Corporate Governance

コンテンツ

By improving our corporate value through the realization of our Management Philosophy, and by increasing shared benefit with our stakeholders in the long term, the TOKYO KEIKI group hopes that our shareholders will feel confident in long-term ownership of our shares. Toward this end, we continuously pursue and work to enhance excellent corporate governance.

Concepts of corporate governance

Along with an understanding of the importance of corporate ethics, we recognize that achieving health, transparency, efficiency, and highly agile corporate management is the key point of corporate management systems for the sustainable growth and development of a company and the increase in its long-term corporate value as it responds swiftly to rapid changes in society and the environment—that is, it is the key point of corporate governance. We are enhancing our corporate governance in line with the following basic approaches.

■Relationship with shareholders and other stakeholders

We will respect the rights of shareholders.
We will ensure the equality of shareholders.
We will build positive and smooth relationships with our shareholders and many other stakeholders.
We will properly disclose company information and ensure transparency in our corporate management.

System of corporate governance

Organizational structure

As the organizational structure of our Company under the Companies Act, we have adopted the form of a company with an Audit and Supervisory Committee. We have an Audit and Supervisory Committee in which Outside Directors with independence and neutrality make up a majority of members, and delegate a substantial portion of the Board of Directors’ authority for business execution to Directors. Doing so allows us to separate the oversight and execution of business and engage in speedy decision-making.

Basic policy on the composition of the Board of Directors

Representative Directors, Management Executives (President & CEO, Vice President & Executive Officer, Senior Executive Officer, Senior Managing Executive Officer), and Directors who are not Audit and Supervisory Committee and its Members are appointed with comprehensive consideration of the balance of the Board of Directors overall and whether candidates possess the knowledge, experience, and capabilities required to satisfy diversity.
Directors who are Audit and Supervisory Committee Members are appointed based on comprehensive judgment of whether the candidates possess sufficient knowledge to properly perform the duties of Audit and Supervisory Committee Members. In particular, we include one or more persons who possess sufficient financial and accounting knowledge.
We also strive to appoint Outside Directors with independence and neutrality to at least one-third of Director positions.

Concepts concerning the functions of the Board of Directors and independence

Outside Directors are Directors who are personally and financially independent from the Company and who fulfill the requirements for independent officers established by the Tokyo Stock Exchange, as well as the requirements for outside directors set forth in the Companies Act. Outside Directors make efforts to achieve excellent corporate governance by providing counsel from perspectives differing from those of other Directors. As necessary, they may request submission of internal company materials or explanation and reporting of internal company information from other Directors, Executive Officers, or employees.
Audit and Supervisory Committee Members bear the role of working to establish an effective corporate governance system by overseeing and auditing the execution of duties by Directors. The Audit and Supervisory Committee composed of those members conducts verification of the content of reports received from Directors, Executive Officers, employees, Accounting Auditors, and other parties, as well as investigation of the status of the Company’s business and assets. The Committee enacts necessary measures in a timely manner, including the provision of counsel, recommendations, and other opinions to Directors and suspension of the actions of Directors.

Composition of the Board of Directors

The Board of Directors has three Outside Directors among its six Directors (including three Directors who are Audit and Supervisory Committee Members). Outside Directors consist of two Directors who are Audit and Supervisory Committee Members and one female Director who is not an Audit and Supervisory Committee Member. From Outside Directors, the Board receives candid comments from an external perspective and opinions of benefit to the Company’s management based on the individuals’ abundant experience. By doing so, we are making efforts to enhance the impartiality of our management and strengthen functions for the oversight of decision-making and execution of duties by business executives. Delegating important decisions on business execution to the Representative Director, President & CEO in accordance with the provisions of the Articles of Incorporation and resolutions by the Board of Directors enables swift decision-making in management and agile business execution, and allows the Board of Directors to focus on the oversight of business executives.

Related Committees

The Audit and Supervisory Committee is composed of two Outside Directors and one Internal Director. The Internal Director, as Standing Audit and Supervisory Committee Member, serves as Chair of the Committee. We have also established the Audit and Supervisory Committee Office, with one dedicated staff person and one staff person concurrently holding another position. This office supports auditing work and smooth execution of duties by the Audit and Supervisory Committee.
  The Company has also established a Nomination and Compensation Committee under the Board of Directors to deliberate on proposals for director appointment and compensation. This Committee is chaired by Representative Director, President & CEO Tsuyoshi Ando, with Outside Directors Takashi Nakamura, Sayoko Izumoto, and Akihiko Hashimoto as members.
  As a decision-making body for execution of management by the President & CEO, we have established a Management Conference to deliberate company-wide basic management strategy and its execution. The Management Conference is composed of Standing Directors, Standing Audit and Supervisory Committee Members, Executive Officers, and Company Presidents. The Corporate Ethics Committee, chaired by the Chief Legal Governance Officer, is composed of corporate ethics managers in the Group. It manages corporate ethics activities across the Group, enforces corporate ethics education for directors and employees, and works to prevent violations. We have also established a whistleblowing system as a means of directly providing information on legally suspect actions, and ensure that no disadvantage befalls whistleblowers.
  The Special Committee is composed of Outside Directors and experts including one or more university professors, attorneys, and certified public accountants who have no interest with the Company.
Our Large-scale Purchase Rules (an anti-takeover defense measure), which clearly and specifically indicate procedures that takeover proposers should take prior to executing specific acts of purchase, in principle require judgment by the Special Committee on decisions regarding whether to implement specific measures, to exclude arbitrary decisions by the Company’s Board of Directors.

　Moreover, to promote sustainability management by which our Group seeks to improve the sustainability of our business through consideration of the sustainability of the environment, society, and economy, we established the Sustainability Promotion Office and the Sustainability Committee. At the enter of our Group, the Sustainability Promotion Office plans and promotes measures involving sustainability management. The Sustainability Committee is chaired by the Representative Director, President & CEO and selects members from Internal Directors and Executive Officers. It functions as a meeting body that discusses and shares sustainability management-related policies and measures, and executes decisions without delay across the Group. It also makes proposals on key measures and issues progress reports to the Management Conference and the Board of Directors.

サステナビリティ推進室およびサステナビリティ委員会の設置

承認：エディタ

Approach and Framework to Respect for Human Rights

Formulation of the Human Rights Policy

The TOKYO KEIKI Group believes that one of our most important responsibilities is to respect the human rights of all individuals affected by our business activities in the countries and regions where we operate and to ensure their physical and mental well-being and a safe and secure working environment. We have also deepened the concept of respect for human rights expressed in our Sustainability Policy and have established the TOKYO KEIKI Group Human Rights Policy in accordance with international human rights norms. This policy was deliberated at the Sustainability Committee, resolved by the Board of Directors in March 2025, and has been disclosed outside the Company.
*TOKYO KEIKI Group Human Rights Policy
https://www.tokyokeiki.jp/e/hrpolicy.html

Initiatives in Line with the Human Rights Policy

Initiatives under each item of the TOKYO KEIKI Group Human Rights Policy are promoted under the leadership of the Chief Sustainability Promotion Officer in collaboration with the Chief Legal Governance Officer and the manager of the Human Resources & General Affairs Dept.

Policy for appointment of directors

Policy for appointing Internal Directors who are not Audit and Supervisory Committee Members

In accordance with guidelines outlining seven requirements, the Company appoints Internal Directors who are not Audit and Supervisory Committee Members from among Executive Officers and employees, etc. who have the strong will, abundant experience, high level of insight, and high level of expertise needed to carry out the duties of a director.

Policy for appointing Internal Directors who are Audit and Supervisory Committee Members

In accordance with guidelines outlining six requirements, the Company appoints Internal Directors who are Audit and Supervisory Committee Members from among current (or incumbent) Audit and Supervisory Committee Members, Executive Officers, and employees, etc. who have the strong will, abundant experience, high level of insight, and high level of expertise needed to carry out the duties of a director. We particularly emphasize a deep understanding of matters such as finance, accounting, and internal control, as well as sufficient experience and expert knowledge.

Policy for appointment of Outside Directors

In accordance with guidelines outlining seven requirements, the Company appoints Outside Directors from among persons who possess abundant experience, a high level of insight, and a high level of expertise; persons who possess a practical perspective as an outside company manager or other position; and persons who possess an objective and expert perspective based on a high level of knowledge of global conditions and socio-economic trends.

Skills matrix

In order to verify whether the TOKYO KEIKI Group is furnished with the management capabilities needed to resolve the Group’s challenges, we have outlined in the following table the knowledge and expertise (skills) possessed by all of our Directors in various fields based on two perspectives: items required for the management of a listed company, and matters required per our business activities. The determination of each Director’s skills took into consideration their accomplishments as Directors and Executive Officers in each field as well as their past professional experience.

Skills matrix

As of June 26, 2025

Note: Directors who possess relevant national qualifications: Sayoko IZUMOTO (Certified Public Accountant)
* Independent：Independent officer under the securities listing regulations of the Tokyo Stock Exchange
* Outside：Outside director

Compensation system for directors

Basic policies

The compensation for Directors who are not Audit & Supervisory Committee Members is determined in accordance with the Rules for Directors’ Compensation. Compensation for Directors who are not Audit & Supervisory Committee Members (excluding Outside Directors) is composed of (1) monetary compensation as basic compensation and as additional compensation (performance-linked compensation), and (2) stock compensation as transfer-restricted stock compensation, with the aim of reflecting business performance and sharing value with shareholders. The compensation for Outside Directors who are not Audit & Supervisory Committee Members consists only of the basic compensation under (1) monetary compensation. For both compensation amounts, the Representative Director, President & CEO receives a Memorandum on Director Compensation from the Committee and, based on this, finally determines and proposes compensation amounts to be resolved by the Board of Directors.
Compensation for Audit & Supervisory Committee Members, consisting of only basic compensation in the form of monthly fixed compensation, is determined through deliberation by Audit and Supervisory Committee Members on the basis of members’ roles, duties, and categorization of standing or non-standing status, within the total amount determined at the General Meeting of Shareholders.

Monetary Compensation

A basic compensation proposal for each director who is not an Audit and Supervisory Committee Member is made by the Representative Director, President & CEO, referencing the necessary information on director compensation allowing comparison with the Company, obtained through sources including surveys on trends in director compensation. Once basic compensation has been determined, amounts may be reduced in consideration of matters including the Company’s current business situation.
For performance-linked compensation, which is provided as additional compensation, the Representative Director, President & CEO consults in advance with the Representative Director in accordance with the criteria prescribed in the Rules for Directors’ Compensation for determining whether the performance-linked compensation should be paid or not (such as consolidated operating income not having decreased by a certain percentage compared with the initial forecast and the previous fiscal year, profit attributable to owners of the parent being at or above a certain level, dividends not having been reduced compared with the initial forecast or suspended, and ROE not having declined by more than a certain percentage from the initial forecast), and determines whether or not performance-linked compensation will be paid. After the decision to pay performance-linked compensation has been made, the amount of said compensation is calculated and proposed in accordance with the following procedure.

Compensation Calculation Formula

Individual payment amount = Consolidated operating income for the fiscal year under evaluation x Performance-linked compensation coefficient for each position x Premium rate

Stock Compensation

The Company sets and pays monetary compensation credits for each eligible Director by multiplying the basic compensation amount by a coefficient corresponding to their respective position. Each eligible director receives an allocation of transfer-restricted stock through the granting of all monetary compensation credits as in-kind contribution. The paid-in amount of the transfer-restricted stock is determined by the Company’s Board of Directors within an extent that is not overly advantageous to the receiving directors, based on the closing price of the Company’s common shares on the Tokyo Stock Exchange on the business day prior to resolution by the Board of Directors concerning issuance or disposal of the stock (or, if no transactions took place on said business day, the closing price on the most recent trading day).
Similar transfer-restricted stock is also allocated to the Executive Officers of the Company and Representative Directors of subsidiaries of the Company.

Amount of compensation by officer category

Officer category	Total amount of compensation, etc. (million yen)	Total amount by type of compensation, etc. (million yen)			Number of eligible officers
Officer category	Total amount of compensation, etc. (million yen)	Basic compensation	Transfer-restricted stock compensation ^{(Note 1)}	Performance-linked compensation	Number of eligible officers
Directors who are not Audit and Supervisory Committee Members (excluding Outside Directors)	70	50	10	10	2
Directors who are Audit and Supervisory Committee Members (excluding Outside Directors)	17	17	-	-	1
Outside Directors	19	19	-	-	4

Notes 1. The total amount of compensation, etc. is the amount of monetary compensation credits paid under the transfer-restricted stock compensation system.
2. The total amount of the above compensation, etc. for Directors does not include amounts equivalent to the employee salaries of Directors who serve concurrently as employees.