Directors

In order that the Board of Directors may fulfill its roles and duties effectively, the Company aims for the Board to be composed of members who have experience and knowledge in the areas of corporate management, business promotion, and strengthening of business foundation. When nominating candidates for outside director, the Company aims to achieve a composition of people with experience such as a corporate manager and with specialist knowledge in areas such as finance and accounting, or law and compliance.

(Notes)
1. The above table lists up to three of the skills possessed by the directors, and does not show all of the skills they possess
2. “Management Experience” means experience and knowledge that provides the basis for strategic thinking aimed at achieving sustainable improvements in corporate value over the medium to long term.
3. “Knowledge of the Medical Device Industry” means experience and knowledge that provides the basis for comprehensive decision-making in the rapidly changing medical device industry
4. “Sales/Marketing” means experience and knowledge that provides the basis for formulating competitive sales strategies in the medical device industry
5. “R&D/Manufacturing/Medical Affairs” means experience and knowledge that provides the basis for formulating competitive product strategies in the medical device industry.
6. “Finance/Accounting” means experience and knowledge that provides the basis for making decisions in relation to corporate and business activities.
7. “Legal Affairs/Compliance” means experience and knowledge that provides the basis for taking advantage of opportunities and managing risk in relation to corporate and business activities.
8. “Personnel Affairs/Human Resource Development” means experience and knowledge that provides the basis for securing and utilizing management resources in relation to corporate and business activities.
9. “DX/IT” means experience and knowledge that provides the basis for reforming business processes in relation to corporate and business activities.

After the Nomination and Remuneration Advisory Committee deliberates on director candidates based on the following appointment criteria, the Board of Directors decides on the candidates based on the report from the Nomination and Remuneration Advisory Committee and proposals for appointments are presented during the General Shareholders Meeting. For director candidates who are members of the Audit and Supervisory Committee, prior consent by the Audit and Supervisory Committee shall be obtained to be considered as a director candidate.

If during a director’s term of office it is recognized that any of the predetermined criteria for dismissal are met, the Nomination and Remuneration Advisory Committee will deliberate on the matter, and upon receipt of the Committee’s report, the Board of Directors will make a decision and initiate procedures for dismissal by resolution at the General Shareholders Meeting.

Appointment Criteria

・Excellent personality and insight, and high ethical standards
・Able to make appropriate decisions regarding overall management
・Able to objectively analyze and make judgments from a company-wide perspective
・Excellent foresight, insight, and leadership
・Audit and Supervisory Committee Member candidates must have the knowledge, experience, and expertise necessary for conducting audits

Upon appointing outside directors, we judge based on our criteria for determining the independence of outside directors, which follows the criteria for independence set forth by the Tokyo Stock Exchange. We recognize our independent directors meeting these standards can perform their duties as outside directors from an independent standpoint.

With regards to outside directors who are not members of the Audit and Supervisory Committee, we selected them based on the belief that appointing individuals with a wide range of insight and extensive experience in corporate management will ensure objectivity and transparency in our decision-making and supervision of business execution.

With regards to outside directors who are members of the Audit and Supervisory Committee, we selected them because they are capable of strengthening the corporate governance of the Company by conducting audits and supervision based on their broad insight and abundant experience in their respective areas of expertise as lawyers or tax accountants.

We judge outside directors are independent with no risk of conflicts of interest with general shareholders if they do not fall under any of the following items.

1. Persons who have been executive directors, executive officers, or other employees. (hereinafter referred to as "Business Executors") of the Company or its subsidiaries (hereinafter referred to as "the JLL Group") at present or in the past 10 years

2. Persons or any company’s Business Executors who have the JLL Group as a major business partner with the amount of transactions with the JLL Group in the most recent fiscal year more than two percent or more of such persons’ or Business Executors’ consolidated net sales

3. Major business partners of the JLL Group or their Business Executors with the amount of transactions with such business partners in the most recent fiscal year more than two percent or more of the JLL Group’s consolidated net sales

4. Major lenders or their Business Executors to the JLL Group with the amount of the JLL Group’s borrowings from such lenders exceeding two percent of the JLL’s consolidated gross asset

5. Consultants, accounting experts, or legal experts who receive a large amount of money* or other property from the JLL Group other than remuneration for their services as directors (if the person receiving such property is a corporation, the person belonging to such corporation.) (Note: the amount is judged as large if the amount of money or other assets exceeds, on average, 10 million yen per year for an individual, or two percent of the consolidated net sales of a corporation, for the past three fiscal years)

6. A person or Business Executors of a corporation who hold 10 percent or more of the total voting rights of the Company

7. Business Executors of companies that have directors (whether full-time or part-time) from the JLL Group

8. Persons or any organization’s Business Executors that have received donations or grants from the JLL Group more than 10 million yen per year in the most recent fiscal year.

9. The accounting auditor of the JLL Group or a person belonging to an auditing firm that is the accounting auditor of the JLL Group

10. Those who have fallen under any of 2 to 9 in the last one year

11. Close relative (spouse or relative within the second degree) of a person who falls under any of 1 through 9 (limited to a person in an important position such as directors other than outside directors, executive officers, or officers with equivalent authority)

The Nomination and Remuneration Advisory Committee discusses the succession plan for the CEO. With regard to the development of candidates for succession, the President and CEO takes the initiative in providing opportunities for candidates to accumulate knowledge and experience through personnel transfers, assignments of high managerial importance, and other measures, and the Nomination and Remuneration Advisory Committee confirms the process. In addition, the Nomination and Remuneration Advisory Committee confirms the status of candidate development by conducting a multifaceted evaluation of successor candidates annually

In order to ensure objectivity and transparency in the remuneration determination process, the NRA (Nomination and Remuneration Advisory) Committee deliberates on the basic policy for remuneration, composition, and amount of remuneration of directors, and the Board of Directors decides based on the report from the Nomination and Remuneration Advisory Committee.

Basic Policy of Remuneration for Directors

1. Provide appropriate incentives for achieving performance targets
2. Provide a competitive remuneration level that will lead to the recruitment of excellent human resources
3. The amount of remuneration should lead to the enhancement of corporate value over the medium- to long-term
4. The process of determining remuneration should be highly objective and transparent

The remuneration for directors is composed of fixed remuneration, performance-linked bonuses, and performance-linked stock remuneration (Directors’ remuneration BIP trust). In addition to fixed monetary remuneration, we have adopted performance-linked bonuses as monetary remuneration linked to short-term performance and performance-linked stock remuneration as an incentive for medium- to long-term improvement of corporate value. In addition, for directors who are Audit and Supervisory Committee members and outside directors, we will only provide fixed remuneration, considering their roles and level of independence from the Company.

We have reviewed the remuneration structure for directors and partially revised the remuneration for directors (excluding those who are Audit and Supervisory committee members) effective from the fiscal year ending March 31, 2024. This revision is due to the resolution at the 43rd regular shareholders' meeting to revise the amount and details of performance-linked stock remuneration (Directors’ remuneration BIP trust) for directors, and the resolution at the meeting of the Board of Directors held after the said meeting to partially revise the remuneration policy for directors, including the method of determining the percentage of remuneration and the amount of performance-linked bonuses to directors (excluding those who are Audit and Supervisory committee members).

Remuneration for Directors

The ratio of performance-linked remuneration to the total amount of remuneration is approximately 80% for fixed remuneration and 20% for performance-linked remuneration in the case of a standard level of performance achievement, as an average of the eligible directors. The ratio of non-monetary remuneration to total remuneration is, on average, 90% for monetary remuneration and 10% for non-monetary remuneration.

Remuneration by Director Category (FY3/2024)

(Notes)
1. The above includes one director who retired due to expiration of term of office and resigned at the conclusion of the 43rd general shareholders' meeting held on June 28, 2023.
2. In addition to the total amount of the above remuneration, based on the resolution of the 37th general shareholders' meeting held on June 28, 2017, we have paid 2 million yen as a retirement bonus to one retiring director. This amount includes 2 million yen set aside for retirement bonuses disclosed in the business report of the previous fiscal year.

To ensure that directors appropriately fulfill their roles and responsibilities, we strive to provide them with information. Prior to the Board of Directors meetings, we distribute materials in advance and offer opportunities for outside directors to be briefed on agenda items, thereby stimulating discussions during the meetings.

For director training, upon appointment, we provide opportunities for external training to understand the roles and responsibilities required of directors. We conduct annual training sessions for directors and support them by covering the costs necessary to acquire the knowledge needed to perform their duties. Additionally, we organize factory tours and business briefings as training for outside directors, offering opportunities to deepen their understanding of Japan Lifeline.