Small Investor Meetingwith Outside Director
October 20, 2021
Masayoshi Nakamura

Lead Independent Director and Board Chair
Nippon Paint Holdings

Profile of Outside Director
Specialized professional in M&A advisory services andfinancing from the capital market
ProfileMasayoshi Nakamura
Lead Independent Director
Board Chair

Masayoshi Nakamura was elected Independent Director ofNPHD in March 2018, serving as the Nominating Advisory
Committee member and the Compensation Advisory
Committee member and as the Lead Independent Director
from March 2020. He has served as the Board Chair
since April 2021, playing an important role in activatingdiscussions in the Board of Directors meetings such as
putting together the opinions of the Independent Directors
and sharing them with the management team. He has morethan 30 years of experience as a specialized professionalin M&A advisory services and financing from the capital
market, which he gained at Morgan Stanley and otherleading US investment banks.

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Main Questions Received from Shareholders and Investors (1)Roles, skills and diversity of the independent directors①Roles as
the Lead
IndependentDirector◆What was the background of your appointment as an outside director of NPHD?
◆What changes have you noticed in the board since your appointment in 2018?
Please tell us how the board has improved and the points that need to be improved.
◆How are you going to leverage your experience to improve the corporate value ofthe Nippon Paint Group?
◆What are the KPIs you are using to measure your contribution to corporate value
as the Lead Independent Director?

◆What are the sources of your incentives and motivation as an outside director thatdrive you to be significantly involved in management?
◆What do you think are the roles of the Lead Independent Director? What advicewould you give to a company which does not have a lead independent director?

②Board skills
matrix anddiversity◆What do you think are the qualities and mindset required for an outside director?

◆What is your view of the current composition of the directors? What improvements
do you think are needed?
◆Do the outside directors have diverse backgrounds? Do the directors use a broad
viewpoint for their discussions?
◆Please share your thoughts on the NPHD board’s diversity.

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Main Questions Received from Shareholders and Investors (2)-1
The Board’s effectiveness and ideal format of its oversight functions③The Board’s ◆Does the Board hold thorough and effective discussions?
effectiveness,atmosphere,◆Are the Board’s discussions effective? Are there any cases in which
and ideal
confirmations of agenda items are merely a formality? Please give examples offormat ofstrategies that were approved based on a proposal of the outside directors or anoversightagenda item that was withdrawn due to objections of the outside directors.
functions◆With a majority of the board members being the outside directors, how is theboard run? What kind of agenda items are discussed and resolved by the board?
What kind of agenda items are entrusted the executive officers for deliberation anddecisions? I would like to know how the board is currently administered given that
the Co-Presidents are not members.

◆Please share with us examples to the extent allowed of agenda items that werewithdrawn due to objections of the outside directors to the extent allowable (wemay decide to withdraw this question depending on the atmosphere of the meetingor the company’s decision.)

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Main Questions Received from Shareholders and Investors (2)-2
The Board’s effectiveness and ideal form of its oversight functions, etc.
③The Board’s ◆How do the outside directors communicate with each other?
effectiveness,atmosphere,◆Please provide information about discussions by the directors regarding theand ideal form
establishment of the New Medium-Term Plan. If I may, please share with us someof oversightexamples that demonstrate the board’s effectiveness and approaches that valuefunctionsinvestors’ viewpoints and MSV.

◆I have questions about ESG-integrated management. I’ve heard that the ESG
Committee reports to the Board four times every year. Please share with us someexamples that demonstrate the board’s effectiveness and approaches that value
investors’ viewpoints and MSV.
◆I have questions about the background of NPHD’s structural reforms. In recentyears, NPHD has undergone significant changes including governance andmanagement structures. Was there already a momentum for reform before Mr.
Nakamura joined the company and did this momentum increase after you joined thecompany in 2018? Or, was the current direction determined in 2018 orafterward?
4Main Questions Received from Shareholders and Investors (3)Relationship with the major shareholder, suitability of nomination andremuneration decision process④Relationshipwith Wuthelam,
the major
shareholder◆If the opinions of Mr. Goh, the representative of the major shareholder Wuthelam,
are not aligned with the interests of minority shareholders, how will you deal withthis situation? Do you think the current governance structure is adequate?

⑤Businesstransfer tothe major
shareholder
Wuthelam◆The carve-out of the India and European businesses, which NPHD announced inAugust, is a transaction with the major shareholder. What criteria did you use todetermine the adequacy of the transaction?

⑥Decisions on ◆How are the outside directors involved in the decisions on nominations andnomination and remuneration?
remuneration◆Who determines the remuneration of the outside directors and how? NPHD
provides restricted stock compensation to the outside directors as well. However,not many Japanese companies have a similar remuneration plan. What do you think
about this?
◆Do you think that the current remuneration structure is appropriate?
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Main Questions Received from Shareholders and Investors (4)Challenges facing the Nippon Paint Group⑦Challenges
facing theNippon PaintGroup◆Do you see any challenges involving the management of the Nippon Paint Group?
◆How much does the board discuss matters related to Environmental(E)and Social(S)issues?
◆What kind of improvements is the board seeking in terms of the basic
management policy and internal control system?
◆Many investors are concerned about the governance of NPHD. What is your takeon this? Please give us your frank view as the Board Chair. What kinds ofsuggestions have the outside directors made to the management team to reflect
the stance of the financial community?

◆NPHD already has a better governance structure than most of your peer
chemicals manufacturers in Japan. What improvements and challenges need to beaddressed?
◆Are there any companies which the board has used as reference for changing thegovernance structure (companies inside and outside the paint/chemicals
industries and both Japanese and overseas companies)?

⑧Other◆You mentioned in the Discussion section (page 85～） of the Integrated Report
2021 that EPS and PER are important metrics for shareholder value. Pleaseelaborate on your understanding of PER as a shareholder value metric.
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