Basic Approach to Corporate Governance, Capital Structure, Corporate Profile, and Other Basic Information

1. Basic Approach
We recognize corporate governance as a means for maximizing corporate value. As such, we reorganize our organizational structure when appropriate to accommodate the expansion of our business ventures, to manage profits and losses of each of our businesses, and to further clarify authority and responsibilities. We also focus on further enhancing the capabilities of the Board of Directors (which serves as the Company’s decision-making body), of Audit & Supervisory Board members (hereinafter, “ASB members”) and the Audit & Supervisory Board to monitor directors’ performance of their duties, as well as on improving our internal control systems in order to prevent improprieties in business activities.
To continually increase management transparency and fairness, we appropriately present statutory disclosure documents and actively conduct IR activities using our website and other appropriate means.

Corporate governance structure

Board of Directors

The Board of Directors has seven members, consisting of four internal directors (currently without female directors) and three outside directors (including one female director). In principle, Board of Directors’ meetings are held once monthly, constituting a system that allows speedy and efficient decision-making. To clarify the managerial responsibilities of directors and create a management system that is able to respond swiftly to changes in the management environment, the term of service for directors is prescribed as one year.
In the fiscal year ended March 31, 2024, 18 meetings of board of directors were held, and discussions were conducted based on the business strategy and reports on the status of execution[ of duties] and [matters relating to ]material business execution (such as e.g. formulation of medium-term management plans, establishment of organizational systems, stock acquisition, withdrawal from businesses, and changes in personnel-related systems) set forth in laws and regulations or internal rules. Under the policy for strengthening of board of directors functions related to strategies and supervision, the board of directors endeavored to enhance discussions, such as by increasing time spent discussing business strategy and the like at the board of directors meetings and improving the quality of submitted materials. Further, monitoring was conducted on a regular basis in relation to the status of communication with investors and the status of measures concerning sustainability.

Attendance at meetings of the board of directors in the fiscal year ended March 31, 2024 was as follows.
https://mixi.co.jp/en/sustainability/materiality/governance/appointment/

Management Council

The Management Council conducts key discussions and decision-making related to business operations. In principle, Management Council meetings are held once a week but may be held whenever necessary. Furthermore, necessary information from Management Council meetings is shared with outside officers.

Audit & Supervisory Board

The Audit & Supervisory Board has three independent outside members (including two female members).We will conduct audits based on our annual plan with cooperation from internal auditors (personnel or divisions) and accounting auditors. The results and details of these audits will be discussed at Audit & Supervisory Board meetings held at least once a month. Based on these discussions, we will provide appropriate advice to the Board of Directors or individual directors as we strive to ensure sound and efficient management.

Nomination and Compensation Committee

We have established a Nomination and Compensation Committee. The objective of the committee is to strengthen transparency and objectivity by obtaining the opinions and advice of outside directors before the Board of Directors deliberates matters related to individual nomination proposals and compensation of directors (excluding outside directors).

The scope of deliberations of the Nomination and Compensation Committee is as follows:

(1) Nominations for and appointments of director candidates along with HR policy proposals
(2) Basic policy proposals for the director compensation system
(3) Compensation condition proposals for directors (including calculation method)
(4) Specific compensation proposals for individual directors (including calculation method)
(5) Other matters requested by the President and Representative Director

Composition of the Nomination and Compensation Committee

Chairperson (internal director): Koki Kimura
Committee Member (internal director): Hiroyuki Osawa
Committee Member (outside director): Satoshi Shima
Committee Member (outside director): Akihisa Fujita
Committee Member (outside director): Hiromi Watase

During the fiscal year ended March 31, 2024, the Nomination and Compensation Committee met three times to examine director evaluations, individual director personnel proposals, individual director compensation proposals, and director compensation structure. In addition, they discussed individual proposals for senior corporate officer, corporate officer, and C-level positions, as well as succession plan initiatives.

Attendance at meetings of the nomination and compensation committee in the fiscal

year ended March 31, 2024 was as follows.

Chairperson (internal director): Koki Kimura	100% (3/3 meetings)
Committee Member (internal director): Hiroyuki Osawa	100% (3/3 meetings)
Committee Member (outside director): Satoshi Shima	100% (3/3 meetings)
Committee Member (outside director): Akihisa Fujita	100% (3/3 meetings)
Committee Member (outside director): Yuki Nagata	100% (3/3 meetings)

(Notes) . Figures in parentheses indicate the number of meetings attended divided by the number of meetings held during the term of office.

Evaluation of the effectiveness of the Board of Directors

The Company conducts self-evaluation and analysis of the effectiveness of its Board of Directors with the aim of enhancing its capabilities and maximizing corporate value.

FY2023 Board of Directors effectiveness evaluation:

During the period from January 2024 to February 2024, a survey was conducted among all directors and ASB members. We ensured anonymity by having an external organization record the results. The results of the survey were analyzed, discussed, and evaluated at the Ordinary Board of Directors Meeting held in April 2024.

Survey focus points
– Composition of the Board of Directors
– Management of the Board of Directors
– Discussions at the Board of Directors meetings
– Director and ASB member support systems
– Discussions with shareholders (investors)

Analysis/evaluation of Board of Directors effectiveness survey results:

The responses to the questionnaire were generally positive and respondents believe that the Board of Directors’ effectiveness as a whole is adequately ensured. Highly evaluated points have been listed below:

• The Board of Directors’ meetings allow for sufficient deliberation time of each agenda item, with discussions being held openly and constructively without rigid formalities
• Internal directors support their reports to the Board of Directors with sufficient financial consideration.
• Topics to be discussed at the Board of Directors’ meetings are appropriately submitted to the President and Representative Director, the Management Council (a meeting body for executive actions that mainly consists of internal directors), etc., without being delegated more than necessary.
• The Management Council’s decisions regarding business execution are in accordance with management strategies and policies.

Along with the above points, the effectiveness of the Board of Directors has been rated more favorably overall when compared to the previous fiscal year, particularly in the key areas focused on for improvement. Its effectiveness is confirmed to be improving through proactive measures.

Initiatives for improving the effectiveness of the Board of Directors:

Based on evaluations of the Board of Directors from the previous fiscal year, the Board of Directors and Secretariat of the Board of Directors have worked on the following points:

• Optimization of meeting time
  The Company proceeded with the delegation of authority from the Board of Directors to the Management Council and other bodies for matters deemed as appropriate for such delegation. By reducing the number of agenda items in the Board of Directors’ meetings, we optimized the time allotted for each meeting, ensuring sufficient time for discussion of each agenda item deliberated by Board of Directors. In addition, each agenda item was deliberated in advance by the Management Council or other group. The chairperson shared the content of their deliberations at the Board of Directors’ meetings in order to promote efficient discussions.
• Improvement of information sharing
  We strived to promote understanding among directors and corporate auditors by sharing an overview of each agenda item and the issues to be discussed in advance. In addition, a discussion forum separate from the Board of Directors’ meetings was established once a quarter for the purpose of sharing information on management strategies and agenda items to be presented to the Board of Directors, which allowed time for in-depth discussions of those agenda items.
• Strengthened discussions on strategies
  In order to enhance discussions with an awareness of profitability and capital efficiency, in addition to monthly financial reports, even more agenda items related to mid-term management plans, management indicators, and other strategies were established than in the previous fiscal year.

Measures to be taken in the future

For the future, we recognize that we need to continue to work on optimizing meeting time, improving information sharing, and strengthening discussions on strategies. We also recognize that deepening discussions on medium- to long-term growth and accelerating the sharing of information regarding financial risks are matters we need to focus on.
Using the results of this evaluation, we will continue striving to improve the effectiveness of the Board of Directors as a whole.

Internal control

We are developing our internal structure with the basic policies of our internal control system as its base.
The Group has established a code of ethics that emphasizes the importance of compliance and ensures that all officers and employees are fully aware of what that entails through an information system, training, and the like. In addition, the Group has established an internal reporting system as a check against activities that are illegal or go against our Articles of Incorporation and to prevent scandals, and has prepared a system to exclude antisocial forces.
For our information management system, we have established rules for information management, clarified denotation for important documents and how they should be stored, and created a system for safely saving and managing personal information, important business secrets, and information regarding director work activities.

Overview of Timely Disclosure System

1. Our stance and policy on timely disclosure

We believe that timely and appropriate disclosure of information to shareholders, investors, local communities, and other stakeholders will promote greater understanding of the Company, allowing proper evaluation of the Company. We are always working to improve our internal systems to ensure that we can disclose corporate information in a timely, accurate, and fair manner from the perspective of our stakeholders.
We also ensure that our officers and employees are educated on subjects such as insider trading and information subject to timely disclosure through internal training programs both when they join the Company and annually.

2. Internal system for the timely disclosure of corporate information

To ensure thorough internal management of corporate information and appropriate and timely disclosures, several specialized departments have been set up under the direction and supervision of the management and company-wide initiatives have been launched. In order to improve the accuracy and content of disclosure materials, we have established a system in which multiple departments mutually check each other’s work while confirming the quality of our internal control system through regular internal audits. We also have auditors regularly conduct quality and legality checks of our accounting information. In addition, the Company’s management and specialized departments have established a system in which they collect and report timely and appropriate information that follows our disclosure guidelines from our subsidiaries, which is then disclosed if deemed necessary.

3. Procedure for timely disclosure

(1) Of information regarding important decisions and occurrences
The senior corporate officer in charge of IR business operations works alongside the IR and Legal Affairs departments to analyze information reported by each of the Company’s departments and the Group’s companies. They then follow the guidelines for timely disclosure, determining whether information needs to be disclosed, what exactly to disclose, the method of disclosure, then disclosing the information promptly.
As a result, any important matters determined subject to timely disclosure are reported to the Management Council or President and Representative Director, then presented to the Board of Directors (directly depending on the level of importance), and promptly disclosed upon approval by the Board of Directors.

(2) Of information regarding financial results
The accounting department shall consult with accounting auditors and outside experts as necessary to make a report regarding carefully examined financial results materials for the senior corporate officer in charge of IR business operations and, upon approval of Board of Directors, promptly disclose the information.

4. Method of timely disclosure

The Company discloses corporate information without delay via TDnet and EDINET and also distributes disclosure materials to the press. In addition, the Company posts publicly disclosed corporate information on its website and otherwise strives to provide timely, accurate and fair updates to all shareholders and investors.

Corporate Governance Report