CONTENTS

Introduction

Feature Story

Environment

SocialGovernance

Data & Statistics

GovernanceCorporate governance
Basic approach

introduced an executive officer system. Each executive officer,
endowed with his/her own authority from the Board, acts as
the head of the department, group company or major
functional organization to speed up decision-making, optimize
business operations, and handle critical business execution.
For our auditing function, we have a Board of Auditors
composed of three company auditors including two externalauditors. The company auditors attend important meetings
such as board meetings and audit the execution of duties by
the directors by inquiring about the status of their business
operations.

We consider the improvement of corporate governance to bea key business issue for raising our performance, value, andsocial credibility.

Corporate governance structure
Our Board of Directors comprised of eight members makes
decisions on key issues in INOAC’s business. Each board
member reports the execution, financial, and performancestatuses of his/her division, based on which the Board
supervises and controls the business execution of thecompany. In order to also separate supervisory andexecutional responsibilities in management, INOAC has

Internal control system
We are implementing various measures to ensure that wecomply with applicable laws as well as the company’s articlesof incorporation in our business execution. For informationmanagement, we determine the responsible department orsection and storage period for each document according toour Document Control Procedure. The Executive
Management Committee controls risk management, andCrisis Management Committee meetings are held when acrisis occurs.
For associated and affiliated companies we haveestablished our Governance Rules for Associated Companies.
We also clarify rules for business operations and conductboth operational and accounting audits as needed.

Corporate governance structure (organizational structure)

Appointment and dismissal

Accounting auditor

Business execution structure

Board of Directors
Chief Compliance Officer (CCO)

President & COO

Compliance Office & Compliance Officers

Businessexecution

Executive
officers

Crisis Management
Committee

Supervise

Business
Auditors’ Office* When a crisis occurs

MonitorAccounting audit

Appointment and dismissal

Business units

Associated/affiliatedgroup companies

Cooperation

Audit
Internal audit

Board of Auditors(including outside company auditors)

Shareholders’ meeting

Appointment and dismissal

Cooperation

CSR REPORT 202224CONTENTS

Introduction

Feature Story

Environment

SocialGovernance

Data & Statistics

GovernanceCompliance
Basic approach
In order for INOAC to satisfy its corporate social
responsibilities and expectations from customers, it is notenough to simply observe the applicable laws. Employees
must also recognize their social responsibilities as part of thecorporation. We strive to implement thorough compliance that
goes beyond simply defining a company policy and observing
the applicable laws by also holding each individual employee
to high ethical standards in their actions.

Information Security Committee establishedCompliance organizational chart
Board of Directors
Appointment and dismissal
Compliance organization
Chief Compliance Officer (CCO)
ReportImplementation system
With authority independent of our directors and executive
officers, our Chief Compliance Officer (CCO) runs theCompliance Office, taking measures and actions forcompliance-related matters. Additionally, we have complianceofficers deployed in each region and department in Japanand overseas who implement compliance activities whilefinding ways to strengthen their overall global coordination.
If any compliance violations arise, the CCO directs theCompliance Office as the person in charge of the response.
The CCO establishes a task force at Head Office to address
the violation in a centralized manner according to the level ofimpact.
We continuously improve the program that determines ourcompliance organization through revisions made regularly by
the CCO. Once per year, we also convene all the complianceofficers to hold a Global Compliance Evaluation Conference.

Compliance OfficeCompliance officers in each region & department

Activities
 Implement countermeasures to reduce occurrences of cyber incidents
 Build systems capable of responding quickly to address cyberincidents when they occur
 Accommodate Cyber Security Guidelines Ver. 2.0 and various
guidelines set out by customers

Goals
Compliance control

Specific initiatives
Compliance training
We are incorporating compliance portions into the regulartraining conducted at major intervals in all employees’ careers(training for new employees, employees hired mid-career,overseas assignment candidates, and those handling corefunctions). In addition, we conduct separate compliancetrainings according to the characteristics of each region anddepartment.

Whistle-blowing system
We have established a whistle-blowing system to enable
everyone who works for or with our company to consult orreport matters involving compliance violations that have or might
have occurred. Our whistle-blowing system connects bothinternally (to the Compliance Office) and externally (to a law firm).

CSR REPORT 2022

We established our Information Security Committee in
September 2022 in order to operate properly in line with ourConfidentiality Management Regulations and to further
improve our management of information. The aim of ouractivities is to implement these globally throughout ourorganizations as we also work to reduce occurrences of cyberincidents and put response measures in place.

(* Within the duration of our security specialist vendor agreement from September 2022 to January 2023)

 Visualize the issues to achieving 90% of the LV1 & LV2 categories ofCyber Security Guidelines 2.0 and how to deal with them, along withthe main departments involved, deadlines, and amounts of investments(as needed) by December 2022
 Formulate the flow of steps to responses when cyber incidents occur

Information security management structure(in normal circumstances)
Board members (Management)
Chief Information Security Officer (CISO)
Information Security Committee
Members of Information
Security Committee
Person responsiblefor department/section &core members of current
confidentiality management project

Director of the Information
Security Committee’s
administrative office
Administrative office
IT Division, Operations Group,
Security Team25