Board Evaluation

The Company analyzed and evaluated the effectiveness of the Board for FY2024 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, the ratio of outside directors became 50% in FY2024, as two female outside directors and one foreign outside director were appointed. 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 FY2024, based on the FY2023 evaluation results, the Company strengthened its sophisticated company-wide risk management framework mainly by the initiative of the Risk Management Committee which confirmed the status of responses to important risks such as information security and implemented measures such as strengthening the Computer Security Incident Response Team (CSIRT) and education programs. The Company also strengthened the support systems for outside directors by conducting factory tours and study sessions regarding the Three-year Business Plan. In addition, the Company has implemented measures to deepen the understanding of outside directors by providing executive summaries to enhance the reporting content at meetings of the Board of Directors. On the other hand, while the pre-explanation of the agenda of the Board meetings was improved, the Board members shared the following issues: the need for further improvement of meeting materials and the quality of deliberations at meetings of the Board of Directors, as well as the need to hold further in-depth discussions on the Company’s risk management.

Because outside directors have become the majority of the Board after approval of the Ordinary General Meeting of Shareholders held in June 2025, the Company will further enhance the supervisory functions of the Board of Directors. In addition to continuing past improvement measures, based on FY2024 evaluation results, the Company will further strengthen the 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 such as geopolitical risks and laws and regulations related to medical devices. 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 FY2024, 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.
On the other hand, the members shared that the following issues to be focused on moving forward is to enhance the monitoring of the risk management framework and the effectiveness of collaboration between the three types of audits; internal audits, audits by the Audit & Supervisory Committee, and audits by the Accounting Auditors. As the Board of Directors and the Risk Management Committee are promoting the development of a sophisticated company-wide risk management framework, the Audit & Supervisory Committee discussed that monitoring methods by the Committee need to be re-evaluated and be improved if necessary, while the Committee has monitored the risk management framework in the past. As for the collaboration between the three types of audits, the members mutually confirmed that the Company needs to increase the effectiveness and efficiency of audits through opportunities for joint meetings of three parties in addition to the collaboration among them.
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.