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Requirements for Independent Directors

Teijin Limited (the Company) has established "Requirements for Independent Directors" for Outside Directors, including candidates, as conditions for their appointment. These requirements are intended to further clarify and enhance transparency in the Board of Directors' management oversight function and the audit functions performed by Directors who are Audit & Supervisory Committee Members with respect to the execution of duties by the Directors and management.

The key content of the Requirements for Independent Directors is as follows:

  • Note:Hereinafter, the term "Teijin Group" refers collectively to i) "Teijin Limited," ii) "subsidiaries of Teijin Limited" and iii) "joint ventures with equal partnership."

Requirements for Independent Directors

An Independent Director must be someone who has no significant interest in the Teijin Group.
A person is deemed to be an Independent Director without significant interests in the Teijin Group if none of the following conditions (a) through (e) apply:

    1. (a)Internal officers or employees and former internal officers or employees of the Teijin Group
    2. (b)Providers of professional services to the Teijin Group
    3. (c)Persons having customer or business partner relations with the Teijin Group
    4. (d)Persons having "reciprocal directorships or auditor relationships" with the Teijin Group
    5. (e)Persons having other interests in the Teijin Group

Detailed Internal Criteria Related to Conditions (a)-(e) Above

  1. (a)Internal officers or employees and former internal officers or employees of the Teijin Group
    Applies if:
    1. (1)The person does not satisfy the requirements under the Companies Act (see Article 2, Paragraph 1, Item 15 of the Companies Act) for an outside director of Teijin Limited
    2. (2)The person is currently, or was within the past five years, a director (or an equivalent &executive& (Note 1)) of the Teijin Group
    3. (3)The person's "family member" (Note 2) is currently a director (or an equivalent "executive") of the Teijin Group
  2. (b)Providers of professional services to the Teijin Group
    Applies if:
    1. (1)The person or the person's "family member" currently provides, or provided within the past five years, accounting audit services to the Teijin Group or belongs, or belonged within the past five years, to an audit firm that provides such services to the Teijin Group
    2. (2)The person or the person's "family" currently provides, or provided within the past three years, any of the following non-audit services to the Teijin Group and received compensation of 7 million yen (or US$60,000) or more

      (i) Legal services (attorney), (ii) Tax services (tax accountant), (iii) Patent agent services (patent attorney), (iv) judicial scrivener services (judicial scrivener), (v) consulting services on management, finance, technology, marketing, etc. (consultant)

  3. (c)Persons having customer or business partner relations with the Teijin Group
    Applies if:

    The person is currently a director (or an equivalent "executive or senior executive" (Note 4)) of a domestic or overseas company or other for-profit organization that is currently a "major customer or business partner" (Note 3) of the Teijin Group

  4. (d)Persons having "reciprocal directorships or auditor relationships" with the Teijin Group
    Applies if:

    The person serves as a director or holds an equivalent position at a domestic or overseas company or for-profit organization in which a director or an auditor of the Teijin Group also serves as a director or an auditor or holds an equivalent position

  5. (e) Persons having other special interests in the Teijin Group
    Applies if:
    1. (1)The person or the person's "family member" currently receives donations, loans or debt guarantees of 1 million yen or more from the Teijin Group
    2. (2) The person or the person's "family member" is currently a director (or an equivalent "executive or senior executive") of a domestic or overseas company or other for-profit organization that currently receives donations, loans or debt guarantees of 1 million yen or more from the Teijin Group

The terminology used above is defined below.

  1. Note 1:" Executive" (equivalent to director) refers to auditors, corporate officers, and employees in positions above general manager level.
  2. Note 2:"Family member" refers to a spouse, children, and relatives by blood or marriage within the second degree.
  3. Note 3:"Major customer or business partner" refers to those whose total annual transaction amount, either as a seller or a purchaser, has exceeded 2% of consolidated total revenue in any of the past three years (when the Teijin Group is the seller, based on Teijin Limited's consolidated total revenue; when the Teijin Group is the buyer, based on the counterparty's consolidated total revenue.)
  4. Note 4:" Executive or senior executive" (equivalent to director) refers to auditors, corporate officers, and employees in positions above general manager level as well as senior advisors (sodanyaku) or advisors (komon).

This "Requirements for Independent Directors" document is provided as a "reference" to help deepen the reader's understanding of the Teijin Group. It outlines a summary of the Company's "Independent Director Regulations" and is not intended to serve as a strict or comprehensive description of these regulations, the Companies Act or any other legal requirements.