Corporate Governance Report

TAISEI CORPORATION

Last updated: September 2, 2024

Taisei Corporation

President and Chief Executive Officer, Representative Director: Yoshiro AIKAWA
Inquiries: Takeshi KAJIUCHI, General Manager, Organization & Governance Management Department
Securities Code: 1801

The following describes the state of corporate governance at Taisei Corporation.

https://www.taisei.co.jp/

I Fundamental approach to corporate governance, capital structure, corporate attributes, and otherbasic information

1. Fundamental approach•••

In accordance with the Taisei Group Philosophy “To create a vibrant environment for all members of society” and the threepillars of the “Taisei Spirit”—“Active and Transparent Culture,” “Value Creation,” and “Evolution of Tradition”—to realize thisphilosophy, Taisei Corporation (the “Company”) aims to achieve sustained growth and to enhance corporate value in themedium and long run.
The Company’s fundamental approach to corporate governance is to ensure swiftness, appropriateness, fairness, andtransparency in management decision-making in order to earn the trust of society while pursuing sustained development
as a business.
Taisei's Fundamental Corporate Governance Policy, which embodies the fundamental approach described above in
response to the principles of the Corporate Governance Code, is posted on the Company’s website.
https://www.taisei.co.jp/corp/rinen/pdf/governance_basic_policy.pdf (Japanese)
https://www.taisei.co.jp/english/profile/philosophy/policies/pdf/governance_basic_policy.pdf (English)[Reasons for not putting into practice a part of the Corporate Governance Code's principles]
The Company fully implements each of the Corporate Governance Code’s principles.

[Disclosure based on the principles of the Corporate Governance Code][Principle 1.3] (Basic capital policy)
The Company intends to develop foundations that contribute to enhancing the Group’s corporate value, on the premise ofmaintaining financial discipline (maintaining our credit rating) and ensuring smooth execution of the construction business,while balancing with the shareholder returns (distribution of profits to shareholders), and securing growth investment
preferentially portfolio, by introducing following financial policies:
1) Continued assurance of ROE of approximately 10% and pursuit of the optimal capital structure; and2) Implementation of growth investment based on investment criteria and fund allocation policies.
The Company has also made a fundamental policy to maintain a dividend payout ratio of approximately 30% based on theassumption of ta long-term stable dividend, while maintaining financial discipline and preferential securing of growthinvestment quotas, and to provide flexible shareholder returns including the acquisition of treasury shares with a total payout
ratio up to 100%.
In May 2024, alongside TAISEI VISION 2030 Achievement Plan and Medium-Term Business Plan (2024-2026), theCompany has formulated and publicized “Action to Implement Management that is Conscious of Cost of Capital and Stock
Price”.
[Principle 1.4] (Cross-shareholdings)(1) Our Policy on Cross-Shareholdings
We maintain cross-shareholdings to establish and strengthen long-term, stable relationships of mutual cooperation with
important business partners and improve our competitiveness and profitability.
We have a policy to timely and appropriately sell cross-holding shares which, as the result of verification by the Board,are considered not to be consistent with our policy on cross-shareholdings because it is not economically reasonable
and promising in the medium to long run to maintain them. Regarding the main cross-shareholdings which the Company
holds, please refer to the annual securities report.
Based on the policy, we are currently in process of consistently decreasing the amount of cross-shareholdings toward
the target of less than 20% of our consolidated net assets by the end of the fiscal year 2026.
As a result, in the fiscal year 2023, we sold 57 listed shares worth ¥49.7 billion and 6 unlisted shares worth ¥0.2 billion(including the cases where the Company sold part of the whole shares).
https://www.taisei.co.jp/ir/data/shoken/pdf/16404.pdf (Japanese only)
Annual securities report:(2)

Verification by the Board of the Economic Reasonableness of Cross-Shareholdings
The Board compares the acquisition prices with the business returns from all listed shares and from unlisted shares
which the Board decides to verify continuously, while using capital costs as a yardstick. In June of each year, the Board
decides on a case-by-case basis whether we should continue to hold the cross-shareholdings. In addition to quantitative1

verifications, the Board uses qualitative information such as orders of construction to be expected in the future for its
decision.
(3) Standards for Exercise of Voting Rights
Voting rights of cross-shareholdings will be exercised appropriately from the viewpoint of whether they contribute toenhancement of our corporate value.
[Principle 1.7] (Transactions between related parties)
The Company ensures that transactions with any of its Members of the Board or Executive Officers, major shareholders,or other stakeholders are brought before the Board or the Management Committee in advance in accordance with the“Board Regulations” or the “Regulations of Management Committee” according to the importance and nature of suchtransactions so that the same are reviewed and approved through due procedures.
[Supplementary Principle 2.4.1] (Ensuring diversity on employment of core personnel, etc.)(1) Approach to ensuring diversity
Taisei Group adopts the following basic approach to ensuring diversity irrespective of gender, nationality, work style,career, etc., to employ of people with diverse abilities and to develop an environment where such abilities can be
exercised to the maximum extent (Diversity, Equity & Inclusion) to realize diversity management based on our Group
Philosophy of “To create a vibrant environment for all members of society” and Taisei Spirit (“Active and transparent
culture”, “Value Creation”, and “Evolution of Tradition”) to pursue the Group Philosophy.
(2)

Goals for ensuring diversity
As for women employees who have a major impact on diversity issues, the Company has set the following goals for
ensuring diversity.
1) To increase the ratio of newly hired women graduates out of all newly hired graduates to "25% or more by 2024
and 30% or more by 2030"
2) To increase the number of women managers to "10 times or more compared to that in FY 2015 by 2025"
3) To increase the ratio of women employees in the technical field out of all employees in the technical field to "15%or more by 2030"(3)

Policies on human resources development and internal environment improvement for ensuring diversity
The Company’s “Human Resources Development Policy (Diversity, Equity & Inclusion Policy)” which set forth policies
concerning human resources development and the internal environment improvement in order to respect diversity andenable every executive and employee to maintain high levels of engagement and play active roles, is posted on its web
site.
https://www.taisei.co.jp/corp/rinen/pdf/diversity_and_inclusion.pdf (Japanese)
https://www.taisei.co.jp/english/profile/philosophy/policies/pdf/diversity_and_inclusion.pdf (English)(4)

Implementation status of ensuring diversity
The Company’s current status of ensuring diversity and implementing human resources development and internal
environment improvement is posted on its web site.
Diversity, Equity & Inclusion
https://www.taisei-sx.jp/social/human_rights/diversity.html (Japanese)
https://www.taisei-sx.jp/english/social/human_rights/diversity.html (English)[Principle 2.6] (Function fulfillment as the owner of corporate pension assets)(1) In managing reserve funds for the corporate pension plan, the Company has established a system that enables it tofulfill the functions to be expected as an asset owner mainly in the manner of monitoring management firms while
enhancing the Company’s management expertise through the methods such as obtaining advice from external
experts.
(2) To ensure that beneficiaries' interests are maximized and that conflicts of interest that may arise between the Company
and beneficiaries are controlled appropriately, the Company verifies the management of reserve funds for the
corporate pension plan through the Pension Preservation Council, which consists of members from the Company andlabor union, and reviews the component ratio of policy assets.
[Principle 3.1] (Improvement of information disclosure)(1) The aims of the Company (the achievement of the corporate philosophy, etc.), management strategy, andmanagement plans
The Company’s Structure of Values and Policies, which consists mainly of the Group Philosophy and management
plans, is posted on its website.
https://www.taisei.co.jp/corp/rinen (Japanese)
https://www.taisei.co.jp/english/profile/philosophy/ (English)(2)

Fundamental approach to corporate governance and the fundamental policy based on the principles of the Corporate
Governance Code(i). Fundamental approach
The Company’s fundamental approach to corporate governance is described in Section I.1. “Fundamental approach”
in this Report.
(ii). Fundamental policy
The Company’s Fundamental Corporate Governance Policy, which describes its response in accordance with theprinciples of the Corporate Governance Code, is posted on its website.
https://www.taisei.co.jp/corp/rinen/pdf/governance_basic_policy.pdf (Japanese)2https://www.taisei.co.jp/english/profile/philosophy/policies/pdf/governance_basic_policy.pdf (English)(3)

Policy and procedure for the Board to determine remuneration for executives and Members of the Board(i).

PolicyRemuneration for Members of the Board consists of fixed compensation and performance-based compensation(monetary compensation) as well as non-monetary performance-based compensation (stock compensation).
Remuneration for Executive Officers consists of fixed compensation and performance-based compensation(monetary compensation).
Remuneration for External Members of the Board is fixed compensation.

(ii). Procedure
The system of remuneration for Members of the Board and Executive Officers as well as the amount of remunerationfor each Member of the Board and Executive Officer based thereupon are determined by the Board after discussions
at the Remuneration Committee, the Board's organ of advance consultation, which is chaired by an External Memberof the Board.
(4)

Policy and procedure for the Board to elect and dismiss executives as well as nominate candidates for Members of
the Board and Audit & Supervisory Board Members(i).

PolicyCandidates for Members of the Board are nominated, and Executive Officers are elected, from the viewpoint of
selecting persons who will contribute to the Company’s sustainable growth and medium- to long-term enhancementof corporate value after taking account of their attributes such as their careers, achievements, character, knowledge,
experience, and abilities as well as the overall balance among Members of the Board in addition to diversity, which
includes gender, international background, career and age. In order to attain the medium- to long-term vision and
the Medium-Term Business Plan, the Board identifies the skills, etc. that the Board should cover, and nominatescandidates for the Members of the Board based on such identified skills. Dismissal may be discussed if any of theattributes that were expected at the time of election to manifest are not recognized.
Candidates for Audit & Supervisory Board Members are nominated from the viewpoint of selecting persons who
contribute to the Company’s sustainable growth and medium- to long-term enhancement of corporate value after
taking account of their attributes such as their careers, achievements, character, knowledge, experience, andabilities as well as the overall balance among Audit & Supervisory Board Members. The Company has selectedindividuals who have expertise in finance, accounting, and legal affairs. Among them at least one individual has
considerable expertise in finance and accounting in particular.

(ii). Procedure
Nomination of candidates for Members of the Board and Audit & Supervisory Board Members as well as election
and dismissal of Executive Officers are determined by the Board after discussions at the Executive Personnel
Committee, the Board's organ of advance consultation, which is chaired by an External Members of the Board.
Nominations of candidates for Audit & Supervisory Board Members are determined by the Board with the consent
of the Audit & Supervisory Board.
(5)

Explanations about the election or dismissal of Executive Officers and the nomination of candidates for Members of
the Board and Audit & Supervisory Board Members given upon election or dismissal or nomination by the Board inaccordance with Section (4) above(i).

Candidates for Members of the Board
The reasons for each candidate for External Member of the Board's nomination are described in the annual securities
report and Section II.1. of this Report, “[Category: Members of the Board] Relationships with companies (2).”Annual securities report:
https://www.taisei.co.jp/ir/data/shoken/pdf/16404.pdf (Japanese only)
The reasons for nominating each candidate for Internal Members of the Board are as follows.
• Shigeyoshi TANAKA, Representative Director (re-elected in June 2024)
Mr. Shigeyoshi TANAKA, specialized in civil engineering technologies, has successively held various posts suchas Chief of Kyushu Branch, Chief of Corporate Planning Office, and Chief of Civil Engineering Division since his
appointment as Executive Officer in April 2011. He has distinguished expertise in civil engineering sector, broad
experience and achievement at the Company, and considerable knowledge of the overall management of theTaisei Group. Since April 2023, he has assumed a role as Chairman, Representative Director. He is consistently
working on to strengthen the decision making and supervising function of the meetings of the Board, and he has
led discussions at the meeting of the Board as Chairman of the Board and contributed to enhancement ofdeliberations at the Board. As Mr. Shigeyoshi TANAKA can be expected to contribute to the sustainable
development and further enhancement of the corporate value of Taisei Group, we nominated him as candidate
for a Member of the Board again.
• Yoshiro AIKAWA, Representative Director (re-elected in June 2024)
Mr. Yoshiro AIKAWA, specialized in building construction technologies, has successively held various posts suchas Chief of Kyushu Branch, Chief of Marketing & Sales (Building Construction) Division II, and Chief ofArchitecture & Engineering Division (Integrated) and Chief of Building Construction Division since his
appointment as Executive Officer in April 2013. He has broad experience and achievement at the Company, andconsiderable knowledge of the overall management of the Taisei Group. Since June 2020, he has served as
President and Chief Executive Officer and contributed to establishing the foundation for future growth of theCompany and the Taisei Group in order to realize the Medium- to Long-Term Vision of the Taisei Group [TAISEIVISION 2030]. As Mr. Yoshiro AIKAWA can be expected to contribute to the sustainable development and further

3enhancement of the corporate value of the Taisei Group, we nominated him as candidate for a Member of theBoard again.
• Masahiko OKADA, Representative Director (re-elected in June 2024)
Ever since Mr. Masahiko OKADA joined the Company, he has engaged in departments related to businessadministration, and successively held various posts such as General Manager of Secretariat Department, andChief of Hokushinetsu Branch since his appointment as Executive Officer in April 2017. He has distinguishedexpert knowledge in accounting and financial fields, broad experience and achievement at the Company, andconsiderable knowledge of overall management of the Taisei Group. At present, as Executive Vice President,
Representative Director, Chief of Business Administration Division in Charge of New Business Planning, he isworking to strengthen the decision-making and supervisory functions of the Board of Directors, as well as
formulating and promoting strategies related to the Group’s overall management. As Mr. Masahiko OKADA canbe expected to contribute to the sustainable development and further enhancement of the corporate value of theTaisei Group, we nominated him as candidate for a Member of the Board again.
• Kenji SHIRAKAWA, Member of the Board (newly elected in June 2024)
Mr. Kenji SHIRAKAWA, specialized in civil engineering technologies, has successively held various posts suchas Chief of Chiba Branch and Deputy Chief of Civil Engineering Division since his appointment as Executive
Officer in April 2019. He has distinguished expert knowledge in civil engineering fields, broad experience andachievement at the Company, and considerable knowledge of overall management of the Taisei Group. At
present, as Senior Managing Executive Officer and Chief of Civil Engineering Division, he is working on todevelop and implement strategies for resolving issues regarding reinforcement of production system, etc. indepartments related to civil engineering. As Mr. Kenji SHIRAKAWA can be expected to contribute to thesustainable development and further enhancement of the corporate value of the Taisei Group, we newly
nominated him as candidate for a Member of the Board.
• Junichi KASAHARA, Member of the Board (newly elected in June 2024)
Mr. Junichi KASAHARA has engaged mainly in the administrative divisions, including general affairs and humanresources, and has successively held various posts such as General Manager of the General Affairs Department
and Deputy Chief of Business Administration Division since his appointment as Executive Officer in April 2020.
He has distinguished expert knowledge in risk analysis and correspondence particularly in his general affairs
operation and human resources fields, broad experience and achievement at the Company, and considerable
knowledge of overall management of the Taisei Group. At present, as Senior Managing Executive Officer, Deputy
Chief of Business Administration Division in Charge of Human Resources System Reform, he is engaged informulating human resources development and human resources strategies for the Group, as well as developing
and promoting its risk management systems. As Mr. Junichi KASAHARA can be expected to contribute to thesustainable development and further enhancement of the corporate value of the Taisei Group, we newly
nominated him as candidate for a Member of the Board.
• Mayuki YAMAURA, Member of the Board (re-elected in June 2024)
Mr. Mayuki YAMAURA, specialized in building construction technologies, has successively performed his duties
as Chief of Chiba Branch since his appointment as Executive Officer in April 2021. He has distinguished expertisein building construction sector, broad experience and achievement at the Company, and considerable knowledgeof the overall management of Taisei Group. At present, as Managing Executive Officer, Member of the Board,
Chief of Architecture & Engineering Division (Integrated), and Chief of building Construction Division, he isworking on to strengthen the decision-making and supervisory functions of the Board of Directors, as well as todevelop and implement strategies for resolving issues regarding reinforcement of production system in
departments related to building construction, etc. As Mr. Mayuki YAMAURA can be expected to contribute to thesustainable development and further enhancement of the corporate value of Taisei Group, we nominated him as
candidate for a Member of the Board again.
• Yuichiro YOSHINO, Member of the Board (re-elected in June 2024)
Mr. Yuichiro YOSHINO, specialized in building construction technologies, has successively performed his duties
as Chief of Chugoku Branch since his appointment as Executive Officer in April 2021. He has distinguishedexpertise in building construction sector, broad experience and achievement at the Company, and considerable
knowledge of the overall management of Taisei Group. At present, as Managing Executive Officer, Member ofthe Board, Deputy Chief of Corporate Planning Office and in Charge of Building Construction Business Strategy,
he is working on to strengthen the decision-making and supervisory functions of the Board of Directors, as wellas to develop and implement strategies regarding overall management of Taisei Group. As Mr. Yuichiro
YOSHINO can be expected to contribute to the sustainable development and further enhancement of thecorporate value of Taisei Group, we nominated him as candidate for a Member of the Board again.
(ii). Candidates for Audit & Supervisory Board Members
The reasons for each candidate for External Audit & Supervisory Board Member’s nomination are described in theannual securities report and Section II.1. of this Report, “[Category: Audit & Supervisory Board Members]
Relationships with companies (2).”Annual securities report:
https://www.taisei.co.jp/ir/data/shoken/pdf/16404.pdf (Japanese only)
The reasons for nominating each candidate for Internal Audit & Supervisory Board Member are as follows.
• Takashi HAYASHI, Audit & Supervisory Board Member (re-elected in June 2023)
Ever since Mr. Takashi HAYASHI joined the Company, he has been engaged in departments related to businessadministration such as finance, accounting and successively held various posts such as Executive Officer of theCompany, and President and Chief Executive Officer of several subsidiaries of the Company. In addition, he hastaken office as Audit & Supervisory Board Member (Full-time) since June 2019, he has adequately performed
4

audit towards fulfilment of the duties of Members of the Board by expressing his opinions suitably at the meetingsof the Board and Audit & Supervisory Board, and by requesting explanation as necessary. Based on his past
performance, he is considered to be suitable for carrying out the task of improving audits by Audit & Supervisory
Board Members at the Company, and thus we nominate him as a candidate for Audit & Supervisory Board
Member again.
• Shuichi OKUDA, Audit & Supervisory Board Member (newly elected in June 2023)
Ever since Mr. Shuichi OKUDA joined the Company, he has been engaged in departments related to businessadministration, and successively held various posts such as General Manager of Accounting Department, andChief of Sustainability Management Promotion Division. He has distinguished expert knowledge in the fields ofaccounting, finance and sustainable development, broad experience and achievement at the Company, andconsiderable knowledge of sustainable management of the Taisei Group. Reviewing his past performance, we
consider Mr. Shuichi OKUDA is a suitable person to take change of enhancing audit function as Audit &Supervisory Board Member, therefore, we newly nominate him as candidate for an Audit & Supervisory Board
Member.
[Supplementary Principle 3.1.3] (Initiatives on sustainable development, etc.)
Taisei Group’s fundamental policy on sustainable development is to realize Sustainability Transformation (SX), which aims
to resolve sustainable development issues through our businesses centered on the construction industry, and to contributeto the development of a resilient society where people can live affluent and cultural lives, based on our Group Philosophy
of “To create a vibrant environment for all members of society” and Taisei Spirit (“Active and Transparent Culture” ”Value
Creation” and “Evolution of Tradition”) to pursue the Group Philosophy.
Recognizing that addressing sustainable development issues will not only reduce the risks but also lead to new profit
opportunities, we will positively and proactively strive to undertake those issues.
To centralize responses to sustainability challenges, in April 2022 the Company founded the Sustainability Division(Integrated) and appointed its Chief as Chief Sustainability Officer (CSuO) in order to clarify the responsibility for TaiseiGroup’s promotion of sustainability. The Sustainability Division (Integrated) has two divisions integrally promoting corporate
sustainability, where the Sustainability Management Promotion Division resolves issues for carbon neutrality and unifies
strategic functions for overall sustainability and the Clean Energy & Environment Business Promotion Division unifies
functions for promoting businesses related to clean energy and the environment.
The Company has set up the Sustainability Committee within the Board to bolster sustainability management throughout
the Group. The Sustainability Committee deliberates on the formulation and execution of significant policies and specificmeasures concerning sustainability management, and raise those matters for the Board’s further deliberation, so that theBoard performs appropriate supervisory functions thus maintaining its effectiveness. Matters deliberated and resolved at
the Board are notified to individual business divisions within the Company as well as its Group companies, and are reflectedin their management plans and business operations.
(1)

Initiatives on sustainable development
Taisei Group formulated [TAISEI VISION 2030] in May 2021 as the Group’s medium- to long-term vision and introduced“The Ever-Evolving The CDE3(cubed) COMPANY ~A pioneering corporate group contributing to the development of a
resilient society where people can live affluent and cultural lives~”. In May 2024, upon the initiation of its second phase,the Medium-Term Business Plan (2024-2026), the Group newly introduced [TAISEI VISION 2030] Achievement Plan.
In the Achievement Plan, the Group has designated “Sustainability Strategy (Environment, Energy and Human Rights)”
as a Policy on Business Foundation Development, and is promoting various measures toward the year 2030.
[[TAISEI VISION 2030] Achievement Plan and The Medium-Term Business Plan (2024-2026)]
https://ssl4.eir-parts.net/doc/1801/tdnet/2435672/00.pdf (Japanese)
https://www.taisei.co.jp/english/ir/policy/plan/ (English)
Among the sustainable development issues, particularly important issues had been identified as material issues (to be
dealt with), and the Group has reviewed those issues in May 2024 and identified five issues as follows:[5 Material Issues]
1. Co-creation of new value to realize affluent lives;
2. Realization of sustainable and environmentally friendly society;
3. Realization of society and workplace environment where everyone can work lively;
4. Integrity and Pride in manufacturing ~Safety, Quality, and Technology~; and5. Fair corporate activities that support trust ~Compliance and Governance~.
As each material issue has been reflected in [TAISEI VISION 2030] Achievement Plan and respective KPIs have been
set under the Medium-Term Business Plan (2024-2026), the Group is dealing with each material issue in collaboration
with its business strategies. The results of KPIs for material issues are predetermined in Management Committee andperiodically reported to the Board for its supervision.

(2)

Investments in human resources and intellectual properties, etc.
For the Group’s measures to enhance human resources, please refer to “Human Capital” under the Fundamental
Management Policy in [TAISEI VISION 2030] Achievement Plan as described in (1) above and the Company’s website.
Please also refer to the Company’s website on which the data related to investments in human resources and intellectual
property and KPIs are posted.
[Fundamental Management Policy]
https://www.taisei.co.jp/ir/management-policy/plan/pdf/2024051301.pdf(Japanese)5https://www.taisei.co.jp/english/ir/policy/plan/ (English)[The data related to investments in human resources and intellectual property]
https://www.taisei-sx.jp/esg_guide_line/esg/index.html#social_datalink (Japanese)
https://www.taisei-sx.jp/english/esg_guide_line/esg/#social_datalink (English)(3)

Measures against Environmental Issues, including Climate Change
The Group, aiming for “Realization of sustainable and environmentally friendly society” as introduced in Material Issues
and Environmental Policy, is engaged in various measures toward achievement of “Decarbonized Society (Carbon
Neutrality)”, “Recycling-Oriented Society (Circular Economy)” and “Nature Co-existing Society (Nature Positive)”.
The Group has publicized its “Integrated Environmental Management Information Disclosure” as the material compiledof integrated information related to the Group’s Environmental Management, in accordance with the frameworkdescribed in the TCFD and TNFD as well as “Guidance on disclosure and dialogue for the promotion of sustainablefinance regarding circular economy” issued by the Ministry of Economy, Trade and Industry as well as the Ministry of
the Environment of Japan.
The details are posted on our website.
[Integrated Environmental Management Information Disclosure]https://www.taisei-sx.jp/esg_guide_line/tcfd/ (Japanese)
https://www.taisei-sx.jp/english/esg_guide_line/tcfd/ (English)(4)

Respect for Human Rights
The Group promotes various measures toward respecting human rights as the Group’s Human Rights Policy describes
the Fundamental Attitude towards Respecting Human Rights to contribute for the realization of an inclusive society byfulfilling the corporate responsibilities voluntarily, positively and proactively so as not to make adverse impacts on humanrights in relation to the business activities,
The details are posted on our website.
[Respect for Human Rights]
https://www.taisei-sx.jp/social/human_rights/ (Japanese)
https://www.taisei-sx.jp/english/social/human_rights/(English)[Human Rights Due Diligence]https://www.taisei-sx.jp/social/human_rights/duediligence.html (Japanese)
https://www.taisei-sx.jp/english/social/human_rights/duediligence.html(English)[Supplementary Principle 4.1.1] (Scope of delegation to executives)
The Board makes important decisions on business execution as stipulated in relevant laws and ordinances, the Articles ofIncorporation, and the Board Regulations.
The Management Committee is newly established as the decision-making organ for business execution of the Company,
and the Regulations of Management Committee stipulate the authority for decision-making related to business executionthat is delegated to the Management Committee by the Board. Furthermore, the system of Executive Officers has been
adopted to facilitate flexible execution of business.
[Principle 4.8] (Effective utilization of Independent External Members of the Board)
At present, five (5) of the Company’s twelve (12) Members of the Board are Independent External Members of the Board.
Among the External Members of the Board, Ms. Atsuko NISHIMURA has been expected to contribute to bolstering
deliberations and managerial supervision at the Board from diverse viewpoints that make the most of her international andobjective perspectives based on her experience and knowledge as a diplomat, thus she is deemed to be eligible for anExternal Member of the Board and so selected. Messrs. Norio OTSUKA, Fumiya KOKUBU, Tsutomu KAMIJO and Ms.
Hiroko KOIDE have been expected to contribute to strengthening governance and compliance system as well as decisionmaking and managerial supervision concerning important matters such as the election and dismissal of executives andmanagement strategy planning, including international operations, by making the most of their rich experience andknowledge obtained as corporate managers and executives, thus they are deemed to be eligible for External Members of
the Board and so selected.
[Principle 4.9] (Criteria and attributes for judging the independency of Independent External Members of the Board)
The Board stipulates criteria for judging the independency of External Members of the Board in Article 18 of the Fundamental
Corporate Governance Policy.
https://www.taisei.co.jp/corp/rinen/pdf/governance_basic_policy.pdf (Japanese)
https://www.taisei.co.jp/english/profile/philosophy/policies/pdf/governance_basic_policy.pdf (English)[Supplementary Principle 4.10.1] (Views on the independence of the composition of the nominating and remunerationcommittee)
The Company has established the Executive Personnel Committee and the Remuneration Committee as prior deliberative
bodies within the Board. Both Committees are voluntary, but like the Board, the members thereof are composed so thatdiverse discussions can be held among internal Members of the Board with expertise in the management of the constructionindustry and independent External Members of the Board with diverse insights, where monitoring by independent External
Audit & Supervisory Board Members functions effectively.
Our view on independence means that deliberations are conducted with a high degree of objectivity and transparency,
respecting opinions of each independent External Member of the Board and independent External Audit & Supervisory6

Board Member, on the premise that each internal Member of the Board (the top management) will fulfil its responsibilities
for explaining proposed items. In both Committees, more than half of the members of each Committee including its
chairperson are composed of independent External Members of the Board and an independent External Audit & Supervisory
Board Member that serves as an observer to ensure the appropriateness of deliberations. This helps to invigorate
deliberations at the Committees, while ensuring independence, objectivity and transparency.
The Executive Personnel Committee deliberates on the matters related to the personnel affairs of Members of the Boardand executive officers, including the nomination of candidates for Members of the Board and Audit and Supervisory Board
Members, the appointment and dismissal of executive officers, and the remuneration and punishment of Members of theBoard and executive officers. In addition, the Remuneration Committee deliberates on the remuneration system forMembers of the Board and executive officers and the amount of compensation based on the system.
Please refer to Section II.1. "Establishment of voluntary committees, committee structures, attributes of chairperson" for thecurrent composition of the members of both Committees.
[Supplementary Principle 4.11.1] (Structure of the Board and procedure for selecting members)
The Company’s Board consists of Internal Members of the Board and External Members of the Board accounting for onethird or more of the total number of members of the Board that are elected upon the identification of the skills, etc. that theBoard should cover in order to attain the medium- to long-term vision and the Medium-Term Business Plan and inconsideration of each member's character, knowledge, experience, and abilities, the overall balance among the Board
members, and diversity (e.g., gender, international background, career and age). Internal Members of the Board strive toensure appropriate decision-making and supervision of business execution by expressing useful opinions that make themost of their rich business experience obtained from years of engagement in the Company’s business. External Membersof the Board do so by expressing useful opinions from objective viewpoints based on their abundant experience andextensive knowledge as an executive or equivalent. Please refer to the skill matrix which displays each Member of theBoard’s careers, etc. on the Notice of the General Meeting of Shareholders.
https://www.taisei.co.jp/ir/soukai.html (Japanese)
https://www.taisei.co.jp/english/ir/meeting/ (English)
The policy and procedure for the election of Members of the Board are described in Section [Principle 3.1] (4).
[Supplementary Principle 4.11.2] (Posts held by Members of the Board or Audit & Supervisory Board Members concurrently)
If a Member of the Board or Audit & Supervisory Board Member of the Company concurrently serves as an executive atother listed companies, he or she shall limit his or her service to the range necessary and reasonable to appropriately fulfill
such roles and responsibilities.
Important posts that Members of the Board and Audit & Supervisory Board Members of the Company hold concurrently aswell as the attendance of Members of the Board and Audit & Supervisory Board Members at meetings of the Board and the
Audit & Supervisory Board held in fiscal year 2022 are included in the notice of the General Meeting of Shareholders.
https://www.taisei.co.jp/ir/soukai.html (Japanese)
https://www.taisei.co.jp/english/ir/meeting/ (English)[Supplementary Principle 4.11.3] (Analysis and evaluation of the overall effectiveness of the Board)
The Board of the Company analyzes and evaluates effectiveness of the Board and discloses the results annually.
I.

Fiscal year 2023 initiatives based on the fiscal year 2022 evaluation
In order to strengthen supervisory functions and invigorate the deliberations at the Board, and to accelerate decisionmaking on business execution, the Company reviewed its governance system in March 2020, that includes a review ofagenda items to be resolved by the Board, and further delegation of its authority to executives accordingly.
Taking account of the review, since the fiscal year 2020, we have strived to enhance the effectiveness of the Board, andwe have been also trying to address the issues found in the effectiveness review in the fiscal year 2022 as follows:a) Enhancing discussions on the appropriate governance system, including the size and composition of the Board
As an ongoing issue, the Executive Personnel Committee and the Remuneration Committee deliberated on the
topics to be considered, including the composition of the members of the Board, and studied on the systematic
designs toward validating and restructuring the present appointment and remuneration system.
b) To the appropriate extent, further delegation of authority to executives
Based on the analysis of the agenda items, the Board secured enough time for deliberations by restructuring theagenda classification system, narrowing down the number of agenda items, and making documents and briefings in
a concise manner.
c) Further enhancing deliberations in the Board meetings in consideration of its role and responsibility from mediumto long-term perspective
The Board intensively deliberated matters focused on the formulation of the Medium-Term Business Plan (20242026) in addition to the discussion on the corporate culture reform.

II.

Overview of the fiscal year 2023 evaluation
The method used to evaluate effectiveness in the fiscal year 2023, and the results of the evaluation are as outlined
below.
(1) Evaluation method and process- The secretariat prepared a self-evaluation questionnaire (evaluation sheet for the Board) and obtained approval
thereof from the Board, and all Members of the Board and Audit & Supervisory Board conducted the self-evaluations.
- The evaluation items in the questionnaire are as listed below. Items 1-5 consisted of five-grade assessments andfree descriptions, and Item 6 comprised free descriptions.
7<< Evaluation items>>
1. Self-evaluation as a Member of the Board
2. Structure and operation of the Board
3. Effectiveness of the Board
4. Support system
5. Deliberation and monitoring regarding the medium- to long-term vision and the Medium-Term Business Plan
6. General Evaluation of the Board(2)

The External Members of the Board conducted an overall assessment towards the result of the self-evaluations
collated by the secretariat.
At the same time, a lawyer prepared a third-party’s opinion towards the result of self-evaluations.
Then the Board deliberated on the effectiveness based on the overall assessment and the third-party’s opinion.
Overview of the evaluation results
Since the corporate governance system as a company has been consistently consolidated in general, it wasassessed that the effectiveness of the Board was improving, while there were some matters which needed to
improve from the standpoint of the roles and responsibilities of the Board.
In order to further enhance the effectiveness of the Board, the Board will continuously work on the followings:a) To enhance discussions on the size and composition of the Board and other aspects of the governancesystemb) To monitor the updated conditions and progress of business execution regarding important management
issuesc) To enhance deliberations in the Board meetings based on the roles and responsibilities of the Board from a
medium- to long-term perspective[Supplementary Principle 4.14.2] (Training policy for Members of the Board and Audit & Supervisory Board Members)
The Company provides necessary training and materials for Members of the Board and Audit & Supervisory Board Members
to fulfill their roles and responsibilities upon taking up their offices, and this training and materials cover the relevant laws
and ordinances, Articles of Incorporation, Board Regulations, and internal regulations that stipulate the Company’s
important policies and other guidelines.
In addition to the aforementioned training, the Company continuously offers opportunities to receive training from externalorganizations, experts, and other parties.
In an effort to facilitate a deeper understanding of the Taisei Group and its business among External Members of the Board
and External Audit & Supervisory Board Members, internal Members of the Board or other employees provide them with
explanations regarding the subject business during the prior briefing sessions when necessary. In addition, other measures
such as visits to work sites are organized.
[Principle 5.1] (Policy for constructive dialogue with shareholders)
The Company’s IR Policy, which stipulates a policy on initiatives to establish a system to promote constructive dialogue
with shareholders, is posted on the Company’s website.
https://www.taisei.co.jp/corp/rinen/pdf/ir_policy.pdf (Japanese)
https://www.taisei.co.jp/english/profile/philosophy/policies/pdf/ir_policy.pdf (English)
Please refer to the following website regarding the status of dialogue with our shareholders.
https://www.taisei.co.jp/ir/data/taiwa/ (Japanese)
https://www.taisei.co.jp/english/ir/library/dialogue/ (English)[Measures for realizing the management focusing on capital costs and stock prices]
With the aim of realizing the goals of “TAISEI VISION 2030” set out as the medium- to long-term vision, the Company
formulated and publicized [TAISEI VISION 2030] Achievement Plan and the Medium-Term Business Plan (2024-2026). In
these plans, we regard the financial policy as one of our fundamental management policies, and we have organized thepolicy related to its optimum capital structure and cash allocation with financial discipline.
Based on this policy, in order to enhance PBR, the Company will: (i) secure stable profits in the group domestic building
construction business and continue to implement a shareholder return policy based on strategic intent as measures toenhance ROE; and (ii) disclose the progress of [TAISEI VISION 2030] Achievement Plan and have sincere dialogues withstakeholders as measures to enhance PER.
https://www.taisei.co.jp/ir/management-policy/plan/group.html (Japanese)
https://www.taisei.co.jp/english/ir/policy/plan/ (English)

2. Capital structure
Percentage of shares owned by foreign nationals

30% or more

[Major shareholders]
Name
Master Trust Bank of Japan, Ltd. (Trust account)
Custody Bank of Japan, Ltd. (Trust account)

No. of shares owned Percentage (%)
29,777,300
16.14
9,650,540
5.23
8

Taisei Associates’ Shareholding PlanNORTHERN TRUST CO. (AVFC) RE SILCHESTER INTERNATIONALINVESTORS INTERNATIONAL VALUE EQUITY TRUSTState Street Bank and Trust Company 505223
Taisei Employees’ Shareholding PlanNORTHERN TRUST CO. (AVFC) RE U.S. TAX EXEMPTED PENSIONFUNDSState Street Bank West Client Treaty 505234
Retirement Benefit Trust in Mizuho Trust (Mizuho Bank, Ltd. Account)
Meiji Yasuda Life Insurance Company

Is there a controlling shareholder (excluding theparent company)?

-----

Is there a parent company?

No

6,144,900

3.33

5,945,800

3.22

4,210,920
3,628,468

2.28
1.97

3,328,084

1.80

3,292,710
2,857,800
2,847,798

1.78
1.55
1.54

Supplementary explanations

3. Corporate attributes
Stock exchange listing the Company’s shares &market category

Tokyo Stock Exchange Prime Market, Nagoya Stock
Exchange Premier Market

Fiscal year-end

March

Industry type

Construction businessNo. of employees as of most recent business year
end (consolidated)

1,000 or more

Net sales for most recent business year
(consolidated)

1 trillion yen or more

No. of consolidated subsidiaries as of most recent
business year end

At least 50 companies and less than 100

4. Guidelines on policy for protecting minority shareholders when the Company interacts with
controlling shareholders-----

5. Other special circumstances that may have serious effects on corporate governance
1. The Company, as the core company of Taisei Group, is operating integrated management of the entire Group, and striving
to maximize the Group’s interests, based on the following basic policies:(i).

To establish the group management strategy taking account of the mission and role of each Group company, and tooperate the entire Group based on such strategy;(ii). To enhance smooth cooperation among the Group companies, and to effectively utilize the management resources(personnel, assets, funds and information, etc.) held by each Group company as the entire Group, in order to enhancesynergy among the business operations of the Group companies;(iii). To promote the sustainability activities and to establish a risk management system as the entire Group, aiming for thesustainable growth of the Group; and,(iv). To establish the systems to ensure the credibility of internal controls on financial reporting for the purpose of securing
the adequacy of financial reporting as the Group
2. The Company has acquired a majority of the shares of PS Construction Co., Ltd. (“PS”, P.S. Mitsubishi Construction Co.,
Ltd. has been renamed since July 1, 2024) and converted it into a consolidated subsidiary of the Company. PS is mainly
engaged in the civil engineering business, building construction business and manufacturing businesses. In the civilengineering business, PS is strengthening its ability of large-scale highway renewal and repair constructions, which it has
designated as a growth area, and is under a process of developing it into a pillar of its civil engineering business. In addition,in the building construction business, PS is working to strengthen order competitiveness and to improve profitability byfurther differentiating its Prestressed Concrete (the “PC”) technology, including factory products, in which it specializes, bydeveloping new customers and by promoting efficient area expansion.
9

The Company has been implementing measures to enhance the corporate value of the Company Group in accordancewith the [TAISEI VISION 2030] Achievement Plan. As one of such measures, through converting PS into a consolidated
subsidiary of the Company, the Company believes that by forming an alliance with PS, which has advanced technologicalcapabilities in fields of the highway renewal and PC Precast Concrete (the “PCa”), and by implementing new initiatives, theCompany’s Group can find a solution to its priority issues, such as developing a system to establish a solid businessfoundation in its domestic civil engineering business and establishing a superiority position in the competitive environment
in its domestic building construction business, the corporate value of both companies should increase.
PS has ensured the independency of its management, by making decision about nomination of candidates for directors etc.
upon deliberation in the nomination advisory committee. In addition, from the viewpoint of respect of management autonomy
and protecting the interests of minority shareholders of listed subsidiaries, PS has established the special committee
consisting of independent external members of the board of directors, which intends to deliberate and review importanttransactions and activities that conflict with the interests of the controlling shareholder therefore to systematically observetransactions with the Company. Moreover, in the Capital and Business Alliance Agreement, the Company and PS haveagreed that PS is required the prior consent of the Company and the report to the Company in advance on important mattersfor management, and the report to the Company after the fact on other certain matters.
3. The Company has executed a capital and business alliance agreement with Heiwa Real Estate Co., Ltd. (“Heiwa Real
Estate”) and made Heiwa Real Estate an equity-method affiliate of the Company through the additional acquisition of sharesof Heiwa Real Estate.
The Company and Heiwa Real Estate have agreed under the capital and business alliance agreement to collaborate mainly
in following business domains: (i) Redevelopment Business; (ii) New Business Fields such as New Real Estate Investment;and (iii) Sustainability and DX, where both companies expect their corporate values to be improved through the alliance.
In addition, under the capital and business alliance agreement, the Company is entitled to nominate one person as a
candidate for an executive officer position at Heiwa Real Estate, while the Company acknowledges and fully respects the
Heiwa Real Estate’s commitment to maintaining listing status and management autonomy, prioritizing the collective interestsof all shareholders in addition to its own.

10

II Organization of business management related to managerial decision-making, execution, andsupervision and other aspects of the corporate governance system

1. Matters related to organizational structure and management, etc.
Type of organization

Company with audit & supervisory board[Members of the Board]
No. of Members of the Board stipulated in the
Articles of Incorporation

15

Term of office of Members of the Board stipulated
in the Articles of Incorporation

One year

Chairman of the Board

Chairperson

No. of Members of the Board

12

Election of External Members of the Board

ElectedNo. of External Members of the Board

5

No. of External Members of the Board designatedas independent executive

5

Relationships with companies (1)Name
Atsuko NISHIMURA
Norio OTSUKA
Fumiya KOKUBU
Tsutomu KAMIJO
Hiroko KOIDE

Attribute
Other
Formerly worked for another company
Formerly worked for another company
Formerly worked for another company
Formerly worked for another companyaRelationships with companies (*)
b

c

d

e

f

g

h

i

j

k





* Choices of relationships with companies* A white circle (“○“) indicates the item currently or has recently applied to the Member of the Board, while a white triangle(“△”) indicates such item applied previously.
* A black circle (“●”) indicates the item currently or has recently applied to any of the Member of the Board's relatives, whilea black triangle (“▲”) indicates such item applied previously.
a.
b.
c.
d.
e.
f.

Business executive at a listed company or its subsidiaryBusiness executive or non-executive director at the parent company of a listed company
Business executive at a sister company of a listed company
Person whose major business partner is a listed company or his/her business executive
Major business partner of a listed company or its business executive
Consultant, accounting expert, or legal profession who receives a large amount of funds or other assets from a listedcompany in addition to executive remuneration
g. Major shareholder of a listed company (if the major shareholder is a corporation, a business executive of the corporation)h. Business executive (the Member of the Board in question only) at a business partner (which does not fall under any ofthe entities listed in d, e, and f) of a listed company
i. Business executive (the Member of the Board in question only) at an entity with which external executives are mutually
exchanged
j. Business executive (the Member of the Board in question only) at an entity to which a listed company has given a
donationk. Other11

Relationships with companies (2)Name

Atsuko NISHIMURA

Norio OTSUKA

Fumiya KOKUBU

Tsutomu KAMIJO

Independent
executive

Supplementary explanations about
the item concerned

Reasons for election

Before becoming a Member of theBoard of the Company, Ms. Atsuko
NISHIMURA served in diplomatic andother important posts. However, sheleft the Ministry of Foreign Affairs
before joining the Company as a
Member of the Board. The Company
has business dealings with the
Ministry but does not have a special
interest therein.

As Ms. Atsuko NISHIMURA has successively held various
important posts of the Ministry of Foreign Affairs of Japan,
possesses wealthy international experience and profoundknowledge obtained from her long years of experience asa diplomat, she is expected to contribute to the sustainable
development and further enhancement of the corporate
value of Taisei Group towards the realization of [TAISEIVISION 2030], the Medium- to Long-Term Vision of theGroup, by providing her supervision, recommendation andadvice from her objective and neutral standpoint to theimportant matters such as strengthening of governanceand compliance system, promotion of diversity, election
and dismissal of executives, and formulation ofmanagement strategy including international business.
Therefore, we consider she is suitable for the position andappoint her as an External Member of the Board. Ms.
Atsuko NISHIMURA has been designated as anindependent executive because the criteria of
independency established by stock exchanges and thoseof the Company do not apply to her and because theCompany has determined that there is no concern about
conflicts of interest between her and general shareholders.



As Mr. Norio OTSUKA has wealthy experience fostered asa corporate executive and profound knowledge ofBefore becoming a Member of theinternational affairs and finance field, he is expected to
Board of the Company, Mr. Norio
contribute to the sustainable development and further
OTSUKA was in charge ofenhancement of Taisei Group towards the realization ofmanagement as Director, President[TAISEI VISION 2030], the Medium-to Long-Term Vision
and CEO at NSK Ltd., but he resigned of the Group, by providing his supervision,from this directorship before joining
recommendation and advice from his objective and neutral
the Company as a Member of thestandpoint to the important matters such as strengthening
Board. The Company has businessof governance and compliance systems, election anddealings with NSK, but the percentage dismissal of executives, and formulation of managementof transactions with the latter to thestrategy including international business. Therefore, weformer's consolidated net sales is
consider he is suitable for the position and appoint him as
small, and such transactions are
an External Member of the Board. Mr. Norio OTSUKA has
considered unlikely to affect the
been designated as an independent executive because
decisions of shareholders andthe criteria of independency established by stock
investors. Therefore, an overview
exchanges and those of the Company do not apply to him
thereof is omitted.
and because the Company has determined that there is noconcern about conflicts of interest between him andgeneral shareholders.



Before becoming a Member of theBoard of the Company, Mr. Fumiya
KOKUBU was in charge ofmanagement as President and CEO,
Member of the Board at Marubeni
Corporation, but he resigned from thisdirectorship before joining theCompany as a Member of the Board.
Currently, he is in charge ofmanagement at the trading firm as
Chairman of the Board, without theright of representation. The Company
has business dealings with Marubeni,
but the percentage of transactions
with the latter to the former's
consolidated net sales is small, andsuch transactions are considered
unlikely to affect the decisions ofshareholders and investors.
Therefore, an overview thereof isomitted.

As Mr. Fumiya KOKUBU has wealthy experience as acorporate executive and profound knowledge ofinternational business and investment in business, he isexpected to contribute to the sustainable development andfurther enhancement of corporate value of Taisei Group
towards the realization of [TAISEI VISION 2030], theMedium- to Long-Term Vision of the Group, by providing
his supervision, recommendation and advice from his
objective and neutral standpoint to the important matterssuch as strengthening of governance and compliancesystems, election and dismissal of executives, andformulation of management strategy including international
business. Therefore, we consider he is suitable for the
position and appoint him as an External Member of theBoard. Mr. Fumiya KOKUBU has been designated as anindependent executive because the criteria of
independency established by stock exchanges and thoseof the Company do not apply to him and because theCompany has determined that there is no concern about
conflicts of interest between him and generalshareholders.



Before becoming a Member of theBoard of the Company, Mr. Tsutomu
KAMIJO was in charge ofmanagement as Chairman of theBoard, Representative Director at
Sapporo Holdings Limited., but heresigned from this directorship before
joining the Company as a Member ofthe Board. The Company has
business dealings with Sapporo
Holdings, but the percentage oftransactions with the latter to the

As Mr. Tsutomu KAMIJO has wealthy experience andprofound knowledge fostered through management of
manufacture and sales of alcoholic beverages and foods
inside and outside the country,, he is expected tocontribute to the sustainable development and further
enhancement of corporate value of Taisei Group towards
the realization of [TAISEI VISION 2030], the Medium- to
Long- Term Vision of the Group, by providing his
supervision, recommendation and advice from his
objective and neutral standpoint to the important matterssuch as strengthening of governance and compliancesystems, election and dismissal of executives, and12former's consolidated net sales issmall, and such transactions are
considered unlikely to affect thedecisions of shareholders andinvestors. Therefore, an overview
thereof is omitted.

Hiroko KOIDE

formulation of management strategy including international
business. Therefore, we consider he is suitable for the
position and appoint him as an External Member of theBoard. Mr. Tsutomu KAMIJO has been designated as anindependent executive because the criteria of
independency established by stock exchanges and thoseof the Company do not apply to him and because theCompany has determined that there is no concern about
conflicts of interest between him and generalshareholders.

As Ms. Hiroko KOIDE possesses abundant experienceand broad insight in the management strategy and
Before becoming a Member of themarketing fields acquired from her involvement in the
Board of the Company, Ms. Hiroko
management of various global companies, she is expected
KOIDE was in charge of management
to contribute to the sustainable development and further
as President and Representative
enhancement of corporate value of Taisei Group towards
Director at Parfums Christian Dior
the realization of [TAISEI VISION 2030], the Medium- to
Japon K.K. and former director atLong- Term Vision of the Group, by providing her
Nippon Lever K.K. (present Unileversupervision, recommendation and advice from her
Japan K.K.), but she resigned fromobjective and neutral standpoint to the important matters
this directorship before joining thesuch as strengthening of governance and compliance
Company as a Member of the Board.
systems, diversity promotion, election and dismissal of
The Company has business dealings
executives, and formulation of managementwith these two companies, but morestrategy including international business. Therefore, wethan ten years have already passed
consider she is suitable for the position and appoint her as
since Ms. KOIDE’s resignation froman External Member of the Board. Ms. Hiroko KOIDE has
directorship at these two companies,
been designated as an independent executive because
and such transactions are considered
the criteria of independency established by stock
unlikely to affect the decisions of
exchanges and those of the Company do not apply to hershareholders and investors. Therefore,
and because the Company has determined that there is noan overview thereof is omitted.
concern about conflicts of interest between her andgeneral shareholders.

[Voluntary Committees]
Is there a voluntary committee that is a nomination
or remuneration committee?

Yes

Establishment of voluntary committees, committee structures, and attributes of the Chairperson

Committee nameVoluntarycommitteethat is anominationcommittee
Voluntarycommitteethat is aremunerationcommittee

Executive
Personnel
Committee

Remuneration
Committee

Total No.
ofmembers88

No. of fulltime
members

No. of Internal
Member of
the Board

0

3

0

3

No. ofExternal
Member of
the Board

55

No. ofexternal
experts

No. of othermembers

0

0

0

0

Chairperson

External
Memberof theBoard
External
Memberof theBoard

Supplementary explanations
The Executive Personnel Committee and the Remuneration Committee are convened as required, and the Secretarial
Department serves as their secretariat. Regarding the authorities and roles of those committees, and the Company’s viewof the independency relating to the composition of the committees and so forth, please refer to [Supplementary Principle
4.10.1] of [Disclosure based on the principles of the Corporate Governance Code] under Section I of this report.
[Members (As of September 1, 2024)]“Executive Personnel Committee”
External Members of the Board: Norio OTSUKA (Chairperson), Atsuko NISHIMURA, Fumiya KOKUBU, Tsutomu KAMIJO,
Hiroko KOIDE
Internal Members of the Board: Shigeyoshi TANAKA, Yoshiro AIKAWA, Masahiko OKADA
External Audit & Supervisory Board Member (Observer): Yasuhiro SATO
Internal Audit & Supervisory Board Member (Observer): Takashi HAYASHI“Remuneration Committee”
External Members of the Board: Norio OTSUKA (Chairperson), Atsuko NISHIMURA, Fumiya KOKUBU, Tsutomu KAMIJO,
13

Hiroko KOIDE
Internal Members of the Board: Shigeyoshi TANAKA, Yoshiro AIKAWA, Masahiko OKADA
External Audit & Supervisory Board Member (Observer): Yasuhiro SATO
Internal Audit & Supervisory Board Member (Observer): Takashi HAYASHI
Major activities of both Committees for FY 2023 (from July 2023 to June 2024) are as described below.
[Members and their attendance at the Committees]“Executive Personnel Committee”
External Members of the Board: Norio OTSUKA (Chairperson, attended all the eight (8) meetings), Atsuko NISHIMURA(attended all the eight (8) meetings), Fumiya KOKUBU (attended five (5) out of eight (8) meetings), Tsutomu KAMIJO(attended six (6) out of eight (8) meetings)
Internal Members of the Board: Shigeyoshi TANAKA (attended all the eight (8) meetings), Yoshiro AIKAWA (attended all
the eight (8) meetings), Masahiko OKADA (attended all the eight (8) meetings)
External Audit & Supervisory Board Member: Yasuhiro SATO (attended five (5) out of eight (8) meetings)“Remuneration Committee”
External Members of the Board: Norio OTSUKA (Chairperson, attended all the seven (7) meetings), Atsuko NISHIMURA(attended all the seven (7) meetings), Fumiya KOKUBU (attended four (4) out of seven (7) meetings), Tsutomu KAMIJO(attended five (5) out of seven (7) meetings)
Internal Members of the Board: Shigeyoshi TANAKA (attended all the seven (7) meetings), Yoshiro AIKAWA (attended all
the seven (7) meetings), Masahiko OKADA (attended all the seven (7) meetings)
External Audit & Supervisory Board Member: Masashi TASHIRO (attended all the seven (7) meetings)[Audit & Supervisory Board Members]
Has an Audit & Supervisory Board been
established?

Yes

No. of Audit & Supervisory Board Members
stipulated in the Articles of Incorporation

6

No. of Audit & Supervisory Board Members

6

Cooperation among Audit & Supervisory Board Members, accounting auditors, and the internal audit unit
Audit & Supervisory Board Members have six regular meetings annually with accounting auditors. Members receive
explanations from accounting auditors regarding audit plans, including the current year's audit policy and the places to beaudited. During the term, they receive reports on the audits conducted, and at the end of the term, they receive reports on
the results of the audits conducted. They maintain close cooperation with the Auditing Department, an internal audit unit,
mainly by periodically holding meetings to receive explanations about audit plans and reports on the results of audits.

Are External Audit & Supervisory Board Members
elected?

Yes

No. of External Audit & Supervisory Board
Members

4

Of External Audit & Supervisory Board Members,
No. designated as independent executive

4

Relationships with companies (1)NameAttribute

Yasuhiro SATO
Keiko OHARA
Masamitsu MIURA
Kazuhiro MIYAUCHI

Formerly worked for another company
Lawyer
Other
Other

a

b

Relationships with companies (*)
c

d

e

f

g

h

i

j

k

l

m



* Choices of relationships with companies* A white circle (“〇“) indicates the item currently or has recently applied to the Audit & Supervisory Board Member, while awhite triangle (“△”) indicates such item applied previously.
* A black circle (“●”) indicates the item currently or has recently applied to any of the Audit & Supervisory Board Member's
relatives, while a black triangle (“▲”) indicates such item applied previously.
a. Business executive at a listed company or its subsidiaryb. Non-executive director or accounting counselor at a listed company or its subsidiaryc. Business executive or non-executive director at the parent company of a listed company
14

d.
e.
f.
g.
h.

Corporate auditor at the parent company of a listed company
Business executive at a sister company of a listed company
Person whose major business partner is a listed company or his/her business executive
Major business partner of a listed company or its business executive
Consultant, accounting expert, or legal profession who receives a large amount of funds or other assets from a listedcompany in addition to executive remuneration
i. Major shareholder of a listed company (if the major shareholder is a corporation, a business executive of the corporation)
j. Business executive (the Audit & Supervisory Board Member in question only) at a business partner (which does not fallunder any of the entities listed in f, g, and h) of a listed company
k. Business executive (the Audit & Supervisory Board Member in question only) at an entity with which external executives
are mutually exchanged
l. Business executive (the Audit & Supervisory Board Member in question only) at an entity to which a listed company has
given a donation
m. Other
Relationships with companies (2)Name

Yasuhiro SATO

Keiko OHARA

Masamitsu MIURA

Independent
executive

Supplementary explanations
about the item concerned

Reasons for election

Before becoming an Audit &Supervisory Board Member of theCompany, Mr. Yasuhiro SATO was incharge of management at Mizuho
Financial Group, Inc. as Member ofthe Board of Directors and President &Group CEO, but he resigned from thisdirectorship before joining theCompany as an Audit & Supervisory
Board Member. Although, theCompany borrows funds from Mizuho
Financial Group, its dependence on
Mizuho Financial Group for borrowing
is not significant and therefore suchborrowing is considered unlikely toaffect the decisions of shareholders
and investors. Therefore, an overview
thereof is omitted.

Mr. Yasuhiro SATO has been elected as an Audit& Supervisory Board Member because he isexpected to contribute to improving audits by Audit& Supervisory Board Members at the Company
from a broad perspective since he has richexperience in corporate management, finance,
and accounting obtained from management offinancial institutions over many years as well as
deep knowledge and outstanding insights basedon such experience. Mr. Yasuhiro SATO has been
designated as an independent executive because
the criteria of independency established by stock
exchanges and those of the Company do not
apply to him and because the Company has
determined that there is no concern about conflictsof interest between him and general shareholders.



Ms. Keiko OHARA concurrently has aposition as a partner at the Kamiyacho
International Law Office, but there isnot specifically any interests between
the Law Office and the Company.

Before becoming an Audit &Supervisory Board Member of theCompany, Mr. Masamitsu Miura held
important police related posts, but heleft National Police Agency before
joining the Company as an Audit &Supervisory Board Member. In
addition, there is not specifically any
interest between National Police
Agency and the Company.

15

Ms. Keiko OHARA, who has long engaged in her
duties as a lawyer in Japan and abroad, possessesrich experience in legal issues as well as profoundknowledge and outstanding insights obtained fromsuch experience. She has been elected as an
Audit & Supervisory Board Member because she isexpected to contribute to improving audits by Audit& Supervisory Board Members at the Company.
Ms. Keiko OHARA has been designated as anindependent executive because the criteria of
independency established by stock exchanges andthose of the Company do not apply to her andbecause the Company has determined that there isno concern about conflicts of interest between her
and general shareholders.
Mr. Masamitsu MIURA, who has long engaged in
his police related duties, possesses richexperience in risk management and crisis
management as well as profound knowledge andoutstanding insights obtained from such
experience. He has been elected as an Audit &Supervisory Board Member because he isexpected to contribute to improving audits by Audit& Supervisory Board Members at the Company.
Mr. Masamitsu MIURA has been designated as anindependent executive because the criteria of
independency established by stock exchanges
and those of the Company do not apply to him andbecause the Company has determined that there
is no concern about conflicts of interest between
him and general shareholders.

Kazuhiro MIYAUCHI

Before becoming an Audit &Supervisory Board Member of theCompany, Mr. Kazuhiro MIYAUCHI
held important posts at the Board ofAudit of Japan, but he left the Board ofAudit before joining the Company asan Audit & Supervisory Board
Member. In addition, there is not
specifically any interest between the
Board of Audit of Japan and theCompany.

Mr. Kazuhiro MIYAUCHI, who has long engaged in
the operations of the Board of Audit of Japan,
possesses rich experience in finance andaccounting as well as profound knowledge andoutstanding insights obtained from such
experience. He has been elected as an Audit &Supervisory Board Member because he isexpected to contribute to improving audits by Audit& Supervisory Board Members at the Company.
Mr. Kazuhiro MIYAUCHI has been designated as
an independent executive because the criteria of
independency established by stock exchanges
and those of the Company do not apply to him andbecause the Company has determined that there
is no concern about conflicts of interest between
him and general shareholders.

[Independent executives]
No. of independent executives

9

Other matters related to independent executives
All external executives who satisfy the qualifications for being an independent executive are designated as independent
executives.

[Incentives]
Implementation of measures related to the grantingof incentives to Members of the Board

Introduction of the performance-based compensation system,
etc.

Supplementary explanation about the item concerned
The Company pays part of monetary remuneration to its Members of the Board (excluding External Members of the Board)in the form of performance-based compensation, the amount of which was determined according to the businessperformance during the term concerned. In addition to this, the Company pays performance-based compensation (stockcompensation) as non-monetary compensation. For the details of the performance-based compensation as monetarycompensation (monetary compensation) and performance-based compensation as non-monetary compensation (stockcompensation), please refer to “Disclosure of the policy for determining the amount of remuneration and its calculation
methods” in the Section [Category: Members of the Board remuneration].

Persons eligible for stock options
Supplementary explanation about the item concerned[Members of the Board remuneration]
Disclosure (of remuneration for individual Membersof the Board)

Remuneration is disclosed for only some Members of the
Board

Supplementary explanation about the item concerned
If the total amount of consolidated remuneration, etc. for a Member of the Board is 100 million yen or more, it will be
disclosed in the annual securities report.
No member is applicable for disclosure for the 164th business year.

Is there a policy for determining the amount of
remuneration and its calculation
methods?

Yes

16

Disclosure of the policy for determining the amount of remuneration and its calculation methods
(1)
(i).

Remuneration for Members of the Board
Basic policy on the determination of the details of remuneration, etc. for each Member of the Board
The remuneration, etc. for Members of the Board of the Company consists of fixed compensation and performancebased compensation, both of which are monetary compensation, as well as non-monetary performance-based
compensation (stock compensation).
The maximum total amount of fixed compensation and performance-based compensation (monetary compensation) is
70 million yen per month in accordance with the resolution at the 146th General Meeting of Shareholders held on June27, 2006.
The maximum total amount of performance-based compensation (stock compensation) is 35,000 points (1 point = 1
share), and 100 million yen per fiscal year respectively in accordance with the resolution at the 160th General Meetingof Shareholders held on June 24, 2020.
The above policy of remuneration was decided comprehensively considering the matters such as the business scale,content, and performance of both the Company and the Taisei Group, as well as the duties and responsibilities of each
Member of the Board.
When determining the details of remuneration, etc. for each Member of the Board, the Board will decide the details of
remuneration for each Member of the Board, taking account of the responsibilities and positions of each Member of theBoard (including the concurrent positions as an Executive Officer, if applicable; the same applies hereafter), based on
examination at the Remuneration Committee, which is authorized to deliberate the details of remuneration, etc. before
the Board’s decision.
The Remuneration Committee consists of more than half number of External Members of the Board and is chaired by
an External Members of the Board. External Audit & Supervisory Members are also included to ensure theappropriateness of deliberations. Thus, the Company has established a system that enables appropriate examinationof the remuneration, etc.

(ii). Policy on determination of the amount and the calculation methods of fixed Compensation
The fixed compensation shall be paid to each Member of the Board on a fixed date every month during the term ofoffice, and shall be determined according to the responsibilities of each Member of the Board, comprehensively taking
account of the Company’s business scale, content, and the duties and responsibilities of each Member of the Board,and the fixed compensation to each Member of the Board other than External Members of the Board, shall be
progressively increased according to his or her position.
(iii). Policy on determination of the contents, and the calculation methods of the amount or the number of performanceindicators for performance-based compensation; and policy on determination of the contents and the amount, or thenumber and the calculation methods for non-monetary compensation
The performance-based compensation is established for the purpose of raising the awareness of each Member of theBoard to contribute to business performance improvement and enhancement of corporate value. However, External
Members of the Board are not eligible for the performance-based compensation.
1) Performance-based compensation (monetary compensation)
The performance-based compensation (monetary compensation) shall be paid to Members of the Board on a fixed
day of each month during the term of office, and for the purpose of clarifying the interrelation between the Membersof the Board’s responsibility for the group management and the amount of remuneration for them, the contents
and the amount of the compensation shall be determined in consideration of Taisei Group’s overall businessperformance, which is designated to be linked to Taisei Group’s short-term business performance, as well as theindividual performance of each Member, which is designated to be linked to the achievement of the Member’s
individually predetermined goal.
Operating Income in the consolidated statements of income for the most recent fiscal year is used as aperformance indicator for Taisei Group’s overall business performance because it is an indicator that shows the
direct results of the Group's business activities, and provides the system so that the amount paid to each Memberof the Board will be progressively increased according to his or her positional ranks.
2)

Performance-based compensation (stock compensation)
The performance-based compensation (stock compensation) is designed to raise the awareness of Members of
the Board to contribute to improving medium- to long-term business results and enhancing corporate value by
clarifying the policy so as to link the remuneration of Members of the Board with Taisei Group's business results
and the value of share, and by sharing with shareholders not only the benefits of a rise in share prices but also therisk of a decline in share prices.
The stock benefit trust (= Board Benefit Trust) method is adopted, and the date of the annual General Meeting of
Shareholders is the grant date.
In accordance with the “Officers’ Share Benefit Regulations” established by the Board, each year during his or her
term of office, points are granted and accumulated. In the event that a Member of the Board retires and satisfies
the beneficiary requirements specified in the “Officers' Share Benefit Regulations”, the Company’s sharesequivalent to the cumulative number of points will be distributed as one (1) share per point after retirement throughprescribed procedures to determine the beneficiary. A part of the payment may be made in cash equivalent to themarket value of the Company’s shares instead of the Company’s shares.
Net income attributable to owners of the parent in the consolidated statements of income for the most recent fiscal
year is used as a performance indicator because it is an indicator that shows the final results of Taisei Group'sbusiness activities.

17

The points to be granted to each Member of the Board are determined separately for Representative Directors
and other Members of the Board respectively considering the status of achievement of business performance,
duties and responsibilities.
(iv). Policy on determination of the ratio of each type of compensation to be applied to the amount of remuneration, etc.
for each Member of Board
With respect to performance-based compensation, the Company has set performance values that serve as criteria formonetary compensation and stock compensation and has established a rule that the ratio of performance-based
compensation will increase when performance is favorable compared to the criteria.
From a medium- to long-term perspective, the Company has a plan to review for reducing the proportion of fixedcompensation and increasing the proportion of performance-based compensation.
However, the compensation for External Members of the Board shall be fixed compensation only.
(Reference)
The ratio of each type of compensation to be applied to the amount of remuneration, etc. for each Member of Board
other than External Members of the Board in the current fiscal year (ended March 2024) was roughly 90% for fixedcompensation, 10% for performance-based compensation (monetary compensation), and 0% for performance-based
compensation (stock compensation).
(2)

Remuneration for Audit & Supervisory Board Members
Remuneration for Audit & Supervisory Board Members is determined by consultation of the Audit & Supervisory Board,and the monthly total is limited to 12 million yen based on the resolution of the 134th General Meeting of Shareholders
held on June 29, 1994.

[Support system for External Members of the Board (External Audit & Supervisory Board
Members)]
The Secretarial Department and the Audit & Supervisory Board Members’ Department are supporting External Members of
the Board and External Audit & Supervisory Board Members with their execution of operations respectively. Prior to ameeting of the Board, which is in principle held once per month, materials data is distributed for perusal. Also, internal
Members of the Board or other employees give advance explanations concerning the proposed resolutions at the priorbriefing sessions. In addition, the meetings to exchange opinions are regularly held among various officers in order tofacilitate the information sharing and cooperation. Through those supporting system, deliberations and expression of
opinions are fully and actively carried during the meetings of the Board.

[Persons who have resigned as Representative Director and President, etc.]
Names of honorary members, and counsellors etc. who were formerly Representative Director and President, etc.

Name

Position/Status

Hyozo
YAMAMOTO

Honorary
MemberOsamu
HIRASHIMA

Honorary
MemberKanji HAYAMA

Honorary
MemberDutiesServing in economic
organizations and as anexternal executive atother companies
Serving in economic
organizations and as anexternal executive atother companies
Serving in economic
organizations and as anexternal executive atother companies

Work pattern/Conditions
Date of(Full-time/Partresignation as
Term of officetime/Remuneration paid President, etc.
or not)[Work pattern] Part-time[Remuneration] None

March 31, 1997 Not set[Work pattern] Part-time[Remuneration] None

March 31, 2001 Not set[Work pattern] Part-time[Remuneration] None

March 31, 2007 Not set

Total No. of honorary members, and counsellors etc. who were3
formerly Representative Director and President, etc.
Other matters[Commissioning procedures] Honorary Member: Resolution of the Board

2. Matters related to functions such as business execution, auditing, supervision, nominationand decisions on remuneration (outline of the current corporate governance system)
To ensure management flexibility and efficiency as well as neutral, objective monitoring and supervision, the Company has
established the following system.
18

(1)

The BoardIn order to act for the interests shared by the Company and its shareholders in response to the latter's mandate and toachieve sustained growth of the Company and to enhance its corporate value in the medium- to long-term, the Board
appropriately fulfills its roles and responsibilities, which consist mainly of three elements: (i) presenting major directionsof corporate strategy, etc., (ii) creating an environment to support proper risk-taking by executives, and (iii) ensuringhighly effective supervision over management and Members of the Board from an independent and objective
perspective.

(2)

The Committees within the Board
To invigorate the Board, the Company has established the Committees within the Board comprised of the Governance
System Review Committee, the Executive Personnel Committee, the Remuneration Committee, and the Sustainability
Committee. At the Executive Personnel Committee and the Remuneration Committee, more than half of the Chairperson
and members of each Committee are independent External Members of the Board to enhance the independency andobjectivity of the function and the accountability of the Board, where an independent External Audit & Supervisory Board
Member serves as an observer of the Committee from the viewpoint of securing the appropriateness of the deliberations
at the Committees. The Board obtains adequate involvement and advice from the Executive Personnel Committee andthe Remuneration Committee regarding the matters including diversity such as gender and the viewpoint of skills whenthe Board deliberates on important matters such as nomination of top management executives and Members of theBoard including a succession plan, and their remuneration. At the Governance System Review Committee and theSustainability Committee, the Chairperson thereof is an independent External Member of the Board, and the observer
thereof is an independent External Audit & Supervisory Board Member in order to strengthen the objectivity andaccountability of the Board’s functions.

(3)Management Committee and executive officer system
The Company has established the Management Committee as a decision-making organ for business execution, andthe Regulations of Management Committee stipulate the authority to decide the scope of business execution that canbe delegated to the Management Committee by the Board. To facilitate flexible business execution, the executive officer
system has been adopted.

(4)Internal audits, audits by Audit & Supervisory Board Members, and accounting audits
At the Company, Audit & Supervisory Board Members, accounting auditors, and the Auditing Department (an internal
audit unit) work together to conduct audits.
Based on annual audit plans, the Auditing Department, which has twelve (12) staff members, conducts internal auditsof the overall administrative and operational systems for managerial activities as well as the lawfulness and rationalityof business execution, including that of Group companies.
In accordance with the audit policy and the audit plan adopted by the Audit & Supervisory Board, Audit & Supervisory
Board Members audit the performance of duties by Members of the Board independently from the Members of theBoard, through attending meeting of the Board and other major meetings, hearing reports from the Members of theBoard and other executives, inspecting important documents, visiting audit of business units, and other means. Four(4) of the six (6) Audit & Supervisory Board Members are External Audit & Supervisory Board Members who havetechnical knowledge and are highly independent, thus maintaining a neutral and objective monitoring system. In
principle, the meeting of Audit & Supervisory Board is convened monthly and additionally as needed. In the meeting,
implementation status and the results are reported by each Audit & Supervisory Board Member, and discussions andresolutions are made for the matters concerning the execution of operations by Audit & Supervisory Members, in addition
to the matters legally required. And they are briefed by the Auditing Department and accounting auditors on audit plans
and the results of audits as required. The Audit & Supervisory Board Members' Department (consists with seven (7)members), which is independent from the Members of the Board, supports Audit & Supervisory Board Members infulfilling their duties.
Accounting audits are undertaken by KPMG AZSA LLC, and in fiscal year 2022, the accounting audits were conductedby Mr. Kensuke SODEKAWA, Mr. Takafumi MAEDA, and Mr. Tadashi SHIBATA, all of whom are certified public
accountants working with the audit corporation, and they were assisted by fourteen (14) certified public accountants,
five (5) members who passed examination of the Certified Public Accountants, and eighteen (18) other persons.
Accounting audits for major Group companies are also carried out by certified public accountants from KPMG AZSA,
who work with accounting auditors for the Company when auditing Group companies. The Auditing Department andthese accounting auditors report on audit plans and the results of audits to the Audit & Supervisory Board as well as the
Accounting Department and other internal control units as needed.

(5)•

Outline of limited liability agreements
Members of the Board and Audit & Supervisory Board Members
The Company has concluded with its Members of the Board (excluding those who are executive Members of the Boardor similar (gyomushikkou torishimari yaku) as stipulated in Item 15 (a) of Article 2 of the Companies Act) and Audit &Supervisory Board Members an agreement under which the liability for compensation stipulated in Paragraph 1 of Article
423 of the Companies Act shall be limited to 10 million yen or the sum of the amounts stipulated in Items 1 and 2 ofParagraph 1 of Article 425 of the Companies Act, whichever is higher, provided that they perform their duties in goodfaith without gross negligence.

•

Accounting auditors
The Company has concluded with its accounting auditors an agreement under which the liability for compensation
stipulated in Paragraph 1 of Article 423 the Companies Act shall be limited to 100 million yen or the sum of the amounts
stipulated in Items 1 and 2 of Paragraph 1 of Article 425 of the Companies Act, whichever is higher, provided that they
perform their duties in good faith without gross negligence.
19

3. Reasons for selecting the current corporate governance system
At the Company, External Members of the Board with rich experience and extensive knowledge supervise businessexecution from an independent and objective standpoint, and External Audit & Supervisory Board Members with technicalknowledge and abundant experience as well as full-time Audit & Supervisory Board Members from the Company who arefamiliar with internal operations work with accounting auditors and internal audit units to conduct audits. The Company has
selected the current system based on the belief that these factors guarantee the appropriateness of its operations.

20III Implementation of measures for shareholders and other stakeholders
1. Initiatives to invigorate the General Meeting of Shareholders and to ensure efficient exercise
of voting rights
Supplementary explanations
Prompt delivery of notices of theGeneral Meeting of Shareholders

To give sufficient time for consideration when shareholders are to exercise their voting
rights, the notices have been mailed at least three (3) weeks prior to the day of holding
a General Meeting of Shareholders. The notices are posted on the Company’s website
about a week prior to the mailing thereof.

Setting the date of the General
Meeting of Shareholders to avoid
the date many companies hold theshareholder meetings
Exercise of voting rights via
electronic voting platform

As part of shareholder services, the “exercise of voting rights via electronic voting
platform” has been in use since the General Meeting of Shareholders held in June
2006.
Voting right exercise services based on the reading of QR codes for smartphones havebeen in use since the Regular General Meeting of Shareholders held in June 2018.

Issuing of invitations to institutional
investors to participate on a
The Platform for Institutional Investors to Exercise Their Voting Rights Electronically,
platform that enables electronic
which is run by ICJ, Inc., has been in use since the General Meeting of Shareholders
exercise of voting rights and other held in June 2006, and each General Meeting of Shareholders is registered on theinitiatives to improve theplatform about four (4) weeks prior to being convened.
environment for the exercise of
voting rights
Provision of the notices (summary)in English

An English version of the notice for each General Meeting of Shareholders is produced
and submitted to the Tokyo Stock Exchange as well as posted on the Company's
website.

Other

Business reports and other documents for General Meetings of Shareholders include
visual aids to make them easier to understand.

2. IR-related activities
Supplementary explanations

Formulation and publication of theCompany’s disclosure policy

Does a representative
give explanation?

The IR Policy has been formulated.
https://www.taisei.co.jp/corp/rinen/pdf/ir_policy.pdf(Japanese)
https://www.taisei.co.jp/english/profile/philosophy/policies/p
df/ir_policy.pdf (English)

Holding of regular meetings forindividual investors

Yes / No

Holding of regular meetings foranalysts and institutional investors

Meetings to explain financial results are held twice a year
(in the second quarter and at the end of the term) with the
President in attendance. In the first and third quarters, theIR unit hosts online conferences.

Holding of regular meetings foroverseas investors

The President holds IR meetings for institutional investors
in Europe and Asia. In response to individual requests, aMember of the Board responsible for or divisions in charge Yes
participate in individual meetings, teleconferences and/or
conferences, etc.

Posting of IR materials on the
Company’s website

In addition to quick reports on financial results and data
books, materials for briefings on financial results are posted
in Japanese and English.
https://www.taisei.co.jp/ir/ (Japanese)
https://www.taisei.co.jp/english/ir/ (English)
Forms for inquiries to the IR unit are available on thewebsite.

21

YesEstablishment of a department(persons) in charge of IR

The Corporate Communication Department’s IR Office is
responsible for IR.

Other

3. Initiatives to respect the viewpoints of stakeholders
Supplementary explanations“Fundamental Corporate Governance Policy” stipulates that based on the Company’s
understanding of ESG and SDGs and having been fully aware of its position that theCompany is sustained by its stakeholders, customers, employees, business parents,
local communities and other various stakeholders, the Company shall satisfy its social
responsibilities that it undertakes and make efforts in improving its corporate value inInternal regulations and otherthe mid- to long-term periods.
guidelines stipulate that
“Action Guidelines for Taisei Personnel and the Taisei Group as a Whole” also
stipulates that when pursuing their business activities, the Taisei Group and Taisei
stakeholders' viewpoints shall be
Personal shall make certain that their words and actions are of value to their customers,
respected.
companies, shareholders, subcontractors, suppliers, and society as a whole.
“Human Resources Development Policy (Diversity, Equity & Inclusion Policy)” stipulates
that the Company shall respect diversity and improve an internal environment so thateach and every executive and employee can maintain high levels of engagement andplay active roles.
The Company’s Fundamental Sustainability Policy is to realize sustainability
transformation (SX) by working to resolve sustainability issues through businesses
centered on the construction industry, and to contribute to the development of a
resilient society where people can live affluent and cultural lives.
As for natural environment conservation, under TAISEI Green Target 2050 described in
the Environmental Policy, the Taisei Group aiming for realization of a Sustainable andEnvironmentally Friendly Society has set goals for three (3) societies: a decarbonizedsociety, a recycling oriented society, and a nature co-existing society, and for two (2)individual issues: forest resources & forest environment, and water resources & water
environment, and is pursuing various initiatives to achieve these goals.
Implementation of environmental
Regarding Respect for Human Rights, the Taisei Group clarifies its commitment tofulfilling the Group’s responsibility to respect human rights, and launched human rights
preservation, CSR, and otherdue diligence initiatives. The Group has especially formulated “Taisei Group
activities
Sustainable Procurement Guidelines” in order to prevent and mitigate violation ofhuman rights in the supply chain, and promote understanding and familiarization ofrespects for human rights through briefings, questionnaires and inspection visits.
In addition, the Group action guidelines provide “communication with local
communities” and “co-prosperity with society,” and as a good cooperate citizen, we
strive to promote dialogue and cooperation with society while contributing to thesustainable growth of society.
Specific initiatives are posted on our company website.
https://www.taisei-sx.jp/ (Japanese)
https://www.taisei-sx.jp/english/ (English)”The Taisei Group and Taisei Personnel shall communicate widely with the public, anddisclose accurate corporate information in a timely and appropriate manner” as statedin Action Guidelines for Taisei Personnel and the Taisei Group as a Whole, and “We
Formulation of policies and otherrecognize that the broad disclosure of important information about our corporate
guidelines to provide information to activities in a timely and appropriate manner contributes to our sustainable
stakeholders
development as a business entity by both encouraging public understanding of ourcompany and obtaining the public’s proper evaluation of our activities” as stated inInformation Disclosure Policy.
<Promotion of Health and Productivity Management>
The Company acknowledges that the well-being of its employees is not only essential
for cultivating a vibrant work environment but also for ensuring the happiness andwelfare of both the employees and their families. With this understanding, the Company
provides comprehensive support for the physical and mental health of its staff.
Specifically, the Company emphasizes post-health checkup interventions as well as
personalized consultations intended for those with long working hours or under severe
stress. The Company also implements measures to encourage employees to improvetheir health literacy by visualizing their health related issues through statistically
Other
aggregating results from the original health checkup management system and habits
related to daily life and meals. Moreover, the Company has introduced an educational
pension benefit system that provides educational support for families in the event thatan employee becomes unable to work due to death, injury, or illness and has to retire.
For mental well-being, the Company has established an Employee Assistance Program(EAP) consultation room, where employees can easily seek advice. The Company
offers consultation services, including face-to-face meetings with external counselors aswell as phone and email consultations that are available to both employees and theirfamilies. Especially for younger staff, the Company regularly administers health22

awareness surveys and encourages consultations with counselors if they areexperiencing stress or anxiety. Also, aiming to create a workplace environment wherefemale employees can make the most of their abilities and continue to play an activerole for a long time with peace of mind, the Company is actively addressing healthissues unique to women. As an outside specialist consultation service, the Company
has introduced a chat and online telephone consultation service through SNS, andoffers consultations on mental and physical health not only to female employees, butalso to their partners, family members, and colleagues and superiors who support
them. In addition, with the aim of supporting employees' life plans, the Company holds
educational seminars to improve employees' health literacy, focusing on the need to
face their current health conditions and provide necessary care (preconception care) in
preparation for future pregnancies. Further, upon requests by participants of theseminars, the Company provides them with a simplified kit that enables them to test
their fertility (the physical function necessary for pregnancy) free of charge, regardlessof gender. Moving forward, the Company will continue to advance its healthmanagement initiatives, focusing on engaging with younger employees, raisingawareness of mental health, and providing support to balance medical treatments withwork commitments.

23

IV Matters related to internal control systems, etc.
1. Fundamental approach to internal control s and their establishment
In order to secure a system for properly and efficiently executing business and to ensure the reliability of financial reporting,
the Company set out its “Fundamental Policy to Enhance Operational Compliance Systems” at the Board as follows:
Specific contents of the resolution(1)

Systems to ensure that Members of the Board and the employees carry out their duties in compliance with laws andregulations and the Articles of Incorporation(i).

Members of the Board shall recognize that compliance is at the core of good management and shall faithfully comply
with all compliance-related regulations, including the Action Guidelines for Taisei Personnel and the Taisei Group asa Whole.
(ii). The Company shall ensure that all the executives and employees recognize their compliance-related obligations:
by implementing programs recommended by the Compliance Committee, such as strict disciplinary
punishments for the executives and employees found to have violated a law or regulation, enhancement ofsystems to prevent collusive bidding practices, and ensuring the effective operation of the corporate ethics
helpline system; andby promoting compliance education and encouraging internal audits (self-audits) at the department level.
(iii). 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 by working closely with the individual corporate
bodies.

(2)
(i).

(3)

Systems to retain and manage information regarding the performance of duties by Members of the Board
The Company shall codify the rules and procedures concerning information and shall develop systems to properly
manage all information belonging to the Company in order to duly record and retain information relating to theperformance of Members of the Board of their duties, to prevent any leakage or unauthorized use of such information,and to effectively use such information.
Risk management rules for controlling risks of loss and other related internal systems(i).

The Company shall develop systems to properly manage primary risks, including those relating to quality, safety,
environment, compliance, information and profit and loss, in accordance with the Company’s fundamental policy fordevelopment of risk management system.
(ii). 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.
(iii). Each corporate body shall enhance its risk management capacity in an organized manner by providing its memberswith risk management education and other programs.
(iv). 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(i).

The Company shall establish the Management Committee as a decision-making body and adopt the executive officer
system that enables the Company to operate its business in a swift manner. In addition, the Company shall makethe decision-making function more vivid and fruitful and enhance the supervisory function of the Board by utilizing
the committees within the Board and consulting the External Members of the Board.
(ii). The Company shall develop and enhance the rules and procedures regarding the delegation of decision-making
and other powers to managers and the execution of the duties, to facilitate more efficient decision-making andmanagement processes, responding to changes in the managerial environment.

(5)

Systems to ensure proper operation of Group companies(i).

The Company shall promote to establish internal rules in each Group company regarding reporting requirements to
the Company in accordance with the Company's fundamental policy and operational guidelines concerning theGroup operation.
(ii). The Company shall establish a risk management system in each group company, promoting to establish internal
rules in each Group company for its risk management with respect to quality, safety, environment, compliance,
information, profit and loss and large-scale disaster and other major risks in accordance with the businesscharacteristics of each Group company.
In addition, the Company shall ensure the effectiveness of Group company’s risk management system through aninternal audit by the Auditing Department and a Group liaison meeting held by the Legal Department and otherdepartments of each Group company, promotion of risk management education in each Group company, andprovision of the Group helpline amongst other things.
(iii). The Company shall assist, advise and collaborate in the business of each Group company by clarifying the functions
and roles of each company in the Group, assisting each Group company to implement an organizational structure
appropriate for its business characteristics and size thereof and utilizing the management resources in the Group.
In addition, the Company shall conduct inspections to Group companies by the President and Chief Executive Officerof the Company from time to time to facilitate communication among its Group companies and to promote mutual
24

understanding and cooperation with respect to issues related to technology, production, marketing and sales,transaction and other issues surrounding the Group.
(iv). The Company shall share within the Group its philosophy (objectives and goals to be pursued), spirit (key concepts
all the executives and employees in our Group must adhere to), and code of conduct (the fundamental principles ofconduct for the organization and standards of behavior and decisions criteria which the executives and employees
in our Group shall adopt and strictly comply with), and the Company shall also establish a compliance system,
promoting to enhance internal rules appropriate for the business characteristics of each Group company.
In addition, the Company shall ensure the effective operation of the compliance system of each Group company
through internal audits conducted by the Auditing Department and Group liaison meetings held by the Legal
Department and other departments of each Group company, including the promotion of compliance education foreach Group company, and provision of the Group helpline.
(6)

Systems regarding the employees supporting Audit & Supervisory Board Members, the independence of such
employees from Members of the Board and ensuring effective instructions from Audit & Supervisory Board Members
to such employees(i).

Audit & Supervisory Board Members and General Manager of Human Resources Department shall discuss inadvance assignments, transfers, evaluations and other issues regarding the staff of the Audit & Supervisory Board
Members’ Department, whose primary role is to assist the performance of duties by Audit & Supervisory Board
Members.
(ii). Each department shall properly perform its duties in order to ensure that staff of the Audit & Supervisory Board
Members’ Department shall effectively follow the instructions from Audit & Supervisory Board Members.

(7)

Systems for reporting to Audit & Supervisory Board Members and preventing the adverse treatment of persons whomake reports(i).

For the purpose of auditing the internal controls of the Company and each Group company by Audit & Supervisory
Board Members, the Company shall determine the matters that the executives and employees of the Company andeach Group company, or any recipient of a report from such executive or employee of the Company, should report
to Audit & Supervisory Board Members, and shall establish the following systems:
1) A system in which Audit & Supervisory Board Members can receive reports from the executives and employeesof the Company at any time;2) A system in which Audit & Supervisory Board Members can receive reports from the executives and employeesof each Group company or a recipient of a report from such officer or employee; and
3) A system in which Audit & Supervisory Board Members shall receive reports of any violation of law or regulation
by any executive or employee of the Company through the corporate ethics helpline and the Group helpline.
(ii). The Company shall establish a system to prevent any adverse treatment of a person who makes a report under thepreceding paragraph based on the fact that he/she made such report.

(8)

Matters concerning policies regarding the allocation of costs arising from the performance of duties by Audit &Supervisory Board Members and systems to ensure that Audit & Supervisory Board Members can effectively conduct
the audit of the Company(i).

If an Audit & Supervisory Board Member claims costs arising from the performance of its duties, Members of theBoard shall properly handle such claim in order to ensure that the audit is effectively conducted.
(ii). Members of the Board representing the Company and Audit & Supervisory Board Members shall facilitate theirmutual understanding, through regular meetings, regarding the status of the audits conducted by Audit & Supervisory
Board Members, and other important issues.
(iii). The relationship amongst Audit & Supervisory Board Members shall be strengthened by measures such as:
Audit & Supervisory Board Members and General Manager of Auditing Department shall exchange 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)(i).

Systems to ensure the appropriateness of financial reports
The Company shall develop internal controls sufficient to ensure the appropriateness of all financial reports.

2. Fundamental approach to the elimination of antisocial forces and establishment of systems
to achieve this goal
The Company’s fundamental approach to the elimination of antisocial forces is to resolve against antisocial forces andgroups, and refuse improper demands as clearly stated in the Group Action Guidelines. The establishment of systems toachieve this goal is as described below.
(1) Establishment of supervisory sections and persons responsible for preventing undue demands
The supervisory sections are the General Affairs Section of the General Affairs Department at the head office and theGeneral Affairs Section or Administration Section of the Administration Department at branches. At least one person
responsible for preventing undue demands is posted at each administration unit of the head office and branches.
(2) Cooperation with external expert organizations
The Company acts in cooperation with police stations with jurisdiction, Centers for Removal of Criminal Organizations
and other related organizations, lawyers, and other experts as required.
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(3)

Collecting and management of information on antisocial forces
The Company constantly collects information through reports to and consultations with the police stations withjurisdiction, local Centers for Removal of Criminal Organizations with which it is affiliated, and so forth, and update withcollected information and control such information strictly.
(4) Contracts with business partners
To prohibit transactions with antisocial forces and groups, the Company introduces clauses to eliminate antisocial forcesin the general conditions of the contracts which the Company concludes with business partners.
(5) Preparation of response manuals
The Company has posted response manuals on its intranet to inform all executives and employees of its stance towards
antisocial forces, how to deal with them, and so forth.
(6) Provision of training
The Company provides risk management training and training programs by using e-learning to its executives andemployees, whenever necessary and in such training, it strives to educate them so that they will thoroughly eliminate
antisocial forces.

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V Other
1. Adoption of anti-takeover measures
Have anti-takeover measures been introduced?

No

Supplementary explanations about the item concernedNone

2. Other matters related to corporate governance systems, etc.
[Internal system related to the Company’s timely disclosure of corporate information]
The Company has established internal systems as indicated in the attached schematic diagram so as to disclose accurate
information fairly and appropriately while complying with the Financial Instruments and Exchange Act, related laws andordinances, and the regulations of stock exchanges.
The person responsible for handling the information to be disclosed instructs the department in charge of disclosure toconfirm and check the corporate information reported by responsible departments for disclosure with a focus on thefollowing two points.
(1) Timing of confirmation and checking
Each time an event occurs at a responsible department(2) Important points to be checked(a) Whether the content of information reported is appropriate in light of timely disclosure regulations(b) Whether the report is submitted at the proper time
Depending on the nature of the event, information may be disclosed in a timely manner with the approval of Chief of theBusiness Administration Division after taking account of the importance of timely disclosure, with such disclosure swiftly
reported to the Management Committed and the Board thereafter as necessary.

Shareholders/General Meeting of Shareholders
Election/Dismissal

Election/Dismissal

Election/Dismissal

Audit & Supervisory Board

Accounting auditor
Cooperation

6 Audit & Supervisory Board Members(Including4 External Audit &Supervisory Board Members)

Committees within the Board

Member of the Board/ the Board

Members/Audit & Supervisory Board

12 Members of the Board(Including 5 External
Members of the Board)

Audit

Prior
Deliberation
and Report

Appointment/Dismissal/Supervision

Audit & Supervisory Board
Members’ Department

Report/Recommendation

Executive Officers
Cooperation

Management Committee

Operation Committees

President and Chief Executive Officer• Sustainability Promotion Committee• Risk Management Committee, etc.

Cooperation
Auditing Department
Audit

Report/Recommendation

Internal audits
Internal auditsGroup Companies• Governance System Review Committee• Executive Personnel Committee• Remuneration Committee• Sustainability Committee

Direction/Supervision

Operating Divisions

Support/Guidance/Cooperation

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Special Committee• Compliance Committee

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