Corporate Governance

Basic approach to corporate governance

The Company strives to strengthen corporate governance to sustainably enhance shareholder value and fulfill its responsibilities to diverse stakeholders. In addition to “ensuring transparency,” “increasing the speed of decisionmaking,” “enhancing ethics and legal compliance,” and “strengthening internal control,” we are working to further advance corporate governance by strengthening initiatives for “information disclosure” and “accountability.”

Principles of the Corporate Governance Code and RYODEN’s initiatives

The Company has formulated and disclosed “Principles of the Corporate Governance Code and RYODEN’s Initiatives,” which summarizes the Company’s initiatives to address each principle in the Corporate Governance Code, in accordance with its basic approach to corporate governance since FYE2023.

Principles of the Corporate Governance Code and RYODEN’s initiatives ( PDF | 909KB )
Corporate Governance Report ( PDF | 380KB )

Strengthening corporate governance

Corporate governance system

At the 84th Ordinary General Meeting of Shareholders held on June 25, 2024, a resolution was passed to amend the Articles of Incorporation to transition to a company with an Audit and Supervisory Committee, and the Company is transitioning to a company with an Audit and Supervisory Committee.
As the environment surrounding the Company's business changes more rapidly, the Company will expedite decision-making by delegating decision-making authority for important business execution to executive directors, and will further improve the effectiveness of the Board of Directors by focusing on deliberations at the Board of Directors on matters related to medium- to long-term management strategies, such as the allocation of management resources, business portfolio, human capital, sustainability and significant risks.
In addition, by delegating part of the Board of Directors' decision-making authority for business execution to directors, the Company will establish a system that enables further acceleration of management decision-making and execution under appropriate supervision of the Board of Directors.In addition, the Company will strengthen the monitoring function of the Board of Directors by granting voting rights at the Board of Directors to directors who are Audit and Supervisory Committee members.

Principles of the Corporate Governance Code and RYODEN’s initiatives

Composition by Body

◎＝Chair or Committee Chair　〇＝Attending Member

Title	Name	1Board of Directors	2Nomination and Compensation	3Management Meeting	4Audit and Other
Representative Director, President & CEO	Katsuyuki Tomizawa	◎		◎
Director and Senior Vice President	Kazumoto Yogosawa	○	○	○
Director and Senior Executive Officer	Yasuhiro Shibata	○		○
Outside Director	Hideki Matsuo	○	◎
Outside Director	Yuka Ogasawara	○	○
Outside Director	Yuji Kageyama	○	○
Director and Full-time Audit and Supervisory Committee Member	Yasumaru Tokiwa	○		○	◎
Outside Director and Audit and Supervisory Committee Member	Noriko Sekiguchi	○	○		○
Outside Director and Audit and Supervisory Committee Member	Thomas Witty	○	○		○
Managing Executive Officer	Shigechika Motoyama			○
Managing Executive Officer	Keiichi Yaji			○
Managing Executive Officer	Shinji Inazawa			○
Senior Executive Officer	Hiroshi Hiraide			○
Senior Executive Officer	Tetsuji Sorita			○
Senior Executive Officer	Norihiko Yamamoto			○
Senior Executive Officer	Noriyuki Shimizu			○
Senior Executive Officer	Takamasa Nitta			○
Senior Executive Officer	Naoki Kasano			○
Executive Officer	Koichi Imaishi			○

1Board of Directors(FY 2025:14meetings)

As the management top decision-making body, the Board of Directors decides on important matters concerning the Company’s execution of business, and supervises the execution of duties by Directors. The Company has introduced an Executive Officer system in order to increase the speed of decision-making, separate oversight functions and execution functions, and to enhance agility of execution, so as to appropriately respond to the business environment in which the Company operates. At the Ordinary General Meeting of Shareholders held on June 25, 2024, we amended our Articles of Incorporation to limit the number of directors (excluding directors who are audit and supervisory committee members) to 10 or less, and the number of directors who are audit and supervisory committee members to four or less. Currently, our Board of Directors consists of six directors (excluding directors who are audit and supervisory committee members) (of which three are outside directors and two are independent outside directors), and three directors who are audit and supervisory committee members (of which two are independent outside directors).
2Nomination & Compensation Advisory Committee(FY 2025:5meetings)

In order to ensure the fairness, transparency, and objectivity of procedures related to the nomination and compensation of executives, including directors, and to enhance corporate governance, we have established the Nomination and Compensation Advisory Committee as an advisory body to the Board of Directors. The matters to be discussed are as follows:
1. Nomination-related matters: Criteria for the appointment and dismissal of executives, selection of candidates for executives, etc.
2. Compensation-related matters: Policies and procedures for determining compensation for executives, matters related to the compensation limit for executives, etc.
3. Other: Individual evaluation of executives, succession plan for the president, etc.
The Nomination and Compensation Advisory Committee is made up of a majority of outside directors (excluding directors who are audit and supervisory committee members), and the chairperson is an independent outside director.
3Executive Committee(FY 2025:27meetings)

We have established a "Management Committee" to discuss important matters related to the agenda of the Board of Directors and the execution of the company's business. Currently, the Board of Directors consists of one President and one Business division executive officer and 12 executive officers.
4Audit & Supervisory Committee

At the Ordinary General Meeting of Shareholders held on June 25, 2024, a resolution was passed to amend the Articles of Incorporation to transition to a company with an audit and supervisory committee, and the Company is transitioning to a company with an audit and supervisory committee. The Audit and Supervisory Committee of the Company is composed of three directors, of which two (a majority) are outside directors. The Audit and Supervisory Committee makes decisions regarding audit policies, plans, and methods, as well as other important matters related to audits. The Audit and Supervisory Committee audits the execution of the directors' duties in accordance with the Audit and Supervisory Committee Audit Standards established by the Audit and Supervisory Committee.
In addition, one substitute Audit and Supervisory Committee member (Masato Denawa) has been appointed in case the number of Audit and Supervisory Committee members required by law is insufficient.

Overview of the corporate governance system

Organizational form	Company with audit & supervisory committee
Number of Directors (of which, Outside Directors)	9 (5)
Term of office of Directors	1 year
Number of Outside Directors designated as Independent Directors	4

Audit and Supervisory Committee Members (of which, Outside Corporate Auditors)	3 (2)
Adoption of an Executive Officer system	Yes
Establishment of voluntary committees	Yes (Nomination & Compensation Advisory Committee)
Compensation system	1 Fixed compensation 2 Bonuses 3 Restricted stock compensation

Views on the balance of knowledge, experience, and skills, and the diversity and size of the Board of Directors

In order to ensure the Board of Directors make decisions and fulfill supervisory functions quickly and decisively in a transparent and fair manner to a maximum degree, achieve the RYODEN Group’s sustainable growth, and increase its corporate value over a medium to long term, we work to ensure that the Board is formed in a way that allows it to achieve the overall right balance between knowledge, experience and skills, and achieve diversity in gender and international mindedness and an optimum size. Furthermore, we strive to ensure Independent Outside Directors represent one-third of the Board.

Skill matrix of the Company’s Board of Directors

Name	Position within the Company	Skills Required to Achieve ONE RYODEN Growth 2029 \| 3034
Name	Position within the Company	Corporate Management	International Experience	Industry Experience	New Business Strategy	Human Resources Management	Finance	Legal and Risk Management	Sustainability
Katsuyuki Tomizawa	Representative Director, President & CEO	○			○				○
Kazumoto Yogosawa	Director and Senior Vice President		○			○			○
Yasuhiro Shibata	Director and Senior Executive Officer			○			○	○
Hideki Matsuo	Outside Director (Independent)	○			○	○
Yuka Ogasawara	Outside Director (Independent)		○			○			○
Yuji Kageyama	Outside Director	○		○				○
Yasumaru Tokiwa	Director and Full-time Audit and Supervisory Committee Member			○				○
Noriko Sekiguchi	Outside Director (Independent) Audit and Supervisory Committee Member						○	○	○
Thomas Witty	Outside Director (Independent) Audit and Supervisory Committee Member		○					○	○

Evaluation of the effectiveness of the Board of Directors

To further enhance our corporate governance and improve its effectiveness, we conduct an annual evaluation of the effectiveness of the Board of Directors (including the Nomination and Compensation Advisory Committee) for its members, and the Board of Directors analyzes and evaluates the results.
The methods for conducting and evaluating this assessment in fiscal year 2025 are as follows.

Participants
All directors (10)
Implementation and Evaluation Methods
1. A questionnaire based on a review by an external consultant will be administered to all directors. Based on the results, the external consultant will conduct interviews with the Chair of the Board of Directors and the outside directors.
2. The external consultant will analyze the results of the questionnaire and interviews, and the Board of Directors Secretariat will compile the findings
3. The results were analyzed and evaluated at a Board of Directors meeting
Survey Questions
1. Size and Composition of the Board of Directors
2. Board of Directors Operations and Secretariat
3. Functions and monitoring of the Board of Directors
4. Self-assessment by individual directors
5. Communication with Investors and Shareholders
6. Nomination and Compensation Advisory Committee

Based on an analysis of the above surveys and interviews, and following deliberations by the Board of Directors, we have confirmed that the effectiveness of our Board of Directors (including the Nominating and Compensation Advisory Committee) continues to be maintained, and that efforts to strengthen corporate governance are being steadily advanced.
The summary of the evaluation results, challenges, and measures are as follows, and we will continue to work toward further improving effectiveness.

No.	Item	Issues Identified and Assessed	Measures
1	Size of the Board of Directors・Composition	There are generally no issues with the current size and composition Increasing the number of independent outside directors and further ensuring diversity are future challenges	The Nomination and Compensation Advisory Committee will continue discussions regarding the size, composition, and necessary skills of the Board of Directors
2	Board Operations・Secretariat	Discussions on important medium- to long-term themes are taking place through agenda setting. However, there is room for further improvement in areas such as theme selection The secretariat’s structure and functions are appropriate at this time There is still room for improvement regarding the timing, quality, and volume of materials distributed to the Board of Directors	Set the agenda—taking into account the opinions of outside directors—to determine when, what, and to what extent issues should be discussed at Board meetings, thereby fostering discussions that contribute to strategic decision-making and judgment Management should clarify key issues and streamline materials based on a deeper understanding of the Board’s functions. Additionally, advance briefings should be conducted for important matters Efforts should be made to enhance opportunities for dialogue between outside directors and frontline employees The Secretariat will continue to fulfill its role as a bridge between oversight and execution
3	Functions of the Board of Directors・Monitoring	The company has transitioned to a structure with an Audit and Supervisory Committee, aiming to strengthen oversight functions and accelerate decision-making Discussions on key topics (progress on the medium-term plan, business portfolio, governance, and risk-related matters) need to be further deepened
4	Communication with Investors and Shareholders	While communication with investors and other stakeholders has improved significantly through proactive IR and SR activities, there is still room for improvement	We will deepen understanding of our strategy through further improvements to IR (and SR) materials (including integrated reports) and the participation of outside directors in SR meetings.
5	Nomination and Compensation Advisory Committee	There are no issues regarding the committee’s structure (chair and members). Further improvements in effectiveness are desired	Enhance the executive appointment process through measures such as setting the annual agenda for the Nomination and Compensation Advisory Committee and conducting regular meetings with executive officers; periodically review the compensation structure and compensation levels; and deepen discussions on matters such as succession planning for outside directors.

Status of Outside Directors

The Company has appointed five outside directors (two of whom are audit and supervisory committee members).The outside directors provide advice and checks on business execution based on their extensive experience and wide-ranging knowledge. In addition, directors who are audit and supervisory committee members work with full-time audit and supervisory committee members to grasp and supervise the status of business execution from an objective and independent standpoint, and audit whether the directors' execution of their duties complies with laws, regulations, and the Articles of Incorporation by verifying the establishment and operation of the Company's and the Group's internal control system.

Name		Independent	Reasons for Appointment	Fiscal Year 2025 Attendance Record
Name		Independent	Reasons for Appointment	Board of Directors	Audit and Supervisory Committee
Outside Director	Hideki Matsuo	○	He has been involved in management for many years at Mitsui Chemicals, Inc., a major Japanese chemical manufacturer, and possesses broad insight into business management. He also has global experience and is well-versed in production and technology. Since 2023, drawing on this experience, he has been fulfilling his duties appropriately as an outside director of our company by providing advice on management from an independent and objective standpoint, contributing to the strengthening of governance, and ensuring appropriate oversight. For this reason, we have appointed him, judging that he will continue to contribute to strengthening our corporate oversight functions and other areas. Furthermore, as Chair of the Nomination and Compensation Advisory Committee, he utilizes his specialized expertise to make objective and transparent proposals and raise issues regarding the nomination and compensation of directors, as well as the formulation and implementation of succession plans, thereby striving to enhance our corporate value. Furthermore, as he has no conflicts of interest with the Company and there is no risk of a conflict of interest arising with general shareholders, he has been designated as an independent director.	14/14	-
	Goro Fujiwara		Having held key positions at Mitsubishi Electric Corporation, he possesses extensive experience and broad insight into industries related to our company. Since 2023, as an outside director of our company, he has appropriately fulfilled his duties by providing various pieces of advice, recommendations, and opinions from an objective standpoint. For this reason, we have determined that he will continue to contribute to strengthening our corporate governance functions and have appointed him accordingly. Furthermore, as a member of the Nomination and Compensation Advisory Committee, he has been dedicated to enhancing the Company’s corporate value by offering objective and transparent recommendations and raising important issues during deliberations on the nomination and compensation of officers, as well as in the formulation, refinement, and promotion of succession plans. Note that Mitsubishi Electric Corporation is classified as a "specified related party" of the Company.	13/14	-
	Yuka Ogasawara	○	With over 20 years of experience in both the nonprofit and business sectors—across government, the private sector, and public interest organizations—he has engaged in activities that pursue profit while simultaneously creating a positive social impact. Since 2024, drawing on this experience, he has been fulfilling his duties appropriately as an outside director of our company, contributing to management advice from an independent and objective standpoint, strengthening governance, and ensuring proper oversight.For this reason, we have determined that he will continue to contribute to strengthening our management oversight functions and have appointed him accordingly. Furthermore, as a member of the Nomination and Compensation Advisory Committee, he utilizes his specialized expertise to offer objective and transparent recommendations and raise important issues regarding the nomination and compensation of directors, as well as the formulation and implementation of succession plans, thereby striving to enhance our corporate value. Furthermore, as he has no special interests with the Company and there is no risk of a conflict of interest with general shareholders, he has been designated as an independent director.	14/14	-
Audit and Supervisory Committee Member	Noriko Sekiguchi	○	As a certified public accountant, he possesses extensive experience and a high level of expertise in corporate accounting, as well as broad insight and practical experience in the corporate sector; furthermore, he has been appropriately fulfilling his duties as an outside auditor of our company since 2022.We have appointed him as a director serving on the Audit and Supervisory Committee, effective June 2024, believing he will contribute to strengthening our Company’s audit and supervisory functions. Furthermore, as he has no special interests with our Company and there is no risk of a conflict of interest with general shareholders, we have designated him as an independent director.	14/14	7/7
Audit and Supervisory Committee Member	Thomas Witty	○	As a lawyer, he possesses extensive professional experience and knowledge, having been involved in M&A transactions for global companies for many years. Furthermore, since 2022, he has served as an outside director of our company, providing advice and recommendations from an objective standpoint and performing his duties appropriately.We have appointed him as a director serving on the Audit and Supervisory Committee effective June 2024, believing he will contribute to strengthening the Company’s audit and supervisory functions. Furthermore, as he has no special interests with the Company and there is no risk of a conflict of interest with general shareholders, we have designated him as an independent director.	14/14	7/7

Compensation for Directors and Auditors

Basic Policy on Compensation for Directors

Increases medium- to long-term corporate value in line with the Company’s Management Principle
Endeavors to share interests in common with shareholders
Is explainable to stakeholders and determined through a transparent process

Policy for determining directors' compensation

The amount and details of remuneration for each director (excluding directors who are audit and supervisory committee members) will be determined by the Board of Directors after consulting with the Nomination and Remuneration Advisory Committee in accordance with the basic policy. In addition, the amount and details of remuneration for each director who is an audit and supervisory committee member will be determined through discussion among the directors who are audit and supervisory committee members.

Position	Relevant officers	Approach for determining compensation, etc.	Resolutions on compensation, etc
Directors	Directors (excluding directors who are audit and supervisory committee members)	Basic compensation (fixed compensation) Fixed remuneration (monetary) based on position and responsibilities is decided by the Board of Directors, taking into consideration a comprehensive range of factors, including company performance, securing excellent human capital, balance with employee salary levels, and economic conditions (including trends in remuneration levels). Payment is made at a fixed time each year. Performance-linked compensation (bonuses)	The remuneration limit for directors (excluding directors who are audit and supervisory committee members), including performance-linked remuneration (bonuses), will be set at 400 million yen per year (of which the amount for outside directors will be 50 million yen per year). (Resolved at the 84th Ordinary General Meeting of Shareholders held on June 25, 2024) The remuneration limit for directors who are audit and supervisory committee members shall be set at 60 million yen per year (resolution of the 84th Ordinary General Meeting of Shareholders held on June 25, 2024). The total amount of monetary compensation paid to Directors (excluding Outside Directors and Directors who are Audit and Supervisory Committee Members) for the purpose of granting restricted stock shall be up to 100 million yen per year.
As an incentive to steadily achieve annual performance targets and promote appropriate management, performance-linked remuneration (monetary) that reflects key performance indicators (KPI) will be paid, and the amount will be calculated using consolidated operating profit, consolidated ROE, and net income per share (non-consolidated) as indicators, and then decided by the Board of Directors after consulting with the Nomination and Remuneration Advisory Committee. Payment will be made at a fixed time each year. Restricted stock compensation Restricted stock compensation is paid to directors (excluding outside directors and directors who are audit and supervisory committee members) in order to provide a continuous incentive to increase the stock price, with the aim of working to achieve sustainable growth and increase corporate value over the medium to long term, and to further promote value sharing with shareholders. The amount of compensation is determined by the Board of Directors after consulting with the Nomination and Compensation Advisory Committee, taking into consideration the balance with monetary compensation, and is paid once a year at a fixed time each year.
Directors who are Audit and Supervisory Committee members	The remuneration is determined through discussions among directors who are audit and supervisory committee members, taking into consideration a comprehensive range of factors, including responsibilities as management oversight, securing excellent human capital, balance with employee salary levels, and economic conditions (including trends in remuneration levels). Payments are made at a fixed time each month.

Position

Relevant officers

Approach for determining compensation, etc.

Resolutions on compensation, etc

Directors

Directors (excluding directors who are audit and supervisory committee members)

Basic compensation (fixed compensation)

Fixed remuneration (monetary) based on position and responsibilities is decided by the Board of Directors, taking into consideration a comprehensive range of factors, including company performance, securing excellent human capital, balance with employee salary levels, and economic conditions (including trends in remuneration levels). Payment is made at a fixed time each year.

Performance-linked compensation (bonuses)

The remuneration limit for directors (excluding directors who are audit and supervisory committee members), including performance-linked remuneration (bonuses), will be set at 400 million yen per year (of which the amount for outside directors will be 50 million yen per year). (Resolved at the 84th Ordinary General Meeting of Shareholders held on June 25, 2024)
The remuneration limit for directors who are audit and supervisory committee members shall be set at 60 million yen per year (resolution of the 84th Ordinary General Meeting of Shareholders held on June 25, 2024).
The total amount of monetary compensation paid to Directors (excluding Outside Directors and Directors who are Audit and Supervisory Committee Members) for the purpose of granting restricted stock shall be up to 100 million yen per year.

As an incentive to steadily achieve annual performance targets and promote appropriate management, performance-linked remuneration (monetary) that reflects key performance indicators (KPI) will be paid, and the amount will be calculated using consolidated operating profit, consolidated ROE, and net income per share (non-consolidated) as indicators, and then decided by the Board of Directors after consulting with the Nomination and Remuneration Advisory Committee. Payment will be made at a fixed time each year.

Restricted stock compensation

Restricted stock compensation is paid to directors (excluding outside directors and directors who are audit and supervisory committee members) in order to provide a continuous incentive to increase the stock price, with the aim of working to achieve sustainable growth and increase corporate value over the medium to long term, and to further promote value sharing with shareholders. The amount of compensation is determined by the Board of Directors after consulting with the Nomination and Compensation Advisory Committee, taking into consideration the balance with monetary compensation, and is paid once a year at a fixed time each year.

Directors who are Audit and Supervisory Committee members

The remuneration is determined through discussions among directors who are audit and supervisory committee members, taking into consideration a comprehensive range of factors, including responsibilities as management oversight, securing excellent human capital, balance with employee salary levels, and economic conditions (including trends in remuneration levels). Payments are made at a fixed time each month.

Percentage of each type of compensation

Internal Directors(excluding the President and Representative Director)

Amounts of Compensation, etc., for Directors and Auditors (FY 2025)

Category of Officer	Number of Eligible Directors (persons)	Total Amount by Type of Compensation, etc. (million yen)			Total Compensation, etc. (million yen)
		Base Compensation	Performance-Based Compensation, etc.	Non-monetary compensation, etc.
		Fixed Compensation	Bonuses	Restricted Stock Awards
Directors (excluding Audit and Supervisory Committee members)	6	119	35	41	196
(of which, Outside Directors)	2	20	-	-	20
Directors (Audit and Supervisory Committee Members)	3	38	-	-	38
(of which, Outside Directors)	2	20	-	-	20

※1The above number of directors and amounts of compensation, etc., do not include one unpaid outside director.
※2We pay performance-based compensation (bonuses) to directors (excluding outside directors and directors serving on the Audit and Supervisory Committee) that reflects single-year performance indicators.The calculation method is as described on page 35 of the Notice of Convocation for the 86th Ordinary General Meeting of Shareholders (hereinafter, all references to page numbers refer to the Notice of Convocation for the 86th Ordinary General Meeting of Shareholders), and the amounts listed above are the amounts scheduled to be paid to three directors (excluding outside directors and directors who are members of the Audit and Supervisory Committee).Furthermore, the performance metrics used for the calculation are consolidated operating income, consolidated ROE, and net income per share (non-consolidated). These metrics were selected to serve as incentives for achieving the management targets set forth in the medium- to long-term management plan and to more clearly link directors’ compensation to the Company’s corporate value.The actual results for consolidated operating income and consolidated ROE are as stated on pages 19 and 20, and the actual net income per share (non-consolidated) is 239.72 yen.
※3The details of restricted stock compensation are as described on page 35; the amount of restricted stock compensation listed above represents the expense recognized for the current fiscal year for restricted stock granted to four directors (excluding outside directors and directors who are members of the Audit and Supervisory Committee).The details regarding the issuance of shares during the current fiscal year are as described in "1. (5) Status of Shares Issued to Corporate Officers as Compensation for the Performance of Their Duties During the Current Fiscal Year" on page 30.

Training for Directors and Auditors

The Company’s newly-appointed Directors and Auditors (excluding Outside) attend external seminars, as well as undertake e-learning for listed companies provided by Tokyo Stock Exchange, Inc. after their appointment. In addition, Directors and Auditors actively participate in external seminars organized by consultants and bodies such as the Japan Auditors Association.