Corporate Governance

Corporate Governance Corporate Governance at the Mabuchi Group The management principle of the Mabuchi Group — ● To clearly separate management decision-making and efficient business "Contributing to international society and continuously execution, and to clarify the scope of accountability increasing our contribution" — sets out the reason for ● To build and operate a sound internal control system our existence in the small DC motor business. Corporate ● To appoint a suitable number of independent corporate officers whose governance at the Mabuchi Group operates through an interests do not conflict with those of general shareholders, to ensure the organizational design, a system of Management Markers, objectivity and neutrality of management supervision functions and business policies that help us practice the Management ● To foster a corporate culture in which all Group employees recognize Principle each and every day. The essential purpose of and share the understanding that the practices of corporate ethics corporate governance is to increase benefits sustainably to all and compliance support the organization’s social impartiality and are stakeholders, including shareholders, through achieving profits fundamental to living up to the trust and expectations of all stakeholders and improving corporate value. As a listed company, Mabuchi ● To disclose corporate information to stakeholders such as all shareholders in an appropriate, fair, timely and clear manner and to ensure accountability Motor believes fully and strongly in the mission-critical mandate through the Board of Directors, the Audit & Supervisory Committee and of sound corporate governance. other bodies Corporate Governance Structure As an organizational design under the Companies Act, Mabuchi Motor has adopted the system of a company with an Audit & Supervisory Committee. Further, in order to clarify the decision-making and supervisory functions of management and the functions of business execution, we introduces the Executive Officer System. The Board of Directors and its members are responsible for the decision-making and supervisory functions, and each executive officer is responsible for the business execution function. General Meeting of Shareholders Appoint/Dismiss Appoint/Dismiss Appoint/Dismiss Audit/ Consult/ Liaise Supervise Report Independent Auditors Audit & Supervisory Board of Directors Nominating Committee Committee Directors and Audit & Supervisory Committee Members Remuneration Assistance Command Committee Audit & Supervisory Liaise Supervise Report Committee Department Direct Internal Audit Department Representative Directors Liaise Report Liaise Consult Accounting Audit Internal Reporting System COO Meeting (Executive Managing Officers) Execute Company Departments (Responsible for Compliance) Internal Audit Subsidiaries (One Director in Charge of Compliance) Composition and Roles of Each Body Outside Outside Outside Director Director Director (M) Director (F) (F; Non-Japanese) Organi- Board of Directors Audit & Supervisory Committee Nominating Committee Remuneration Committee zation Com- Chairman Chairman Chairman Chairman position 13 (Internal: 7, Outside: 6) 4 (Internal:1, Outside: 3) 4 (Internal:2, Outside: 2) 4 (Internal:2, Outside: 2) • A ppointing and dismissing directors, • Su pervising directors' execution of their • Deliberating on matters related to the • Deliberating on policies related to executive officers, and associate directors duties appointment and dismissal of directors, decisions on the remuneration, etc. of • Determining the remuneration of • Advising the appointment, remuneration, executive officers, and associate directors directors, executive officers, and associate directors, executive officers, and associate and other matters regarding directors who and reporting the results of these directors who are not Audit & Supervisory Role directors who are not Audit & Supervisory are not Audit & Supervisory Committee deliberations to the Board of Directors Committee members, the remuneration, Committee members members etc. of individuals, and others, and • Ma king important decisions on the • E xercising authority on the appointment, reporting the results of these deliberations execution of business dismissal and remuneration of to the Board of Directors independent auditors 65 Members of Each Institution ◎ : Chairman Audit & Supervisory Nominating Remuneration Position Name Board of Directors Committee Committee Committee Representative Director CEO Hiroo OKOSHI ◎ ○ ○ Representative Director COO Masato ITOKAWA ○ ○ ○ Director Hirotaro KATAYAMA ○ Director Shinichi TANIGUCHI ○ Director Tadahito IYODA ○ Director Takashi KAWAMURA ○ * Outside Director Naoki MITARAI ○ ◎ ◎ Outside Director Kazuhiko TSUTSUMI ○ ○ Outside Director Jody L. ONO ○ ○ Director (Full-time Audit & Supervisory Committee) Kazuyuki SOMEYA ○ ○ Outside Director (Audit & Supervisory Committee) Takashi ASAI ○ ◎ Outside Director (Audit & Supervisory Committee) Kyoko UEMURA ○* ○ * Outside Director (Audit & Supervisory Committee) Yoko TOYOSHI ○ * ○ * (Note) The director with an asteri sk(*)is newly appointed at the General Meeting of Shareholders in March 2021. The attendance rate of reappointed directors from the date of the general meeting of shareholders in March 2020 to the day before the general meeting of shareholders in March 2021 is 100%. Board of Directors The Board of Directors consists of 13 members, 7 internal directors and 6 independent outside directors. In accordance with laws and regulations, the Board makes important business execution decisions and reports on the status of key business operations and results. Matters decided by the Board of Directors are moved into business execution of through the Representative Director and each Executive Officer. The Board of Directors meets regularly once a month and as appropriate. Independent outside directors recognize that they are responsible for oversight of and advice to management at the Board of Directors meetings, and contribute to ensuring and improving management transparency. Evaluating the Effectiveness of the Board of Directors Since 2016, we have analyzed and assessed the effectiveness of our Board of Directors with the goal of enhancing corporate governance and our corporate value. Based on the results of the assessment, we discuss ways to improve Board effectiveness and governance. Evaluation method Results of the evaluation (2020) Future initiatives • Participants: All directors The evaluation results confirmed the Board of We are working to further improve (including Audit & Supervisory Directors’ effectiveness, noting that: Board effectiveness through the Committee members) • The company has an established and well- following actions: • Method: Anonymous functioning system for rigorous management • Providing more explanations questionnaire. Survey decision-making and the diligent supervision of and information to outside responses collected and business execution. directors about important evaluation report prepared. • Directors, including outside directors, discuss and mattersand strategic issues, such Discussions held with exchange opinions actively. as medium- and long-term plans all directors, including • Meetings are conducted in a way that is and budgets, to increase their independent outside officers, appropriate for the diverse composition of the understanding prior to Board at the Board of Directors‘ Board of Directors. Information is provided and meetings. meeting. understanding ensured, especially to and among • Making changes to meeting outside directors. structure and implementation that meet the needs of a more diverse Board composition. 66 Corporate Governance Skill Matrix for Directors HR Labor Corporate Global Corporate Internal Legal Finance / Management Business / Technology / Purchasing / Name Management Experience Planning / Control / Affairs / Risk Accounting / HR Sales Quality Production Experience Strategy Governance Management Development Hiroo OKOSHI ○ * ○ ○ ○ ○ ○ ○ ○ ○ Masato ITOKAWA ○ ○ ○ ○ ○ ○ ○ Hirotaro KATAYAMA ○ * ○ ○ ○ ○ ○ ○ ○ ○ Shinichi TANIGUCHI ○ * ○ ○ ○ ○ Tadahito IYODA ○ * ○ ○ ○ ○ ○ ○ ○ ○ Takashi KAWAMURA ○ ○ ○ ○ ○ Naoki MITARAI ○ ○ ○ ○ ○ ○ Kazuhiko TSUTSUMI ○ ○ ○ ○ ○ Jody L. ONO ○ ○ ○ Kazuyuki SOMEYA ○ * ○ ○ ○ ○ Takashi ASAI ○ ○ ○ ○ Kyoko UEMURA ○ ○ ○ Yoko TOYOSHI ○ ○ ○ (Note) An asterisk(*) indicates a person who has experience as president of the Company and Group companies. Training for Directors We provide the training opportunities necessary for Directors to fulfill their roles and responsibilities. In order to deepen outside directors’ understanding of our business issues, we provide them with the necessary information and input from our internal departments and units, as well as opportunities to visit our overseas bases (including remotely). Board of Directors: Outside Directors Mabuchi Motor appoints outside members to its Board of Directors who are professionals from diverse backgrounds and fields, including law, academia, finance and accounting, and (other companies in) the private sector. We select people who bring different perspectives to our company. From them, we expect and value insights that are both high-level and experience-based. Audit & Independent Name Supervisory Field Professional Profile Officer Committee Served for many years in corporate management as an executive officer of Hitachi, Ltd. and Naoki MITARAI - ● Private sector its group companies. Offers a wealth of experience and insight into global management systems and

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