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DUSKIN 60th Anniversary

Corporate Governance

Basic Policy

Upholding Founder Seiichi Suzuki's philosophy of Prayerful Management, we have forged onward with each of our business operations for the purpose of sowing the seeds of joy for people and communities. Our interpretation of corporate governance is for all of our employees to fully incorporate his earnest wish, as reflected in his philosophy, in our everyday activities.

Duskin positions the strengthening of corporate governance as one of its highest management priorities to build a stronger relationship with various stakeholders, increase corporate value over the medium to long term, and achieve sustainable growth. Therein, Duskin is further bolstering its structure, organization and systems to ensure highly transparent and sound management. Duskin also places compliance at the center of all corporate activities to continuously improve its corporate value.

Management Philosophy

Approach to corporate governance

Duskin ensures the implementation of all of the principles contained in the Corporate Governance Code. For additional information, please refer to our Corporate Governance Report.

Corporate Governance [PDF:735KB] (July 31, 2024)

Initiatives to strengthen corporate governance

We are strengthening corporate governance, as we believe it to be one of the most important issues for business management. In 2017 we created a Directors Evaluation Committee and introduced an Operating Officer System in 2018. In 2019, we changed the Directors Evaluation Committee to consist of only independent Directors and to function as an advisory body to the Board of Directors. In 2022, we also increased the number of female Outside Directors by one to three. Taking into account amendments to laws and changing society, We will continue to work toward further improvements in corporate governance.

Five Key Characteristics of Corporate Governance

1 Ratio of Outside Directors on the Board of Directors
33%
  • ❖ Of the nine board members, three are Outside Directors.
  • ❖ The ratio of Outside Directors on the Board of Directors remained at 33%, as it was in FY2021.
2 Ratio of women on the Board of Directors
33%
  • ❖ Of the nine board members, three are women.
  • ❖ Duskin is offering greater opportunities for women, who are essential to our business growth. One of our efforts is to ensure board diversity by promoting the appointment of female Directors.
3 Board of Directors attendance rate
100%
  • ❖ All Directors, including Outside Directors attend every Board of Directors meeting and actively engage in discussions on corporate management and business operations.
  • ❖ This attendance rate reflects the average attendance rate for the Board of Directors meetings since the general meeting of shareholders held in June 2022.
4 Establishment of a Directors Evaluation Committee
  • ❖ To improve the effectiveness of appointments to and evaluations of the Board of Directors, Duskin established the Directors Evaluation Committee, which is composed only of independent directors and functions as an advisory board to the Board of Directors.
5 Building a structure that allows Board members to comprehensively deliberate on important matters
  • ❖ The Operating Officer System expedites the execution of company business by delegating decision-making authority for matters concerning a particular division to the officer in charge of that division. Delegating authority in this way enables the Board of Directors to focus on deliberating on important agenda items and on supervising the execution of company business.
2003 Quality Assurance Committee (now Sustainability Committee) established
Compliance Promotion Committee (now Compliance Committee) established
2006 Management Philosophy included in the Articles of Incorporation
A basic policy for the Internal Control System established
Risk Management Committee established
Duskin stock listed on the first section of Tokyo Stock Exchange and Osaka Securities Exchange*
* The cash equity markets of Tokyo Stock Exchange and Osaka Securities Exchange were integrated on July 16, 2013.
2007 The Directors' retirement benefit program terminated
2008 The number of Outside Audit and Supervisory Board Members increased from two to three
2013 Starts participating in Electronic Voting Platform
2014 The number of Outside Directors increased from one to two
2015 Outside Directors and Audit and Supervisory Board Members Council established
The number of Outside Directors increased from two to three
Posting of shareholders' meeting notice on the web (earlier than distributing printed version) started
2016 Analysis and evaluation of the effectiveness of the Board of Directors started
2017 A share-based remuneration-type stock option program established
Directors Evaluation and Nomination System introduced
Directors Evaluation Committee established
2018 Operating Officer System introduced
The number of Directors decreased from not more than 15 to not more than 12
Independent Outside Directors account for at least one third of all Directors
2019 Advisory body function of the Directors Evaluation Committee switched to the Board of Directors instead of to the President
2020 Succession Plan to train and develop next-generation management launched
Operations restructured into groups; COO and CFO designated
2021 Share-based remuneration-type stock options replaced with a restricted stock remuneration plan
Hybrid virtual shareholders' meeting (a meeting in which online participants do not have voting rights) held
2022 Three female independent Outside Directors appointed
Moved from the first section of the Tokyo Stock Exchange to its Prime Market

Corporate governance structure

Duskin corporate governance uses an audit and supervisory board system. Furthermore, Duskin has introduced an Operating Officers System with the goal of strengthening the decision-making and supervisory function of the Board of Directors and as a means to accelerate the performance of operations. To ensure the system's effectiveness, we maintain a Directors Evaluation and Nomination System. And to ensure objectivity and transparency pertaining to decisions on remuneration for each Director, we maintain a Directors Evaluation Committee as an advisory body to the Board of Directors. At the Board of Directors, Directors, who typically serve concurrently as Operating Officers, monitor and supervise the performance of other Directors. The Audit and Supervisory Board consists of independent outside Audit and Supervisory Board Members capable of objectively conducting audits and internal full-time Audit and Supervisory Board Members, who are well acquainted with our business operations and have skills needed to gather information. Under this system, the Audit and Supervisory Board members, internal and outside, perform accurate audits. We consider this structure highly effective as it supports customer-oriented management while ensuring sound and efficient business operations. This system also enables us to swiftly and precisely respond to changes in the business environment.

Corporate governance structure (as of June 2023)

Corporate governance structure

Enlarge the image.

Board of Directors

Chair: Hiroyuki Okubo, Representative Director, President and CEO

Main function
Make decisions concerning important Duskin Group business matters and supervise business execution.

In order to maintain business health, efficiency, and effectiveness and to ensure the balance required to make successful high-level business judgments across a wide array of business domains, Duskin appoints up to 12 Directors, considering diversity in areas including capabilities, experience, career histories, and gender. With this foundation, the Board of Directors is able to fulfill its function of making important decisions and supervising business execution, and is equipped with a system that can respond quickly and accurately to changes in the business environment.

Board skills matrix
Name Title Tenure Nationality Age Corporate Management Sustainability Corporate Governance Finance and Accounting Sales and Marketing IT and Digital Transformation Global Expansion Franchise Operation

Hiroyuki
Okubo		 Representative Director, President and CEO4Japan61 ○○○○○○

Kazushi
Sumimoto		 Director and COO10Japan63 ○○○○○

Tetsuya
Wada		 Director and COO4Japan61 ○○○○○

Naoto
Miyata		 Director and CFO4Japan60 ○○○○○

Shinichiro
Ueno		 Director and Operating Officer2Japan60 ○○○○○

Keiichi
Emura		 Director and Operating Officer-Japan52 ○○○○○

Yukiko
Tsujimoto		 Outside Director4Japan60 ○○○○

Fumi
Musashi		 Outside Director2Japan64 ○○○○

Rie
Nakagawa		 Outside Director-Japan55 ○○○

Hideyuki
Naito		 Audit and Supervisory Board Member4Japan62 ○○○○

Koji
Tsukamoto		 Audit and Supervisory Board Member-Japan60 ○○

Hidekazu
Saruki		 Outside Audit and Supervisory Board Member2Japan48 ○○

Ichiro
Sakamoto		 Outside Audit and Supervisory Board Member-Japan63 ○○○

Seiichiro
Yamamoto		 Outside Audit and Supervisory Board Member-Japan49 ○○○
Note:
  • 1. The number of service years and age are as of the end of the 62nd Annual General Meeting of Shareholders.
  • 2. This is not a comprehensive summary of the entire set of knowledge, experience, and capabilities of the candidates.

Summary of identified skills
Skills Requirements (skill summary)
Collective Skills Corporate Management Ability to allocate business resources effectively based on legal and compliance skills, risk management skills, and human resource skill and sow the seeds of joy for people and society, in order to achieve sustained growth and raise corporate value over the medium to long term while striving to co-exist and co-prosper with the environment and local communities—from the perspective of the franchise system
Finance and Accounting Accounting and strategic financial skills that come with well-founded knowledge and experience required for strategic financial planning to forge a solid financial foundation, invest in growth and enhance shareholder returns
Industry Skills Sales and Marketing Strategic marketing skills, including those for developing and manufacturing (production) of products and services, required for our franchising businesses
IT and Digital Transformation Ability to drive corporate reform across Duskin's products, services and business models, as well as the corporate culture and climate, by using data and digital technologies: this is a skill required nowadays with digitalization on the rise as lifestyles change
Global Expansion Ability required for capturing new growth opportunities not only in the domestic market affected by aging and a declining birthrate, but also with an eye toward entering emerging overseas markets following their growing populations
Franchise Operation Ability to lead operations as a franchisor, including organizational development: this is a skill especially required by Duskin — a pioneer for franchising in Japan and currently a franchisor for almost all of its businesses

Meeting attendance by Board Members and Audit and Supervisory Board Members

■Board of Directors ●Audit and Supervisory Board ★Chair ○Member △Observe
Name Title Attendance
in FY2022		 Sustainability
Committee		 Compliance
Committee		 Outside
Directors
and Audit &
Supervisory
Board
Members
Council		 Directors
Evaluation
Committee		 Risk
Management
Committee
Teruji
Yamamura		 Board Director and Chairman ■17/17 ○
Hiroyuki
Okubo		 Representative Director, President and CEO ■17/17 ○
Kazushi
Sumimoto 		Board Director and COO ■17/17 ○
Tetsuya
Wada		 Board Director and COO ■17/17 ○ ○
Naoto
Miyata		 Board Director and CFO ■17/17 ○ ★
Shinichiro
Ueno		 Board Director and Operating Officer ■14/14 ○
Nobuko
Sekiguchi 		Outside Director ■17/17 ○ ★ ★
Yukiko
Tsujimoto		 Outside Director ■17/17 ○ ○ ○
Fumi
Musashi		 Outside Director ■14/14 ○ ○ ○
Takashi
Yoshida		 Audit and Supervisory Board Member ■17/17
●13/13		 ○ △
Hideyuki
Naito		 Audit and Supervisory Board Member ■17/17
●13/13		 ○
Sachiko
Kawanishi		 Outside Audit and Supervisory Board Member ■17/17
●13/13		 ○
Kyoichiro
Arakawa 		Outside Audit and Supervisory Board Member ■17/17
●13/13		 ○
Hidekazu
Saruki		 Outside Audit and Supervisory Board Member Newly appointed ○ ○

Business Strategy Meeting
Chair: Hiroyuki Okubo, Representative Director, President and CEO

Main function
Discuss company-wide business strategies, business portfolios and the allocation of Duskin Group resources, etc. from a medium- to long-term perspective.

The Business Strategy Meeting is for all Directors and division managers to discuss company-wide business strategies, business portfolios and the allocation of Duskin Group resources, etc. from a medium- to long-term perspective.

Advisory bodies

Sustainability Committee
Chair: Keiichi Emura, Operating Officer

Main function
Determine the medium-term framework and annual action plans regarding sustainability and deliberate on how to address unresolved sustainability issues.

To achieve corporate growth and contribute to building a sustainable society, we maintain the Sustainability Committee, which is an advisory body to the Board of Directors. The purpose of the committee is to determine priority issues and the scope of action for ESG and SDGs to implement sustainable management across the Duskin Group.

Outside Directors and Audit and Supervisory Board Members Council
Chair: Nobuko Sekiguchi, Outside Director

Main function
Make recommendations for increasing corporate value over the medium to long term.

Duskin maintains an Outside Directors and Audit and Supervisory Board Members Council, which is an advisory body to the Board of Directors. Its purpose is to provide beneficial views for ensuring effective corporate governance, while enabling Outside Directors and Outside Audit and Supervisory Board Members to gather information appropriately without affecting their independence. This makes it possible to monitor and supervise Duskin's management from a transparent, fair and objective viewpoint

Directors Evaluation Committee
Chair: Nobuko Sekiguchi, Outside Director

Main function
Provide necessary advice in response to consultations from the Board of Directors in selecting candidates for Directors and Operating Officers and in determining their remuneration.

This committee provides necessary advice in response to consultations from the Board of Directors in selecting candidates for Director and Operating Officer positions and in determining their compensation. It consists of only independent Directors — two Outside Directors and one Outside Audit and Supervisory Board Member — which allows the committee to function more effectively and with enhanced objectivity and transparency.

Executive bodies

Operating Officers' Board
Chair: Hiroyuki Okubo, Representative Director, President and CEO

Main function
Deliberate important matters related to business execution.

For the President and CEO to conduct business operations based on the basic management policy established at the Board of Directors meetings, Duskin maintains an Operating Officers' Board, a deliberative body to examine important business matters.

Budget Meeting
Chair: Hiroyuki Okubo, Representative Director, President and CEO

Main function
Monitor budget progress for each business division, identify the discrepancies between forecasts and actual results and discuss measures to be taken.

The Budget Meeting is held to monitor budget progress for each business division, identify the discrepancies between forecasts and actual results and discuss measures to be taken, as well as to share information on such issues.

Investment Assessment Committee
Chair: Naoto Miyata, CFO

Main function
Raise the quality of facility investments, etc. and implement assiduous post-investment monitoring.

The Investment Assessment Committee was established to raise the quality of facility investments and new business development, and to assiduously monitor the effectiveness of these investments. The committee meets to deliberate as needed.

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Membership in Committees and Meetings
Name Membership 2022
Achievements
Board of
Directors
  • 9 Directors (3 Outside Directors), 5 Audit & Supervisory Board Members (3 Outside Audit & Supervisory Board Members)
 17
Audit &
Supervisory
Board
  • 5 Audit & Supervisory Board Members (3 Outside Audit & Supervisory Board Members)
 13
Sustainability
Committee
  • 1 Chairman, 6 Operating Officers (5 are also Directors), 2 Outside Directors, 1 Standing Audit & Supervisory Board Member
 2
Risk
Management
Committee
  • 1 Operating Officer, 1 from corporate office department, 11 from business departments, 1 Audit & Supervisory Board Member as observer
 2
Compliance
Committee
  • 7 Operating Officers (2 are also Directors), 2 Outside Directors, 1 Standing Audit & Supervisory Board Member, 1 President of the Duskin Workers' Union, 1 attorney
 4
Outside
Directors and
Audit &
Supervisory
Board
Members
Council
  • 3 Outside Directors, 3 Outside Audit & Supervisory Board Members
 12
Directors
Evaluation
Committee
  • 2 Outside Directors, 1 Outside Audit & Supervisory Board Member
 4
Business
Strategy
Meeting
  • 1 Chairman, 14 Operating Officers, 3 Outside Directors, 5 Audit & Supervisory Board Members (3 Outside Audit & Supervisory Board Members)
 2
Operating
Officers
Board
  • 1 Chairman, 14 Operating Officers Observers: 2 Standing Audit & Supervisory Board Members
 12
Budget
Meeting
  • 1 Chairman, 6 Operating Officers (5 are also Directors), 2 Standing Audit & Supervisory Board Members
 9

Evaluating Board of Directors effectiveness

Duskin analyzes and evaluates the effectiveness of the entire Board of Directors annually in order to achieve medium- and long-term sustainable growth and stronger corporate value.

The FY2022 analysis and evaluation process and results and FY2023 plans are as follows.

Analysis and evaluation process
Target and Period: 13 meetings of the Board of Directors held between April 2022 and December 2022

  • 1.Third party expert
  • 2.Outside Directors & Audit & Supervisory Board Members Council
  • 3.Board of Directors
  • 4.
Analysis and evaluation period February 9, 2023-March 22, 2023
Regarding the effectiveness of the Board of Directors
  • ･Matters of major importance to the management of the Group resolved at the Board of Directors meetings are supported by thorough deliberations.
  • ･In addition to making important decisions, the Board discusses management issues. The time spent on such discussions has increased over the previous fiscal year.
  • ･Business Strategy Meetings held to define the Company's management strategy for the medium and long term enjoy full attendance from their members, including Outside Directors and Ouside Audit and Supervisory Board Members, and constructive discussions take place at these meetings. Furthermore, Outside Directors participate as observers in important meetings on business execution such as the Operating Officers' Board and Budget Meetings, and actively express their opinions as necessary. It is in ways such as these that the Board carries out its monitoring and supervisory functions effectively.
  • ･All committees and meeting bodies serving as advisory panels to the Board of Directors are transparent and objective, and are functioning properly.
  • ･Every year, an evaluation of the previous fiscal year is conducted to identify challenges. As such, initiatives and measures to further improve the Board of Directors' effectiveness are being implemented with much dedication.

Plans for the FY2023
Specific issues Progress during the year ended March 31, 2023
With the aim of ensuring a return to growth, and in order to facilitate the PDCA cycle, the performance evaluation units spread over a wide range will be redefined into business group units, based on profit models, competitive environments and value chains. We have not reached the stage for reevaluating business performance evaluation units, but to move the review forward, we launched a project to reform the management accounting system and conducted further discussions.
Set KPIs in line with business strategies and work to enhance monitoring and discussion. We have specified KPIs in step with the Medium-Term Management Policy 2022, monitored their progress at the monthly Budget Meeting and used them as the basis for substantive discussions at Business Strategy Meetings and other important meetings.

Election policies for Board Directors

Selection standards

Duskin selects candidates for election as Directors from among individuals who fulfill the criteria of possessing the character, knowledge and integrity to serve as a Director and who have no health issues that would interfere with performing the duties of a Director.

◆Internal Director candidates

  • The Representative Director requests recommendations from the current Directors and Audit and Supervisory Board Members.
  • From amongst the recommendations, the Representative Director selects the candidate who will serve as a reliable driving force for the Duskin Group's medium- to long-term growth strategy, and who will have a positive effect on the organization's vitality.
  • The Board of Directors makes final selections after thorough discussions, with advice from the Directors Evaluation Committee.

◆Outside Director candidates

  • ◆Must not have any special financial relationship with Duskin Group
  • ◆Must be able to maintain independence
  • ◆Must have a business career and professional knowledge needed to actualize the supervisory and advisory functions of the Board of Directors
  • ◆Must be able to provide useful advice from a multifaceted perspective in order to maintain the transparency and soundness of management and the fairness of procedures

After thorough discussions, the Board of Directors makes the final selection among candidates who meet the aforementioned criteria.

Under the provisions of Article 427, Paragraph 1 of the Companies Act, Duskin maintains contracts with Outside Directors that limit their damage compensation liability as provided in Article 423, Paragraph 1 of this act. The maximum damage compensation liability under the contracts is the amount as provided in laws and ordinances.

Reasons for selections of Outside Directors
Name Reasons for election
Nobuko Sekiguchi After working as a management consultant, Ms. Sekiguchi joined Capcom, where she served as a Managing Corporate Officer responsible for corporate planning that included preparing the Med-Term Plan, managing the annual budget, working on organizational reforms, and M&A. She held a leading role in reforming Capcom's personnel system. Ms. Sekiguchi was appointed an Outside Director because she is expected to provide Duskin with advice based on her past experience and expertise from the perspective of overall management supervision and raising corporate value in the medium- and long-term.
Yukiko Tsujimoto As a Director at Procter & Gamble Japan, Ms. Tsujimoto has a wealth of experience and insight in corporate management. As part of her tenure at the company, Ms. Tsujimoto has been responsible for overseeing brand marketing and communications, as well as serving as brand publicity leader for the Asian region. Ms. Tsujimoto was appointed an Outside Director because she is expected to provide Duskin with advice based on her past experience and expertise from the perspective of overall management supervision and raising corporate value in the medium- and long-term.
Fumi Musashi After joining Chori Co., Ltd., she engaged in overall China related business, including becoming the first foreign representative employee in Chori. Additionally, from 2018 onward, she has accumulated management experience through posts including simultaneously serving as Chair and President of Chori (China) Co., Ltd, a subsidiary in China. Ms. Musashi was appointed an Outside Director because she can be expected to provide Duskin with advice based on her past global management experience and expertise from the perspective of overall management supervision and raising corporate value in the medium- and long-term.
  • Note: All three are independent directors.

Standards for independence of Outside Directors and Outside Audit and Supervisory Board Members

To ensure the independence of Outside Directors and Outside Audit and Supervisory Board Members, Duskin selects members in accordance with our own selection criteria* as well as the independence standards of the Enforcement Rules for Securities Listing Regulations of the Tokyo Stock Exchange.

When selecting the candidates, Duskin confirms that they comply with all items of the criteria. Then, the Board of Directors makes the final decision after thorough discussions.

*Independence standards for outside directors established by our company are stipulated in our securities report.

Officer remuneration

Duskin positions Directors' remuneration as an important issue for our corporate governance. To raise Directors' motivation to achieve medium- and long-term sustainable growth and enhance corporate value, Duskin established the Directors Evaluation and Nomination System. With this system in place, their contributions, capabilities, and qualities are evaluated and reflected in their remuneration. The methods used in calculating Director remuneration and actual remuneration in FY 2022 are as follows.

Process and calculation methods of Director remuneration and actual remuneration
Items Methods applied in the fiscal year ended March 31, 2023
Board Directors Outside Directors Audit and Supervisory Board Members
Decision-making
Process
  • • The determination of remuneration by the Board of Directors is based on officer remuneration survey data provided by an external research organization comparing Duskin to companies of a similar size and companies in similar business sectors and with similar operations.
  • • The Board of Directors makes the final decisions, taking into consideration the advice of the Directors Evaluation Committee, after thorough discussions .
  • • A certain amount is set as base remuneration and bonuses for Outside Directors, after taking into account their backgrounds and other matters.
  • • Remuneration is determined within the amount resolved at the general shareholders' meeting.
Remuneration The remuneration consists of basic remuneration (fixed amount), a bonus (performance-based) and restricted stock remuneration* (medium- to long-term incentive).
  • *This is to allocate share acquisition rights in an amount not exceeding 50 million yen per year in lieu of a portion of basic remuneration.
  • • A certain amount is set as base remuneration and bonuses
  • • Remuneration for each Audit and Supervisory Board Member is determined based on discussions with those members.
  • Note: Remuneration is determined within the amount resolved at the general shareholders' meeting.

Policy on determining the percents for figures including individual Director remuneration amounts

The remuneration percentage for each type of director is deliberated at the Directors Evaluation Committee based on the benchmarks of remuneration standards and percentages from companies of the same business size, industry, and category as Duskin. With full weight given to the report from the Directors Evaluation Committee, the Board of Directors determines the remuneration, etc., of each individual Director within the remuneration percentages given for each category within that report.

Percentage of remuneration categories for each Director position
Director position Composition of remuneration Total
Basic remuneration
(Fixed amount)		 Bonus
(Performance-based)		 Restricted stocks
Representative
Director		 President and CEO 66.4% 19.0% 14.6% 100.0%
Board Directors Business/Administrative Group Operating Officers 69.7% 18.0% 12.3% 100.0%
Operating Officers 74.6% 15.2% 10.2% 100.0%
Note:
  • 1. The basic remuneration amount is composed of fixed remuneration and position-based remuneration, and the composition ratio is calculated based on the median value of the five-level position-based remuneration.
  • 2. Performance-based remuneration is a Duskin-designated standard model, and the percentage is subject to change based on performance.

Matters related to decisions on the remunerations, etc. for each Director

Individual remuneration amounts are determined as follows. Based on policy approved by the Board of Directors, the Board of Directors consults with the Directors Evaluation Committee concerning the basic remuneration amount for each Director, bonus appraisal allocation considering the business responsibilities of each Director, and allotted share proposals for each Director pertaining to share remuneration. The Board of Directors receives a report from the Committee and makes a decision via the Board approval process.

<Audit and Supervisory Board Member remuneration, etc.>

The total remuneration amount for all Audit and Supervisory Board Members is determined within the remuneration limits approved at the general meeting of shareholders, and individual Audit and Supervisory Board Member remuneration amounts are determined through discussion among Audit and Supervisory Board Members. Audit and Supervisory Board Member remuneration is composed of basic remuneration and bonuses.

Actual remuneration (for the fiscal year ended March 31, 2023, thousands of yen)
Category Total remuneration Type of remuneration Number of directors
Basic remuneration
(Fixed amount)		 Bonus
(Performance-based)		 Share-based remuneration
Board Directors 293,300 191,070 65,300 36,929 7
Outside Directors 25,100 20,400 4,700 — 4
Standing Audit and Supervisory Board Members 54,900 47,700 7,200 — 2
Outside Audit and Supervisory Board Members 28,650 23,850 4,800 — 4

Succession Plan (Successor Development Plan)

Duskin formulated its succession plan to train next-generation management and successors to our chief executives. We have created a program to train those with the appropriate qualities, as well as a selection process for candidates for operating officers and director positions. We have launched these operations and regularly share information and report to the Board of Directors on the progress.

Furthermore, the President and CEO conducts periodic (monthly) individual interviews with all Operating Officers. Quantitative assessments of their performance are made every six months in line with the Directors Evaluation and Nomination System, with the opportunity used to provide further guidance as well as to review performance and capability improvement with them.

Training Board Directors and Audit and Supervisory Board Members and deepening their knowledge of Duskin.

We have also established an officer training program together with the succession plan, and have begun deploying them. Duskin provides periodic training that Board Directors and Audit and Supervisory Board Members need in order to perform their decision-making and executing duties, and training that Operating Officers need in order to perform their business duties.

When appointing Outside Directors, the President and CEO explains Duskin's management philosophy to the candidates. After confirming their agreement with the philosophy, the President and CEO further explains Duskin's business strategy and business operations. In addition, to help them deepen their knowledge of Duskin, the company provides them with opportunities to visit major business sites, training facilities and plants.