ビジョン（9416） – [Delayed] Corporate Governance Report

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Corporate Governance Report CORPORATE GOVERNANCE VISION INC. Last Update: April 1, 2022 Vision Inc. Kenichi Sano, Representative Director, President, & CEO Contact: Management Division IR Department +81-(0)3-5325-0344 Securities Code: 9416 https://www.vision-net.co.jp/ir/ The corporate governance of Vision Inc. (the “Company”) is described below. I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information 1. Basic Views Our Group always strives to improve ourselves, to realize our ideals, to take on the challenge of change without hesitation, and to always be grateful for the support of our many stakeholders as we conduct our business activities with a sense of humility in order to go above and beyond our customers’ expectations. We strive to comply with laws, regulations, internal rules, and policies, work with integrity, and build optimal corporate governance in accordance with this code of conduct. Reasons for Non-compliance with the Principles of the Corporate Governance Code Principle 2-4-1 Ensuring diversity when promoting core personnel We actively employ a diverse range of human assets (human resources) regardless of educational background, work experience, gender, nationality, or disability. Based on the belief that making the most of each employee’s individuality will lead to the creation of diverse products and services and the growth of our company, we are working to create a fulfilling work environment in which all people working for our company can grow. We have a policy of actively hiring and promoting talented people without regard to their educational background, work experience, gender, nationality, disability, or other attributes. However, we recognize the importance of human resource strategy for medium and long term improvement of corporate value, including from the perspective of ensuring diversity, and will consider formulating a human resource development policy and internal environment improvement policy to ensure diversity. Supplementary principle 3-1-3 Sustainability initiatives From the viewpoint of increasing corporate value over the medium to long term, we recognize that addressing issues related to sustainability is an important element of our management strategy. We disclose our sustainability initiatives on our website and in financial results presentation materials. In addition to matters related to the environment, we will also consider disclosing information in light of the importance of social factors such as investment in human capital and intellectual property. For details on Vision’s approach to ESG and SDGs, please refer to our website: https://www.vision-net.co.jp/company/esg.html Principle 4-1-3 Roles and responsibilities of the Board of Directors (1) (Supervision of succession planning by the CEO and others) 1 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. In a business environment that will change from time to time, our company will have thorough discussion before appointing top executives. For instance, in our company the Board of Directors will designate top executives from candidates who are considered appropriate for the position in terms of their personality, knowledge, business performance, and other factors, in accordance with our management philosophy and business strategies. We will hold discussion on supervision of succession planning. 4-1-3. of abilities. the future. Supplementary principle 4-3-3 Roles and responsibilities of the Board of Directors (CEO dismissal procedure) The Company has not established uniform evaluation criteria or requirements for the removal of the CEO. In cases where the dismissal of the CEO is objectively deemed appropriate, such as when the CEO is found to have violated laws, regulations, the Articles of Incorporation, etc., and significantly damaged the Company’s corporate value, a resolution will be passed after thorough deliberation at a meeting of the Board of Directors attended by the independent outside directors. This will be an issue for future consideration along with the supervision of the succession plan of the CEO, etc. as described in Principle Supplementary principle 4-10-1 Involvement and advice of independent external directors on nominating, remuneration, and other matters through the establishment of voluntary advisory committees The Company’s Board of Directors consists of 3 out of 6 for Directors and 4 out of 4 for Corporate Auditors. All these outside officers actively express their opinions at meetings of the Board of Directors from an independent and objective standpoint. Nomination and appointment of candidates for directors and corporate auditors are decided by the Board of Directors through deliberation, taking into consideration their knowledge, experience, and abilities, and compensation, is decided by the representative directors based on the resolution of the Board of Directors, within the limit of the total amount of compensation resolved at the General Meeting of Shareholders. Therefore, the Company has not established a voluntary advisory committee on nomination and remuneration separately from the Board of Directors, and this is an issue to be considered in the future. Supplementary principle 4-11-1 Prerequisites for ensuring the effectiveness of the Board of Directors and Board of Corporate Auditors (policies and procedures regarding composition and appointment of the Board of Directors) The Company’s Board of Directors consists of six members (including three outside directors), with internal directors appointed from within the Company who are familiar with the Company’s business and operations, and outside directors appointed from outside the Company who have a wealth of experience and a wide range of insight. The Company ensures a balance and diversity Disclosure of the combination of skills and other attributes possessed by directors, including a skills matrix, will be considered in Disclosure Based on the Principles of the Corporate Governance Code Principle 1-4 Cross-shareholdings Our basic policy is not to hold any strategic stock holdings in principle, except in cases where it is recognized that such holdings will contribute to medium to long term improvement in corporate value. In cases where listed shares are held as policy stockholdings, the Board of Directors will review all shares on a quarterly basis and sell shares of companies that the Board of 2 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Directors determines cannot be expected to increase corporate value over the medium to long term, taking into consideration factors such as share price and market trends. With respect to the exercise of voting rights, we will make decisions on a case-by-case basis, taking into consideration whether the exercise of voting rights will contribute to the enhancement of our corporate value over the medium to long term. We do not disclose the results of verifying the purpose of holding shares held by policy holdings, as it is related to our business strategy and disclosure may damage the interests of the Company and its shareholders. Principle 1-7 Related party transactions From the standpoint of sound corporate management, we recognize that there is a high need for caution when entering into transactions with related parties, and therefore, we ask ourselves whether the transaction will not impair the soundness of our group’s management, whether the transaction is valid in light of our rational judgment, and whether the terms of the transaction are appropriate compared to other outside transactions. The Company pays particular attention to whether the approval of the Board of Directors is appropriate, such as by a resolution of the Board of Directors, in accordance with the Company’s internal rules for approval and rules on administrative authority. In order to identify related party transactions, the Company requires all directors and officers to submit a list of related parties and a survey sheet regarding the existence of such transactions at the time of their appointment and at the end of the fiscal year. Principle 2-6 Demonstration of functions as asset owner of corporate pension plan The Company does not have a corporate pension fund plan. (1) The Company discloses its management philosophy, management strategies, etc. on our website. (2) The Company discloses its basic philosophy and policies on corporate governance in our Corporate Governance Report and Principle 3-1 Full disclosure Annual Securities Report. (3) The amount of remuneration for each director is determined by the representative director based on delegation by resolution of the Board of Directors, within the limit of the total amount of remuneration resolved at the general meeting of shareholders, taking into consideration the Company’s business performance and his/her contribution to the Company. The design of the compensation system is reviewed by the Board of Directors as necessary. (4) In nominating candidates for Directors and Corporate Auditors, the Company comprehensively considers the knowledge, experience, and abilities of each individual, and the Board of Directors makes a resolution and submits the nomination to the General Meeting of Shareholders. In addition, the Board of Directors passes a resolution on the nomination of corporate auditor candidates proposed by directors, after deliberation and consent by the Board of Corporate Auditors, of which more than half are outside corporate auditors, and submits the resolution to the General Meeting of Shareholders for deliberation. In cases where the dismissal of a senior management member is objectively deemed appropriate, such as when it is recognized that the member has violated laws, regulations, the Articles of Incorporation, etc., and significantly damaged the Company’s corporate value, the Board of Directors meeting attended by independent outside directors will make a resolution after thorough deliberation. (5) The reasons for the appointment of each candidate for outside director are disclosed in the reference documents of the notice of convocation of the General Meeting of Shareholders. 3 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Supplementary principle 4-1-1 Determination of scope of delegation to management and disclosure thereof The Board of Directors makes decisions on matters prescribed by law, the Articles of Incorporation, and the Regulations of the Board of Directors. The scope of authority delegated to the management team is clarified in the Rules of Authority and other regulations. Principle 4-8 Effective utilization of independent outside directors In the company, three of the six directors are independent outside directors. We believe that the three independent outside directors will contribute to strengthening our corporate governance by utilizing their extensive experience in web marketing, inbound business, the financial industry, global business, and other areas, as well as their experience as corporate managers, to monitor the company’s management, and provide advice on the company’s overall management. Principle 4-9 Criteria for judging the independence of independent outside directors and their qualifications The company selects its directors with reference to the Companies Act and the standards established by the Tokyo Stock Exchange. In addition, the company has selected individuals who can provide advice on all aspects of the company’s management based on their extensive experience and knowledge. Supplementary principle 4-11-2 Preconditions for ensuring the effectiveness of the Board of Directors and Board of Corporate Auditors (concurrent positions of directors and corporate auditors) Directors and corporate auditors allocate the time and efforts necessary to properly perform their roles and responsibilities to their duties as directors and corporate auditors, and their concurrent positions are within a reasonable range. The status of their concurrent positions is disclosed in the reference document of the notice of the general meeting of shareholders, the business report, and the Annual Securities Report. Supplementary principle 4-11-3 Preconditions for ensuring the effectiveness of the Board of Directors and Board of Corporate Auditors (analysis and evaluation related to the effectiveness of the Board of Directors) Based on the current status of comments and discussions on the board including the outside directors and outside corporate auditors, we believe that the effectiveness of the company’s Board of Directors is maintained. In addition, each director is asked to complete a self-evaluation questionnaire, the results of which are confirmed by the external auditors, in an effort to further improve the effectiveness and functions of the system. Supplementary principle 4-14-2 Policy for training for directors and audit & supervisory board members Directors and corporate auditors continuously acquire the knowledge necessary for their respective positions and businesses by participating in seminars, study groups, and social gatherings of their affiliated organizations at their own discretion, and the Company provides financial support as necessary. Principle 5-1 Policy for constructive dialogue with shareholders If shareholders or others want to have a dialogue with Vision, the company will respond positively within a reasonable range, to contribute to the sustainable growth of the company and the medium to long-term improvement in corporate value. As of now, 4 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Vision holds a briefing session attended by the president or a director in charge of IR at least twice a year, meetings with institutional investors domestic and foreign, briefing sessions for individual investors several times a year, and so on. The information on their results is properly shared through meetings of the Board of Directors, etc. In addition, Vision takes thoroughgoing measures for preventing the leakage of insider information. 2. Capital Structure Foreign Shareholding Ratio 20% or more and less than 30% Status of Major Shareholders Updated Name or Company Name Number of Shares Owned Percentage (%) Kenichi Sano The Master Trust Bank of Japan, Ltd. (Investment Trust) Custody Bank of Japan, Ltd. (Investment Trust) GOLDMAN SACHS INTERNATIONAL STATE STREET BANK AND TRUST COMPANY 505001 INTERACTIVE BROKERS LLC GOVERNMENT OF NORWAY MSCO CUSTOMER SECURITIES Credit Saison Co., Ltd. The Nomura Trust and Banking Co., Ltd. (Investment Trust) Name of Controlling Shareholder, if applicable (excluding Parent Company) Name of Parent Company, if applicable None Supplementary Explanation Updated 12,460,900 6,252,000 5,003,100 2,798,008 2,372,342 1,579,500 1,223,300 850,100 824,844 542,400 26.18 13.14 10.51 5.88 4.99 3.32 2.57 1.79 1.73 1.14 1. The above list of major shareholders is based on the shareholders as of December 31, 2021. 2. The Company holds 1,501,590 shares of treasury stock but is excluded from the above list of major shareholders. 3. Shareholding ratio is calculated excluding treasury stock. 3. Corporate Attributes Listed Stock Exchange and Market Segment Prime Market Fiscal Year-End Business Sector Number of Employees (Consolidated) as of the End of the Previous Fiscal Year December Information & Communication 500 or more and fewer than 1,000 5 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Net Sales (Consolidated) as of the End of the Previous Fiscal Year ¥10 billion or more and less than ¥100 billion Number of Consolidated Subsidiaries as of the End of the Previous Fiscal Year 10 or more and fewer than 50 4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder 5. Other Special Circumstances which May have Material Impact on Corporate Governance II. Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management 1. Organizational Composition and Operation Corporate Governance System Company with Audit and Supervisory Board* *Referred to in the Corporate Governance Code reference translation as “Company with Kansayaku Board” Directors Incorporation Number of Directors Stipulated in Articles of Directors’ Term of Office Stipulated in Articles of Incorporation Chairperson of the Board Number of Directors Number of Outside Directors Number of Independent Directors Election of Outside Directors Elected 2 years President 8 6 3 3 6 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Outside Directors’ Relationship with the Company (1) Name Attributes Relationship with the Company* a b c d e f g h i j k Shinichiro Naito From another company Shiori Harada From another company Michimasa Naka From another company *Categories for “Relationship with the Company”. (Use “○” when the director presently falls or has recently fallen under the category; “△” when the director fell under the category in the past; “●” when a close relative of the director presently falls or has recently fallen under the category; and “▲” when a close relative of the director fell under the category in the past.) a. Person who executes business of the Company or a subsidiary b. Person who executes business or a non-executive director of a parent company c. Person who executes business of a fellow subsidiary d. Person/entity for which the Company is a major client or a person who executes business for such person/entity e. Major client of the Company or a person who executes business for such client f. Consultant, accounting expert, or legal expert who receives large amounts of cash or other assets in addition to director/Audit and Supervisory Board Member compensation from the Company g. Major shareholder of the Company (in cases where the shareholder is a corporation, a person who executes business of the h. Person who executes business for a client of the Company (excluding persons categorized as any of d, e, or f above) (applies i. Person who executes business for another company holding cross-directorships/cross-auditorships with the Company (applies corporation) to self only) to self only) j. Person who executes business for an entity receiving contributions from the Company (applies to self only) k. Other Outside Directors’ Relationship with the Company (2) Name Membership of Supervisory Committee Designation as Independent Director Supplementary Explanation of the Applicable Relationship Shinichiro Naito ○ ○ management and contribute to the strengthening of Reasons for Appointment Shinichiro Naito is an outside director and has a wealth of experience from web marketing, advanced knowledge from many years as a corporate manager, as well as a vast range of insight. We hope to make use of these experiences and knowledge to monitor corporate governance by receiving advice on the overall management of the Company. There is no special interest between the Company and him, and he has been designated as an independent officer as a neutral and impartial person. Shiori Harada is an outside director and has a wealth of experience in the inbound travel business, advanced knowledge from many years as a corporate manager, and a vast range of insight. We hope to Shiori Harada ○ ○ 7 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. make use of these experiences and knowledge to monitor management and contribute to the strengthening of corporate governance by receiving advice on the overall management of the Company. There is no special interest between the Company and her, and she has been designated as an independent officer as a neutral and impartial person. Michimasa Naka is an outside director and has a wealth of experience in the financial industry and global business sectors, advanced knowledge from many years as a corporate manager, and a vast range of insight. We hope to make use of these experiences and knowledge to monitor management and contribute to the strengthening of corporate governance by receiving advice on the overall management of the Company. There is no special interest between the Company and him, and he has been designated as an independent officer as a neutral and impartial person. Michimasa Naka ○ ○ Voluntary Establishment of Committee(s) equivalent to Nomination Committee or Remuneration Committee Not Established Audit and Supervisory Board Member* *Referred to in Corporate Governance Code reference translation as “kansayaku” Establishment of Audit and Supervisory Board Established Number of Audit and Supervisory Board Members Stipulated in Articles of Incorporation Number of Audit and Supervisory Board Members 4 4 Appointment of Outside Audit and Supervisory Appointed Board Members Number of Outside Audit and Supervisory Board 4 8 Cooperation among Audit and Supervisory Board Members, Accounting Auditors and Internal Audit Departments Corporate auditors, the internal audit division, and the accounting auditor share the audit environment and problems specific to the Company by mutually sharing audit plans, explaining, and reporting on them, and conducting periodic interviews. Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Members Board Members Number of Independent Audit and Supervisory 4 Outside Audit and Supervisory Board Members’ Relationship with the Company (1) Name Attributes Relationship with the Company* a b c d e f g h i j k l m Kazuhiko Umehara From another company Junichi Motai From another company Jun Houzumi From another company Yoshinori Nakajima From another company *Categories for “Relationship with the Company”. (Use “○” when the director presently falls or has recently fallen under the category; “△” when the director fell under the category in the past; “●” when a close relative of the director presently falls or has recently fallen under the category; and “▲” when a close relative of the director fell under the category in the past.) a. Person who executes business of the Company or a subsidiary b. A non-executive director or an accounting advisor of the Company or its subsidiaries c. Person who executes business or a non-executive director of a parent company d. An Audit and Supervisory Board Member of a parent company of the Company e. Person who executes business of a fellow subsidiary f. Person/entity for which the Company is a major client or a person who executes business for such person/entity g. Major client of the Company or a person who executes business for such client h. Consultant, accounting expert, or legal expert who receives large amounts of cash or other assets in addition to director/Audit and Supervisory Board Member compensation from the Company i. Major shareholder of the Company (in cases where the shareholder is a corporation, a person who executes business of the j. Person who executes business for a client of the Company (excluding persons categorized as any of f, g, or h above) (applies k. Person who executes business for another company holding cross-directorships/cross-auditorships with the Company (applies corporation) to self only) to self only) l. Person who executes business for an entity receiving contributions from the Company (applies to self only) m. Other Outside Directors’ Relationship with the Company (2) Name Independent Officer Designation as Independent Director Supplementary Explanation of the Applicable Relationship Kazuhiko Umehara Reasons for Appointment Kazuhiko Umehara was appointed as an outside corporate auditor and has a wealth of experience, high level of insight at financial and neutral auditing services to the Company based on his experience as a corporate manager. There is no special interest between the 9 ○ ○ institutions, and is expected to provide objective Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Company and him, and he has been designated as an independent officer as a neutral and impartial person. Junichi Motai was appointed as an outside corporate auditor and has a wealth of experience, high level of insight as a certified public accountant, and is expected to provide objective and neutral auditing services to the Company based on his experience as a corporate manager. Also, we have appointed an outside auditor to contribute to the strengthening of corporate governance by providing support to the overall management of the Company. There is no special interest between the Company and him, and he has been designated as an independent officer as a neutral and impartial person. Jun Houzumi was appointed as an outside corporate auditor and has a wealth of experience, high level of insight as a certified public accountant, and is expected to provide objective and neutral auditing services to the Company based on his experience as a corporate manager. Also, we have appointed an outside auditor to contribute to the strengthening of corporate governance by providing support to the overall management of the Company. There is no special interest between the Company and him, and he has been designated as an independent officer as a neutral and impartial person. Yoshinori Nakajima is an outside corporate auditor and has a high level of professional knowledge as a prosecutor and lawyer and has and appropriate knowledge of law and company compliance policies will contribute to the promotion of the Company’s compliance Junichi Motai ○ ○ Jun Houzumi ○ ○ ――― Yoshinori Nakajima ○ ○ ――― been appointed in the belief that his experience 10 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. management. There is no special interest relationship between him and the Company and Nakajima, and the Company has designated him as an independent officer as a neutral and impartial independent organization. Matters Concerning Independent Directors and Independent Audit and Supervisory Board Members Number of Independent Directors and Independent 7 Audit and Supervisory Board Members Other Matters Concerning Independent Directors and Independent Audit and Supervisory Board Members The Company designates as independent director all persons who meet the qualifications of independent directors. Incentives Implementation Status of Measures related to Incentives Granted to Directors Introduction of Stock Options Scheme Supplementary Explanation for Applicable Items The purpose of the introduction of this system is to further increase morale and motivation to improve business performance. Persons Eligible for Stock Options Internal Directors, Employees, Subsidiaries’ Employees, Other The purpose of this program is to motivate and encourage internal directors and employees to improve their performance. Others Supplementary Explanation for Applicable Items are former employees of the Company. Director Remuneration Status of Disclosure of Individual Directors’ No Disclosure for any Directors Remuneration Supplementary Explanation for Applicable Items Individual remuneration is not disclosed because there are no persons whose total amount of remuneration is 100 million yen or more. The total amount of remuneration for directors is disclosed. Policy on Determining Remuneration Amounts and Established the Calculation Methods Thereof Disclosure of Policy on Determining Remuneration Amounts and the Calculation Methods Thereof 11 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. It is stipulated that directors’ remuneration shall be determined by the Board of Directors within the limit of the total amount resolved at the General Meeting of Shareholders. Support System for Outside Directors and/or Outside Audit and Supervisory Board Members The administration division serves as a contact point for outside directors, and the administration division and internal audit office serve as contact points for outside corporate auditors, respectively, to share information. The agenda, materials, etc. for the Board of Directors meetings are explained in advance as necessary. The full-time corporate auditor provides support to the outside corporate auditors by reporting on the status of corporate auditor audits, accounting audits, internal audits, and other audits as appropriate. 2. Matters Concerning Functions of Business Execution, Auditing and Supervision, Nomination, and Remuneration Decisions (Overview of Current Corporate Governance System) The Company’s corporate governance structure is outlined below. Please refer to the attached for a diagram of these systems. The Board of Directors consists of six directors (including three outside directors) and in addition to the regular monthly The Company makes decisions on important matters related to overall management and supervises the execution of business a. Board of Directors meetings, special meetings are held as necessary. operations. b. Management Committee The Management Committee, consisting of internal directors, full-time corporate auditors, executive officers, division managers, and other executives, meets at least once a month. The meeting is held at least once a month to discuss agenda items for the Board of Directors, as well as to confirm daily business operations and speed up decision-making, in order to improve the efficiency of management activities. c. Board of Corporate Auditors and plan. d. Internal Audit Office The Board of Auditors consists of four auditors (all of whom are outside auditors) and audits the daily activities of directors, including the execution of their duties, to enhance the effectiveness of corporate governance in accordance with the audit policy The Internal Audit Office, consisting of two members, verifies, evaluates, and advises on whether the Group’s organization, systems, and operations are being managed efficiently and in compliance with management policies, laws, regulations, and rules. Through this process, the Internal Audit Office strives to prevent legal violations, fraud, and errors, provide accurate management information, preserve assets, and improve business activities. e. Accounting Auditor f. Compliance Committee The Company has entered an audit contract with KPMG AZSA LLC and appropriate audits are conducted. The Compliance Committee has been established as a body to ensure compliance. The committee is composed of the president, directors in charge of administrative divisions, full-time corporate auditors, and other department managers and above, and meets regularly twice a year and whenever necessary. 12 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. g. Policy on Determination of Amounts of Remuneration, etc. for Directors and Corporate Auditors The Company’s policy for determining the remuneration, etc. of individual directors was resolved and decided at a meeting of the Board of Directors held on January 15, 2021. Based on the basic policy that the remuneration system should be linked to shareholders’ interests so that it can function as an incentive to continuously improve corporate value, and that objectivity and transparency should be ensured by obtaining the opinions of the Board of Directors, of which the majority is composed of external directors, the amount of remuneration, etc. for Directors is determined by the Representative Director based on the delegation of authority by resolution of the Board of Directors, taking into consideration the Company’s business performance, level of contribution and other factors, within the limit of the total amount of remuneration resolved at the General Meeting of Shareholders. The Board of Directors confirms that the remuneration, etc. of each director is consistent with the decision-making The total amount of remuneration for Directors was resolved at the Extraordinary General Meeting of Shareholders held on September 25, 2004 to be no more than 200 million yen per year (not including employee salaries for Directors who are also employees of the Company), and the amount of individual remuneration is determined by the Board of Directors, taking into consideration the Company’s performance and contribution to the Company. Also, the total amount of remuneration for auditors was resolved at the Extraordinary General Meeting of Shareholders held on September 25, 2004 to be no more than 20 million yen per year, and the amount of individual remuneration is determined by the Board of Auditors. 3. Reasons for Adoption of Current Corporate Governance System The Company has introduced an executive officer system to strengthen its management structure by separating the business execution function from the management decision-making function to increase the efficiency and speed of each, and has appointed outside directors to enhance the function of management supervision. In addition, in order to ensure the effectiveness of audits, corporate auditors, the Internal Audit Office, and the accounting auditor actively exchange information through such means as holding regular reporting meetings in order to maintain close mutual cooperation, thereby enhancing the effectiveness and efficiency of audits. We believe that the fairness and transparency of management are sufficiently ensured by this current III. Implementation of Measures for Shareholders and Other Stakeholders Updated 1. Measures to Vitalize the General Shareholder Meetings and Facilitate Exercise of Voting Rights Supplementary Explanation Early Posting of Notice of the General We make every effort to send notifications out earlier than the statutory due Shareholders Meeting date. Scheduling of the General Shareholders Meeting During Non-Peak Days The Company’s fiscal year ends on December 31 and the annual general meeting of shareholders is held in March. Therefore, we recognize that we have been able to avoid the concentration date. The Company allows shareholders to exercise their voting rights via the Electronic Exercise of Voting Rights policy. system. Internet. 13 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Participation in a Platform for the Electronic Exercise of Voting Rights and Other Initiatives to Enhance Environment for Institutional Investors to Exercise Voting Rights The Company participates in an electronic voting platform. Provision of Notice (or Summary of Notice) of provide information in English to our overseas shareholders and the English the General Shareholders Meeting in English translation of the convocation notice is disclosed on the Company’s website Considering the composition of our shareholders, we recognize the need to Other 2. Status of IR-related Activities Updated and the websites of financial services exchanges. At the General Meeting of Shareholders, the Company provides a video presentation to enable shareholders to gain a deeper understanding of the Company’s business report. In addition, the convocation notice is posted on TDnet and the Company’s website three days prior to being sent out. Supplementary Explanation Explanation by a representative director or a representative executive officer Formulation and Publication of Our disclosure policy is posted on our website. Please refer to Disclosure Policies the following URL: Regular Investor Briefings held for Individual Investors Regular Investor Briefings held for Analysts and Institutional Investors Regular Investor Briefings held for Overseas Investors Online Disclosure of IR Information https://www.vision-net.co.jp/ir/guide/policy.html Company briefings are held regularly. Briefings on financial results are held by the President and CEO four times a year on a quarterly basis to explain financial results and answer questions. In addition, small meetings and Held individual meetings are held as needed and attended by the President & CEO and internal directors. The President & CEO, Director and General Manager of the Administration Division, and head of the IR department visit Europe, North America, Asia, and other regions on a regular basis to continue dialogue with shareholders and investors. In addition, we regularly participate in conferences hosted by securities firms in Japan to explain our management policies to overseas investors and to promote understanding of our company through Q&A sessions. Held Held 14 Establishment of Department and/or We have created an IR webpage, which is available in both Placement of a Manager in Charge of IR Japanese (https://www.vision-net.co.jp/ir/) and English Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. (https://www.vision-net.co.jp/en/ir_information). The Company also discloses IR materials in the following languages: Japanese, English, Chinese, and Korean. The materials include financial statements, financial results briefing materials, timely disclosure materials other than financial results information, annual securities reports, quarterly reports, notices of convocation of general meetings of shareholders, and this report. 3. Status of Measures to Ensure Due Respect for Stakeholders Supplementary Explanation Establishment of Internal Rules Stipulating We have established and adhere to standards of conduct to respect the position Respect for the Position of Stakeholders of each stakeholder in accordance with compliance regulations. Implementation of Environmental Preservation Activities and CSR Activities, etc. We have expanded into Saga City, Saga Prefecture, and established a customer support desk to contribute to local development and regional revitalization. In addition, we have acquired an environmental certification (Green Site License) for the prevention of global warming through “green power” as part of our website’s CO2 reduction activities, and we support an organization (specified nonprofit organization) that disseminates information, provides support in the disaster areas, and supports various activities with the aim of “creating a society in which as many people as possible can be saved in times of disaster”. We support and cooperate with the activities of the Earthquake Disaster Regain Corporation. Our environmental preservation activities, CSR activities, and other initiatives are posted on our website. Please refer to the following URL https://www.vision-net.co.jp/company/esg.html Our basic policy is to provide all stakeholders, including shareholders and Formulation of Policies, etc. on Provision of investors, with information on our management policies, business activities, Information to Stakeholders and financial information in an easy-to-understand, fair, timely, and appropriate manner. IV. Matters Concerning the Internal Control System 1. Basic Views on Internal Control System and Status of Development As a system to ensure the appropriateness of business operations, the Company’s Board of Directors, at its meeting held in March 2015, established and resolved the “Basic Policy for the Establishment of an Internal Control System”. The outline of the policy is a. System to ensure that the execution of duties by directors and employees complies with laws and regulations and the Articles of as follows Incorporation 15 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. (a) The “Compliance Regulations” shall be established to ensure that the execution of duties by Directors and employees comply with laws, regulations, the Articles of Incorporation, and the Company’s management philosophy, which is positioned as the highest priority in corporate management. (b) In order to ensure thorough compliance activities, the Company shall establish a Compliance Committee with the President as the officer in charge, and shall make company-wide efforts. (c) The Internal Audit Office shall be established to conduct internal audits of all activities of the business execution divisions in accordance with the audit plan approved by the Representative Director, and shall report the audit results to the Representative Director and to the Corporate Auditors. (d) The Company shall ensure that there is a means for directors and employees to directly report violations or suspicious activities, etc., and as one such means, the Company shall establish and operate a compliance reporting and consultation service that allows directors and employees to report directly to outside parties. In this case, the name of the whistleblower shall not be disclosed without the consent of the whistleblower (guarantee of anonymity), and it shall be ensured that the whistleblower shall not be disadvantaged. reports. (e) The Board of Directors recognizes that the preparation of appropriate financial reports is extremely important for the maintenance and improvement of public trust, and in order to ensure the appropriateness of financial reporting, the Board of Directors shall establish effective internal controls to prevent misstatements and errors in the process of preparing financial b. System for storage and management of information related to the execution of duties by Directors (a) In accordance with the Document Management Regulations, the chief administrator shall preserve the documents (including electronic records; the same shall apply hereinafter) specified in the following items together with related materials. I. Minutes of general meetings of shareholders and related materials II. Minutes of Board of Directors meetings and related materials II. Management meeting minutes and related materials IV. Minutes and related materials of other important meetings organized by directors V. Other important documents related to the execution of duties by directors (b) In addition to the above, documents related to the Company’s business operations shall be properly stored and managed in accordance with the “Document Management Regulations” and the “Document Retention Period Table”. (c) Electronic records stored or managed by the Company shall be secured in accordance with the “Information Security Regulations”, “Information Security Management Regulations”, and “Information Security Management Regulations” to prevent (d) Directors and corporate auditors shall always have direct access to inspect, copy, or duplicate information stored and managed information damage or leakage to outside parties. by each business execution division. c. Regulations and other systems for loss risk management (a) With respect to risk management, the Company shall establish “Risk Management Regulations” and designate the President as the Chief Risk Management Officer, and at the same time, establish a Risk Management Committee to effectively and efficiently implement risk management. (b) Policies for dealing with major management risks and other important matters from the viewpoint of risk management shall be fully discussed at the Executive Committee and particularly important matters shall be reported to the Board of Directors. 16 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. d. System to ensure the efficient execution of duties by directors (a) In principle, the Board of Directors shall meet once a month on a regular basis and on an as-needed basis on an ad hoc basis to facilitate flexible decision-making. (b) The status of execution of duties by Directors shall be reported to the Board of Directors as appropriate. (c) Directors and employees shall exercise their authority in an appropriate and efficient manner in accordance with the “Regulations on Administrative Authority.” e. System to ensure the appropriateness of operations of the corporate group consisting of the Company and its subsidiaries (a) With respect to the management of group companies, while respecting the autonomy of each company, the Company shall require compliance with the “Affiliate Company Management Regulations” established by the Company. (b) Internal audits shall be conducted by the Internal Audit Office to monitor the proper execution of business by group companies as appropriate. f. Matters concerning employees to assist the Statutory Auditors in performing their duties when the Statutory Auditors request such assistance, and matters concerning the independence of such employees from the Directors (a) The appointment of employees to assist the duties of the Corporate Auditors and, if appointed, the number of such employees shall be determined upon consultation between the Corporate Auditors and the Board of Directors. (b) When the employees mentioned in the preceding paragraph assist the duties of Corporate Auditors, they shall not be subject to the instructions and orders of Directors. g. System for reporting to Corporate Auditors by directors and employees, and other systems for reporting to Corporate Auditors (a) Directors and employees shall report from time to time on the status of execution of their duties and other matters as requested by the Corporate Auditors. with the nature of his/her duties. (b) The General Manager of the Accounting Department, etc., shall periodically report to the Corporate Auditors in accordance (c) Corporate Auditors shall attend meetings of the Board of Directors and other important meetings such as the Management Committee, which shall be attended by Corporate Auditors appointed by the Board of Corporate Auditors. h. Other systems to ensure the effective execution of audits by Corporate Auditors The corporate auditors shall hold a regular meeting of the Board of Corporate Auditors once a month, as well as extraordinary meetings as necessary, to exchange information and discuss the status of audits, etc., and receive regular reports on audits from the Internal Audit Office and the accounting auditors and exchange opinions with them. i. Basic Policy and Status of Prevention of Transactions with Anti-Social Forces (a) The Company’s compliance policy is to have no relationship with antisocial forces and to take a firm stand against them. (b) In the event of unjustified demands by antisocial forces, the Legal Department shall be the department responsible for responding to such demands, in cooperation with the police and other related agencies. (c) When concluding a contract related to business, confirm that the counterparty is not an antisocial force or an individual or corporation that is involved with antisocial forces. (d) When concluding a business contract, both parties agree that they are not involved with antisocial forces or related individuals or corporations, etc. If a breach of contract is later discovered, the contract shall be terminated and the parties shall sign a written agreement that includes provisions for the elimination of antisocial forces, such as the obligation to claim compensation for damages. 17 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. 2. Basic Views on Measures for Eliminating Anti-Social Forces and Status of Development In our compliance regulations, we state that “compliance is our management policy and we will not have any relationship with a. Basic Policy on Elimination of Antisocial Forces antisocial forces”. b. Status of Maintenance for Elimination of Antisocial Forces (a) Status of Internal Regulations Each relevant regulation stipulates that no transactions with antisocial forces are permitted. (b) Methods of Eliminating Antisocial Forces Based on the “Guidelines for Investigation of Anti-Social Forces,” we confirm that new business partners have no relationship with anti-social forces by searching for articles in newspapers and other media from the past. For continuing business partners, periodic checks are conducted at least once a year. In addition, the Company includes a clause for elimination of organized crime groups in the basic contract when transactions are initiated. (c) Cooperation with Outside Specialized Agencies and Collection of Information The Company is using the “Violence Hotline”, a consultation service under the jurisdiction of the Tokyo Metropolitan Police Department, and has joined the “Metropolitan Center for the Elimination of Anti-Social Forces” (a public interest incorporated foundation) to collect information. (d) Status of Implementation of Training Activities Regular internal study sessions are held by outside lecturers. V. Other 1. Adoption of Anti-Takeover Measures Adoption of Anti-Takeover Measures Adopted Supplementary Explanation for Applicable Items the future. ――― 2. Other Matters Concerning the Corporate Governance System The Company has no current plans to introduce anti-takeover measures, but this may become an issue requiring consideration in 18 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. 19 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Internal System for Timely Information Disclosure (Organizational Chart) 20