Board Evaluation

The Company analyzed and evaluated the effectiveness of the Board for FY2025 to clarify issues and improvement of the Board and further improve the function of the Board. The Company concluded that overall effectiveness of the Board was ensured based on the results below. The Company also started evaluating the effectiveness of the Audit & Supervisory Committee in FY2022.

In terms of size, composition, and operations of the Board, two female outside directors and one foreign outside director were appointed and the ratio of outside directors became majority in FY2025. It was confirmed that the diversity and internationality of the Board of Directors have been ensured and that the structures necessary to enable appropriate performance of the Board’s supervisory functions have been established. It was also concluded that the Board operates effectively with an open atmosphere that enables inside and outside directors to engage in candid discussion. 
In FY2025, based on the FY2024 evaluation results, the Company strengthened its sophisticated company-wide risk management framework through reporting from the Risk Management Committee to the Board of Directors on the status of responses to important risks. The Company also streamlined routine reporting items to enable the Board of Directors to appropriately allocate deliberation time according to the importance of agenda items. On the other hand, the Board members shared the following issues: the need to hold further in-depth discussions on the Company’s risk management, as well as the need for preparing meeting materials which concisely and clearly organize the information necessary for decision-making.

To further enhance the supervisory functions of the Board of Directors, in addition to continuing past improvement measures, based on FY2025 evaluation results, the Company will further strengthen the company-wide risk management framework through appropriate reviewing and reporting from the Risk Management Committee to the Board of Directors on the status of responses to important risks identified by the Committee, as well as specific mitigation measures. The Company will also improve the management of the Board meetings by preparing meeting materials which concisely and clearly organize the information necessary for decision-making, and by appropriately allocating deliberation time according to the importance of agenda items. 
The Company will practice sustainability management, as well as continuing to improve overall effectiveness of the Board aiming at growth of corporate value and for an enhancement of corporate governance.

Nihon Kohden has evaluated and analyzed the effectiveness of the Audit & Supervisory Committee since FY2022, and discussed issues and future improvement measures with the aim of improving the reliability and quality of the committee’s activities and enhancing the effectiveness of audits.
In FY2025, after the items and contents of the evaluation were explained to all directors serving as Audit & Supervisory Committee members, their evaluations and opinions were collected through discussions, and they discussed the evaluation of the Committee’s effectiveness, as well as any other issues and future improvement measures and key themes.
As a result of the evaluation, it was confirmed that the Audit & Supervisory Committee operates effectively, in each of the items such as the size, composition, and operations of the Committee, and that the overall effectiveness of the Committee activities is ensured with an open atmosphere that enables inside and outside members to engage in candid discussions. The Committee also incorporated the issues identified in the evaluation in FY2024 into the priority audit items for FY2025.
To enhance the monitoring of the risk management framework, the Committee promoted a shared understanding of the current situation and key issues through interviews and exchanges of opinions with the Risk Management Supervisory Division. To enhance the effectiveness of collaboration between the three types of audits; internal audits, audits by the Audit & Supervisory Committee, and audits by the Accounting Auditors, the Committee strived to improve both efficiency and audit quality by deepening mutual understanding of audit plans and risk perceptions through joint meetings of the three parties. Through these initiatives, continuous improvements in effectiveness were confirmed throughout the year.
On the other hand, the effectiveness of IT governance and frameworks was identified as one of important themes in the future. As the corporate digital transformation (DX) is advancing and sophisticating and the importance of cybersecurity measures is also increasing, the Committee mutually confirmed the need to monitor continuously the trends in these areas.
The Company will make ongoing efforts to improve the overall effectiveness of the Audit & Supervisory Committee to enhance audit reliability and audit quality with the goal of continuously increasing corporate value and strengthening corporate governance.