We will continue working to strengthen corporate governance, based on our understanding of the importance of raising management transparency and fairness, achieving sustainable growth and development and fulfilling our social responsibilities. Specifically, we aim to strengthen corporate governance by reinforcing the internal control system, increasing management transparency and promoting the reinforcement of management oversight functions. By conducting honest management that emphasizes corporate ethics through these measures, we aim to increase our corporate value.

We have introduced a corporate officer system to develop a more robust group management control system and ensure corporate governance in accordance with changes in the environment surrounding our business. 
This clarifies the supervisory and executive responsibilities in each business of our Group and enables directors to focus on supervision, thereby bolstering the management’s supervisory function and encouraging the delegation of the task of business execution to corporate officers, which leads to further expeditious decisions being made. 
The directors and corporate auditors check the management of our company from their respective perspectives. The directors carry out deliberations in accordance with the basic policies of management while ensuring that there are no breaches of laws and the Articles of Incorporation. Furthermore, to promote timely and appropriate decision-making, our company has established the Executive Committee, chaired by the CEO, as an organization to decide or report on important matters concerning the execution of duties delegated by the Board of Directors (excluding matters to be resolved by the Board of Directors under the Rules of Administrative Authority). Furthermore, our company has established an optional Nomination/Remuneration Committee as an advisory body to the Board of Directors. The majority of its members are made up of independent external directors.

* Actual results for FY2022

*1 The maximum number of directors defined in the Articles of Incorporation is 15.
*2 The maximum number of corporate auditors defined in the Articles of Incorporation is 6.

To enhance the transparency of the Board of Directors and further strengthen management structure, the Board of Directors is comprised of 11 directors, including 4 external directors, making up over 30% of the board, and discusses and makes decisions on important items.
Board of Directors meetings are attended by both standing and part-time corporate auditors, who offer opinions. The directors and corporate auditors, who have different duties, monitor management from their own unique perspectives.

The attendance status of directors and corporate auditors with regard to Board of Directors meetings held during FY 2022 was as follows.

* The attendance status of Executive Directors Kunio Tajiri and Misao Kikuchi pertains to the period after their appointment on June 29, 2022.

• Matters related to the General Meeting of Shareholders (determination of proposals for voting)
• Matters related to quarterly and annual operating results, and financial reports and forecasts for the next period
• Matters related to directors and corporate officers (director candidates and responsibilities of directors and corporate officers)  
• Matters related to the effectiveness of the Board of Directors
• Matters related to examination of cross-shareholdings
• Report on the operating status of our Group’s internal reporting system and risk management system
• Matters related to Tokyo DisneySea Fantasy Springs
• Matters related to stock split and changes in shareholder benefit program
• Matters related to the introduction of the stock provision trust (J-ESOP) and disposal of treasury stock through third-party allotment

According to changes around the business environment, our Group has introduced the Corporate Officer System to accelerate decision-making by promoting the delegation of authority to corporate officers. 
 The Board of Directors delegates authority to the Executive Committee, which is chaired by the CEO and comprised of the CEO and corporate officers. The Committee discusses, decides and reports on important items pertaining to business execution (excluding items requiring a Board of Directors resolution). Furthermore, standing corporate auditors can also attend and offer opinions.

The Board of Corporate Auditors is comprised of 4 corporate auditors, of whom 3 are external corporate auditors, and activities include listening to reports from directors, officers and employees and viewing important documents, while discussing the status of deliberation at important meetings, audit results and other matters among the corporate auditors. The 2 standing corporate auditors attend meetings of the Board of Directors, the Executive Committee and other committees to monitor and gather information.
Furthermore, to assist the corporate auditors in their duties, employees who are independent from directors and the business execution divisions are assigned as staff, and the effectiveness of corporate auditing is also enhanced through cooperation between the corporate auditors, independent accounting auditors, and the Internal Auditing Department.

A voluntary Nomination / Remuneration Committee, which includes a majority of independent directors, has been established as an advisory body to the Board of Directors. The goal is to enhance the independence and objectivity of the functions of the Board of Directors related to director nomination, remuneration, and other such matters. The committee deliberates on director nominations and remuneration (including draft proposals on these for the General Meeting of Shareholders), as well as succession plans, and then reports to the Board of Directors. Decisions on individual remuneration amounts for directors are entrusted to the committee by the Board of Directors.

During FY 2022, a meeting of the Nomination / Remuneration Committee was held once, with the following members in attendance: Toshio Kagami, Committee Chair, Representative Director, Chairperson and CEO; Kenji Yoshida, Representative Director, President and COO; Tsutomu Hanada, Executive Director (External); Yuzaburo Mogi, Executive Director (External); and Misao Kikuchi, Executive Director (External). The committee resolved the amount of remuneration provided to individual directors, as tasked by the Board of Directors, and reported on matters concerning the CEO/COO succession plans.
A committee meeting has also been held once during the first quarter of FY 2023, where proposal drafts for the General Meeting of Shareholders on the election of directors and the election of representative directors and executive directors were discussed with the attendance of all of the aforementioned members.

We have in place an Internal Auditing Department to ensure compliance with laws and internal rules as well as efficient business execution. From an objective standpoint, the Department examines, assesses and advises on whether Company operations are being conducted appropriately and efficiently in compliance with management policies and plans as well as internal regulations for the purpose of promoting management efficiency and contributing to enhanced profitability. The results of internal audits are reported to the president of the Company, as well as at the Board of Corporate Auditors to enhance coordination among parties concerned. Furthermore, depending on the audit subject, the Department reports the audit results to the Risk Management Committee and Compliance Committee, among others, and directly raises issues and proposes improvement measures to the audit subject with the aim of enhancing internal control on an ongoing basis.

To ensure accurate accounting, we receive audits from KPMG AZSA LLC. Our designated unlimited liability and engagement partners from KPMG AZSA LLC are certified public accountants Yoshitaka Kuwamoto and Daika Azuma. Additionally, a total of 20 accountants and assistants engage in other accounting and auditing activities (As of June 29, 2023).

OLC maintains an oversight system through the appointment of external officers to strengthen supervisory functions. The external directors give advice and make suggestions to the Board of Directors as necessary to ensure the validity and appropriateness of the decisions made by the Board of Directors. They also offer prudent advice based on their wealth of experience, wide-ranging insights and outside perspectives, further enhancing management’s ability to maintain fairness. 
The external corporate auditors receive reports from the Board of Directors on the execution of duties and the state of important meetings, such as the Executive Committee meeting, at the Board of Corporate Auditors, as well as on the state of auditing of subsidiaries and on the auditing plans and auditing results of the Internal Auditing Department, and aim to enrich audits through mutual understanding on a daily basis. The external corporate auditors receive reports on the results of the independent accounting auditor’s year-end reviews and audits of the Company’s financial statements for the first to third quarters. They also exchange opinions regarding the Company’s operations as necessary while remaining well versed in a variety of Company-related information.

The Company’s Board of Directors decides on the policy regarding decisions on the content of remuneration for individual directors (hereinafter, the “Decision Policy”), after consulting with the Nomination / Remuneration Committee on its draft policy. Decisions on remuneration for directors are entrusted to the Nomination / Remuneration Committee by the Board of Directors. Remuneration shall be decided within the limits determined by resolution at the General Meeting of Shareholders, after assessing the degree of achievement of management targets, the degree of achievement of targets for individual directors, and the contributions of individual directors to the Company, so that such remuneration serves as a sound incentive to drive sustainable growth. Said remuneration shall be paid periodically in cash and stock. However, external directors are paid remuneration in cash only. 
The Board of Directors has determined that the decisions regarding the content of individual directors’ remuneration are in line with the Decision Policy, because the Nomination / Remuneration Committee made the decision after considering the content from multiple perspectives, including consistency with the Decision Policy.

The Company believes in the need for long-term and amicable relationships with companies related to its business to drive sustainable growth and advances in the core Theme Park business. We maintain cross-shareholdings only in companies deemed to contribute to the deepening of mutual ties and enhancement of our corporate value. We will reduce such cross-shareholdings when said objectives cannot be met over the medium- to long-term.
Every year at the Board of Directors meeting, we carefully examine individual cross-shareholdings in terms of the appropriateness of the purpose for retention, the benefit associated with the holding (asset value, dividends, transactions, etc.), and whether or not the risk is commensurate with the capital cost, to determine the viability of the cross-shareholding.
When exercising voting rights on listed shares held, the Company shall make judgments on each agenda item from the following perspectives.

1. Will the holding enhance the corporate value of the investment target over the medium- to long-term and lead to greater shareholder return?
2. Is there a risk that the holding will significantly damage share prices due to a major violation of laws or regulations, antisocial acts, scandals, or other inappropriate activities committed by the investment target?
3. Has there been significant and prolonged stagnation in performance by the investment target?
4. Is there a possibility that the holding will harm the common interests of shareholders?

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