YKK Philosophy & Sustainability

Environmental

SocialGovernance

Financial Information

Management Foundation Based on the YKK Philosophy

GovernanceCorporate GovernanceFundamental Approach and System
The philosophy of the YKK Group in conducting our corporate activities is based on the philosophy of the Cycleof Goodness®. In other words, “No one prospers without rendering benefit to others.” This principle of consistentfairness is the foundation of all our management activities. In line with these ideas, we are working to enhance ourcorporate governance system with the aim of further increasing corporate value.
The governance structure of the Fastening Business, which is the mainstay of YKK Corporation, is as follows.

Fastening Business Corporate Governance Structure
Shareholders Meeting
Appointment / Dismissal

Appointment / Dismissal

Appointment / Dismissal

Audit

Accounting
Auditors

Audit
ReportAudit &
Supervisory
Board

Accounting audit

Nomination andCompensation
Committee

Board of Directors
Management Strategy
Council

Audit

Response

Proposal and report

Proposaland report

Selection and appointment
Dismissal and removal

Approval
andsupervision

Sustainability Committee
Internal Auditing
ReportChief Risk Management
Officer (CRO)and Compliance Director
5 Risk Committees(Control of Major Risks)
Quality
Trade Control
Risk Management
Technology Asset Control
Information Security
Compliance Committee

Officers Meeting
PresidentInternal
audit
Guide andadviceCollaboration
Guide andadviceOther Officers
Investment
approval

Fastening Business
Sales / Manufacturing and Engineering /Administration / Others
Business Headquarters /Operating Companies
Japan

Americas

Europe

ISAMEA

ASEAN

China

Overseas capitalmanagement andgovernance

Chief Financial
Officer (CFO)

Regional
Headquarters /Group Officers

Internal Control Systems Related to the Execution of Operations
The company’s directors establish the Board of Directors
regulations and other necessary internal rules andotherwise conduct business appropriately in compliancewith laws, regulations, and the articles of incorporation.
● The company established its Management Strategy
Meeting to make careful decisions after thoroughly
discussing, from multiple perspectives, the YKKGroup Management Principles, management policies,
management strategies, and important matters forresolution by the Board of Directors, etc.
● Important committees are established to appropriately
deliberate, manage, and oversee important issues related
to management. Based on the basic policy of contribution●

to creating a sustainable society, the Sustainability
Committee that was established in FY2021, reports to
the Management Strategy Meeting, under which it wasestablished, on the progress of relevant policies from theperspective of achieving the YKK Sustainability Vision
2050 targets.
● As for the management structure in the Fastening
Business, there is a clear separation between role ofgovernance by the regional business headquarters andthe role of promoting business through supervision ineach business region in light of the characteristics, etc., of
products and commercial distribution.

The status of the internal control structure and operation has been disclosed on page 40 of the 88th annual securities report(in Japanese only).
https://www.ykk.co.jp/japanese/corporate/financial/securities/index.html– 43 –YKK Philosophy & Sustainability

Environmental

SocialGovernance

Financial Information

State of Directors and Audit & Supervisory Board Members (as of June 29, 2023)
The company selects inside directors from the perspective of global business management that is critical to theGroup’s consolidated management. We have selected two outside directors to obtain advice and oversight related
to the company’s management, based on a broad range of insight and abundant experience from the perspective ofenhancing corporate governance. In addition, we have selected Audit & Supervisory Board members who have theappropriate experiences and abilities and the necessary knowledge regarding finance, accounting, and legal affairs.
(Numbers in brackets are board attendance in FY2022) *1 Outside director *2 Outside auditor
Masayuki Sarumaru

Fumio Ikeda

Satoshi Kawai

Chairman

Director
Research & Development

Audit & Supervisory Board Member*2(Board meetings: 13/13)(Board meetings: 13/13)

After working for many years in the fastening business,
including being stationed in the United States, became a
director of the company in June 2008. Served as presidentof the company from June 2011 to March 2017. Appointed
Representative Director and Chairman (Chairman of theBoard) in June 2018.

After working for many years in the company’s Machineryand Engineering Division, was appointed executive vicepresident over the Machinery & Engineering Group in April
2017. In June 2018, became a director of the company.

In addition to having served as an attorney in legal work formany years, has experience as an outside director for othercompanies. In June 2004, appointed as an outside Audit &Supervisory Board member.

Hiroaki Otani

Yoshimine Kobayashi

Kiyotaka Nagata

President

Director

Audit & Supervisory Board Member (Full-time)(Board meetings: 13/13)(Audit & Supervisory Board meetings: 14/14)(Board meetings: 13/13)
After working for many years in the fastening business,
including being stationed in China, became a director of
the company in June 2014. Appointed president of thecompany in April 2017.

After working for many years in the company’s Machinery andEngineering Division, including being stationed in the UnitedStates and Asia, was appointed executive vice president over
the Manufacturing & Engineering Division in April 2023. In
June 2023, became a director of the company.

After working for many years in the company’s accounting
and finance division, served as head of the Internal
Auditing Department. In June 2013, appointed as a fulltime corporate auditor.

Koichi Matsushima

Hidemitsu Hori

Naoki Yanagida

Director

Director

Audit & Supervisory Board Member*2(Board meetings: 13/13)(Audit & Supervisory Board meetings: 12/14)(Board meetings: 13/13)
After working for many years in the fastening business,
including being stationed in Europe, China, and Asia,
became executive vice president over the Fastening
Products Group of the company in April 2017. In June
2018, became a director of the company.

After working in the United States, served as vicepresident of YKK AP Inc. from April 2007, then was
appointed director of the same company in June 2009,president in June 2011, and Chairman Representative
Director in April 2023. In June 2023, became a directorof the company.

Satoshi Honda

Keinosuke Ono

Director
Pension Policies CFO

Director*1(Board meetings: 13/13)

Saeko Arai
Audit & Supervisory Board Member*2

Has served as a professor at Keio University and Chubu
University, has a deep understanding of management andexperience as an outside director for other companies. In
June 2007, appointed as an outside director.

Katsuya Yumoto

Erica Okada

Director
Compliance Director & CRO

Director*1(Board meetings: 10/10)(Board meetings: 10/10)

Skill Matrix

Masayuki Sarumaru
Hiroaki Otani
Koichi Matsushima
Satoshi Honda
Katsuya Yumoto
Director
Fumio Ikeda
Yoshimine Kobayashi
Hidemitsu Hori
Keinosuke Ono (Outside)
Erica Okada (Outside)
Audit & Satoshi Kawai (Outside)
Supervi- Kiyotaka Nagata
sory Board Naoki Yanagida (Outside)
Member Saeko Arai (Outside)

Specialist Fields

Company
Management

GlobalSales/
Marketing

●

●

●

●

●

●

●

●

●

Manufacturing/ Financial/ Organization/
Legal/Engineering AccountingHR
Compliance
●

●

●

●

●
●

●
●

●
●

●
●

●

●

2 (3.7%)

●
●

●
●
●

4 (7.4%)

Number and ratio of
foreign national officers

●

●

●

54

Number and ratio of
female officers●●●

State of Directors, Audit &Supervisory Board Members,
Operating Officers, Specialized
Officers, and Group Vice Presidents
Total number●●

Possess specialized knowledge as a certified public
accountant and has experience as an outside director forother companies. In June 2023, appointed as an outside
Audit & Supervisory Board member.

Has conducted research related to consumer behavior for
many years at universities and graduate schools in Japanand overseas, giving her a high level of expertise related tomarketing. Also has experience as an outside director for othercompanies. In June 2022, appointed as an outside director.

After working in the United States, was appointed vicepresident over the Legal and IP Center in April 2010. In
June 2022, became compliance director and CRO (Chief
Risk Management Officer).

Name

In addition to having served as an attorney in legal work formany years, has experience as an outside director for othercompanies. In June 2016, appointed as an outside Audit &Supervisory Board member.

(Board meetings: 12/13)

After working for many years in corporate planning,
including being stationed in the United States, wasappointed executive vice president over businessadministration in April 2019. Became director of thecompany assigned to pension policies and was appointed
Chief Financial Officer (CFO) in June 2020.

Type(Board meetings: 13/13)(Audit & Supervisory Board meetings: 14/14)●– 44 –

Note: The text on the left does not include all
the specialized expertise, knowledge, andexperience of the individuals concerned.

YKK Philosophy & Sustainability

Environmental

SocialGovernance

Financial Information

The History of the Strengthening of Corporate Governance- 1990s2000 -

2010 -

2020 -

June 1999: Reform of the management organization executed (Reform of the Board of Directors, and adoption of the Officer System)
2003 – Strengthening of the consolidated management of the YKK Group(Persons from YKK and YKK AP responsible for each organization appointed as directors)
2004 – Appointment of Group officers
2004 – Appointment of the Pension Policies Director

Management
Structure2005 – Appointment of Chief Financial Officer (CFO) and Chief Risk Management Officer (CRO)2020 –
Execution of recapitalization ofsubsidiaries, etc., between YKKCorporation and YKK AP Inc.;
commencement of the capitalmanagement of the Architectural
Products Business by YKK AP Inc.

2003 Introductionof outside directors(1 director)

OutsideDirectors
Outside Audit& Supervisory
Board
Members

1994 Outside
Audit & Supervisory
Board Members(2 members)

2001 – 2006
(1 – 3 members)

2007 – Increase in the number of outside directors (2 directors)

2007 –(3 members)

2001 – Advisory Boards established and meeting held (until 2019, since 2022)
Other2008 – Voluntary establishment of Nomination and Compensation Committee,
which includes two outside directors as members

Overview of the Board of Directors and Individual
Committees and the Status of Holding Meetings
Overview

Number ofmeetings
in FY2022

Board ofDirectors

Composed of ten directors, two of whom are outside
directors. In accordance with the Companies Act and theYKK Board of Directors regulations, the Board of Directors
provides a wide range of oversight from overseeing basic
Group management policies, mid-term management plans
and annual business plans to important investments,
basic policies on personnel systems, risk management,
basic compliance polices and all other matters related todecision-making and the progress of business execution by
the Directors and Vice Presidents of YKK and its subsidiarycompanies.

13 times

Audit &
Supervisory
Board

Composed of four corporate auditors (three of whom areoutside auditors). Evaluates auditing policies and audit
plans, the status of establishment and operation of internal
control systems, accounting auditors, etc.

14 times

Nomination andCompensation
Committee

Established as an advisory committee for the Board of
Directors. Deliberates on policy and systems related to thecompensation of directors, vice presidents, etc., criteria
and amounts of compensation, establishment, revision, andabolition of internal rules for compensation, and mattersrelated to evaluation of performance, etc., and reports
the results to the Board of Directors. Composed of fivemembers, two of whom were outside directors, in FY2022.
Nominates candidates for director and corporate auditor,
appoints vice presidents and specialized officers, revises
internal rules, and reviews performance evaluations andother such matters.

10 times

Management
Strategy Council

Makes careful decisions after thoroughly discussing,from multiple perspectives, the YKK Group Management
Principles, management policies, management strategies,
and important matters for resolution by the Board of
Directors, etc.

13 times– 45 –

Directors and Corporate
Auditors’ Remuneration
The basic policy for the compensationof the company’s directors is tohave a compensation structure thattakes into consideration consistency
with continued improvement ofcorporate value and stable provisionof dividends to shareholders, aswell as the company’s performance
to increase the awareness ofimproving performance, and to set it
at an appropriate level in light of theindividual’s responsibilities and duties,
when determining the compensationfor each director. Specifically, thecompensation of directors consistsof basic compensation and officer
bonuses as short-term compensation
and retirement bonuses as long-termcompensation.
The composition of officer compensationand the amount of compensation have been
disclosed from page 44 of the 88th annual
securities report (in Japanese only).

https://www.ykk.co.jp/japanese/
corporate/financial/securities/
index.html

YKK Philosophy & Sustainability

Environmental

SocialGovernance

Financial Information

Risk Management
Fundamental Approach and System
YKK has established a Group Risk Management Policy and is engaged in risk management. A Chief Risk Management
Officer (CRO) has been appointed to promote risk management. Various committees – Quality Committee, Foreign
Trade Control Committee, Crisis Management Committee, Technical Asset Management Committee, and Information
Security Committee – have been established, with regulations on risk management adopted and enforced.
Furthermore, a Chief Financial Officer (CFO) has also been appointed, and a system established for appropriately
managing financial and investment risks at YKK. In addition, YKK has established "Risk Response Guidelines" to ensurethat it responds appropriately and promptly to any risks that may arise.

Risk Management StructureYKK Group Risk Management Policy
By actively controlling risk levels and preventing

CROvarious corporate risks, we will reduce or avoid theloss of human, material, and other management
resources, and in the event of an emergency, we will
promote risk management throughout the GroupYKK Trade
ControlCommittee

YKK Quality
Committee

to minimize damage and losses, thereby leading tosustainable growth and increasing corporate value.

[Quality risks][Foreign trade
management]

YKK RiskManagement
Committee[Human
and natural
disasters]

YKK
Technology
AssetManagement
Committee[Managementof technology
and know-how]

YKKInformation
Security
Committee[Information
security]

Risk Assessment Process and the Flow of Identifying Key Risks

Risk Management
PolicyRisk
identification

Risk analysis,
assessment

Risk response

Large← Scale of damage →Small

Details of risk analysis have been disclosed
from page 22 of the 88th annual securities
report (in Japanese only).

Risk Assessment Process and the Flow of Identifying Key Risks(conceptual diagram)

Review

In accordance with the Risk
Management Policy, risks are identified
once each year by each organization,
worst-case scenarios and the statusof response are confirmed, and therisks are assessed according to thescale of loss and damage (¥100 million
or less to ¥5 billion or more) and thefrequency of occurrence (5 years orless to 50 years or more). In addition,risks that are anticipated to have an
impact of ¥100 million or more per
year are deemed to be key risks thatshould be managed at the corporate
management level, and the risks aremanaged while identifying their trends
and making the status of progress of
the response visible.
YKK categorizes the key risks
identified through the process into
four classifications: (1) financial risks,(2) risks in specialized fields, (3) risks
addressed by the Committee, and(4) risks in the execution of business,and the CRO, CFO, and each of the
responsible persons take the lead in
addressing those risks.

Risk assessment results

Key risk identification● International conflicts/civil war● Rising prices and tight supplyof raw materials and fuel● Large-scale natural disasters● Violations of laws andregulations related topersonal information
protection● Cyberattacks

Low←

Frequency of occurrence

→High

•
•

Risk Item Classification
Financial risks(Responsibility of eachassigned department)

Fluctuating exchange rates, projected benefit obligations, dropin the share prices of held stock, etc.

Risks in specialized fields(Responsibility of eachassigned department)

Outbreak of disease, the Anti-monopoly Act/Subcontract Act,
transfer pricing taxation, infringing on third-party patents or
having YKK patents infringed on, bribery, response to more
stringent environmental regulations, workplace injuries, etc.

Risks addressed by
the committee(Responsibility of each
Risk Committee)

International conflicts/civil war, large-scale natural
disasters, violations of laws and regulations related topersonal information protection, cyberattacks, terrorism/
demonstrations, product defects/recalls, fires/explosions,
technology leaks, etc.

Risks in the execution ofbusiness(Responsibility of theperson responsible ateach division)

Rising prices and tight supply of raw materials and fuel,declining demand/sluggish economy/intensifying competition,
failed capital investments, delayed response to technologicaladvancements, failed marketing/delayed entry into markets,delayed development of human assets, rumors, etc.

– 46 –YKK Philosophy & Sustainability

Environmental

SocialGovernance

Financial Information

ComplianceFundamental Approach and System
YKK considers compliance as “responding to societal demands.” Which means, in addition to abiding by laws,
regulations, and internal rules, the company must conform to social standards when conducting business activities.
The company has appointed a Compliance Director and established a Corporate Legal and Compliance Group under
the Officer in charge of compliance. They work with external advisors to maintain a compliance system for YKK. In
addition, a Compliance Committee was established to undertake appropriate compliance promotion measures fromthe perspective of business management and to deliberate on the operational status of compliance and responses toissues, and the latest regulatory developments.

YKK Group Code of Conduct

Seven Principlesof the YKK Group Codeof Conduct

The YKK Group Code of Conduct that was revised in June 2021 iscomposed of seven principles and 29 detailed rules. They use as reference
and conform to the Ten Principles of the UN Global Compact and the eight
fundamental conventions of the International Labour Organization (ILO).
They are also linked to the SDGs. We will work to ensure that every one of
our employees implements the YKK Group Code of Conduct to “build trust,transparency and respect” with all our stakeholders, as stipulated in ourCore Values.

ComplianceFair operating practices● Respect for human rights● Harmony withthe environment● Health and safety● Product quality and safety● Contribution to communities●●YKK Group Code of Conduct (entire text)
https://www.ykk.com/english/philosophy/index.html

Revision and Distribution of the Compliance Book
In light of revision of the “YKK Group Code of Conduct,” we updated the “YKKGroup Compliance Book” and have been distributing it to all relevant officers
and employees.* In addition to providing easy-to-understand explanationsof the contents and behavior that should be followed in each stipulationof the Code of Conduct, we have included a column for past compliancerelated cases, and sections on the main relevant internal rules and laws andregulations, and information on the whistleblowing system, etc.
*The pictured book is an example from the East Asia Region (Japan, YKK Korea Co., Ltd., and YKK Taiwan
Co., Ltd.). Creation and distribution of the Compliance Book based on the laws and regulations of eachcountry and area in other regions.

YKK Global Criteria of Compliance (YGCC)YKK established the YKK Global Criteria ofCompliance (YGCC) to ensure that YKK deploys
and carries out proper and effective complianceprograms to conduct transparent business activities.
Based on the YGCC, each YKK Group company inthe world conducts internal and external audits ofmanagement systems, human rights, labor practices,
the environment, health and safety, and fair businesspractices, working to strengthen and continuously
improve YKK’s compliance system. The standards
are regularly revised based on the societal demands.
In FY2023, we updated the YGCC to version 4.0
and audits are being conducted according to the newstandards, which are in line with current trends.

YKK
Code of
Conduct

GlobalStandards

Analyses of evaluation
result and Improvement

Drafting action plan basedon the ComplianceStandard Policy

Periodic evaluation basedon the ComplianceStandard Policy

Maintenance and
Implementation ofCompliance System

Management
SystemFair Business
Practice

Manuals andProcedures

Labor
Conditions

ComplianceTraining
Monitoring

Hours &
Wages

Environment

Health & Safety

Request From
Stakeholders– 47 –

Laws And
RegulationsYKK Philosophy & Sustainability

Environmental

SocialGovernance

Financial Information

Intellectual Property Management
Fundamental Approach and System
YKK conducts intellectual property activities on a global basis as part of its business activities. Intellectual Property
Department sites are located at the Kurobe Manufacturing Center, as well as in China, Singapore, England, and theUnited States. A system that can deal appropriately with requests and consultations from business and development
departments in any country or region of the world has been established. Under this system, in the event, forexample, that an invention is created at a development site somewhere in the world, it is promptly reported to the
Patent Review Committee in Japan and the optimal rights are secured in accordance with YKK business strategy. In
addition, when enforcing rights against a patent infringer or company making similar products, etc., the Intellectual
Property Department in each country/region collaborates with the business division to devise measures concurrently
for the country where the violating items were manufactured and the country in which they were distributed.
This is to ensure that customers purchase authentic products, etc. Moreover, with the Trademark Committee inJapan taking the lead, we manage and operate trademarks including NATULON® and AcroPlating®, according tostandardized Group rules so as to increase value from the perspective of the intellectual property under the YKKbrand. In addition, to effectively promote measures against counterfeit products, we have established a Brand
Counterfeit Product Countermeasures Committee in the company. We also partner with customers and many othercompanies and organizations outside the company to operate a Brand Protection Partnership (B.P.P.), an association
for the exchange of opinions on measures against counterfeit products.

Status of Trademarks/Patents
YKK Trademark Registration(Class 26)

177 countries/regions

Patents, utility models, anddesigns(including pending patents)

5,749

Brand Protection Partnership (B.P.P.)
Number of participants (organizations) in workshops
for measures against counterfeit products

3,668 people (2,105 organizations)Registered trademarks forzippers, etc.

(including pending patents)

4,144

Intellectual Property Achievement Award
Award for excellent corporations utilizing theintellectual property rights system (trademark) givenby the Ministry of Economy, Trade and Industry2021(As of March 31, 2023)

Strategic Intellectual Property Protection Initiatives
YKK generally files patents for its inventions to maximize
the protection of original products and equipment, which are
key to the unique ideas and technology capabilities of thecompany, through intellectual property rights. One intellectual
property strategy is to file bundled patents to acquire
multiple patent licenses for a single product. For example,
the AiryString® zipper has received a primary patent for anelement sewing method as well as multiple secondary patents.
These types of patents protect original products born fromYKK technology capabilities while preventing counterfeit
products and ensuring the high-quality products that ourcustomers can use with confidence.

– 48 –

Standard zippers

AiryString®