Based on the basic mission of the sustainable improvement of shareholder value, the Teijin Group has been strengthening its governance to fulfill its responsibilities to various stakeholders. The basics of corporate governance are improving transparency, ensuring fairness, accelerating decision-making, and ensuring the independence of monitoring and supervision, and we are working to establish and strengthen an effective corporate governance system through items such as a "Nomination Advisory Committee and Compensation Advisory Committee," an "Advisory Board," a "Board of Directors including Independent Outside Directors and a Corporate Officer System," and a "Board of Statutory Auditors System including Independent Outside Statutory Auditors." Furthermore, the Group has established and published the Teijin Group Corporate Governance Guide, which serves as its guidelines for corporate governance, compliance, and risk management.

1. *Applicable from the current Senior Advisor

The current Companies Act requires the Board of Directors to appropriately carry out two roles: engaging in important business judgment and decision-making, and monitoring and supervising management. To properly fulfill these roles, the Company deems that a corporate governance system based on two core functions--(1) the execution of business led by the internal directors who are corporate officers and (2) management oversight and supervision focused on by outside directors and the Chairperson of the Board of Directors as well as monitoring and auditing carried out by statutory auditors and the Board of Statutory Auditors--is appropriate. Therefore, the Company has decided to continue to be a company with a Board of Statutory Auditors, for the time being.

(As of September 2023)

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• Conduct audits with a focus on the soundness of the Company's business activities
• Assess the situation of increasingly important core overseas businesses
• Emphasize preventative audits through an appropriate approach toward risks
• Collaborate appropriately with the accounting auditors and the Corporate Audit Department

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Directors

1. *1Includes experience with portfolio transformation and structural reforms
2. *2Includes experience with manufacturing and quality assurance

(As of September 2023)

Statutory auditors

1. *1Includes experience with portfolio transformation and structural reforms
2. *2Includes experience with manufacturing and quality assurance

(As of September 2023)

1. *1Member since fiscal 2023
2. *2Former CEO of the American Chemical Society
3. *3SEO Economisch Onderzoek, Chairman-Supervisory Board

(As of September 2023)

The Nomination Advisory Committee and the Compensation Advisory Committee are established as consultative bodies of the Board of Directors to further enhance the transparency concerning the appointment of directors and officers. Each committee deliberates on the following matters and makes recommendations to the Board of Directors.

• Deliberation on CEO succession and recommendation of successor
• Selection and dismissal of candidates for representative directors
• Selection and dismissal of candidates for directors (including Chairperson)
• Selection and dismissal of candidates for statutory auditors
• Promotion, demotion, selection, and dismissal of internal directors and senior management
• Deliberation on matters concerning the criteria for independence of outside directors and outside statutory auditors
• Selection of candidates for CEO and review of the CEO's plan and progress thereof for developing potential successors

• Deliberation on matters concerning the compensation system of corporate officers of the Teijin Group
• Deliberation on matters concerning the level of compensation of corporate officers of the Teijin Group
• Evaluation on the performance of and deliberation on matters concerning the amount of compensation for internal directors (including the CEO) and senior management

Nomination Advisory Committee: 5
Compensation Advisory Committee: 9

Important matters related to business execution of the Company and the Teijin Group, for which authority has been delegated by the Board of Directors, are decided 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, chief officers, and other members designated by the CEO. The CEO convenes and chairs the committee meetings. The Group Management Committee comprises the CEO, chief officers, general managers of the Company's business units, and others designated by the CEO.
The CEO convenes and chairs the meetings of this committee as well. In addition to these members, the committees are also attended by the internal full-time statutory auditors.

Based on the viewpoint of corporate governance and the stakeholders and to further enhance corporate value creation based on strengthening management from a medium- to long-term perspective, including in terms of sustainability and environmental, social, and governance (ESG) initiatives, the Company introduced "restricted stock" and "performance share units" systems. These systems were introduced with the aim of providing an incentive for directors to achieve the targets of the Company's management plans and to enhance corporate value over the medium to long term. As a result of introducing these systems, the ratio of share-based remuneration has increased. In addition, this revised officer compensation system has been applied to all corporate officers on a global basis in order to further strengthen the Group's management foundation.

The compensation ratio for internal directors (excluding the Chairperson and Senior Advisors) is as follows.

1. Note:The Chairperson, Senior Advisors, outside directors, and statutory auditors are not eligible to receive performance-linked compensation, restricted stock (shares), and performance share units, and are only paid basic compensation.

(As of September 2023)

1. Note:Since the targets for the fiscal year under review were not achieved, the portion of performance share unit compensation for directors (excluding outside directors) corresponding with business execution was not granted.

In addition to enhancing shareholder value, the mission of the Teijin Group is to conduct sustainable business activities that deliver value to its shareholders and all of its other stakeholders. In light of this mission, the Group strives to comprehensively and effectively assess, evaluate, and manage the various risks that could threaten the realization of its mission. By doing so, the Group adopts an organizational and systematic approach to risk management that leverages its Groupwide management capabilities. Specifically, the Group has in place a Total Risk Management (TRM) system targeting both strategic risks--which relate to such factors as the formulation of management strategies and plans, the implementation of strategic actions, and the determination of individual investment projects--and operational risks, which involve various adverse events that can negatively affect the Group's operations, in order to address the various risks that impact the sustainable growth of the Group.
Established in fiscal 2003, the TRM Committee, chaired by the CEO, serves under the Board of Directors. The Board of Directors deliberates and decides the basic policy and annual plan related to TRM proposed by the TRM Committee. At the same time, the Board of Directors formulates systems for managing important risks and ensuring business continuity. Also, the statutory auditors conduct audits to check whether the Board of Directors is appropriately handling policy decisions, overseeing, and monitoring with regard to TRM. The CEO is in charge of assessing strategic risks and provides this assessment as valuable information to the decision-making process of the Board of Directors and other bodies. The Chief Sustainability Officer (CSO) is in charge of overall Groupwide operational risks, including risks facing overseas Group companies, and works on a cross-organizational level to ascertain and confirm the status of risk management in each business unit and at each Group company. At the same time, we promote necessary efforts to address risks that require consistent response policies on a Groupwide basis. In addition, the Group is working to clarify how risks and opportunities presented by trends in the macroeconomic environment relate to its materiality and follows up on such risks accordingly.