Management Structure

Corporate governance structure and the reasons for adopting such a structure

To strengthen the management transparency and oversight function of the Board of Directors, Chori has an Audit & Supervisory Committee in place, the majority of which consists of outside directors.
At Board of Directors’ meetings, the directors (including those who are Audit & Supervisory Committee members) engage in lively and full discussions and deliberations from an open and independent perspective on the supervision of decision-making and business execution. The Board also consists of two outside directors who are Audit & Supervisory Committee members, both of whom audit the legitimacy and appropriateness of business execution objectively and rationally. The Company therefore believes that the Board of Directors is sufficiently fulfilling its management supervisory function. Moreover, to ensure a results-centered approach, the Company has set the term of office of directors (excluding those who are Audit & Supervisory Committee members) and executive officers at one year and has established a management structure that can promptly respond to changes in the business environment.

Corporate Governance Structure (As of December 26, 2023)
Composition and Overview of the Board of Directors, Executive Committee, and Other Principal Committees
Name Description Number of meetings held in fiscal 2022
1 Board of Directors The Board of Directors consists of all directors and has been positioned as the committee responsible for making strategic decisions and overseeing the Company’s operations. The Board of Directors meets at least once a month, in principle, to make decisions on important management matters and to supervise the directors’ execution of duties. 16
2 Executive Committee The Executive Committee consists of executive officers and those who were approved by the Board of Directors and was established as an organization for conducting discussions and exchanging important information and opinions on matters related to business execution. 26
3 Audit & Supervisory Committee The Audit & Supervisory Committee convenes regularly once a month to discuss matters related to management conditions and audit results upon the exchange of information with outside directors. In addition to attendance at important meetings of the Board of Directors, directors who are Audit & Supervisory Committee members conduct individual meetings with those in charge of the Sales Department and Corporate Planning Divisions to make decisions on important management-related matters (including on their process) and sufficiently audit and monitor the appropriateness of the execution of duties by each director (excluding those who are Audit & Supervisory Committee members) and executive officer. 15
4 Governance Committee The Governance Committee aims to enhance the Company’s corporate governance structure in order to strengthen the independence and objectivity of the functions and accountability of the Board of Directors regarding director nomination, remuneration,
etc., and to protect the interests of minority shareholders.
5
5 Legal Compliance Committee The Legal Compliance Committee is chaired by the president, CEO & COO and consists of the general manager of the Corporate Planning Division, the heads of corporate divisions, and other members. The committee deliberates on important compliancerelated issues and reports the results to the Board of Directors and the Executive Committee as necessary. 6
6 Business Investment Committee Chaired by the president, CEO & COO, the Business Investment Committee discusses and deliberates the appropriateness of risk–return assessments and plans and the feasibility of important investments and financing. 3
7 M&A Promotion Committee The M&A Promotion Committee is chaired by the general manager of the Corporate Planning Division and consists of the general manager of the Sales Department and other members. The committee deliberates on and examines matters pertaining to the business portfolio of Group companies, including M&A and the Group’s medium- to long-term management plan, from the perspective of improving consolidated management. 1

Committee Members

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Committee chair
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Committee member
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Nonmember attendee
Name Position Fiscal 2023 Committees and Committee Members
Board of Directors Executive Committee Audit & Supervisory Committee Governance Committee Legal Compliance Committee Business Investment Committee M&A Promotion Committee
Kazuo Sakihama President, CEO & COO,
President and Executive Officer
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-
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Tatsuyuki Sakoda Director,
Managing Executive Officer
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- -
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Kazuhiro Tohge Director, Executive Officer
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- - - - -
Kazuhiko Shuto Director
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- - - - - -
Hiroko Noda Outside Director
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- - -
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- -
Shigemasa Yabu Director, Full-Time Audit &
Supervisory Committee Member
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-
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- -
Masaaki Sawano Outside Director, Audit &
Supervisory Committee Member
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-
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- -
Hiromasa Suzuki Outside Director, Audit &
Supervisory Committee Member
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-
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△
- -

Diversity of the Board of Directors

Directors
Name Gender Length of Service*1 Area of Expertise and Experience
Independent Director (Outside) Corporate Management Global Business Finance & Accounting Legal & Compliance
Kazuo Sakihama male 10 years  
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Tatsuyuki Sakoda male 1 year  
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Kazuhiro Tohge male 5 years  
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Kazuhiko Shuto male Newly appointed  
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Hiroko Noda female 1 year
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  1. *1Indicates number of full years of service as of June 16, 2023.
Directors Who Are Audit & Supervisory Committee Members
Name Gender Length of Service*1 Area of Expertise and Experience
Independent Director (Outside) Corporate Management Global Business Finance & Accounting Legal & Compliance
Shigemasa Yabu*2 male 1 year      
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Masaaki Sawano male 5 years
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Hiromasa Suzuki*3 male 1 year
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  1. *1Indicates number of full years of service as of June 16, 2023.
  2. *2Shigemasa Yabu served as a director of the Company for six years prior to concurrently serving as an Audit & Supervisory Committee member.
  3. *3Hiromasa Suzuki served as a director of the Company for one year prior to concurrently serving as an Audit & Supervisory Committee member.

Maintenance of a Certain Level of Independence from Our Parent Company

As of September 30, 2023, TORAY INDUSTRIES, INC., Chori’s parent company, owned 52.48% of its voting rights. We aim to create synergies by developing a stronger connection between TORAY INDUSTRIES’ material development capabilities and Chori’s information gathering and sales capabilities in its core Fibers, Textiles, and Garments and Chemicals businesses in Japan and overseas, thereby increasing the corporate value of both companies. As a member of TORAY INDUSTRIES’ corporate group, Chori enjoys many benefits, such as the ability to accurately assess market trends and the business environment as well as strong credibility.
With the exception of one director, Chori’s executives and employees do not concurrently serve as executives or employees at its parent company or Group companies and the Company does not accept employees through transfers from other companies. Moreover, at Chori we have our own management plan in place, through the execution of which we have developed and will continue to develop our business.

To promote sustainable growth and enhance corporate value, Chori and TORAY INDUSTRIES, INC., have formed an agreement to implement the following:

  1. 1Verify the appropriateness of the Company maintaining its listed status
  2. 2Execute appropriate transactions between the Company and TORAY INDUSTRIES, INC.
  3. 3Ensure the effectiveness of corporate governance that considers the interests of the Company’s general shareholders
  4. 4Execute proper risk management for the TORAY Group (including prior consultations on specific matters regarding corporate governance and internal controls)

Based on strict adherence to the abovementioned agreement, we have determined that the Company’s operational independence from its parent company is sufficiently maintained.