The knowledge and expertise desired in company Directors

To secure a competitive advantage that will boost corporate value, a company must have knowledge backed by real-world experience in the fields of production, sales, technology, and market information (including information about competitors), along with sound business judgment. Also of growing importance are management skills at international business locations and experience in business practice compliance that includes financial accounting, an outlook based on experience outside of the company, and other forms of diversity, plus recently, business judgment from the perspective of ESG.

Taking all of the above into consideration, we discuss the knowledge and expertise that we deem necessary for corporate management and to raise corporate value, and select the appropriate candidates who possess those qualities to be directors.

Board of Directors

Audit and Supervisory Committee

The internal Audit Office verifies compliance status both periodically and as needed. The Audit Office also strives to maintain close liaison with the Audit and Supervisory Committee Members, collaborating with the Audit and Supervisory Committee to ensure effective implementation of auditing operations.

For the Accounting Auditor (external audit), Achilles Corporation has appointed Deloitte Touche Tohmatsu LLC to implement auditing. Audit report meetings are held at which the Audit and Supervisory Committee receives a presentation from the Accounting Auditor on the state of audit implementation and the audit implementation results, and at which the Accounting Auditor offers advice regarding issues relating to accounting and internal controls.

Governance Committee

Remuneration for Directors (excluding Directors who are also serving as Audit and Supervisory Committee Members)

Calculation of performance-based remuneration = (target table^*2 × degree of target achievement) × management ability effect coefficient (weight)^*3

• *1 Percentages are approximate.
• *2 Performance indicators used to determine performance-based remuneration are as follows: the ordinary profit ratio from the perspective of short-term profitability, and the Return on Equity (ROE) and Return on Assets (ROA) from the perspective of improving corporate profits in the medium- to long-term. Performance-based remuneration is determined in accordance with regulations pertaining to compensation for Directors. The base pay is calculated taking the standard pay (which in turn is based on factors such as degree of responsibility, comparison to other companies, the company’s performance, employee pay levels, etc.) and exempting the fixed remuneration from this figure. A goal table is devised with indicators used in calculations, specifically averages for the past five fiscal years. On top of this, criteria such as degree of achievement of the various goals of the past fiscal year (as well as management skills) are factored in and weighted in accordance with benchmarks determined ahead of time. Also, it is subject to review by the Governance Committee at the time of establishment.
• *3 Pre-set

Note: The above remuneration does not include employee salaries and bonuses when directors (non-external) also serve concurrently as employees.

Remuneration for Directors who are also serving as Audit and Supervisory Committee Members