Governance Section

Message from the Chairman of the Board

I Will Contribute to Increasing theGroup’s Corporate Value by Enhancing
Trust between the Execution Side andthe Supervision Side.

Shigeyoshi TANAKA
Chairman of the Board,
Representative Director

On the Occasion of Assuming the Chair
Starting in April 2023, I succeeded Mr. YAMAUCHI as
Emeritus Counselor and assumed the role of Chairman of
the Board. I feel quite honored and humbled since I take on
this crucial role at the milestone of our 150th anniversary.
In April 2020, the Company undertook a review ofgovernance, which is aiming at strengthening the Board’s
supervisory function, enhancing deliberation, and accelerating decision-making in business execution, in order tofortify governance. I see my role as continuing along thispath, striving to further refine the governance structure of
the Group.
I will deepen communication between External
Members of the Board and Internal Members of theBoard. Leveraging my practical understanding of theGroup’s business and operations specifically at the worksite, I will work to enhance the effectiveness of our Board
as its Chairman and aim to increase corporate value.

Role of the Chairman of the Board
The Company’s Board currently comprises twelve (12)Members of the Board, four (4) of whom are External
ones. Internal Members of the Board and Executive
Officers are responsible for explaining agenda items. We
carry out highly objective and transparent deliberations byrespecting the opinions of External Members of the Board
and External Audit & Supervisory Board Members whobring specialized expertise and experience to the Board.
In this context, my role as Chairman is to select appropriate agenda items and facilitate discussions to ensurethat they serve as a forum for constructive debate andexchange of diverse opinions, thereby enhancing thequality of the discussions.
Concerning the agenda brought to the Board, weare delegating authority to the executive side based on
annual analysis of the Board’s topics. However, there isroom for improvement. The Board primarily focuses on

its supervisory function, and we will continue to review
the agenda to further enrich discussions on the broader
strategic direction of the Company, including its “desired
state” and “medium- to long-term value increase.”
Moreover, for the purpose of fostering deeper mutual
understanding between External and Internal Members of
the Board, we regularly hold board opinion-exchange meetings and open discussions. We plan to further rejuvenate
these board discussions by increasing such opportunities.
In addition, another important aspect of my role isto secure diverse human capital with the knowledge,
specialized skills, and experience that will contribute toour medium- to long-term vision for the Company, whichis to be a “pioneering corporate group contributing to
the development of a resilient society where people canlive affluent and cultured lives.” We will review the composition of the Board, considering diversity in terms ofinternal and external candidates, gender, etc., in anticipation of our future vision for the Company.

Initiatives for This Fiscal Year
This fiscal year is crucial for the Group to restore thetrust and credibility we have with our stakeholders. We
will work towards increasing the corporate value of theGroup by implementing effective monitoring measures forbusiness execution. This will allow us to surpass clients’
expectations in the value we deliver. In addition, we will
focus on building stronger trust between the execution
side and the supervision side, while also providing thenecessary support for our executives and employees
in the execution side to take appropriate risks aimed atdriving growth. Through implementation of all those measures, I will contribute to increasing the corporate value of
the Group.

TA I SE I A N N UA L R E P O R T 2 0 2 3 82

About the Taisei Group

Governance Section

Yasuhiro SATO
External Audit & Supervisory
Board Member
Elected since 2020

The roles of Audit & Supervisory Board Members have significantly
expanded compared to the past. Now, it is not only about traditional
auditing of the duties executed by Members of the Board but also providing
insights into the Company’s overall management. In other words, a new
aspect of the roles is to support the Company’s prospective growth froman auditing perspective. Based upon this understanding, I actually engage
in discussions about each project, offering candid opinions while keeping
Taisei Corporation’s leading position in the construction industry in mind.
So far, the governance reforms at Taisei Corporation have positively
impacted the Board’s operations and invigorated its discussions, showing that we are moving in the right direction. However, it seems that theexecution side is not yet accustomed to incorporating the perspectives
and concerns of External Members of the Board. I feel that there is an
opportunity here to more actively integrate the external viewpoints of theseExternal Members into our management strategies.
Governance and growth strategies are inextricably linked, and I aim tocontribute to shaping the new governance framework that will support theCompany’s future.
.

To Enhance the Effectiveness of Audits from anExternal Perspective

Seishi TASHIRO
External Audit & Supervisory
Board Memberr

83 T A I S E I ANNUA L R EPORT 2023

Sustainability Section

Governance Section

Data Section

Message form the External Audit & Supervisory Board Members

To Support the Company’s Growth from an Auditing
Perspective

Elected since 2020

Taisei Group’s Growth Strategy

The Audit & Supervisory Board Members and the Audit & Supervisory Board
have a duty to audit the performance of Members of the Board, taking into
account their fiduciary duties to shareholders. This is fulfilled to respond tosocietal trust through actions that contribute to both the integrity of corporate management and the enhancement of corporate value. In this context,
External Audit & Supervisory Board Members play a crucial role in enhancing
the effectiveness of these audits. They do this by offering perspectives andinsights from an external viewpoint, while collaborating with full-time Audit& Supervisory Board Members, the internal audit department, and theaccounting auditors.
It has been three years since I took on the role of an External Audit &Supervisory Board Member. I have noticed significant improvements in theselection of topics discussed during Board meetings and the amount of time
allocated for meaningful deliberation, compared to when I first assumed thisposition. These more dynamic discussions have contributed to enhanced
governance. Within the Audit & Supervisory Board, we scrutinize the agenda
items prior to meetings at the Board and engage in post-meeting discussions to assess the adequacy of the deliberations.
Moving forward, as an External Audit & Supervisory Board Member, I am
committed to making contributions that bring joy to all stakeholders such as
clients, shareholders, employees and society at large.

To Expect Greater Diversity as the Key to Future
Success
There are two elements I particularly pay attention to in my role as an Audit &Supervisory Board Member. The first is the concept of individual accountability
among Audit & Supervisory Board Members. This implies that we should constantly question how well we are fulfilling our responsibilities, not just towards
the executive management but also towards our fellow Audit & Supervisory
Board Members. The second is to be fully familiar with Taisei Corporation. By
comprehending not just the business operations but also the company culture,
we can better promote governance mechanisms that are truly suitable for ourorganization. In this context, the synergy between Internal and External Audit &Supervisory Board Members is paramount.
At the Board meetings, Audit & Supervisory Board Members often have
many opportunities to opine and are seen as proactive contributors to thecollective decision-making process. I also notice that various committees aim
to bolster governance by actively involving both Internal and External Audit& Supervisory Board Members as observers. However, I feel that there is stillroom for improvement in terms of diversity, especially concerning the genderand international background of Members of the Board and Executive Officers.
I anticipate that enhancing the diversity of human capital across the organization and fostering a wide range of skills and perspectives will be crucial for the
future growth and success of the Taisei Group.

Keiko OHARA
External Audit & Supervisory
Board Member
Elected since 2020

To Pursue Right Decisions from an Impartial Standpoint
External Audit & Supervisory Board Members are highly expected tomaintain an impartial and independent position in relation to the company.
While auditing the Members of the Board’s execution of duties, we remain
acutely aware of this impartiality. We meticulously evaluate whether theinternal control system is functioning as it should. Should any irregularities arise, we engage in comprehensive discussions with the Company toboth address the issue at hand and devise preventive measures for the
future. In addition, I believe it is crucial to continually ensure that the Audit& Supervisory Board receives timely and appropriate reports, enabling us
to make informed decisions.
At the Board meetings, I look forward to increasingly meaningful discussions informed by the hands-on experience of Internal Members of theBoard and the broader perspectives of External Members of the Board. The
synergy from these discussions, I believe, will further enhance the Company’s corporate value.
Currently, we are facing with challenges such as optimizing and streamlining work processes in compliance with labor hour regulations, and properly allocating human resources. I am committed to contributing, in whateverway I can, to providing employees with an organizational environment where
they can find satisfaction and fully dedicate themselves to their work.

Masamitsu MIURA
External Audit & Supervisory
Board Member
Elected since 2021

T A I S EI A N N UA L R EPO R T 2023 84

About the Taisei Group

Governance Section

Taisei Group’s Growth Strategy

Sustainability Section

Data Section

Governance Section

C o rp o ra t e G o v er n an ce

Corporate Governance▎ Our Fundamental Approach
The Taisei Group’s fundamental approach to corporate governance is to ensure the swiftness, appropriateness, fairness, and transparency in management decision-making in order to earn the trust of society whilepursuing sustained development as a business.
Corporate Governance / Internal Controls
Fundamental Corporate Governance Polity

Evolution of the Company’s GovernanceFurthermore, the Company has set up the Sustainability Promotion Committee and the Risk Management Committee. These
operational committees deliberate on matters concerning consultations with the Management Committee and the President.
To ensure thorough compliance, the Compliance Committee, chaired by an external expert, has been established as a special
committee to address consultations with the President.
The Audit & Supervisory Board receives reports from each member about the status and outcomes of their audits. They
discuss and decide on statutory issues and those related to the performance of Audit & Supervisory Board members’ duties.
Periodic reports on audit plans and results are also received from both the internal Auditing Department and the external
Accounting Auditor. This board includes six (6) members: two (2) internal and four (4) external, ensuring a neutral and objective
oversight mechanism with the help of External Audit & Supervisory Board Members who possess specialized knowledge andmaintain a high level of independence.

Corporate Governance Structure（As of July 1, 2023)
Shareholders / General Meeting of Shareholders

1999● Jun. 1999

Aug.
● Nov. 2000

● Jun. 2003

Introduced the executive officer system
Established the Ethics Committee (now Sustainability Committee)

Established the Executive Personnel Committee

Election/Dismissal

Election/Dismissal

Election/Dismissal

Committees within the Board
Accounting Auditor

Cooperation

Members of the Board/
the Board

Audit & Supervisory
Board Members/
Audit
Audit & Supervisory Board

Elected an External Member of the Board for the first time

Prior
Consultation
and Report● Governance System Review

Committee● Executive Personnel Committee● Remuneration Committee● Sustainability Committee

Cooperation● May 2006

2006

Jun.		

Formulated the Fundamental Policy to Enhance Operational Compliance Systems		
Established the Remuneration Committee

Appointment/
Dismissal/Supervision

Abolished the executives’ retirement benefits system

Executive Officers● Jun. 2010

Elected an Independent External Audit & Supervisory Board Member● Apr. 2014

Elected an Independent External Member of the Board● Nov. 2015

Formulated the Fundamental Corporate Governance Policy● Jan. 2020

Established the Governance System Review Committee

Management Committee
President andChief Executive Officer

Cooperation

2015

Apr.

Established the Management Committee

Taisei Corporation has chosen a company structure with an Audit & Supervisory Board. The board of directors (the “Board”) focuseson the Company’s sustainable growth and the enhancement of corporate value in the medium-to-long-term. Its primary roles are: (i)to indicate the future directions from wide viewpoints in respect of the corporate strategy, (ii) to establish an environment that supports appropriate risk-taking by the senior management, and (iii) to effectively oversee the management and Members of the Board
from the independent and objective viewpoints. The board comprises twelve (12) members: eight (8) from within the Company andfour (4) external members. These external members of the Board, consisting of three (3) men and one (1) woman, provide an objective perspective, enriching board deliberations with diverse views and strengthening management oversight.
To invigorate its operations, the Board has established several internal committees: the Governance System Review Committee, the Executive Personnel Committee, the Remuneration Committee, and the Sustainability Committee.
The Management Committee, serving as the highest decision-making body on the execution side, deliberates and resolves
business execution matters delegated by the Board. Chaired by the President, the Committee includes eleven (11) members
chosen by the Board.

Report/Recommendation

Internal auditsGroup Companies

Operations Committees● Sustainability Promotion Committee● Risk Management Committee, etc.

Special Committee

Auditing Department

Audit

Introduced a performance-based compensation (stock compensation) system▎ Overview of Corporate Governance System

Report/Recommendation

Internal audits● Compliance Committee

Direction/Supervision

Operating Divisions

Support/Guidance/
Cooperation

Committees within the Board （As of July 1, 2023)
Name

Terms of reference

Governance System
Review Committee

Consideration of the development andoperation of governance systems

Executive Personnel
Committee

Consideration of personnel of Members of
the Board and Executive Officers, etc.

Remuneration
Committee

Consideration of remuneration for
Members of the Board and Executive
Officers

Sustainability
Committee

Consideration of strengthening the sustainability management of the entire Group,
including the Company

Members

Observers

Explanatory
notes

Chairperson

EMB*1

Chairperson

EASBM*2

Chairperson

IMB*3

Chairperson

FASBM*4*1 External Member of the Board *2 External Audit & Supervisory Board Member *3 Internal Member of the Board*4 Full-Time Audit & Supervisory Board Member

85 T A I S E I ANNUA L R EPORT 2023

T A I S EI A N N UA L R EPO R T 2023 86

About the Taisei Group

Governance Section

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

C o rp o ra t e G o v er n an ce▎ Skill Matrix▎ Analysis and Evaluation of the Overall Effectiveness of the Board⃝ Expertise and experience expected from Members of the Board and Audit & Supervisory Board Members

The Board of the Company analyzes and evaluates effectiveness of the Board and discloses the results annually.

Business
Management

Legal Affairs andRisk Management

Finance andAccounting

Global Experience

Sustainability

Sales/MarketingTechnologies

●

●

●

●

Members of the Board

Shigeyoshi TANAKA●

Yoshiro AIKAWA

●

●

●

●

Hiroshi TSUCHIYA

●

●

●

●

Masahiko OKADA●

Hiroshi KIMURA

●

●

●

●

Mayuki YAMAURA

●

●

●

Yuichiro YOSHINO

●

●

●

Toshiyuki TSUJI

●

●

●

●

External members●

Atsuko NISHIMURA

●

●

●

●

●

●

●

Fumiya KOKUBU

●

●

●

Tsutomu KAMIJO

●

●

●

Takashi HAYASHI●

Shuichi OKUDA
External members

Audit & Supervisory Board Members

Norio OTSUKA

Yasuhiro SATO

●

●

●

●

●

●

●

●

Seishi TASHIRO

●

●

●

１．FY2022 initiatives based on FY2021 evaluation

In order to strengthen supervisory functions and invigorate the deliberations at the Board, and to accelerate decision-making
on business execution, the Company reviewed its governance system in March 2020, which includes a review of agenda items
to be resolved by the Board, and further delegation of its authority to executives accordingly.
Taking account of the review, since FY2020, we have strived to enhance the effectiveness of the Board, and we have been
also trying to address the issues found in the effectiveness review in FY2021 as follows:ａ）
	Enhancing discussions on the appropriate governance system, including the size and composition of theBoard from a medium- to long-term perspective	As an ongoing issue, the Executive Personnel Committee deliberated on the topics to be considered, including
the composition of the members of the Board.
ｂ） To the appropriate extent, further delegation of authority to executives and the implementation of deeper
deliberations on important management issues
	Based on the analysis of the agenda items, the Board secured enough time for deliberations by narrowing
down the number of agenda items, reviewing the matters to be reported, making documents and briefings in
a concise manner.
ｃ） Improving the effectiveness of deliberations at the Committees within the Board
In accordance with the topics to be deliberated, we made efforts to deepen deliberations on important issues
by ensuring sufficient deliberation time.
ｄ） Discussing specific measures to strengthen the effectiveness of group governance	In order to restructure its group governance, the Company implemented measures such as establishing thesystem to exchange personnel between the Company and the Group companies and setting up a management committee at each of the major Group companies.

Keiko OHARA

●

●

●

２．Overview of the FY2022 evaluation

Masamitsu MIURA

●

●

●

The method used to evaluate effectiveness in FY2022, and the results of the evaluation are as outlined below.

Note: The above matrix indicates skills particularly expected for Members of the Board and Audit & Supervisory Board Members and does not list all skills that Members of theBoard and Audit & Supervisory Board Members currently have.

⃝ Concepts behind the above “Expertise and Experience”●B usiness Management

Skills for management in General

Experience as a top executive of a company or corporation, or practical insights related to our business operations.
●L egal Affairs and Risk Management

Expertise in legal affairs and risk management, or possessing attorney qualifications.
●Finance and Accounting

Expertise in finance and accounting, management experience in a financial institution, or credentials as a certified public
accountant or tax accountant.
●G lobal Experience

Experience in overseas business or insights into global management, or a comprehensive understanding of international affairs.
●Sustainability

Knowledge and experience in renewable energy, environmental sectors, human resource development, diversity, social
contributions, corporate governance, and other related fields.
Skills for theCompany’s
business●S ales/Marketing

Insights and experience in sales and marketing pertaining to our business operations.
●Technologies

Knowledge and experience regarding technologies relevant to our business operations.

87 T A I S E I ANNUA L R EPORT 2023

Data Section(1) Evaluation Method and Process⃝T he 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 theself-evaluations.
⃝T he evaluation items in the questionnaire are as listed below. Items 1-5 consisted of five-grade assessments
and free descriptions, and Item 6 comprised free descriptions.
《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-TermBusiness Plan; 6. General Evaluation of the Board⃝ The External Members of the Board conducted an overall assessment towards the result of the self-evaluations collated by the secretariat.
⃝A t the same time, a lawyer prepared a third-party’s opinion towards the result of self-evaluations.
⃝T hen the Board deliberated on the effectiveness based on the overall assessment and the third-party’s
opinion.
(2) Overview of the Evaluation Results⃝S ince the Board was able to secure a considerable deliberation time towards medium- and long-term management issues, it was assessed that the functions of the Board were improving, while there were somematters which needed to improve from the standpoint of the roles and responsibilities of the Board. In orderto 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 governance systemｂ）
To delegate further authority to executives to the appropriate extentｃ）
To invigorate deliberations furthermore based on the roles and responsibilities of the Board from a medium		 to long-term perspective

T A I S EI A N N UA L R EPO R T 2023 88

About the Taisei Group

Governance Section

Sustainability Section

Governance Section

Data Section

C o rp o ra t e G o v er n an ce▎ Ensuring the Credibility of Financial 		

ReportingInternal controls on financial reporting based on the
Financial Instruments and Exchange Act are recognized as
one of the most important issues for a corporation. We have
set up the internal systems including daily monitoring toensure the credibility of the financial reporting disclosed tothe public. The effectiveness of the system is evaluated by
the Auditing Department and audited by KPMG AZSA LLC.
The results are disclosed in the Internal Control Report andin the Audit Report of Internal Controls. We will fulfill oursocial responsibility as a corporation by continuing to ensure
the effectiveness of these internal controls.
In order to continue to operate the internal control
systems relating to financial reporting in a sound manner, we
are also publishing messages from the President, implementing e-learning, and other campaigns to raise awarenessamong executives and employees.

▎ Promotion of Internal Controls
At Taisei Corporation, in May 2006, the Board established
the Fundamental Policy to Enhance Operational
Compliance Systems, which was revised in July 2022. This
policy is designed to ensure that as a Group, we conduct
operations both appropriately and efficiently and maintainthe reliability of financial reporting. To further enhancecompliance and risk management, the Company undertakes various measures. This includes providing training on
compliance with the Antimonopoly Act, conducted byexternal lawyers, primarily targeting executives and staff inthe sales division.

Fundamental Policy to Enhance Operational Compliance Systems▎ Election, Dismissal, and Development 		

Plan of Executives

When nominating the Member of the Board candidates andappointing executive officers, we consider qualifications
and overall balance based on individual backgrounds,
achievements, personalities, knowledge, experience, andabilities. Additionally, we take into account diversity
aspects, including gender, international exposure, career
history, and age. Our aim is to select individuals who cancontribute to the sustainable growth of the Company andenhance its value in the medium-to-long-term.
Furthermore, the Board identifies skills essential forachieving medium- to long-term objectives and theMedium-Term Business Plan. Nominations for Board
membership are based on these identified skills. If thequalifications expected at the time of election are notrecognized, the possibility of dismissal is considered.
Regarding the development plan for executives, we
identify and nurture management candidates to ensure
their retention and commitment. Our training programs
focus on equipping them with a broad understanding of theexternal business environment and proficiency in corporate
governance and management strategies.
In the program, we offer opportunities to gain insightsfrom the management perspective from the early stages,
such as participating as observers in important meetings
including Management Committee, and organizing
sessions to exchange opinions with external Members of
the Board. By attending externally organized training
sessions, our management candidates get the opportunity
to interact with leaders from various industries, aiming tobroaden their knowledge and network. We are actively
working to develop this approach systematically.

89 T A I S E I ANNUA L R EPORT 2023

Taisei Group’s Growth Strategy▎ Top Management Seminar▎ Remuneration, Etc.

Top management convenes for keynote lectures byexternal speakers and to engage in discussions about
management challenges, applying insights to organizational operations.

① Matters Concerning Policies on Determination of theRemuneration, Etc. for Each Member of the Board
Based on the deliberation by the Remuneration Committee,
the Board decided on a policy on determination of the content of compensation, etc. for each Member of the Board at
the Board meeting held on February 25, 2021. The details
are as follows:▎ Support System for External Executives
The Secretarial Department supports our External Membersof the Board, while the Audit & Supervisory Board
Members’ Department aids our External Audit &Supervisory Board Members. Before each monthly the
Board meeting, relevant materials are distributed andpre-meeting briefings are held. These sessions allow for
explanations by internal Members of the Board on agenda
items. Regular opinion-exchange sessions and site visits
further foster information sharing and collaboration among
the Members of the Board. This support structure ensuresthorough and lively discussions during Board meetings.

▎ Dialogue with Shareholders and Investors
Taisei Corporation is committed to fostering constructive
dialogues with shareholders and investors as we strive forsustainable growth and enhanced corporate value in themedium-to-long-term. Our timely and appropriate information disclosures lay the foundation for these dialogues.
In alignment with our Information Disclosure Policy andthe Fundamental Corporate Governance Policy, we ensurecompliance with legal and stock exchange regulations
when revealing financial results, management strategies,
risk factors, governance structures, human capital management, intellectual property, and sustainability initiatives.
We also strive to share up-to-date insights about ourbusiness activities with stakeholders through our website
and annual reports.
For dialogue with shareholders and investors, our actions
are grounded in our IR Policy. We promote constructive
dialogue with our stakeholders through interviews, IR
briefings, and general meetings of shareholders.
Specifically, we conduct semiannual financial results
briefings, hold individual meetings for both domestic andforeign institutional investors, and engage in overseas IR
activities. Our Taisei Circle newsletter serves as a communication tool, offering shareholders insights into our
focused business activities and ESG initiatives.
Internally, we document these dialogues and interactions. Reports capturing these engagements are sharedmonthly with senior management and presented in detail to
the Members of the Board at least twice a year, ensuringthat our investor relations activities contribute to enhancing
our management capabilities.

Taisei Circle(Shareholder Newsletter)

Shareholder newsletter / Status of dialogue with shareholders,investors and others

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 the Board(including the concurrent positions as an Executive Officer, if
applicable; the same applies hereafter), based on deliberation
at the Remuneration Committee, which is authorized to deliberate the details of remuneration, etc. before the Board’s
decision. The Remuneration Committee shall comprise of
Members of the Board (internal) and the same numbers ofExternal Members of the Board as those of Internal Members
and shall be chaired by an External Member of the Board.
Furthermore, an External Audit & Supervisory Board Member
shall be added as a member of the Committee from theviewpoint of securing adequateness of the deliberations at
the Committee. Thus, the Remuneration Committee establishes the system to properly consider the details of remuneration, etc. for each Member of the Board.

1．Fundamental policy on the determination of the detailsof remuneration, etc. for each Member of the Board
The remuneration, etc. for Members of the Board of the Company consists of fixed compensation and performance-based
compensation, both of which are monetary compensation, as
well as non-monetary performance-based compensation (stockcompensation). The above policy of remuneration was decided
comprehensively considering the matters such as the businessscale, content, and performance of both the Company and theTaisei Group, as well as the duties and responsibilities of each
Member of the Board.

Schematic diagram of remuneration of Members of the Board of the Company
Maximum

60.0%

Current
Business Year

82.3%

Minimum

100.0%

31.3%

17.7%

8.7%

■ Fixed compensation (Monetary compensation)■ Performance-based compensation(Monetary compensation)■ Performance-based compensation(Stock compensation)

Notes: 1.The above ratio is the remuneration for President and Chief Executive Officer, Representative Director calculated as an example.
2.Remuneration for External Members of the Board is the Fixed Compensation only, and the Performance-based Compensations
are not applicable to the remuneration.

Composition of the Remuneration Committee
Members of Board(Internal Members)

External Members of Board

3

Number ofMembers

2．Policy on determination of the amount and the 				 calculation methods of fixed Compensation
The fixed compensation shall be paid to each Member of theBoard on a fixed date every month during his or her 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 theduties and responsibilities of each Member of the Board, andthe fixed compensation to each Member of the Board otherthan External Members of the Board, shall be progressively
increased according to his or her position.
3．Policy on determination of the contents, and thecalculation methods of the amount or the number of
performance indicators for performance-based
compensation; and policy on determination of thecontents and the amount, or the number and thecalculation methods for non-monetary compensation
The performance-based compensation is established
for the purpose of raising the awareness of each
Member of the Board to contribute to business performance improvement and enhancement of corporate

4Note: One observer is included.

value. However, External Members of the Board are noteligible for the performance-based compensation.
(a) Performance-based compensation (monetary 		
compensation)
The performance-based compensation (monetarycompensation) shall be paid to each Member of theBoard on a fixed date every month during his or her
term of office and the contents and the amount of thecompensation shall be determined based on our
Company’s short-term performance.
Net income attributable to owners of parent in the
consolidated statement of income for the most recent
consolidated fiscal year is used as a performanceindicator because it is an indicator that shows the final
results of Taisei Group’s business activities, and provides the system so that the amount paid to each
Member of the Board will be progressively increased
according to his or her positional ranks.
T A I S EI A N N UA L R EPO R T 2023 90

About the Taisei Group

Governance Section

The points to be granted to each Member of the Board
are determined separately for Representative Directors andother Members of the Board respectively considering thestatus of achievement of business performance, duties andresponsibilities.

4．Policy on determination of the ratio of each type ofcompensation to be applied to the amount of
remuneration, etc.
With respect to performance-based compensation, theCompany has set performance values that serve as criteria
for monetary compensation and stock compensation andhas 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 theBoard shall be fixed compensation only.
②M atters Related to the Policy on Determination of theAmount and the Calculation Methods of Remuneration, Etc. for Audit & Supervisory Board Members
The remuneration, etc. for Audit & Supervisory Board
Members consists only of fixed remuneration, and the amountfor each Audit & Supervisory Board Member is determined by
the Audit & Supervisory Board through consultation.

③ Matters concerning the resolution of the General Meeting of Shareholders on the remuneration, etc. for Members of theBoard and Audit & Supervisory Board Members
Type of remuneration,
etc.

Compensation limit

Date of resolution at
the General Meeting of
Shareholders

Up to ¥70 million per month

June 27, 2006
(The 146th General Meeting of
Shareholders)

Fixed compensation

Members of the
Board

Performance-based
compensation(Monetary compensation)

Audit & Supervisory
Board Members

Number of the Members
applicable for payment at
the time of resolution
14(including two External Membersof the Board)
12

Up to ¥100 million, 35,000 points
per fiscal year
(1 point = 1 share of stock)June 24, 2020
(The 160th General Meeting of
Shareholders)8

Fixed compensation

Up to ¥12 million per month

June 29, 1994
(The 134th General Meeting of
Shareholders)5(including two External Audit &Supervisory Board Members)

Total Amount of remuneration, etc.
(Millions of yen)Non-monetary compensation

Monetary compensation⃝ Activities of the FY2022 Board and Audit & Supervisory Board by External Members
Category

Name

Major activities

Atsuko NISHIMURA

Based on her perspective and broad insight as a diplomat, she oversaw the management of the Company andprovided advice on the execution of business at the Board from an objective and neutral standpoint as an External Member of the Board. Additionally, as chairperson of the Governance System Review Committee, which is a
pre-deliberative body of the Board, she led discussions on how the Group’s governance system should adapt tochanges in the business environment.

Takao MURAKAMI*

During his tenure, based on his perspective and broad insight as a manager, he supervised the Company’s
management and provided advice on business operations at the Board from a neutral and objective standpoint
as an External Member of the Board. Furthermore, until his resignation on September 30, 2022, as the chairmanof the Executive Personnel Committee, a preliminary deliberation body of the Board, he spearheaded discussions on the skills Board members should possess and the plans for developing managerial personnel.

Norio OTSUKA

From a managerial perspective and with extensive knowledge, he supervised the management of the Company
and provided advice on business operations at the Board from an objective and neutral standpoint as an External Member of the Board. Moreover, as the chairman of the Remuneration Committee, a preliminary deliberationbody of the Board, he led discussions on how executive remuneration should adapt to changes in the businessenvironment. After his appointment in October 2022, he also chaired the Executive Personnel Committee, where
he directed discussions on the required skills of Board members and managerial development plans.

Fumiya KOKUBUWith his managerial viewpoint and vast knowledge, he supervised the Company’s management and gave advice
on business operations from an objective and neutral position as an External Member of the Board at Board meetings. Additionally, as the chairman of the Sustainability Committee, a pre-discussion entity of the Board, he led thediscourse on the direction of sustainability management, among other topics.

Yasuhiro SATO

Drawing from his vast experience and comprehensive insight as a financial institution manager and his extensive
knowledge of finance and accounting, he provides opinions as necessary.

Seishi TASHIRO

Given his rich experience and wide-ranging expertise from the Board of Audit of Japan, along with his deep
understanding of finance, accounting, and auditing, he voices his opinions as needed.

Keiko OHARA

She provides her viewpoints when required, based on her specialized and advanced knowledge as an attorney,
coupled with her extensive international experience and understanding of diversity.

Members of
the Board

Audit &
Supervisory
Board Members

his comprehensive experience and profound insight into police administration, including international
Masamitsu MIURA Utilizing
investigations, he offers his perspectives when necessary.
* Member of the Board Mr. Takao MURAKAMI resigned from his position as an External Member of the Board on September 30, 2022.
Note: In the ongoing “(Tentative Name) Sapporo Kita 1 Nishi 5 Project undertaken by our Sapporo branch, we failed to satisfy steel erection accuracy requirements. External
Members of the Board Ms. Atsuko NISHIMURA, Mr. Norio OTSUKA, and Mr. Fumiya KOKUBU, as well as External Audit & Supervisory Board Members Mr. Yasuhiro
SATO, Mr. Seishi TASHIRO, Ms. Keiko OHARA, and Mr. Masamitsu MIURA, did not recognize the fact until it was turned out, but had been drawing attention to theCompany since early stage from the viewpoint of compliance and corporate governance. In addition, since the incident was found out, each of them has appropriately
fulfilled their responsibility by offering suggestions to prevent the Company from repeating similar failures and expressing each view with respect to the necessity ofenhancing internal controls and other matters.

Holding record and attendance situation

Performance-based
compensation(Stock compensation)

Category

Representative
Directors

Fixed compensation

Performance-based
compensation

Stock compensation

Board

Audit & Supervisory Board

Governance System Executive Personnel
Review Committee
Committee

Remuneration
Committee

Sustainability
Committee

13 meetins in total

15 meetins in total

4 meetins in total

4 meetins in total

2 meetins in total

2 meetins in total

Takashi YAMAUCHI

12/13 ( 92%)—－

3 / 4 ( 75%)

2 / 2 (100%)—

Yoshiro AIKAWA

13/13 (100%)—

4 / 4 (100%)

4 / 4 (100%)

2 / 2 (100%)

2 / 2 (100%)

Name

Shigeyuki SAKURAI

13/13 (100%)—

4 / 4 (100%)

4 / 4 (100%)

2 / 2 (100%)

2 / 2 (100%)

Shigeyoshi TANAKA

12/13 ( 92%)—

3 / 4 ( 75%)

3 / 4 ( 75%)

1 / 2 ( 50%)

1 / 2 ( 50%)

Number of eligible
recipients(Persons)

Norihiko YAGUCHI

13/13 (100%)—

4 / 4 (100%)

—

—

—

Hiroshi KIMURA

13/13 (100%)

—

—

—

—

—

Atsushi YAMAMOTO

13/13 (100%)

—

—

—

—

—

Yoshihiro TERAMOTO

12/13 ( 92%)

—

—

—

—

2 / 2 (100%)

Total amount of remuneration in kind (Millions of yen)

Members of the Board(External Members)

669
(54)

564
(54)

105
(0)

0
(0)

12
(4)

Audit & Supervisory
Board Members(External Members)

124
(57)

124
(57)

—
—

—
—

6
(4)

Notes:
1. Among the types of monetary compensation, the performance indicator of the performance-based compensation should be an indicator that shows the final results of our Group’s businessactivities. Thus, the Company adopts the net income attributable to owners of parent in the consolidated statements of income for the most recent consolidated fiscal year. The total sum of
the net income attributable to owners of parent in the consolidated statements of income for the most recent consolidated fiscal year is ¥47,124 million.
2. Stock compensation (non-monetary compensation) adopts the method of the Board Benefit Trust (=BBT), 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 to one (1) share per point.
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 shares equivalent to the cumulative number of points will be distributed after retirement through prescribed procedures to determine the beneficiary. A part of the payment may be made in cash equivalent to the market valueof the Company’s shares instead of the Company’s shares.
		 The stock compensation is also categorized as performance-based compensation. Therefore, net income attributable to owners of parent in the consolidated statements of income” for themost recent consolidated fiscal year is adopted as the performance indicator of the stock compensation because it is an indicator that shows the final results of Taisei Group’s businessactivities. The net income attributable to owners of parent in the consolidated statements of income for the current consolidated fiscal year is ¥47,124 million.
3. We judge that the contents of remuneration paid to Members of the Board during this fiscal year are within the maximum amount approved at the General Meeting of Shareholders subject tothe basic policy determined by the Board on the determination of the details of remuneration, etc. for each Member of the Board, and also judge that the contents of remuneration determinedby the Board are also in accordance with the determination policy, because the contents of remuneration were determined at the Board based on deliberations at the Remuneration
Committee, which is authorized to deliberate the details of remuneration, etc. before the Board’s decision.

91 T A I S E I ANNUA L R EPORT 2023

Data Section

Governance Section⃝ Attendance Situation of Board Meetings and Audit & Supervisory Board Meetings④ The total amount of remuneration for Members of the Board and Audit & Supervisory Board Members, etc.

Category

Sustainability Section

C o rp o ra t e G o v er n an ce(b) Performance-based compensation (stock compensation)
The performance-based compensation (stock compensation) is designed to raise the awareness of Members of theBoard to contribute to improving medium- to long-termbusiness results and enhancing corporate value by clarifying linkage between the remuneration of Members of theBoard with Taisei Group’s business results and the value ofshare, and by sharing with shareholders not only the benefits of a rise in share prices but also the risk of a decline inshare prices.
The stock benefit trust (= Board Benefit Trust) method isadopted, 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 to one (1) share per point. In theevent that a Member of the Board retires and satisfies thebeneficiary requirements specified in the “Officers’ Share
Benefit Regulations,” the Company’s shares equivalent tothe cumulative number of points will be distributed after
retirement through prescribed procedures to determine thebeneficiary. A part of the payment may be made in cash
equivalent to the market value of the Company’s shares
instead of the Company’s shares.
As well as the performance-based compensation (monetary compensation), net income attributable to owners ofparent in the consolidated statements of income for themost recent consolidated fiscal year is used as a performance indicator because it is an indicator that shows the
final results of Taisei Group’s business activities.

Category

Taisei Group’s Growth Strategy

Members of
the Board

Audit &
Supervisory
Board
Members

Atsuko NISHIMURA

13/13 (100%)—

4 / 4 (100%)

4 / 4 (100%)

2 / 2 (100%)

2 / 2 (100%)

Takao MURAKAMI*1

5 / 7 ( 71%)—

1 / 2 ( 50%)

1 / 2 ( 50%)

2 / 2 (100%)0/1(

Norio OTSUKA

13/13 (100%)—

4 / 4 (100%)

4 / 4 (100%)

2 / 2 (100%)

2 / 2 (100%)0%)

Fumiya KOKUBU

13/13 (100%)—

4 / 4 (100%)

3 / 4 ( 75%)

2 / 2 (100%)

2 / 2 (100%)

Takashi HAYASHI*2—

15/15 (100%)

4 / 4 (100%)

—

—

—

2

Akihiko NOMA*—

15/15 (100%)

—

—

—

—

Yasuhiro SATO—

14/15 ( 93%)—4 / 4 (100%)——

Seishi TASHIRO—

15/15 (100%)——

2 / 2 (100%)—

Keiko OHARA—

15/15 (100%)

—

—

—

2 / 2 (100%)

Masamitsu MIURA—

15/15 (100%)

4 / 4 (100%)

—

—

—

*1 Member of the Board, Mr. Takao MURAKAMI resign from his position as an External Member of the Board on September 30, 2022.
*2 Mr. Takashi HAYASHI and Mr. Akihiko NOMA* are the Full-Time Audit & Supervisory Board Members.

T A I S EI A N N UA L R EPO R T 2023 92

About the Taisei Group

Governance Section

Taisei Group’s Growth Strategy

Sustainability Section

Data Section

Governance Section

Compliance

Compliance

Education / training

Themes covered in recent years● For advancing compliance ● Regarding the increased penalties for defamation

The Taisei Group has established the Action Guidelines for Taisei Personnel and the Taisei Group as a Whole as
the basic principles of organizational behavior and standards of behavior and judgment that should be actively
practiced or strictly observed by executives and employees. These Action Guidelines are the Group’s code ofcompliance. In the Fundamental Policy to Enhance Operational Compliance Systems, they state that “Membersof 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 TaiseiGroup as a Whole.” This is applied to all Group companies, including those in Japan and overseas.

Action Guidelines for Taisei Personnel and theTaisei Group as a Whole▎ Compliance Promotion System

As shown in the diagram below, the Company has appointed managers, promoters and implementers in each division, and has
established an internal compliance promotion system. In addition, the Compliance Committee, chaired by an external expert(lawyer), has been established as the Special Committee that responds to consultations with the President. We are working toheighten the awareness among all executives and employees and further ensure compliance by establishing a system to set
stricter disciplinary actions, etc., against any legal and other violations committed by executives and employees and to call forcompliance with the Antimonopoly Act, implementing a range of measures based on the recommendations by the Compliance
Committee and compliance training in each division, and taking other steps.

Chart of Compliance Promotion System
President
Administrative Structure

Compliance Committee
Head Office Business Administration Division

Compliance General Manager (Chief of Business Administration Division)
Compliance General Promoter (General Manager of General Affairs Department)

Secretariat

Issuing of Compliance Newsletter(Once a month)● Licensing in the construction industry and supervisory dispositions based on the Construction Business Act● About bribery ● Regarding the results of Compliance Questionnaire● Handling of trade secrets, among others

Compliance training via e-learning(Twice a year)● Regarding power harassment ● Concerning embezzlement, bribery, and harassment● Measures for contacts with competitors and internal leniency program● Regarding the Corporate Ethics Helpline (internal whistleblowing system) and more

▎ Whistleblowing and Consultation System
Based on the Whistleblower Protection Act, at the TaiseiGroup, we have established an internal whistleblowing
system (the Corporate Ethics Helpline / Group Helpline /Whistleblowing System) in which executives and employees
as well as external parties (staff of partner companies[primary suppliers] that have a direct contractual relationshipwith the Company) can report and consult on illegal acts
including bribery and other corruption committed byexecutives and employees and acts that violate (or an act
intended to violate) the Action Guidelines for Taisei
Personnel and the Taisei Group as a Whole, and we haveestablished consultation desks in-house and at an externalorganization (a law firm). The system also allows anonymous
reporting to obtain information clues on a wide range of
violations. In addition, to enhance the effectiveness of thesystem, we actively conduct educational activities such as
distributing the Help Line Cards summarizing the outline of

the system to all executives and employees and introducing
the contents and operational results of the system throughe-learning and Compliance Newsletter.
In response to reports received, we will investigate thefacts of the report received and take corrective action as
required. In doing so, we ensure that the whistleblower’s
information is kept confidential and strictly follows internal
regulations to ensure that the whistleblowers are not treateddisadvantageously for reporting.
For external stakeholders who do not have a direct contractual
relationship with the Company, our website provides inquiries onhuman rights, environmental issues and other issues.

Internal whistleblowing system /Operational results

Compliance Promotion Section*1

FY202028 cases

FY202130 cases

FY202273 cases

Implementation Structure
Division Compliance Managers (Chiefs of Division (Integrated), Chiefs of Division)
Division Compliance Promoters (General Managers in Charge of Administration)
Head OfficeCompliance Implementers (All Department General Managers)＊2
All Executives and Employees

Division Compliance Managers (Chiefs of Branch)
Division Compliance Promoters (Administrative Managers)
Branches

Flow of Internal Whistleblowing Based on the Helpline System

Compliance Implementers (All Department General Managers)＊2

Audit & Supervisory
Board Members /Audit & Supervisory Board

All Executives and Employees

Audit

Board
ReportSustainability Committee*1*2

Promotes and embeds compliance awareness among executives and employees. Also functions as a secretariat for the Compliance Committee.
All general managers of departments are appointed compliance implementers. The general managers of each department educate and inform all executives and employees in theirown departments about compliance.

93 T A I S E I ANNUA L R EPORT 2023

President

organization for core subcontractors) to ensure thoroughcompliance throughout the supply chain.

■ Conduct Compliance Questionnaire (Annually)
The Taisei Group conducts the Compliance Questionnaire for all executives
and employees with the aim of understanding the current status and issues
related to compliance and further promoting compliance.
The results of the questionnaire are analyzed, measures are considered,reported to top management, and disclosed to all executives andemployees through the Compliance Newsletter, and necessary
measures are taken in cooperation with related departments topromote compliance.

Executives

役員

Employees

社員

Temporary
Dispatched
派遣社員
workers
temporarystaff 臨時従業員

Employees on
secondment
出向社員
Retired退職者
personnel

Primary
suppliers that have a direct contractual
当社と直接契約関係がある協力会社
relationship with Taisei Corporation
従業員
Staff

Corrective action

Chief Risk Management Officer (CRO):
Chief of Business Administration Division

Whistleblower (anonymous whistleblower accepted)
通報者
（匿名可）
Taisei Corporation and its Group companies
大成建設及びグループ会社▎ System and Framework⃝ Compliance Education and Training
At Taisei Corporation, we conduct annual compliancetraining for all executives and employees to raise compliance awareness. In addition, to strengthen complianceacross the entire Group, we regularly hold meetings for legal
affairs managers to share information and opinions on legal
affairs issues with the Group companies in Japan. We also
hold group compliance hearings to confirm the status ofcompliance promotion and exchange opinions and strive toensure thorough compliance and promote communication.
Furthermore, compliance training is conducted annuallyfor business partners (specialized contractors) and new
employees of the Soyukai* (Taisei Corporation’s proprietary

ReportReportWhistleblowing/Consultation

Response/
ReportConsultation Desk
Person in charge of implementation:
General Manager of General Affairs Dept.

Investigation instruction
ReportDepartmentsin charge

In-house
consultation desk:
コンプライアンス推進室長
Manager of Compliance Promotion Officeconsultation desk:
弁護士事務所
社外窓口 External
Law firm

Taisei Corporation: Contact* For more about Soyukai, see the glossary on page 118.

T A I S EI A N N UA L R EPO R T 2023 94

About the Taisei Group

Governance Section

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

C o m p l i a n c e a nd Ris k Man ag emen t▎ Anti-Corruption Policy
Taisei Corporation supports Principle 10,
Anti-Corruption, of the United Nations
Global Compact, which we joined in 2018.
The “Action Guidelines for Taisei Personnel and the Taisei Group as a Whole,” isdesigned to prevent all forms of corruption, including extortion, bribery, money
laundering, and obstruction of justice. The
policy emphasizes “ensuring fair transactions,” “maintaining
sound relationships with politics and the administration,” and“dealing with antisocial forces and organizations.” This code
explicitly states that the Group shall not provide illegal moneyor goods to the clients or any of its individual officers or
employees. We shall also refrain from engaging in actions that
violate criminal laws, such as bribery, or cause misunderstandings in our relationships with politicians and public
officials, including those from foreign countries. Moreover, weshall not acquiesce to unreasonable demands from antisocialgroups. Furthermore, we have established a code of conduct
to comply with the Antimonopoly Act. We require our executives and employees to act responsibly, ensuring they do not
violate criminal laws related to practices like bid rigging or
breach the provisions of the Antimonopoly Act. We arecommitted to preventing any form of corruption.
To raise awareness and provide education about antibribery measures for politicians and public officials (including
those from foreign countries), we have prepared a booklet
titled “Quick Guide to Compliance.” This booklet covers
topics like bribery and corruption in depth, aiming to prevent
actions like collusion that undermine fair competition. Throughe-learning and other methods, we aim to reinforce our executives’ and employees’ knowledge and consciousness aboutanti-corruption measures.
In relationships requiring special attention with foreign
public officials and the like, we have introduced a pre-checksystem from the FY2020 to prevent bribery involving foreign
public officials, and are working diligently to thoroughly
prevent corrupt practices.

▎ Verification and Guidance on 			Compliance with Laws and Regulations
At Taisei Corporation, to ensure the propriety of bidding
operations, branch managers are tasked with confirmingthat no inappropriate actions have occurred during thebidding process. They then create and preserve theserecords within an established internal system.
Furthermore, on an annual basis, the Legal Department
reviews the propriety of the bidding operations and checks
for adherence to the Construction Business Act, the Antimonopoly Act, and the Subcontractors Protection Act.

▎ Fair and Equitable Transactions
Taisei Corporation has outlined in its Group’s Action Guidelines the “promoting partnerships with subcontractors andsuppliers,” emphasizing the need to establish transparent
and trusting relationships with our partners and to conductbusiness on an equal footing.
In August 2020, we introduced and publicly disclosed
our Declaration of Partnership Building. This declaration
promotes mutual growth throughout the entire supply chain
and encourages new collaborations beyond distinctions ofsize or affiliation. It also emphasizes adherence to the “Promotion Standards” set by the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises. To guard
against antisocial forces, we have outlined in our BasicContract for Specialist Construction Work that our partners
should neither be antisocial entities nor engage in transactions with such entities. In case of any breach, stipulations
permit the termination of the contract without prior notice.
Moreover, the Taisei Group Sustainable Procurement
Guidelines specifically emphasize fair and equitable transactions, upholding legal and societal norms, and thereverence for human rights. By annually carrying out
supplier self-assessments regarding these principles, weare diligent in our efforts to understand and mitigate therisk of involvement in transactions with antisocial elements,
corruption, and organizations that partake in inhumane
labor practices.

Risk Management
Under the guidance of our Risk Management Policy and the Basic Risk Management Regulations, the TaiseiGroup has instituted a risk management system that is systematically implemented across the entire Company. Additionally, we have set up a robust management framework that addresses major ESG-related risks,
including quality, compliance, information, safety, and environmental concerns.
To ensure the effectiveness of our company-wide risk management and maintain the integrity of our operations, we adhere to preventative risk measures outlined in internal policies and manuals. Should a risk manifest unexpectedly, we promptly take appropriate actions to minimize any losses, striving to ensure both thecontinuity of our business and the sustained trust of the community.

▎ Risk Management System⃝ Promotion of Company-Wide Risk Management System
At Taisei Corporation, we work to continuously operate therisk management system to appropriately identify and manage risks associated with business operations. Under the risk
management system, the President serves as Chief Executive
Officer of Risk Management, and Chief of the Business
Administration Division serves as the Chief Risk Management
Officer (CRO). Each year, we take into account the risks that
became apparent during the current fiscal year to review therisk management for the following fiscal year through the
PDCA cycle and verify the effectiveness of the risk management system.
Based on the Basic Risk Management Rules, each divisionof the Head Office, in cooperation with the branches, reviews

Advancement of Company-Wide Risk Management
Audit & Supervisory Board Members/
Audit & Supervisory Board

Action Guidelines and Response to
Violations

At Taisei Group, the “Rules on Enforcement of the Compliance System for the Action Guidelines for Taisei Personnel
and the Taisei Group as a Whole (“Action Guidelines”)”
explicitly specify that if an executive or employee breaches
the Group’s Action Guidelines, the facts will be thoroughly
and rigorously reviewed by the Board or the Management
Committee, and appropriate disciplinary actions will be
imposed in accordance with internal regulations.
In instances of significant compliance breaches, such as
violations of the Group Action Guidelines, the Group
implements comprehensive measures to prevent any
reoccurrence. The Group conducts investigations tounderstand the context, the involved parties, the natureand details of the violation, the damage incurred, and theimpact on stakeholders. Based on an accurate grasp of thefacts, reports are filed with the pertinent governmental
bodies when necessary. The violators are subjected tonecessary disciplinary actions, which may include termination of employment.

Board

Audit
ReportSupervision

President

United Nations Global Compact▎ Review of Adherence to the Group’sand identifies all risks associated with their business activities
and selects the “Head Office-governed risks.” The “Head
Office-governed risks” are then narrowed down to risks
that can possibly have a material impact especially on
corporate management. Such risks are selected as “keycompany-wide risks” and are subject to risk management
across the entire company. The “key company-wide risks”
are determined by the CRO after deliberation by the Risk
Management Committee headed by the CRO. The President and the Board receive reports on the risks andconfirm the operating status of the risk management
system and maintain the effectiveness of the system.

Chief Executive Officer of Risk Management

Corporate Governance / Internal Control▎ Specific Initiatives for Compliance with

the Antimonopoly Act

Instruction

Countermeasures and Prevention of Reoccurrence

Chief Risk Management Officer (CRO): Chief of Business Administration Division
Supervision of risk management

In light of the antimonopoly allegations the Company faced
in 2018 related to the Linear Chuo Shinkansen construction
project, we have undertaken initiatives below based on the
deliberations of the Compliance Committee, led by an
external attorney, and resolutions by the Board.
1. Revision and tightening of internal rules relating to contracts withcompetitors (September 2018)
2. Reinforcement of procedures to confirm the appropriateness ofthe bidding process (September 2018)
3. Implementation of e-learning for all executives and employees 		
(implemented every fiscal year since FY2018)
4. Implementation of training by an external lawyer for executives andemployees in the sales departments and the technical departmentsthat engage in operations related to taking orders (implemented
every fiscal year since FY2018)

ReportIncident / Accident Response

Risk Management Committee
CRO Secretariat

Risk Management Council

Head Office Risk Management Promotion Committee
Head Office

Branch Offices

Group Companies

Branch Offices Risk Management Promotion Committee

Fundamental Policy to Enhance Operational Compliance Systems / Risk Management Policy

Review of Adherence to the Group’s Action Guidelines andResponse to Violations

95 T A I S E I ANNUA L R EPORT 2023

T A I S EI A N N UA L R EPO R T 2023 96

About the Taisei Group

Governance Section(1) Market Risks① Trend of the construction market② Fluctuations in prices of materials③ Asset holding risk
④ Retirement benefit obligations⑤ Fluctuations in interest rates⑥ Risks of related or incidental businesses(2) Risks of violation of legal controls over thecivil engineering business and the building
construction business① Risk of violation of the Construction
Business Act and related laws andregulations② Risk of violation of the Antimonopoly Act(3) Risk of infringement of intellectual property rights(4) Risk of inappropriate financial reporting(5) Risk related to antisocial forces(6) Risk associated with quality due to construction
failure(7) Risk of design flaw(8) Risk of process delays(9) Risk of accidents(10) Risk of information leakage and system trouble

Below is an excerpt of risks updated in the 2022 release.
(14) Risk associated with environmental issues including climate change
There is growing expectation for companies to engage in the resolution ofenvironmental issues including climate change through their business
operations. Inadequate efforts and information disclosure risk lowering ourcorporate competitiveness and our reputation among our stakeholders.
In order to deal with such risk, the Group has established a long-term
environmental target, “TAISEI Green Target 2050” based on the concept of
the “Realization of a sustainable and environmentally friendly society,” as set
out in the Environmental Policy and aims to achieve the three types of society(decarbonized society, recycling-oriented society, and nature co-existingsociety) and resolve two individual issues (forest resources/forest environment and water resources/water environment). The Group also conducts
environmental due diligence based on the Environmental Policy to preventand mitigate the negative impact of the Group’s business activities on theenvironment as well as the negative impact of the environment on thebusiness activities of the Group, including the impact on the supply chain.
To achieve carbon neutrality, which is our biggest challenge, we areengaged in TAISEI Sustainable Action® (TSA), a Group-wide environmental
impact reduction initiative aimed at curbing our CO2 emissions in Scope 1
and 2. We will strive to reduce CO2 emissions in Scope 3 by pursuing green
procurement, using environmentally friendly concrete, and developing andpromoting ZEB technology as a means to contribute to realizing a decarbonized society.
The Group appropriately discloses its initiatives towards these environmental issues in its Annual Reports and website. Also, regarding climatechange, in accordance with the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD), the Group discloses the impactof the risks and opportunities associated with climate change on businessactivities, based on scenario analysis.

Governance Section

Data Section(15) Risk associated with human rights issues(12) Risk associated with the working environment(14) Risk associated with environmental issues
including climate change(15) Risk associated with human rights issues(16）Credit risk(17）Contract risk
(18 ) Risk of the spread of infectious diseases▎ Business Continuity Plan (BCP) Initiatives

In the construction industry, it is imperative to share
information with numerous stakeholders, including clients andcollaborative entities like specialized contractors, during theconstruction process. Recognizing this, the Taisei Group has
articulated the “Management of Information and Intellectual
Property Rights” in its Action Guidelines for Taisei Personnel
and the Taisei Group as a Whole. We have taken various
steps towards information security and have formulated boththe Policy on the Protection of Personal Information and theCode of Conduct for the Use of Social Media.
At Taisei Corporation, we have consolidated a set of corerules for managing electronic information into a booklet. This
serves as a foundation for the education and guidance weprovide to all our executives, employees, and business
partners. In addition, we are actively enhancing theinformation security measures at our overseas branches andproject sites, and we are particularly focused on bolstering
safeguards against potential information leaks that could
arise from telecommuting (working from home).
Moreover, to proactively prevent and lessen intellectual
property risks—like rights infringements or technology
outflows that could profoundly impact our business
operations—we rigorously enforce risk management acrossall our business activities.
In light of the escalating threat of cyber-attacks, we remain
vigilant. Central to this effort is our Taisei-Security Incident
Response Team (SIRT), established in 2013. Collaboratingwith external agencies through the Nippon CSIRT Association, we continuously gather the most recent intelligence on
cyber threats. Armed with this information, we strategize andimplement advanced defensive measures, aiming to preemptively ward off potential attacks.

To uphold our duty as a comprehensive construction company that underpins the foundation of socioeconomic activities, it is essential that we ensure the safety and well-beingof our executives, employees, and their families, even in theface of significant disasters or accidents. To this end, we laidout our Policy on Business Continuity in Times of Disaster in2005. In alignment with this policy, we have structured abusiness continuity plan for times of disaster. All the Company’s executives, employees, and those of the Group
companies participate in disaster preparedness training
sessions. This training is held at least annually, and based on
the outcomes, we periodically review and enhance theentirety of our business continuity plan.
Our persistent and routine endeavors towards bolsteringbusiness continuity have earned us the Resilience Certification.
Moreover, since 2015, we have annually collaborated withorganizations like the Japan Federation of Construction
Contractors in joint training exercises. This collaboration has
enabled us to craft a company-wide recovery support
structure that can swiftly address requests for aid.

Policy on Business Continuity in Times of Disaster

Column Proactive Approaches to Business Continuity

Information Disclosure Based on the TCFD Recommendations

Companies are expected to engage in initiatives to respect the human rights of
their stakeholders. Inadequate efforts and disclosure may risk violation of thehuman rights of stakeholders as well as a decline in the Company’s competitiveness and reputation among stakeholders.
In order to deal with such risk, we carry out human rights due diligence basedon the Human Rights Policy and continuously conduct initiatives for the respectof human rights including those of the supply chain by working to prevent andmitigate the negative impact of the Group’s business activities on human rights,
assessing the effectiveness of the measures, developing a grievance mechanismand disclosing information on these initiatives, among others.

(13) Risk of violation of environmental laws andregulations▎ Information Security Measure

P.74 Sustainability Section(11) Risk of large-scale disasters(20) Geopolitical risk

Sustainability Section

Ri s k M a n a g e m en t

⃝ Business and Other Risks
Risks that may significantly impact corporate management are reported to the Management Committee and the Board. Theycollectively review and decide upon a comprehensive strategy to address such risks. These risks are documented in theBusiness and Other Risks section of the annual securities report.

(19）Country risk

Taisei Group’s Growth Strategy

P.55 Taisei Group’s Growth Strategy

Human Rights Due Diligence Initiatives(20) Geopolitical risk
Due to the increasing political, military, and social tensions in certain
overseas regions, delivery may be delayed as a result of the risk ofsoaring material prices and logistics disruption.
In order to deal with such risk, we tackle the soaring prices of materials
by monitoring pricing trends from an early stage by interviewing manufacturers and conducting market research, among other means, and takemeasures, as necessary, such as early procurement and switching toalternative products. To combat delivery delays due to logistics disruptions, we confirm production sites and transportation routes, consider
natural, social, and legal risks, and manage the progress of procurement
operations to prevent delays in delivery.

Policy on the Protection of Personal Information /Code of Conduct on the Use of Social Media▎Risk Management for Infectious Diseases

and Pandemics

In response to infectious diseases like COVID-19, the CRO
Secretariat spearheads efforts, centralizing information on
infection statuses across both domestic and international
business locations. This ensures that our entire Company can
respond to crises both swiftly and cohesively.
Moreover, in November 2020, we revised and establishedthe “Business Continuity Plan for Infectious Disease
Outbreaks.” This new plan integrates the previously separate“Novel Influenza Response Guidelines” to ensure adaptability
not only to COVID-19 but also to any potential future
infectious diseases.
In practice, this involves educating our executives,
employees, and specialized contractors about actions totake during an outbreak or if an infection occurs in theworkplace. We are also actively stockpiling supplies
essential for infection prevention.
Currently, COVID-19 has been reclassified as a Class 5
infectious disease under the Infectious Diseases Act.
Nonetheless, we remain equipped to rapidly enact infection
prevention measures should there be a resurgence.

Forming Disaster Prevention Agreements withThree Entities Possessing Advanced Drone
Operation Skills
From a perspective of strengthening resilience during times ofdisaster, Taisei Corporation has entered into disaster prevention agreements with three bodies, each boasting specialized
and advanced drone operation capabilities: 1) the DPCA,
2) the Regional Revitalization & Disaster Prevention UsefulDrone Promoters Association, and 3) the Japan Unmanned
Aerial Vehicle Application Council (JUAVAC).
Natural disasters in Japan have been intensifying in recent
years. To swiftly ascertain disaster situations and draft
responsive recovery plans, the deployment of technologies
with superior immediacy and maneuverability is essential.
With this agreement in place, we will utilize drones on disasterrecovery sites to rapidly understand the conditions anddevise appropriate recovery strategies.
Moving forward, by actively incorporating digital technologies during disasterrecovery efforts andbeyond, we aim to further
enhance our resilience. In
doing so, we are fulfilling
our duty as a comprehensive construction firm that
upholds the bedrock ofsocioeconomic endeavors.
Drone Operations

Business and Other Risks in FY2022
Annual Securities Report

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T A I S EI A N N UA L R EPO R T 2023 98

About the Taisei Group

Governance Section

Taisei Group’s Growth Strategy▎ Executive Officers (AS of July 1, 2023)

Shigeyoshi TANAKA

Yoshiro AIKAWA

Chairman, Representative
Director

President andChief Executive Officer,
Representative Director

Elected since June 2015

Elected since June 2019

Title
Business in Charge

Name

President and Chief Executive Officer

Yoshiro AIKAWA

Executive Vice President
Chief of Marketing & Sales Division (Integrated); In Charge of Safety

Hiroshi TSUCHIYA

Senior Managing Executive Officer
Chief of Sustainability Division (Integrated);
Chief of Clean Energy & Environment Business Promotion Division
Senior Managing Executive Officer
Deputy Chief of Marketing & Sales Division (Integrated),
Supervising Marketing & Sales (Civil Engineering) Division;
Chief of Marketing & Sales (Civil Engineering) Division

Masahiko OKADANew

Hiroshi KIMURA

Mayuki YAMAURA

New

Representative Director

Representative Director

Member of the Board

Member of the Board

Elected since June 2023
Chief of Marketing & Sales Division(Integrated); In charge of Safety

Elected since June 2023
Chief of Business Administration Division;
In charge of New Business PlanningElected since June 2019
Deputy Chief of Marketing & Sales Division(Integrated), Supervising Marketing & Sales(Civil Engineering); Chief of Marketing & Sales(Civil Engineering) Division

Elected since June 2023
Chief of Architecture & Engineering Division(Integrated); Chief of Building Construction Division

New

Toshiyuki TSUJI

New

Atsuko NISHIMURA

Norio OTSUKA

Member of the Board

Member of the Board

Member of the Board*1, 3

Member of the Board*1, 3Elected since June 2023
In charge of Building Construction Business
Strategy; Deputy Chief of Corporate Planning
OfficeElected since June 2023
Chief of Marketing & Sales Promotion Division

Elected since June 2017▎Concurrent Position:

Elected since June 2019▎Concurrent Position:
Outside Director of Sojitz Corporation;
Outside Director of WORLD TRADE 		
CENTER BUILDING, INC.

Outside Director of INPEX CORPORATION

Fumiya KOKUBU

Tsutomu KAMIJO

Member of the Board*1, 3

Member of the Board*1, 3Elected since June 2019▎Concurrent Position:
Chairman of the Board of Marubeni 		Corporation;
Outside Director of Honda Motor Co., Ltd.

Elected since June 2023
▎Concurrent Position:
External Member of the Board of Tohoku 		Electric Power Co., Inc.;
External Member of the Board of Okamura
Corporation

New

Takashi HAYASHI

Shuichi OKUDA

Audit & Supervisory Board
Member (Full-Time)

Audit & Supervisory Board
Member (Full-Time)

Elected since June 2019

Elected since June 2023

Yasuhiro SATO

Seishi TASHIRO

Keiko OHARA

Masamitsu MIURA

Audit & Supervisory Board
Member*2, 3

Audit & Supervisory Board
Member*2, 3

Audit & Supervisory Board
Member*2, 3

Audit & Supervisory Board
Member*2, 3Elected since June 2020

Elected since June 2020

Elected since June 2020▎Concurrent Position:
Founding Partner, Kamiyacho International
Law Office Director;
Member of the board (Independent) of 		Financial Products Group Co., Ltd.;
Outside Director of FUJI KYUKO CO., LTD.

Elected since June 2021

New

Jiro TANIYAMA

Hiroshi KIMURA

Senior Managing Executive Officer
Chief of Kansai BranchTakeshi KAGATA

Senior Managing Executive Officer
Chief of Safety Administration Division

Shun KITANO

Senior Managing Executive Officer
Chief of Marketing & Sales (West Japan) Division

Shimpei OGUCHI

Senior Managing Executive Officer
In Charge of Marketing & Sales (Building Construction),
Marketing & Sales Division (Integrated)

Masao YOSHIKAWA

Senior Managing Executive Officer
Chief of Sapporo Branch

Noriaki KON

Senior Managing Executive Officer
Chief of Business Administration Division;
In Charge of New Business PlanningManaging Executive Officer
Chief of Marketing & Sales (Building Construction) Division III

Yuichiro YOSHINO

Data Section(As of July 1, 2023)▎ Members of the Board / Audit & Supervisory Board Members

New

Governance Section

M a n a g e m e n t M ember sManagement Members

Hiroshi TSUCHIYA

Sustainability Section

Masahiko OKADA
Yuichi KITAGUCHIManaging Executive Officer
Chief of Chubu Branch

Atsushi SUZUKIManaging Executive Officer
Chief of Tohoku Branch

Iwao NISHIOKAManaging Executive Officer
Chief of Chugoku Branch

Akira NAKAYAManaging Executive Officer
Deputy Chief of Marketing & Sales (Civil Engineering) Division

Yoshio ABEManaging Executive Officer
Chief of Yokohama Branch

Akira EJIMAManaging Executive Officer
General Manager of Design Department, Civil Engineering Division

Yasushi KAMEZAWAManaging Executive Officer
Deputy Chief of Marketing & Sales (Building Construction) Division I

Shinsaburo SAWAManaging Executive Officer
Deputy Chief of Marketing & Sales (Civil Engineering) Division

Yoshihiko IKEUCHIManaging Executive Officer
Chief of Taisei Advanced Center of Technology

Ichiro NAGASHIMAManaging Executive Officer
Chief of Civil Engineering Division

Kenji SHIRAKAWAManaging Executive Officer
Chief of Engineering Division

Shinichiro TAKAHAMAManaging Executive Officer
Deputy Chief Marketing & Sales (West Japan) Division,
In Charge of Building Construction

Koichiro OKUHATAManaging Executive Officer
In Charge of Technology

Shigeo OCHIManaging Executive Officer
Deputy Chief of Clean Energy & Environment Business
Promotion Division

Miyoshi KATO

*1 External Member of the Board as defined by the Companies Act, Article 2-XV.
*2 External Audit & Supervisory Board Member as defined by the Companies Act, Article 2-XVI.
*3 Independent officers in accordance with the rules of the Tokyo Stock Exchange and the Nagoya Stock Exchange.

99 T A I S E I ANNUA L R EPORT 2023

T A I S EI A N N UA L R EPO R T 2023 100

About the Taisei Group

Governance Section

Taisei Group’s Growth Strategy

Sustainability Section

Data Section

M a n a g e m e n t M ember s

Title
Business in Charge

Name

Yusuke HATAEManaging Executive Officer
Chief of Building Renovation Division

Executive Officer
Chief of Proposal & Solutions Division

Tohru UEMATSU

Yoshiyuki ASADAManaging Executive Officer
Chief of Mechanical & Electrical Division

Executive Officer
Chief of Kanto Branch

Yuji TANIGAWA

Shin SUZUKIManaging Executive Officer
In Charge of Technology

Executive Officer
Chief of Marketing & Sales (Building Construction) Division II

Kazuhiro SAWADA

Yoichi TAKASEManaging Executive Officer
In Charge of Technology

Akio TAKASE

Executive Officer
Deputy Chief of Tokyo Branch;
In Charge of Shinjuku Station West Exit Development ProjectManaging Executive Officer
Chief of Marketing & Sales (Building Construction) Division I;
In Charge of Community Design Project

Masaru KAMATAManaging Executive Officer
Chief of Nuclear Facilities Division

Yuji IJIRIManaging Executive Officer
Chief of International Operations Headquarters

Tatsuya SUGAWARA

Executive Officer
Chief of Chiba Branch
Executive Officer
Deputy Chief of Kansai Branch;
General Manager of Marketing & Sales Department (Construction Building),
Kansai Branch
Executive Officer
General Manager of Secretarial Department

Managing Executive Officer
Deputy Chief of Business Administration Division

Junichi KASAHARA

Executive Officer
Chief of Kyusyu Branch

Makoto NISHIKAWA

Managing Executive Officer
Chief of Design Division

Masato MATSUMURA

Executive Officer
Chief of Procurement Division

Kozo MORITAManaging Executive Officer
Chief of Corporate Planning Office

Hiroki FUKASAWA

Executive Officer
Deputy Chief of Marketing & Sales (Building Construction) Division II

Masaki ADO

Executive Officer
Deputy Chief of Marketing & Sales (Building Construction) Division III

Shigehisa KOYAMA

Executive Officer
Chief of Quality Control Division; General Manager of Quality Control
Department

Kunihiko KAWAIManaging Executive Officer
Chief of Architecture & Engineering Division (Integrated);
Chief of Building Construction Division
Managing Executive Officer
In Charge of Building Construction Business Strategy
Deputy Chief of Corporate Planning Office
Managing Executive Officer
Chief of Marketing & Sales Promotion Division
Managing Executive Officer
Deputy Chief of International Operations Headquarters (Building Construction);
General Manager of Building Construction Department
Managing Executive Officer
Chief of Tokyo BranchManaging Executive Officer
In Charge of Marketing & Sales (Building Construction),
Marketing & Sales Division (Integrated)
Executive Officer
In Charge of Marketing & Sales (Building Construction),
Marketing & Sales Division (Integrated)
Executive Officer
In Charge of Technology
Executive Officer
Deputy Chief of Civil Engineering Division;
General Manager of Civil Engineering Department
Executive Officer
Chief of Urban Development Division
Executive Officer
Deputy Chief of Corporate Planning Office;General Manager of Corporate Planning Department;
General Manager of New Business Planning Department
Executive Officer
In Charge of Marketing & Sales, Marketing & Sales Division (Integrated)
Executive Officer
In Charge of Technology;
In Charge of Energy & Environment
Executive Officer
Deputy Chief of Design Division (Structure)
Executive Officer
In Charge of Technology;
General Manager of Construction Engineering Department,
Civil Engineering Division

101 T A I S E I ANNUA L R EPORT 2023

Governance Section

Mayuki YAMAURA
Yuichiro YOSHINO

Junichi HIROSE
Kenji ADACHI
Motoyuki MAKITA

Toshiyuki TSUJI
Masamichi BABA

▎ E xecutive Fellows

Yuko NAKAMURA

Title
Business in Charge
Executive Fellow
Deputy Chief of Taisei Advanced Center of Technology;
General Manager of Infrastructure Technology Research Department

Shinya MATAKE
Katsuhiko KITAGAWA
Yasuji YAMAUCHI
Hideki NISHIYAMA(As of July 1, 2023)

Executive Fellow
Deputy Chief of Urban Development Division
Executive Fellow
General Manager of Construction Sitework Promotion Center,
Building Construction Division
Executive Fellow
General Manager of Digital Product Center,
Building Construction Division

Name

Tsuyoshi MARUYA
Akehiko TOMITA
Fujio FUNAMIZU
Jun HIROSE

Takashi YAMAZAKI

Executive Fellow
Deputy Chief of Design Division (Mechanical & Electrical Construction)

Akihiko DENO

Yukio HABA

Executive Fellow
General Manager of Machinery Department, Civil Engineering Division

Hidetoshi SAKAMOTO

Masahiro YOSHIDA

Executive Fellow
Deputy Chief of Design Division (Building Construction);
General Manager of Design Department in Kansai Branch

Hiroyuki HIRAI

Yoji UEDA
Yozo SHINOZAKI
Masami SHIMIZUT A I S EI A N N UA L R EPO R T 2023 102