zz株式会社アウトソーシング
100-0005
東京都
千代田区
丸の内1-8-3

Corporate Governance

Status of Corporate Governance, Etc.

Overview of Corporate Governance, Etc.

(I) Basic Views
Fully embracing its responsibility to contribute to society as an exemplar corporate citizen, the Company established the Corporate Principles. The Company recognizes that, in working on achieving growth and enhancing corporate value over the medium to long term in a constantly changing business environment, its important managemental task will be to create a fully autonomous and highly ethical corporate governance system that is closely monitored and routinely reviewed. Such a system shall prove invaluable in the ongoing building of trust and confidence with all its stakeholders, including shareholders, clients and suppliers, local communities and employees.
Towards this end, the Company has disclosed the framework of its corporate governance system in its Corporate Governance Guidelines and will continue to enhance and fortify this system through various initiatives.


(II) Outline and Rationale for the System
In order to further strengthen the Company’s corporate governance, having been granted approval at the ordinary general meeting of shareholders held on March 28, 2023, we have transitioned from a company with an Audit and Supervisory Committee to a company with a Nominating Committee, etc., which has three committees (Nominating, Compensation and Audit), each composed of a majority of external directors, creating a system which enables significant delegation of authority from the Board of Directors to executive officers, in order to further clarify the separation of management supervisory and execution functions and to ensure prompt and decisive decision making while strengthening management supervisory functions.
With the transition to a company with a Nominating Committee, etc., the Company aims to further strengthen the supervisory function of the Board of Directors, secure impartiality and transparency of management, and raise overall efficiency.

(Board of Directors)
As of March 31, 2023, the Company’s Board of Directors consists of 12 directors, including ten external directors, who convene once a month to examine, evaluate and decide on matters stipulated under the laws and regulations of Japan as well as important management issues. Board directors are also responsible for examining the policies and plans, as well as the status of the policies and plans being executed, with regards to management and corporate operations. The Board may also meet at any time it deems necessary.
Out of external directors who carry out objective and neutral oversight functions from an independent perspective, all ten external directors who meet the requirements for independent director as defined by the Tokyo Stock Exchange are registered as independent external directors.


Board of Directors composition and skills matrix

Position Name Independence Gender
(female: YES)
International experience Corporate management Staffing industry Sales and marketing Finance and accounting Corporate governance / Legal / Risk management
Director (chairperson) Haruhiko
Doi



YES YES YES

Director Anne
Heraty

YES YES YES YES YES

Director
(External)

Hideo
Shiwa
YES
YES


YES YES

Director
(External)

Masaru Namatame YES
YES


YES YES

Director
(External)

Atsuko Sakiyama YES YES YES YES
YES

Director
(External)

Hirotomo
Abe

YES
YES



YES

Director
(External)

Makiko
Ujiie
YES YES




YES

Director
(External)

Toshio
Mukai
YES
YES


YES YES

Director
(External)

Azuma
Inoue
YES




YES YES

Director
(External)

Hiroshi
Kizaki
YES
YES


YES YES

Director
(External)

Kenichi
Fujita
YES
YES YES

YES


Director
(External)

Hiroko Ozawa YES YES
YES

YES




(Audit Committee)
The Committee consists of five directors (of which five are external directors) as of March 31, 2023, including full-time Audit Committee members. In accordance with the laws and regulations, the Articles of Incorporation and the Audit Committee Rules, the Committee oversees and prepares reports for the execution of duties by the directors and executive officers and determines agendas regarding elections, dismissals and refusals of reappointment of the accounting auditor that will be proposed to the General Meeting of Shareholders. It also determines the Committee’s audit policies, annual audit schedule and other related matters. By convening Audit Committee Meetings both routinely and as necessary, the Committee shares information among its members and confirms the progress of its audit plan by examining the important issues which have been submitted for discussion, reporting on audit contents, exchanging opinions and so forth. To enhance overall coordination, the Audit Committee exchanges information in a timely manner with the Internal Audit Office as well as the accounting auditor. The Committee works closely with the Corporate Management Division, which is also the internal control division, as well as with the General Affairs, Legal and Accounting Departments, to improve the efficacy of the auditing process.

(Nominating Committee)
As of March 31, 2023, the Committee consists of five directors, of which three including the chairperson are external directors. The Committee makes decisions on proposals for the election and dismissal of directors to be made at the General Meeting of Shareholders and decisions on matters related to the standards and processes of director appointment and dismissal. It also deliberates on the appointment and dismissal of executive officers and operating officers and on the development of candidates for the next Chief Executive Officer and other positions as part of the successor planning.

(Compensation Committee)
As of March 31, 2023, the Committee consists of five directors, of which four including the chairperson are external directors. The Committee makes decisions on the policy and content of the compensation for individual directors and executive officers.

(Executive Committee Meeting)
The Executive Committee Meeting is a discretionary body, consisting of six executive officers as of March 31, 2023. The Meeting is held once a month and the Extraordinary Executive Committee Meeting is also held when necessary. In accordance with the directions and basic policies set by the Board of Directors, it makes decisions on the management of the Company or the Company’s group based on matters delegated by the Board of Directors. It also deliberates on matters including measures to respond to changes in the business environment, matters on approval and reporting stipulated in the Authority Rules, matters on approval and reporting as stipulated in the Management Rules for Group Companies and Affiliates, agenda items to be discussed at the Board of Directors Meeting and matters that require the CEO’s approval and must be deliberated beforehand.

Executive Committee Meeting composition and skills matrix (executive officer)

Position Name Gender
(female: YES)
International experience Corporate management Staffing industry Sales and marketing Finance and accounting Corporate governance / Legal / Risk management
Representative Executive Officer, Chairman and CEO (chairperson) Haruhiko
Doi


YES YES YES

Executive Vice President Masashi Fukushima     YES YES YES

Senior Managing Executive Officer

Kazuhiko Suzuki
YES YES
YES

YES YES

Senior Managing Executive Officer

Franciscus van Gool
YES YES
YES
YES
   

Senior Managing Executive Officer

Lorna Conn YES
 
YES

YES  

Executive Officer

Masashi Umehara
 
YES

YES

(Sustainability Committee)
The Sustainability Committee is a discretionary body consisting of nine members, as of March 31, 2023, with the Executive Officer and Head of Corporate Management Division as its chairperson. The purpose of the Sustainability Committee is to promote management with an awareness of sustainability across all companies in the Group, including initiatives to achieve SDGs and a more sophisticated ESG approach in management. The Committee deliberates on the Group’s sustainability policies/strategies, priority issues and other medium- to long-term themes and directions, as well as the monitoring of the progress of KPIs, and brings the matter up to the Board of Directors.

(Compliance Committee)
The Compliance Committee is a discretionary body consisting of 11 members as of March 31, 2023, with its chairperson as the Executive Officer and Head of the Corporate Management Division who is also the general manager of compliance practice. The Company has designated its CEO as the Chief Compliance Officer (CCO) having the highest authority in the Company’s compliance activities. The Executive Officer and Head of the Corporate Management Division is responsible for overseeing the actual operations in conducting specific compliance activities. The Compliance Committee is a company-wide meeting body for compliance activities. Its purpose is to ensure that the Company is deeply aware of its social responsibilities as a company, complies with relevant laws and regulations in the daily execution of businesses and conducts activities in accordance with the social ethics. The Committee defines the matters that are relevant to company-wide compliance, informs each group company on compliance matters, examines the necessary matters and submits agenda items to the Board of Directors.

Members of the Nominating, Compensation and Audit Committees

  Nominating Committee Compensation Committee
Audit Committee
Chairperson Hirotomo Abe Atsuko Sakiyama
Masaru Namatame
Member Atsuko Sakiyama Hirotomo Abe Hideo Shiwa

Member

Hideo Shiwa Masaru Namatame
Azuma Inoue

Member

Haruhiko Doi Makiko Ujiie
Hiroshi Kizaki

Member

Anne Heraty Haruhiko Doi
Toshio Mukai

External directors are underlined.
* Masaru Namatame, chairperson of the Audit Committee, is a full-time committee member

The chart below visualizes the above-mentioned system:

(Corporate Governance System)

 


(III) Other Items Related to Corporate Governance

A. Status of Internal Control System
During the Board of Directors meetings, the Company resolves and enforces its “Basic Policy on Establishment of Internal Control Systems,” which is based on the laws and regulations. Based on this basic policy, executive officers are responsible for the overall management of internal control, and the various department heads are tasked with the management and promotion of internal control in their respective departments on an operational level. Internal control is reinforced on a Group-wide basis through the routinely held Management Meeting, which executive officers attend whenever a Group issue concerning management is placed on the meeting agenda. In addition, at the meeting, the Group’s management policies are communicated, progress reports on business activities are given, and important matters pertaining to corporate operations and issues requiring discussion are reported.
The Company also established the Internal Audit Office, which is independent of the Group’s business units and reports directly to the CEO. Based on the Company’s internal audit program, the Internal Audit Office not only audits the operations of each department and subsidiary, but also monitors the internal administrative system. Furthermore, the Office conducts inspections to ensure that the Group remains in compliance with the various laws and internal regulations, as well as examining the status of the Group’s risk management program. Findings from the audited departments are reported to the CEO, and the directors. Such findings form the basis of a written recommendation that features specific solutions for the audited department, thus delivering a more efficient and effective means for business operations improvements.
Also, the Group takes the material misstatement due to inappropriate accounting or error that was carried out at the Group in prior years with utmost seriousness, and will pursue the strengthening of the corporate governance system.

B. Status of Risk Management Program
The Corporate Management Division is tasked with the overall authority over the risk management of the Company and its Group companies, conducting risk control and management, while the General Affairs Department is engaged in conducting effective management by creating regulations relevant to the program. Meanwhile, the Legal Department oversees the legal dimensions, not only developing legal responses but also communicating the latest government regulations to the entire Group, coordinating risk management with internal control.
In case of a crisis, an “Emergency Task Force” will be set up and headed by the CEO. A special communications team will also be organized, as will an external advisory team that includes the Company’s legal counsel. The aim of this system is to make a rapid response and prevent losses or damages from spreading to minimize their effects.
In order to safeguard the personal data of the Group’s employees, the Company has established the “Personal Information Protection Guidelines” to ensure that the management of such sensitive information is thorough and irreproachable. Specifically, this means special attention is paid to the appropriate handling of personal data acquired during the hiring process of an employee from even before he or she is hired, and that this data – including a person’s resume and other important documentation – will be kept or deleted based solely on the decision of that person.
As for the risk management of corporate information, in accordance with its “Information Security Policy,” the Company has established the “Information System Management Regulations,” with its Application System Department designated to serve as the primary administrator for establishing a safe, secure, and efficient operating environment. This system specifically includes physical, technical, and human security programs.

C. Status of Institutional Enhancement to Secure Proper Operations at Subsidiaries
The Company oversees and monitors the status of director and employee work execution at its Group companies in order to ensure that subsidiaries and affiliates are operating properly. It defines the “OUTSOURCING Group Code of Corporate Ethics and Conduct” as the guideline and action plan to govern all Group companies and requires directors, auditors, and employees at the said companies to strictly adhere to the guideline. In compliance with the “Management Rules for Subsidiaries and Affiliates,” which define the requirements relevant to and inclusive of chain of command, authorities, decision-making, and other organization-related matters, the Group also requires the entirety of a stipulated item that affects management to be subject to approval by the Boards of Directors, Management Meeting or the officers in charge, as appropriate.
Furthermore, by receiving business status reports from every Group company at least once a month, such as from the officers in charge upon their attending the board of directors meetings of each subsidiary, the Company’s Board of Directors can examine and review the status and details of the collected information. At the Management Meeting, issues defined by the “Management Rules for Subsidiaries and Affiliates” are discussed, and the Group Management Meeting consisting of executive officers and each Group company’s representative director is convened as necessary in cases in which further details on business conditions need to be examined. As such, the Group engages in intra-Group information sharing and communication facilitation as well as standardization of management policies.

D. Summary of Agreements Exempting or Limiting Liability of Directors and Executive Officers
The Company’s Articles of Incorporation stipulate that directors and executive officers (including former directors and executive officers) can be exempted from liability related to actions stipulated in Article 423 of the Companies Act to the extent stipulated in Article 425 and Article 426 of the same act by Board of Directors’ resolution in accordance with Article 426 of the same act so that directors can fully execute their expected duties.
Furthermore, the Company and its directors (excluding directors responsible for executing operations) have concluded agreements that limit compensation for damages stipulated in Article 423, Paragraph 1, of the Companies Act in line with the provisions of the Article 427, Paragraph 1, of the same act. The amount of compensation for damages based on this agreement is limited to the minimum amount stipulated in Article 425, Paragraph 1, of the same act. The limited liability is only in situations when the director’s execution of his/her duties that resulted in liability was done in good faith and without negligence.

 E. Summary of Liability Insurance Policy for Directors and Officers
The Company has entered into a directors and officers liability insurance policy with an insurance company, as stipulated in Article 430-3, Paragraph 1 of the Companies Act with directors and executive officers (including officers of some domestic consolidated subsidiaries) as the insured.
a. Summary of insurance accidents to be covered
The policy covers damages and legal expenses incurred by the insured due to claims for damages made against the insured during the insurance period as a result of acts (including omissions) committed by the insured in relation to his/her duties as an officer of the Company. However, there is an exclusion of liability for claims for damages arising from certain acts, such as acts committed by the insured while in full knowledge that they violate laws and regulations.
b. Insurance premiums
Insurance premiums, including for the special contract portion, are fully paid by the Company.

F. Requirements of Resolutions for Number of Directors and Elections
a. The Articles of Incorporation stipulate that the Company shall have not more than 15 directors.
b. The Articles of Incorporation stipulate that a resolution for the election of directors requires the presence of shareholders holding one-third or more of the voting rights of shareholders who can exercise voting rights, the resolution passes with a majority of votes, and cumulative voting is prohibited.

G. Items to be Resolved at the General Meeting of Shareholders That Can Be Resolved at the Board of Directors
a. Interim dividend
In order to enable flexible return of profits to shareholders, pursuant to the provisions of Article 454, Paragraph 5, of the Companies Act, the Articles of Incorporation stipulate that the Company may pay an interim dividend with a reference of June 30 of each year by a resolution of Board of Directors.
b. Treasury shares
The Articles of Incorporation stipulate that the Company can purchase its own shares through market transactions, etc., based on a resolution of the Board of Directors and in accordance with Article 165, Paragraph 2, of the Companies Act, in order to flexibly execute the capital policy to meet changes in the business environment.
c. Accounting auditors can be exempt from liability by Board of Directors’ resolution
The Articles of Incorporation stipulate that accounting auditors can be exempted from the liability of accounting auditors (including former accounting auditors) stipulated in Article 423, Paragraph 1, of the Companies Act by Board of Directors’ resolution to the extent permitted by laws, ordinances, etc., so that accounting auditors can sufficiently fulfill their expected role.

H. Conditions on Special Resolutions at General Meeting of Shareholders
The Articles of Incorporation stipulated that special resolution of shareholders’ general meeting resolutions prescribed in Article 309, Paragraph 2, of the Companies Act require the presence of shareholders holding one-third or more of the voting rights of shareholders who can exercise voting rights, and the resolution passes with a two-thirds majority of votes. This was done to facilitate general meeting of shareholders by loosening the quorum requirements for special resolutions to that legally permitted.

(IV) Efforts During the Most Recent Year to Reinforce the Company’s Corporate Governance

The status of activities of each organization in fiscal 2022 prior to transitioning to a company with a Nominating Committee, etc. is as follows.
a. The Board of Directors met a total of 19 times, at least once a month and when necessary, monitored business decision making and the execution of operations, and handled important matters and other issues in line with the Companies Act.
b. The Audit and Supervisory Committee met a total of 20 times for regular and irregular meetings, decided on the audit policy and division of duties through deliberations, and conducted audits.
c. The Internal Audit Office conducted internal audits of the headquarters, offices, and group companies as stipulated in the internal audit plan and made reports to the President, Board of Directors and Audit and Supervisory Committee.


Directors’ Compensation, Etc.

(I) Matters Concerning the Policy for Determination of Amounts or Methods of Calculation of Compensation, Etc. to Directors
Compensation for directors and executive officers of the Company (Article 361, Paragraph 1, of the Companies Act, “Compensation, etc.”) is decided by the Compensation Committee based on the below policies decided by the committee.

A. Policy Regarding Compensation for Directors and Executive Officers
Compensation for directors of the Company is aimed at ensuring that the Board of Directors sufficiently exercises its management supervisory function to realize the corporate principles, the medium-term management plan and other management strategies, and compensation is paid based on the roles and responsibilities required of each director.
Furthermore, because executive officers are responsible for realizing the management strategy through business execution, so that compensation functions as a sound incentive for the sustainable growth of the Group, while maintaining compensation levels that are appropriate based on job responsibilities, we also reflect corporate results and appropriately include stock compensation.
Specifically, so that directors sufficiently exercise their management supervisory function, director compensation is composed of basic compensation as fixed compensation and stock compensation to encourage enhancing corporate value by sharing value with shareholders and investors and maintaining and enhancing the oversight system. However, directors who concurrently service as executive officers are not paid compensation as directors.
Compensation for executive officers is composed of basic compensation as fixed compensation and stock compensation as an incentive to enhance corporate value over the medium and long term. The Company’s corporate results are considered in deciding the amount of basic compensation.
In terms of stock compensation, in principle restricted share-based compensation is used, and as it is difficult for the Company to grant restricted shares to those who do not live in Japan, the Company grants monetary compensation linked to the Company’s share price (phantom stock) to those individuals as a substitute for the restricted shares.

B. Policy to Decide the Amount of Individual Basic Compensation (Including Policy to Decide the Timing and Conditions to Distribute Compensation)
Basic compensation for directors is paid in a set amount monthly as monthly fixed compensation based on the roles and responsibilities of the director’s position. Furthermore, so that the management supervisory functions required of the Board of Directors is sufficiently exercised, corporate results, etc. are not considered in basic compensation for directors.
The total amount of basic compensation for executive officers is decided in line with performance based on corporate results and the economic added value produced from business activities established in the corporate governance guidelines. Basic compensation is paid to executive officers in a set amount monthly amount decided for each executive officer based on their position, job duties, and the results of individual interviews.

C. Policy to Decide the Details, Amounts, and Calculation Methods for Performance-linked Compensation and Non-monetary Compensation (Including Policy to Decide the Timing and Conditions to Distribute Compensation)
Although the Company does not adopt performance-linked Compensation, non-monetary Compensation (“Non-monetary Compensation, etc.” set forth in Article 98-5, Item 3 of the Regulations for Enforcement of the Companies Act. Same hereinafter.) is provided as an incentive to enhance medium- to long-term corporate value and to share value with shareholders. In principle, restricted share-based compensation is granted, and restrictions are lifted when the director or executive officer retires on the condition that they remained in their position until the period to which the grant date belongs has been completed.
Identical to basic compensation, restricted shares are granted during a set period annually in a number corresponding to a monetary amount set according to the position and job duties of the director or executive officer based on corporate results and the economic added value produced from business activities established in the corporate governance guidelines.
For directors and executive officers who do not live in Japan and to whom it is difficult for the Company to grant restricted shares, phantom stock is granted. The date of right allotment and other conditions are established according to the details of the restricted shares granted to other directors and executive officers, and phantom stock is granted during a set period annually in a unit number corresponding to a monetary amount set according to the position and job duties of the eligible director or executive officer.

D. Policy to Decide the Ratio of the Amounts of Basic Compensation, Performance-linked Compensation, and Non-monetary Compensation in the Amount of Individual Compensation for Each Director and Executive Officer
The ratio of basic compensation to restricted shares or phantom stock will be generally determined within 9:1 to 7:3, after taking into consideration the director’s position and the details of duties.

E. Items Related to Deciding the Details of Individual Compensation for Each Director and Executive Officer
Individual compensation for each director and executive officer, including the details of the policy, is decided by a resolution at the Compensation Committee, chaired by an independent external director.


(II) Details of Officer Compensation, Etc. in the Current Fiscal Year

At the 26th Ordinary General Meeting of Shareholders held on March 28, 2023, the Company transitioned from a company with an Audit and Supervisory Committee to a company with a Nominating Committee, etc. The details of the compensation for officers in the current fiscal year prior to the transition to a company with a Nominating Committee, etc. is as follows.

A. Policy Related to Decisions on Compensation, Etc. of Directors (Excluding Audit and Supervisory Committee Members)
a. Decision-making authority for policy on determining amounts of Compensation, etc.
Matters involving compensation, etc. of the Company’s directors (excluding Audit and Supervisory Committee Members) are governed by the Board of Directors, which maintains the authority to make decisions on policy on determining amounts or methods for calculating compensation, etc.
In making such decisions, however, the Board of Directors is to resolve such matters in light of findings derived from inquiries carried out by the Nomination and Compensation Advisory Committee (hereinafter, the “Advisory Committee”), which is a voluntary body consisting of five members including an external director who acts as its chairperson. The Board of Directors deems that details of individual compensation, etc. for the fiscal year are in accordance with the policy, given this process of determining compensation.
b. Policy on determining amounts of Compensation, etc.
Although the Company has not adopted performance-linked compensation as compensation, etc. for its directors (excluding Audit and Supervisory Committee Members), it has adopted a restricted share-based compensation plan at its 23rd Ordinary General Meeting of Shareholders held on March 25, 2020, with the aims of providing its directors (excluding Audit and Supervisory Committee Members and external directors) with incentive to increase the Company’s corporate value over the medium to long term and sharing value with shareholders. In addition, from fiscal 2021, as it is difficult for the Company to grant restricted shares to directors who do not reside in Japan, the Company grants monetary compensation linked to the Company’s share price (phantom stock) to those directors as a substitute for the restricted shares. As such, the compensation, etc. for directors (excluding Audit and Supervisory Committee Members and external directors) consists of two types of compensation: basic compensation (fixed monetary compensation) and restricted share-based compensation. (However, for directors who do not reside in Japan, the two types of compensation are basic compensation and phantom stock.)
The basic compensation is a fixed amount provided each month, and restricted share-based compensation and phantom stock are granted at a certain time each year.
From among the directors (excluding Audit and Supervisory Committee Members), external directors are eligible solely for basic compensation (fixed monetary compensation), which is a fixed amount paid every month, but not for restricted share-based compensation out of consideration for the independence required in regard to their professional duties.
c. Process for decisions on directors’ Compensation, etc.
As for specific amounts to be paid as compensation, etc., the Advisory Committee decides total amounts commensurate with financial results, taking into account factors such as corporate performance and economic added-value that has been generated by business activities stipulated in the corporate governance guidelines, and the Committee draws up a policy proposal for allocating such amounts to each director, taking into consideration the various factors such as each director’s position and professional duties, and interview results. Those amounts are then determined by resolution of the Board of Directors, upon deliberation by the Audit and Supervisory Committee. However, when it comes to external directors, such amounts are determined without considering corporate performance and other such factors given the independence required in regard to their professional duties.
The ratio of basic compensation to restricted shares or phantom stock will be generally determined within 9:1 to 7:3, after taking into consideration the director’s position and the details of duties.

B. Policy Related to Decisions on Compensation, Etc. for Directors Who Are Audit and Supervisory Committee Members
Whereas compensation for directors who are Audit and Supervisory Committee Members is also limited to basic compensation (fixed monetary compensation), which is a fixed amount paid every month, compensation, etc. for individual directors who are Audit and Supervisory Committee Members is determined by deliberation of such directors.

C. Resolutions at General Meeting of Shareholders
As for the amount of compensation, etc. for directors (excluding Audit and Supervisory Committee Members), the Company resolved to set a ceiling on annual compensation, etc. for directors (excluding Audit and Supervisory Committee Members) at ¥1,500 million, at its 24th Ordinary General Meeting of Shareholders held on March 25, 2021. At the time of this resolution, there were seven directors (excluding Audit and Supervisory Committee Members) who were eligible for payment (the Articles of Incorporation stipulate that there are to be no more than 15 such directors).
As for a separate ceiling on such compensation, etc., the Company resolved to set a ceiling on compensation related to monetary compensation claims for allocating restricted shares amounting to not more than ¥120 million per year, and a ceiling of up to 100,000 shares per year of the Company’s ordinary shares issued and appropriated as consideration in the form of monetary compensation, at its 23rd Ordinary General Meeting of Shareholders held on March 25, 2020. At the time of this resolution, there were three directors (excluding Audit and Supervisory Committee Members and external directors) who were eligible for payment.
The Company resolved to set a ceiling on annual compensation, etc. for directors who are Audit and Supervisory Committee Members at ¥100 million, at its 19th Ordinary General Meeting of Shareholders held on March 25, 2016. At the time of this resolution, there were four directors who were Audit and Supervisory Committee Members who were eligible for payment (the Articles of Incorporation stipulate that there are to be no more than five such directors).

D. Activities of Advisory Committee and Board of Directors During the Fiscal Year Ended December 31, 2022
Activities carried out by the Advisory Committee and the Board of Directors regarding nominations, compensation, etc. for directors (excluding Audit and Supervisory Committee Members) in fiscal 2022 are as follows.
a. Activities of Advisory Committee
During the fiscal year ended December 31, 2022, the Advisory Committee meeting was held five times for deliberation on nomination and compensation. The meetings mainly involved reviewing and deliberating on election or dismissal of directors, setting goals for directors and checking their progress with regards to their goals, reviewing the compensation structure, reviewing and deliberating on compensation for individual directors, reviewing and deliberating on phantom stock as a substitute for the restricted shares, and reviewing and deliberating on the total amount of compensation.
b. Activities of Board of Directors
At its meetings held on February 4, 2022 and March 29, 2022, the Board of Directors deliberated on and determined compensation for individual directors related to basic compensation (fixed monetary compensation) for the fiscal year ended December 31, 2022. At its meeting held on April 15, 2022, the Board of Directors deliberated on and determined compensation for individual directors related to restricted share-based Compensation for the fiscal year ended December 31, 2022.


(III) Total Compensation, Etc. by Category of Officer, Total Amount by Type of Compensation Etc., Number of Officers to Be Paid 

Category of officers

Total amount of Compensation, etc.
(millions of yen)

Total amount of compensation, etc. by type
(millions of yen)

Number of officers to be paid
(persons)

Basic compensation

Restricted share-based compensation

Directors (excluding Audit and Supervisory Committee Members)

446

405

41

12

[of which external directors]

[45]

[45]

[–]

[6]

Directors (Audit and Supervisory Committee Members)

78

78

 

4

[of which external directors]

[78]

[78]

[–]

[4]

Total

524

483

41

16

[of which external directors]

[123]

[123]

[–]

[10]

(Note 1) Following approval at the 26th Ordinary General Meeting of Shareholders held on March 28, 2023, the Company transitioned from a company with an Audit and Supervisory Committee to a company with a Nominating Committee, etc. However, the above figures for the total amount of compensation, etc. and the number of officers are the figures for the Company’s directors (excluding Audit and Supervisory Committee Members) and directors (Audit and Supervisory Committee Members) in the current fiscal year.

(Note 2) Material notes on employee salaries for officers who also serve as employees
Not applicable.

(Note 3) For restricted share-based compensation, the amount of restricted share-based compensation (including phantom stocks that were granted to directors who are non-residents of Japan) to be recorded as expenses for the fiscal year ended December 31, 2022 is shown.

(Note 4) Restricted share-based compensation falls under the category of “non-monetary compensation, etc.” set forth in Article 98-5, Item 3 of the Regulations for Enforcement of the Companies Act.

(IV)   Total Amount of Compensation, Etc. of Persons Whose Total Compensation, Etc. Is ¥100 Million or More

Name

Total amount of Compensation, etc.
(millions of yen)

Category of officers

Category of company

Amount of compensation, etc. by type
(millions of yen)

Basic compensation

Restricted share-based compensation

Kazuhiko Suzuki

111

Senior Executive Director

Reporting company

99

12

(Note 1) For restricted share-based compensation, the amount of restricted share-based compensation to be recorded as expenses for the fiscal year ended December 31, 2022 is shown.

(Note 2) Restricted share-based compensation falls under the category of “non-monetary compensation, etc.” set forth in Article 98-5, Item 3 of the Regulations for Enforcement of the Companies Act.