Corporate Governance Structure

• Corporate Governance
• Corporate Governance Structure
• Outside Directors and Outside Auditors
• Appointment and Nomination
• Executive Compensation
• Others

Overview

Board of Directors Meeting

Our Board of Directors consists of eight directors, and in consideration of diversity and a balance in the knowledge, experience and capabilities of the Board of Directors as a whole, five are independent outside directors. We believe this is necessary for our sustainable growth and medium-to long-term enhancement of corporate value of Skylark Group. As our Group’s highest decision-making body for management and execution of business, the Board of Directors meets at least once a month in principle.

＜Analyzing and Assessing the Effectiveness of the Board of Directors＞
Based on the recognition that the Board of Directors should be a place for effective and strategic discussions for the sustainable growth of the Group and the enhancement of corporate value, we analyze and evaluate the effectiveness of the Board of Directors every year with the aim of further enhancing its functions.
A summary of the evaluation outlines and results for FY2023 is as follows.

1. Evaluation Outline

Subject	All directors（8 persons）
Evaluation method	The Nominating Committee and the Board of Directors discuss the appropriateness of the questionnaire-based self-evaluation method and the outline of the questionnaire content and evaluation process in advance, and after determining that the method is appropriate, questionnaires are sent to individual executives, and the secretariat collects and consolidates the results.
Evaluation process	Each director responded anonymously to each question based on a self-administered questionnaire (4 items), and also provided an evaluation of individual directors by writing in the free-response columns for each item, indicating points that they appreciated, issues they recognized, and other opinions. The results of the evaluation are summarized, and the grades for each question, opinions expressed in the free response column, and issues to be addressed in the following fiscal year and beyond are reported to and discussed by the Board of Directors.
	February 2024
Applicable period	Board meetings held in 2023 and off-board activities for directors and officers.
Evaluation items	(1) Composition of the Board of Directors (2) Operation of the Board of Directors (3) Supervisory Functions of the Board of Directors (4) Board Meeting Agenda

2. Summary of Evaluation Results and Future Initiatives

1. （1）The composition of the Board of Directors was evaluated as having the skills, experience, and knowledge necessary for the Board as a whole and for individual directors to fulfill their roles and responsibilities, and the ratio and number of executive directors and outside directors were also evaluated as appropriate.
2. （2）In terms of the operation of the Board of Directors, the evaluation was that sufficient materials were provided to the Board of Directors to enable open and active discussion, and that the proceedings of the Board of Directors were properly managed.
3. （3）In terms of the oversight function of the Board of Directors, the evaluation was that the Board provides adequate opportunities for outside directors to exercise their oversight function through the Independent Directors Liaison Meeting and the minutes of the Group Risk Compliance Committee and the Group Sustainability Committee.
4. （4）In terms of the board meeting agenda, the topics, rapporteurs and time allocations were rated as adequate.
5. （5）The evaluation of the lead independent outside director is as follows. The board of directors is composed of diverse personnel of appropriate size, and open and active discussions are held on various management issues. Information is provided to the Board of Directors for sufficient discussion, the Board allows sufficient time for discussion, and there is a high level of transparency in the operation of the Board. Through the holding of liaison meetings for independent directors and the sharing of minutes from the Group Risk Compliance Committee and the Group Sustainability Committee, the Board of Directors is able to deepen its understanding of the company's business and the status of responses to various issues, and is provided with opportunities to appropriately fulfill its functions as a supervisory body. We do not see any problem with the effectiveness of the Board of Directors.

The Company will further improve the effectiveness of the Board of Directors by addressing issues identified through the evaluation process as described above.

Board of Directors Meetings in 2023	Held 13 times

Senior Management Meeting

In order to ensure the prompt and flexible execution of the planning and execution of company-wide management policies and strategies, the Company has established a Management Committee consisting of the Chairman and CEO, the President and COO, and all executive officers, which meets in principle every week. Based on the above objectives, the Senior Management Meeting fully reports, examines, and deliberates on important matters pertaining to the entire Group.
In addition, the Group Committees (Personnel and System Committee and Policy & Investment Committee), composed of members determined by the Senior Management Meeting, meet once a month to report, review, and deliberate on important matters, personnel systems, policies, and other matters pertaining to the entire Group.

Senior Management Meetings in 2023	Held 48 times

Audit & Supervisory Committee Member Audits and Other Audit Functions

The Audit & Supervisory Committee, which consists of three auditors (two of them, the majority, are independent outside directors), meets once a month in principle to supervise and provide a check on management and business execution. Based on auditing policies, plans and standards determined by the Audit & Supervisory Committee, audit and supervisory committee members attend Board of Directors Meetings and other important meetings. At the same time, they ascertain the state of the Group by examining business conditions and other methods to audit that business activities are being conducted in conformance with laws, internal regulations, and other rules. In addition, audit and supervisory committee members cooperate with the Internal Audit Group and the accounting auditor through regular discussions and other means to ensure an efficient and effective auditing system. The Internal Audit Group, which is our internal audit organization, has been established as a division under the direct control of the Chairman and CEO as well as the President and COO to ensure its organizational independence. The Audit & Supervisory Committee is also positioned as a division that possesses authority to supervise and command. Based on internal regulations and annual plans, it conducts operating audits of headquarters, central kitchens, and restaurants to identify problems, suggest improvements, and provide corrective guidance.
Accounting audits are conducted by Deloitte Touche Tohmatsu LLC, which was selected at the General Meeting of Shareholders.

Board of Auditors, Audit and Supervisory Committee in 2023	Board of Auditors　　　 Held 2 times Audit and Supervisory Committee　Held 10 times

Other Committees

The Group Risk and Compliance Committee, consisting of the Chairman and CEO, the President and COO, and all executive officers, meets at least once a year to discuss important matters related to the Group's compliance and determine basic policies. The Group Compliance Meeting, consisting of compliance promotion managers selected by each affiliated company, is held as necessary to confirm and report on the status of compliance promotion at affiliated companies, measures to prevent violations, and investigations and remedial measures in the event of violations. The committee confirms and reports on the status of compliance promotion at affiliated companies, measures to prevent violations, and investigation and remedial measures in the event of violations. In addition, outside officers are appointed as advisors to the Committee to receive suggestions and advice from outside perspectives.
In addition, the minutes of the Committee's meetings are shared with the outside directors who are in a position to oversee the Company's risk management system, and the Company has established rules for sharing information with outside directors to enhance the provision of information on important risk issues and emergency situations and the status of responses to such issues.
In order to promote sustainability management across the Group, the Group Sustainability Committee, consisting of the Chairman and CEO, the President and COO, all executive officers, and the presidents of Group companies, meets as necessary to formulate Group sustainability policies, identify and periodically review materiality issues, determine policies and measures related to the environment and society, and report on sustainability promotion activities to the Board of Directors. The committee formulates Group sustainability policies, identifies and regularly reviews materiality issues, determines environmental and social policies and measures, and reports on sustainability promotion activities to the Board of Directors. The Committee also includes outside officers in an advisory capacity, and receives suggestions and advice from outside perspectives.
In addition, the Group has established the "Skylark Group Whistleblower Hotline," which is staffed by an external specialist company, to facilitate early detection, correction, and prevention of recurrence of legal violations and misconduct that may be detrimental to our customers, investors, society, and other stakeholders, The contact point is an external specialist company that accepts whistleblowing from all officers, employees, and their families of the Group in Japan, retirees, and business partners. Whistleblower reports are shared directly with outside directors and full-time Audit Committee members, while taking into consideration the confidentiality of the whistleblower. Each overseas affiliated company also has its own whistleblower hotline, and the Company receives reports and supervises them.

Group Risk and Compliance Committee in 2023	Held 6 times in person, 7 times in writing
Group Sustainability Committee in 2023	Held 6 times in person, 2 times in writing

To supplement the functions of the Board of Directors, the Company has established the "Nominating Committee" and the "Remuneration Committee," voluntary committees whose main members are independent outside directors appointed by resolution of the Board of Directors, thereby creating a system for fair deliberations from an independent and objective standpoint.

1. (i) Nomination Committee
   The Nomination Committee discusses matters related to the proposals of appointment and dismissal of the Company’s directors and executive officers to be submitted to the Board of Directors.
   The committee members consist of the Chairman and Chief Executive Officer serving as the Chairperson, and other members appointed by resolution of the Board of Directors. Currently, the committee consists of five members: the Chairperson (the Chairman and CEO of Skylark Group), the President and COO, and three independent outside directors, who compose the majority of the committee.
2. (ii) Remuneration Committee
   The Remuneration Committee discusses the proposed compensation of the Group’s directors and executive officers submitted to the Board of Directors and the proposed compensation of audit and supervisory committee members submitted to the Audit & Supervisory Committee.
   The committee members consist of the Chairman and Chief Executive Officer serving as the Chairperson, and other members appointed by resolution of the Board of Directors. Currently, the committee consists of five members: the Chairperson (the Chairman and CEO of Skylark Group), the President and COO, and three independent outside directors, who compose the majority of the committee.

Nomination Committee in 2023	Held 4 times in person, 1 time in writing
Remuneration Committee in 2023	Held 3 times in person, 2 times in writing

Independent Officer Liaison Committee

The Company has established an Independent Officer Liaison Committee, chaired by the leading independent outside director and consisting of outside directors and outside corporate auditors to strengthen collaboration among independent officers through site visits and exchanges of opinions, and to carry out a variety of activities as a place to provide raw information on business execution be utilized in discussions at the Board of Directors. The Leading Independent Outside Director represents the outside directors in liaison and coordination with management and the Audit Committee.
In addition, in order to enhance the means of communication with outside officers, we have introduced a system where cloud-based groupware is used for questionnaires, opinion exchanges and schedule adjustments.
In FY2023, we held an information exchange meeting among outside directors as a liaison meeting for independent directors to enhance communication among outside directors. Executive officers, presidents of affiliated companies, and other members of the management team were also present at the information exchange meeting to share details of their operations.