About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Sustainability of SHO-BOND

Sustainability of SHO-BOND

Basic Concept for Sustainability
With its Corporate Philosophy at the core of management, the Grouphas designated material issues (Materialities) to get close to its vision.
Four designated Materialities involve internal activities and how
business activities affect society. We believe that all of these activities
are sustainability management that contributes to accomplishing theSDGs and achieving our Corporate Philosophy. We have established a
Sustainability Policy and ESG-related policies to provide guidelines forconstant activities in accordance with materiality priorities. In August
2022, we set KPIs for each of the priorities to measure their progressand disclosed targets and results.
We will enhance our corporate value over the medium to longterm and contribute to creating a sustainable society by continuing to
upgrade sustainability initiatives with the input of our internal andexternal stakeholders. Specifically, we will improve our promotion
framework, consider measures, and regularly review them to upgrade
the initiatives.

Sustainability Policy

Strengthening Our Sustainability
Promotion Framework
The Group has established a Sustainability Committee, chaired by the
President and Representative Director and composed of all inside andoutside directors. The Committee meets once a year as a general rule
to discuss sustainability issues including social and environmental

Materiality

KPIs
Number of violations of environmental
laws and regulations(vs. FY2022 [5,238t])
Contribution to thedevelopment ofsustainable cities

Sustainability Philosophy

Corporate Philosophy
Comprehensive
maintenance system backed
by the organizational
capabilities

Our Vision

Productivity improvement
through technology
development(CO2 emissions intensity*)

Sustainability Policy

S

G

Environmental Policy

Quality Policy
Health and Safety Policy
Human Rights Policy
Procurement Policy

Anti-Bribery Policy

Sound governance andmeasures for more
improvements

Target year

FY2022

FY20230Every year003,929t[-25%]

FY20315,238t[±0.0%]

5,474t[+3.5%](6.5 t-CO2 / 100 million yen)

(6.5 t-CO2 / 100 million yen)

(4.9 t-CO2 / 100 million yen)

Average scores for contractor performance
evaluation in construction industry

MLIT：78 or higher
NEXCO：80 or higher

Every year

MLIT：80.0
NEXCO：86.0

MLIT：80.6
NEXCO：86.5

Percentage of construction sites where“8 days off in 4 weeks” is achieved(according to the Japan Federation ofConstruction Contractors)

100%

FY2024

85.9%

94.3%

0

Every year00

Lost Time Injury (LTI) frequency rate

0.7 or lower

Every year

0.67

0.00

Achievement rate of annual overtime
limit of 720 hours

100%

FY2024100%

100%

Percentage of female employees inregular recruiting

15% or more

Every year

9.5%

16.2%

38

FY202426

30

2.4% or more

Every year

3.3%

3.1%

Childcare leave rate of new fathers

100%

FY2024100.0%

74.0%

Rate of response to safety confirmation

100%

Every year

100%

100%

Compliance training participation rate

100%

Every year

98.8%

100%

Number of serious violations of laws
and regulations

0

Every year

0

0

100%

Every year

90.3%

100%

Number of fatal accidents

Number of female engineers
Percentage of employees with disabilities

E

meetings with ESG promotors from each department and Group
company as needed to ensure that the Group as a whole collaborates
at the practical level. Under such a structure, we are committed to
staying and becoming more sustainable through organic cooperation
among the management team, the ESG Promotion Office, respective
departments, and Group companies.

KPIs Related to Sustainability

CO2 emissions (Scope 1 and 2)

Materiality

issues. The Committee also submits and reports the results ofdiscussions on important matters to the Executive Committee and theBoard of Directors. The Committee mainly discusses general importantmatters related to sustainability such as the development of policies
and measures related to sustainability, the identification, assessment,
and management of climate-related risks and opportunities, and the
management of KPIs for non-financial information.
We have also established an ESG Promotion Office to integrate
activities related to sustainability. The ESG Promotion Office holds

Information security training
participation rate

* (Reference value) CO2 emissions per consolidated net sales (100 million yen)

45

SHO-BOND 2023 Integrated Report46

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Efforts for Environment

Efforts for Environment

Climate-Related Financial Disclosure Basedon the TCFD Recommendations
Contribution to thedevelopment ofsustainable cities

Climate-related Financial Disclosure Based on the TCFD Recommendations

Metrics and Targets
CO2 Emissions Reduction Targets

Strategy

The SHO-BOND Group (the “Group”) expressed its support for the
TCFD recommendations and joined the TCFD Consortium in July
2022. Based on its corporate philosophy of “Inheriting and passing
on social infrastructure to the next generation in good condition,”
the Group is committed to “contribution to the development ofsustainable cities” as one of its Materialities and is aware that
combatting climate change is an important management challenge.
Based on the recognition that a longer service life of infrastructure
contributes to reducing greenhouse gas emissions, we will makeefforts so that we can contribute to realizing a sustainable society.
These efforts include information disclosure and other initiatives
related to climate change, in addition to core business activities as an
infrastructure maintenance specialist.

The Group conducted a scenario analysis to identify and assess theimpact on its overall business management of the risks andopportunities associated with the “transition” to a low-carbon
economy and those associated with the “physical” changes brought
about by climate change.
As assumptions for the scenario analysis, we selected the 2˚C orlower and 4˚C scenarios by referring to several existing scenarios
published by the International Energy Agency (IEA), theIntergovernmental Panel on Climate Change (IPCC), and otherorganizations. Businesses subject to the analysis are the domestic
construction business and the manufacturing and sales business of
repair and reinforcement materials; the time horizon is assumed to beup to the year 2030. For the climate-related risks and opportunities
identified, we have sorted out necessary countermeasures as shownin the table below.
By implementing the countermeasures identified in this report, we
will contribute to developing sustainable cities and will achievesustainable growth by enhancing the resilience of our business.

Base year

CO2 emissions（Scope1 and 2）

FY2022

FY2031FY2051

Total emissions

5,238t-CO2

3,929t-CO2(−25%)Net zero(CO2 emissions intensity*)(6.5t-CO2/100 million yen)

(4.9t-CO2/100 million yen)

* (Reference value) CO2 emissions per consolidated net sales (100 million yen)

To realize a decarbonized society—the basic principle underlying the
Act on Promotion of Global Warming Countermeasures, the Group
has set targets of reducing its CO2 emissions (Scope 1 and 2) 25%
from FY2022 levels by FY2031 and ultimately achieving carbon
neutrality by FY2051.

CO2 Emissions (Scope 1, 2, and 3)(Unit : t-CO2)

Risks / Opportunities covered
Changes expected
Changes in reputation
among shareholders andinvestors

ncreased ESG investment in the SHO-BOND Group as an infrastructure•Imaintenancespecialist due to being highly regarded for its low CO
Opportunity

Changes in customer
behaviors
Rises in raw materials
costs

2

Risks

extension work, in the face of growing severity of weather disasters
price competitiveness with the delivery of low-carbon•Increased
construction services and products in the field of repair and reinforcement
to CO emissions regulations, the number of life-extending works•Dofuebuildings
and infrastructures increases while the amount of overall
Opportunities
2

Acceleration of national
resilience measures

Increase in averagetemperature

Growing severity of
weather disasters

investments in construction decreases

ncreased demand for infrastructure maintenance to counter natural•Idisasters

Risks

Risks

ecreased productivity in line with increased heat stroke cases among•Don-site
workersncreased costs for improving working environment and introducing•Iequipment,
etc. to prevent heat stroke
orsening worker shortages due to deteriorating outdoor working•Wconditions•Increased costs due to process delays at disaster-stricken sites•Supply chain disruption
amage to or shutdown of operations at disaster-stricken own•Dfactories
or contracted manufacturing plants

FY2022

FY2023

Scope1

2,667

2,805

Scope2

2,571

2,669

Total of Scope1 and 2

5,238

5,474

6.5

6.5

2

and 3) and initiatives aimed
at reducing CO2 emissions(Scope 1 and 2)

emissions•Increased procurement costs for energy and materials
ecreased transactions due to our inability to adequately respond to•Dcustomers’
requests for reducing CO emissions
urges in the purchase prices of resin-based materials and steel•Smaterials
as a result of decreased production of naphtha and iron ore
ncreased demand for watershed flood control and disaster restoration•Iwork,rather than seismic reinforcement work and service life

Category

information about•DCOiscloseemissions (Scope 1, 2,

2Introduction of carbon
pricing
Introduction of moreaggressive targets /policies for CO2 emissions
reduction by countries
around the world

Countermeasures

Description

romote green procurement,•Pincluding
switching to
low-carbon materials
Switch to renewable energy
and promote energy
conservation during
construction
Invest in solar power
generation for own
consumption, etc.
Develop low-carbon anddecarbonization technologies
Develop new technologies
that support the preventive
maintenance ofinfrastructure••

Targets

Metrics

Measures to Combat Climate Change
The operations of the SHO-BOND Group generate a relatively
small amount of CO2 emissions due to the characteristics of theinfrastructure maintenance business, which left us limited optionsfor Scope 1 and 2 reduction measures. Factoring in thesecircumstances, the Group examines various types of methods forCO2 emission reductions and carbon offsets mainly in the
Sustainability Committee.
The Kita-Nihon Regional Office of SHO-BOND CORPORATION,
which is in the city of Sendai in Miyagi prefecture, was relocated in
FY2023 to a building that received ZEB (Net Zero Emission Building)certification under the BELS (Building-Housing Energy-efficiency
Labeling System). ZEB certification requires zero or negative net
primary energy consumption annually by using energy-efficientfacilities and renewable energy sources. The Group assessed thedesign and equipment of the building including estimates ofcost-effectiveness based on the building’s location, sunshine
exposure, and other parameters.
The Group will continue activities to achieve carbon neutrality
by 2050 while examining a diverse array of measures.

••

CO2 emissions intensity(t-CO2/100 million yen)evelop technologies for•Dimproving
on-site working
environments and implement
heat stroke countermeasures

Exterior of the Kita-Nihon Regional Office building

Scope3110,008

110,468

Total of Scope1, 2, and 3

115,246

115,942

ork together with the•Wentire
supply chain tostrengthen BCP measures in
preparation for disasters
Manage sanitation related towater in a sustainable manner•

The building’s spacious interior

Rooftop solar panels

Coverage: Domestic group companies

47

SHO-BOND 2023 Integrated Report48

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Efforts to Develop Talent and Improve
the Workplace Environment

Efforts to Develop Talent and Improve
the Workplace Environment

Basic Views
Employees are the most valuable asset of the SHO-BOND Group. For
the Group to survive and grow while fulfilling its social responsibilities
and contributing to the development of a sustainable society, we
believe every employee of the Group must have a dream and feel asense of fulfillment by demonstrating their abilities.
Therefore, we aim to create a workplace where every employee ismentally and physically healthy and can continue their work for along time with confidence while having the opportunity to maximize
their abilities and potential.

Recruiting
Explaining the need for infrastructure repair and reinforcement andthe social significance of these activities is an effective way to attract
new university or technical college graduates, especially in the fieldsof civil engineering and architecture. For this purpose, SHO-BOND
invites students and instructors to visit the Technical Research Instituteand Tsukuba Training Center and send our engineers to give special
lectures on the campus regularly.
When it comes to hiring people with previous work experience,
we use many channels including an employee referral system todiversify our human resources.

Talent Development
Experience is a critical component of repair and reinforcement
construction activities. For this reason, we provide education mainly
through on-the-job training, and we are working to improve theirability to solve problems independently by delegating responsible
tasks and putting them in charge of them in their early stages.
As for off-job training, we select effective and efficient learning
methods for each theme, and offer our employees various training
opportunities according to their stage of growth, such as internal/
external education programs, e-learning, etc. In 2021, we opened the
Tsukuba Training Center, which is adjacent to the Technical ResearchInstitute, for hands-on training programs. We will continue to develop
the skills of everyone in the Group from a long-term perspective while
upgrading education programs and encouraging people to learn new
skills in a well-planned manner.

49

SHO-BOND 2023 Integrated Report

Employee Surveys and Human Resources Interviews

Junior/middlemanagers

General staff

Job-specifictraining
Rank-specifictraining

Department
managers andhigher positions

Training
for new employees

Subjects(including
duplication)

Responses(including
duplications)

Response rate

Interviews(including duplications)

April 2021March 2022

1,468

1,429

97.3%

63

April 2022March 2023

2,385

2,297

96.3%

84

Childcare leave
rate of new
fathers

FY2019FY2020

FY2021

FY2022

FY2023

45.8%

80.0%

65.0%

100.0%

74.0%

Attrition Rate

Follow-up training
Training outside the group

(%)
12

11.0％

Job-specific training
10● Interviewing system

Selfdevelopment

Interviewsby human resources
personnel

Time

Safety training

OJT

Employee Surveys

Productivity improvement
through technology
development

childcare leave by male employees, we started a system of making
one-off payments when they return from childcare leave in 2019. To
raise awareness of that, we have made a pamphlet for introduction
and it has raised the number of male employees taking childcare
leave as well as the number with long-time childcare leave.
In 2020, SHO-BOND CORPORATION received Kurumin certification
as a company that supports childcare.

● Self-declaration system● Skill and performance evaluation system● Job rotation● Support for earning public qualifications● Information about correspondence courses● Reference book recommendations

8.7％

8

All-industry average
The SHO-BOND Group6● Information about

3.5％

correspondence courses● Reference book4

Selection of Employment Category and the
Self-Declaration System
The Group gives employees the flexibility to choose an employment
category with or without transfers to different locations. Many
individuals change their status to reflect the current stage of their lives.
Every year, some employees ask to be shifted. The self-declaration
system allows individuals to confirm their employment category andjob status once every year.

recommendations
2

Training for Specific Job Levels
SHO-BOND has training programs structured to give employees theknowledge and skills required depending on their specific job levels.
These follow-up training programs extend from education for new
employees to training for people with more experience, which coversubjects selected to enable the participants to advance to the next
step of their careers. Furthermore, the Tsukuba Training Center haslessons that are very similar to conditions at job sites and theemployees can obtain practical knowledge.

Support for Earning Certifications
The Group gives employees a variety of support for earning
professional qualifications and other certifications required for theirjobs. Not only is the cost of tests and registrations for certifications
covered but receiving certifications also raises the monthly income of
employees. For Professional Engineer and other difficult qualifications,
we have carried out measures including supplementary lessons by theemployees who have been certified and commendation at the time ofcertification. Through such promotion measures, the number of thosequalified has been steadily increasing.
We will continue to expand these programs in order to enable ourstaff to earn the certifications required for their work and evendifficult qualifications.

Employee Retention
SHO-BOND conducts monthly surveys of employee job satisfaction,
goals, and other items with an emphasis on younger employees andindividuals returning from leave. Using the results, human resources
personnel timely interview and support those in need with thecooperation of the supervisors and others. These activities let
employees know that there is a framework in place to help them deal
with various problems and relieve their anxiety.
In addition, we offer opportunities to work at home and selectstaggered working hours for more flexibility. Measures like these toconstantly improve the workplace environment based on theemployees’ needs result in a higher retention rate.

Diversity and Inclusion0

FY2023

FY2013*Attrition rate only counts for employees who resign voluntarily. All-industry average isdetermined by SHO-BOND using Ministry of Health, Labour and Welfare data.

Workplace Environment Initiatives
Maintaining Proper Working Hours
The Proper Working Time Project was started in 2014 with measuresthat include improvements to the rules of employment and theinitiation of no overtime days to prevent excessive working hours andencourage employees to take time off.
In 2017, the Group started using a new system for recording
working time. This framework allows efficient monitoring of thenumber of job hours and the situation of weekend or holiday
attendance.
To promote the tendency to use vacation days more easily, we
have designated a month when employees are encouraged to takepaid holidays. In FY2023, we achieved the target of no employee
having fewer than 110 days off per year. We have continued to takeaction concerning paid leave, increasing the use of vacation time.
Starting in April 2024, construction companies in Japan will have tocomply with a limit on overtime working hours. We are committed tocomplying with these regulations by making continual improvements
such as reducing total working time and increasing the use of paid leave.

To maintain diversity in our workforce, the Group makes efforts torecruit diverse new employees as well as conduct the selection
process in a fair and non-discriminatory manner. In addition, theGroup selects management personnel based solely on eachindividual’s capabilities and performance.
To increase the participation of women in the workforce, we makeefforts to maintain at least a 15% regular recruiting rate of females,
and from a longer perspective, we hope to encourage the participationof more females in management and other higher levels of work. The
15% goal was achieved in FY2023. In addition, there are workplaceenvironment measures and a training program with follow-up surveys
for female engineers that result in a high retention rate.
To retain elder employees and continue benefiting from their
many years of experience, the remuneration for these people wasraised significantly in FY2021 and FY2023. Partly because of that, allemployees who reached their mandatory retirement age in FY2023
decided to remain at SHO-BOND.
For many years, we have hired large numbers of people with priorwork experience. At the end of June 2023, mid-career employees
were 52.3% of the entire workforce and 33.5% of all managers. We
remain committed to maintaining a diverse workforce.

FY2019FY2020

FY2021

FY2022

FY2023

Number of female
engineers

16

18

23

26

30

FY2019FY2020

FY2021

FY2022

FY2023

Percentage of female
employees in regular
recruiting

2.8%

5.3%

17.2%

9.5%

16.2%

127.0

129.4

130.2

134.3

134.5

Employee retention
after mandatory
retirement age

65.0%

86.0%

80.0%

88.0%

100.0%

Average annual
days off

Supporting Employees in Balancing
Work and Childcare and/or Nursing Care
We provide employee assistance programs thatexceed the legal requirements and promote
the use of these programs to allow employees
to balance work with childcare and nursing
care without anxiety. To increase the use of50

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

FeatureFeature: SHO-BOND Training Programs

SHO-BOND
Training Programs

New Employee Training – Hands-on Lessons for Practical Knowledge

A new employee learning on-site practices from anexperienced individual now in his sixth year at the Group[ Training for new employees ][ The Group-wide Construction Engineering
Technology Conference ]Training for new employees is designed as a first phase to let themacquire know-how essential for working at the Group and become
the core members of the workforce. This one-year training consistsof an introductory course mainly in the form of classroom lecturesand practical training at workplaces where new employees aretemporarily assigned.
[ Introductory training ]The main purposes of the 45-day introductory training are to (1)give them the proper mindset as a businessperson, (2) acquirebasic knowledge about their jobs, and (3) foster a sense ofsolidarity among them as employees of the Group.
Many of the new employees have majored in civil engineering andconstruction in college or university but most of them are
introduced to the maintenance field for the first time at SHO-BOND.
We design training programs in a way that allows them to acquire
the fundamental knowledge needed to advance to the on-the-job
training phase.
[ On-the-job training ]On-the-job training accounts for the majority of the one-yeartraining for new employees. This training is an important process
for new employees to apply the knowledge acquired during the
introductory training under the guidance of experienced
employees.
We believe that the fundamentals of every job within the Groupare learned at work sites, regardless of future career paths. This is
why on-the-job training is provided mainly at construction sites
where new employees acquire repair and reinforcement skills.

Every year, SHO-BOND holds a Construction Engineering Technology
Conference at the head office to allow our employees to shareknowledge and experience and further upgrade their skills. The event
is attended by about 100 engineers of all ages from all areas of Japan.
Selected employees give presentations about timely themes andinnovations in maintenance work, which can cultivate the essential
ability of communication. Therefore, this event provides every
participant with valuable learning opportunities. After the pandemic
started, online links with regional offices nationwide have been used
to enable engineers unable to attend in person to participate.

The Sumida River, which flows
through downtown Tokyo, ishome to bridges of such diverse
designs and structures that it
can be said to be a “bridge
exhibition.” On their field trip
to this river, new employees
hear explanations of bridge
structures and components
from members of theEngineering Division. Seeing bridges from this perspective gives
everyone a sound understanding of the structure of bridges, which
will be part of their future maintenance activities.

Participants listen to a
construction engineering
presentation

Award winners pose with the Engineering
Division general manager[ Education matching the requirements of
in-house companies ]One of the goals of the Group’s current Medium-term Business Plan is
to upgrade the order receipt strategy utilizing the in-house company
structure and to increase activities for large projects and construction
work capability. One element of these activities is the reinforcementof training, field trips, and classes specifically for in-house companies.
Within the Group, the condition differs depending on workforce
composition, regional characteristics of projects, and other factors.
Training programs must reflect these differences. This is why we give
people practical know-how and skills that cover precise requirements.

As part of introductory training, new employees complete handson lessons at the Technical Research Institute and the Tsukuba
Training Center about construction site processes and quality andtasks involving safety management. The hands-on lessons include
special experience such as handling the same tools and materials
used at job sites, assembling scaffolding, etc., which enables
trainees to simulate the actual construction process.
New employees need to understand what types of work takeplace at construction sites, precautions that are required, andother points about their jobs. Giving them this practical knowledge
allows them to do their jobs at these sites with confidence. The
instructors are experienced engineers of SHO-BOND, mainly fromthe Technical Research Institute, Construction Division, and Safety
Management Department.

Activities centered on hands-on experiences are a distinctive feature of training at SHO-BOND as a specialist in infrastructure
maintenance. Using this methodology gives new employees the basic knowledge and skills needed for this field of construction
and the subsequent transition to actual job sites will also be smooth. We will continue to make further improvements to ourtraining programs to enhance the effectiveness of job introductions.
Training at the Technical Research Institute51

SHO-BOND 2023 Integrated Report

A field trip for female engineers of the West Japan In-house Company

52

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Efforts for Health and Safety

Efforts for Health and Safety
Comprehensive
maintenance system backed
by the organizational
capabilities

Basic Views

Productivity improvement
through technology
development

Targets and Accomplishments

Health and Safety Policy

Basic Responsibilities

1. W
 e will achieve a safety culture at an even higher level.
2. W
 e will establish a health and safety management system.

In addition to complying with laws and regulations related tooccupational health and safety, the SHO-BOND Group aims to create
a comfortable working environment in which everyone strives toeliminate occupational accidents, while maintaining and improving
their health, based on the philosophy that “respect for human lifeand safe construction take precedence over everything else.”
Health and safety management is one of the most importantmanagement issues of the Group. In recent years, orders for largescale construction have expanded, and the number of high-difficulty
construction projects such as expressways has been increasing.
Completing these projects with no accidents demands a high level ofsafety skills along with a strong commitment to safety among
everyone at the Group and partner companies. Based on this stance,
we have established the following Health and Safety Policy for thethree years ending in June 2024. In addition, the president of
SHO-BOND directed in January 2020 the start of the Initiatives for
Creating a SHO-BOND Culture of Safety.

3. W
 e will ensure the accurate implementation of risk assessments.
4. W
 e will carry out measures for the reduction of occupational
accidents involving third parties and severe workplace accidents.
5. We will execute thoroughgoing health and safety education
toward our own employees and the staff of our partner companies.

The Group has set “zero fatal accidents” and “a lost time injury (LTI)
frequency rate of no more than 0.7” as KPIs related to health andsafety. In FY2023, we achieved zero fatal accidents and the workplace
accident frequency rate and severity rate were both zero. Both KPIs
were below the average of Japan’s general construction sector for thethird consecutive year.

6. W
 e will ensure thorough preventive measures for occupational
diseases.

Targets

7. W
 e will promote work style reforms for the prevention of healthdisorders caused by overwork.

Number of fatal accidents

8. W
 e will thoroughly ensure the prevention of property damage
accidents.

Lost time injury (LTI)
frequency rate*

FY2022 results

FY2023 results

0

0

0

Maximum of 0.7

0.67

0.00

Determine the basic principles and set goals forhealth and safety management

President
General Managers
of Regional Offices

Set and publicize annual safety and healthmanagement plans for the regional office based on
the SHO-BOND Health and Safety Policy

Make and publicize the policy, and set goals for
Branch Managers construction health and safety
and Site Supervisors Create, implement, and improve construction healthand safety management plans
Partnercompanies

Create risk assessment procedure manuals* Lost work time of 4 or more days

Key Initiatives Based on the Health and Safety Policy

Health and Safety Management System

Priority Actions in FY2022 and FY2023
1. Promote the Initiatives for Creating a SHO-BOND Culture of Safety

Initiatives for Creating a SHO-BOND
Culture of Safety

2. P romote initiatives to motivate people involved in construction
projects, such as commending our employees and partnercompanies for their outstanding performance in health andsafety management
3. P romote digital transformation and other methods for more
effective and efficient health and safety management activities

Our goal is to raise the SHO-BOND culture of safety from a“dependent” structure, where supervisors oversee safety measures,to an “independent” and “interdependent” structure in which
individuals act independently and promote safety among themselves.
We believe these changes will establish accident-free workplaceenvironments where people can do their jobs with even greater safety
and confidence. To accomplish these goals, we are taking actions
based on the Initiatives for Creating a SHO-BOND Culture of Safety.

Priority Actions in FY2024
1. Ensure that a series of measures are taken, from the identification ofrisk factors that can cause serious accidents to the implementationof mitigation measures and confirmation of their implementation
2. H
 ealth and safety officers perform daily workplace patrols andnip accidents in the bud
3. C reate comfortable and smart workplaces and construction sites

SHO-BOND has a health and safety management system in which
everyone from the president to supervisors at all levels has clearly
defined roles, responsibilities, and authority. This structure is used toperform well-planned health and safety management activities at all
business sites.
We conduct health and safety patrols at construction sites toimprove the level of health and safety. In FY2023, the president,
regional and branch office general managers, and other senior
managers performed 3,791 patrols, which is an average of 1.5 patrols
per month at each construction site.

Health and safety patrols by the company president

Health and Safety Management Organization Chart

Head officeHigh

Instinct

Initial position

Bradley Curve

Regional office healthand safety management plans

Regional offices(result of safety awareness survey)

Health and Safety Policy

Safety management system guidelines

Supervision

Goal

Injuryrate

Self

Branches
Team

Zero

Reactive

Dependent

Independent

Interdependent

RA of the construction project

Progress with creating a culture of safety
Actions only after an
accident happens

Follow rules because
they are mandatory

Individuals takeresponsibility for
their own safety

Construction
sites

RA in the meeting with related managers
and site supervisors before construction

Care for others
Pride of belonging
to SHO-BOND

Health and safety management plans

Partnercompanies
Company A

Company B

RA procedure
manuals

RA procedure
manuals* RA = Risk assessment

53

SHO-BOND 2023 Integrated Report54About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Efforts for Health and Safety

Somatosensory Health and Safety Education at the Tsukuba Training Center
Major Activities
Health and Safety Training
The Group provides safety training programs to employees of theConstruction Department, Marketing and Sales Department, andEngineering Department in July every year. The July 2023
program included reports about workplace accidents andproperty damage caused by accidents during FY2023 and priority
actions for the next fiscal year. We also provided special
education as well as health and safety training by SHO-BOND
instructors to our engineers and 350 employees from 65 partnercompanies in FY2023.

Digital Transformation (DX) of Health and Safety Activities
The Group promotes DX in health and safety activities to improve
effectiveness and reduce on-site workers’ workloads. To
accomplish these goals, we formed a Safety DX Promotion
Working Team. While identifying areas for improvement in current
health and safety activities, we are working on specific initiatives
to promote DX, such as setting targets.
Using web conferences, chat tools, and other methods, we are
implementing initiatives such as early resolution promptly bychecking the status of work and sharing problems throughreal-time communications between regional and branch offices
and construction sites.

The Tsukuba Training Center has a full range of facilities for
conducting effective health and safety education. To foster anawareness of health and safety, including risk perception, judgment
criteria, and beliefs, we conduct employee training at the time ofjoining the company and when they are promoted to a higher level. In
addition, we also provide hands-on education on health and safety topartner companies and overseas trainees, using actual training bridges
and scaffolding, as well as VR and other hands-on equipment.

Trial Dangle with a Torso Belt and Body Harness
Repairing and reinforcing bridges involves numerous tasks at elevatedheights, such as erecting and dismantling scaffolding. For the sake ofsafety, it is inevitable to equip safety belts or harnesses for fall
prevention. Therefore, ensuring everyone on-site using this safety
equipment properly is essential for health and safety management.
During training, participants are suspended by torso belts and bodyharnesses, so that they can tell the difference of the burden on theirbody, and learn how to help themselves relieve the burden they aretaking by using a supplementary leg support attachment while
waiting for help.

Training under the Initiatives for Creating a SHO-BOND
Culture of Safety Roadmap
Felt leadership training for new senior executives and managers
takes place at the Group, with the support of the external
consultants. In FY2024, felt leadership training will be expanded to
managers of partner companies and younger employees of
SHO-BOND.
This training aims to equip employees with the leadership skills
to demonstrate their strong
commitment to safety throughtheir actions so that an
improvement of awarenesswill spread to the people
around them, creating a
comfortable environment andorganization, and fostering aculture of safety.

Construction Site Health and Safety Patrols by
Administrative Personnel
Health and safety patrols are also performed by employees inadministrative departments, who do not have construction site
jobs. Some people go to the construction site for the first timethrough these patrols. It is expected to raise awareness of healthand safety throughout the Group while improving the level ofsafety and health on sites since they can see construction sites
from a viewpoint unlike that of construction personnel, which
creates synergies for further health and safety improvements.
Many office workers who visit construction sites are surprised
to see that these locations are
not dangerous nor dirty. They
are pleased to see the positive
atmosphere of theseworkplaces and impressedwith the numerous health andsafety measures that evenpeople with no construction
experience can notice.

55

SHO-BOND 2023 Integrated Report

VR systems are used (right) to generate realistic views of accidents (left).

Emergency Relief Training with Fire Departments andRescue Units
As part of on-site safety activities, we conducted joint rescue andevacuation drills with the local fire department and external
emergency response organizations.
We aim to enhance the understanding of health and safety
activities among construction workers through real experiences of
the whole process, including checking the contact list andevacuation sites, providing first aid for people requiring help,
requesting emergency services, and conducting ambulance
activities in case of an emergency. We also hope that eachindividual will develop their own safe behavior, thinking, and value
through such activities.

Training inside the scaffolding on the actual training bridge

Training participants are suspended by a harness (left) and torso belt (right).

Recreating Accidents with Mannequins

Simulating Falls with Mannequins

In the accident simulation area, actual accidents are reproduced using
mannequins to show the potential causes of accidents and theirsevere consequences.
There is a training corner where employees can learn how torecognize unsafe locations and unsafe behavior on scaffolding. We
also make it possible to intuitively learn about the dangers of disasters
by checking unsafe situations in which accidents have occurred, suchas accidents caused by vehicles for high lift work and accidents inwhich people injured their hands and feet while using a power tool.

What would happen if people fell without wearing a safety belt or if
the support rail for the harness hook was improperly placed? To
demonstrate such accidents, we use mannequins weighing the sameas typical workers. Experiencing the forceful shock firsthand,
individuals learn to appreciate the gravity of occupational accidents
and the importance of proper use of safety belts.

56

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Corporate GovernanceCorporate GovernanceSound governance andmeasures for more
improvements

Basic Views

Progress in Strengthening
Corporate Governance

The SHO-BOND Group positions corporate governance as one of thehighest management priorities to realize our corporate philosophy“With a sense of mission of ‘Inheriting and passing on social
infrastructure to the next generation in good condition,’ we willcontribute to the realization of a safe and affluent society by utilizing
our advanced technological development capability as a leading
company in the structure maintenance business.”
By fulfilling our social responsibility as a company that specializes
in the maintenance business, we will work together with ourshareholders and all other stakeholders to achieve sustainable growthand enhance our corporate value over the medium to long term. In
addition, we will aim for highly sound and transparent management
by developing and promoting a corporate governance system thatenables swift and decisive decision-making.

We transitioned to the holding company system ahead of our industry
peers and later became a company with an Audit and Supervisory
Committee to strengthen corporate governance. We will continue
maintaining a proper governance system while keeping a close eye onsocial circumstances.
Event

January 2008

Transitioned to the holding company system

September 2015

Transitioned to a company with an Audit and Supervisory
Committee and shortened directors’ term of office to one year

September 2017

Increased the number of Outside Directors to three

July 2018

Started evaluating the effectiveness of the Board of Directors

November 2018

Established the Nomination and Remuneration Advisory Committee

August 2022

Established the Sustainability Committee

Board of Directors

General Meeting of Shareholders
Appointment / Dismissal

Accounting
AuditorAppointment / Dismissal

ReportCooperation

Audit andSupervisory
Committee

Appointment / Dismissal

Board of Directors

Cooperation

Inquiry

Accounting
audit

Audit /
Supervision

Cooperation

Nomination andRemuneration
Advisory Committee

Instruction Audit Appointment / Dismissal /Supervision

Audit OfficeInstruction
ReportPresident
Executive Committee

Internal audit
Submission / Report

Respective departments /Group companies

57

SHO-BOND 2023 Integrated Report

The Board of Directors has eight members including four directors who
are members of the Audit and Supervisory Committee. The directors
discuss and reach decisions about important matters involving
management as prescribed by laws and regulations and the rules for
the Board of Directors. As a rule, the board meets once every monthand meets at other times as needed in order to reach decisions quickly.
(Number of meetings in FY2023: 13 times)

Audit and Supervisory Committee
Response

Risk Management Committee
Sustainability Committee
Internal Control Committee
Asset Management Committee

The President and Representative Director presides over the Executive
Committee as a body to assist his decision-making in management.
This committee consists of directors outside the Audit and Supervisory
Committee and senior executives nominated by the President,
including the executives of SHO-BOND subsidiaries. As a rule, thecommittee meets twice every month and meets at other times asneeded in order to reach decisions quickly.
(Number of meetings in FY2023: 23 times)

Internal Committees
Date

Overview of Corporate Governance System
Corporate Governance Structure

Executive Committee

SHO-BOND is a company with an Audit and Supervisory Committee.
The Audit and Supervisory Committee has four members, of whomthree are Outside Directors. As a rule, the committee meets once
every month and meets at other times as needed. The Audit andSupervisory Committee, as an independent body, audits andsupervises the performance of directors who are not members of the
Audit and Supervisory Committee. The committee also prepares audit
reports and reaches decisions on other stipulated matters based onlaws and regulations, the Articles of Incorporation, and Audit andSupervisory Committee rules and audit standards. The Audit andSupervisory Committee works with the accounting auditor and the
Audit Office to perform audits efficiently.
(Number of meetings in FY2023: 12 times)

Nomination and Remuneration Advisory Committee
The Nomination and Remuneration Advisory Committee has four
members: three Outside Directors and the President andRepresentative Director. This committee is actively involved in theformation and execution of the succession plan for the President andhas adequate discussions on directors’ nomination and remuneration
while giving opinions and advice to the Board of Directors.
(Number of meetings in FY2023: 4 times)

Major committees related to business execution include the Risk
Management Committee, Sustainability Committee, Internal Control
Committee, and Asset Management Committee. Importantmanagement issues are continuously discussed by theme at thesecommittees and submitted and reported to the Executive Committee
as needed.

Method of Evaluating Effectiveness of
the Board of Directors
To evaluate the effectiveness of the Board of Directors, a third-party
external adviser is invited every other year for objectivity
considerations. The evaluation is performed by asking all directors,
including members of the Audit and Supervisory Committee, tocomplete questionnaires, which will be analyzed and reviewed by the
Board of Directors. The issues recognized here will be approached andreviewed with self-analysis and evaluation in the next year.

Summary of Evaluation Results
For the fiscal year ended in June 2023, we confirmed the effectivenessof the Board of Directors as a result of the evaluation based on the
self-analysis, after implementing the action plan formulated based on
the results of the questionnaire conducted by an external advisor in
the previous fiscal year.
To address one of the issues in the action plan, which was offeringcontinuous training for executives, we held three directors’ study
sessions to improve their knowledge and abilities. We will continue toimprove the effectiveness of the Board of Directors by providing
further opportunities for dialogue, such as lunch meetings between
outside directors and senior managers, and providing more training
for executives.

SHO-BOND’s Outside Directors

providing oversight and advice from an independent standpoint
drawing on their respective knowledge and experience. None of thethree Outside Directors have personal, capital, or business
relationships or any other special interests with the Company. In
addition, the standards for Independent Outside Directors in the
Company’s Corporate Governance Guidelines comply with theindependence standards of financial instruments exchanges. We seek
to provide the Outside Directors with information in an efficient andin-depth manner so that they can fully understand the Group andexercise their abilities to the fullest. In promoting smoothcommunication, relevant executive officers directly give explanations
to the outside directors as needed when they make inquiries.

Dialogue with Shareholders
and Investors
The Group places importance on information disclosure and dialogue
with shareholders, institutional investors, analysts, and otherinterested parties. For institutional investors, we hold an information
meeting about financial results twice a year as well as one-to-one
meetings held every quarter. In addition to such one-to-one meetings
more than 100 times a year, we hold a small meeting attended by the
President after announcing the full-year financial results. For
individual shareholders, we hold information meetings in Tokyo andOsaka in March every year after transitioning to the holding company
system in 2008. Dialogues are consistent with the spirit of fairdisclosure, and care is exercised to prevent the disclosure of insider
information. The Executive Committee and the Board of Directors
periodically receive feedback concerning the opinions and concerns ofshareholders, which help achieve sustainable growth.
The basic policy for investor relations is to provide accurate, fair,
and timely information about our management strategies, businessactivities, financial conditions, and other items. The purpose is tobuild long-term relationships rooted in trust and receive a proper
evaluation from all stakeholders. This policy is posted on our website.

ActivityFrequency (FY2023)

Information meetings for individual shareholders*

2 times

Information meeting for institutional investors(attended by President and Chief Financial Officer)

2 times

One-to-one meetings

114 times* The meetings are held in Tokyo and Osaka in March every year.

The Company elects three Outside Directors who are Audit andSupervisory Committee members.
Mr. Satoru Miura has knowledge and experience as a certified
public accountant as well as a corporate accounting advisor. Mr. Akira
Hongo has knowledge and experience as an attorney as well as acorporate consulting attorney. Ms. Reiko Kuwano has considerable
academic expertise and experience in the field of civil engineering as
a professor at the University of Tokyo. The three of them play a role inensuring the properness of the business execution of the Company by

58

About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Corporate GovernanceDirectors

Yasuhiro Sekiguchi

Tatsuya Kishimoto

Details of Compensation for Directors(and Other Officers)
At the Board of Directors, the Company resolved the policy regarding
the details of the compensation, etc. for each Director (excluding
Directors serving as Audit and Supervisory Committee Members;hereinafter “Directors”), and the details of such are as follows:
As the Company is a holding company that is in charge ofsupervising Group companies, the compensation for the Company’s
Directors comprises basic compensation only. Furthermore, the paymentof basic compensation shall be monthly fixed compensation in cash.
The Company’s Directors concurrently serve as Directors ofsubsidiaries. Compensation is determined by proportionately taking
into consideration the weight of the business of both the Company
and its subsidiaries, and multiplying it by the monthly compensationof subsidiaries.
Furthermore, bonuses, which are paid depending on financial
results, are paid by the subsidiaries to which the Directors belong.
In determining compensation, etc., the President andRepresentative Director prepares a compensation proposal, including
the portion to be paid by subsidiaries, that is determined at a Boardof Directors meeting after consulting the Nomination andRemuneration Advisory Committee, which comprises the Company’s
Outside Directors and the President and Representative Director.

April 2001
April 2011

Cross-shareholdings
As a rule, the Company does not purchase or hold the stock ofsuppliers and other business partners, with the exception of cases
where purchasing and holding stock helps conduct business
operations efficiently, maintain and strengthen business relationships,
thereby contributing to the medium- to long-term growth of its
corporate value. Stock holdings of other companies are examined
individually by taking into consideration qualitative and quantitative
benefits and risk factors, including holding purposes, the number oftransactions with these companies, their operating environment,
results of operations and financial position, dividend yields as a returnof investments and stock price fluctuation risks. Stock holdings are
reduced when there is little need to continue owning the stock inaccordance with the current Medium-term Business Plan. Voting
decisions concerning the stock of other companies are based on thegoals of increasing shareholder value and contributing to the longterm growth of the corporate value of them.

Internal Control
The SHO-BOND Group has a system of internal controls for ensuringthat all business operations are conducted properly in accordancewith the Companies Act and Ordinance for Enforcement of theCompanies Act. In addition, the Board of Directors has established
The Basic Policy for Constructing an Internal Control System that has
the goals of efficient business activities, reliable reports, strict
compliance with laws and regulations, and other items.
We are taking various measures, including the establishment of anInternal Control Committee and a department in charge of promotinginternal control in FY2019, in order to further strengthen internal
control within the Group and permanently ensure a favorable control
environment.

Total amount of compensation, etc. for the fiscal year ended June 30, 2023 (Million yen unless otherwise stated)
Category

Number of Directors (persons)AmountTotal amount of remuneration
by type: Basic remuneration

Directors (excluding Directors serving as Audit
and Supervisory Committee Members)[of which, Outside Directors]

5

85

85

[–]

[–]

[–]

4

41

41

[3]

[21]

[21]

9

127

127

[3]

[21]

[21]

Directors(Audit and Supervisory Committee Members)[of which, Outside Directors]
Total

Shigeru Naraoka

Managing Director
Chief Financial Officer
Corporate Administration

President andRepresentative Director
Joined SHO-BOND CORPORATION
Director and Executive Officer, and General Manager
of Kinki Regional Office
July 2012
Senior Managing Director and General Manager of
Kinki Regional Office
September 2012 Director of the Company
April 2013
Senior Managing Director and General Manager ofMarketing and Sales Division of SHO-BOND
CORPORATION
April 2015
Executive Vice President and Director
April 2017
President and Representative Director (current position)
Director and General Manager of Corporate Planning
Department of the Company
September 2017 President and Representative Director of the Company(current position)

April 1989

Joined The Mitsubishi Bank, Ltd.
(currently MUFG Bank, Ltd.)
General Manager of Strategic Investment Division
Joined SHO-BOND CORPORATION
Director, Deputy General Manager of Corporate
Administration Division, and General Manager ofCorporate Planning Department
September 2018 Director and General Manager of Corporate Planning
Department of the Company
Managing Director, Deputy General Manager of Corporate
April 2020
Administration Division, and General Manager of Corporate
Planning Department of SHO-BOND CORPORATION
September 2022 Managing Director, General Manager of Corporate
Administration Division, General Manager of Corporate
Planning Department, and General Manager of ESG
Promotion Office, Corporate Planning Department
September 2023 Managing Director, General Manager of Corporate
Administration Division of SHO-BOND CORPORATION(current position)
Managing Director of Corporate Administration andGeneral Manager of Corporate Planning Department of
the Company (current position)
May 2014
July 2017
December 2017

Takayasu Shimada

Shunya Tojo

Director
Business Strategies

Director and Full-time Audit andSupervisory Committee Member

April 1992
April 2017

Joined SHO-BOND CORPORATION
Executive Officer and General Manager of Chubu
Regional Office
April 2020
Director and General Manager of Chubu Regional
OfficeApril 2021
Director and General Manager of Shutoken Hokuriku
Regional Office
April 2023
Director, General Manager of Marketing and Sales
Division, and General Manager of DX Promotion Office
September 2023 Managing Director, General Manager of Marketingand Sales Division, and General Manager of DX
Promotion Office of SHO-BOND CORPORATION(current position)
Director of Business Strategies of the Company(current position)

Director
Sales Management
May 1989
July 2012

Joined SHO-BOND CORPORATION
Director and Executive Officer, and General Manager
of Chubu Regional Office
July 2016
Director and General Manager of Sales Management
Department of SHO-BOND MATERIAL CO., LTD.
April 2017
Director and General Manager of Marketing and Sales
Department, Marketing and Sales Division of
SHO-BOND CORPORATION
April 2018
President and Representative Director of SHO-BOND
MATERIAL CO., LTD. (current position)
April 2019
Director and General Manager of Sales Management
Department, Marketing and Sales Division of
SHO-BOND CORPORATION
September 2019 Director and General Manager of Sales Management
Department of the Company
September 2023 Director of Sales Management (current position)

November 1990
July 2012

Joined SHO-BOND CORPORATION
Director and General Manager of Administration and Human
Resources Department of SHO-BOND CORPORATION
April 2014
Managing Director, General Manager of Corporate
Planning Division, and General Manager of
Administration and Human Resources Department
September 2015 Director, General Manager of General Affairs Department,
and General Manager of Compliance Department
September 2017 Managing Director, General Manager of Corporate
Administration Division, and General Manager of
Administration and Human Resources Department of
SHO-BOND CORPORATION
Director and General Manager of Public Relations
Department of the Company
April 2019
Senior Managing Director, General Manager ofCorporate Administration Division, and General
Manager of Administration and Human Resources
Department of SHO-BOND CORPORATION
Director and General Manager of General Affairs
Department of the Company
September 2022 Director (Full-time Audit and Supervisory Committee
Member) of the Company (current position)

Outside Director

Outside Director

Outside Director

Satoru Miura

Akira Hongo

Reiko Kuwano

Audit and Supervisory Committee Member

Audit and Supervisory Committee Member

Audit and Supervisory Committee Member

April 1981
June 1990
February 2015

Registered as certified public accountant (to present)
Established Miura C.P. A. Office (to present)
Outside Corporate Auditor of NODA CORPORATION(current position)
March 2015
Corporate Auditor of Toukei Computer Co., Ltd.
March 2017
Outside Director(Audit and Supervisory Committee Member)
September 2017 Outside Director (Audit and Supervisory Committee
Member) of the Company (current position)
September 2021 Auditor of SHO-BOND CORPORATION

April 1988
April 1995
April 2010

Registered as attorney at law (to present)
Established Hongo sogo Law Office (to present)
Professor of Keio University Law School(current position)
September 2017 Outside Director (Audit and Supervisory Committee
Member) of the Company (current position)

April 1989
March 1999
October 2001
April 2006

Joined TAISEI CORPORATION
Research Associate of the University of Tokyo
Senior Researcher of Public Works Research Institute
Associate Professor, Institute of Industrial Science of
the University of Tokyo
July 2013
Professor (current position)
September 2017 Outside Director (Audit and Supervisory Committee
Member) of the Company (current position)

Knowledge, experience, skills, etc. of each Director (skill matrix)
Finance/
Accounting

HR

Legal affairs/
Compliance/
Risk management

●

●

No.

Name

InsideOutsideCorporate
management

1

Tatsuya Kishimoto

Inside●2

Yasuhiro Sekiguchi

Inside●3

Shigeru Naraoka

Inside●4

Takayasu Shimada

Inside●●●5

Shunya Tojo

Inside●●●6

Satoru Miura

Outside●7

Akira Hongo

Outside8

Reiko Kuwano

Outside●●●GlobalTechnology / R&D
●

●
●

●

●

●

●
●

●

* The table is not indicative of all the expertise and experience possessed by the Directors.

59

SHO-BOND 2023 Integrated Report60About Us

Management Strategies

Business Strategies

Business Foundation

Company Information

Risk Management / Compliance

Risk Management

Compliance

Risk Management Framework Chart

Risk Management Framework

Basic Concept for Compliance

Board of Directors

Establishment of Anti-bribery Policy
The Group has sought to maintain sound business practices. In August
2022, we established an Anti-bribery Policy to clarify our anti-corruption
philosophy from a sustainability perspective. Based on the SHO-BOND
Group Code of Conduct, we will continue to uphold high ethicalstandards to prevent bribery, and continue to ensure fair and soundrelationships with our customers and all other stakeholders.

Executive Committee
Risk Management Committee

Other Risks

Quality Management Committee

IT Promotion Committee

Asset Management CommitteeIntellectual Property Committee

Safety and Health Committee

The Group has risk management rules and a Risk Management
Committee to guide events that can have a major impact on businessactivities and reduce exposure to these risk factors. Risk management
also includes measures to minimize damage and losses if a crisis
occurs and to prevent incidents from happening again.
The Risk Management Committee plays a central role in risk
management at the Group. The Committee chaired by President andRepresentative Director meets once a quarter as a general rule. The
Committee puts together individual risks discussed in other internal
committees to (1) identify risks and implement preventive measures,(2) act as an emergency response headquarters when a crisis may
occur, and (3) develop actions to prevent incidents from happening
again across the Group. The Committee periodically evaluates risk
factors according to the established process, and constantly
reexamines the risk management process itself to reflect current
changes in the social and business environment.

Group Companies

Information Security Measures

Risk Management Process

61

Process

Explanation①
Risk
identification

Business risk factors of the SHO-BOND Group are divided
into Risk Categories and specific potential problems are
identified for each risk factor.
Magnitude of risk is defined as “the impact of an incident”
multiplied by “the probability of the incident happening.”②
Risk analysis
and monitoring

Studies to determine numerical and other indicators forindividual risk factors and the methods for monitoring them.
Monitoring for changes in “the impact of an incident” and“the probability of the incident happening.”
Estimates of changes in risk exposure by using a qualitative
analysis of changes in regulations, amendments to laws,
government financial policies and other items that are
difficult to measure numerically.

③
Risk control

Prepare lists of business tasks that every business unit
performs periodically in order to measure and monitor risk
factors. Next, check to confirm that risk factors are being
controlled by these business tasks.

④
Risk evaluation

By using the reports from business units, the executive incharge of risk management assesses the magnitude ofevery risk factor and submits a report to the Risk
Management Committee.
The Risk Management Committee determines priorities
concerning the magnitude and categories of risk factors anddiscusses methods for the efficient management of risk.

⑤
Responses
to incidents

Emergency response manuals to be prepared for incidents.
Perform studies concerning crisis management activities,
such as direct responses to incidents, crisis management
meetings, reports to government offices and agencies,
public announcements about emergencies, and other
responses to incidents.

SHO-BOND 2023 Integrated Report

With the acceleration of DX and changes in the usage environment of
information systems, information security risk has been increasingthese days, such as the growing sophistication of externalcyberattacks. In the construction industry in particular, ensuring
information security is an urgent issue as construction site offices are
exposed to major information security risks. We therefore raiseawareness of these risks among employees by taking such measures
as having all employees including the executive officers completee-learning courses, conducting a phishing drill, and distributing
awareness posters to our construction sites across Japan. Goingforward, we will prevent unauthorized access from outside the Groupand computer viruses by sequentially taking more defensive anddetective network security measures.

Business Continuity Plan
The Group has a business continuity plan (BCP) to address disasterrisk such as a great earthquake. We strive to improve our capability tocontinue business operations based on the BCP on a regular basis to
avoid the disruption of key operations as much as possible in theevent of a major disaster and to return to normal operations early if
disrupted.
We periodically conduct an evacuation drill and first aid training
on the assumption that a great earthquake has occurred. We also
conduct a drill of responding to a safety confirmation email and haveeach site regularly check the items of an emergency kit. We willcontinue to upgrade the BCP and expand the scope of areas coveredby it to reduce disaster risk.

The SHO-BOND Group believes that a sound compliance framework
is vital to conducting business activities that meet high standards ofsocial responsibility and are capable of sustainable growth. The
SHO-BOND Group Code of Conduct enables all employees to do theirjobs based on a thorough understanding of socially acceptablebehavior, laws and regulations, internal rules and other guidelines.
All employees at the Group are dedicated to the achievement of
the action principles “Corporate Credo” and the Corporate
Philosophy by using a broad range of activities for earning the trust ofsociety and all stakeholders.

Compliance Promotion Framework
The Group implements a compliance program. The SHO-BOND Group
Code of Conduct clearly states the rules of behavior that its
employees are expected to follow. We also have a compliance manual
to ensure that all employees are aware of the importance ofcompliance.
In addition, we have close cooperation among Group companies
by establishing a Compliance Office responsible for compliancematters and assigning a compliance leader to each site.
Further, we provide education and training to all employees of theGroup to raise compliance awareness.

Compliance Training
The Group provides compliance education as part of training for new
employees and follow-up training* provided each year. In the
training, we give a general compliance lecture and urge employees toobserve the SHO-BOND Group Code of Conduct. We also ensure that
employees are aware of the Construction Business Act that must be
observed as a construction company.
We seek to create an employee-friendly work environment by
periodically having all employees do a self-check and providing themwith e-learning to prevent all forms of harassment.
* Follow-up training is targeted at employees for their second year and those who have justgot promoted.

The SHO-BOND Group Code of Conduct
Social mission
1. Earn customer satisfaction and trust
We will fulfill all of our contractual obligations with customers and, based on
sound communications with customers, provide the best possible construction
services and products by making proper and timely decisions.
2. Provide outstanding technologies and quality
We will constantly develop new technologies and aim for even higher quality.

Take responsibility for your actions
3. Perform sales activities properly
We refuse to engage in collusion, bribes, dumping and other improper activities
for receiving orders and will never accept any invitation to participate in thesetypes of activities. We will work closely with project owners and prime contractors
in order to receive orders in a fair manner and to clearly define contract terms.
4. Remain focused on suitable construction operations and safety
At all projects, we will establish a framework for compliance with theConstruction Business Act and other construction laws and regulations,preventing accidents, and facilitating mutual understanding and cooperation
with partner companies and suppliers.
5. Ensure that accounting procedures and disclosure activities are proper
We will establish and adhere to fair and appropriate procedures for accounting
activities to ensure the reliability of financial reports and disclose information
required by our stakeholders.
6. Eliminate antisocial forces
We refuse to respond to improper requests from antisocial forces and will
never have any relationship with antisocial forces.
7. Maintain a sound crisis management framework
We have an organizational crisis management framework in order to respond
immediately to a natural disaster, cyberattack, terrorism or other crisis.

Unify the workplace
8. Contribute to maintaining a pleasant and productive workplaceenvironment
We will maintain healthy and safe workplace environments through measures
to improve employment terms and other working conditions.
9. Show respect for human rights
We will never allow discrimination or other improper treatment of ouremployees regarding employment and compensation based on theirnationality, gender, beliefs or other personal characteristics.
10. Play a role in placing the right people in the right jobs
We will perform fair and appropriate performance evaluations and provide
compensation and training with the goal of enabling our employees to fully
utilize their capabilities.

Contribute to society
11. Participate in community involvement
We will increase opportunities for communications with communities in orderto participate in many programs for contributing to society.
12. Be part of environmental conservation activities
We will reduce the environmental impact of our construction projects throughmany activities in order to combat global warming, conserve energy andprotect the environment in other ways.

Whistleblowing Contact Points
The Group has internal and external contact points for whistleblowers
to report any kind of violation they detect, regardless of its agent(individual or organization) and the type of regulations violated(applicable laws, the rules of employment, the SHO-BOND Group
Code of Conduct, etc.). The purpose is to investigate and eradicate
such violations as soon as we can.
We pay due care so that whistleblowers will remain anonymous asa general rule and will not suffer any disadvantages.

62