Enhancing the Effectiveness of Corporate Governance

The Evolution of Chori’s Corporate Governance

Evaluation of the Effectiveness of the Board of Directors

Chori conducts an evaluation of the effectiveness of the Board of Directors each year in order to realize a more effective Board of Directors. The evaluation process involves conducting a questionnaire with all directors on the composition, operation, discussions, and support system of the Board of Directors and then compiling the views of each director. Based on the results of the questionnaire, the Governance Committee and the Board of Directors evaluate and analyze the effectiveness of the Board of Directors as a whole. Through this process, it was determined that the Board of Directors is composed of suitably qualified members that include outside directors, and the Board of Directors’ meetings are held in a free and open environment that facilitates constructive discussions and the exchange of opinions. Accordingly, it has been deemed that the Board of Directors is operating appropriately on the whole and that its effectiveness is ensured.

Respondents
All eight directors (including those who are Audit & Supervisory Committee members) in fiscal 2022 (anonymous questionnaire)
Method of Evaluation and Analysis
Evaluation and analysis conducted by the Governance Committee and the Board of Directors upon aggregation of results by a third-party institution and ensuring confidentiality
Questionnaire Content

Questions are based on the following nine major themes

  • Composition of the Board of Directors
  • Operation of the Board of Directors
  • Discussions of the Board of Directors
  • Monitoring function of the Board of Directors
  • Support system for directors (including those who are Audit & Supervisory Committee members)
  • Training
  • Dialogue with shareholders (investors)
  • Individual initiatives
  • General overview
Overview of Evaluation Results
In our medium-term management plan, we have adopted ROE and ROIC as key performance indicators of profitability and capital efficiency, which were viewed as issues in fiscal 2021, and set the ROIC for the fiscal 2025 plan at approximately 10% with the aim of increasing corporate value. Although the status of dialogue with shareholders and investors is reported to the Board of Directors by the director in charge of investor and public relations, directors expressed the desire for more detailed feedback on the content of dialogues on a regular basis. In following up on the progress of our medium-term management plan, we will promote further discussions on the management and business issues that are identified going forward in order to continue to enhance the effectiveness of the Board of Directors.