E

Section 3

Basic Axes

Environment

Basic Axes

Promotion of ESG (Environment)

Climate Change Action andEnvironmental Initiatives
In accordance with the Skylark Group Charter of Corporate Behavior, Skylark Grouphas established the Group Sustainability Committee and is voluntarily and actively
undertaking environmental initiatives to minimize the impacts of climate change.
1. Compliance with laws andregulations

We comply with environmental laws and ordinances and promptly respond to legal revisions.

Across the entire supply chain, spanning procurement of food ingredients to production, logistics,
2. Environmental conservation
in-store processing, and disposal, we make efforts to conserve energy and water and reducefood loss and wastes.
3. Enhancement of environmental We promote environmental education by which every individual maintains awareness ofawarenessenvironmental conservation.
4. Environmental management
We set environmental targets and aim to continuously reduce our environmental impacts.
5. Disclosure of environmental
We actively disclose environmental information and strive for transparency in our environmental
informationconservation activities.

The short-term, medium-term, and long-term climate-relatedrisks and opportunities and the financial impacts of majorrisks on our business that we recognize are shown below. We
also disclose measures to address climate-related risks andopportunities on our website.
Once a year, we check the content of our measures toaddress climate-related risks and opportunities, update thestatus of our actions, and explain the resilience of our strategy.

In the scenario analyses, we analyzed two scenarios: the 2°C(1.5°C) scenario in which impacts manifest as the transition to a
low-carbon society takes place, and the 4°C scenario in which
physical impacts associated with climate change manifest.

■ Financial impacts of main risks■ Measures to address major risks (excerpt)

Item

4°C scenario

Impacts ofchanges inelectricity
prices

4°C scenario

Impacts offlooding

Value of impacts on businessin 2030 (estimated)

Scenario

Impacts ofcarbon tax
introductions

Impactsof storm
surgesー2°C (1.5°C) scenario

0.3 billion yen

2°C (1.5°C) scenario−0.64 billion yen

4°C scenario−2.63 billion yen

2°C (1.5°C) scenario−1.49 billion yen

4°C scenario−0.34 billion yen

2°C (1.5°C) scenario−0.33 billion yen

In 2023, we conducted scenario analysis for a “2°C (1.5°C)
scenario” and a “4°C scenario.” In terms of main risks presented
by climate change, we carried out quantitative evaluations of(1) the impacts of carbon tax introductions, (2) the impacts ofchanges in electricity prices, (3) the impacts of flooding, and (4)the impact of storm surges.

Our measures to address major climate-related risks andopportunities

Addressing impactsof the introduction ofcarbon taxes(1) Energy and power saving: Reduction ofenergy usage(2) Use of renewable energy(3) Development of environmentallyconsiderate stores

Addressing the impactsof changes in electricity
pricesPower-saving activities at stores

Addressing the impactsof flooding
Addressing the impactsof storm surges

Status of countermeasures against flooding
and storm surges for employees, stores,
MDCs, and headquarters■ Measures to address main opportunities (excerpt)

For 4°C scenario, USD 0/t-CO2; for 2°C (1.5°C) scenario, USD 140/t-CO2 (source: “World Energy
Outlook 2022,” IEA)

Information disclosure related to the TCFD RecommendationsWeb−3.22 billion yen● Assumed amounts of carbon taxes in 2030:

Climate change initiatives

Skylark Group positions climate change as one of theimportant management risks that we face. We endorse therecommendations of the Task Force on Climate-related Financial
Disclosures (TCFD) and disclose all 11 items of the TCFD
Recommendations. Understanding the risks and opportunities
presented to our company by climate change, we disclose ourclimate-related initiatives and targets along with our progress
toward these.

Strategy

Addressing opportunities
in the 2°C (1.5°C)
scenario

Example: De-plasticization and otheractivities to promote decarbonization

Addressing opportunities
in the 4°C scenario(1) Opportunities through increased
occasions for store visits(2) Opportunities through productdevelopment matching consumer needs(3) Opportunities through increased use ofdelivery services(4) Opportunities through increased
demand for retail sales products● Assumed electricity prices in 2030:

For 4°C scenario, USD 209/MWh; for 2°C (1.5°C) scenario, USD 231/MWh (Source: graph in“World Energy Outlook 2019,” IEA)
● Assumed multiple of occurrence of flooding in 2030:

For the 4°C scenario, 3-fold; for the 2°C (1.5°C) scenario, 1.7-fold (calculated from sources
including “TCFD Guidance,” Ministry of the Environment, and “Recommendations for FloodControl Planning Based on Climate Change,” Ministry of Land, Infrastructure, Transport andTourism, after mapping the locations of all stores, factories, headquarters, and other workplacesof all Group companies)● Assumed multiple of occurrence of storm surges in 2030:

For the 4°C scenario, about 1.08-fold; for the 2°C (1.5°C) scenario, about 1.06-fold (source:“Climate impact explorer,” CLIMATE ANALYTICS, after mapping the locations of all stores,
factories, headquarters, and other workplaces of all Group companies)* Franchise stores of Tomato and Associates are not included in estimates of the impacts offlooding and storm surges on assets.
* Franchise stores of Tomato and Associates and Skylark Restaurants are not included in estimatesof the impacts of losses from business suspension due to flooding.

Governance
Skylark Group has established the Group Sustainability
Committee under the supervision of its Board of Directors as
a decision-making body for sustainability-related initiatives. The
Committee consists of the Chairman and Chief Executive Officer,
President and Chief Operating Officer, all executive officers, andGroup company presidents.

Our activities to promote sustainability are reported to theBoard of Directors. Outside directors also participate in theCommittee as advisors so that issues can be identified andadvice can be received based on an outside perspective.

Indicators and goals
KPIs related to decarbonization, water resource conservation,and de-plasticization, covering the entire Skylark Group, areas follows. Materiality-specific KPIs are posted on P19-20 ofMajor Indicators

Risk management
We have established the Group Risk and Compliance
Committee as an organization that oversees management ofrisks, including climate change-related risks, for the entire Group.
The Committee consists of the Chairman and Chief Executive
Officer and all executive officers, with the President and Chief
Operating Officer serving as chair. The Committee centrally
identifies climate change-related and other risks, and pinpoints
those that should be tackled in consideration of factors such as
their degree of impact. With regard to climate-related risks andopportunities, the Group Risk and Compliance Committee sets
49

Skylark Group Integrated Report 2023

out and operates an annual review process, based on the statusof our actions and changes in the environment.
We also endeavor to ensure transparency in our risk
management system, through means such as sharing
information on the content of Group Risk and Compliance
Committee deliberations with outside directors. By having
outside officers also participate in the Committee as advisors,
we have built a structure that allows issues to be identified andadvice to be received from outside perspectives.

Decarbonization

Preservation ofwater resources

this Integrated Report, with additional details available on our
website.
Web

ESG Data Book

KPI
2030

2050

Rate of reduction in
GHGs(Scopes 1, 2)

50.4% reduction(compared to
2018)

0

Rate of reduction in
GHGs(Scope 3)

30% reduction(compared to
2018)

0

Rate of reduction in
GHGs(Scopes 1, 2, 3)

37% reduction(compared to
2018)

0

Amount of water
intake10% reduction(compared to
2018)

20%
reduction(compared to
2018)

KPI

Major Indicators

Reductionof plastic
consumption

2026

2030

Amount ofsingle-use
plastics used

50% reduction(compared to
2020)

50%
reduction(compared to2020)

Percentageof petroleumderived
materials usedin single-use
plastics

50%

0Skylark Group Integrated Report 2023

50

Section 3

Decarbonization
Launch of CO2 Reduction Subcommittee in 2023
We launched the company-wide CO2 Reduction Subcommittee
in 2023 and are undertaking the following initiatives.

Preservation of water resources
Web

Environmentally friendly model stores• Accurate calculation
We obtained a third-party assurance for energy usage, in addition
to Category 1 of Scope 1, 2 and 3 for CO2 emissions in 2023.
• Setting of KPIs for reducing CO2 emissions
We set yearly KPIs in accordance with the Science Based
Targets (SBT) initiative and based on accurate calculation of CO2
emissions. We report on the progress of those KPIs and on our
initiatives to reduce usage to the Sustainability Committee every
quarter.
Web

Energy-related usage reduction KPIs and results• Example of CO2 reduction efforts
We have opened an environmentally friendly store that emits
virtually zero greenhouse gases through the use of solar power,
CO2-free power, carbon neutral gas, and electric motorbikes fordelivery.

In our central kitchens and stores, we are actively switching
to renewable energy through solar power generation. We areworking toward introduction at 100 facilities during 2024 as a KPI.
Web

Introduction of on-site solar power generation service for inhouse use

Web

Introduction of off-site PPA service using solar power generation

Food loss reduction
Recognizing our responsibility for food production and its
consumption, we are working to reduce food loss.
Initiatives at our central kitchens
We are increasing the ratio of highly processed products thatare processed in our central kitchens and reducing the number
processes in stores in order to reduce food loss. Food waste isrecycled into fertilizers or animal feed and the total food recycling
rate at our central kitchens is approximately 90%.
Initiatives at our stores
Through promotion via notifications on table terminals, the useof our “Mottainai Pack” (20 yen; tax included) for taking homemeal leftovers tripled last year (as of June 2023; approximately
109,000 packs per year). We recycle 100% of stores’ waste
cooking oil into feed, fats, oils, and other products, while also
conducting research into the future recycling of other wastes.
Initiatives by the Food Waste Reduction Subcommittee
Launched in 2022, the Food Waste Reduction Subcommittee
works to reduce waste across the company.
• Accurate calculation
Previously, we only weighed amounts and types of waste
generated in our stores. However, we now also ask business
partners to weigh our waste to gain more accurate data to leadto further reduction of waste.

51

Skylark Group Integrated Report 2023

Basic Axes: Promotion of ESG (Environment)• Setting of yearly reduction KPIs
Based on accurate calculations of amounts of waste, we set
yearly KPIs for reduction amounts and report on amounts ofwaste and reduction initiatives to the Sustainability Committee
every quarter.

All our employees work together to conserve water with theaim of global environmental protection and cost reduction. Using
the “Water Risk Atlas” of the WRI’s Aqueduct, we conducted aninvestigation of our company’s sites located in water risk areas
where the amounts and quality of water resources are at risk. Asof the end of 2023, no sites were located in watersheds at highor very high water risk. One facility in Japan and one overseas
were located in high water stress watersheds. We are working
to address these appropriately.
We use high depth groundwater, use rainwater for cooling
outdoor facilities, and use secondary water for cleaning at
manufacturing sites to reduce actual water usage. To achieveboth hygiene management and water conservation, we have
set rules for hand-washing procedures and standards for theamount of water used in hand-washing areas, and are working
to spread these rules through employees education. We are

About wastewater treatment
As we use considerable amounts of water for cooking
and for cleaning dishes and utensils, we also attach
importance to wastewater. About 90% of our wastewater
is discharged to third parties for treatment, but we also
perform primary and secondary wastewater treatment inhouse in accordance with legal and regulatory standards.
We also inspect the water quality and temperature ofwastewater at least once a year and properly manage
these.

Reduction of plastic consumption
As a company with approximately 3,000 stores nationwide,
since 2018 we have been taking the lead in tackling the reductionof petroleum-based plastic products.
In 2021, we launched the Group Sustainability Committee andits subordinate bodies, the Packaging Materials and Consumables

Subcommittee and the Consumables Reduction Subcommittee.
To date, these have been reducing the size and thickness ofplastic bags, garbage bags, and disposable containers andpackaging materials for delivery and take-out, while also initiating
charges for disposable cutlery and plastic bags.
•T otal cumulative donations to the Green Fund: 2,669,973 yen
From the perspective of valuing limited
resources, from January 2023 we begancharging for disposable cutlery. We donate
a portion of the revenue from these to theGreen Fund of the National Land Afforestation
Promotion Organization.

• Case study of reduction
Our Syabu-Yo all-you-can-eat shabu-shabu stores propose
environmentally friendly dining that addresses the social issue
of food loss.
Webalso actively installing water-saving equipment including watersaving frames, nozzles, toilets, and dishwashers.

Web

Komamedori Project (Food loss initiative)

Click here for details of our de-plasticization initiatives thathave accelerated since 2018

Biodiversity“Komamedori” is an initiative to encourage customers to take what they can eat andenjoy their meals without leaving any leftovers. Not overeating, not leaving out food, andbeing happy for both customers and the earth.

• Training for employees
In May 2023, we held a Food Loss Reduction Study Session
for store employees. In the session, we provided complementaryknowledge and shared information on measures to reduce loss.
Because the amounts and types of waste for disposal differ bystore, we determine reduction measures and KPIs on a perstore basis in monthly discussions with superiors, and connect
this to action.

Based on strict procurement standards, we strive to procuresustainable raw materials that are environmentally and sociallyfriendly, protective of basic human rights as well as protective of
biodiversity. In addition to actively using FSC/PEFC certified paper
products (paper straws, copy paper, etc.), 30% of the coffee
beans used for the coffee that we serve at Gusto restaurants,
our main brand, and at several other restaurants are Rainforest
Alliance certified beans. In addition, we are discussing with our
suppliers to change the blend of frying oils to reduce the ratioof palm oil and introduce RSPO-certified palm oil. In addition,
we intend to develop new production areas to increase the ratio
of production areas with JGAP-certification or equivalent farmmanagement standards for domestically produced vegetables
and rice.
Web

Click here for details of the formulation of our Group
Biodiversity Policy in 2023

Skylark Group Integrated Report 2023

52

S

Section 3

Basic Axes

Basic Axes

Social■ Example of Gusto’s menu

Health & nutrition

Promotion of ESG (Social)

Contributing to Enriched Lifestyles
and the Advancement of Society
Skylark Group practices sustainability management aimed at achieving our
purpose: “To contribute to enriching people’s lives and to the advancement ofsociety as a whole by creating the future of dining.”
In corporate management, we engage in appropriate collaboration with ourmulti-stakeholders, based on the importance of co-creation of value withcustomers, business partners, employees, local communities, shareholders,investors, the global environment, and other stakeholders.

In response to the growing health consciousness of customers
in recent years, Skylark Group has developed menus thatare nutritionally balanced and low in calories and fat, including
vegetable-rich menus and low-carbohydrate menus, and reviews
product portion sizes as appropriate. In addition to offering a wide
variety of menu options to meet the various needs of customers
based on factors such as age, physical constitution, and physicalcondition that day, we also provide several types of side dishes,a series of small-sized side dishes, toppings, sauces, anddressings that customers can combine themselves to choose
the volume and flavor of their meals. In doing so, we strive toprovide appropriate information such as salt and calorie content,
ingredient origin information, and up-to-date allergy information.
We will endeavor to provide personal nutrition suggestion tocustomers through our Digital Menu Books in the future.

Food safety and security▶See P25-26

for details of safety and security initiatives.

Relationships with customers
Customer orientation

Relationships with business partners

In order to meet the food service needs of all people, we
are working to develop menus and improve services basedon data analysis by time of day, customer attributes, store
location, individual restaurant, and usage occasions by utilizing
big data such as sales performance data from POS systems,
smartphone apps, and customer surveys. In FY2022, weestablished a system whereby all management and relevant
departments can view opinions, requests, and other customer
feedback received by the Customer Service Office on a daily
basis, and utilize them to review business operations by the
QSC Improvement Committee to make prompt improvements
to products and services. As a result of such initiatives, overallcustomer satisfaction has risen from 73% in 2021 to 81% in
2022 and 85% in 2023.

Responsible procurement

April 2024 Grand Menu (Menu focused on product development
incorporating customer feedback)Overall customer satisfaction

81% → 85%

Customers

Telephone

Email

Customer Service Office

Management

53

Coordination

Skylark Group Integrated Report 2023

Opinions andsuggestions

SurveyCoordinationQSC Improvement
Committee

Coordination

Relevant divisions:Improve and develop
products andservices

Information
response forms

Improved
products andservices

Stores and employees

Education

Practice

By establishing procurement management regulations
and complying with laws and regulations to fulfill our social
responsibilities through our business, we promote the purchaseof safe, high-quality food materials and work to address social
issues.
In the selection of suppliers, we confirm not only financial
reliability and quality stability but also the status of suppliers’
employee management (assurance of occupational health andsafety), consideration for human rights (child labor, forced labor,
discrimination, freedom of association, collective bargaining, long
working hours), consideration of the environment (energy, climatechange, water resources, biodiversity, food loss, and resourceuse), and antisocial acts. Our selections prioritize suppliers that1carry out their social responsibilities.
We require that employees of our suppliers are provided
with information on our environmental policy and require theirunderstanding and cooperation in communication with ourcompany, training, and more. Together with suppliers, we aim
for the coexistence and co-prosperity of corporate activities,
society, and the environment.
Although we currently procure from 40 countries, we makedecisions not based on each countries’ laws, customs, andcurrent conditions but rather based on whether significant
gaps exist in light of applicable Japanese law. We strive forresponsible procurement by implementing a strict policy of notinitiating transactions when any problem exists.
Web

About responsible procurement
https://corp.skylark.co.jp/en/sustainability/environment/supply/

About selection of suppliers

When selecting new suppliers, we carry out due diligence on
all suppliers prior to the start of transactions, as follows. We
do so in accordance with our Detailed Rules for Sustainable■ Due diligence process
Corporate
Philosophy

Sustainability
PolicyProcurement Management and with the objective of managing
risks involved with environmental issues and societal issues.

Three processes
Procurement
Policy, CSR
Guidelines

1

CSR
agreement

2

CSR
self-check3

CSR check(on-site audit)

Report on
results ofevaluation

Requestforcorrection

At least once every 2 years (4 years)

Skylark Group Integrated Report 2023

54

Section 3

Relationships with local communities

2 About supplier monitoring and audits

  

Item

FY2023

Total number of suppliers

743

Number of primary suppliers

280

Number of key primary suppliers*

28

Number of major suppliers other than primary suppliers

30

Total number of key suppliers

58

Number of suppliers evaluated119

Percentage of major suppliers evaluated

5.2%

Number of suppliers evaluated as having negative impacts
Number of suppliers for which transactions having significant
negative impacts were ended
Number of suppliers who supported improvement plans/corrective
measures
Percentage of major suppliers who supported improvement plans/corrective measures

Basic Axes: Promotion of ESG (Society)Largetransaction
volumesuppliers
Suppliers
handling coreproducts

119100%* Number of key suppliers: The number of suppliers that have been identified as having an
impact on ESG or as representing high business relevance or risk

IrreplaceablesuppliersKey
suppliers

As a company with about 3,000 stores nationwide, Skylark
Group fulfills its social missions by rapidly implementing support
activities in the event of a disaster.

Lowsustainability
risk suppliers● 2024 Noto Peninsula Earthquake
After the earthquake that struck on January 1, we launchedemergency relief fundraising at 2,700 stores on the following day
and began serving food to evacuees on January 12. By the endof March, we had provided about 20,000 widely varied meals
through 120 company volunteers. In-store donations totaled
approximately 19.8 million yen, which was donated to Toyama,
Ishikawa, and Niigata prefectures.
● 2024 Eastern Taiwan Earthquake
After the earthquake that struck on April 3, we launchedemergency relief fundraising at 2,700 stores on the following
day, with Skylark matching the donated amount. We alsodecided to extend Bamiyan’s Taiwan Fair campaign, carriedout in partnership with a Taiwanese company, and decided to
donate a portion of campaign sales (30 yen per meal).

TOPICS

30

Activities grounded in our social mission(Volunteer activities and fundraising)■ Identification process

As a first for the food service industry,in October 2023 we obtained certification
for ISO 20400, the international standard
for sustainable procurement.
▶ See P23-24 for an interview with the Managing Director of the
Procurement Division.

Relationships with employees
To ensure that diverse human resources can play active roles,
Skylark Group establishes no differences in treatment or inhuman resource promotion on the basis of gender, nationality,
race, religion, or presence or absence of disabilities. We haveestablished an internal environment improvement policy and ahuman resource development policy and work to enhance ourhuman capital, thereby increasing our corporate value.
Disaster Relief Menu at Bamiyan's Taiwan Fair campaign▶See P45-48

for details on Human Capital Management.

Other support achievements
We donated about 8.5 million yen collected by the Turkey-Syria
Earthquake Disaster Relief Fund to the United Nations Refugee
Agency (UNHCR) / ・ Through the Children’s PlaygroundSupport Foundation, employee volunteers installed playgroundequipment three times at the Kodomo no Ie children’s housein the city of Kiyose, Tokyo Prefecture /・We donated about 5
million yen collected towards the Hawaii Maui Wildfire Disaster
Relief Fund to the Maui Strong Fund of the Hawai’i Community
Foundation•

Relationships with shareholders and investors

55

The basic policy for our IR activities is fair and timely disclosureof information to our shareholders, investors, and otherstakeholders. We have established an IR team to plan and carry out
activities for dialogues with shareholders and investors. Following
announcements of quarterly financial results, we conduct online
financial results briefings for analysts and institutional investors,
and communicate with the stock market through the words ofour management team. In 2023, we held a total of 227 individual
meetings by our management team and IR staff.
We are building mechanisms by which we consolidate
the opinions of the stock market based on dialogues withshareholders and investors, regularly communicate feedback
from shareholders and investors to top management in Board of
Directors meetings, and incorporate opinions and feedback into
our corporate management.

Information disclosure structure

Information disclosure policy

General Meeting of Shareholders

In our IR information disclosure policy, we believe that we beara responsibility to disclose information appropriately and promptly
while complying with timely disclosure, doing so on a foundationof transparency, fairness, and continuity. In addition to disclosureof business results, financial information, and other matters basedon laws and regulations, we actively disclose information on ESGrelated issues and sustainability promotion-related initiatives
through our web site, Integrated Report, and other means.

Before the annual General Meeting of Shareholders, weissue convocation notices at an early date to ensure a period
during which shareholders can fully consider proposals. We
are also developing an environment supporting participationby shareholders, through acceptance of questions in advancevia the Internet, support for exercise of voting rights, live virtual
viewing of meetings, and creation of a more convenient website
for smartphones.

Skylark Group Integrated Report 2023

We have established internal Disclosure Control Regulations
and Information Disclosure Detailed Rules to achieve fair, timely,
and appropriate information disclosure.
1. We assign responsibility for information handling to theManaging Director of the Finance Division and supervisionof timely disclosure to the Finance Division.
2. We have set up a Disclosure Committee that is composedof internal stakeholders and chaired by a representative
director.

Web

Support Activities in Disaster-Affected Areas of Noto Peninsula(website in Japanese)
https://corp.skylark.co.jp/sustainability/social/community/support2401.html

Stakeholder Engagement

Customers

Believing in the importance of mutual
understanding with all stakeholders,Skylark Group strives for active dialogue
through varied opportunities forcommunication. We sincerely address
the feedback and requests we receive
and work to create value throughmanagement grounded in an ESG
perspective.

Global environment

Shareholders
and investors

Business partners

Employees

Local communities

Skylark Group Integrated Report 2023

56

G

Section 3

Basic Axes

Governance

Basic Axes

Promotion of ESG (Governance)

Board of Directors

Enhancement of Corporate
Governance
We have established the Skylark Group Charter of Corporate Behavior,
sharing it with all executives and employees in our efforts to act with a social
conscience while observing laws, international rules, and the spirit of these.
We also follow basic policies to ensure soundness, effectiveness, andtransparency in our management, and carry out initiatives aimed at enhancing
corporate governance.

Our basic approach to corporate governance
Under our corporate philosophy of “Creating Richness with
Value to Society” and our corporate purpose of “Contributing to Life
Enrichment and Advancement of Society by Creating the Futureof Dining,” Skylark Group operates approximately 3,000 stores,
mainly table service restaurants, that welcome approximately 300
million customers annually. We do so with the aim of offering greattasting food at affordable prices with good service in a comfortable
store environment to as many people as possible. We believe that
contributing to society through dining-related businesses andcontinuously enhancing our corporate value are among our mostimportant management tasks. We aim to be a corporate groupthat is trusted by customers, shareholders, business partners,
local communities, and employees, and all other stakeholders. To
achieve these objectives, we have established the Skylark Group
Charter of Corporate Behavior, sharing it with all executives andemployees in our efforts to act with a social conscience whileobserving laws, international rules, and the spirit of these. We
also carry out initiatives to ensure soundness, effectiveness,and transparency in our management, and work to enhance ourcorporate governance.

July 2014

Appointed one independent outside director and twooutside auditors

October 2014

Listed on the First Section of the Tokyo Stock Exchange

January 2016

Transitioned to a holding company structure

March 2016

Increased the number of independent outside directors
from one to two, with outside directors making up the
majority of directors

April 2016

Established the Independent Officer Liaison Committee,
consisting of a majority (two out of three) members
from each of the voluntary Remuneration Committee
and Nominating Committee appointed as independent
outside directors

May 2016

Formulated the Basic Corporate Governance Policy

March 2017

Increased the number of outside auditors with expertisein finance and accounting by one

March 2019

Increased the number of outside directors by one(female), and appointed three of eight directors and twoof the three auditors as independent officers

May 2019

Built a system for reporting the content of whistleblowing
directly to independent outside directors

October 2019

Began evaluations of the effectiveness of the Board of
Directors

December
2020

Established the Group Sustainability Committee andenhanced our organizational structure for promoting
sustainability

March 2021

Increased the number of independent outside auditors
by one (female), creating an officer composition withmultiple female officers and independent directors as amajority of all officers (six out of 10)

March 2022

Increased the number of independent outside auditors
by one (female), setting the ratio of women on the
Board of Directors (directors and auditors) at 30% (three
women out of 10 directors)

March 2023

Strengthened functions for supervision of the Board of
Directors, and transitioned from a corporate structurewith a board of corporate auditors to a corporate
structure with an audit and supervisory committee tofurther enhance our corporate governance

Basic Policy
1. We respect the rights of shareholders and ensure equality.
2. We consider the interests of shareholders and otherstakeholders, and collaborate appropriately with them.
3. We properly disclose corporate information and ensuretransparency.
4. We ensure the effectiveness of functions to supervise theexecution of duties by the Board of Directors.
5. We engage in constructive dialogues with shareholders who
have investment policies aligned with the interests of mediumto long-term shareholders.

57

Overview of our corporate
governance structure

Skylark Group Integrated Report 2023

Our Board of Directors consists of eight directors, five of which
are independent outside directors, in consideration of diversity
and balanced knowledge, experience, and capabilities of theBoard of Directors as a whole. We believe this is necessary
for the sustainable growth of Skylark Group and the mediumto long-term enhancement of our corporate value. As ourGroup’s highest decision-making body for the management andexecution of business, the Board of Directors generally meets atleast once a month.

Senior Management Meeting
To promptly and flexibly carry out planning and executionof company-wide management policies and strategies, thecompany established the Senior Management Meeting,composed of the Chairman and Chief Executive Officer,
President and Chief Operating Officer, and all executive officers.
During meetings, important matters related to the entire Groupare reported, examined, and discussed. Meetings are generally
held every week. In addition, Group Committees (the Personnel
and Systems Committee and the Policy and Investment
Committee), composed of members determined in Senior
Management Meetings, convene once a month to report on,
examine, and discuss our personnel system, policies, and otherimportant matters related to the Group overall.
■ FY2023 Senior Management Meetings: Held 48 times

Functions of the Audit and Supervisory
Committee audits and other audits
The Audit and Supervisory Committee, composed of threeauditors (a majority two of which are independent outside
directors), generally meets once a month to supervise and conduct
checks on management and the execution of duties. Based on
auditing policies, plans, and standards determined by the Audit
and Supervisory Committee, members of the committee attend
Board of Directors meetings and other important conferences.
They further assess the state of the company by examining
business conditions to audit whether management activities arebeing conducted in conformance with laws, internal regulations,and other rules. Audit and Supervisory Committee members
also cooperate with the Internal Audit Group and the accounting
auditor through regular discussions and other means to ensure an
efficient and effective auditing system.
The Internal Audit Group, our internal auditing organization, is
positioned as a division under the direct control of the Chairman
and Chief Executive Officer and of the President and Chief
Operating Officer to ensure its organizational independence. The
Audit and Supervisory Committee is also positioned as a divisionthat possesses supervision and command authority. Basedon internal regulations and annual plans, it conducts operating
audits of headquarters, factories, and stores to identify problems,suggest improvements, and provide corrective guidance.
Accounting audits are conducted by Deloitte Touche Tohmatsu
LLC, as determined at the General Meeting of Shareholders.
■ FY2023 performance➡ Board of Auditors: Convened 2 times / Audit andSupervisory Committee: Convened 10 times

Analysis and evaluation of the effectiveness of
the Board of Directors
Based on the recognition that the Board of Directors should bea venue for effective and strategic discussions for the sustainablegrowth of the Group and the enhancement of corporate value,
we analyze and evaluate the effectiveness of the Board of
Directors every year to further enhance its functions. Analysis in
FY2023 concluded that the size of our Board of Directors andthe skills of individual directors are appropriate.
Web

Overview and results of evaluations conducted in 2023
https://corp.skylark.co.jp/en/sustainability/governance/cg/system/

Other committees
Group Risk and Compliance Committee(Convened 6 times; 10 times in writing)
The committee meets at least once a year. It discusses importantmatters regarding compliance and determines basic policy. Outside
officers serve as advisors.
Group Compliance Committee(Convened 2 times in writing)
The committee engages in checks and reports regarding the stateof compliance at subsidiaries, measures to prevent violations, andinvestigations and remedial actions in response to violations.
Group Sustainability Committee(Convened 6 times; 2 times in writing)
The committee meets as required. It determines policies andmeasures related to sustainability and reports to the Board of
Directors on activities to promote sustainability. Outside officers
serve as advisors.
Nomination Committee(Convened 4 times; 1 time in writing)
The Nomination Committee discusses matters related toproposals submitted to the Board of Directors regarding
the appointment and dismissal of the company’s directors
and executive officers. Committee members consist of the
Chairman and Chief Executive Officer serving as Chairperson,and other members appointed by resolution of the Board of
Directors. The committee currently consists of five members,
including the Chairman and Chief Executive Officer who serves
as Chairperson and three independent outside directors who
compose the majority of the committee.
Remuneration Committee(Convened 3 times; 1 time in writing)
The Remuneration Committee discusses proposals submitted to
the Board of Directors regarding compensation for the Group’s
directors and executive officers, and proposals submitted to
the Audit and Supervisory Committee regarding compensation
for its members. Committee members consist of the Chairman
and Chief Executive Officer serving as Chairperson, and othermembers appointed by resolution of the Board of Directors.
The committee currently consists of five members, including the
Chairman and Chief Executive Officer who serves as Chairperson
and three independent outside directors who compose themajority of the committee.
Skylark Group Integrated Report 2023

58

Section 3

Independent Officer Liaison Committee
The company has established an Independent Officer Liaison
Committee composed of outside directors to strengthen
collaboration among independent officers through site visits andexchanges of opinions, and to carry out activities as a venue
for the provision of raw information concerning the executionof duties, for use in discussions by the Board of Directors. To
strengthen means of communication with outside officers, wehave also introduced a system using cloud-based groupware forquestionnaires, opinion exchanges, and schedule coordination.

Officer remuneration■ S tatus of main activities of the Independent Officer
Liaison Committee in 2023
Month and year
convened

Policy and decision-making process fordetermination of remuneration

Description

February 2023

Visits to new brand stores opinion exchanges

October 2023

Visits to environmentally friendly stores and Super
Urban stores; opinion exchanges

December 2023

Information exchange meeting with top management

Training policy for directors
The company appropriately provides the training andinformation required for directors to properly fulfill their roles andresponsibilities. As a part of this effort, at least once a year we
provide directors with lectures and training by experts in law,
corporate governance, and other subjects. To date, this has

included study groups on insider trading prevention, branding,risk management, crisis management, and ESG. In 2023, we
created opportunities for considering approaches toward andengagement with institutional investors, under the theme ofwhat institutional investors expect from companies.

Status of outside directors
Among our eight directors, we appoint five outside directors
with advanced management experience and knowledge tostrengthen functions for supervising the execution of duties.
The five outside directors are registered with the Tokyo Stock
Exchange as independent officers, and are appointed as fiveindependent outside directors who make up a majority of ourdirectors. Of these, three independent outside directors areincluded among the members of the Nomination Committee
and the Remuneration Committee that serve as advisorycommittees for their respective topics, creating a structure forfair deliberations.

■ Reasons for appointment and skill matrix of directors
8 Directors
5 Outside Directors

Name
Title

Policy on the appointment of executive management
and the nomination of candidates for director

59

Skylark Group Integrated Report 2023

Decision-making skills

Reason for appointment

Supervisory skills

To keep up with the rapidly changing food service market,
we nominate director candidates, from inside or outside thecompany, who possess diverse knowledge, experiences, andcapabilities. With regard to candidates for internal director, after
consideration of the balance of candidates’ knowledge andexperience in family restaurant management, financial strategy,
and marketing strategy, we nominate those who are able tocontribute to society through the food service business andwho are able to demonstrate leadership aimed at continuously
enhancing corporate value. With regard to candidates for outside
director, we appoint those who possess extensive management
experience in diverse companies and organizations, includingin the food service industry. With regard to candidates for Audit
and Supervisory Committee member, we appoint people whoare able to appropriately audit the execution of duties by auditors
based on their knowledge of corporate management and theirknowledge of and experience with accounting, finance, law, andrisk management. Under the above nomination policy, we also set
a policy of actively promoting female candidates who possess thenecessary skills for the Board of Directors to the position of officer.
Specifically, we have set a target of 30% for the ratio of womenserving on the Board of Directors. The ratio in 2023 was 25%.

Basic Axes: Promotion of ESG (Governance)

Web

Corporate Management
Finances/Accounting
International Business
MarketingConsumers
IT/DX
Skylark Group Business
Management
Economic/Social
Legal
Risk Management
Sustainability/ESG● Makoto Tani
Chairman andChief Executive Officer
After joining the company in 1977
and gaining sales experienceat stores, he has held posts
including General Manager of theSales Division and President andRepresentative Director of NILAX
Inc., and has served as President
and Chief Executive Officer ofthe company since 2008. He wasappointed as a director for his
extensive business experience in
the Group and insight regarding
overall management offamily restaurants, business
management, and management
and operation, in addition tohaving an intimate knowledge ofconsumer marketing in the foodservice market.
〇● Minoru Kanaya
President andChief Operating Officer
He was appointed as a director
in view of results achievedin supervising our Finance,
Administration and Human CapitalManagement divisions since2008, together with his wealthof experience and insights fromworking at a securities company
which we believe he will leverageon behalf of our growth strategy.

● Fumio Tahara● Ayako Sano

● Hirohiko Imura

Outside Director

Outside Director

Outside Director

In the expectation that hewill leverage his extensive
experience and insightsfrom working at the Ministryof Agriculture, Forestry
and Fisheries and industry
associations for the benefitof our management and will
provide advice and supervisionfrom an objective and longterm perspective, we haveappointed him an outside
director.

In the expectation that she
will leverage her practicalexperience from working
with a securities company,
wide-ranging insights as an
attorney, and experience
with taxation for the benefitof our management and will
provide advice and supervisionfrom an objective and longterm perspective, we haveappointed her an outside
director.

In the expectation that hewill leverage his practicalexperience from working witha major trading company andas the representative directorof a company supervising acable television station for the
benefit of our management
and will provide advice andsupervision from an objective
and long-term perspective, wehave appointed him an outside
director.

〇
〇

〇
〇
〇

〇
〇

〇

〇

〇
〇
〇

Our policy for remuneration and other compensation for
directors is designed to contribute to the continuous improvementof our operating results and corporate value and to the sharingof value with shareholders. Remuneration for directors of thecompany (excluding outside directors and directors who are
Audit and Supervisory Committee members) consists of a fixedbase remuneration and a performance-linked remunerationthat varies with company performance. Performance-linked
remuneration consists of fiscal year-end bonuses based on
consolidated business results for each business year andremuneration for which the amount paid is linked to the stock
price for a set period (“phantom stock”). From phantom Stock in
2022, in addition to the stock price requirement, an evaluation
by an international ESG evaluation organization is added as an
ESG indicator to ensure that executive compensation is linked
to the promotion of the Company's sustainability management.
Beginning with phantom stock in 2024, in addition to theabove indicators, target values for employee engagement,
target values for overall customer satisfaction, and target values
for reduction of CO2 emissions are added as achievement
indicators, creating a system by which officer remuneration islinked to the promotion of our sustainability management.
We have also set stock ownership guidelines for the sharingof value among directors executing duties, executive officers,
and shareholders, and for the enhancement of medium- to longterm corporate value.

〇

〇

Web

Securities Report (Japanese only)
https://corp.skylark.co.jp/ir/library/financial_report/

Web

Main initiatives to strengthen corporate governancehttps://corp.skylark.co.jp/en/sustainability/governance/cg/

Web

Policy on the appointment of executive management and thenomination of candidates for directors and for directors who
are Audit and Supervisory Committee members
https://corp.skylark.co.jp/en/sustainability/governance/cg/candidate/

Web

Support structure for outside directors
https://corp.skylark.co.jp/en/sustainability/governance/cg/outside/Web

Training policy for directors and directors who are Audit andSupervisory Committee Members
https://corp.skylark.co.jp/en/sustainability/governance/cg/candidate/● Makoto Suzuki
Director, Standing Audit andSupervisory Committee member
After joining the company
in 1979 and gaining sales
experience at stores, heheld posts including General
Manager, Manager of the
President’s Office andManager of the Internal
Audit Office. Based on
his extensive businessexperience in the Groupand his insights regarding
company management, we
expect that he will provide
appropriate supervision of
our management and haveappointed him a director who
is an Audit and Supervisory
Committee member.

〇● Reiko Okuhara
Outside Director, Audit andSupervisory Committee member
In the expectation that
she will leverage her work
experience at the Ministry of
Finance and her wide-ranging
insights as an attorney, andthat she is an appropriate
human resource able tocontribute to the enhancementof corporate governancefrom the perspectives ofcompliance structure andrisk management, we haveappointed her a director who
is an Audit and Supervisory
Committee member.

〇
〇

〇
〇
〇

● Tatsuya Aoyagi
Outside Director, Audit andSupervisory Committee member
In the expectation that hewill leverage his extensive
experience as a certified public
accountant and certified tax
accountant and his knowledgeof accounting and finance toperform supervision of ourGroup’s management andachievement of continuous
enhancement of corporate
value, and that he is anappropriate human resource
able to contribute to theenhancement of corporate
governance, we haveappointed him a director who
is an Audit and Supervisory
Committee member.

〇

〇

〇
〇

〇
〇

These guidelines stipulate that we will hold a set percentageof the company’s stock for position-specific base remuneration
within five years from the assumption of office, and will strive
to hold the shares during the period of office even after the set
percentage is reached.
From a perspective of ensuring independence, theremuneration of outside directors and directors who are Audit
and Supervisory Committee members is not linked to businessperformance, and only base remuneration is paid. The Boardof Directors determines remuneration and other compensation
for directors based on proposals from the Remuneration
Committee, which is an advisory organization of the Board.
Beginning in FY2022, the performance-linked remuneration of
the year-end bonus and phantom stock have malus and clawback
clauses which, in the event of a material accounting error, fraud,or violation, allow the Board of Directors, by resolution, to reduceor to require the return of such remuneration, in part or in full,
following deliberations by the Remuneration Committee.

〇

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〇

〇
〇
〇

〇
〇

〇

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〇
〇

Names and definitions of skills
https://corp.skylark.co.jp/en/sustainability/governance/cg/candidate/
Skylark Group Integrated Report 2023

60

Section 3

Basic Axes: Promotion of ESG (Governance)

Directors & Officers (as of April 1, 2024)
Directors

Audit and Supervisory Committee Members

Makoto Tani

Minoru Kanaya

Fumio Tahara

Ayako Sano

Hirohiko Imura

Makoto Suzuki

Tatsuya Aoyagi

Reiko Okuhara

Chairman and Chief Executive Officer
Born December 25, 1951 (age 72)
Number of shares held: 50,000
Attendance at Board of Directors meetings:
13/13 times (100%)

President and Chief Operating Officer
Born January 26, 1959 (age 65)
Number of shares held: 10,000
Attendance at Board of Directors meetings:
13/13 times (100%)

Outside Director
Born August 7, 1948 (age 75)
Number of shares held: 1,000
Attendance at Board of Directors meetings:
13/13 times (100%)

Outside Director
Born December 9, 1977 (age 46)
Number of shares held: –Attendance at Board of Directors meetings:
13/13 times (100%)

Outside Director
Born February 14, 1958 (age 66)
Number of shares held: –Attendance at Board of Directors meetings: –April 1977
Joined Skylark Co., Ltd.
December 1987	Director and General Manager of Sales
Division of NILAX Inc.
January 2000	President and Representative Director of
NILAX Inc.
January 2007	President and Representative Director of
NILAX Inc. and Executive Officer in chargeof HD Business Strategy Group No. 1 ofSkylark Co., Ltd.
October 2007	Managing Executive Officer and General
Manager of Sales Division No. 2 of Skylark
Co., Ltd.
August 2008	President and Representative Director of
Skylark Co., Ltd.
September 2008	President and Representative Director andGeneral Manager of Corporate Planning
Division of Skylark Co., Ltd.
February 2011	President and Representative Director andGeneral Manager of Product Division ofSkylark Co., Ltd.
June 2012	President and Representative Director of
Skylark Co., Ltd.
July 2014	President and Chief Executive Officer ofSkylark Holdings Co., Ltd.
March 2018	Chairman, President and Chief Executive
Officer of Skylark Holdings Co., Ltd.
March 2023	Chairman and Chief Executive Officer ofSkylark Holdings Co., Ltd. (to present)

April 1981
Joined Nomura Securities Co., Ltd.
June 2000	Head of European Administration Department,
Nomura International PLC
July 2004	Executive Officer of Nomura Principal FinanceCo., Ltd.
January 2008	Managing Director, Skylark Co., Ltd.
January 2012	Managing Executive Officer and General
Manager of Administrative Division, Skylark
Co., Ltd.
October 2015	Executive Officer, Managing Director of
Corporate Support Division and Managing
Director of Human Capital Management
Division, Skylark Co., Ltd.
February 2017	Managing Executive Officer, Managing
Director of Corporate Support Division
and Managing Director of Human CapitalManagement Division, Skylark Holdings
Co., Ltd.
March 2018	Corporate Director and Managing Executive
Officer, Managing Director of Corporate
Support Division and Managing Director of
Human Capital Management Division, Skylark
Holdings Co., Ltd.
April 2021	Managing Executive Officer, Managing
Director of Finance Division, Skylark Holdings
Co., Ltd.
March 2023	President and Chief Operating Officer(to present)

April 1972	Joined the Ministry of Agriculture and Forestry(current Ministry of Agriculture, Forestry and
Fisheries)
September 1984	Director, Marine Products Section, Shizuoka
Prefecture Agriculture and Fisheries Department,
Ministry of Agriculture and Forestry
November 1987	Secretary to the Minister, Ministry of Agriculture,
Forestry and Fisheries
February 2000	Deputy Director-General of the Minister’s
Secretariat, Ministry of Agriculture, Forestry and
Fisheries
January 2001	Private Secretary to the Minister, Ministry ofAgriculture, Forestry and Fisheries
July 2003	Director-General of the Fisheries Agency
August 2005	Director, JA Kyosai Research InstituteNovember 2008	Director, Overseas Fishery Cooperation Foundationof Japan
July 2012	Part-time advisor to Yanmar Co., Ltd. (part-timeadvisor to Yanmar Holdings Co., Ltd. since April 1,
2013)
July 2012	Part-time advisor to Kyokuyo Co., Ltd.
March 2014	Outside Auditor, Skylark Co., Ltd.
July 2014	Outside Auditor, Skylark Holdings Co., Ltd.
March 2018	Outside Director, Skylark Holdings Co., Ltd. (topresent)
June 2020	Chairman, All Japan Purse Seine Fisheries
Association (to present)
July 2020	Part-time advisor, Yanmar Marine System Co., Ltd.
(to present)

April 2001	Economic Research Division, Goldman
Sachs (Japan) Ltd. (currently Goldman
Sachs Japan Co., Ltd.)
January 2009	Joined Tokyo Nishi Law Office (currently
TNLAW Law Office)October 2018	Civil Conciliation Commissioner, Tokyo
District Court
December 2018	Representative, Aya Law Office (to present)
March 2019	Outside Director, Skylark Holdings Co., Ltd.
(to present)
March 2021	Outside Director (Audit and Supervisory
Committee member), Metaps Inc.
(to present) (currently Metaps Holdings, Inc.)
March 2024	Outside Director, Sodick Co., Ltd.
(to present)
May 2024
Outside Auditor, CLAS, Inc. (to present)

April 1981	Joined Sumitomo Corporation
April 2005	Head of SCOA Risk Management Group,
Executive Officer and General Manager
of Corporate Risk Management attachedto the General Manager of the Americas,
Sumitomo Corporation of Americas
April 2012	Executive Officer and General Manager ofCorporate Risk Management, Sumitomo
Corporation
December 2014	Outside Auditor, Kato Sangyo Co., Ltd.
April 2015	Managing Executive Officer, General
Manager of Media and Lifestyle BusinessGroup, Sumitomo Corporation
June 2015	Representative Director and Managing
Executive Officer, Sumitomo Corporation
April 2017	Representative Director and Senior
Managing Executive Officer, Sumitomo
Corporation
	President, Jupiter Telecommunications
Co., Ltd. (currently JCOM Co., Ltd.)
July 2017	President and Representative Director,
Jupiter Telecommunications Co., Ltd.
July 2020	Chairman and Representative Director,
Jupiter Telecommunications Co., Ltd.
June 2022	Outside Auditor, DeNA Co., Ltd. (to present)
June 2023	Outside Auditor, TV TOKYO Holdings
Corporation (to present)
March 2024	Outside Director, Skylark Holdings Co., Ltd.
(to present)

DirectorStanding Audit and Supervisory Committee member
Born February 11, 1957 (age 67)
Number of shares held: 2,000
Attendance at Board of Directors meetings:
13/13 times (100%)
Attendance at Audit and Supervisory Committee
meetings: 10/10 times (100%)

Outside Director
Audit and Supervisory Committee member
Born August 8, 1971 (age 52)
Number of shares held: –Attendance at Board of Directors meetings:
13/13 times (100%)
Attendance at Audit and Supervisory Committee
meetings: 10/10 times (100%)

Outside Director
Audit and Supervisory Committee member
Born May 17, 1962 (age 61)
Number of shares held: –Attendance at Board of Directors meetings:
13/13 times (100%)
Attendance at Audit and Supervisory Committee
meetings: 10/10 times (100%)

April 1979	Joined Skylark Co., Ltd.
May 1994	General Manager of Kita-Kanto Sales Department
No. 2, Skylark Co., Ltd.
January 1999	Manager of the President’s Office, Skylark Co., Ltd.
April 2009	Manager of the President’s Office and Manager of
the Internal Audit Office, Skylark Co., Ltd.
July 2010	Manager of the President’s Office, Skylark Holdings
Co., Ltd.
March 2011	Standing Auditor, Skylark Holdings Co., Ltd.
Auditor, FLO Japon Co., Ltd. (to present)
Auditor, NILAX Inc. (to present)	Auditor, Tomato and Associates Co., Ltd. (topresent)
June 2012	Standing Auditor, Skylark Co., Ltd.
November 2014	Auditor, Taiwan Skylark Co., Ltd. (to present)
December 2015	Auditor, Skylark Split Preparation Co., Ltd. (tradename changed to Skylark Restaurants Co., Ltd. on
January 1, 2016) (to present)
March 2023	Director and Standing Audit and Supervisory
Committee member, Skylark Holdings Co., Ltd.
(to present)

October 1993	Joined Tohmatsu Auditing (currently Deloitte
Touche Tohmatsu LLC)
February 2007	Joined Masters Trust Accounting
Incorporated (currently Masters Trust Inc.)
July 2007	Representative Director, Heartworth
Partners, Inc. (to present)
August 2007	Director, Share Generate Co., Ltd.
February 2010	Outside Auditor, Amlead Co, Ltd.
May 2010	Outside Auditor, BT Holdings Co., Ltd.
(currently Primagest, Inc.)
June 2010	Outside Auditor, MIXI, Inc.
June 2012	Outside Director, MIXI, Inc.
March 2017	Outside Auditor, Skylark Holdings Co., Ltd.
July 2021	Outside Director, Sanwa Seiko Corporation(to present)
March 2023	Outside Director and Audit and Supervisory
Committee member, Skylark Holdings
Co., Ltd. (to present)

April 1985	Joined the Ministry of Finance
April 2000	Joined Kohwa Sohgoh Law Offices
April 2004	Partner and Attorney, Kohwa Sohgoh Law
Offices (to present)
April 2012	Member of Civil Conciliation Commissioner,
Tokyo Summary Court (to present)
April 2018	Deputy Chair, Daiichi Tokyo Bar Association
April 2018	Standing Director, Japan Federation of Bar
Associations
April 2019	Member of the Bidding Oversight Committee,
Kanto Regional Development Bureau, Ministry ofLand, Infrastructure, Transport and Tourism(to present)
June 2021	Director, Japan Law Foundation (to present)
March 2022	Outside Auditor, Skylark Holdings Co., Ltd.
March 2023	Outside Director and Audit and Supervisory
Committee member, Skylark Holdings Co., Ltd.
(to present)
Outside Director of Axis Co., Ltd. (to present)

Nobuyuki Katayama

Kouzou Nishida

Shimon Kato

Akira Hirano

Ikuo Umeki

Ichiro Takei

Hisashi Nakashima

Takuya Aizawa

Executive Officer
Managing Director of Procurement Division

Executive Officer
Managing Director of Human Capital Management Division

Executive Officer
Managing Director of Production Division

Executive Officer
Managing Director of Marketing Division

Executive Officer
Managing Director of Store Development Division

Executive Officer
Managing Director of Administrative Division

Executive Officer
President of Skylark Restaurants Co., Ltd.

Executive Officer
Managing Director of Finance Division

Joined Jonas Co., Ltd. (former Jonathan Co.,
Ltd.; merged into our company in January2012) in 1982. He served as a store manager,business manager, and Director of the Akishima
Logistics Center of the company. After joining
Skylark Co., Ltd. in 2004, he has worked asa General Manager and Deputy Managing
Director in the Procurement Department,
and has served in his current position since
October 2017.

Joined Bamiyan Co., Ltd. in 1993. After
working in positions including store manager,
BamiyanCompanyhuman
resources
manager, and sales promotion supervisor, he
has served as the Chairperson of the Central
Executive Committee of the Skylark Labor
Union since 2010. Since 2016, he has served
as Director and Deputy Managing Director of
the company’s Human Capital Management
Division. He has served in his current position
since October 2018.

Joined Skylark Co., Ltd. in 1983. After working as a store
manager, he led the Product Development Division formany years and has served as Deputy Managing Director ofMarketing Division since 2016. After working as Director of
the Corporate Planning Office, Deputy Manager of Marketing
Policy, Manager of the Cross-Brand Menu Division,and other positions as an Executive Officer of Skylark
Restaurants Co., Ltd., he has served as the Managing
Director of the Production Division since May 2020 andbecame the Managing Director of Menu Development,
Marketing and Production Division in October 2020. He hasserved in his current position since September 2022.

Joined the Central Audit Corporation (Certified Public
Accountant) in 1994. He gained experience throughpositions as Senior Manager of Accenture Japan Ltd.,Manager of BPM Business Division of SAS Institute Japan,
and Senior Director of the Accounting and Finance Divisionof Quintiles Transnational Japan KK (currently IQVIAServices Japan G.K.). After joining the company in April
2015, he became the Director of the Finance Division, thenthe Deputy Managing Director of the IT Division in January
2019, Executive Officer in September 2019, and theManaging Director of the IT Headquarters in July 2020. He
has served in his current position since September 2022.

Joined Skylark Co., Ltd. in 1995. After working as astore manager, he served as the Manager of the Gusto
Management Policy Office and the Manager of the
Menu Planning Office in the position of Executive Officer.
After working as General Manager of the Corporate
Planning Division and the Managing Director of the
Gusto Field Operations Division, he was appointed
Representative Director of FLO Japon Co., Ltd. in 2014.
He has served as the Deputy Managing Director of our
Corporate Support Division since May 2020, and was
appointed Executive Officer in January 2021. He hasserved in his current position since April 2021.

Joined Skylark Co., Ltd. in 1984. After working
in positions including store manager, personnel
planning leader, and promotion planning
leader, he has served as General Affairs Group
Director since 2012, directing governance,risk management, and other Administration
Division work. He has served in his current
position since April 2021.

Joined Bamiyan Co., Ltd. in 1995. After working
in positions including store manager, education
and area manager, human resources manager, andfield operations leader, he was appointed Director
and Bamiyan Field Operations Supervising Group
Director, Family Restaurant Division, of Skylark
Restaurants Co., Ltd. in 2016. He has served as
Executive Officer and Manager of the Bamiyan Sales
Division since 2018, Executive Officer and Directorof the Sales Policy and QSC Improvement Groupsince May 2022, and his current position since
September 2022.

Joined Skylark Co., Ltd. in 1999. After
working in positions including store manager,
leader in charge of brand planning at the
Bamiyan Company Policy Office, leader incharge of budget management in the Budget
Management Department, Director of the
Accounting Group of the Finance Division, andDirector of the company-wide Management
Analysis Group, he was appointed Executive
Officer and Managing Director of the Finance
Division in 2020. He has served in his current
position since March 2023.

▶See P59-60 for reasons for selection andskill matrix of the eight directors.

Executive Officers

61

Skylark Group Integrated Report 2023

Skylark Group Integrated Report 2023

62

Section 3

Basic Axes: Promotion of ESG (Governance)

A Talk with Our Outside Directors

Fumio Tahara
Outside Director
Possesses extensive experiencethrough work at the Ministry ofAgriculture, Forestry and Fisheries
and industry associations, as well as
experience as an auditor of the company.
In current position since 2018.

Surviving the Rapidly Changing
Business Environment
Highly transparent corporate governance and a robust management structure ーー
Following the announcement of our Medium-Term Management Plan in May 2024, Skylark Group is taking steps
toward our targeted growth stage. Three outside directors took part in a discussion of the current situation andissues facing corporate governance and sustainability management for Skylark Group.

Making well-balanced responses tothe external environmental changes andmedium- to long-term issues we face
Since COVID-19 was downgraded to a Category V
infectious disease under Japan’s infectious diseases
legislation, signs of steady recovery have appeared in the foodservice industry, and Skylark Group is seriously considering
strategy for a counteroffensive. My view is that control bymanagement has let us minimize impacts in terms of ourbusiness and governance. Recently, the Board of Directors
held serious discussions on the “basic axes” that will support
future business growth in the Medium-Term Management
Plan, and created a medium- to long-term strategy. The
direction indicated in the recently announced Medium-Term
Management Plan has been evaluated as generally reasonable.
Fumio
TaharaAyako Sano
Outside Director
Possesses practical experience throughwork at a securities company andknowledge as an attorney. In current
position since 2019.

As an attorney and outside director, I maintain anawareness of having a perspective on governanceand internal control.
When commenting on the Medium-Term Management Plan,I thought that it reflected the path that Skylark Group should
pursue, a path that was thrown into relief during the difficulties
under the COVID-19 pandemic. The external environment
is changing drastically even now. A challenging phase iscontinuing, as seen in soaring raw materials costs, logistics
costs, and utility costs under the Russia-Ukraine situation, theIsrael-Palestine situation, and other geopolitical risks. Given
that securing resilience in the supply chain is a pressing issue, I
think the management team is calmly and objectively analyzing
evidence and reflecting it in growth strategy.
Ayako
Sano

Hirohiko Imura
Outside Director
Possesses experience and insights as
a company manager at a major trading
company and cable television station.
Appointed to current position in 2024.

As the “VUCA* era” label suggests, the current
Hirohiko
Imura
era is an extremely difficult time for forecasting
the future. To adapt to an era like this, I believe that my role
involves providing information and materials for the steering ofmanagement and for decision-making, not only functions forgovernance and monitoring of enforcement. In the sustainability
management pursued by Skylark Group, I think we have to givea particular emphasis to diversity. How we take in and respondto the diversifying values and preferences of customers, notonly employees, is a perspective essential to further corporate
growth.

From that standpoint, I see the fiscal year ended
December 2023, when our business performancerecovered, as the year when Skylark Group’s true value wasquestioned. As consumer trends recovered from the pandemic,
Chairman Tani and President Kanaya have demonstrated
outstanding leadership. They quickly hammered out a
Medium-Term Management Plan and showed the seriousnessof the management team. Exhaustive discussions werealso held within the company to create a more freely openorganization. I believe that drastic improvements in service
quality, supply structures, and risk management throughinitiatives like these became the driving force in achieving
double-digit earnings growth and a return to profitability
last year. The stance of Skylark Group seems very wellbalanced as it makes a steady shift toward growth areas.
Fumio
TaharaA management stance that views humanresources as the foundations of growth
Human capital management involves a variety of
aspects, but the first key point is enhancement of
employee engagement. For a company to increase the numberof employees who identify with the company’s way of creating
value and who feel a personal involvement in its management
issues, the company’s communication stance for actively
sharing the management team’s thinking with employees is vital.
In Skylark Group, however, with its 100,000 employees, carrying
out human resources development perfectly is a daunting task.
The food service industry, which employs a wide range of people,
exists in a business environment that embraces a pack of risks, so
to speak. I want management to engage in the risk management
aspects of human resources with care, but I think our current
governance is functioning well, including in terms of openness.
Fumio
TaharaIt’s also important that we enhance working
environments with an emphasis on diversity, equity,and inclusion. I think human capital management is what
will achieve these, even if it takes time to do so. Also, while
diversity is not only a matter of gender, looking at gender asa typical aspect, half of the population and of our customers
consists of women, and many of our employees are women,
too. I want management to take a stance capable of achieving
workplaces where women can actively demonstrate their power.
Ayako
Sano

* Volatility, Uncertainty, Complexity, and Ambiguity.

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Section 3

Together with detailed numerical trends, the Board ofHirohiko
Imura
Directors recognizes human resources as a vital topic
that has to be discussed. I attended a Board of Directors meetingfor the first time today. My first impression was that the Board
has a wonderful attitude, with substantial, serious, and open
discussion taking place on the spot, as opposed to some planned
harmony worked out in advance. I think that this openness in
the Board of Directors has spread to Skylark Group employees
as well, and is leading to the construction of a free and open
corporate culture, which in turn connects to enhanced loyalty
to the company and strengthened awareness of compliance.

generation? We have to think about that, including developmentof those leaders. As an example, if we’re to think about the nextgeneration management team a decade from now with women
included, we need to start considering it now. If I were to namean issue, this is the one that strikes me.
I’m in agreement. I think we’ve currently built an
Ayako
Sano
almost miraculously well-balanced structure, with thetwo top managers cooperatively demonstrating their differingstrengths. Chairman Tani has wonderful communication skills
and solid leadership, to the point that shareholders taking partin the General Meeting of Shareholders the other day posted
on social media that it was worth attending the meeting justto see him. And yet, the more wonderful the current structure
is, the more there’s a question of how we nurture the next
generation and hand over the baton, as Mr. Tahara noted. The
Skylark Group’s top management is required to demonstrate
a diverse array of capabilities and qualities, including ethicalsense, trustworthiness, toughness, a sense of responsibility,
positivity, decision-making ability, strategy-creating ability,
and leadership. How the Group is trying to select, nurture,
and appoint candidates for new leader positions is somethingthat has not yet been fully made clear to outside directors.
Succession plans are a concern for any company. I
Hirohiko
Imura
think that the specs required for the top managementof today differ from the specs for the next-generation leadershipof tomorrow. As I noted earlier, future conditions are uncertain in
the VUCA era. As an example, at times when the food service
industry was steadily growing, we were able to expand businessby rolling out headquarters-led menus and customer service
manuals nationwide. But under conditions in which customers’
preferences are more diversified and subdivided than ever,The challenge for our management
structure of Chairman Tani and President
Kanaya is development of the next
generation
With Audit and Supervisory Committee members
Fumio
Taharaexcluded, Skylark Group has five directors. Threeof these, including myself, are outside directors. The ratioof outside directors to Board of Directors members overall is
62.5%, which makes for a management structure capable of
ensuring transparency and fairness in governance from theperspective of third parties, even when viewed as numbers.
Against this background, a year has passed since the start ofthe structure with Chairman Tani and President Kanaya as thetwo top managers. My sense is that they’re making great efforts.
In particular, I think that the personalities and management
skills of the two have synchronized well, which has let them set
business performance back on track and prepare the groundfor the next stage. If I were to name an issue facing us, it’s that
as of now, it’s difficult to envision the era after Chairman Taniand President Kanaya. That is, who’ll be the leaders in the next

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Basic Axes: Promotion of ESG (Governance)

I think that the decentralization concept of delegating authority
to regions or stores to some extent is needed more than theconcept of centralization. In Board of Directors discussions
today, the Chairman and President made clear that they willemphasize “store-centered management” from here on out.
This was an expression of Skylark Group’s intent to actively
challenge the greatly changing business environment, andthat in the development of human resources toward that
end, it is vital that we construct a development structure
through ideas and thinking different from those of the past.

Toward more effective operation of
the Board of Directors
The end of today’s discussion brings us to thequestion of the Skylark Group’s governancestructure. On the point of aiming for a separation ofmanagement and execution, our governance structure isconsistent with the spirit of the Corporate Governance Code.
We have also established a Nomination Committee and a
Remuneration Committee, which makes me think that we are
effectively approaching a level on par with the corporate formof “corporation with a nominating committee.” Our score is not
perfect, but I think we’ve built up about halfway to our ideal form.
Fumio
TaharaFive years have passed since I became an outside
director. I appreciate the stance of the management
team in actively listening to opinions within the company andincorporating them to lead the organization in a better direction.
As an outside director, one point I’ve noted as key to strengthening
corporate governance is the importance of information sharing.
As an example, in the event of some misconduct, we’re required
to establish a route through which information is accurately andspeedily reported to management. I appreciate that Skylark
Group is mindful of the importance of such information sharing.
Ayako
Sano

As long as a company is listed, as an organization it
faces demands from society to construct a governancestructure in accordance with the requirements and rules ofsociety. I think Skylark meets these in a considerable number of
aspects. However, I see the ultimate purpose of governance as
not whether the company simply conforms to rules but whether it
addresses every stakeholder sincerely and squarely. A particularly
important matter is the questions of whether the company
addresses customers sincerely and whether it engages inmanagement closely aligned with customers. Shareholders exist
as an extension of customers, but at the recent General Meetingof Shareholders, when I heard compliments from shareholders
about polite service and store staff behavior, I felt renewed pridein our customer-oriented stance. More than anything, I feelthat our shareholders are both customers and fans of Skylark
Group, and I want to help make relationship even stronger.
Hirohiko
Imura

Shareholders of Skylark Group now number
over 400,000. These are both shareholders andcustomers. Naturally, they take an interest in not only thestock price, dividends, and shareholder benefits but also in the
Skylark Group’s customer service overall as customers, basedon which they deliver a variety of opinions to us. I think that, in
discussions by the Board of Directors, we outside directors needto maintain a monitoring role from such a perspective. What will
customers think about the Medium-Term Management Plan andgrowth strategy that were announced, along with the services
provided at stores? This is a perspective I want to hold dear.
Fumio
TaharaI, too, value opinions from the viewpoint of
Ayako
Sano
shareholders, but also see the viewpoints ofstakeholders in general, including non-shareholders, as
important. Discussions by the current Board of Directors
keep the maintenance of win-win relationships in mind, suchas by never making unilateral demands in our relationships
with supply chain business partners, to give an example.
I want to continue to maintain a stance of engaging in honest
management that is conscious of sustainability and reputation.

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