Ⅳ. Corporate Governance (PDF:1.75MB/22Pages)

G O V E R N A N C E S E C T I O N

IV. Corporate Governance

Directors	78
Composition of the Board of Directors	80
Executive Officers, Operating Officers,
and Audit Officers	82
Message from an Outside Director	83
Corporate Governance	84
Risk Management	94
Compliance	96

Governance Corporate

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DIRECTORS

(As of June 25, 2021)

Takuya Nakata

Director, President and Representative Executive Officer Number of shares owned: 75,500

1981 Joined the Company

2005 General Manager of Pro Audio & Digital Musical Instruments Division 2006 Executive Officer

2009 Director and Executive Officer

2010 President and Director of Yamaha Corporation of America Senior Executive Officer of the Company

2013 President and Representative Director

2014 Director of Yamaha Motor Co., Ltd. (Outside Director) (to the present) 2015 President of Yamaha Music Foundation (to the present)

2017 Director, President and Representative Executive Officer (to the present)

Satoshi Yamahata

Director and Managing Executive Officer

Number of shares owned: 28,400

1988 Joined the Company

2009 General Manager of Accounting and Finance Division

2013 Executive Officer and General Manager of Corporate Planning Division

2015 Executive General Manager of Operations Unit

Director and Senior Executive Officer

2016 Executive General Manager of Corporate Management Unit (to the present) 2017 Director and Managing Executive Officer (to the present)

2020 Executive General Manager of Human Resources and General Administration Unit (to the present)

Taku Fukui

Independent Outside Director

Number of shares owned: 0

1987 Registered as an attorney

Joined Kashiwagi Sogo Law Offices

2004 Professor of Keio University Law School (to the present)

2005 Outside Audit & Supervisory Board Member of Shin-Etsu Chemical Co., Ltd. 2009 Managing Partner of Kashiwagi Sogo Law Offices (to the present)

2017 Outside Director of Yamaha Corporation (to the present)

2021 Outside Audit & Supervisory Board Member of METAWATER Co., Ltd. (to the present)

Yoshihiro Hidaka

Independent Outside Director

Number of shares owned: 2,900

1987 Joined Yamaha Motor Co., Ltd.

2010 Vice President of Yamaha Motor Corporation, U.S.A.

2013 Executive General Manager of 3rd Business Unit, MC Business Operations of Yamaha Motor Co., Ltd.

2014 Executive Officer of Yamaha Motor Co., Ltd.

2015 Executive General Manager of 2nd Business Unit, MC Business Operations of Yamaha Motor Co., Ltd.

2016 Executive General Manager of 1st Business Unit, MC Business Operations,

and General Manager of ASEAN Sales Division, 1st Business Unit, MC Business Operations of Yamaha Motor Co., Ltd.

2017 Executive General Manager of Corporate Planning & Finance Center of Yamaha Motor Co., Ltd.

Senior Executive Officer and Director of Yamaha Motor Co., Ltd.

2018 President, Chief Executive Officer, and Representative Director of Yamaha Motor Co., Ltd. (to the present)

Outside Director of Yamaha Corporation (to the present)

DIRECTORS

Mikio Fujitsuka

Independent Outside Director

Number of shares owned: 0

1977 Joined Komatsu Ltd.

2001 General Manager, Corporate Controlling Department, Komatsu Ltd.

2005 Executive Officer

2008 President of Global Retail Finance Business Division

2009 General Manager, Corporate Planning Division

and President of Global Retail Finance Business Division

2010 Senior Executive Officer

2011 CFO, Director and Senior Executive Officer

2013 Director and Senior Executive Officer

2016 Executive Vice President and Representative Director

2019 Outside Director of Yamaha Corporation (to the present)

Outside Corporate Auditor of Mitsui Chemicals, Inc. (to the present)

Paul Candland

Independent Outside Director

Number of shares owned: 300

1985 Joined Owens Corning

1987 Joined PepsiCo, Inc.

1994 President of Okinawa Pepsi-Cola, Inc.

1998 Representative of Japan Branch, PepsiCo International Ltd.

Representative Director and General Manager of The Disney Store Japan, Inc.

2002 Managing Director, Walt Disney Television International Japan of The Walt Disney Company (Japan) Ltd.

2007 Representative Director and President, The Walt Disney Company (Japan) Ltd. 2014 President of The Walt Disney Company, Asia

2018 Managing Director of PMC Partners Co., Ltd. (to the present)

2019 Outside Director of Yamaha Corporation (to the present) CEO of Age of Learning, Inc. (to the present)

Hiromichi Shinohara

Independent Outside Director

Number of shares owned: 0

1978	Entered Nippon Telegraph and Telephone Public Corporation
2003	Head of Access Service System Laboratory of NIPPON TELEGRAPH
	AND TELEPHONE CORPORATION (NTT)
2007	Head of the Information Sharing Laboratory Group of NTT
2009	Senior Vice President, Head of Research and Development Planning,
	Member of the Board of NTT
2012	Executive Vice President, Head of Research and Development Planning,
	Member of the Board of NTT
2014	Senior Executive Vice President, Head of Research
		GovernanceCorporate
	and Development Planning, Member of the Board of NTT
2018	Chairman of the Board of NTT (to the present)
2021	Outside Director of Yamaha Corporation (to the present)

Naoko Yoshizawa

Independent Outside Director

Number of shares owned: 0

1988 Entered Fujitsu Limited

2009 Vice President of Mobile Phones Unit of Fujitsu Limited

2011 Head of Global Research & Development Center of Fujitsu Laboratories of America, Inc.

2016 Deputy Head of Advanced System Research & Development Unit and Head of AI Promotion Office of Fujitsu Limited

2017 Corporate Executive Officer and Head of AI Platform Business Unit of Fujitsu Limited

2018 Corporate Executive Officer, EVP and Vice Head of Digital Services Business of Fujitsu Limited

Corporate Executive Officer, EVP of Fujitsu Limited, CEO of FUJITSU Intelligence Technology Ltd.

2019 Corporate Executive Officer, EVP and Evangelist of Digital Software & Solutions Business Group of Fujitsu Limited

2020 Director of knowledge piece Inc. (to the present)

2021 Outside Director of Nitori Holdings Co., Ltd. (to the present) Outside Director of Yamaha Corporation (to the present)

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COMPOSITION OF THE BOARD OF DIRECTORS	COMPOSITION OF THE BOARD OF DIRECTORS

			Attendance at Meetings of the				Expertise of Directors
	Appointed			Legal affairs			Manufacturing,
Name	Reasons for Appointment, Expected Role, and Independence of Outside Directors	Board of Directors	Corporate	Finance	IT and digital	Sales	Global
Committee	and risk	technology,
		and Committees in Fiscal 2021	management	and accounting	technologies	and marketing	operations
			management	and R&D
		Having served in positions such as General Manager of our Pro Audio & Digital Musical Instruments Division, President and Director of
		Yamaha Corporation of America, Mr. Takuya Nakata has a wealth of experience and achievements alongside broad insight in business.
Takuya Nakata	Nominating	He has led the Group as President and Representative Director since June 2013, and as Director, President and Representative	Board of Directors:	12/12 (100%)
Committee	Executive Officer since June 2017 after our transition to a Company with Three Committees (Nominating, Audit, and Compensation).	●			●	●	●	●
Director, President and	Nominating Committee:	3/3 (100%)
Compensation	Additionally, he has been a leader in corporate governance reform via initiatives such as the transition to a Company with Three
Representative Executive Officer	Compensation Committee:	4/4 (100%)
Committee	Committees (Nominating, Audit, and Compensation), and has worked to strengthen the oversight function of the Board of Directors.
		He has been appointed as a director on expectations that he will help further strengthen the oversight function of the Board of
		Directors through these achievements and insights, etc.
		In addition to work experience at an overseas subsidiary, Mr. Satoshi Yamahata has served as General Manager of the Accounting
Satoshi Yamahata		and Finance Division, General Manager of the Corporate Planning Division, Executive General Manager of the Operations Unit,
	Executive General Manager of the Corporate Management Unit, and Executive General Manager of the Human Resources and General	Board of Directors:	12/12 (100%)		●	●				●
Director and Managing Executive	-	Administration Unit, and has a wealth of experience and achievements alongside broad insight. He has promoted corporate governance
Officer		reform as Director and Senior Executive Manager since June 2015 and as Director and Managing Executive Officer since June 2017,
	and has worked to strengthen the oversight function of the Board of Directors. He has been appointed as a director on expectations
		that he will help further strengthen the oversight function of the Board of Directors through these achievements and insights, etc.
		With a mastery of corporate law and corporate governance in Japan and overseas as an attorney, Mr. Taku Fukui has a high degree of
		expertise, wealth of experience, and achievements alongside broad insight. Since assuming the position of Outside Director of the
Taku Fukui		Company in June 2017, he has provided highly effective supervision while supporting the determination of major corporate actions and
Audit	quick and decisive execution on decision-making, based on his high degree of expertise, wealth of achievements and insights, etc. He	Board of Directors:	12/12 (100%)		●					●
Independent Outside Director	Committee	has been appointed as a director on expectations that he will help further strengthen the oversight function of the Board of Directors	Audit Committee:	15/15 (100%)
	through these achievements and insights, etc.
		There are no transaction relationships between the Company and Kashiwagi Sogo Law Offices, where Mr.Taku Fukui serves as
		Managing Partner.
		Having been involved in management at one of the largest global transportation equipment manufacturers in Japan, Mr. Yoshihiro Hidaka
		has a wealth of experience and achievements alongside broad insight as a corporate officer. Additionally, as President and Representative
		Director of Yamaha Motor Co., Ltd., a company that shares a common brand with the Company, he is a person with one of the deepest
		understandings of the Yamaha brand. Since assuming the position of Outside Director of the Company in June 2018, he has provided
		highly effective supervision while supporting the determination of major corporate actions and quick and decisive execution on
		decision-making, based on his wealth of achievements and insights, etc., as a corporate officer. He has been appointed as a director on
		expectations that he will help further strengthen the oversight function of the Board of Directors through these achievements
	Nominating	and insights, etc., and improve the Yamaha brand value.
Yoshihiro Hidaka	As the Company and Yamaha Motor Co., Ltd., where Mr. Yoshihiro Hidaka serves as President and Representative Director, share	Board of Directors:	12/12 (100%)
Committee	●		●				●
the Yamaha brand, the two companies are in a relationship such that enhancements to the brand value via the Company's sustainable	Nominating Committee:	3/3 (100%)
Independent Outside Director	Compensation
growth also provides a positive effect on said company's corporate value, while damage to the brand due to violations of laws and	Compensation Committee:	4/4 (100%)
	Committee	regulations or deficient governance, etc., by the Company will have a negative effect on said company's corporate value. Mr. Yoshihiro
		Hidaka is a person with one of the deepest understandings of the Yamaha brand, which is the source of the Company's brand value,
		and he shares an interest with ordinary shareholders regarding improvement of the Company's brand value. Furthermore, not only
		there are no significant transaction relationships* between the Company and Yamaha Motor Co., Ltd., but as the Company is no longer
		a major shareholder of said company since 2017, there are no concerns that Mr. Yoshihiro Hidaka will have conflicts of interest with
		ordinary shareholders, and the Company believes that he can fulfill his duty for supervision, etc., of management from an independent
		standpoint in order to maximize profits for shareholders of the Company.

* The amount of transactions between the Company and Yamaha Motor Co., Ltd. is less than 0.2% of consolidated net sales of both companies.

		Having been involved in management as CFO at one of the largest global construction machinery manufacturers in Japan, Mr. Mikio
Mikio Fujitsuka		Fujitsuka has a wealth of experience and achievements alongside broad insight as a corporate officer, as well as adequate knowledge
Audit	of finance and accounting. Since assuming the position of Outside Director of the Company in June 2019, he has provided highly	Board of Directors:	12/12 (100%)	●	●	●			●
Independent Outside Director	Committee	effective supervision while supporting the determination of major corporate actions and quick and decisive execution on decision-making,	Audit Committee:	15/15 (100%)
	based on his wealth of achievements and insights, etc., as a corporate officer. He has been appointed as a director on expectations that
		he will help further strengthen the oversight function of the Board of Directors through these achievements and insights, etc.
		Having been involved in management as the person responsible for the Asian region and the Japanese firms of a global entertainment
		company, Mr. Paul Candland has a wealth of experience and achievements alongside broad insight as a corporate officer as well as
	Nominating	broad knowledge of brand and marketing. Since assuming the position of Outside Director of the Company in June 2019, he has
Paul Candland	provided highly effective supervision while supporting the determination of major corporate actions and quick and decisive execution	Board of Directors:	12/12 (100%)
Committee	●				●	●
on decision-making, based on his wealth of achievements and insights, etc., as a corporate officer. He has been appointed as a director	Nominating Committee:	3/3 (100%)
Independent Outside Director	Compensation
on expectations that he will help further strengthen the oversight function of the Board of Directors through these achievements and	Compensation Committee:	4/4 (100%)
	Committee
	insights, etc.
		There are no transaction relationships between the Company and PMC Partners Co., Ltd. or Age of Learning, Inc., where Mr. Paul
		Candland serves as representative, and neither party is classified as a major shareholder of the other.
		Having been involved in management as a Representative Director of one of the largest communications and ICT companies in Japan,
	Nominating	Mr. Hiromichi Shinohara has a wealth of experience and achievements alongside broad insight as a corporate officer. He also has wide-
Hiromichi Shinohara	ranging and in-depth knowledge of communications systems and electronics. He has been appointed as a director on expectations that
Committee
he will help strengthen the oversight function of the Board of Directors through these achievements and insights., etc.	-		●			●	●	●
Independent Outside Director	Compensation
There are no significant transaction relationships* between the Company and NIPPON TELEGRAPH AND TELEPHONE CORPORATION
	Committee	(NTT), where Mr. Hiromichi Shinohara serves as a director, and neither party is classified as a major shareholder of the other.
		* The amount of transactions between the Company and NTT is less than 0.3% of consolidated net sales of either of the two companies.
		Having been involved in management as an executive officer of one of the largest electronics and ICT companies in Japan and as the
Naoko Yoshizawa		CEO of its overseas group company, Ms. Naoko Yoshizawa has a wealth of experience and achievements alongside broad insight as a
Audit	corporate officer. She also has a high degree of expertise in digital and AI technologies. She has been appointed as a director on expec-	-		●			●	●	●
Independent Outside Director	Committee	tations that she will help strengthen the oversight function of the Board of Directors through these achievements and insights, etc.
	There are no transaction relationships between the Company and knowledge piece Inc., where Ms. Naoko Yoshizawa serves as a
		director, and neither party is classified as a major shareholder of the other.

Note: The Company has submitted notification to the Tokyo Stock Exchange to designate Taku Fukui, Yoshihiro Hidaka, Mikio Fujitsuka, Paul Candland, Hiromichi Shinohara, and Naoko Yoshizawa as Independent Directors as described in the provisions set forth by the Tokyo Stock Exchange.

Governance Corporate

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EXECUTIVE OFFICERS, OPERATING OFFICERS, AND AUDIT OFFICERS

(As of June 25, 2021)

MESSAGE FROM AN OUTSIDE DIRECTOR

President and Representative Executive Officer

Executive Officers

Takuya Nakata

Executive General Manager of Musical

Instruments Business Unit

Please refer to page 78 for career summary.

Managing Executive Officers

Shinobu Kawase

Executive General Manager of Musical

Instruments & Audio Products Production Unit

and Audio Products Business Unit

1983 Joined the Company

2004 President of Yamaha Fine Technologies Co., Ltd.

2011 General Manager of Wind, String & Percussion

Instruments Division

2013 General Manager of Acoustic Musical

Instruments Production Division, Musical

Instruments & Audio Products Production Unit

2014 Executive Officer

2015 Senior Executive Officer

Executive General Manager of Musical

Instruments & Audio Products Production Unit

Shigeki Fujii

Executive General Manager of IMC Business Unit and Technology Unit

1983 Joined the Company

2005 General Manager of Advanced System Division Center

2009 General Manager of Semiconductor Division

2013 Executive Officer

Executive General Manager of IMC Business Unit (to the present)

2015 Senior Executive Officer

2017 Executive Officer (to the present)

2018 Executive General Manager of Technology Unit (to the present)

Seiichi Yamaguchi

Executive General Manager of Musical Instruments & Audio Products Sales Unit

1985 Joined the Company

2006 Director and President of Yamaha Scandinavia AB

2010 Chairman and President of Yamaha Music & Electronics (China) Co., Ltd.

2013 Executive Officer

2014 General Manager of Business Planning Division, Musical Instruments & Audio

Mikio Fujitsuka

Independent Outside Director

Career Summary

Mr. Mikio Fujitsuka has held positions as General Manager of the Corporate Planning Department and CFO at Komatsu Ltd., a major Japanese global construction equipment manufacturer, and was even involved in management as an Executive Vice President and Representative Director. He has been serving as an outside director with the Company since June 2019.

Major Concurrent Position

• Outside Corporate Auditor of Mitsui Chemicals, Inc.

Ongoing Growth Achieved by Utilizing Strengths and Overcoming Weaknesses

Impression of Yamaha When Viewed from a Specialist Perspective

(to the present)

2016 Managing Executive Officer

2017 Managing Executive Officer (to the present)

2020 Executive General Manager of Audio Products Business Unit (to the present)

Satoshi Yamahata

Executive General Manager of Corporate

Management Unit and Human Resources and

General Administration Unit

Please refer to page 78 for career summary.

Products Sales & Marketing Unit

2015 Executive General Manager of Service Business Unit

2016 Senior Executive Officer

2017 Executive General Manager of Musical Instruments & Audio Products Sales Unit (to the present)

Executive Officer (to the present)

Yamaha's strengths can be seen in the solid position of the Yamaha brand, which is founded on the Company's core products boasting superior profitability and market shares. Another characteristic of Yamaha is that the human resources who were involved in various business fields back when the Company was engaged in diversified businesses are now driving the growth of businesses in different fields. Yamaha employees are diligent and adaptable, and I also have praise for Yamaha's decisiveness, as seen in its active appointment of talented individuals to new business fields.

• Conversely, Yamaha's employees seem to be more reserved than those of other Japanese companies. I therefore hope that employees will find a way to break out of their own shells. In terms of corporate governance, Yamaha has been enhancing its systems to accommodate the evolution of its business from a domestic affair to a global enterprise. Even with these advancements, it is important to remember that there is no endpoint to the enhancement of governance. A company must always pursue new pinnacles of governance, and this is more true today than ever.

Advancements Necessary for Improving Corporate Value and Achieving Ongoing Growth

Operating Officers

Shinichi Takenaga				Atsushi Yamaura
	Taro Tokuhiro		Senior General Manager of
Deputy Executive General			Digital Musical Instruments
Manager of Audio		Executive General Manager		Division, Musical Instruments
Products Business Unit		of Operations Unit		Business Unit
Masato Oshiki		Hiroko Ohmura
	Executive General
President of Yamaha		Manager of Brand

If a company hopes to achieve ongoing growth, it is imperative for it to practice constant self-analysis in order to build upon its strengths and overcome its weaknesses. Yamaha has proceeded to revise its organizations and business domains through selection and concentration. However, the Company must not become complacent with its success thus far, but should rather continue to evolve in this fashion. In pursuing such evolution, it will be important for Yamaha to evaluate the areas in which it can capitalize on its existing strengths and exercise its competitiveness when it seeks to start new business with its eyes looking five to 10 years down the line.

• Luckily, Yamaha currently has an incredibly strong balance sheet, no doubt a product of constant effort on the part of its forebears. Finding an outlet for exercising this financial com- petitiveness will be an important area of consideration going forward. I also hope to the see the Company engaged in more substantive discussion on how best to conduct forward- looking growth and strategic investments while striking a balance with shareholder returns.

Governance Corporate

Music Japan Co., Ltd.		Development Unit	Audit Officers
Thomas Sumner		Yutaka Matsuki		Hirofumi Mukaino
	Senior General Manager
President of Yamaha		of Piano Division, Musical		Senior General Manager
Corporation of America		Instruments Business Unit		of Internal Auditing Division
Naoya Tetsumura		Hirofumi Yamashita
Deputy Executive General		Senior General Manager		Yasushi Nishiyama
Manager of Musical		of Corporate Planning
Instruments & Audio		Division of Corporate		Senior General Manager
Products Production Unit		Management Unit		of Audit Committee's Office

Yamaha's Mission and Future Expectations

Yamaha's business consists of music instruments, audio equipment, golf products, and resorts, and could thus be called an entertainment business based on a broad definition. The role, the mission, of an entertainment business is to bring joy to people around the world. When I see the joy in the eyes of children attending Yamaha's music schools across the globe, I cannot help but feel that the ongoing development of this business, which brings joy and enriches lives, will contribute to the accomplishment of the SDGs. Of course, one cannot deny the importance of generating profit in the short term. However, the increased social emphasis on sustainability has created a need for companies to focus on both

long-term profitability and the resolution of social issues. There may be times when this approach places downward pressure on short-term earnings, but I believe that it is the responsibility of Yamaha's management to commit itself to a sustainability-minded approach with a sense of decisiveness shaped by an understanding of the future growth potential of its businesses and Yamaha's role and mission.

• As an outside director and a member of the Audit Committee, I look to identity obstacles to Yamaha's ongoing growth as well as means of removing these obstacles while also helping drive the enhancement of corporate governance.

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CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

Changes in Corporate Governance

Yamaha views corporate governance as fundamental for improving the quality of overall management, and as an essential aspect of sustainable development for a corpora- tion. Furthermore, the Company is aware of the need to constantly reform and improve corporate governance systems once they have been put into place.

Yamaha has consistently taken steps to strengthen corpo-

rate governance, such as introducing an operating officer

Reinforcement of Oversight Functions

In a bid to accelerate management, the Company has separated functions for business oversight and execution. Yamaha has reinforced oversight functions by increasing the ratio of independent outside directors. As of June 25, 2021, independent outside directors comprised three-fourth of the members on the Board of Directors (please see Ratio of Outside Directors to the right).

Performance-Linked Compensation

In 2017, Yamaha increased the ratio of performance-linked compensation for directors responsible for business execution and executive officers after completely revising the officer compensation system with the objective of aligning the values of management with shareholders and providing

Ratio of Outside Directors

sound incentives that link the compensation system to enhancements in corporate value over the medium and long term while sustaining growth (please see Example of Compensation for an Officer below).

For information on compensation systems, please refer to page 88.

system in 2001; appointing an outside director and establish-

ing the nominating and compensation committees on a vol-

untary basis in 2003; reducing the number of inside directors

and appointing multiple outside directors in 2010; and formu-

lating the Corporate Governance Policies in 2015. In addition,

in June 2017 the Company transitioned to a Company with

Initiatives for Separating the Oversight and Executive FunctionsThe Board of Directors determines important matters-such as basic management policies-required by laws and ordi- nances, the articles of incorporation, and the rules of the Board of Directors. Authority for important decisions pertaining to business execution is delegated to executive officers

Inside directors: 3

Outside directors: 2

Inside directors: 2

Outside directors: 6

Inside directors: 2

Outside directors: 6

(1 independent	(5 independent	(6 independent
outside director)	outside directors,	outside directors,
	1 woman)	1 woman,
		1 foreign national)
2010	2017	2021

Three Committees (Nominating, Audit, and Compensation)

structure and appointed its first female independent outside

director; in June 2019 the Company appointed its first foreign

national as an independent outside director; and in April 2020

the Company established the new position of audit officer.

Consolidated Core Operating Profit Ratio (Operating Income Ratio) and Reinforcement of Corporate Governance Yamaha continues to strengthen and improve the effectiveness of its corporate governance system. Backed by strong oversight functions and incentives, the Company has continued to increase profitability by executing its medium-term management plans with a sense of urgency since fiscal 2010.

from the Board of Directors, and matters related to these decisions that must be reported to the Board of Directors are defined by the rules of the Board of Directors. By adhering to these rules and requiring related procedures and approvals to be conducted in a rational manner, the Board of Directors exercises its oversight function. Executive officers regularly report on the status of business execution to the Board of Directors, and the Board of Directors oversees business execution by executive officers. The Audit Committee audits the execution of duties by directors and executive officers based on audit standards and audit plans. To ensure that executive officers, operating officers, and audit officers are able to perform their duties efficiently, the Company has

Example of Compensation for an Officer

Fixed: 80%

Link to short-term

Fixed: 50%

Link to short-term

performance:

performance:

20%

30%

2009

2017

Link to medium-term

performance:

20%

Note: The Company includes claw-back clauses in agreements that require the return of all or a portion of restricted shares transferred to officers on an accumulated basis without compensation in the event of serious cases of accounting fraud or major losses, depending on the responsibility of the officers in charge.

Women  Foreign nationals

Performance	• Consolidated net income
• ROE
evaluation criteria
	• Individual achievement
	Medium-term manage-
Performance	ment plan:
• Operating income ratio
evaluation criteria
• ROE
	• EPS

established rules for these officers and provisions for this purpose are included in the rules for the Managing Council.

Corporate Governance Structure (As of June 25, 2021)

General Shareholders' Meeting

Appointment / dismissal

Appointment / dismissal

Reinforcement	Appointed multiple				Transitioned to a Company with		Establishment of
outside directors		Increase in outside
of Oversight			Three Committees (Nominating,		the new position
Decreased the number		directors
Functions			Audit, and Compensation)		of audit officer
of inside directors

	Board of Directors 8 persons
Outside Directors	Inside Directors
6 persons	2 persons

Performance-

Linked

Compensation

Core operating profit ratio (Operating income ratio) *1

1.6%

Completely linked officer

Introduced stock purchase

Completely revised officer

bonuses to consolidated

compensation

compensation system

net income

12.8%*2

12.1%*2

11.3%

10.9%

11.2%

10.9%

9.3%

YMP125

NEXT STAGE 12

target: 6%

target: 12%

7.0%

6.3%

3.5%

YMP2016

2.5%

target: 7%

2.3%

Nominating Committee

Compensation Committee

Audit Committee

Report

Accounting

4 persons

4 persons

3 persons

Auditor

Corporate

Outside

Inside Director

Outside

Inside Director

Outside

Directors

Directors

Directors

• Decision of

1 person

1 person

3 persons

3 persons

3 persons

appointment proposal

• Judgments of

Accounting

accounting audit

audit

Governance

Audit Committee's Office

Audit

Audit Officers

authenticity

1 person

Appointment /

Report

Appointment /

Instruction

Report

Managing Council

dismissal / oversight

dismissal / oversight

Request

Risk Management

Instruction

Committee

for advice

President, Representative

Internal Auditing Division

Sustainability Committee

Report

Executive Officer 1

person

Report

Audit Officers

Executive Officers 5 persons

1 person

Brand Strategy Committee

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

Medium-Term

Make Waves 1.0

YMP125

YMP2016

NEXT STAGE 12

Develop closer ties

with

Management Plan

Rebuild business platforms

Increase profitability

Increase brand power

customers and society, and

boost value creation capabilities

*1 Calculated based on J-GAAP standards up until fiscal 2019; calculated based on IFRS from fiscal 2020 forward *2 12.8% under J-GAAP and 12.1% under IFRS in fiscal 2019

Human Resources Development Committee

Internal audit

Operating Officers 9 persons

Other Corporate Committees

Individual Business Divisions, Administrative Divisions

Domestic Group Companies

Overseas Group Companies

Oversight Function  Executive Function  Audit Committee's Office and Internal Auditing Division  Outside Director  Inside Director

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