CORPORATE GOVERNANCE

WACOAL HOLDINGS CORP.

Last Updated: on May 31, 2021

Wacoal Holdings Corp.
Hironobu Yasuhara, Representative Director, President and Corporate Officer; Representative Director
Contact: +81(075)682-1010
Securities Code: 3591
https://www.wacoalholdings.jp/en/
Overview of the corporate governance at Wacoal Holdings Corp. (the “Company”).

I. Basic Concepts, Capital Structure, Corporate Attributes and other Basic Information on Corporate Governance
1. Basic Concepts(1) Management Philosophy of Wacoal Group“Mutual Trust”
Our business activities are built upon “relationships of mutual trust” based on listening to the voice of each and every one of our customers, and bycontinually transforming our business with humility. This spirit of “mutual trust” is our starting point and has been our management philosophy since
our establishment.
(2) Basic Policy on Corporate GovernanceThe basic policy and purpose of our Group’s corporate governance is to continuously enhance our corporate value by increasing transparency andensuring the fairness and independence of our corporate management in order to build “mutual trust” in relationships with every stakeholder,
including shareholders, customers, employees, business partners, and the local community.
【Reasons for Not Implementing Certain Principles of Corporate Governance Code】<Principle 1.4>
1. In order to enhance our medium- to long-term corporate value, we may hold shares of other companies as cross-shareholdings for the purposeof maintaining and enhancing our transactional relationships, building, maintaining and enhancing our cooperative and transactional
relationships for business expansion, or maintaining stable financial transactions.
2. We will examine whether the purpose of a cross-shareholding is appropriate from a medium- to long-term perspective and whether the benefit
and risks related to such cross-shareholding are appropriate given the capital cost, and will report to the Board of Directors on a periodic basis.
The Board of Directors will assess whether such shareholding contributes to the enhancement of our medium- to long-term corporate value
based on the outcome of such examination, and will decide on whether to continue the cross-shareholding or to dispose of such shares. If ourholding of any shares loses its significance, we will dispose of and reduce as appropriate our holding of such shares after considering thecircumstances of the issuer.
3. In voting any of the shares held for cross-shareholding purposes as to any agenda item, we will determine whether or not to vote in favor ofsuch agenda item after closely examining comprehensively whether the relevant vote would contribute to the enhancement of the issuer’s andour corporate value, while fully respecting the issuer’s management policy. A close due diligence review will be performed in case an issuer
releases losses for certain consecutive periods, its shareholder value is significantly damaged as a result of reorganization, or there is a matterof serious concern regarding the issuer’s corporate governance such as a corporate scandal.
【Disclosure Based on Certain Principles of Corporate Governance Code】<Principle 1.7>
We prescribe guidelines on related party transactions and conduct periodic investigations regarding related parties. Any related party transactionthat is material or untypical is subject to the approval of the Board of Directors.
<Principle 2.6>
To appropriately manage the contributory defined retirement benefit plan, a Pension Committee composed of the members from the Accounting
Department, Finance Department and Personnel and Administration Department has been established. The Committee reviews the asset
management policies and strategic asset allocation. A third-party manager is entrusted to manage the plan, and we review the management
status, including leadership activities, at quarterly management report meetings. In addition, we perform appropriate management by retaining amanagement consultant for additional expertise and knowledge, and enhance the expertise of personnel who engage in the management of thecorporate pension fund.
<Principle 3.1>
(1) Management Philosophy and Management Plan, etc.
Please see “Basic Concepts” in this Report and our website at https://www.wacoalholdings.jp/group/governance/(2) Basic Concepts and Basic Policy on Corporate Governance
Please see “Basic Concept” of this Report and our Corporate Governance Guidelines which are separately prescribed(https://www.wacoalholdings.jp/group/files/governance_guideline.pdf).
(3) Policies and Procedures on Compensation for Senior Management and Directors
・Compensation for executive directors is linked to long-term shareholder interests and is managed and balanced appropriately and fairly
to enhance the motivation of such executive directors to maximize the corporate value of the Company.
・
Our compensation system for officers is designed by the “Executive Compensation Advisory Committee,” which is chaired by the
Independent Outside Director.
・The compensation paid to Directors consists of “basic compensation” the amount of which is fixed, “performance-based bonus” that is
linked to the business results of each fiscal year, and “share-based stock option incentive” which is an incentive from a mid-to-long term
viewpoint. Independent Outside Directors and Audit & Supervisory Board Members who are independent from business execution
receive only the fixed “basic compensation.”・The level of compensation has been set according to the business results and scale of the Company and is based on comparison withother companies within the same industry or of the same scale.
(4) Policies and Procedures Regarding the Election and Removal of Senior Management and the Nomination of Candidates for Directors andAudit & Supervisory Board Members
The Company has separately prescribed the “Criteria for Election of Officers” for appointing and removing a Director and an Audit &Supervisory Board Member. The Board of Directors appoints and the Executive Nomination Advisory Committee nominates a candidate for
Director based on fair and strict deliberations. The Board of Directors appoints a candidate for Audit & Supervisory Board Member with theconsent of the Audit & Supervisory Board. Afterward, a list of candidates will be submitted as an agenda for the General Meeting of
Shareholders.
<Supplementary Principle 4.1.1>
1. The Board of Directors considers medium- and long-term management strategy and social challenges in addition to matters stipulated bylaws, ordinances or our Articles of Incorporation.
2. Matters to be considered are specifically prescribed in the “Regulations of the Board of Directors.”
3. Under the medium- and long-term management strategy prescribed by the Board of Directors, the Group Management Meeting examines
matters concerning the management strategy of Wacoal Group and other important management issues. Also, the Group Strategy
Committee and the Quarterly Business Results Review Committee share issues and review progress on quarterly results. By establishing
this system, we aim to increase the effectiveness and expedite the execution of the monitoring function of the Board of Directors.
<Principle 4.9>
The Company has prescribed “Criteria for Election of Outside Officers (to ensure independence).” For details, please see “Information on
Independent Officers” in this Report.
<Supplementary Principle 4.11.1>
1. The “Criteria for Election of Officers” prescribe the qualifications required to be appointed as a Director and the diversity that the Board of
Directors aims to achieve. For details, please see “Information on Independent Officers” in this Report.
2. Our Articles of Incorporation prescribe that the number of Directors of the Company shall not exceed eight (8).
<Supplementary Principle 4.11.2>
1. The Corporate Governance Guidelines (https://www.wacoalholdings.jp/group/files/governance_guideline.pdf), separately prescribed by theCompany, set forth the responsibilities of our Directors and Audit & Supervisory Board Members.
2. The “Criteria for Election of Officers” prescribe that our Outside Directors and Outside Audit & Supervisory Board Members shall notconcurrently hold positions as officers of 4 or more listed companies.
3. None of our Internal Directors nor Audit & Supervisory Board Members concurrently holds positions as an officer in other listed companies.
<Supplementary Principle 4.11.3>
We conducted a hearing at the meeting of Independent Outside Officers, and organized and reported the results of the hearing to our Board of
Directors meetings. The main points are as follows:
1. Status of efforts to address the findings in the effectiveness evaluation of the previous year
・ (Findings) For the purpose of deepening understanding of the Group’s business, we received a request to expand contact points with theGroup through site visits and to create opportunities for understanding the MD strategy and brand strategy.
・ (Initiatives) For the purpose of deepening their understanding of the Group’s business, we created an inspection plan for Outside
Officers and prepared sites to visit, such as store’s with 3D body scanners; however, due to the spread of COVID-19 infections, only
some inspections were carried out. Going forward, we will conduct inspections after taking measures against the aforementioned viral
infections.
2. Findings in the effectiveness evaluation of this year and the initiative to deal with such findings(1) Aiming to further improve the efficiency of the Board of Directors, the content of the materials distributed in advance of the Board of
Directors’ Meeting will be enhanced, and the timing of their distribution accelerated.
(2) Regarding the Executive Nomination Advisory Committee, Executive Compensation Advisory Committee, and the Independent Outside
Officers Meeting, their agendas, meeting frequencies, participating members, and management methods will be reconsidered.
(3) There was a request to increase contact points among executive management, such as executive officers and general managers. We willproceed with making examinations and improvements in line with the findings.
We will conduct our next hearing at the meeting of Independent Outside Officers scheduled to be held in September 2021, and discuss theresults of the hearing at the Board of Directors meeting thereafter.
<Supplementary Principle 4.14.2>
The Company provides training opportunities for our Directors and Audit & Supervisory Board Members to acquire qualifications that are requiredin fulfilling their roles. For our Internal Directors and Audit & Supervisory Board Members, we provide information on qualifications as a manager
or auditor, knowledge regarding the Companies Act and Corporate Governance, compliance and other valuable information on management. For
our Outside Directors and Outside Audit & Supervisory Board Members, upon their election and periodically thereafter, we provide them
explanations regarding the management strategy and an overview of the business of Wacoal Group and its circumstances, as well as theenvironment of our industry and of Wacoal Group in order to foster a deeper understanding of this environment.
<Principle 5.1>
1. The Company has prescribed the “Basic Policy for Constructive Dialogue with Shareholders, etc.,” which is announced on our website athttps://www.wacoalholdings.jp/sustainability/talk_with_stockholder/. The investor relations department and the Officers and employees of
Wacoal Group that are assigned to this department are responsible for meetings with shareholders. The investor relations department issupervised by the relevant director in charge. The Company will consider how to respond to a shareholder who wishes to meet with our
Directors in light of the proposed subject matter and the attributes of the shareholder. The Company makes efforts to foster a deep
understanding of our positions and our thinking by our shareholders and investors inside and outside Japan, through timely, appropriate andfair disclosure of the status of our management and financial condition, and by actively communicating to them the market environment andour unique strengths.
2. The investor relations department will, on a half-yearly basis, provide feedback to management to give an overview of the dialogue withshareholders and to communicate to management suggestions received regarding management from such dialogue, while regularly
reviewing the shareholding status of shareholders and gathering related information in cooperation with other relevant departments. With
respect to initiatives other than promoting individual dialogue with shareholders, we hold a briefing session for institutional investors andanalysts at the end of the fiscal year and at the end of second quarter of each fiscal year, at which the President and Directors report on andgive an overview of our business results and the progress of our management strategy. We also hold a briefing session regarding subjects
and individual business items that attract strong interests from shareholders and offer tours of our facilities several times a year. For
individual investors, we participate in information sessions held by securities firms where we explain the strengths and business of theCompany. In addition, the Company has been issuing the “Integrated Report” since fiscal 2013 as a part of its effort to promote
communication of the creation of medium- and long-term corporate value.
3. The Company thoroughly protects any insider information obtained through dialogue with shareholders. Such insider information is subject toour internal rules, training and non-disclosure declarations. We seek to ensure fair and appropriate disclosure by establishing the timing andmethods of disclosure of information pursuant to our “Basic Policy on Information Disclosure” prescribed by the Company(https://www.wacoalholdings.jp/ir/management/discloser/).

2. Capital Structure
More than or equal to 20%, but less than 30%

Shareholding ratio by foreign investors【Status of Major Shareholders】

Number of Shares
held by Shareholder(share)3,447,100
3,195,014
3,081,700
3,050,000
2,352,530
1,836,261
1,775,122
1,525,000
1,366,062
1,241,207

Name of Shareholder
The Master Trust Bank of Japan, Ltd. (Trust Account)
The Bank of Mitsubishi UFJ, Ltd.
Japan Trustee Services Bank, Ltd. (Trust Account)
Meiji Yasuda Life Insurance Company
The Bank of Kyoto, Ltd.
Nippon Life Insurance Company
The Shiga Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
The Dai-ichi Life Insurance Company, Limited
Asahi Kasei Fibers Corporation

Controlling Shareholders (excluding
parent company)―――

Parent Company

None

Shareholding
Ratio (%)
5.52
5.12
4.94
4.89
3.77
2.94
2.84
2.44
2.19
1.99

Supplementary Information
The substantial shareholding report dated April 13, 2018 filed by Mitsubishi UFJ Financial Group, Inc., which is publicly available, indicates that theshareholders in the below table are holding the respective numbers of the Company’s shares as of April 9, 2018. However, as we were unable toconfirm the actual status of the shareholdings by these shareholders as of the end of fiscal year 2020, those shareholdings have not been taken into
account in the above table.
Details of the substantial shareholding report (the amended report) are as follows:
Name of Shareholder
The Bank of Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Mitsubishi UFJ Kokusai Asset Management Co.,
Ltd.
Total

Number of Shares
held by Shareholder
3,295 thousand shares
3,167 thousand shares
187 thousand shares

Shareholding Ratio

6,649 thousand shares

4.60%
4.42%
0.26%
9.28%

3. Corporate Attributes
Stock Exchange Listings and Market DivisionTokyo Stock Exchange, First Section

Fiscal Year-End

March

Category of Industry

Textiles & Apparels

Number of Employees as of the Previous Fiscal
Year-End (consolidated basis)

More than or equal to 1,000

Sales Amount as of the Previous Fiscal YearEnd (consolidated basis)

More than or equal to 100 billion yen, but less than 1 trillion yen

Number of Consolidated Subsidiaries as of thePrevious Fiscal Year-End

More than or equal to 50, but less than 100

4. Guidelines for Measures to Protect Minority Shareholders upon Transactions with Controlling Shareholders―――

5. Other Special Circumstances that May Have a Material Impact on Corporate Governance―――II. Overview of Business Management System and Other Corporate Governance Systems related toManagerial Decision-Making, Execution and Supervision

1. Matters Concerning Organization Structure and Operations
The Company has adopted an Audit & Supervisory Board system.

Form of Organization【Information on Directors】
Number of Directors prescribed in the Articles
of Incorporation

8 (maximum)

Term of Office for Directors prescribed in the
Articles of Incorporation

1 yearChairman of the Board of Directors

President

Number of Directors

8Election of Outside Directors

Yes

Number of Outside Directors

3

Number of Outside Directors designated as
Independent Officer

3

Relationships with the Company (1)NameAttributesab

Relationship with the Company*
c
d
e
f
g
h
I

j
k
Madoka Mayuzumi
Other
Shigeru Saito
From another company
Tsunehiko Iwai
From another company* Type of relationship with the Company* Insert ○ if any the following is/was applicable to the Outside Director either “currently or until recently,” and insert △ if any of the following wasapplicable to the Outside Director in the past
* Insert ● if any of the following is/was applicable to a close relative of the Outside Director either “currently or until recently,” and insert ▲ if any of thefollowing was applicable to a close relative of the Outside Director in the pasta
A person who executes business of the Company or its subsidiariesb
A person who executes business or who is a non-executive director of a parent company of the Companyc
A person who executes business at an affiliate company of the CompanydA person (or, in case of a legal entity, a person who executes business for that entity) whose major customers include the Companye
A person (or, in case of a legal entity, a person who executes business for that entity) who is a major client of the Companyf
A consultant, accountant or legal advisor who receives a large amount of money or other property other than compensation received as an officer
from the Companyg
A major shareholder of the Company (in case of a legal entity, a person who executes business for that entity)h
A person who executes business at a customer of the Company (which does not fall under d, e and f above)i
A person who executes business at an entity which has an outside officer from the Companyj
A person who executes business at an entity to which the Company makes donationsk
Other
Relationships with the Company (2)Name

Madoka Mayuzumi

Independent
Officer○

Supplementary Information
on Eligibility Requirements

Reasons for the Election

Visiting professor at Kitasato University
Visiting professor at the Department ofJapanese Language and Literature, Facultyof Humanities and Culture, Showa Women’s
University
Visiting professor at the Department ofJapanese Language and Literature, Facultyof Humanities, Kyoto Tachibana University
Board of Trustees Member of East Japan
Railway Culture Foundation

Ms. Mayuzumi plays an active role as a haiku
poet in the field of arts and culture in Japanand overseas. While serving as Advisor of
the Company from April 2014, she has
provided advice that addresses social
challenges and educational training for
employees of the Company and Wacoal
Corp. We expect that, with her knowledge
and experience, she will contribute to theCompany’s management which respects
diversity.
Although Ms. Mayuzumi has never been
involved in the Company’s management
other than by way of serving as an Outside

Shigeru Saito○

Representative Director and Chairman, andCEO of TOSE CO., LTD.
Outside Director of SCREEN Holdings Co.,
Ltd.

Tsunehiko Iwai○―――

Existence of Voluntary Advisory Committee
equivalent to Nomination Committee orRemuneration Committee

Director or Outside Audit & Supervisory
Board Member in the past, we believe that
she will be able to perform her duties
appropriately for the above-stated reasons.
Because she meets the eligibility
requirements that the Company hasprescribed under “Criteria for Election of
Outside Officers (to ensure independence)”and because there are no concerns that any
conflict of interest with general shareholders
may arise, we have designated her as anindependent officer.
Mr. Saito currently serves as theRepresentative Director and Chairman at
another company, and has many years ofexperience and knowledge as management.
We believe that he is qualified to be an
Outside Director to further strengthen the
supervisory function of the Company
management.
Also, because he meets the eligibility
requirements that the Company hasprescribed under “Criteria for Election of
Outside Officers (to ensure independence)”and because there are no concerns that any
conflict of interest with general shareholders
may arise, we have designated him as anindependent officer.
We believe that Mr. Iwai is qualified to be an
Outside Director to further strengthen the
supervisory function of the Company
management, as he has extensive knowledge
and experience as management, as well as
specialized knowledge in the fields ofresearch & development, production andtechnology.
Also, because he meets the eligibility
requirements that the Company hasprescribed under “Criteria for Election of
Outside Officers (to ensure independence)”and because there are no concerns that any
conflict of interest with general shareholders
may arise, we have designated him as anindependent officer.

Yes

Status, Members and Attributes of Chairperson of the Voluntary Advisory
Committee(s)Name of Committee

NumberofMembers

Number of
Full-timeMembers

Number ofInternal
Directors

Voluntary
Advisory
Committee
equivalent toNomination
Committee

Executive
Nomination Advisory
Committee

6

0

3

3

0

0

OutsideDirector

Voluntary
Advisory
Committee
equivalent toRemuneration
Committee

Executive
Compensation
Advisory Committee

6

0

2

3

0

1

OutsideDirector

Supplementary Information

Number of
OutsideDirectors

Number of
OutsideExperts

Committee
Chair(Chairperson)

Other

The Board of Directors of the Company has adopted a resolution at its meeting held on December 26, 2018 to change our system as below.
The Executive Nomination Advisory Committee and the Executive Compensation Advisory Committee, the majority of which consist of Outside
Directors with Independent Outside Director Mr. Tsunehiko Iwai designated as chairman, were each established as an advisory body to discuss andprovide recommendations on the nomination, promotion, and compensation of Directors, and matters resolved at such Committees’ meetings arereported to the Board of Directors. The Committees are composed of six (6) members (half of which are Outside Directors) and 1 staff member, andthe Independent Outside Director acts as the committee chair. As a general rule, each meeting of the Executive Nomination Advisory Committee isheld on the day of the meeting of the Board of Directors in January of each year, and each meeting of the Executive Compensation Advisory
Committee is held on the day of the meeting of the Board of Directors in April, July, and February of each year. Such Committees are operated with ahigh degree of transparency and fairness pursuant to resolutions approved unanimously with all members in attendance.

【Information on Audit & Supervisory Board Members】
Establishment of an Audit & Supervisory Board

Yes

Number of Audit & Supervisory Board Membersprescribed in the Articles of Incorporation

5

Number of Audit & Supervisory Board Members

5

Status of Cooperation among Audit & Supervisory Board Members, Accounting Auditor and Internal Audit Department
Our Audit & Supervisory Board Members and Internal Audit Department (audit office) hold regular meetings for reporting and confirmation once amonth. The main purpose of these meetings is to report the discussions held at major meetings attended by our Audit & Supervisory Board Members,
activities conducted by our audit office, and other matters. We have implemented an audit system allowing the sharing of documents and informationnecessary for audits so that audit working papers are mutually exchanged and confirmed by our Audit & Supervisory Board Members and the audit
office and the audit can be performed more efficiently and effectively through cooperation between our Audit & Supervisory Board Members and theaudit office.
The number of members at our Internal Audit Department (audit office) as of June 26, 2020 was eleven (11).
Our Audit & Supervisory Board Members and Accounting Auditor have regular meetings for discussion six times a year. The purpose of suchdiscussion is mainly to report and confirm the plan and status of the audit and to exchange opinions on the management. Further meetings may beheld from time to time as necessary.
Election of Outside Audit & Supervisory Board
Members

Yes

Number of Outside Audit & Supervisory Board
Members3

Number of Outside Audit & Supervisory Board
Members designated as Independent Officer

3

Relationships with the Company (1)NameAttributesab

Relationship with the Company*
c
d
e
f
g
h
i
△

j
k
Hiroshi Shirai
Certified public accountant
Mitsuhiro Hamamoto
Attorney-at-law
Minoru Shimada
From another company* Type of relationship with the Company* Insert ○ if any of the following is/was applicable to the Outside Audit & Supervisory Board Member either “currently or until recently,” and insert △ if
any of the following was applicable to the Outside Audit & Supervisory Board Member in the past
* Insert ● if any of the following is/was applicable to a close relative of the Outside Audit & Supervisory Board Member either “currently or until
recently,” and insert ▲ if any of the following was applicable to a close relative of the Outside Audit & Supervisory Board Member in the pasta
A person who executes business of the Company or its subsidiariesb
A person who is a non-executive director or accounting advisor of the Company or its subsidiariesc
A person who executes business or who is a non-executive director of a parent company of the CompanydA person who is an audit & supervisory board member of a parent company of the Companye
A person who executes business at an affiliate company of the Companyf
A person (or, in case of a legal entity, a person who executes business for that entity) whose major customers include the Companyg
A person (or, in case of a legal entity, a person who executes business for that entity) who is a major client of the CompanyhA consultant, accountant or legal advisor who receives a large amount of money or other property other than compensation received as an
officer from the Companyi
A major shareholder of the Company (in case of a legal entity, a person who executes business for that entity)j
A person who executes business at a customer of the Company (which does not fall under f, g and h above)k
A person who executes business at an entity which has an outside officer from the CompanylA person who executes business at an entity to which the Company makes donations
m Other

Relationships with the Company (2)Name

Independent
Officer

Supplementary Information on Eligibility
Requirements

Reasons for the Election○Certified public accountant and head at
Shirai Certified Public Accountants’ OfficeOutside Audit & Supervisory Board Memberof ALTECO Inc.
Supervisor of University Public Corporation
Osaka

Mitsuhiro Hamamoto○

Representative attorney-at-law at Hamamoto
Law OfficeOutside Director of Toa Valve Engineering
Inc.
Outside supervisor of Osaka Hyogo Concrete
Industrial Association

Minoru Shimada○

Hiroshi Shirai

Full-time advisor of SOTSU CORPORATION

We believe that Mr. Shirai is qualified to be
our Outside Audit & Supervisory Board
Member because he has knowledge andexperience in accounting and finance(including U.S. accounting standards) as acertified public accountant.
Mr. Shirai worked at Deloitte Touche
Tohmatsu LLC, our accounting auditor, from
August 2007 to September 2011, but he wasnever involved in the audit services engaged
for the Company during that period. It has
been six years and eight months since Mr.
Shirai left Deloitte Touche Tohmatsu LLC.
Because he meets the eligibility requirements
which the Company has prescribed under“Criteria for Election of Outside Officers (toensure independence)” and because there
are no concerns that any conflict of interest
with general shareholders may arise, wehave designated him as an independent
officer.
We believe that Mr. Hamamoto is qualified tobe our Outside Audit & Supervisory Board
Member, as he has legal knowledge andgreat store of experience of business andcommercial issues as an attorney at law.
Also, we have designated him as anindependent officer because he meets theeligibility requirements that the Company hasprescribed under “Criteria for Election of
Outside Officers (to ensure independence)”and because there are no concerns that any
conflict of interest with general shareholders
may arise.
We believe that Mr. Shimada is qualified tobe our Outside Audit & Supervisory Board
Member, as he has years of experience inthe financial industry and also has extensive
experience and expertise in different
industrial sectors.
Also, we have designated him as anindependent officer because he meets theeligibility requirements that the Company hasprescribed under “Criteria for Election of
Outside Officers (to ensure independence)”and because there are no concerns that any
conflict of interest with general shareholders
may arise.

【Information on Independent Officers】
Number of Independent Officers

6

Other Matters concerning Independent Officers<Independence of Outside Officers>
The “Criteria for Election of Officers” and “Criteria for Election of Outside Officers (to ensure independence)” were newly stipulated in writing at theBoard of Directors’ meeting held on April 30, 2015, and the “Criteria for Election of Officers” was partially amended at the Board of Directors’ meeting
held on June 27, 2019.
<Criteria for Election of Officers>
Upon the election of Directors and Audit & Supervisory Board Members of Wacoal Holdings Corp. (the “Company”) (collectively, the “Officers”), theExecutive Nomination Advisory Committee submits a list of candidates based on the following criteria to the Board of Directors, and the Board of
Directors nominates the candidates based on such list and submit them as an agenda item for the General Meeting of Shareholders:
Criteria for Election
1. A candidate with superior character and knowledge who is mentally and physically healthy;
2. A candidate who has a law-abiding spirit;
3. A candidate who has comprehensive experience in business operation, company management, the legal community, administration, accounting,education or culture and art and upon re-election, his/her management performance and contribution to the group management during the termof office shall be considered;
4. One third of the number of Directors shall be Outside Directors, and with respect to Outside Directors and Outside Audit & Supervisory Board
Member (collectively, the “Outside Officers”), a candidate who is not in violation of the “Criteria for Election of Outside Officers (to ensure
independence)” separately prescribed by the Company;
5. With respect to Outside Officers, a candidate who is not currently holding a position as an officer of 4 or more listed companies; and6. A candidate whose election to the Board of Directors or the Audit & Supervisory Board contributes to balanced knowledge, experience andexpertise and ensures diversity such as gender and internationalism.
1.

Criteria for Removal
If an officer acts against public policy; or2.

If an officer is neglecting its duties and deemed to be failing to fulfill its duties.

<Criteria for Election of Outside Officers (to ensure independence)>
Wacoal Holdings Corp. (the “Company”) believes that Outside Directors and Outside Audit & Supervisory Board Members (collectively, the “Outside
Officers”) should maintain independence so that they do not cause any conflict of interest with general shareholders. From this perspective, theCompany appoints candidates for Outside Officers who do not fall under any of the following categories:
1. Has held a position to execute business (Note 1) at the Company and any of its consolidated subsidiaries (collectively, “Wacoal Group”) in thepast;
2. Is a major shareholder holding the shares of the Company under its own name or another name whose percentage of voting rights is equal to or
higher than 5% (in case such major shareholder is a legal entity or an association such as general partnership (the “Entities”), a candidate whoholds a position to execute business at such Entities);
3. A candidate who:
(1) is a major client of Wacoal Group or who considers Wacoal Group as a major client of the candidate (in case such candidate is an Entity, acandidate who holds a position to execute business at such Entity) (Note 2);(2) is a major lender of Wacoal Group (in case such lender is an Entity, a candidate who holds a position to execute business at such Entity)(Note 3);(3) holds a position to execute business as lead manager of the Company;(4) holds a position to execute business at any Entity in which Wacoal Group holds shares with a percentage of voting rights equal to or higher
than 5%;
4. A certified public accountant who works at an audit firm that is the Accounting Auditor of Wacoal Group;
5. Any legal counsel, accountant, tax accountant, patent attorney, consultant or other expert who receives a large amount (Note 4) of money orother property from Wacoal Group (in case such candidate is an Entity, an expert who works at such Entity);
6. Anyone who receives a large amount of donations from Wacoal Group (Note 5) (in case such candidate is an Entity, a candidate who holds a
position to execute business at such Entity);
7. A person who executes business at another company which has an outside officer from the Company;
8. A spouse or second-degree relative of a person who materially falls under any of the items under 1 through 7 above (Note 6);
9. A candidate who used to fall under any of the items under 2 through 8 above during the past three years; and10. A candidate who is deemed to be subject to special circumstances under which a possible conflict of interest with general shareholders of theCompany may arise.
It should be noted, however, that a candidate who falls under any of the items under 2 through 9 above, but who fulfills the requirements of an outside
officer under the Companies Act, may under exceptional circumstances become a candidate for an Outside Officer if the Company deems it
appropriate for such candidate to be appointed as an Outside Officer and if the Company describes its reasons for making such judgement.
End
Note 1: A person holding a position to execute business shall mean an executive director, executive officer and other employee who is in an
equivalent position.
Note 2: A major client shall mean a supplier or purchaser of Wacoal Group whose average amount of transactions in the last 3 years exceeded 2% of
the consolidated net sales of Wacoal Group or those of the supplier or purchaser.
Note 3: A major lender shall mean a financial institution or an individual who provides loans to Wacoal Group and whose average amount ofoutstanding loans in the last 3 years exceeded 2% of the consolidated total assets of the Company or those of such lender;
Note 4: A large amount shall mean that the average annual amount of compensation payable for the duties performed by the expert in the last 3 years
exceeded 10,000,000 yen, whether such expert as an individual or the organization that such expert belongs provides services to Wacoal Group.
Note 5: A large amount shall mean that the average annual amount of donation in the last 3 years exceeded 10,000,000 yen.
Note 6: A significant person shall mean (i) a member or other person who is in an equivalent position in case of a certified public accountant who
belongs to an audit firm or an accounting firm, a partner or other person who is in an equivalent position in case of a lawyer who belongs to a law firm,
and a person who is in an equivalent position in case of another expert who belongs to an Entity, and (ii) an executive director, executive officer,
corporate officer, an employee who is in a position of senior management (i.e., a general manager or higher level) in case of a person who executes
business at an Entity, and an executive holding a title such as trustee, councilor and auditor, as well as any other person who is objectively andreasonably deemed to have equal significance as any of the above.

【Incentives】
Status of Implementation of Measures to Grant
Incentives to Directors

Adoption of a performance-linked compensation system and stock option plan

Supplementary Information
The Company adopts “performance-based bonus” that is linked to the business results of each fiscal year, and “share-based stock option incentive”
which is an incentive from a mid-to-long term viewpoint.
Eligible Recipients of Stock Options

Internal Directors and Directors of our Subsidiaries

Supplementary Information
The Internal Directors of Wacoal Holdings Corp. and the Directors of Wacoal Corp., our core operating entity, are the only eligible recipients of stock
options.

【Information on Directors’ Compensation】
Disclosure Status (of compensation for
individual directors)

Individual disclosure (partial information)

Supplementary
Information
Aggregate amount of compensation paid during the fiscal year ended March 2020:
Aggregate amount of
Basic compensation
Stock options
compensation(Millions of yen)
(Millions of yen)
(Millions of yen)
To 5 Directors
282
227(excluding Outside
Directors)
To 2 Audit &39
39
Supervisory Board
Members(excluding Outside
Audit &
Supervisory Board
Members)
To 6 Outside
49
49
Officers

Bonus(Millions of yen)
43

12

－

－

－

－

Aggregate amount of consolidated compensation of persons who receive 100 million yen or more as compensation on aconsolidated basis:
Aggregate amount of
Basic compensation
Stock options
Bonus
compensation(Millions of yen)
(Millions of yen)
(Millions of yen)
(Millions of yen)
Yoshikata156
129
21 5 (Representative Director andTsukamoto
Chairman of Wacoal Holdings Corp.)

Policy for Determining the Amount or Calculation Method ofCompensation
Updated

Yes

Details of Disclosure on Policy for Determining the Amount or Calculation Method for Compensation
Our compensation for executives consists of “basic compensation” the amount of which is fixed, “performance-based bonus” that is linked to thebusiness results of each fiscal year, and “share-based stock option incentive” which is an incentive from a mid-to-long term viewpoint. Only the “basic
compensation” payable in a fixed amount is paid to the Independent Outside Directors and Auditor & Supervisory Board Members, who are
independent from the execution of business.
<Basic compensation>
The amount of basic compensation is set according to the title of each executive and is paid as a fixed monthly remuneration. Even for the same title,
however, the amount of compensation payable in a relevant year will be increased within a certain range according to the degree of contributions byexecutives to the business results in the previous fiscal year. The level of compensation is set according to the business results and scale of theCompany based on comparison with other companies within the same industry or of the same scale regarding the appropriateness of thecompensation level in reference to the results of compensation surveys conducted each year by an outside organization.
Concerning the amount of basic compensation for Directors, the Board of Directors determines the specific content based on the results ofdeliberations by the Executive Compensation Advisory Committee, half of whose members are independent outside directors. The amount of basic
compensation paid to Auditor & Supervisory Board Members is decided through discussions held by the Audit & Supervisory Board.
<Performance-based bonus>
The amount of performance-based bonus is determined based on the rate of achieving the reference value of consolidated operating income for asingle fiscal year with other business results (consolidates net sales, consolidated profit before tax, etc.) taken into account in order to enhance thedegree of the linkage with consolidated business performance. The payment will be made once in the month in question after the total amount has
been approved at the General Meeting of Shareholders for the relevant fiscal year.
The amount of the performance-based bonuses for Directors is determined by the Board of Directors based on the results of deliberations by the
Executive Compensation Advisory Committee, half of whose members are independent outside directors, and the total amount is decided by aresolution of the General Meeting of Shareholders.
<Share-based stock option incentive>
The amount of share-based stock option incentive is determined by a resolution of the Board of Directors’ meeting based on the monthly amount of
the basic compensation and the fair value of stocks that have been decided in accordance with reports issued by the Executive Compensation
Advisory Committee, half of whose members are independent outside directors, and the number of shares decided upon is allocated once a year. The
exercise date for stock acquisition rights shall be the time when the position of Director, Corporate Auditor or Executive Officer is lost, and thetermination date shall be the earlier of 20 years from the day following the date of stock acquisition rights allotment or five years from the date of
exercise. However, all unexercised stock acquisition rights shall be waived in the event of a violation of the regulations laid forth in the stockacquisition rights allocation agreement or dismissal as a Director or Executive Officer.
The maximum annual amounts of basic compensation paid to Directors and Audit & Supervisory Board Members were determined to be 350 million
yen (excluding the amount of employee’s salary for Directors who concurrently serve as employees) and 75 million yen, respectively, by a resolution
adopted at the 57th Ordinary General Meeting of Shareholders held on June 29, 2005. The number of Directors when the resolution was passed wasseven (7). The amount of performance-based bonus is determined according to the business results of each fiscal year by a resolution at theOrdinary General Meeting of Shareholders held for the relevant year. Further, the maximum annual amount of stock options was determined to be 70
million yen by a resolution adopted at the 60th Ordinary General Meeting of Shareholders held on June 27, 2008. The number of Directors when the
resolution was approved was eight (8).
The ratio of basic compensation, performance-based bonus, and stock options is as follows when the performance-based bonus is calculated inaccordance with the standard values :Basic compensation: 71%; Performance-based bonus: 18%; Stock options: 11%
The retirement allowance system of officers was abolished by a resolution adopted at the 57th Ordinary General Meeting of Shareholders held on
June 29, 2005.
＜Roles and Activities of the Executive Compensation Advisory Committee＞
As an advisory body to the Board of Directors, the Executive Compensation Advisory Committee deliberates and makes decisions regarding Director
compensation and its related system from an independent and objective standpoint. Half of the members of the Executive Compensation Advisory
Committee are Independent Outside Directors, and the Committee is chaired by Tsunehiko Iwai, also an Independent Outside Director. Additionally,
Outside Auditors participate as observers to ensure even further transparency.
The following deliberations and decisions were made regarding executive compensation for the business year concerned.
December 25, 2020: Medium- to long-term incentives (alternatives to stock options)February 5, 2021: Policy for determining individual remuneration, etc. for Directors
March 25, 2021: Verification of Director compensation level data and basic compensation amount
April 28, 2021: The amount of performance-based bonuses for Directors＜Roles and Matters of the Board of Directors＞
The Board of Directors deliberates and makes decisions in response to findings from the Executive Compensation Advisory Committee.
The following deliberations and decisions were made regarding executive compensation for the business year concerned.
June 26, 2020: Basic remuneration for FY2020
June 26, 2020: Stock option issuance
February 24, 2021: Policy for determining individual remuneration, etc. for Directors
May 27, 2021: The amount of performance-based bonuses for Directors
The Executive Compensation Advisory Committee is continuously working on revising the entire executive compensation system, and the main items
being examined are as follows.
•Examination and formulation of basic policy related to executive compensation•Composition of basic compensation, performance bonuses, and medium- to long-term incentives (review amounts and ratios)•Method for calculating performance bonus (strengthen linkage to target values of the medium-term management plan)【Support System for Outside Directors (Outside Audit & Supervisory Board Members)】
For our Outside Directors, the Management Planning Department distributes documents setting out the proposals presented to Board of Directors’
meetings in advance and gives prior briefings on important matters.
As a system to support our Audit & Supervisory Board Members, including the Outside Audit & Supervisory Board Members, we have established anadministrative office for our Audit & Supervisory Board. The prior briefings for our Outside Audit & Supervisory Board Members on the proposals
presented to the Board of Directors’ meetings are conducted by our Internal Audit & Supervisory Board Members.

2. Matters Concerning Functions of Business Execution, Audits/Supervision, Nomination andDecisions etc. Compensation (Outline of Current Corporate Governance System)
1.

Outline of Current System
We, as a holding company, use an “Audit & Supervisory Board system” for the purpose of maintaining the corporate governance of Group
companies. We require that both the Board of Directors and the Audit & Supervisory Board monitor and supervise the management of theCompany.
Our Board of Directors is composed of eight (8) Directors (one of which is a female Director), including three (3) Outside Directors. The role of
our Directors is to supervise and make business judgements from an objective perspective. We have been working to enhance the supervisory
function and to improve the decision-making process. The term of office of each Director is one year, which defines the responsibilities of ourmanagement and establishes a management system that can respond quickly to changes in the business environment.
In addition to the supervisory function of the Board of Directors, the Audit & Supervisory Board is composed of five (5) Audit & Supervisory Board
Members, including three (3) Outside Audit & Supervisory Board Members. The function of our Audit & Supervisory Board is to monitor andsupervise our management.
We, as a holding company, seek to govern our Group companies in connection with business execution, audits and supervision of management
as set out below:
・
The Board of Directors holds a regular Board of Directors’ meeting every month and also holds special Board of Directors’ meetings fromtime to time as necessary, in accordance with the Regulations of the Board of Directors, to make decisions on matters concerning importantbusiness such as management policy and management strategy, and matters stipulated by laws, ordinances or our Articles ofIncorporation. Further, we have established a “Group Management Meeting” comprising our Directors and core management members,
which examines matters concerning the management strategy of our Group and other important management issues and conducts
preliminary reviews of matters for review by our Board of Directors.
・
The Audit & Supervisory Board holds an Audit & Supervisory Board’s meeting every month in conjunction with a regular Board of Directors’
meeting and also hosts special Audit & Supervisory Board’s meetings from time to time as necessary, in accordance with the Regulations of
the Audit & Supervisory Board, to make decisions on matters concerning policies on preparation of audit reports and implementation ofaudits, methods of examining the statuses of business performance and assets, and other matters related to business execution by Audit &Supervisory Board Members.
・The Executive Nomination Advisory Committee and the Executive Compensation Advisory Committee, the majority of which consist of
Outside Directors with Independent Outside Director Mr. Tsunehiko Iwai designated as chairman, were each established as an advisory
body to discuss and provide recommendations on the nomination, promotion, and compensation of Directors, and matters resolved at such
Committees’ meetings are reported to the Board of Directors. As a general rule, each meeting of the Executive Nomination Advisory
Committee is held on the day of the Board of Directors’ meeting in January of each year, and each meeting of the Executive Compensation
Advisory Committee is held on the day of the Board of Directors’ meeting in April, July, and February of each year. Such Committees areoperated with a high degree of transparency and fairness pursuant to resolutions approved unanimously with all members in attendance.
・The meeting of Independent Outside Officers, which consists mainly of Independent Officers, evaluates the Board of Directors byexchanging opinions on the Board of Directors. After the contents of the meeting have been reported to the Board of Directors, information
is disclosed in corporate governance reports.
・In order to improve our system of compliance, we have established a Corporate Ethics and Risk Management Committee, for which our
President and Representative Director acts as administrative manager and the Director of Supervisor of Group Business Management acts・

as chairman, which will consider any compliance issues which may have a material impact on the Wacoal Group, enhance awareness andenlightenment on corporate ethics and effectively promote control of any management risks on the Wacoal Group
With respect to our accounting audits, an accounting audit agreement has been executed between the Company and Deloitte Touche
Tohmatsu LLC (“Tohmatsu”) pursuant to the Companies Act and the Financial Instruments and Exchange Act. There are no special
relationships between the Company and Tohmatsu or any of the partners of Tohmatsu who have been engaged in the audit of theCompany. The names of the certified public accountants who were engaged in the audit of the Company and the number of the assistants
for audit services for the fiscal year ended March 2019 are as follows:
Names of the certified public accountants who were engaged in the audit
Designated Limited Liability Partners and Managing Members: Wakyu Shinmen, Hiroaki Sakai, Tsuji Tomomi
Number of the assistants engaged in the audit services: 8 certified public accountants, 6 persons who passed the certified public
accountant examination, and 7 other persons

2.

Functions and Roles of Outside Directors
With respect to our Outside Directors, we have elected persons with extensive management knowledge and experience and persons playing
active roles in the field of arts and culture in Japan and overseas. Each such person takes a role in improving the appropriateness of the decision
making by the Board of Directors by giving objective and independent advice based on their long careers in each business area and extensive
professional knowledge.

3.

Initiatives to Strengthen Functions of Audit & Supervisory Board Members
Under our system of having an Audit & Supervisory Board with 2 Standing Audit & Supervisory Board Members and 3 Outside Audit &Supervisory Board Members, an audit is conducted not only from the perspective of illegality but also of appropriateness. The Audit &Supervisory Board holds a regular Audit & Supervisory Board meeting every month in conjunction with the regular Board of Directors’ meeting,and also holds a special Audit & Supervisory Board meeting from time to time as necessary. The Standing Audit & Supervisory Board Member
mainly leads the audits and determines the assignment of tasks pursuant to the annual audit plan. For the purpose of such audits, the Audit &Supervisory Board Members may make requests to the audit office regarding any matters that are required to provide audit services. We also
make efforts to conduct an appropriate audit regarding accounting in cooperation with the Accounting Auditor.
A person who has accounting experience at our Accounting Department and who has a respectable degree of finance and accounting
knowledge has been elected as one of our Standing Audit & Supervisory Board Members. Further, with respect to our three (3) Outside Audit &Supervisory Board Members, we have elected a certified public accountant having a considerable degree of finance and accounting knowledge,
an independent attorney-at-law, and a person with many years of experience and profound knowledge as business administrator in financial
services, each of whom maintains a high degree of independence and uses their respective knowledge and experience to strengthen our audit
system.

3. Reasons for Using the Current Corporate Governance System
We have adopted a governance system composed of a “Board of Directors” consisting of Directors who are experts in each business area andOutside Directors with diverse careers, and an “Audit & Supervisory Board” including Outside Audit & Supervisory Board Members. We, as a holding
company, believe that this governance system is effective in supervising and auditing the execution of duties at our group companies and to realize
and maintain high-quality management. These are the reasons for using the current governance system.

III. Status of Implementation of Measures related to Shareholders and Other Stakeholders
1. Initiatives to Revitalize General Meeting of Shareholders and to Facilitate
Exercise of Voting Rights
Supplementary Information
Early Delivery of Convocation Noticefor the General Meeting of
Shareholders

We send out our convocation notice no later than three weeks (the period designated by law is two weeks)prior to the meeting in order to ensure sufficient time to examine the agenda items.

Exercise of Voting Rights by Way ofElectromagnetic Means

Since the 68th Ordinary General Meeting of Shareholders held on June 29, 2016, we have adopted theway of exercising voting rights using electromagnetic devices (e.g., personal computers, smartphones,
tablet devices).

Participation in Platform for Exercising
Voting Rights by Electronic Means andOther Efforts toward Improving
Environment for Exercise of Voting
Rights by Institutional Investors

Since the 68th Ordinary General Meeting of Shareholders held on June 29, 2016, we participate in the“Platform for Exercising Voting Rights” managed by ICJ, Inc.

Provision of Convocation Notice(Summary) in English

We submit the English version (full text) of the convocation notice to the Tokyo Stock Exchange.

2. IR Activities

Supplementary Information

Preparing and Disclosing Disclosure
PolicyExplanation byRepresentative

We have enacted the “Basic Policy on Information Disclosure” in 2015,
which is posted on the Company’s website.
https://www.wacoalholdings.jp/group/governance/

Holding Regular Briefing Sessions for
Individual Investors

We participate in information sessions held by securities firms etc.
around four times a year. To bring about a better understanding of theCompany, we hold “corporate study sessions” and conduct “facility tours”
from time to time. For example, we held informational meetings to try on
our highly-functionality products in April and November 2017, and a tourof the factory of Hokuriku Wacoal Sewing Corp. in March 2018.

No

Holding Regular Briefing Sessions forAnalysts and/or Institutional Investors

We hold briefing sessions twice a year in Japan at the time of financial
results presentations (at fiscal year-end and at the end of the second
quarter of each fiscal year) which are presented by our President andRepresentative Director. Additionally, in December 2019, a briefing
session on the theme of the Wacoal business’s (Japan) digital strategy
was held. Furthermore, from the fiscal year ending March 2021, we plan
to hold financial results briefings at the end of the first and third quarters
as well.

Yes

Holding Regular Briefing Sessions for
Foreign Investors

We deal with overseas institutional investors by visiting or welcoming
them on a regular basis. In addition, we participate in conferences
hosted by securities firms several times a year. Furthermore, ourDirectors conduct individual visits targeting institutional investors in
Europe and Asia to explain our business results and management
strategies.(In February 2020, the President and Representative Director
held consultations in an individual visit format in the West Coast regionof the United States.)

Yes

Uploading IR Materials on Company
WebsiteStatutory and voluntary disclosure materials (including convocation
notice for the general meeting of shareholders, annual securities report(quarterly report), timely disclosure materials, financial statements(reports of quarterly financials and results), integrated report, andbellwether indicators such as monthly sales data) are posted on the
Company’s website. We also post videos of the briefing sessions
presented at fiscal year-end and at the end of the second quarter of
each fiscal year by our President and Representative Director. In
addition, we post quarterly financial results presentation materials both inJapanese and English.
https://www.wacoalholdings.jp/ir/

Division (Person) in charge of IR

Corporate Communication division; Akira Miyagi, Director and Managing
Corporate Officer of Investor Relations.

Other

In addition to the regular briefing sessions, which are held twice a year,
we also hold briefing sessions focused on certain business or importantmatters, conduct tours of our facilities and arrange special visits fromtime to time.

3. Initiatives to Respect Interests of
Stakeholders
Supplementary Information

Provisions of Internal Rules for
Respecting Interests of Stakeholders

We have included provisions related to our respect for the interests of stakeholders in the “Wacoal and its
Business Activities” and “Wacoal and Society” sections of the “Corporate Ethics: Wacoal’s Code of
Conduct.”

Implementation of Environment
Conservation Activities, CSR Activities,etc.

We have a CSR division in the Corporate Communication division which actively promotes the Group’s
CSR activities and issues an integrated report on CSR and an annual report once a year. With respect toenvironmental activities, Wacoal Corp., our core operating entity, obtained ISO14001 certification andimplements practical initiatives centering on the Environmental Committee. We also actively support the
Pink Ribbon Program, an awareness program against breast cancer. In addition, we provide humanresources and financial support to The Kyoto Costume Institute.

Formulation of Policies for Disclosureof Information to Stakeholders

We prescribe the “Corporate Ethics: Wacoal’s Code of Conduct” and make efforts to ensure fullawareness of timely and appropriate disclosure of information required by stakeholders.
Also, we are actively disclosing information to stakeholders pursuant to the “Basic Policy on Information
Disclosure.”

Other

Since 2001, under the slogan of becoming a “company that stands by the emotions of women,” we aim tobecome a company that cares for the emotions and feelings of women and that empathizes andresonates with women during the course of business in all aspects. As we aim to become a genuine“company that stands by the emotions of women” and to become a company that allows our female
employees to take active roles in various contexts, we promote initiatives to provide opportunities for
women and to clarify and resolve issues that we face in human resources development and our humanresources system.

IV. Matters Regarding the Internal Control System
1. Basic Concept of the Internal Control System and its Status
Our fundamental philosophy toward the internal control system and the status of the improvement of this system, details of which have been
determined at the Board of Directors’ meetings, is as follows:<System to Ensure Appropriate Business Conduct>(System to ensure that execution of duties by Directors and/or employees is in compliance with laws and regulations and the Articles ofIncorporation)
・To ensure that all Directors and employees of the business group composed of the Company and its subsidiaries (the “Wacoal Group”)
comply with laws and regulations and the Articles of Incorporation and conduct business based on sound social norms, We have enacted
the “Wacoal Code of Ethics” and the “Corporate Ethics: Wacoal Standards of Conduct.”・
In order to improve our system of compliance, we have established a Corporate Ethics and Risk Management Committee, for which our
President and Representative Director acts as administrative manager and the Director of Supervisor of Group Business Management
acts as chairman, which will consider any compliance issues which may have a material impact on the Wacoal Group, enhanceawareness and enlightenment on corporate ethics and effectively promote control of any management risks on the Wacoal Group. The
Management Planning Department shall act as organizer, and shall be responsible for the corporate ethics and risk management related
to Wacoal Group.
・We have established a system under which our legal/compliance department could be promptly notified if the Company becomes awarethat a Director and/or employee of the Wacoal Group may have violated the “Wacoal Code of Ethics” or the “Corporate Ethics: Wacoal’s
Code of Conduct,” or of any other compliance issues. We have also established an internal alert system (corporate ethics hotline to thelegal/compliance department and a law firm). After being notified and/or alerted, the legal/compliance department conducts aninvestigation and formulates preventive measures after discussions with the related department. If the issue is critical, thelegal/compliance department will refer the matter to the Corporate Ethics and Risk Management Committee and will report the results of
its deliberation to the Board of Directors and/or Audit & Supervisory Board.
(System concerning the Storage and Management of Information related to Execution of Duties by Directors)
・With the approval of the Board of Directors, we have enacted the Document Management Rules pursuant to which we store the following
documents (including electromagnetic records; hereafter the same) along with any related materials:
Minutes of the General Meeting of Shareholders, minutes of the Board of Directors’ meetings, minutes of the Group Management
meetings, documents for which a Director is the final decision maker, and any other documents prescribed in the Document Management
Rules
・
The retention period and the place for storage of the documents prescribed in the preceding paragraph shall be subject to the Document
Management Rules, but such retention period shall be at least ten years. The Directors and Audit & Supervisory Board Members shallhave access to these documents at all times.
(Rules and Other Systems concerning Management of Risks of Loss)・In order to understand the management risk within the Wacoal Group in general and to improve and/or strengthen our risk management
system, we have established a Corporate Ethics and Risk Management Committee, For which our President and Representative Director
acts as administrative manager and the Director of Supervisor of Group Business Management as Chairman. The Management Planning
Department shall act as the organizer.
・
The Corporate Ethics and Risk Management Committee prescribes risk management rules, subject to the approval of the Board of
Directors, which form the basis for our risk management system. The Corporate Ethics and Risk Management Committee clarifies the
responsibilities by risk category pursuant to these rules and formulates a risk management system that thoroughly and/or
comprehensively controls potential risk within the Wacoal Group.
・
The Corporate Ethics and Risk Management Committee regularly reports on the operations of the Wacoal Group’s risk management
system to the Board of Directors.
(System to Ensure Effective Execution of Duties by Directors)
・In order to enhance appropriate decision making by our Directors, we will appoint more than one-third Independent Outside Directors.
・We will formulate a medium-term management plan to be shared by the Directors and/or employees within the Wacoal Group and will
direct and confirm courses of action and business targets in the mid to short term that are consistent with such plan.
・We will follow the business results of each Wacoal Group company on a monthly basis and report back to the Board of Directors. In
addition, by holding “Quarterly Business Meetings” and “Group Strategy Committee Meetings,” we will confirm the business results andthe implementation of measures and policies, consider measures in the event targets are not achieved, and review such targets, as may
be necessary・At main Group companies, we will establish appropriate and efficient organizations by delegating authority and clarifying the system fortaking responsibility through an executive officer structure.
(System to Ensure Appropriate Business Conduct within Group Companies)
・
We have enacted and managed our group companies in accordance with our Group Management Rules, which prescribe basic policies
regarding the management of group companies and matters to be decided by our Board of Directors, as well as matters to be reported to
the Company.
・We conduct any inter-company transaction fairly in compliance with laws and regulations, accounting principles, and the tax system.
・
Our audit office will conduct business audits, including an audit of the establishment and/or operation of our compliance system and risk
management system, With in the group companies and the audit office will report the results of its audits to the Board of Directors andappropriate departments, and will give guidance and/or advice related to the above group companies to ensure the appropriate conductof business.
・
Our foreign subsidiaries will comply with the laws and regulations of their respective home countries and will adopt a system that is in linewith our policies to the extent reasonable.
(Matters concerning Assistants to Audit & Supervisory Board Members)
・
Audit & Supervisory Board Members may appoint employees of the Company as their assistants who are to assist the duties of the Audit& Supervisory Board Members.
・
Such assistants shall be full-time employees. In addition, the consent of the Audit & Supervisory Board Members shall be obtained
regarding such matters as the election, evaluation, relocation and discipline of such assistants in order to ensure the effectiveness andindependence of such assistants.
(Reporting System of Directors and Employees to the Audit & Supervisory Board Members and Other Reporting System to Audit & Supervisory
Board Members)

・

・

・

Directors of the Wacoal Group will promptly report to the Audit & Supervisory Board Members if they become aware of a material fact that
violates the applicable laws and regulations and/or our Articles of Incorporation, Misconduct or a fact that may cause significant damage
to any company of the Wacoal Group.
Employees of the Wacoal Group may directly report to the Audit & Supervisory Board Members if they become aware of a material factthat violates the applicable laws and regulations and/or our Articles of Incorporation, Misconduct or a fact that may cause significant
damage to any company of the Wacoal Group. Any employee who makes such report will not be at a disadvantage for the reason of
making such report.
Through the reporting of the following matters in addition to statutory matters to the Audit & Supervisory Board Members by Directors andemployees of the Wacoal Group, we strive to have the Audit & Supervisory Board Members audit conducted effectively:
matters referred to the Group Management Meeting;monthly and quarterly group management conditions;
results of internal audits;
the condition of our internal alert system; andOther significant matters.

(Other Systems to Ensure Effective Audit by the Audit & Supervisory Board Members)
・The majority of the Audit & Supervisory Board Members will be independent Outside Audit & Supervisory Board Members to enhance thetransparency and neutrality of audits.
・
The Audit & Supervisory Board Members may order employees who belong to the audit office to perform any matters that are required toprovide in that role. In addition, the Audit & Supervisory Board Members may request that the Company reimburse expenses incurred inperforming their duties.
・
Audit & Supervisory Board Members will attend meetings of the Board of Directors and may also attend other primary meetings of the
Wacoal Group.
・
The Audit & Supervisory Board Members will regularly meet with the audit office and the Accounting Auditor to receive reports and to
exchange opinions.
・
The Audit & Supervisor Board may consult legal counsel, certified public accountants, consultants, or other outside advisers as it deems
necessary.
<Outline of Operation of our “System to Ensure Appropriate Business Conduct”>(System to ensure that execution of duties by Directors and/or employees is in compliance with laws and regulations and the Articles ofIncorporation)
・We have a Compliance Committee which specifically establishes and operates our compliance system. The Compliance Committee helda meeting each quarter and discussed and reviewed awareness of compliance and matters reported to us through the internal alert
system.
・
Our legal/compliance department continued to provide level-specific group education and e-learning programs as part of our educational
activities for our employees. We are also working on awareness activities for our overseas Group companies and enriching the internal
alert system, such as the expansion of corporate ethics hotline to a third party.
(System concerning the Storage and Management of Information related to Execution of Duties by Directors)・Documents prescribed in the Document Management Rules have been properly stored in accordance with the Document Management
Rules and the Directors and Audit & Supervisory Board Members have access to these documents on a timely basis.
(Rules and Other Systems Concerning Management of Risks of Loss)
・The Corporate Ethics and Risk Management Committee assessed risks, monitored the implementation of measures taken, and reported
to the Board of Directors on a quarterly basis.
・
Setting up a CSR Procurement Committee under the Corporate Ethics and Risk Management Committee in April 2018, we began efforts
to put into practice a series of processes, including monitoring of suppliers based on their self-assessment, Analysis and evaluation
feedback, corrective and improvement plans, and follow-ups regarding the status of suppliers’ conformance with the “Wacoal Group’s
CSR Procurement Guideline” as the Group’s procurement policies that has stipulated promotion of business transactions with businessenterprises that emphasize attention to such social requirements as human rights, working practices, environment and ethics. And, weare moving forward while continuing to expand the scope of these actions.
(System to Ensure Effective Execution of Duties by Directors)
・We engage in highly transparent decision-making by appointing three (3) independent Outside Directors among our eight (8) Directors.
In addition, “Criteria for Election of Officers” and “Criteria for Election of Outside Officers (to ensure independence)” were newly stipulated
in April 2015.
•
We considered and formulated the Wacoal Group management policies for the fiscal year ending March 2021.
・We held meetings of the “Quarterly Business Results Review Committee” and “Group Strategy Committee” on a quarterly basis andconfirmed and reviewed the business results and implementation of measures.
•
At the Board of Directors meeting held in February 2020, we decided to introduce an executive officer structure into the company from
April 1, 2020, aiming to further enhance management execution capabilities as a Group.
(System to Ensure Appropriate Business in the Business Group Composed of the Company and Its Subsidiaries)
・
Matters to be decided and reported by our subsidiaries are appropriately managed in accordance with the Group Management Rules.
・
Our audit office develops an audit plan for each fiscal year and conducts audits on the operation and internal controls of the Company
and our domestic and overseas subsidiaries.
(Matters Concerning Assistants to Audit & Supervisory Board Members and Matters Concerning Independence of such Assistants from Directors)
・
Our audit office is currently assisting the duties of the Audit & Supervisory Board Members upon their request from time to time. Audit &Supervisory Board Members have not requested or appointed any assistant for their duties.
(Reporting System of Directors and Employees to the Audit & Supervisory Board Members and Other Systems related to the report to Audit &Supervisory Board Members)
・
The Audit & Supervisory Board Members attended primary meetings and received reports on matters that were discussed and on the
management condition, and also received reports, from time to time, On the results of business audits and matters reported through theinternal alert system.
(Other Systems to Ensure Effective Audits by Audit & Supervisory Board Members)・
We enhance the effectiveness of audit by appointing three (3) independent Outside Audit & Supervisory Board Members among the five(5) Audit & Supervisory Board Members.
・
The Company reimburses any and all expenses incurred by the Audit & Supervisory Board Members for performing their duties.

・・In addition to attending Board Meetings and other important meetings, the Audit & Supervisory Board Members conducted hearings with
the Directors and visited our domestic and overseas subsidiaries to conduct audits. In addition, the Audit & Supervisory Board Memberspresided at “Audit & Supervisory Board Group Meetings” and received periodic reports from the audit & supervisory board members ofthe domestic subsidiaries.
The Audit & Supervisory Board Members have, regularly and whenever necessary, exchanged information and opinions with the
Accounting Auditor and the audit office.

2. Basic Concept of Efforts against Antisocial Forces and its Status
The “Corporate Ethics: Wacoal’s Code of Conduct” prescribes that the Company shall firmly refuse to comply with demands of antisocial forces. In
order to handle unjust demands from antisocial forces, we cooperate with specialized outside institutions, collect and control information related toantisocial forces and are building an internal system.

V. Other
1. Adoption of Takeover Defense Measures
Adoption of Takeover Defense
Measures

No

Supplementary
Information
The Board of Directors of the Company has resolved at its meeting held on April 26, 2018 to discontinue the takeover defense measures upon the
conclusion of the General Meeting of Shareholders held on June 28, 2018.

2. Other Matters Concerning Corporate Governance
SystemThe following is an overview of the Company’s internal system for timely disclosure:1.

Basic Stance on Timely Disclosure
We enacted the corporate ethics regulations “Wacoal’s Code of Conduct” pursuant to the ideas that the Company “stands with the support of society”
and “focuses on management with business integrity and pride,” which our founder and current top management believe to be the starting point ofmanagement, and with the aim that these ideas form the basis for the specific code of conduct for all officers and employees in their overall businessactivities.
In order for everyone to share awareness of this code of conduct, we provide practical training on corporate ethics for management-level employees,
and such management-level employees provide guidance to general employees. The content of the descriptions on the information disclosure is asfollows.
・“An act to disclose only information that is favorable to Wacoal and to hide any information that is inconvenient to Wacoal would damagetransparency and would mislead investors when making judgments.”
・“Wacoal will timely and properly disclose any information required by stakeholders, in addition to significant facts as stipulated by the Financial
Instruments and Exchange Act, irrespective of the effects on share price. We will ensure reliability by enhancing the transparency ofmanagement related information.”・“We will not share any material information obtained during the course of our business with a third party, including any relatives. Any trading ofshares prior to the disclosure of relevant facts (insider trading) is strictly prohibited.”

2.

Internal System and Operation of Timely Disclosure
The handling of material financial information and non-financial information that is subject to timely disclosure is as follows:(1) Analysis of Timely Disclosure of Information
・
Statutory disclosure items under the Financial Instruments and Exchange Act and material facts prescribed in the timely disclosure rules ofstock exchanges
・Material information deemed necessary to be disclosed (information that is reasonably expected to have a material influence on investment
decisions by investors)(2) Internal System
The Management and Planning Department, Corporate Communication division, Accounting Department, General Affairs/Asset Management
Department, and the Legal/Compliance Department are the responsible divisions for the management of information that is subject to timely
disclosure. These departments follow the “Basic Policy on Information Disclosure” which was internally prescribed by the Company andpromptly disclose information after determination or occurrence of relevant facts. Information related to financial results is disclosed, inprinciple, on the day of occurrence with the approval of the Board of Directors. Any facts that were determined or that occurred at our
subsidiaries are reported to the Management and Planning Department by the representatives of such subsidiaries and are disclosed throughthe same procedures.
The Management and Planning Department controls information regarding the determination of material policies of the Company and operations
related to settlement of accounts, and also any events and facts, together with Corporate Communication division, the Accounting Department
and the General Affairs/Asset Management Department. Also, the Legal/Compliance Department makes judgments regarding the importanceof various information from a legal perspective and acts as the point of contact for the communication with the Tokyo Stock Exchange and the
Financial Services Agency upon disclosure of such information.
Further, in order to judge the appropriateness of the information disclosure, we have established an audit office which is under direct control of
the President for the comprehensive operation of the Company’s internal system for timely disclosure.

Internal System for Timely Disclosure

Department Managers of the Company, Representatives of Subsidiaries(Events/determination of various types of information,
settlement of accounts related information)

Report to

Responsible Divisions for Management of Information<Management and Planning Department, Corporate Communication division, Accounting Department, General
Affairs/Asset Management Department, Legal/Compliance Departments>

Analysis of Information
Statutory disclosure items under the Financial Instruments and Exchange
Act and material facts prescribed in the Timely Disclosure Rules of theTokyo Stock Exchange
Other material information deemed necessary to be disclosed
Review of Details and Method of Information Disclosure

Report toReport toRepresentative Director
Director in charge ofFinanceGive
instructions to

Board of Directors

Report to

Give
instructions to

Supervisors of Management<Management and Planning Department, Corporate Communication division >Disclosure of Information