc., of Directors who are not Audit & Supervisory Committee Members.

FY2026 Activities

The Audit & Supervisory Committee has designated management's efforts to address important management issues toward a return to a growth trajectory, as set forth in the "Teijin Group Medium-Term Management Plan 2026-2028" that was announced in May 2026, as the most important auditing topic. In order to visualize the risks and their degree of importance for each business and function, the Company has adopted a risk heat map* approach to management. This framework allows high-risk areas to be identified at a glance by assessing and categorizing risks for each of the main audit points for every business and function into three levels. This map is shared with the executive side, and will be used to follow up progress in improvement measures on an ongoing basis, thus leading to more effective auditing activities and improvements in corporate value.

Key audit matters
  • Monitoring of risks in the medium-term management strategy
  • Management through the use of risk heat maps for each business and function and response when risks materialize, plus initiatives to prevent recurrence
  • Establishment and operation of internal controls (including J-SOX) for the Group as a whole
  • Rebuilding of the internal auditing organization, including strengthening of internal auditing frameworks at overseas group companies
  • Appropriateness of examination process and discussions in relation to the appointment and compensation, etc., of Directors who are not Audit & Supervisory Committee Members

Nomination Advisory Committee/Compensation Advisory Committee

To enhance transparency in the appointment and compensation of Directors and Corporate Officers, the Company shall establish and operate the Nomination Advisory Committee and the Compensation Advisory Committee. Each of these committees deliberates on the following matters and formulates proposals and makes recommendations to the Board of Directors.
Both committees shall consist of all Independent Outside Directors who are not Audit & Supervisory Committee Members, the Chairperson of the Board, and the CEO (in cases where the Chairperson is absent, all Independent Outside Directors who are not Audit & Supervisory Committee Members and the CEO). The Chair of each committee shall be selected from among Independent Outside Directors who are not Audit & Supervisory Committee Members and shall preside over the respective committee meetings. The CEO, as an interested party, shall, in principle, not be included as a member of the decision-making body in matters concerning the CEO. Similarly, the Chairperson of the board, as an interested party, shall, in principle, not be included as a member of the decision-making body in matters concerning the Chairperson of the Board.

Matters to be Discussed

Nomination Advisory Committee

  1. （a）Succession of the CEO and nomination of a successor
  2. （b）Appointment, retirement, and removal of the Representative Directors
  3. （c）Election, retirement, and dismissal of Directors who are not Audit & Supervisory Committee Members (including the Chairperson of the Board)
  4. （d）Election, retirement, and dismissal of Directors who are Audit & Supervisory Committee Members
  5. （e）Matters concerning personnel changes of Executive Officers (including appointment, retirement, removal, promotion, and demotion), and appointment or removal of Senior Advisors
  6. （f）Matters concerning the criteria for independence of Independent Outside Directors
  7. （g）Selection of candidates to succeed the CEO and review of the succession development plan formulated by the CEO and its progress
  8. （h）Matters concerning internal rules on Directors and Officers (excluding those related to compensation)

Compensation Advisory Committee

  1. （a）Matters concerning the compensation system for Directors, Executive Officers, and Senior Advisors (hereinafter collectively referred to as "Teijin Group Executives")
  2. （b）Matters concerning the compensation levels of the Teijin Group Executives
  3. （c）Matters concerning the performance evaluation and compensation amounts for Internal Directors (including the CEO) who are not Audit & Supervisory Committee Members, and for Executive Officers
  4. （d）Matters concerning internal rules on Directors and Officers (compensation-related)

    5. Main Matters Discussed by the Respective Advisory Committees in FY2025

    Nomination Advisory Committee
    • Examination on re-election of the CEO; review of the details and implementation status of the training provided by the CEO for CEO successor candidates
    • Revision of appointment systems for directors and officers
    • Appointment of directors and officers for FY2026
    • The independence of Independent Outside Directors and officers
    Compensation Advisory Committee
    • Revision of the executive compensation plan
    • Consideration of executive compensation levels
    • Performance evaluation of internal directors, including the CEO, and other management executives, for FY2024; and calculation of compensation amounts

    Policy and Procedure Pertaining to the Nomination of Candidates for Director and Election and Dismissal of Senior Management

    In terms of candidates for director, the Board of Directors considers and proposes to the General Meeting of Shareholders those who are suitable to be directors of the Company by virtue of their outstanding personalities and insights, as well as their competence, past performance record, and so forth.
    The selection of Directors (including the Chairperson and CEO) and members of the senior management as well as nomination of a successor CEO are deliberated upon by the Nomination Advisory Committee, after which proposals are submitted to the Board of Directors. The Board of Directors makes decisions on these matters after giving full consideration to the proposals.
    If a member of senior management is engaged in improper or unfair conduct, a suspected breach of trust, or other action unbefitting senior management, the Nomination Advisory Committee will deliberate on the matter and the Board of Directors will decide on the dismissal of the individual concerned based on the Committee's advice.

    Group Strategy Committee and Group Management Committee

    Important matters related to the business execution of the Company and the Teijin Group, for which authority has been delegated from the Board of Directors, are decided upon by the CEO through deliberation in the Group Strategy Committee, which meets at least twice a month in principle, and the Group Management Committee which meets once a month in principle. The Group Strategy Committee consists of the CEO, executive officers, and other members designated by the CEO. The CEO convenes and chairs the committee meetings. The Group Management Committee consists of the CEO, executive officers, general managers of business units, and other members designated by the CEO. The CEO convenes and chairs the committee meetings. In addition to the members, both committees are also attended by the Full-time Audit & Supervisory Committee Members.

Executive Compensation

The policy for determining the individual compensation, etc., for Directors of the Company (excluding Directors who are Audit & Supervisory Committee Members), is reviewed annually for its appropriateness by the Compensation Advisory Committee, which consists of a majority of Independent Outside Directors, and approved by a resolution of the Board of Directors. These deliberations by the Compensation Advisory Committee take into consideration changes in the business environment as well as the opinions of shareholders and investors, while being informed by third-party organizations with extensive global experience and expertise. The term "Director" below refers to Directors who are not Audit & Supervisory Committee Members unless otherwise specified.

Basic Policy on Compensation Systems

  1. ⅰ.The system should motivate employees to achieve short-, medium-, and long-term management targets, as well as enhance awareness of contributing to medium- to long-term increases in profits and corporate value
  2. ⅱ.The system should be closely linked to the Company's performance and highly transparent and objective
  3. ⅲ.The system should be primarily focused on sharing value with stakeholders and enhancing shareholder-oriented management
  4. ⅳ.The system should maintain sufficient compensation levels and content to act as incentives to secure high-quality global management personnel

Compensation Levels

Executive compensation levels for Directors are determined each year after verifying the appropriateness of the standard amount of total compensation for each position and job grade based on the results of a compensation survey in which major corporations in Japan participate.

Composition of Compensation for Directors

  1. ⅰ. The compensation for Inside Directors who concurrently serve as Executive Officers is composed of performance-linked compensation (short-term incentive compensation), restricted stock compensation (medium- to long-term incentive compensation), and performance share units compensation (medium- to long-term incentive compensation) which are variable compensations, with the aim of providing an incentive to achieve short-term performance goals, achieve the medium-term management plan, and improve medium- to long-term corporate value, in addition to fixed basic compensation that is not linked with the performance of the Company. For Inside Directors who do not concurrently serve as Executive Officers, only basic compensation and performance-linked compensation, or only basic compensation is granted based on their appointed duties, and restricted stock compensation (medium- to long-term incentive compensation) and performance share units compensation (medium- to long-term incentive compensation) are not granted.
  2. ⅱ. The compensation for Outside Directors is solely basic compensation that is not linked to the performance of the Company.
    The compensation for Directors who are Audit & Supervisory Committee Members is solely basic compensation based on their duties.

Composition Ratio of Executive Compensation

The compensation of Internal Directors who serve concurrently as Executive Officers is determined as follows.

Fixed Compensation

Variable Compensation

Officer Compensation Amounts (FY2025)