Established on May 18, 2006
Amended on April 27, 2007
Partially amended on April 24, 2008
Partially amended on April 23, 2010
Partially amended on July 22, 2010
Partially amended on April 22, 2015
Partially amended on April 1, 2020
Partially amended on July 1, 2022

Fundamental Policy to Enhance Operational Compliance Systems

1.

Systems to ensure that Members of the Board and employees carry out their duties in compliancewith laws and regulations and the Articles of Incorporation(1) Members of the Board shall recognize that compliance is at the core of good management andshall faithfully comply with all compliance-related regulations, including the Action Guidelines
for Taisei Personnel and the Taisei Group as a Whole.
(2) Taisei Corporation (the “Company”) shall ensure that all officers and employees recognize theircompliance-related obligations: by implementing programs recommended by the Compliance Committee, such as strict
disciplinary punishments for officers and employees found to have violated a law or regulation,enhancement of systems to prevent collusive bidding practices, and ensuring the effective
operation of the Corporate Ethics Helpline; and by promoting compliance education and encouraging internal audits (self-audits) at thedepartment level.
(3) The General Affairs Department shall guide the compliance-related activities of individual
corporate bodies, and the Auditing Department shall ensure the effectiveness of internal audits byworking closely with the individual corporate bodies.

2.

Structure to retain and manage information regarding the performance of duties by Members ofthe Board(1) The Company shall codify the rules and procedures concerning information and shall develop
systems to appropriately manage all information belonging to the Company in order toappropriately record and retain information relating to the performance of the Members of theBoard of their duties, to prevent any leakage or unauthorized use of such information, and toeffectively use such information.

3.

Risk management rules and measures; and internal system(1) The Company shall develop systems to appropriately manage primary risks, including thoserelating to quality, safety, environment, compliance, information and profit and loss, in accordancewith the Company's fundamental policy for development of risk management system.
1(2) The Company shall develop systems to manage the risks in the event of an emergency or a large
disaster, including arrangements to ensure the continuation of business operations.
(3) Each corporate body shall enhance its risk management business unit capacity by providing its
members with risk management education and other programs.
(4) The General Affairs Department will promote proper management of company-wide risks, and
the Auditing Department will promote endeavors to continually improve the risk management
system through internal audits.
4.

Systems to ensure the efficient performance of duties by Members of the Board(1) The Company has established the Executive Committee as a decision-making body and adopted theexecutive officer system that enables the Company to operate its business in a swift manner. Inaddition, the Company shall also enhance the decision making process and supervisory roles of theBoard by utilizing the committees within the Board to examine important issues prior to theirsubmission at the meetings of the Board and consulting the External Members of the Board.
(2) The Company shall develop and enhance the rules and procedures regarding the delegation ofdecision making and other powers to managers, to facilitate more efficient decision making andmanagement processes, including with respect to the execution of duties and responding tochanges in the managerial environment.
5.

Systems to ensure proper operation of Group companies(1) The Company shall promote the establishment of rules in each Group company regarding
reporting requirements to the Company in accordance with the Company's fundamental policy andoperational guidelines concerning Group operation.
(2) The Company shall establish a risk management system in each Group company, promoting theestablishment of internal rules in each Group company for its risk management with respect toquality, safety, environment, compliance, information, profit and loss and large-scale disaster andother major risks in accordance with the business characteristics of such Group company.
In addition, the Company shall ensure the effectiveness of Group company’s risk management
system through an internal audit by the Auditing Department and a Group liaison meeting held by
the Legal Department and other departments of each Group company, promotion of risk
management education in each Group company, and provision of the Group helpline amongst
other things.
(3) The Company shall assist, advise and collaborate in the business of each Group company byclarifying the functions and roles of each company in the Group, assisting each such Groupcompany to implement an organizational structure appropriate for its business characteristics andsize thereof and utilizing the management resources in the Group.
In addition, the Company shall conduct inspections to Group companies by the President andChief Executive Officer of the Company from time to time to facilitate communication among its
Group companies and promote mutual understanding and cooperation with respect to issues
2related to technology, production, marketing and sales, transaction and other issues surrounding
the Group.
(4) The Company shall share within the Group its ideals (ongoing objectives and goals), spirit (respect
for the opinions of all officers and employees in our Group), and code of conduct (the fundamental
principles of conduct for the organization and standards of behavior and decisions criteria which
officers and employees in our Group shall adopt and strictly comply with), and the Company shallalso establish a compliance system, promoting the enhancement of internal rules appropriate forthe business characteristics of each Group company.
In addition, the Company shall ensure the effective operation of the compliance system of eachGroup company through internal audits conducted by the Auditing Department and Group liaisonmeetings held by the Legal Department and other departments of each Group company, including
the promotion of compliance education for each Group company, and provision of the Grouphelpline.
6.

Systems regarding employee support of the Audit & Supervisory Board Members, theindependence of such employees from Members of the Board and ensuring effective instructions
from the Audit & Supervisory Board Members to such employees(1) Audit & Supervisory Board Members and the General Manager of the Personnel Department shalldiscuss in advance assignments, transfers, evaluations and other issues regarding the staff of theAudit & Supervisory Board Members’ Department, whose primary role is to assist theperformance of duties by Audit & Supervisory Board Members.
(2) Each department shall properly perform its duties in order to ensure that staff of Audit &Supervisory Board Members shall effectively implement the instruction from the Audit &Supervisory Board.

7.

System for reporting to Audit & Supervisory Board Members and preventing the adverse
treatment of persons who make reports(1) For the purpose of auditing the internal controls of the Company and each Group company byAudit & Supervisory Board Members, the Company shall determine the matters that officers andemployees of the Company and each Group company, or any recipient of a report from such officer
or employee of the Company, should report to the Audit & Supervisory Board Members, and shallestablish the following systems:
1)

A system in which Audit & Supervisory Board Members can receive reports from officers
and employees of the Company at any time;2)

A system in which Audit & Supervisory Board Members can receive reports from officers
and employees of each Group company or a recipient of a report from such officer oremployee; and,3)

A system in which the Audit & Supervisory Board Members shall receive reports of any
violation of law or regulation by any officer or employee of the Company through thecorporate ethics helpline and the Group helpline.
3(2) The Company shall establish a system to prevent any adverse treatment of a person who makes areport under the preceding paragraph based on the fact that he/she made such report.
8.

Matters concerning policies regarding the allocation of costs arising from the performance ofduties by the Audit & Supervisory Board Members and system to ensure that the Audit &Supervisory Board Members can effectively conduct the audit of the Company(1) If an Audit & Supervisory Board Member claims costs arising from the performance of its duties,
Members of the Board shall properly handle such claim in order to ensure the audit is effectivelyconducted.
(2) Members of the Board representing the Company and Audit & Supervisory Board Members shall
facilitate their mutual understanding, through regular meetings, regarding the status of the audits
conducted by Audit & Supervisory Board Members, and other important issues.
(3) The relationship among Audit & Supervisory Board Members shall be strengthened by measures
such as: Audit & Supervisory Board Members and General Manager of the Auditing Department shallexchange documents regarding the cooperation between Audit & Supervisory Board Members
and the Auditing Department; and The Auditing Department and Accounting Auditor shall have regular meetings with Audit &Supervisory Board Members.

9.

Structure to ensure appropriateness of financial reports(1) The Company shall develop internal controls sufficient to ensure the appropriateness of all
financial reports.

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