Corporate Governance
CORPORATE GOVERNANCE
March 27, 2024
Frontier Management Inc.
Shoichiro Onishi representative director
Contact:

Company Planning Division 03-6862-8335

The status of our corporate governance is as follows.

I. Basic Views on Corporate Governance, Capital Structure, Corporate Attributes, and Other Basic Information
1.Basic policy
In order to continuously increase our corporate value, we recognize the importance of accelerating decisionmaking to improve management efficiency, while at the same time strengthening risk management inmanagement.
We are a company with a board of directors and a company with an audit and supervisory committee. We monitor
management risks through the board of directors and audit and supervision by the Audit and Supervisory
Committee, and through audits by the Internal Audit Office, we strive to ensure thorough compliance andstrengthen self-purification capabilities.
Through these measures, we will ensure the effectiveness of corporate governance and further enhance ourgroup's business management organization.

[Reasons for not implementing each principle of the Corporate Governance Code]We are continuously implementing initiatives to strengthen corporate governance, and we believe that we aresatisfying all of the principles of the Corporate Governance Code.

[Disclosure based on each principle of the Corporate Governance Code][Principle 1-4] (Policy for holding policy shareholdings and voting rights exercise criteria)
We do not currently hold any listed shares as strategic shareholdings.
If we decide to hold listed shares for the purpose of strategic holding in the future, we will examine whether itwill contribute to enhancing the corporate value of our group from a medium-to long-term perspective, taking
into account our business strategy, business relationships, and other factors. Depending on the results, we willtake measures such as reducing the number of shares held. We plan to disclose the details of the verification ina timely and appropriate manner in a manner that contributes to the interests of shareholders. In addition, withregard to the exercise of voting rights related to strategic shareholdings, we plan to formulate specific standards
from the perspective of enhancing the corporate value of our group, and disclose them appropriately in a mannerthat contributes to the interests of shareholders.

[Principle 1-7] (Procedures and Monitoring System for Transactions between Related Parties)
When we engage in transactions (including conflicts of interest transactions) with related parties, such as our1Corporate Governance
CORPORATE GOVERNANCE
executives and major shareholders, we pay attention to ensuring that such transactions do not harm the interestsof the Company and the common interests of shareholders. In addition, in order to implement legal procedures,
including the Companies Act, the Board of Directors approves and reports the implementation of suchtransactions.

[Replenishment Principles 2-4①] (Securing diversity by promoting women, foreigners, and mid-career
recruitments to managerial positions)(1) Approach to Securing Diversity
In order to continue to seize the diversifying needs of our customers and establish a position as a pioneer
company that opens up the future of our clients with expertise and diverse solutions, we are working to develop
a work environment that makes maximum use of the characteristics and abilities of our core human resources
and to acquire management skills, while securing human resources with diverse attributes, sensibilities andvalues, such as women, foreigners and mid-career recruits with various career backgrounds.
In August 2022, we established DE&I Promotion Committee as an institution to exchange views and consider
measures with the aim of realizing a workplace where the individuality of employees can be utilized andfostering an organizational culture with vitality, and we are proceeding with discussions.

(2) Voluntary and measurable targets to ensure diversity and the status thereof<Promotion of female managers>
As of the end of December 2023, female employees accounted for 24.7% of our employees (compared to 21.9%
in the same period of the previous fiscal year) and female employees accounted for 6.8% of our employees inmanagement positions (compared to 6.9% in the same period of the previous fiscal year). We believe that
promoting diversity within the company, including promoting the active participation of women, is an importantmeasure to ensure our sustainable growth.
We will promote the creation of an environment in which women can play an active role, and will increase thenumber of female employees involved in management decision-making in the future while supporting theautonomous growth of employees.

<Target>Target 1: Increase the ratio of female workers among employees to 30% or more (target for fiscal 2026).
Target 2: Increase the ratio of female workers in managerial positions to 15% or more (target for fiscal 2026).

<Promotion of foreigners to managerial positions>
We have been continuously recruiting foreign nationals, and now have 25 employees, six of whom are active inmanagement positions.
At this time, we have not set a target for the ratio of foreign managers, but we will continue to recruit foreign
human resources and promote them to managerial positions in order to expand our business domains byacquiring cross-border projects, create new businesses, and secure a competitive advantage.
2

Corporate Governance
CORPORATE GOVERNANCE<Promotion of mid-career recruits to management positions>
At present, our managers are occupied by mid-career recruitments.
We will continue to actively recruit and train mid-career employees based on our policy of securing management
personnel and professional personnel and strengthening the diversity of women and foreigners.

(3) Human Resource Development Policy and Internal Environmental Development Policy for Securing
Diversity, and Status
We recruit employees by job category and provide an environment that maximizes the capabilities of individual
employees. We also support multifaceted career development by utilizing a system that allows employees toswitch to other job types if they wish.
With regard to improving the internal environment, we are promoting work style reforms to create a work
environment that is conducive to diverse human resources by appropriately managing and limiting working
hours, reviewing our personnel system, further enhancing employee benefits, and providing thoroughharassment education.

[Principle 2-6] (Exercise of corporate pension fund's function as asset owner)
We do not have a defined benefit pension plan and have a company defined contribution pension plan. As aresult, we are not involved in, and do not plan to, invest in the funding of the corporate pension plan as the asset
owner.

[Principle 3-1] (Enhancement of Information Disclosure)(i)Corporate goals (management philosophy, etc.), corporate strategy and corporate planningManagement philosophy and plans are disclosed on our website, medium-term management plan, and financial
results briefing materials.

(ii)Basic Policy on Corporate GovernanceOur basic approach to corporate governance is described on our website, this report, etc.

(iii)Policy and Procedures for Determining Remuneration of Directors, etc.
When determining director compensation, in order to increase transparency and fairness, based on the policies
described in II1 of this report, the Nominating and Compensation Advisory Committee first deliberates, decides
the draft of individual director compensation, and reports to the Board of Directors. The Board of Directors thendeliberates the draft submitted by the Nomination and Compensation Advisory Committee and determines theindividual compensation of each director.

(iv)Policies and Procedures for Election, Dismissal, and Nomination of Candidates for Director
This report is as described in [Supplemental Principles 4-11①].
3

Corporate Governance
CORPORATE GOVERNANCE(v)Explanation on the appointment, dismissal, and appointment of candidates for directors
When nominating candidates for Directors, the reasons for individual election and dismissal shall be disclosed
to the notice of convocation of the general meeting of shareholders.

[Replenishment Principle 3-1③] (Initiatives regarding Sustainability)(1)Initiatives for the Company's Sustainability
Our Group has been working to contribute to the enhancement of corporate value and the building of asustainable society by providing diverse solutions tailored to the business phases of our customers, such as
consulting, M&A, management staffing, and revitalization support, to domestic and overseas companies throughteams of specialist groups. To contribute to the sustainability of our entire Group more than ever before, we haveestablished the "Basic Policy on Sustainability" and the "Material Issues for Sustainability (Materiality)" that
our Group should prioritize, and have established the "Sustainability Promotion Committee."<Basic Sustainability Policy>
Since its foundation, our group has been operating under the management philosophy of "Contributing to theinterests of clients," "Contributing to the interests of stakeholders," and "Contributing to society."
Our Group will gather the wisdom of our diverse professionals and contribute to a prosperous global
environment and a sustainable society by helping our customers solve their management issues. At the sametime, we will realize the sustainable growth and development of our Group.

<Material Sustainability Issues (Materiality)>
In view of the fact that "human capital" is the core of the Group's management resources, the first important
theme is "establishment of diversity and expertise in human resources." Our second important theme is to use
human capital to "contribute to the transition of society and business." In addition, in order for our Group
itself and our client companies themselves to grow, we have identified "strengthening corporate growth andresilience" as a third important theme, and we have established important issues (materiality) in accordancewith these three important themes.
Our group will contribute to a sustainable global environment and society by tackling these important issues,and strive for further growth of our group. We believe that the growth of our group will have a positive effecton the enhancement of human capital.

Important theme

Material Issues (Materiality)①Deepening Diversity and Acceptance②Continued investment in human capital

Establishing Human Resource Diversity and③Development and development of management

Expertisepersonnel④Contributing to a society where people can4Corporate Governance
CORPORATE GOVERNANCE
play an active role by making the most of theirindividuality⑤Fostering business ethics
Contributing to the Transformation of Society and⑥Promote the transition to a carbon-free,Business Ideals

recycling-oriented society⑦Contribution to Regional Revitalization⑧Enhance the long-term value of clientcompanies

Strengthening Corporate Growth and Resilience⑨Pursuing a Sound Governance System<Sustainability Promotion System>
We have established the Sustainability Promotion Committee to deliberate on action plans and targets forimportant sustainability issues (materiality), manage their progress, discuss matters related to the disclosure ofsuch information, and issue business instructions, and regularly report and make proposals to the Board of
Directors.

・Verification and proposals from a sustainability perspective regarding the Group's management policies andbusiness strategies
・Determination of policies for dealing with key issues (formulation of KPI)・Formulation of annual activity plans based on response policies and confirmation of progress (reports andproposals to the Board of Directors)
・For TCFD items, in addition to the items examined by the Risk Management Committee, company-wide risk
management and cooperation are implemented.
・Formulation of information disclosure content related to the Group's sustainability initiatives

The Sustainability Promotion Committee is chaired by Shoichiro Onishi, President and Chief Executive Officer,
and is composed of the chairs of major organizations.

<Initiatives for TCFD>Our Group will contribute to climate change by promoting the reduction of greenhouse gas emissions and the
reduction of environmental impact, while at the same time, supporting client companies in their transformation
to a new business model in order to build a sustainable global environment and society.
We disclose information related to climate change on our website based on TCFD framework of Governance,
Strategy, Risk Management, and Indicators and Targets.

Response to TCFD recommendations: Disclosed on the "https://www.frontier-mgmt.com/sustainability/"
section of our website.
In November 2022, our Group established the Basic Policy on Sustainability and the Material Sustainability
Issues (Materiality) that our Group should prioritize, and established the Sustainability Promotion Committee

5Corporate Governance
CORPORATE GOVERNANCE
in order to contribute to the sustainability of the entire Group over the medium to long term.

In the scenario analysis, we analyzed the financial impact in 2030 on our consulting and advisory business,
which is our main business, assuming two scenarios: a 1.5°C scenario in which the impact in terms of transitionmaterializes, and a 4°C scenario in which the impact in terms of physical aspects materializes.
While climate change has a negative impact on our consulting and advisory business due to natural disasters
and other factors, there is a possibility that demand for our consulting and advisory business will increase as wemove toward a carbon-free society and adapt to climate change.

The Group considers climate change risk to be one of the important risks. The Risk Management Committee
anticipates and appropriately assesses business risks and takes measures to avoid, mitigate and transfer risks. In
addition, the status of responses is reported regularly to the Board of Directors.

We calculate CO ₂ emissions (Scope1, 2) at our domestic sites as 77.9t-CO ₂ emissions for 5.5t-CO₂(2022 fiscal
year in fiscal 2023 and 0.3t-CO ₂ emissions for 0.0t-CO₂(2022 fiscal year in fiscal 2023 per employee. Since
September 2022, we have switched the electricity used by our head office, which accounts for the majority of
our electricity consumption, to green power, and the benefits of reducing CO ₂ emissions have been remarkable.

Our carbon-related KPI are as follows.
KPI
Scope1、2(t-CO₂)

Fiscal 2021

Fiscal 2022

Fiscal 2023

Fiscal 2030

Target for

Results

Results

Results

Targets

FY2050

105.9

77.9

5.5

―

0.4

0.3

0.0

Scope1、2(t-CO₂)
Employees

Compared to

Virtually zerofiscal 2021
50% reduction

Per capita

We have set the following targets aimed at achieving "virtually zero" carbon dioxide emissions.
・We will reduce greenhouse gas emissions by 50% from the fiscal year ended December 2021 by the fiscal
year ending December 2030.
・We aim to achieve zero emissions of greenhouse gases from the fiscal year ended December 2021 by the fiscal
year ended December 2050.
・We will work to reduce the use of disposable plastics in our offices.
・We will strive to encourage employees to make business trips in consideration of climate change.
・We will promote support for the transition to a carbon-free, recycling-oriented society for client companies.

In December 2022, we joined TCFD Consortium. We agreed to actively disclose financial data on climaterelated changes. We will continue to actively disclose information on our own climate change-related risks and6

Corporate Governance
CORPORATE GOVERNANCE
opportunities by utilizing information exchanges with companies and organizations endorsed by the consortium.

(2)Investments in human capital and intellectual property
As described in "(1) Initiatives Related to Our Company's Sustainability" above, the core of our Group's
management resources is "human capital," and our important theme is "establishment of diversity and expertisein human resources."
With regard to investment in human capital, the Group's important strategy is to continue to actively recruit
human resources and to recruit human resources with expertise in key industrial fields in order to build a support
system for a wide range of industries. At the same time, as described in this report [Supplementary Principles
2-4①], the Group is working to secure diversity by appointing core human resources (women, foreigners, midcareer recruits, etc.).
In addition, based on our management strategy, our group actively engages in investment in intellectual property
that enables us to provide diverse solutions for clients' problems by appointing professionals such as lawyers,
accountants and tax accountants, as well as management consultants, industrial analysts and other professionals.
In November 2022, we participated in the Human Capital Management Consortium, which was established withthe aim of promoting human capital management in Japanese companies both in terms of practice and disclosure.
We will make use of this information to promote our human capital management through sharing of advanced
examples of human capital management practices and discussions on cooperation between companies.

[Replenishment Principle 4-1①] (Scope of Delegation to Management)
We stipulate matters to be judged and decided by the Board of Directors in the rules of the Board of Directors.
Matters delegated to management are stipulated in the Rules for Administrative Authority and the Rules for
Executive Officers.

[Principle 4-9] (Independence Criteria for Appointing Independent Outside Directors)
The Board of Directors has formulated the Board of Directors Composition and Guidelines for the Appointment
of Director Candidates. The internal rules stipulate the following criteria for determining independence in theappointment of independent outside directors.

The Board of Directors and the Nomination and Compensation Advisory Committee determine that an outside
director is independent if the outside director does not fall under any of the following items.
(1) A close relative within the second degree of kinship of the said outside director is currently or has held office
as a director, executive officer, executive officer, department manager or other important executive officer of
the Company or any of its subsidiaries in the past year.
(2) In the event that the outside director currently serves as an executive director, executive officer or employee
and receives payment from us or pays payment to us in exchange for the provision of products or services, theamount of the transaction exceeds 10% of the consolidated net sales of any company in any of the past threefiscal years
7Corporate Governance
CORPORATE GOVERNANCE(3) In the event that such outside directors receive remuneration (other than remuneration as a director of theCompany) in excess of 10 million yen directly from us as legal, accounting or tax specialists, consultants oradvisors in any of the past three fiscal years[Replenishment Principles 4-10①] (Establishment of Advisory Committees with Independent Outside Directors
as Major Members)
We are a company with an Audit and Supervisory Committee. Of the six directors, three are independent outside
directors. Independent outside directors account for half of the Board of Directors. In addition, the voluntary
Nomination and Compensation Advisory Committee consists of three independent outside directors and one
internal director. The majority of these directors are independent outside directors, and the chairman of thecommittee is an independent outside director, thereby enhancing their independence and objectivity. Deliberates
on matters related to the nomination and compensation of directors and executive officers at the level ofmanaging directors and executive officers consulted by the Board of Directors, and reports the details to theBoard of Directors.

[Replenishment Principles 4-11①] (Approach to Balance, Diversity and Scale of the Board of Directors)
In light of our medium-to long-term management direction and business strategy, the Board of Directors is
composed of directors with diverse backgrounds, taking into account the knowledge and experience required of
directors. The Board of Directors maintains an appropriate size that enables the Board of Directors to effectively
perform its functions.
The Board of Directors consults with the Nominating and Compensation Advisory Committee regarding director
candidates, and subsequently deliberates the draft determined by the committee and appoints director candidates.
In doing so, the Board of Directors and the Nominating and Compensation Advisory Committee appoint
candidates in accordance with the following policies stipulated by the Board of Directors Composition and
Policy on Appointment of Director Candidates, which are internal regulations of the Board of Directors.

Composition of the Board of Directors and Policy on Appointment of Director Candidates (excerpt)
The Board of Directors and the Nominations and Compensation Advisory Committee shall consider thefollowing when determining the candidates for the Board of Directors.
(1) The prospective director is a person with excellent personality and insight.
(2) Candidates for directors (excluding outside directors) have excellent track records in our businesses, both
inside and outside the company.
(3) Candidates for outside directors shall have expertise or practical experience in management, economics,
finance, accounting, finance, tax, legal, risky, IT, engineering, administration and other areas, inaddition to meeting the criteria for determining independence set forth in the following Article.

At present, our Board of Directors is composed of six members, including three outside directors. One of thethree outside directors is a woman.
8

Corporate Governance
CORPORATE GOVERNANCE<Skills Matrix for Our Directors>
N

a

m

e

( Curr ent posit i on)

Attribute

Corporate
Management

Shoichiro
O n i s h i(Representative
Director)

Finance

EconomyAccounting●

M a s a o
Nishihara(Directors)

Corporate
Investments
and loans

●

●

●

●

●

●

●

●

●

Legal
Affairs

Sales

Risk

MarketingGlobalEnvironment
Society

Management

●

●

●

●

Takeshi Umemoto(Audit andSupervisory
Committee
M e m b e r )Kazuhito Osugi(Audit andSupervisory
Committee
M e m b e r )Outside thecompany
Independent●

Keiko Unotoro(Audit andSupervisory
Committee
M e m b e r )Outside thecompany
Independent●

Hikaru Minami(Audit andSupervisory
Committee
M e m b e r )Outside thecompany
Independent

●

●

●

●

●

●

●

●

[Replenishment Principles 4-11②] (Interlocking Position in Cases Where Directors Have Been Executives of
Other Listed Companies)
We disclose the status of important concurrent positions held by directors and those candidates annually in the
Notice of Convocation of the General Meeting of Shareholders and the Annual Securities Report.

[Replenishment Principles 4-11③] (Analysis and Evaluation of the Effectiveness of the Board of Directors as a
Whole)
We aim to achieve sustainable growth and increase corporate value over the medium to long term. To achievethis, we recognize that it is necessary to improve the effectiveness of the Board of Directors and further
substantiate corporate governance.
We assessed the effectiveness of the Board of Directors in the fiscal year ended December 2023 and recognizedissues that need to be addressed in order to further improve the effectiveness of the Board of Directors. The
overview of these issues is as follows.

9Corporate Governance
CORPORATE GOVERNANCE
1.Outline of the Effectiveness Evaluation Method(1)Determination of valuation method
At a meeting of the Board of Directors held in January 2024, the effectiveness of the previous questionnairemethod (a method for evaluating the effectiveness of the method of evaluating the subject by freely describing
each question in the questionnaire) was recognized. Accordingly, it was concluded that the questionnaire method
would be continued for the evaluation of the effectiveness of the Board of Directors for the fiscal year ended
December 2023.
(2)Feedback receiverExcluding directors (6) and auditors (2) * corporate auditors who resigned during the applicable period.
(3)Evaluation method①In January 2024, we conducted a questionnaire survey of those subject to the evaluation.
②At the Board of Directors meeting held in March 2024, after exchanging opinions on the results of thequestionnaire, the effectiveness evaluation of the Board of Directors for the fiscal year ended December 2023
was finalized.
(4)Evaluation items
Based on the issues identified through the "Fiscal 2022 Evaluation of the Effectiveness of our Board of
Directors," we have formulated questions after discussing matters to be implemented in order to further improvethe effectiveness of our Board of Directors.
The questionnaire for the fiscal year ended December 2023 contains the following major items. The systemevaluates each question by 10 points, and a free response column is provided for each question.
①Effective oversight of directors and management (executive officers, etc.) (6 questions + open responses)②Securing human resources (6 questions + open responses)③Initiatives related to sustainability (3 questions + open responses)④Other functions of the Board of Directors (2 questions + open responses)

2.Summary of Evaluation Results(1)Effective Supervision of Directors and Management (Executive Officers, etc.)
The Board of Directors was positively evaluated as follows: (i) discussing management strategies, management
plans, important matters, etc. in a necessary and sufficient manner; (ii) establishing internal controls and risk
management systems appropriately and supervising the directors and management team (executive officers, etc.)
in an effective manner; and (iii) working closely with the Board of Corporate Auditors and the Internal Auditing
Division.
On the other hand, there were opinions that discussions on management strategies to increase the Group's
corporate value over the medium to long term should be conducted even more actively.
(2)Securing Human Resources
The Board of Directors was positively evaluated as follows: (i) the nomination and remuneration system fordirectors and management (executive officers, etc.) is appropriately designed for the Board of Directors tosupervise the directors and management in order to improve our corporate value; (ii) the nomination and
10

Corporate Governance
CORPORATE GOVERNANCE
remuneration system for directors and management (executive officers, etc.) is appropriately designed for
securing our human resources; and (iii) the nominating and remuneration advisory committee is appropriately
functioning for securing the human resources of directors and management (executive officers, etc.).
On the other hand, there were opinions such as the importance of investment in human capital in order to secure
human resources with diversity and expertise.
(3)Sustainability Initiatives
The Board of Directors was positively evaluated as follows: (i) discussing sustainability initiatives (basic
policies, materiality, promotion systems, etc.), (ii) discussing long-term strategies that we should tackle in orderto realize the sustainable growth and development of our group, and (iii) discussing long-term strategies that weshould tackle in order to contribute to an affluent global environment and a sustainable society.
(4)Other functions of the Board of Directors
There was a positive opinion that outside directors and outside Audit & Supervisory Board members were able
to express their opinions in a vigorous manner, and that they were making efforts to thoroughly discuss the issue
without urgency depending on the proposal.
On the other hand, there were opinions such as the need to further strengthen the coordination between themutual audit supervision of directors and internal controls and internal audits.

3.Initiatives to Improve the Effectiveness of the Board of Directors
Based on the issues recognized through the "Fiscal 2023 Evaluation of the Effectiveness of our Board of
Directors," we will deliberate on matters to be implemented and decide on the policies for fiscal 2024 in orderto further improve the effectiveness of our Board of Directors.

[Replenishment Principles 4-14②] (Policy of Training for Directors and Audit & Supervisory Board Members)
We have formulated the Executive Training Guidelines, which are internal regulations of the Board of Directors,
with regard to the policy for training directors. These internal rules have generally stipulated the following as a
training policy.

・Directors shall attend external seminars as necessary to deepen their insight into the duties and responsibilities
of officers. We shall bear the expense of the training.
・We shall establish opportunities for directors to meet with each other and cultivate the knowledge of ourindustry and our knowledge.

[Principle 5-1] (Policy for Establishing a System to Promote Constructive Dialogue with Shareholders)(Basic Approach)
We believe it is important to engage in constructive dialogue with shareholders and investments in order toincrease corporate value over the medium to long term. Through dialogue, we strive to gain shareholders andinvestors an understanding of our management policies, etc., and to appropriately reflect the opinions ofshareholders and investors in our management policies, etc.
11Corporate Governance
CORPORATE GOVERNANCE(Supervising Manager)
In order to achieve constructive dialogue with shareholders and investors, the Company has appointed a director
in charge of the Corporate Planning Department or a person appointed by such director as the person in chargeof IR.
(Initiatives)
The Corporate Planning Department is the department in charge of IR, and related departments, centered on thisdepartment, share information and other internal coordination.
(Means of Dialogue)
We strive to enhance the means of dialogue by holding general shareholders' meetings, financial results briefingsand group meetings for institutional investors, and briefings for individual investors.
(Feedback Measures)
Shareholders' views obtained through dialogue are compiled by the department in charge of IR, and appropriate
feedback is provided to the Representative Director or the Board of Directors by the person in charge of IR as
needed.
(Measures for Management of Insider Information)
For dialogue, insider information is appropriately managed in accordance with the Internal Information
Management Regulations, which are internal regulations.

[Measures for realizing management that is conscious of the cost of capital and stock price] <With English
disclosure>
We consider ROE to be one of the key management indicators. Our ROE for the year ended December 31, 2023
was 23.6%.
In February 2024, we formulated and disclosed a medium-term management plan covering the period from thefiscal year ended December 2024 to the fiscal year ended December 2026. Major KPI in this plan are ①
consolidated ordinary income of 3.5 billion yen or more, ② consolidated ordinary income ratio of 20% or moreexcluding Frontier Capital Inc. (FCI), and ③ maintaining ROE30% or more in the fiscal year ended December
2026, ④ consolidated number of employees (excluding FCI consolidated investees) of 620 or more, ⑤investments in investing businesses of 8 cases (consolidated 2 cases) and investments of 15 billion yen, and ⑥
CxO dispatched personnel of 50 or more per year. Going forward, we will continue to make ROE one of the key
management indicators to realize management that is conscious of the cost of capital and the stock price.

[Status of Dialogue with Shareholders]
We are actively engaged in interviews with domestic and foreign institutional investors by the representative
director, the director in charge of IR, and the person in charge in the department in charge of IR. In addition, theCompany actively provides information through IR website, materials for announcements of financial results,
notices of general meetings of shareholders, etc. (including disclosure in English), and gathers opinions obtained
through dialogue and feeds them back to management. IR activities for individual investors (shareholders) arealso actively carried out by the representative director, the director in charge of IR, and the person in charge of12

Corporate Governance
CORPORATE GOVERNANCE
the department in charge of IR.
The activities for the year ended December 31, 2023 are as follows.
(i)Financial results briefing: 4 times(ii)Interviews with institutional investors and analysts (total)
・Domestic institutional investors 43
・Overseas institutional investors 8(iii)IR for individual investors.
・Appearance on radio programs for individual investors
・Video distribution to information websites for individual investors
・Implementation of questionnaire on potential shareholders

2.Capital Structure
Foreign shareholding ratioLess than 10%[Major Shareholders]Name

Number of shares held

Percentage (%)

Shoichiro Onishi

2,179,458

18.60

Masahiro Matsuoka

2,179,458

18.60

The Custody Bank of Japan, Ltd. (Trust Account)

878,200

7.49

The Master Trust Bank of Japan, Ltd.(Trust Account)

657,300

5.61

Masaya Yajima

614,880

5.25

Takahiro Yamaguchi

503,200

4.29

Tomohiro Murata

258,500

2.21

ANTEMA

223,900

1.91

BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)

216,630

1.85

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

153,800

1.31

Name of controlling shareholders (excluding parent―――

company)

Name of parent company

None

Parent company's stock exchange―――

Supplementary Explanation
Although Sparks Asset Management Co., Ltd. owned shares as of March 15, 2021 in a report of large
shareholdings made available to the public on March 17, 2021, the number of shares beneficially owned as ofDecember 31, 2023 has not been confirmed as a result, and is not included in the above list of major shareholders.

13Corporate Governance
CORPORATE GOVERNANCE
In addition, although the "Report of Changes" made available to the public on January 7, 2022 stated that
Sumitomo Mitsui Trust Asset Management Co., Ltd. and Nikko Asset Management Co., Ltd. jointly held theirshares as of December 31, 2021, we were unable to confirm the actual number of shares held as of December
31, 2023. Accordingly, the figures are not included in the above list of major shareholders.

3.Company attributes
Listed exchange and market divisionTokyo Prime

Fiscal year end

DecemberIndustry typeService industry

Number of employees (consolidated) as of the end

100 to less than 500of the immediately preceding fiscal year
(Consolidated) sales for the immediately preceding

10 billion yen to less than 100 billion yen

fiscal year
Number of consolidated subsidiaries at the end of theLess than 10 companies

immediately preceding fiscal year

4.Guidance on measures to protect minority shareholders when conducting transactions with controlling shareholders―――

5.Other Special Circumstances which may have Material Impact on Corporate GovernanceNot applicable.

Status of II.'s corporate governance system, including the business management organization for decision-making,execution, and supervision
1.Organizational structure and operation
Organizational structure

Company with an Audit and Supervisory Committee[Directors]
Number of directors in the articles of incorporation

10 people

Term of directorships in the Articles of Incorporation

1 yearChairman of the board of directors

President

Number of Directors

6 people

Appointment of outside directors

Be appointed

Number of Outside Directors

3 people

Numberofoutsidedirectors

appointed

as

3 people

independent director

14Corporate Governance
CORPORATE GOVERNANCE
Relationship with the Company (1)NameAttribute

Relationship with the Company (*1)
A

Kazuhito Osugi

From other company

Keiko Unotoro

From other company

Hikaru Minami

From other company

B

C

D

E

F

G

H

I

J

K

△

※ Nature of relationship with the Company※ "○" when the person corresponds to "Present/Recent" or "△" when the person corresponds to "Previous"※ "●" if the family corresponds to "Present/Recent" and "▲" if it corresponds to "Past"
a. Managing Person of a Listed Company or its Subsidiaryb. Executive officer or non-executive director of the parent company of a listed company
c. Executive officer of a sister company of a listed company
d. A person whose main business partner is a listed company or the person who executes the business thereof
e. Major clients of listed companies or their business executives
f. Consultants, accounting professionals and legal professionals who receive substantial sums of money and otherproperty in addition to executive compensation from listed companies
g. Major shareholders of listed companies (in cases where the relevant major shareholder is a corporate, the businessexecutive of the said corporation)h. Business executives of listed companies' business partners (those who do not fall under any of d, e, or f) (for theindividual only)
i. Executive officers who are mutually appointed as outside officers (for the individual only)
j. Executors who are donated by listed companies (individual only)
k. Other

Relationship with Companies (2)Name

Independent

Supplementary

Officers

Explanation

Reason for appointment

Concerning
Relationship with
the Company
Kazuhito Osugi○

The Company has

We would like to see the Bank of Japan

entered into advisory

and IRCJ draw on their deep insightagreements for the

into the economy, finance, and businesspurpose of providing

revitalization gained through theirbusiness support tocareers in the Bank of Japan and IRCJ

financial institutions.

to strengthen the supervisory function

Upon appointment asof our Board of Directors. In addition,

15

Corporate Governance
CORPORATE GOVERNANCE
Director,

the

he

meets

the

requirementsforAdvisory Agreement

independent directors as stipulated by

was terminated in

the Tokyo Stock Exchange, and theAugust 2018.

Company has determined that there isno risk of conflicts of interest withgeneralshareholders

and

has

designated him as an independent
director.
Keiko Unotoro○―

We would like to see you contribute to
the strengthening of the supervisory
function of our Board of Directors
based on your deep insight andextensive experience in economic laws
and competition policies and corporate
compliance, which you have cultivatedduring your career as a key member of
the Fair Trade Commission. In addition,
he

meets

the

requirementsforindependent directors as stipulated by
the Tokyo Stock Exchange, and theCompany has determined that there isno risk of conflicts of interest withgeneralshareholders

and

has

designated him as an independent
director.
Hikaru Minami○―

Since joining Marubeni Corporation,
He have been engaged mainly in fiscal,
accounting, logistics, information, andreal estate-related operations. I have
served as Managing Executive Officer
and Representative Director, and I hope
that

He

will

contribute

to

the

enhancement of our corporate value inthe future based on my financial andaccounting

expertiseaccumulated

during his career as an Audit &Supervisory Board Member, and my16

Corporate Governance
CORPORATE GOVERNANCE
knowledge of general trading company
management

andglobalbusinessmanagement. In addition, he meets therequirements for independent directors
as stipulated by the Tokyo Stock
Exchange, and the Company has
determined that there is no risk of
conflicts of interest with generalshareholders and has designated him as
an independent director.

[Audit and Supervisory Committee]
Composition of Committee Members and Attributes of the Chair

Audit andAll

Full-time

Internal

OutsideChairmanmembers

members

directors

Directors(Chairman)(Name)(Name)(Name)(Name)

4

1

1

3

Supervisory

Internal
directors

Committee

Existence of directors and employees to assist theYes

Audit and Supervisory Committee in its duties

Matters related to the independence of such directors and employees from the managing directors
We have established the Audit and Supervisory Committee Secretariat to assist the Audit and Supervisory
Committee in its duties and have assigned employees. There are no directors who should assist the Audit andSupervisory Committee in its duties.
When the employee serves as an assistant to the Audit & Supervisory Committee, he or she shall not belong to
the chain of command in the execution of business but shall comply with the instructions of the Audit &Supervisory Committee, and the transfer, personnel evaluation, disciplinary action, etc. of the employee shallbe subject to the consent of the Audit & Supervisory Committee.

Cooperation among the Audit & Supervisory Committee, Accounting Auditors, and the Internal Audit Division
The Audit and Supervisory Committee shall cooperate closely with the accounting auditor by holding meetingsand exchanging information as necessary. In addition to exchanging information on a day-to-day basis with theInternal Audit Division, we will cooperate with each other by conducting audits jointly.

17Corporate Governance
CORPORATE GOVERNANCE[Voluntary committees]
Existence of a nominating committee or a voluntarycommittee

equivalent

to

the

Yes

compensationcommittee

Status of the establishment of voluntary committees, composition of committee members, and attributes of thechairperson
Voluntary committee equivalent to the nominating committee
Title of the committee

Nomination and Compensation Advisory Committee

All members

Full-time

Internal

OutsideInternal

Other

Chairman(Name)

members

directors

Directors

experts(Name)(Chairman)(Name)(Name)(Name)(Name)

0

1

3

0

4

0

OutsideDirectors

Voluntary committee equivalent to the Compensation Committee
Title of the committee

Nomination and Compensation Advisory Committee

All members

Full-time

Internal

OutsideInternal

Other

Chairman(Name)

members

directors

Directors

experts(Name)(Chairman)(Name)(Name)(Name)(Name)

0

1

3

0

4

0

OutsideDirectors

Supplementary Explanation
・Nomination and Compensation Advisory Committee
1.Purpose of establishing the committee
The Company aims to ensure appropriate opportunities for the involvement and advice of independent directors
with regard to decisions on executive nomination and remuneration, etc., and to improve the fairness, objectivity,
and transparency of the decision-making process at the Board of Directors, and to further enhance and strengthen
the corporate governance system.

2.Work of the committee(1)Nominating Consultation Matters
In response to inquiries from the Board of Directors, the Board of Directors shall deliberate on matters relating
to the nomination of Directors and other relevant matters and report to the Board of Directors.
(2)Compensation Advisory Matters
In response to inquiries from the Board of Directors, the Board of Directors deliberates on matters related to18

Corporate Governance
CORPORATE GOVERNANCE
remuneration, etc. for Directors and reports to the Board of Directors.

3.Committee structure
The Nomination and Compensation Advisory Committee consists of one representative director and at least two
independent directors. The chairperson of the committee is selected by resolution of the committee from among
the members who are independent outside directors.

[Independent Directors/Auditors]
Number of Independent Directors/Auditors

3 people

Other matters concerning independent directors/auditors
All outside directors who qualify as ID/As are appointed as ID/As.

[Incentive Relationship]
Initiatives and Implementation Status Concerning

Introduction

Incentives for Directors

systemofperformance-linked

remuneration

Introduction of stock option plan
Supplementary Explanation
We have introduced a restricted stock compensation plan as a performance-based compensation plan for
directors (excluding outside directors; hereinafter referred to as "eligible directors"). The content consists ofcash bonuses and stock-based compensation A as single-year performance-based compensation, and stock-based
compensation B as medium-to long-term performance-based compensation.

(1) Non-consolidated performance-based compensation (cash bonus and stock-based compensation A)
Single-year performance-linked remuneration
The single-year performance-linked remuneration (cash bonus and stock remuneration A) is linked to the levelof achievement of management targets for a single fiscal year and the degree of improvement in corporate value,etc. The amount of remuneration is determined based on our single-year performance, etc., and the amount of
remuneration determined after the vesting of business results for each fiscal year is paid to the target directors
through cash bonuses and restricted stock (stock remuneration A).
The composition ratio of the single-year performance-linked remuneration for each applicable director shall be
1/2 for cash bonuses and 1/2 for stock-based remuneration A.
The basic indicators for consolidated performance are the rate of share price increase and the amount ofconsolidated net income excluding Frontier Capital Inc. The amount of single-year performance-linked
remuneration paid to each eligible director is determined based on the degree of performance contribution andthe maximum amount of remuneration for the eligible director.

19

Corporate Governance
CORPORATE GOVERNANCE(2) Medium-to Long-Term Performance-Based Compensation (Stock Compensation B)
Medium-to long-term performance-linked remuneration (stock remuneration B) is linked to the level ofachievement of management targets and the degree of improvement in corporate value in the medium-term
management plan. The Company will pay restricted stock (stock remuneration B) to eligible directors based on
the base amount of remuneration according to their position at the beginning of each fiscal year. In principle,
after the end of the period covered by the Medium-Term Management Plan, the number of shares for which thetransfer restrictions will be lifted will be determined based on the degree of achievement of the managementtargets of the Medium-Term Management Plan and the degree of improvement in corporate value with respect
to the shares granted during the applicable period.
Indicators of management targets for the medium-term management plan from 2024 to 2026 include the rate ofincrease in stock prices, consolidated net income excluding Frontier Capital Inc., and the degree of achievementof consolidated ROE excluding Frontier Capital Inc. In the event that a new medium-term management plan isformulated in the future, indicators of such management targets may be changed by resolution of the Board of
Directors.

2.In 2018, we granted stock options to directors with the aim of further enhancing the motivation and morale ofdirectors to contribute to the medium-to long-term improvement of business performance and enhancement ofcorporate value.
The number of awards granted is determined based on a comprehensive consideration of each person'scontribution to performance and expectations for the future.
All three directors who were granted stock options exercised their rights to acquire common stock.

Eligible persons for stock options

Internal directors and employees

Supplementary Explanation
Stock options for internal directors are as described in the "Supplementary Explanation on Relevant Items"
section of "Implementation of Measures for Incentive Grants for Directors" above.
Stock options for employees were granted in 2018, 2021, 2022, and 2024 to raise employee sense of belonging
to the Company, to promote businesses with an awareness of enhancing shareholder value, and to provide
incentives for future contributions of all employees.

[Director Compensation]
Disclosure Status

Disclosure of individual compensation is not made.

Supplementary Explanation
Since there are no persons whose total remuneration amount is 100 million yen or more, individual disclosureof remuneration is not provided. Compensation for directors and corporate auditors is disclosed on a gross basis.

20

Corporate Governance
CORPORATE GOVERNANCE
Whether or not there is a policy for determining theYesamount of remuneration or the method for
calculating that amount
Disclosure of the policy for determining the amount of remuneration or the method of calculating remuneration
1. Policy for determining director remuneration(1)Basic Policy
Compensation that enables the Company to appoint talented individuals as directors who put the Corporate
Philosophy into practice and contribute to the achievement of short-term performance targets, the achievementof medium-to long-term performance targets, and the sustained improvement of corporate value.
We have a highly transparent, fair, and rational compensation system that enables us to fulfill our accountability
to our stakeholders.

(2)Compensation structure
Remuneration for directors (excluding directors serving as members of the Audit and Supervisory Committee
and outside directors) consists of base remuneration, which is a fixed remuneration, and single-year
performance-linked remuneration and medium-to long-term performance-linked remuneration, which fluctuatein accordance with performance, while balancing the elements listed in the basic policy above.
The remuneration of directors serving on the Audit and Supervisory Committee and outside directors consists
solely of base remuneration from the perspective of their role and independence.
The composition ratio of each performance-linked remuneration to base remuneration for directors (excluding
directors serving as Audit & Supervisory Committee members and outside directors) is determined according
to the classification of officers.

(3)Basic remuneration
Basic remuneration, which is a fixed remuneration, is paid to directors on a monthly basis.
Basic remuneration for directors (excluding directors serving as members of the Audit and Supervisory
Committee and outside directors) is determined by taking into account the level of other companies in the same
industry, taking into consideration such factors as the nature of duties, scope of responsibility, length of service,contribution to short-term and medium-to long-term performance, and contribution to the improvement ofcorporate value.
Directors and outside directors serving on the Audit & Supervisory Committee shall be determined inconsideration of their responsibilities and the level of other companies.

(4)Single-year performance-linked remuneration and medium-to long-term performance-linked remuneration
For single-year performance-linked remuneration and medium-to long-term performance-linked remuneration,please refer to "Supplementary Explanation on Relevant Items" under "Implementation of Measures for
Incentive Grants for Directors" above.

21

Corporate Governance
CORPORATE GOVERNANCE(5)Compensation governanceDirectors' remuneration (basic remuneration, single-year performance-linked remuneration, and medium-to
long-term performance-linked remuneration) is determined by a resolution of the Board of Directors based on
the deliberations and reports of the Voluntary Nominating and Compensation Advisory Committee.
In the event of serious fiscal improprieties or large losses, a clash back clause shall be set to the effect that all orpart of the paid share compensation A and share compensation B shall be refunded free of charge according to
the responsibilities of each director.

2. Contents of the director's compensation system(1)Compensation Composition Ratio, etc.
Remuneration for Directors consists of "base remuneration," which is a fixed remuneration, and "single-year
performance-linked remuneration (cash bonus, stock remuneration A)," which is linked to the degree ofachievement of single-year management targets for target directors and the degree of improvement in corporate
value, etc., and "medium-to long-term performance-linked remuneration (stock remuneration B)," which is
linked to the degree of achievement of management targets and the degree of improvement in corporate value,etc. under the Medium-Term Management Plan.
The compensation composition ratio of each performance-linked remuneration to base remuneration isdetermined according to the classification of officers.

(2)Basic remuneration
Basic remuneration, which is a fixed remuneration, is paid to directors on a monthly basis.
The basic remuneration amount shall be determined by taking into account the level of other companies in thesame industry, taking into consideration such factors as the job content, scope of responsibility, length of service,contribution to short-term and medium-to long-term performance, and contribution to the improvement ofcorporate value. For outside directors, the basic remuneration amount shall be determined by taking into accountthe level of responsibilities and other companies.

(3)Annual performance-linked remuneration (cash bonus, stock-based remuneration A)
Performance-linked remuneration for a single fiscal year will be paid to eligible directors after the determinationof business results for each fiscal year and before the ordinary general meeting of shareholders is held.
The annual performance-linked remuneration (total amount for all eligible directors) is the sum of the baseremuneration for 16 months for the representative director and the base remuneration for each eligible director(excluding the representative director) for 9 months. The remuneration is calculated by multiplying the shareprice increase rate and the consolidated net income excluding Frontier Capital Inc. (net income attributable toowners of the parent, before deduction of single-year performance-linked remuneration and before deduction of
additional bonuses for employees) by a certain ratio based on the achievement status.
The amount of single-year performance-linked remuneration for each applicable director will be determined
22

Corporate Governance
CORPORATE GOVERNANCE
based on the degree of performance contribution and the maximum amount of remuneration for the applicabledirector.
The composition ratio of the single-year performance-linked remuneration for each applicable director shall be
1/2 for cash bonuses and 1/2 for stock-based remuneration A.

(4)Medium-to Long-Term Performance-Based Compensation (Stock Compensation B)
As mid-to long-term performance-linked remuneration, stock-based remuneration B will be allocated to theeligible directors at the beginning of each fiscal year based on the base amount of remuneration according totheir position.
Medium-to long-term performance-linked remuneration (total amount for all eligible directors) shall becalculated by multiplying the sum of the base remuneration for 3 months for the representative director and thebase remuneration for 1.5 months for each eligible director (excluding the representative director) by a certain
ratio based on the rate of share price increase, consolidated net income excluding Frontier Capital Inc., and theachievement status of the consolidated ROE excluding Frontier Capital Inc.
The amount of mid-to long-term performance-linked remuneration for each eligible director will be determinedbased on the degree of performance contribution and the maximum amount of remuneration for the eligible
director.
In principle, after the end of the period covered by the Medium-Term Management Plan, the number of sharesfor which the transfer restrictions will be lifted will be determined based on the degree of achievement of the
management targets of the Medium-Term Management Plan and the degree of improvement in corporate value
with respect to the shares granted during the applicable period.

3. Restrictions on Transfer of Performance-Based Stock Awards(1)Stock grants A
A transfer restriction shall be imposed for a period of three years from the date on which the Subject Directors
receive the delivery of such shares, during which the Subject Directors shall not transfer, mortgage or otherwise
dispose of such shares (hereinafter referred to as the "Transfer, etc.").
In principle, the transfer restriction shall be terminated at the time of expiration of the transfer restriction period.
In the event the Subject Director resigns prior to the expiration of the Restriction on Transfer due to the
expiration of the term of office, death or any other justifiable reason, the Restriction on Transfer shall beterminated with respect to all such shares granted to the Subject Director after reasonable adjustment as may benecessary for the time when the Restriction on Transfer is to be terminated.
If, prior to the expiration of the Restriction Period on Transfer, the Subject Directors retire from office without
the expiration of their term of office or for any other reason deemed justifiable by our Board of Directors, wewill, of course, acquire free of charge all such shares allocated to such Subject Directors.
In the event that, during the Restriction Period on Transfer, a merger agreement under which we become an
extinguished company, a share exchange agreement, a share transfer plan, or other matters relating toorganizational restructuring, etc. (hereinafter referred to as the "organizational restructuring agreement, etc.")
23

Corporate Governance
CORPORATE GOVERNANCE
are approved at our general meeting of shareholders (provided, however, that, in the event that the approval of
our general meeting of shareholders is not required for such organizational restructuring agreement, etc., theBoard of Directors of the Company), the restriction on transfer shall be terminated with respect to all of theshares granted to such director after reasonably adjusting the time to terminate the restriction on transfer asnecessary.
We will, of course, acquire without charge the shares for which the restriction on transfer has not been terminatedat the time when the number of shares for which the restriction on transfer is terminated is determined.
In the event of serious fiscal improprieties or large losses, the Company will set a claimable back clause to theeffect that all or part of the paid share compensation A will be refunded free of charge according to the
responsibilities of each director.

(2)Stock grants B
A transfer restriction shall be established for a period of three years from the date on which the Subject Directors
receive the delivery of such shares, and the Subject Directors shall not transfer, etc. such shares during such
period.
In principle, after the end of the period covered by the Medium-Term Management Plan, the Company
determines the number of shares for which the transfer restrictions will be lifted depending on the degree ofachievement of the management targets of the Medium-Term Management Plan and the degree of improvement
in corporate value with respect to the shares granted during the applicable period.
In the event the Subject Director resigns prior to the expiration of the Assignment Restriction Period due toexpiration of the term of office, death, or any other justifiable reason, (i) in the event such resignation occurs
during the period from the time when such shares are granted to the time when the number of shares for whichtransfer restrictions are to be cancelled is determined, the number of such shares for which transfer restrictions
are to be cancelled and the time when the transfer restrictions are to be cancelled in accordance with theachievement level of the management goals of the Mid-term Management Plan and the degree of improvement
in corporate value at that time, and (ii) in the event such resignation occurs during the period from the time when
the number of shares for which transfer restrictions are to be cancelled to the time of expiration of the Transfer
Restriction Period among such shares, the time when the transfer restrictions are cancelled shall be reasonably
adjusted as required. If, prior to the expiration of the Restricted Transfers Period, the Subject Directors retire
from our Directors without such cause as the expiration of their term of office or otherwise as our Board of
Directors may deem justifiable, we will naturally acquire, without charge, all such allotted Shares.
In the event that a restructuring agreement, etc. is approved at a general meeting of shareholders of the Company(provided, however, that approval is not required at a general meeting of shareholders of the Company withrespect to the relevant restructuring agreement, etc., at a meeting of the Board of Directors of the Company), (i)in the event such approval is given during the period from the time when the relevant shares are granted until
the number of shares for which the restriction on transfer will be cancelled is determined, the number of sharesfor which the restriction on transfer will be cancelled and the time when the transfer restriction will be cancelledin accordance with the degree of achievement of the management goals of the medium-term management plan24

Corporate Governance
CORPORATE GOVERNANCE
and the improvement of corporate value at that time, and (ii) in the event such approval is given during theperiod from the time when the number of shares for which the restriction on transfer will be cancelled to thetime when the restriction on transfer expires, the time when the restriction on transfer will be cancelled shall bereasonably adjusted as required.
We will, of course, acquire without charge the shares for which the restriction on transfer has not been terminatedat the time when the number of shares for which the restriction on transfer is terminated is determined.
In the event of serious fiscal improprieties or large losses, a clash back clause shall be set to the effect that all orpart of the paid share compensation B shall be refunded free of charge according to the responsibilities of eachdirector.

[Support System for Outside Directors]
Support for outside directors is provided by the Board of Directors (Corporate Administration Department).
In addition, to ensure that the Board of Directors has sufficient time to consider proposals, the Board of Directors
sends relevant materials in advance, and the Board of Directors' Secretariat holds a pre-briefing session on
proposals for outside directors. In addition, information is transmitted by telephone or E-mail as appropriate.

2.Matters related to functions such as business execution, auditing and supervision, nomination, and compensation
determination (outline of the current corporate governance system)
a. Board of Directors
The Board of Directors meets once a month and extraordinary meetings are held as necessary. In accordancewith the Articles of Incorporation and laws and regulations, the Board of Directors makes decisions on importantmanagement issues and business execution, including legal resolutions and management policies, and alsosupervises the status of directors' business execution. Directors serving as members of the Audit and Supervisory
Committee also attend meetings of the Board of Directors to audit the status of directors' business execution.
There are currently six directors (including directors serving on the Audit and Supervisory Committee), three ofwhom are independent outside directors.

b. Audit and Supervisory Committee
We transitioned to a company with an audit and supervisory committee. There are currently four directors
serving on the Audit and Supervisory Committee, three of whom are independent outside directors, and one ofwhom is a full-time internal director.
In addition to the regular monthly meetings of the Audit and Supervisory Committee, the Audit and Supervisory
Committee holds extraordinary meetings as necessary when important matters arise.
The Audit and Supervisory Committee resolves important matters and reports on the progress of operations inaccordance with laws and regulations, the Articles of Incorporation, and our Audit and Supervisory Committee
rules.
In addition, the Board of Directors attends meetings of the Board of Directors and other important meetings to25

Corporate Governance
CORPORATE GOVERNANCE
express opinions on the directors' business execution as appropriate, and to monitor and audit the overallbusiness execution. In addition, the Audit & Supervisory Committee shall cooperate closely with the personnel
in charge of internal audits and the accounting auditor to conduct audits based on the annual audit plan, request
reports from officers and employees as necessary, and discuss matters discovered through audits, etc. at the
Audit & Supervisory Committee and submit items pointed out in the audit to the Board of Directors.

c. Accounting Auditor
We are a company with accounting auditors. When selecting accounting auditors, we appoint them as candidates
for accounting auditors at the Audit & Supervisory Board and consult with the General Meeting of Shareholders,taking into account the audit results and other factors of the auditing firm. Our independent auditor is AZSA
LLC. The name of the certified public accountant who executed the corporate is as follows.
Naruki Sugiyama, a designated limited partner executive employee
Keinori Saito, a designated limited liability partner and executive officer employee
In addition, three certified public accountants and three other assistants provide assistance with auditing services.

d. Business Execution Structure
The Company has adopted an executive officer system under the supervision of the Representative Director.
The President and Chief Executive Officer leads other executive officers and oversees the execution ofcompany-wide businesses.
The executive officer system has been introduced to strengthen, streamline, and accelerate the businessexecution functions of management. We have also established the Executive Committee and the Management
Committee as preliminary advisory bodies to the Board of Directors.
The Managing Directors' Meeting is attended by Representative Directors, Full-time Directors, President &Chief Executive Officer, Executive Vice President, Senior Managing Executive Officers, Senior Executive
Officers, and those appointed by the Chairman of the Board of Directors. In principle, meetings are held once amonth. In addition, meetings are held and discussed if there are matters requiring promptness and mattersrequiring confidentiality, such as important human resources and business alliances with other companies.
The Executive Committee is attended by the representative director, full-time director, president and executive
vice president, executive vice president and executive officer, senior management executive officer, managing
executive officer, head of the Internal Audit Office and other executive officers, division heads, deputy division
heads, or general managers designated by the representative director. In principle, it meets once a month, andextraordinary meetings are held as necessary to share information on the status of business execution and discussmatters related to important business execution.

e. Authority to make decisions
The authority for decision-making is clarified in the administrative authority regulations. Major decisions are
made by the Board of Directors after consulting with the Executive Committee or the Management Committee.

26Corporate Governance
CORPORATE GOVERNANCE
f. Contents of Contract for Limitation of Liability
We and our directors (excluding those who are executive officer directors, etc.) have concluded an agreement
to limit their liability for damage under Article 423, Paragraph 1 of the Companies Act in accordance with theprovisions of Article 427, Paragraph 1 of the same Act. The limited amount of liability for damages under theapplicable agreement is the minimum amount of liability as stipulated by law.

3.Reasons for Adoption of Current Corporate Governance System
We have shifted to a company with an Audit and Supervisory Committee with the aim of further enhancing thecorporate governance system and achieving sustainable growth in corporate value by further strengthening thesupervisory functions of the Board of Directors and improving the flexibility of business execution.

III. Implementation of Measures for Shareholders and Other Interested Parties
1.Efforts to Invigorate the General Meeting of Shareholders and Facilitate the Exercise of Voting Rights
Supplementary Explanation
Early Dispatch of

In order to ensure that shareholders have sufficient time to consider our agenda, we

Stockholder Meeting

sent out the notice of convocation related to our 17th Ordinary General Meeting ofConvocation Notices

Shareholders at an early date two weeks prior to the date of the meeting. The postingof convocation notices on our website is conducted approximately one week in advanceof shipment.

Scheduling of

We hope to avoid the days when general meetings of shareholders of other companies

Stockholder

are expected to be concentrated, and to set the days when it is easy for many

Meetings to Avoid

shareholders to attend.

Peak Periods
Voting by

The exercise of voting rights by electronic means (Internet) is adopted.

Electromagnetic
MethodParticipation in

We participate in an electronic voting platform for institutional investors operated byElectronic Voting

ICJ Inc.

Platform and Efforts
to Improve the
Voting Environmentof Institutional
Investors
Provision of

We provide the convocation notice (full text) in English on our website.

convocation notices(summary) in English

27

Corporate Governance
CORPORATE GOVERNANCE
2.Investor Relations Activities
Presentation by the
Supplementary Explanation

Group CEO andPresident

Creation and

Our IR website (https://www.frontier-mgmt.com/)publication ofThis is disclosed in corporate/ir/management/governance.html).

disclosure policy
Regular briefings for

It will be held as needed.

Yes

Regular briefings for

We hold quarterly briefings for analysts and institutional investors.

Yes

analysts andIndividual visits to institutional investors are also made.

individual investors

institutional investors
IR materials posted

We have a IR website that contains various IR materials (earnings

on the Company's

reports, timely disclosure materials, financial reports and quarterly

websitereports, materials for corporate briefings, status of corporate
governance, notices of convocation for general meetings ofstockholders, etc.).

Creation of an IR

A person in charge of IR has been appointed in the Corporate

Dept. (IR Officer)

Planning Department.

3.Measures to Ensure Due Respect for Stakeholders
Supplementary Explanation
Internal Rules andOur corporate philosophy is to contribute to society, and our code of conduct calls forRegulations

us to act in a way that contributes to a sustainable society.

that

Promote Respect fortheStatusPositionandof

Stakeholders

Matters Related to IV. Internal-Control Systems
1.Basic approach to internal control systems and progress update
At the Board of Directors meeting held on March 27, 2024, our Group revised the following in order to realize
our management philosophy of "contributing to the interests of our clients, contributing to the interests of our
stakeholders, and contributing to society."

１.Structure to ensure that the execution of duties by directors and hired experts is in keeping with corporate
law and the articles of incorporation

28

Corporate Governance
CORPORATE GOVERNANCE（1）Recognizing that thorough compliance is indispensable to ensuring the survival and sustainable growthof the company, we will make all directors and employees aware of compliance and conduct training on
compliance for all directors and employees.

（2）The Audit and Supervisory Committee shall conduct audits by the Audit and Supervisory Committee andthe Internal Audit Office in order to confirm that the execution of duties by directors and employees isconducted appropriately without violating laws, regulations, the Articles of Incorporation, and internal rules.

（3）Establish a system for reporting violations of laws and regulations by establishing the Compliance Rules
and Internal Reporting Rules, and promptly recognize and deal with such acts.

２.Structure and System to Maintain and Manage Information Relating to Directors in the Execution of theirDuties（1）Documents pertaining to the execution of duties by Directors (including electromagnetic records) shallbe stored and managed in accordance with laws and regulations, the Articles of Incorporation, the Document
Management Rules, and other relevant regulations.

（2）Such documents (including electromagnetic records) shall be available for perusal at all times upon therequest of the directors.

３.Systems for managing risks of loss including the relevant internal regulations（1）The general manager in charge of risk management shall serve as the representative director, and the risk
management rules shall be established to stipulate the necessary matters concerning risk management acrossthe organization, and a risk management system shall be established based on these rules.
（2）Establish crisis management rules and establish a reporting and command and communication system inthe event of an emergency, so as to identify emergencies promptly and appropriately and minimize losses.

４.System for ensuring efficient execution of Directors' duties（1）In principle, the Board of Directors holds regular meetings once a month and extraordinary meetings asnecessary to make decisions on important matters stipulated in the Board of Directors' rules and to supervise
the execution of duties by directors.

（2）Matters submitted to the Board of Directors are subject to consultation at the discretionary Nominating
and Compensation Advisory Committee, the Managing Directors' Meeting, or the Management Committee.

５.System to ensure the appropriateness of operations in the corporate group consisting of us and our
subsidiaries（1）In order to ensure the appropriateness of business as a corporate group consisting of us and our
subsidiaries, we shall establish the Subsidiary Management Rules and implement the management of our
subsidiaries in accordance with those rules.

（2）In addition to discussing management as a corporate group through day-to-day communication with thedirectors of subsidiaries, confirm that subsidiaries are operating properly in accordance with our subsidiary29

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CORPORATE GOVERNANCE
management regulations.

６.Matters concerning directors and employees to assist the Audit and Supervisory Committee in its duties
Establish the Secretariat of the Audit and Supervisory Committee to assist the Audit and Supervisory
Committee in its duties and assign employees. There are no directors who should assist the Audit andSupervisory Committee in its duties.

７.Matters concerning independence of employees from directors who are not Audit and Supervisory
Committee members in the previous item
When an employee as set forth in the preceding item is engaged in assisting the Audit and Supervisory
Committee, he/she shall comply with the instructions and orders of the Audit and Supervisory Committee
without belonging to the chain of command for the execution of business, and with regard to the transfer,
personnel evaluation, disciplinary action, etc. of the said employee, the matters to be agreed upon by the
Audit and Supervisory Committee shall apply.

８.Matters concerning the assurance of the effectiveness of instructions to employees under Item 6 of the Audit
and Supervisory Committee
The Audit and Supervisory Committee shall hold regular meetings with employees listed in Item 6 to
confirm the status of the performance of businesses by these employees.

９.System for directors and employees who are not Audit & Supervisory Committee members and directors,
Audit & Supervisory Board members and employees of our subsidiaries to report to the Audit &Supervisory Committee（1）Directors and employees who are not Audit and Supervisory Committee members shall report on thestatus of execution of duties and other matters at the request of the Audit and Supervisory Committee.

（2）Members of the Audit and Supervisory Committee attend meetings of the Managing Board and otherimportant meetings and receive reports on important matters from directors and employees who are notmembers of the Audit and Supervisory Committee.

（3）The Audit and Supervisory Committee receives reports from the directors, statutory auditors andemployees of subsidiaries, either directly or through Audit and Supervisory Committee members andinternal auditors, in accordance with the Subsidiary Management Rules and the Internal Audit Rules.

１０.A system to ensure that the person who has made the report set forth in the preceding item is not treateddisadvantageously by reason of such person's having made the report
We prohibit any person who has made the report in the preceding item from treating such person
disadvantageously on the grounds that he or she has made the report, and shall operate the report inaccordance with or in accordance with the Internal Reporting Rules.

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Corporate Governance
CORPORATE GOVERNANCE
１１.Matters concerning advance payment or reimbursement procedures for expenses arising from theexecution of duties by Audit and Supervisory Committee members and other matters concerning policies
for the disposal of expenses or liabilities arising from the execution of duties（1）The Audit and Supervisory Committee ensures the budget necessary to implement the audit plan approvedby the Audit and Supervisory Committee.
（2）Where an Audit and Supervisory Committee member requests expenses, etc. for the execution of his/herduties, the Company shall promptly pay such expenses, except in cases where it is found clearly
unnecessary to perform the duties of an Audit and Supervisory Committee member.
（3）The management and execution of expenses related to the execution of duties by Audit & Supervisory
Committee members shall be conducted by the employees who should assist the Audit & Supervisory
Committee members and Audit & Supervisory Committee members.

１２.Other systems to ensure that audits by the Audit and Supervisory Committee are conducted effectively（1）The Audit and Supervisory Committee establishes the Audit and Supervisory Committee Rules and Audit
and Supervisory Committee Audit Standards, prepares an audit plan, explains the contents thereof at theBoard of Directors meetings, and obtains understanding and cooperation with regard to the conduct of audits.

（2）The Audit and Supervisory Committee exchanges opinions with the representative directors throughregular meetings.

（3）The Audit and Supervisory Committee shall ensure the effectiveness of audits by exchanging opinionswith internal auditors and through close cooperation with relevant departments.

１３.System to Ensure Appropriateness of Financial Reporting
Directors and employees shall ensure the appropriateness of financial reports through business execution incompliance with the Basic Policy Statement on the Development, Operation and Evaluation of Internal Control
over Financial Reporting.

１４.Basic Approach and Systems to Exclude Anti-Social Forces
We confront antisocial forces with a firm stance and block any relationship with them. In addition, in order toblock relations with anti-social forces, the SDF will establish compliance rules and other internal rules to ensurea system for blocking relations with anti-social forces.

2.Basic Approach and Systems to Exclude Anti-Social Forces
We respect the "Guidelines for Companies to Prevent Damage from Anti-Social Forces" (the June 2007 meetingof the Executive Board of the Ministers on Crime Countermeasures), and are building and operating a system
in accordance with these guidelines. Our policies and standards are stipulated in the Basic Policy of the Internal
Control System, and we are working to ensure that the content of these policies and standards is thoroughly
understood at major meetings and other opportunities.

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CORPORATE GOVERNANCE
The internal control department is responsible for operations business to the exclusion of anti-social forces, andas a practical provision, the Company has prepared the Bylaws Concerning Response to Anti-Social Forces, theAnti-Social Force Survey Manual, and the Unfair Demand Response Manual.
In addition, we have established provisions to eliminate anti-social forces in our contracts with our business
partners, and are working to ensure that these provisions are thoroughly implemented.
With regard to cooperation with external organizations, the Company will consult with police stations, theViolence Abatement Promotion Center, etc. as necessary.

V. Other
1.Adoption of anti-takeover measures
Introducing the anti-takeover measure

None

Supplementary Explanation―――

2.Other corporate governance related matters
A diagram of the flow of our corporate governance system and procedures for timely disclosure is attached as
reference materials.

[Diagram (Reference)]

General Meeting of Shareholders
Appointment/Dismissal

Appointment/Dismissal

Reporting

Nomination andcompensation
Advisory Committee

Board of Directors

Consultation

Audit

Director

Report(excluding Audit andSupervision

ReportingBusiness

Sustainability
Promotion Committees

Reporting

Audit and Supervisory

Supervision
Collaboration
Appointment or dismissal, supervision Reporting
Instruction and supervision

Representative Director
Overall management

Monitoring evaluation

Internal Audit Office

Reporting

Advisory and reporting

Executive Committee

Risk Management

ReportingCommittee

Accounting

Director

Supervision (Audit and Supervisory
Committee

Advisory and reporting

Executive Committee
Audit

ReportingInstruction and supervision
Audit

Each department andCollaboration

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Corporate Governance
CORPORATE GOVERNANCE[Overview of Timely Disclosure System (Diagram)]<Information on decision facts and settlement of accounts, etc.>

Representative Director
Administration Division
Executive Committee

Summary of matters to be resolved by the Board ofConfirmation of disclosure

Directors

or non-disclosure
Company Planning Division

Progress and Results Report

Deliberation
ProposalConfirmation of whether or not disclosed in accordance with

Corporate Information
Manager(Manager in charge ofBoard of Directors

Information disclosure<Information regarding facts that have occurred>

Each department
Occurrence of emergency
situations
ReportingCompany Planning Division
Confirmation of whether or not disclosed inaccordance with the Securities Listing Regulations

Representative Director

Information disclosure

Confirmation of disclosure
or non-disclosure
Progress and Results Report
Corporate Information
Manager(Manager in charge ofOr more33