Platform that Supports Value Creation Process*Please visit the following page for details of our CSR.
http://www.tis.com/group/csr/

TIS INTEC Group’s Platform for
Supporting Corporate Value Process(ESG Section)
Communication with TIS INTEC Group’s stakeholders is a what supports improvement in corporate value.
Consideration for the environment along with efforts in quality control and R&D are also essential for thebusiness of information systems—a key social infrastructure—to function in harmony with society andsteadily evolve. With this in mind, we strive to enhance corporate governance and internal controls, which
form a vital cornerstone of business activities within the Group.

Communication with Stakeholders
The TIS INTEC Group strives to build bonds of trust through communication with all stakeholders, including clients, employees, shareholders and investors, and business partners, and to boost corporate value.

● Customer service points of contact● Cooperation and support for NGO/NPO social

contribution activities● Charity concerts

industry associations
and others

Community/
Society

TIS INTEC Group

Shareholders
and Investors

Acknowledge responsibilities as a leading corporate group in the IT services industry and undertakesound corporate activities with integrity and clarity of purpose. In addition, be sincere and fair in
dealings with all stakeholders and proactively disclose pertinent corporate information.

Provide optimum
services

Always provide the very best to clients and strive to raise customer satisfaction levels through excellent
quality and technology built on the composite strengths of the Group.

Develop talent

Cultivate an environment in which employees always look ahead, striving to achieve higher goals andembracing new challenges. Provide opportunities to grow and realize personal goals, create a safe andproductive work environment, and give each person the freedom to reach his or her potential.

Respect the law

Maintain high corporate morals, obey the law and uphold parameters of socially acceptable conduct,
and respect the spirit of such standards. Have absolutely nothing to do with antisocial forces.

Maintain fairbusiness practices

Ensure appropriate business transactions, based on fair and open competition.

Protect theenvironment

Recognize that environmental problems warrant universal attention and promote efforts to saveresources and energy in the execution of corporate activities. Also, through IT services, support clients’efforts to enhance operating efficiency and reduce energy consumption, thereby contributing to lower
environmental impact.

Contribute to society

Actively participate in community events as a corporate citizen whose social standing matches its
leading industry status.

Be a part of theinternational
community

Naturally, obey internationally recognized rules and local laws in the execution of cross-border projects,
but also contribute to social and economic development in the countries where TIS INTEC Group
maintains a presence by recognizing local culture and customs.

Primary methods ofcommunication
with stakeholders

Platform that Supports Value Creation Process(ESG Section)● Responses to relevant ministries/agencies and● Company news, Group news

opinion exchange groups● Day at the office for children of
employees● President’s Caravan
and others

Ensure sound,transparent management practices● Opinion posts from website

Employees● Personnel exchange groups,

The management philosophy that permeates the TIS INTEC Group stresses the Group’s development into a
corporate citizen whose activities, hinging on the provision of various services utilizing IT, match its status as aleading corporate group. This philosophy also underpins the Group’s efforts to raise corporate value, supported inthis effort by the high regard of all its stakeholders, including clients and shareholders as well as employees andtheir families. The Group’s stance on corporate social responsibility is evident in its commitment to cultivate a vibrantcorporate culture that encourages the companies and individuals under the Group’s umbrella to work toward higher
goals and embrace new challenges, to be honest and fair in business pursuits based on respect for the law, ofcourse, as well as high moral standards, and to fulfill social obligations. This is the Group’s basic direction on CSR.

● Local event participation(call center, website, main number)● Seminars, fairs and forums for clients● Publication of newslettersand technical brochures● Client satisfaction surveys● Regular meetings
Clients
and others● Intranet

Basic Direction on Group CSR

In line with Basic Policy on Group CSR, the TIS INTEC Group is considering andpursuing various measures from the perspectives described below.
Organizational Governance■ Human rights

Due diligence, crisis situations impacting human rights, avoidance of complicity, complaint resolution, prejudice, sociallydisadvantaged, citizen and political rights, economic, social and cultural rights, basic principles and rights in labor■ Labor practices

Hiring and hiring-related issues, working conditions and social safeguards, social dialogue, health and safety in theworkplace, personnel instruction and training in the workplace

Business
Partners■ Environment

Approaches to prevent pollution, use of sustainable resources, mitigating and dealing with climate change,
environmental protection, preserving biodiversity and restoring natural habitats■ Fair business practices

41● General meeting of shareholders● Information meetings on policy (guidelines)● Results briefing● Creating opportunities for discussion (project information)● Small meetings, domestic and overseas roadshows,● Engineer development and support (educational support, seminars)

participation in conferences● Information disclosure on IR section of corporate websites● Integrated Report● Business Report and others● New Year celebrations, informal social gatherings● Questionnaires, opportunities for opinion exchange and others

Approaches to prevent corruption, responsible political ties, fair competition, promoting social responsibility in value
chain, respect for property rights■ Consumer issues

Fair marketing, information and contract execution, protecting health and safety of consumers, sustainableconsumption, services and support for consumers as well as complaint and dispute resolution, consumer dataprotection and privacy, improved access to required and indispensable services, education and awareness■ Community involvement and community development

Involvement in the community, education and culture, job creation and skill development, development of technology
and access to technology, wealth and income creation, health, socially responsible investment

42

Sustainability

Solving societal challenges through business to create a sustainable society
The TIS INTEC Group will deepen awareness of its position corporate social responsibility, namely, tocontribute to social development through businesses that provide solutions to social issues, and willreinforce initiatives related to corporate sustainability.
We are particularly committed to creating a sustainable society by making continuous mid- to long-term
enhancements to initiatives designed to solve societal challenges through business and reduce the impact
on the environment.

Sustainable Development Goals (SDGs)
These international goals, running from 2016 to 2030,
are described in the 2030 Agenda for Sustainable
Development, adopted at the U.N. Summit in
September 2015. The agenda comprises 17 goals and
169 targets aimed at putting the world on a sustainable
path and pledges that no one will be left behind.
To achieve these objectives, companies are asked toparticipate as vital partners through respective corebusinesses.

Management structure to promote sustainability
The TIS INTEC Group has developed amanagement structure to promote sustainability.
At the heart of this is the Corporate Sustainability
Committee chaired by the president.
The committee discusses policies onsustainability, deliberates plans, reviews progresson implementing them, and promotes measurestaken by group members in line with thesepolicies and plans.

Board of directors

Signatory to the UN Global Compact
President

Corporate Sustainability Committee
President (chairman)
Standing directors, standing Audit & Supervisory Board Members
Presidents of principal operating subsidiaries*Plan to establish dedicated structure regarding sustainability within Corporate
Planning Department in October 2019

Secretariat of the Committee

TIS—and by extension, the TIS INTEC Group—signed on to the U.N. Global Compact and was
registered as a participant as of July 19, 2018. Through strategies and actions in line with 10
principles encompassing four categories—human rights, labor, environment and anti-corruption—
we will encourage every employee to be involved in fulfilling our social responsibilities as acorporate citizen of the world and promote activities that support sustainable social development.

External evaluation

FTSE Blossom Japan Index

FTSE4Good Index Series

MSCI Japan Empowering Women Index (WIN)Corporate Planning Dept.*
Group companies

The TIS INTEC Group will contribute to the achievement of SDGs through materiality-oriented activities.
Materiality

Identifying Materiality

1. Create society in which diverse human resources
are engaged and thrivea. Promote diversity
b. Promote workstyle reformsc. Human resource development and trainingemphasizing self-fulfillment

The Group is pursuing a variety of measures to enrich society through innovation and co-creation in business. Working
with our clients, business partners, and other stakeholders, we are making extensive use of advanced ICT to contributeto the development of a sustainable society.

2. Create comfortable society through innovation andjoint activities
d. Promote safe, convenient social foundation that
supports people and society
e. Connect with stakeholders and promote joint activities
f. Reduce environmental impact

The Group is helping to create a more robust, sustainable society and realize safe and comfortable living by using ICT toaddress local challenges such as labor force decline. As part of this process, we have established a hub in AiCT, our ICT officein Aizuwakamatsu, Fukushima Prefecture, to promote projects that create new solutions and solve societal challenges in threefields: cashless payments, robotics, and health care. Working with the Open Government Consortium (of which we are amember), we will be involved in the following real-world trials.

3. Create safe society through high-quality services
g. Continuous quality improvement
h. Information security
i. Safeguard personal information
4. Enhance corporate governance and earn trust ofsocietyj. Corporate governancek. Compliancel. Risk management

Outside experts had a discussion about the appropriateness of materiality issues identified by TIS for the TIS INTECGroup and how the Company assesses importance.
For details, please go to the following site:
http://www.tis.com/group/csr/gcsr/materiality/#dia

43

Enriching society through innovation and co-creation

Case File Hub established in Fukushima to contribute to regional revitalization(1) Cashless payments
A new cashless network will be developed in collaboration with local communities toprovide residents with cashless means of payment for goods, transport, health care, andother services. Consumer data will additionally be used to revitalize local economies.
(2) AI and robotics
The project is intended to help address the problem of labor force decline in theprovinces. The aim is to pilot and commercialize delivery of the RoboticBase platform
allowing integrated control and coordination of multiple service robots with the ultimate
goal of realizing Fukushima Prefecture’s Fukushima Innovation Coast Initiative andMinamisoma Robot Development Vision.
(3) Health care field
The aim of this project is to produce information that delivers deeper insights for medical
institutions by integrating the information held by local health care providers with vital
information obtained regarding everyday life.

AiCT office building

44

Platform that Supports Value Creation Process(ESG Section)* The inclusion of TIS Inc. in any MSCI INDEX, and the use of MSCI logos, trademarks,
service marks or index names herein, do not constitute a sponsorship, endorsement
or promotion of TIS Inc. by MSCI or any of its affiliates. The MSCI indexes are theexclusive property of MSCI. MSCI and the MSCI INDEX names and logos aretrademarks or service marks of MSCI or its affiliates.

Materiality and SDGs

Human Resources Strategy

Emphasize measures to help employees achieve personal career goals andcreate framework/culture that enables diverse human resources to thrive~Individual cycle of personal fulfillment will be driver of growth for the Group~
Of all the management resources available to the TIS INTEC Group, employees are the most important. One of
the basic policies described in Transformation 2020—the medium-term management plan that TIS launched in
April 2018—is to emphasize employee self-fulfillment, and efforts will be directed toward the creation of anenvironment, corporate culture and systems that make diverse human resources excited about their work.
TIS will promote the environment and opportunities that enable each and every employee under the Groupumbrella to fully demonstrate their skills, which will lead to sustainable growth of the Group overall.
■ Human Resources Strategy in Medium-Term Management Plan (2018-2020)■ Initiatives to Boost Motivation
A shared understanding within the TIS INTEC Group is that efforts enabling employees to perform their duties with peace of mind and in good
health, both physically and mentally, and to fully demonstrate their capabilities will lead to corporate growth and social contribution. Seeking to
improve quality of life for each and every employee, TIS is on board with health management to realize good physical and mental well-being,
boost motivation and create an atmosphere infused with vitality.
(Related content in Group Human Resources Roundtable Discussion starting on page 47)

Promoting Performance Management
To push added value higher through the personal growth of employees, TIS is working hard to reinforce human resources management. Part of this effort involves a performance management* strategy. Through various measures, hinging on 1-on-1, the Company iskeen to promote greater communication between managers and their staff and, through management with a stronger view on
training, the Company will encourage interaction, enthusiasm and a greater sense of independence.
*Performance management is a management technique designed to draw out employee skills and enthusiasm while working toward business targets.

Boost motivation through constantcycle of self-fulfillment

Imaginean ideal
Highermotivation

Cycle ofself-fulfillment

Problemsolve

Human resources who fuel process ofstructural transformation● Account managers, service managers whodrive activity in strategic domains● Consulting staff who formulate businessstrategies along with clients● Service production staff who can turnindustry knowledge and businessknow-how into marketable products● In-house entrepreneurs who plan, launchand promote new businesses● High-level engineers who support activities
in strategic domains through quality andproductivity

Breakdown of Performance Management Structure
Performance
Management
Process

Set goals (meeting)Support execution ofduties

Evaluation (meeting) /treatment

Performance
evaluation

Various instruction andtraining programs

Performance
evaluation system

1 on 1

Ability evaluation
system360˚ Feedback

Compensation system

Establish humanresources systemapplicable throughout
the Group

Establish humanresources portfolio

In fiscal 2019, TIS accelerated efforts to help employees—a huge source of corporate growth—reach personal career goals, based on the TIS Human Resources SBU Manifesto. This included a system that allows employees to remain active in the workplace after mandatory retirement at 65,
workstyle reform and performance management. Going forward, we will raise motivation and reinforce personnel management, and we will
create a framework/culture that enables diverse human resources to thrive within the Group and constantly cultivates top-level capabilities tounderpin structural transformation.
Initiatives as of March 31, 2019,

Initiatives in Fiscal 2020

Boost motivation through constant cycle of self-fulfillment

Boost motivation through constant cycle of self-fulfillment● Increase standard wage, raise promotion ratio● Maintain robust investment in human resources (increase opportunities for learning, raisein the workplace if they are willing and able, regardless of their age.
● Introduce superflex option

Assignment,
treatment, transfers
linked to achievement of
personal career goals

Visualize humanresources information

standard wage

Career support(including planning sheet, seminars)
In-house recruitment
system

Structure at TIS

Workstyle, healthsupport, benefits
package systems■ Initiatives as of March 31, 2019, Activities to Implement in Fiscal 2020

● Introduce system— “Retirement at 65” —that enables employees to continue to be active

Consider career plan toachieve career goals

Platform that Supports Value Creation Process(ESG Section)

Realizegoals

Declare andshare

Selectively develop model employees
to fuel transformation of the Group

Create framework and systems toachieve optimum deployment of
human resources within the Group

TopicsTeleworker option for all-day telework, work-interval system and work smart allowance
In April 2019, TIS launched Teleworker, which hinges on all-day telework without an upper limit on telework days; a work-interval system,
which ensures that a certain number of hours separate the end of one work day and the beginning of the next; and a work smart allowancethat links increased productivity to personal growth. We will maintain these programs and follow up with workstyle reforms that promote
growth of each and every member of our diverse human resources while ensuring sustainable development as a company, and we will
tackle health management, as well, including measures to control long working hours and improve health literacy.

● Promote activities that contribute to local communities, such as support for volunteer■ External Evaluation● Create culture and atmosphere conducive to praise and recognition of achievements andWithin the TIS INTEC Group, each member company has endeavoured to cultivate a corporate culture and work environment that enables diverse
human resources to thrive and has been successful in reducing working hours, increasing the ratio of paid vacation days taken, and establishingvarious work systems, including shortened work days, work-at-home and flextime work. These activities have been recognized by various externalorganizations.

programs

introduce peer bonus system

Selectively develop model employees to fuel transformation of the Group

Selectively develop model employees to fuel transformation of the Group● Define personnel portfolio to facilitate Group reforms● Monitor pipeline for people suited to roles as project leaders and in management● Reinforce personnel management and develop skills of people who will be project leaders● Actively recruit people with the potential to contribute to structural transformation. Includes

Create framework and systems to achieve optimum deployment of humanresources within the Group

Create framework and systems to achieve optimum deployment of humanresources within the Group● Visualize personnel information and promote TIS approaches throughout the Group● Promote employee exchanges among Group companies

consultants, service producers, AI engineers and data scientists● Consider approaches in human resources applicable throughout the Group to create sharedplatform

45

46

Group Human Resources Roundtable Discussion

Jun Ikimune,
Senior Managing Executive Officer,
Division Manager of Human
Resources SBU, TIS, Inc.
Kyoko Takayanagi,
Executive Officer, Department Manager
of Human Resources Department,
Deputy Division Manager of Human
Resources SBU, TIS, Inc.

Personnel system highlighting work style reform nearlycomplete, moving into vital operation phase

Mayumi Akaba,
Department Manager,
Human Resources Department,
Corporate Planning SBU, AGREX, Inc.

The goal is to promote initiatives that enable employees todemonstrate their capabilities to the fullest degree and thereby
raise corporate value of the Group overall.
Focusing on themes of health management and improved corporate value, roundtable participants
talked about the human resources strategy that extends throughout the Group and the status ofefforts at core companies under the Group umbrella—TIS, INTEC and AGREX.

Ikimune: One of the basic objectives raised in the MediumTerm Management Plan, drafted by TIS for the TIS INTECGroup, is to promote employee self-fulfillment. The plan also
describes efforts to create an environment, culture and programs that motivate employees to work hard and to build ahuman resources portfolio that supports structural transformation and places employees throughout the Group in posi-

47

tions that best use their skills. This approach will elevate theGroup’s profile and underpin development into a family ofcompanies that enjoy the loyal support of employees, clientsand society as a whole.
Business models and the content of business activities
may differ among companies under the Group umbrella, but
the belief that people are a most valuable management
resource is a constant and unchanging concept. OUR
PHILOSOPHY—a basic philosophy infused by a set of values
common throughout the Group—and Group Vision 2026 are
not only keys to a bright corporate future but also to solutions

Takayanagi: Until the end of March
2019, I was working in a business division. The Human Resources SBU
Manifesto conveyed to me a level ofcorporate commitment because it
acknowledged that human resources
are a vital asset and that forward-looking investment in acompany’s people leads to higher corporate value and also
because it set out concrete, genuine measures for work stylereform. I gave serious thought to how my staff would actually
make use of new work styles and initiated a trial. Frontline
staff felt the options had potential, so I think we’ve taken a
big first step in driving work style reform ahead.
Going forward, it will be my mission—my priority—as
manager of the Human Resources Department to promotewidespread awareness of new work styles and to encourage
the frontline to engage. Currently, as structural transformation
unfolds, operating divisions with a focus on service-style business are more likely to find such options as telework easy to
implement. But other divisions may find it difficult to suddenly
change the style they are accustomed to. For the system to be
used in good balance throughout TIS, it must be understoodand accepted not only in-house but also by clients. Toward
this end, as manager of the Human Resources Department, I
will begin tagging along with operating division managers on
their client visits to explain the system and our perspective.
Masuda: I, too, recently assumed a new role. I was in a management position in the Administration Control Division up
until last fiscal year, and now I head up the Work Style Reform
Promotion Department, which was established this past April.
In April, INTEC executed a major review of its qualification system, wage structure, and salary raises and promotions—pillarsof the personnel system—based on the idea that all employees are specialists, and embraced a structure that encourages
employees to strive toward specialization and growth.
This recent personnel system review complements ongoing efforts, including time management, work-life balance
management, child-raising support and initiatives to promote
the role of women in the workplace. Against this backdrop, I
see myself advocating for additional steps in work style reformand putting the system firmly into place. With regard to diversity in work styles, we have a number of business models that
require INTEC employees to be on-premise at client offices, so
telework, for example, isn’t a practical work style option. Thisis a reality that must be acknowledged and addressed. Thatsaid, employees who are dead-set against a change in work
style need to be encouraged to change that attitude. Everyone
needs to be receptive to the advantages that work stylereform offers for career development. The Human Resources
Division must be the guide that leads employees to a newunderstanding.
Looking back at the last couple of years, overtime work
has decreased. These overtime hours are a total, combining
data for office staff and frontline staff, but the result reflects a
concerted and sustained effort at time management on a daily
basis. To turn this into higher productivity requires a realchange in the way we approach work.
Akaba: In fiscal 2019, AGREX relocated its headquarters andused the establishment of Biz TRUXIA—a new businessresource center at the Tama Center that integrates know-how
from all locations—to introduce a free-address system
intended to promote active exchange between employees andtake BPO to new heights. In addition, we made Biz TRUXIA amodel for work style reform and promoted both telework andwork-from-home options. AGREX also has businesses that
require employees to be on-premises at client offices, and forthem, options like telework would be hard to put into practice. The use of new work styles requires the understanding ofclients, and I think they will see the benefits that come withthis structure if it’s properly explained to them. In April 2019,
our personnel system was drastically revised, as well. Thechanges go beyond straight-line career advancement and are
better matched to each individual’s career interests, such as amanagement position or contributing to higher technologicalcapabilities. Going forward, we will make preparations, suchas instruction for people who evaluate employees, namely,
training on how to conduct an evaluation, to ensure that thesystem is properly executed. To encourage women to be more
active in the workplace, we are considering manager training
to eliminate unconscious bias that precludes women from certain promotions. An issue that needs to be addressed is thesmall number of women in management positions in the system development division. We have to explore a frameworkthat enables women to achieve diverse career advancement,complemented by suitable training and other support programs.
Ikimune: If we want clients to understand and accept work style reform,
we have to explain that such reform
has advantages not only for ourselves
but for our clients as well. The 2020
Summer Olympics in Tokyo could provide some momentum. While the games are on, getting
around Tokyo is going to be difficult. Public transportation isgoing to be crowded, and roads are sure to be congested.
Work style reform can be presented as an approach to business that ensures seamless access to services despite commuting challenges. I think clients will support the idea. It’s a great
opportunity.

48

Platform that Supports Value Creation Process(ESG Section)

Shinobu Masuda,
General Manager, Work Style Reform
Promotion Department,
Health Care Department,
Human Resources Division, INTEC, Inc.

Earnestly developing human resources strategy applicable groupwide to create companies that are respectedby employees, clients and society as a wholethat address social issues through business activities. Guided
by OUR PHILOSOPHY and Group Vision 2026, the Group will
work as a cohesive team to implement measures based on agroupwide human resources strategy that makes a diverse
workforce excited to be members of the Group. This is vital
because it is our people that will drive the Group forward.

Health management a recognized theme, underpinning
better quality of life for employees
Ikimune: People tend to think about health management innarrow terms—that it merely refers to not getting sick. If you
acknowledge that work style reform allows people to workwhere and when they want—the place and time of theirchoosing—then health management also encompasses efforts
to improve quality of life and motivate employees. The business activities of Group companies may differ, but improved
quality of life for employees is a common theme when it
comes to health management—same as for work style reform.
When we convey information about health management toemployees, we should also highlight our initiatives and results
outside the TIS INTEC Group as well.
Takayanagi: I feel employees need to change their perception
about health, too. Unlike specific policies, like working from
home, effective policies for ensuring personal health are difficult to enforce. We have to plan some events, maybe starting
off with sessions for managers, on the theme of health management to foster a new awareness.
I’d also like to see Group human resources divisions tackle
responses together, such as discussing policies to boost
employee resilience, which would underpin Group initiatives.

* Absenteeism is being absent from work due to illness, while presenteeism isbeing at work but hindering efforts and unable to perform at top level due tohealth problems.

Takayanagi: For young employees, it’s not only individual
issues, such as job proficiency, that cause stress. Businessmoves at an overwhelmingly faster pace than it used to, andthis tends to make people feel that they’re always under pressure to perform. I think it’s important to establish opportunities for managers and frontline staff to learn about healthfrom a scientific perspective. I would consider training basedon academic data, such as the positive effect on performancefrom a repeated process of good stress followed by a break,as well as good sleeping habits, and having meals at set times.
Also, the national government introduced a law, effectivefrom April 2019, that encourages employers to adopt a workinterval system* as a goal to achieve, and TIS has incorporated
a minimum interval into its rules of employment. There’s nopunishment if the minimum is not met, but the system is inplace for divisions—not individuals—to consider how to
improve the situation next time and to report on results.
* System that sets a minimum limit on the interval of time between the end of
one work day and the beginning of the next.

49

Akaba: We equate health management with enhanced quality of life for
employees, and in fiscal 2020, ending
March 31, 2020, at AGREX, the
Human Resources Department will be
conveying a message to employees
about providing a “happiness platform.” Each employee has a
career plan as well as a life plan, and we at AGREX aim to put
in motion support measures in fiscal 2020 that help build
careers. In addition, through various approaches, such as family events, we will transform AGREX into a company thatspreads happiness not only to employees but to their families
as well.
Ikimune: How an employee evaluates his or her job is key tothe level of motivation that person feels. With changes inwork style, such as telework, motivation will not necessarily
be determined through an evaluation of an employee in theline of sight. Therefore, going forward, we, as a group, haveto strengthen performance management, which will lead to
improved quality in employee evaluations. At TIS, we haveapplied a few approaches toward this end, including 1-on-1
Meetings between supervisors and staff to deepen communication and 360˚ Feedback, which invites comments fromsupervisors, staff and colleagues. Different approaches havebeen initiated at other Group companies, and I’d like to see
the effective ones applied on a groupwide basis.
Takayanagi: For 1-on-1 Meetings, the decision was made tolet staff present the themes each time, so this gives staff practice thinking up themes on their own and carrying the conversation, which instills confidence. For their part, managers will
have to be able to accurately grasp conditions affecting staff.
Each manager has a staff of five to eight people and meetswith each one once every two weeks. It’s not a huge dent intheir schedules. I participated in 1-on-1 Meetings and foundthis to be a very valuable approach.
1-on-1 Meetings are intended to make staff excited about
their work and boost motivation through improved communication, both in terms of quantity and quality. Managers—
more than 1,500 of them—will have to be trained on themeeting format, and it may take more than a year before we
see tangible results.

Power of all employees under Group umbrella is sourceof higher composite corporate value of Group
Takayanagi: With great timing, TIS presented a shared philosophy—OUR PHILOSOPHY—and a shared direction—Group
Vision 2026—for the Group along with efforts to strengthen
the personnel system. Frontline motivation is steadily rising. I
feel that the power of all employees under the Groupumbrella creates tremendous energy that will drive the composite corporate value of the Group consistently higher.

Akaba: If anyone were to feel uneasy about personnel system
reform or organizational restructuring, it would be because
management’s message was not conveyed correctly. But management engages employees in discussion and consistently
offers solid explanations about why changes are necessary.
This turns apprehension into expectation and draws the powerof individuals together for exponentially larger impact.
Masuda: INTEC also implemented
major changes to its personnel system,seeking to improve corporate value. But
as I mentioned at the top of our discussion, the next task is to create rules to
run the system. What rules are needed?
I’m going to go to the frontline and talk with people to findout. In that sense, I will focus my energies on the critical
moment that comes now to improve corporate value.

Ikimune: A priority measure for the Human Resources SBU is
to raise the quality of human resources. Toward this end, weseek to build a human resources portfolio extending across theGroup to develop business personnel with high-level capabilities. To accelerate this process, we will actively communicate
with management and personnel divisions at core Group companies and focus on activities that cut across the Group.
We have made steady progress in developing the Grouphuman resources strategy and must be at stage six of this corporate mountain climbing expedition by now. However, thepersonnel system is always in a state of change, evolving alongwith society. You might say it’s a never-ending journey. One
point of arrival is the establishment of a personnel system withthe flexibility to adapt and a good corporate culture. We aremaking steady progress toward this goal, and I am confident
this will lead to higher corporate value on a groupwide basis.

Human Resources SBU Manifesto(Highlights)
Human Resources SBU Declaration

Become a company where all employees feel motivated to work hard
1. Desired status (by March 2021)

Platform that Supports Value Creation Process(ESG Section)

Masuda: Available data indicates a downward trend in overtime and the rate of annual paid vacation taken as well as thenumber of people absent from work and the number of days
absent, particularly due to mental health issues. However—and this is referred to absenteeism and presenteeism*—justbecause someone shows up for work doesn’t necessarilymean he or she is fine. Was time-off cut short? Do more
employees have latent problems? It’s also important to lookclosely at frontline conditions.

Efforts to strengthen performance management
groupwide

We seek to accelerate improvement in the composite corporate value of the Group by raising theindividual capabilities of diverse human resources.

2. Human Resources SBU
Three-Point Mission

1.

2.
3.

Create company where motivationlevel is high, and quickly andvigorously work toward this fromsystem and environment perspectives.

Achieve optimized deployment of
human resources while providing anenvironment conducive to selffulfillment of career goals.

Ensure thorough labor-related
compliance and create safe andpleasant company atmosphere.

3. Measures and Direction Through 2021
1. Measures related to evaluation, treatment and compensationi. Raise standard compensation: Raise compensation to industry’s top
levelii. Evaluation system that looks to boost motivation: Performance-based
evaluation and compensation matched to capabilities and positioniii. Personnel system with groupwide perspective: Build new personnel
system geared toward Group Vision 2026
2. Measures related diversity, workstyle and health managementi. Promote diverse workstyles: Offer greater freedom in terms of place
and time to encourage innovation
ii. Engage in health management: Enrich employees’ quality of life and becompany full of vitalityiii. Enable diverse human resources to be active: Provide place where
employee can thrive regardless of gender, nationality or age
3. Measures related hiring, training and assignments
i. Create human resources portfolio: Promote talent management
throughout the Groupii. Recruit people who will play a truly vital role in our success: Secure
human resources with high contribution potential and specialized
capabilitiesiii. Optimum deployment of human resources: Implement strategic humanresources deployment and regular rotation

50

Communication with Shareholders

Contributing to Global Environment

Fast, fair and impartial information disclosure

Environmental measures

We provide performance results and the latest news on our business activities to analysts as well as institutional andindividual investors through events, such as information meetings, the production of pamphlets and other materials, and also
in the investor relations section on the TIS website.

The Group actively addresses environmental issues through its business activities. At the data centers and offices that form
the foundations of our business activities, we pursue a range of environmentally friendly steps, including measures toconserve energy and reduce emissions of greenhouse gases.
We are working in particular to consolidate our data center operations to make greater use of advanced, environmentallyfriendly facilities that are electrically more efficient. We are also expanding our use of natural energy sources (including
geothermal power, outside air for cooling, rainwater, and solar power).

IR Events in Fiscal 2019

Frequency

Contents

Results briefings for analysts andinstitutional investors

4 timesQuarterly briefings

Small meetings for analysts and institutional
investors

176 times

Provide IR-oriented information for analysts and institutional investors. Of these meetings, 51
were for overseas investors. Total coverage: 260 companies (339 people)

Small meetings

2 timesPresident held one meeting with sell-side analysts, and one meeting with buy-side analysts.

Overseas roadshows

3 timesPresident, director responsible for overseas IR and other members of senior management met withshareholders and investors in Europe, United States, and Asia

IR conferences for individual investors

one time

Held a conference in Tokyo

Production of materials for individual investors

2 timesIssued “Business Report”*Please visit the following page for details of our environmental activities.
http://www.tis.com/group/csr/report/environment/#e01

Guiding principles for addressing environmental issues
1. We promote development and provision of environmentallyfriendly services.
2. We strive to address climate change and make effective use ofresources in consideration of environmental impacts.

3. We comply with environment-related laws, regulations,
voluntary standards, and other the like.
4. We conduct environmental education programs and work toraise environmental awareness of employees.

Initiatives to combat global warming
TIS is working to reduce its rates of energy consumption by 1% from a year earlier.

TIS’ IR Activities Recognized with Awards from External Organizations
At TIS, we believe that timely and objective information disclosure to shareholders and investors is an important obligationthat any listed company must fulfill. Therefore, we strive to enrich our IR activities and improve the content and function of
the IR pages on our website. The success of our efforts is substantiated in part by the following awards.
Internet IR
Excellence
Award



2018 Internet IR Commendation Award (Daiwa Investor Relations Co., Ltd.)
Received award for excellence from 2013 in sixth consecutive year.

Internet IR

Excellence
Award



Internet IR
Excellence
Award



Selected for inclusion in the JPX-Nikkei
index 400 (since August 2018)

Gomez IR Site Comprehensive Ranking 2018 (Morningstar Japan K.K.)
Received award for excellence from 2015 in fourth consecutive year.

OUTPUT
Unit

Fiscal 2017 Fiscal 2018 Fiscal 2019

Thousandkwh

Unit

Fiscal 2017 Fiscal 2018 Fiscal 2019

169,907

157,623

147,921t-CO2

83,76978,12571,096

Heavy fuel oil A2

kl

26

28

32

Heavy fuel oil A2

t-CO2

71

75

87

Light mineral oil

kl

11

11

10

Light mineral oil

t-CO2

28

29

25

389

379

343

City gas

t-CO2

877

854

773

Electricity

EnergyCity gas

1

2

2

Thousand m

2

Results

Electricity

2

1

2

Emissions by scope
Unit

Fiscal 2017 Fiscal 2018 Fiscal 2019

Scope 12

t-CO2

976

958

885

1

t-CO2

83,76978,12571,096t-CO2

84,74579,083

71,980

Scope 2

Scopes 1+2

Coverage:
1. 13 group companies (TIS, INTEC, and key subsidiaries)
2. TIS and INTEC

Case File A verification test of next-generation transit infrastructure in Assabu region

IR Policy
Purpose of IR Activities

As part of its pursuit of fair and transparent management, the Company
engages in investor relations activities in order to fulfill its accountability
obligations to not only the shareholders who entrust management to it, butalso to investors, securities analysts, and capital market participants ingeneral. By engaging in proper disclosure and constructive dialogue throughits investor relations activities, the Company also aims to promote
understanding of the Group, develop long-term trusting relationships, andearn fair valuations of its corporate value.

Basic Policy on IR Activities

Recognizing that investor relations activities are an important element of its
management activities, the Company is committed to fulfilling its accountability obligations to shareholders, investors, securities analysts, and othercapital market participants and to building trusting relationships based on
full communication achieved through ongoing conscientious and positive
engagement in investor relations activities.
To promote understanding of the Group, the Company will endeavor todisclose and explain its management policies, details of its business
operations, business strategies, earnings performance, finances, and othercorporate information in a timely, fair, accurate, and clear manner byparticipating in interviews and responding to inquiries pertaining to investor
relations, holding earnings briefings and small meetings, and engaging inother such activities. Opinions and other feedback on the Group obtained
through constructive dialogue will be shared within the Company throughreports to the Board of Directors and similar channels, and will be used for
purposes such as reviewing the Company's management strategies.
51

Basic Policy on Disclosure

1. Disclosure Standards
To ensure transparency by promoting information disclosure, the Company
discloses material information that could influence investment decisions,
including information disclosed in conformance with the Securities Listing
Regulations of the Tokyo Stock Exchange and the Financial Instruments andExchange Act (meaning information on decisions made by the Company,
occurrences of material facts, and business results and similar information;
the same applies hereinafter). In addition to the above, the Company also
discloses, to the extent possible, information judged useful for furthering
understanding of the Company and the Group.
2. Information Disclosure System
The Company has developed a communications structure linking divisions
and member companies of the Group, and it has established a structure fordisclosing material information that could influence investment decisions,
including information disclosed in conformance with the securities listing
regulations of the Tokyo Stock Exchange and the Financial Instruments andExchange Law, in a fair and timely manner. The Company is committed torigorous information management and preventing insider trading.
* Please see the Company’s web site regarding “3. Methods of Disclosure”,“4. Spokespersons for Investor Relations Activities”, “5. Yet-to-Be-Released
Material Information”, “6. Quiet Period”, “7. Response to Rumors, etc.”,“8. Earnings Forecasts, etc. by Third Parties”, “9. Framework for Disclosing
Information on Company Website” of Basic Policy on Disclosure.
http://www.tis.com/ir/other/policy/

Responding to moves to eliminate coal dependence and switch to use of locally produced and consumed energy
resources, which is a key element of the Japanese government’s Society 5.0 vision, the Group is using its many
years of business experience to help solve societal challenges.
To assist in this process, the Group has partnered with INDETAIL to implement the Project. The aim of this projectis to overcome some of the problems generated by the decline of transport infrastructure caused by the falling birthrate, population aging, anddepopulation of rural areas and the decline of regional economies caused by increases in energy costs. It will do so by developing a next-generationtransport and energy platform that uses advanced ICT to deliver new modes of transport, revitalize regions, and create communities that are sustainablefrom the point of view of meeting residents’ needs and reducing their energy use and environmental footprints.
The project is being led by INDETAIL and TIS and involves a group of other companies including Hokkaido Electric Power Company, Takaoka Toko,
Oracle Japan, Mitsui Sumitomo Insurance, Smart Value, and Cle-Net.

From August 2019, a verification test is underway in Assabu
town on the northern island of Hokkaido, following which theplatform will be rolled out on a full-scale basis.
(1) Launch and management of local currency for limited uses
A new local currency will be launched to encourage use of local transportand revitalize centrally located shopping centers.
(2) Energy management schemeElectricity providers and users will use renewable energies to promotelocal energy production and consumption.
(3) MaaS platform
This platform is tailored to the needs of older people and people withpoor IT skills and access to deliver greater peace of mind in everyday life.

52

Platform that Supports Value Creation Process(ESG Section)

Fiscal 2018 Homepage Quality Ranking Survey of All Listed Companies(Nikko Investor Relations Co., Ltd.)
Received highest award as excellent website in comprehensive ranking, from Fiscal
2015 in fourth consecutive year.

Selected for candidates, 50 companies, ofthe 8th Corporate Value Improvement
Award in fiscal 2019

INPUTMessages from Our External Directors

Corporate Governance

We will draw on theexperience and insights ofexternal directors to improvethe composite corporate
value of the TIS INTEC Group.
TIS’ three external directors haveprovided comments on themes ofimportance and expectations regarding
structural transformation of the TIS
INTEC Group.
Photo: From left, external directors Fumio Tsuchiya, Koichi Sano andNaoko Mizukoshi

Helping to solve social issues as a public entity of society through services that only TIS can provide

Most important function of external directors is to provide opinions based on calm judgment

Fumio Tsuchiya, External Director
In addition to the conventional idea that corporate governance is a practice or process for identifying, correcting and preventing illegal activity, corporate
governance is shifting toward a new awareness—to make management more effective by aligning the interests of stakeholders, which ultimately leads tomaximum corporate value. For that reason, a duty that the Board of Directors must fulfill is, when drafting a management plan, to adequately consider
whether or not the ideas on which the plan is based are in good balance and then, through subsequent verification and evaluation of progress, reflect thatstatus in the next plan.
Independent external directors comprise one-third of TIS’ Board of Directors, and the Company ensures access to business information, including opportunities to get information on key projects before the Board meets, so that we external directors are able to present objective opinions from an external perspective. An issue that concerns me, given that TIS is promoting structural transformation for the future against a backdrop of solid corporate results—
higher sales and higher income—with an emphasis on speed, is the pitfall of prioritizing speed at the expense of prudent risk evaluation. How will the opinions and advice of external directors be incorporated to realize more effective management?
Even as an external director, I know that there are watch points for corporate governance when business is good, just as there are when business is poor,and I am reminded of the need for calm judgment and the importance of stating opinions based on this perspective.

Based on OUR PHILOSOPHY (TIS INTEC Group Philosophy) and Group Vision, we
have formulated basic corporate governance policies aimed at improving theGroup’s corporate value over the medium and long terms. We are working
constantly to enhance corporate governance.
■Basic Policy
TIS will constantly strive to achieve the highest level of corporate governance and will work to maintain andfurther enhance its approaches to corporate governance.
Management believes that the key to good corporate governance is to ensure transparency and fairness
in decision-making processes, make full and effective use of management resources, and raise the integrityof management practices through swift and accurate assessment of situations, from the viewpoint ofpromoting sustainable corporate growth and boosting medium- and long-term corporate value. Accordingly,
management at the Company is committed to upholding good corporate governance in line with the following basic principles.
1. To respect the rights of shareholders and to ensure equality.
2. To consider the interests of stakeholders, including shareholders, and work with stakeholders in an
appropriate manner to achieve stated goals.
3. To disclose corporate information appropriately and ensure transparency.
4. To engage in constructive dialogue with shareholders based on a medium- to long-term investment
perspective.
(From Article 4, Basic Policies on Corporate Governance)

Corporate Governance Structure
Organizational Structure

Company with Audit & Supervisory Board

Chairman of the Board

Chairman and president

Number of Directors

Nine, including three external directors

Director’s Term of Office

One year

Number of Audit & Supervisory Board Members

Five, including three external audit & supervisory board members

Term of Office for Audit & Supervisory Board Members

Four years

Number of Independent Directors

Six, including three external directors and theee external audit &supervisory board members

I take special interest in organizational diversity and will actively contribute to discussions from this perspective.

Naoko Mizukoshi, External Director (Partner of Leftright Law & IP)
TIS formulated Group Vision 2026 to guide the TIS INTEC Group and seeks to shape an organization oriented for the future, contributing to society, brimming with vitality and boasting diversity in its human resources through efforts to instill OUR PHILOSOPHY in the minds of employees at all companies
under the Group umbrella, training for employees and a fine-tuned human resources strategy. This is the cornerstone of structural transformation, based on
the medium-term management plan, which will see the development of strategically anticipated businesses and increased created value. In addition to
Board of Directors’ meetings and briefing sessions held prior to these meetings, TIS sets up opportunities for directors to exchange opinions in a candid andopen atmosphere, conducts dialogue on human resources, the future of stock-based business and overseas strategies, steadily undertakes structural transformation, and strives to create a corporate group that is trusted by and indispensable to society.
That said, issues I feel TIS must continue to address include improving group governance as a company heading up a corporate group of some 20,000
people and dealing with the increasingly fast-paced changes developing across the competitive landscape. For me, I take special interest in the perspectiveof diverse stakeholders, including shareholders; views based on experience as a lawyer and at an IT company; and organizational diversity from a woman’s
standpoint. My participation in discussions reflects these perspectives. I will continue to be an active voice in meetings of the Board of Directors, theNomination Committee, the Compensation Committee and opportunities for opinion exchange, and I will strive to contribute to higher composite corporate
value for the TIS INTEC Group.
53

54

Platform that Supports Value Creation Process(ESG Section)

Koichi Sano, External Director
The level of discussion has steadily improved, thanks to such approaches as briefing sessions held prior to Board of Directors’ meetings, which promotes animated dialogue, as well as a review of discussion standards. In addition, TIS is very keen to maintain excellent corporate governance, guided by basic policy
on corporate governance, and this stance has had a beneficial impact on the evaluated effectiveness of the Board of Directors.
Shareholders place their trust in directors and expect them to engage in multifaceted, constructive discussion of strategies regardless of whether they arefrom inside or outside the Company or the extent of their responses. The responsibilities of external directors are huge, given corporate governance reform,and even the choice of external directors is influenced by diversity requirements. It’s important to promote a higher ratio of outside-to-inside directors on the
Board and welcome a wider range of backgrounds and attributes. The appointment of directors responsible for certain aspects of business, such as ICT andAI, is part of this approach. Going forward, to ensure sustainable growth and higher corporate value for TIS and the TIS INTEC Group, I will offer advice andmonitor status from an external perspective to reinforce the supervisory function of the Board of Directors and keep priorities pointed toward medium- tolong-term strategy themes, such as building a strategic business structure and developing human resources, as well as enhanced governance of operationsgroupwide. While the improvement trend indicates that the number of unprofitable projects is shrinking, I think TIS should shift from ratios to value amounts
and strengthen policies by applying approaches laterally across the Group. I will watch so that operating margin, order profitability to ROE growth, and productivity are not hemmed in by market evaluations.
TIS will have to raise the bar in terms of quality, content and speed in its decision-making process. Consequently, decisions will have to be made objectively, with attention given to such aspects as overall business, the appropriateness of prerequisites and strategies that successfully distinguish TIS from thecompetition or accurate risk management and flexible, effective business management. For projects to support the structural transformation that TIS
seeks—where service-style business is the driver of growth—and then, from the perspective of ESG and SDGs, for this to be not only the profit center of theCompany but also position the Company as a public entity of society, TIS must form decisions that enable the Company to be part of solutions to social
issues through business activities that only TIS—and by extension, the TIS INTEC Group—can provide.

*Please visit the following page for details of our corporate governance.
http://www.tis.com/ir/policy/governance/Organizational Chart

Summary of Results of Analysis and Evaluation of Effectiveness of Entire Board of Directors

General Meeting of Shareholders
Appointment, dismissal

Appointment, dismissal

Nomination
Committee

Corporate
Sustainability
Committee

Discussion/report
Reports

Reports

Supervision

Election, dismissal, supervision

Cooperation

President

Units involved
in internal audits

Reports

Executive Committee
Discussion/report on
significant issuses

Appointment, dismissal

Audit &
Supervisory Board(Members)

Board of Directors(Directors)

Compensation
Committee
Group Internal
Control Committee

Audit, reports
Statement of
opinionCooperation
Reports

Accounting Auditor

Accounting
audit
Cooperation

Internal audits

Delegation of authority to
execute operations

Executive Officers
Evaluation

Divisions/Departments

Affiliated companies

TIS is a Company with an Audit & Supervisory Board, a model chosen for its double-check function through which the Board of
Directors oversees the execution of business activities and the Audit & Supervisory Board audits activities to ensure operations
are legal and appropriate. In addition, the Company aims to strengthen the supervisory function of the Board of Directors byappointing outside directors with industry- and corporate management-related experience and insight and drawing on advice andrecommendations from an independent standpoint to ensure the validity and appropriateness of decision-making by the Board of
Directors.

Directors and Board of Directors

55

management direction as well as meetings ahead of Board of
Directors' meetings—in principle, twice a month—to giveexternal directors and outside members of the Audit &Supervisory Board sufficient background information toparticipate in discussions. In addition, the Company organizes
study sessions with experts—in-house and external—andarranges visits to local Group facilities and offices. TIS also
creates opportunities four times a year when external directors
can exchange opinions with the president and sets up meetings
twice a year that involve only external directors and outside
members of the Audit & Supervisory Board. This facilitatessmooth but vigorous discussion by the Board of Directors.

1. Method of evaluation
TIS distributed a questionnaire regarding the effectiveness of
the Board of Directors to all directors and members of the Audit& Supervisory Board and obtained responses. The Company’s
Board of Directors then used these responses to analyze andevaluate the effectiveness of the Board of Directors.
Note that TIS conducted this effectiveness evaluation basedon advice and verification by an external attorney.
2. Results of analysis and evaluation of effectiveness of
the Board of Directors
The Company’s Board of Directors concluded that a certain
degree of effectiveness had been ensured to appropriately
supervise the approval of important management matters andbusiness execution, such as the execution status of businessactivities and investments at the Company and Groupc­ ompanies, through deliberation based on Company regulations. In addition, the Board of Directors concluded that thelevel of effectiveness continues to trend upward, reflecting
improvement measures based on the results of the effectivenessevaluation conducted in the previous fiscal year.
However, management acknowledged the importance ofstrengthening governance at each Group company through theBoard of Directors and for more active opinion exchange on
important themes at meetings of the Board of Directors toensure greater effectiveness in running such meetings.
3. Future issues and associated responses, based on­analysis and evaluation
In light of the analysis and evaluation previously mentioned, TIS
will focus particular efforts on the following issues.
(1)	Strengthen governance of the Group and respond toissues with sense of speed
Through the Board of Directors, the status of governancewithin the Group is always known and responses to issues are
executed with a sense of speed.
(2)	Promote more active opinion exchange on key themes
at meetings of the Board of Directors
The Board of Directors exchanges opinions on shareholder composition, overseas business strategies and other issues of importance to the Group. Going forward, the Board of Directors will
pursue a more robust approach to the exchange of opinions on
key themes, such as business strategy, human resources strategy and investment strategy with market trends and the stateof competition in mind. Opinions with potential will bereflected in management practices with a sense of speed.

Policy and Procedures for Election, Dismissal, and Nomination of Directors, etc.
In nominating candidates for directors, audit & supervisoryboard members and executive officers, the Board of Directors
will nominate persons with abundant experience, a high levelof insight and advanced specialization based on the following
election criteria that make them suitable as directors or audit& supervisory board members in order to realize effective corporate governance and contribute to the sustainable growthof the Company as well as the enhancement of its medium-to long-term corporate value while also considering aspects ofdiversity such as gender and internationality.
If a situation arises where a management executive should
be dismissed, the Board of Directors shall determine a dismissal proposal. However, the dismissal of a director shall be
conducted in accordance with the Companies Act and otherrelevant provisions.

56

Platform that Supports Value Creation Process(ESG Section)

Reason for Selection of Current Corporate Governance Organization

As stipulated in its Articles of Incorporation, the Company's
Board of Directors will comprise at least three and no morethan 15 directors, and to strengthen the supervisory functionsof the Board of Directors, a policy has been established thattwo or more of the directors must be independent external
directors. At present, three independent external directors havebeen appointed.
For swift and dynamic decision-making by the Board of
Directors, the Board of Directors convenes in principle once
monthly and also meets on an ad hoc basis whenevernecessary.
TIS holds an information meeting once a year to present

Since fiscal 2016, ended March 31, 2016, the Company has
evaluated the effectiveness of the Board of Directors each fiscal
year. This process reveals issues and points for improvement
and leads to initiatives that will raise the effectiveness of theBoard of Directors to a higher level. For the fiscal 2019 evaluation, all directors and members of the Audit & Supervisory
Board were given a questionnaire to be submitted anonymously. The questionnaire asked them to conduct a comprehensive self-evaluation and self-analysis of the composition andoperation of the Board of Directors, and then the Board of
Directors pursued discussions based on the results. The method
and results of the evaluation, as well as future issues brought tolight through this process and measures to address such issues
are described below.

Reason for Election of Directors and Audit & Supervisory Board Members

Directors
Toru Kuwano, Chairman and President
Date of Birth: May 3, 1952
April 1976	Joined Toyo Information Systems Co., Ltd.
­(currently TIS Inc.)
June 2000
Director of the Company
April 2004
Executive Director of the Company
April 2008
Executive Managing Director of the Company
April 2010	Executive Vice-President and Representative
Director and General Manager of Financial Industry
HQ of the Company
April 2011	President and Representative Director of theCompany
June 2018	Chairman, President and Representative Director of
the Company, in charge of Auditing Dept. (to­present)

Reason for Election
After assuming the office of President and Representative Director of theGroup company, Mr. Kuwano was appointed as a Director of the Company inJune 2013. Since June 2016, he has assumed the office of President andRepresentative Director of the Company.
He has a wealth of experience and knowledge about the Company’s and
its Group’s business, as well as in business administration.
He was appointed as a Director since he is highly expected to continue topromote the Medium-Term Management Plan (from 2018 to 2020) and fulfill
the duties of significant decision-making for the Group as well as the administration and oversight of business management.

Masahiko Adachi, Representative Director, Executive Vice President
Reason for Election
Mr. Adachi has been in the office of Representative Director since June 2018
following the office of Division Manager of the corporate department and thefinancial system department of a financial institution and the Company’sGroup company.
Based on these experiences, he was appointed as a Director since he ishighly expected to continue to promote group governance as set out in theMedium-Term Management Plan of the Group (from 2018 to 2020), centeredon the corporate function, and fulfill the duties of significant decision-making
for the Group and oversight of business management.

57

Reason for Election
Mr. Yanai was mainly engaged in corporate section in the corporate planningdepartment of the Company and its Group company for many years. He
assumed the office of Executive Officer and Division Manager of corporate
planning division of the Company in April 2011. Since June 2016, he has been
serving as a Director of the Company.
He has a wealth of experience and knowledge about the business of theCompany’s and its Group, as well as in business administration. Based on theseexperiences, he was appointed as a Director since he is highly expected to continue to promote the Medium-Term Management Plan (from 2018 to 2020) ,and fulfill the duties of significant decision-making for the Group and theadministration and oversight of business management as a Director.

Takayuki Kitaoka, Director
Date of Birth: December 14, 1960
April 1984
Joined INTEC Inc.
April 2015
General Manager of BPO Division of INTEC Inc.
April 2016	Executive Officer, General Manager of Corporate
Planning Division of INTEC Inc.
April 2017	Managing Executive Officer, General Manager ofCorporate Planning Division of INTEC Inc.
April 2018	President and Representative Director of INTEC Inc.
(to present)
June 2018	Director of the Company (to present)

Reason for Election
Mr. Kitaoka was engaged in business related to IT infrastructure of INTEC Inc.,
the Company’s major subsidiary, and served in management administration of
the Group companies at the Company for three years since April 2012. 		
Furthermore, he has assumed the office of President and Representative
Director of INTEC Inc. since April 2018 and the office of Director of theCompany since June 2018.
He was appointed as a Director since he is highly expected to continue topromote the duties of INTEC Inc. assigned by the Medium-Term Management
Plan (from Fiscal 2018 to Fiscal 2020) and to fulfill the duties of significant
decision-making for the Group and the administration and oversight of business management, based on the above experiences and from the viewpoint ofGroup management.

Akira Shinkai, Director

Yasushi Okamoto, Director and Senior Managing Executive Officer
Date of Birth: March 3, 1962
April 1985	Joined Toyo Information Systems Co., Ltd. (currently TIS Inc.)
April 2011	Executive Officer, Department Manager ofCorporate Planning & Control Dept. of theCompany
April 2013	Managing Executive Officer, Division Manager of IT
Solutions Services SBU. of the Company
April 2016	Senior Managing Executive Officer, Division
Manager of Industries & Solutions SBU of theCompany
June 2018	Director, Senior Managing Executive Officer andSector Director of Service Strategy Sector of theCompany (to present)

Date of Birth: November 14, 1963
April 1987
Joined the Long-Term Credit Bank of Japan, Limited
January 2000	Joined Toyo Information Systems Co., Ltd.
­(currently TIS Inc.)
April 2009	Executive Officer, Department Manager ofCorporate Planning & Control Dept., Corporate
Planning & Control Div. of the Company
May 2015	Managing Executive Officer, Division Manager ofCorporate Planning Division of the Company
June 2016	Director, Managing Executive Officer and Division
Manager of Corporate Planning SBU of the Company
April 2018	Director, Senior Managing Executive Officer andSector Director of Industry Strategy Sector of theCompany (to present)

Reason for Election
Mr. Okamoto has been serving as Senior Managing Executive Officer andDivision Manager of the planning and development department of industrial
systems since July 2016, and has been in the office of Director since June
2018, after having been engaged in corporate business in the corporate­planning department of the Company for many years.
Based on these experiences, he was appointed as a Director since he ishighly expected to continue to promote the Medium-Term Management Plan(from 2018 to 2020), and fulfill the duties of significant decision-making for
the Group and oversight of business management.

Date of Birth: March 24, 1959
February 1986	Joined Yokogawa U System Corporation
April 2000	Joined YDC Corporation
June 2001	Director of YDC Corporation
October 2009	Joined Nippon System Gijutsu Co., Ltd.
June 2010	Director and Managing Executive Officer of Nippon
System Gijutsu Co., Ltd.
April 2011	Joined INTEC Inc. Deputy General Manager of NSG
Department of INTEC Inc.
June 2012	Executive Officer, General Manager of NSG
Department of INTEC Inc.
May 2015	Managing Executive Officer, General Manager ofIndustrial Solutions Business Division of INTEC Inc.
April 2016	Managing Executive Officer, General Manager ofMetropolitan Social Service Headquarters of INTEC Inc.
April 2018	Director, Executive Vice President, in charge ofCorporate Information Department, Business
Strategy Promotion Division, and Metropolitan
Distribution Service Headquarters, and General
Manager of Metropolitan Distribution Service
Headquarters of INTEC Inc. (to present)
June 2018	Director of the Company (to present)

Reason for Election
Mr. Shinkai was engaged in business of new service planning and marketingand has assumed the office of Director and Executive Vice President of INTEC
Inc., the Company’s major subsidiary, since April 2018, and the office of
Director of the Company since June 2018.
Based on these experiences, he was appointed as a Director since he ishighly expected to continue to promote the Medium-Term Management Plan(from 2018 to 2020), and fulfill the duties of significant decision-making for
the Group and the administration and oversight of business management.

58

Platform that Supports Value Creation Process(ESG Section)

Date of Birth: May 9, 1956
April 1981	Joined Sanwa Bank, Limited (currently MUFG Bank,
Ltd.)
April 2011	Executive Officer, Division Manager of Corporate
Management Div. of TIS Inc.
April 2013	Managing Executive Officer, Division Manager ofFinancial Industry SBU. 1 of the Company
April 2016	Senior Managing Executive Officer, Division
Manager of Financial Industry SBU. 1 and Division
Manager of Financial Industry SBU. 3 of theCompany
April 2018	Executive Vice President, in charge of Corporate
Planning SBU of the Company
June 2018	Representative Director, Executive Vice President, incharge of Corporate Planning SBU of the Company(to present)

Josaku Yanai, Director and Senior Managing Executive Officer

External Directors

Tatsufumi Matsuoka, Standing Audit & Supervisory Board Member

To help the Group post constant growth and achieve higher corporate value over the medium to long term, TIS strives tokeep participation of external directors in good balance with inside directors and looks for people who possess diverse
knowledge, experience and capabilities.
■ Corporate management■ Financial accounting

Koichi Sano*, External Director
Date of Birth: August 30, 1948
April 1971	Joined Mitsui Petrochemical Industries, Ltd. (currently Mitsui
Chemicals, Inc.)
June 2003	Executive Officer and Manager of Finance Department of
Mitsui Chemicals, Inc.
June 2005
Executive Director of Mitsui Chemicals, Inc.
June 2009	Executive Vice-President and Representative Director of Mitsui
Chemicals, Inc.
June 2013
Special Councilor of Mitsui Chemicals, Inc.
June 2015
Retired from Mitsui Chemicals, Inc.
June 2016
Director of the Company (to present)(Other Important Concurrent Positions)
External Director of Nippon Yakin Kogyo Co., Ltd.
Reason for Election
Mr. Koichi Sano worked mainly in the finance and accounting departments, and served as
Executive Vice-President and Representative Director of Mitsui Chemicals, Inc., and has awide range of experience and a wealth of expertise in corporate management. He wasappointed as an External Director since his advice and suggestions from an independent
perspective by utilizing these experiences and expertise in the Company’s business will
ensure that the decisions to be made by the Company’s Board of Directors will be reasonable and appropriate, and he is highly expected to be a person who will contribute to theenforcement of the corporate governance of the Company.

Fumio Tsuchiya*, External Director

August 2010	Section Manager of Internal Auditing Office of Faith, Inc.
June 2011
Full-time Audit & Supervisory Board Member of Faith, Inc.
June 2017
Director of the Company (to present)
Reason for Election
Mr. Tsuchiya previously worked in an important position in overseas offices and the
Corporate Planning Department of Japan Airlines Co., Ltd. After having assumed theoffice of Director of Japan Airlines in June 2004, he served as Managing Director and wasthereafter appointed as President & CEO of JALCard, Inc. in June 2007, which is a groupcompany of Japan Airlines. He has a wide range of experience and a wealth of expertisein corporate management.
He was appointed as an External Director since his advice and suggestions from an
independent perspective by utilizing these experiences and expertise in the Company’sbusiness will ensure that the decisions to be made by the Company’s Board of Directors
will be reasonable and appropriate, and he is highly expected to be a person who willcontribute to the enforcement of the corporate governance of the Company.

Naoko Mizukoshi*, External Director
Date of Birth: September 23, 1967
April 1993	Joined Legal Training and Research Institute of Supreme
Court of Japan
April 1995
Registered as a lawyer with Osaka Bar Association
	Joined Miyazaki Sogo Law Office (currently Legal
Professional Corporation Miyazaki Sogo Law Office)April 1998	Registered as a lawyer with Yokohama Bar Association (currently Kanagawa Bar Association)
	Joined Legal Department of Nomura Research Institute, Ltd.
September 1999	Registered as a lawyer with Daini Tokyo Bar Association
Joined Legal Department of Autodesk, Ltd.
September 2002	Joined Legal Headquarters of Microsoft Co., Ltd.
Registered as a lawyer in the State of California, U.S.A.
November 2006 Joined TMI Associates
January 2008
Partner of TMI Associates■ International experience ■ Legal work
■ ICT

March 2010	Founded Endeavour Law OfficePartner of Endeavour Law Office
June 2018
Director of the Company (to present)
December 2018 Partner of Leftright Law & IP (to present)
Reason for Election
Ms. Mizukoshi is a qualified lawyer and has a wealth of professional knowledge of, andexperiences in, intellectual property, ICT and international transactions.
Her advice and suggestions from an independent perspective will ensure that thedecisions to be made by the Company’s Board of Directors will be reasonable and appropriate by utilizing these experiences and expertise in the Company’s business, and she ishighly expected to be a person who will contribute to the enforcement of the corporate
governance of the Company.
She has not participated in corporate management but has expertise on corporate
legal works. Therefore, she was appointed as an External Director since she could discharge duly the duties of External Director.

Audit & Supervisory Board Members
Katsuhiko Ishii, Standing Audit & Supervisory Board Member
Date of Birth: November 5,1953
April 1976	Joined the Long-Term Credit Bank of Japan, Limited
October 2001 Joined SORUN Corporation
June 2007	Director and Executive Officer of SORUN Corporation
April 2011	Managing Executive Officer, Division Director of the
Financial Industry SBU. , Financial Industry HQ. and Division
Manager of the Financial Systems Div. 3 of TIS Inc.
October 2011	Managing Executive Officer and Deputy Division Manager
of Financial Industry SBU. of the Company.
April 2012	Managing Executive Officer and Deputy Division Manager
of Corporate SBU. of the Company.

59

April 2014	Managing Executive Officer and Division Manager of Corporate SBU. of
the Company.
April 2016
Advisor to the Company.
June 2016	Full-time Audit & Supervisory Board Member of the Company (to present)
Reason for Election
Mr. Ishii worked for a financial institution and served as General Manager of the
Corporate Department of a Group company. He also served as an advisor at the same
Group company. Based on these experiences, he was appointed as an Audit & Supervisory
Board Member as he can be expected to oversee the execution of duties of the Company’s
Directors in a fair and appropriate manner.

April 2016	Managing Executive Officer, Deputy Division Manager of Public Solutions& Services SBU and Deputy Division Manager of Industries SBU of theCompany
Chairman and Director of TIS System Service Inc.
April 2019
Advisor to the Company
June 2019	Standing Audit & Supervisory Board Member of the Company (to present)
Reason for Election
Mr. Matsuoka has a wealth of expertise in finance and accounting as well as corporate
management based on experience accumulated through his service at financial institutions and management of companies over many years. He was appointed as an Audit &Supervisory Board Member, as he is expected to discharge audit and supervisory duties
regarding the execution of duties of the Company’s directors in a fair and appropriatemanner.

External Audit & Supervisory Board Members
To help the Group post constant growth and achieve higher corporate value over the medium to long term, TIS strives tokeep participation of external audit & supervisory board members in good balance with inside members and looks forpeople who possess diverse knowledge, experience and capabilities.

Taigi Ito (Certified Public Accountant and President, Ito Office)*, External Audit & Supervisory Board Member
Date of Birth: October 13,1946
January 1970
Joined Tsuji Audit Corporation
February 1989	Representative Partner of MISUZU Audit Corporation
July 2004	Deputy Chairman of the Japanese Institute of Certified Public
Accountants
August 2007
Chief of Ito CPA Firm (to present)
April 2009	Professor at Graduate School of Accountancy, Waseda
University
June 2012	Audit & Supervisory Board Member of the Company(to present)

Reason for Election
Mr. Ito is a licensed Certified Public Accountant. His expertise and knowledge in the fieldof finance and accounting and professional experience are beneficial to the Company inenforcing its audit system. Although he was not directly involved in corporate management, he was appointed as an External Audit & Supervisory Board Member as he wasconsidered to be well qualified to appropriately perform the duties of Audit & Supervisory
Board Members given the above credentials.

Muneaki Ueda (Chairman, Professional Bank, Inc.)*, External Audit & Supervisory Board Member
Date of Birth: January 1,1948
August 1983
Joined Temporary Center Inc. (currently, Pasona Inc.)
January 1988	Executive Director and Manager of International Division andManager of Business Development Dept. of Pasona Inc.
	President and Representative Director of Pasona N A, Inc.
April 1991	Executive Managing Director and General Manager of Sales
Division of Pasona Inc.
June 1993
Director and Vice-President of Pasona Inc.
June 2000
President and Representative Director of Pasona Inc.

■ Corporate management■ International experience

August 2004
President and Representative Director of Professional Bank Inc.
April 2007	Chairman and Representative Director of Professional Bank Inc. (topresent)
June 2012	Audit & Supervisory Board Member of the Company (to present)
Reason for Election
Mr. Ueda has a wealth of experience and wide-ranging insight as a corporate executive.
He was appointed as an External Audit & Supervisory Board Member in expectation ofobtaining his overall management advisory and management oversight on execution ofduties from an external perspective.

Sadahei Funakoshi*, External Audit & Supervisory Board Member
Date of Birth: August 15,1954
April 1977
Joined Mitsubishi Corporation
March 2003	Transferred to Mitsubishi Corporation Financial &Management Services (Japan) Ltd. as Director and VicePresident
April 2009	Transferred to Mitsubishi Corporation LT, Inc. as Advisor
June 2009	Director and Managing Executive Officer of Mitsubishi
Corporation LT, Inc.
June 2011	Director and Senior Managing Executive Officer of Mitsubishi
Corporation LT, Inc.
January 2013	Representative Director and Senior Managing Executive
Officer of Mitsubishi Corporation LT, Inc.

■ Corporate management■ Financial accounting■ Industry knowledge■ International experience

May 2013
Statutory Auditor of IT Frontier Corporation
July 2014
Statutory Auditor of TATA Consultancy Services Japan, Ltd.
June 2016	Audit & Supervisory Board Member of the Company (to present)
Reason for Election
Mr. Funakoshi has a wealth of experience and knowledge in corporate management, withhis experience in the management of investment and loan, credit and administrative
departments of Mitsubishi Corporation, as well as his service as an auditor at IT companies. He was appointed as an External Audit & Supervisory Board Member in expectationof obtaining his overall management advisory and management oversight on execution ofduties from an external perspective.

* Designated for Independent Director/Auditor as specified by the Tokyo Stock Exchange in Japan.
Notes: 1. As of June 25, 2019.
2.	As of July 1, 2016, the Company (previous name, IT Holdings Corporation) changed its name to TIS Inc. due to the absorption-type merger with the p­ revious TIS Inc.
(an absorbed company), wholly-owned subsidiary of the IT Holdings Corporation (a surviving company).

60

Platform that Supports Value Creation Process(ESG Section)

Date of Birth: May 10, 1948
July 1971
Joined Japan Airlines Co., Ltd.
May 1999	Director and Section Manager of Personnel & Corporate
Planning Section of JAL Hotels Co., Ltd. (currently Okura
Nikko Hotel Management Co., Ltd.)
October 2002	Executive Officer, Deputy Section Manager of Corporate
Planning Section of Japan Airlines System, Inc. (currently
Japan Airlines Co., Ltd.)
June 2004	Director and Section Manager of Corporate Planning
Section of Japan Airlines Corporation (currently Japan
Airlines Co., Ltd.)
April 2006	Managing Director, in charge of PR & IR, Legal Affairs andGeneral Affairs of Japan Airlines Co., Ltd.
June 2007
President & CEO of JALCard, Inc.
June 2010Retired from JALCard, Inc.

■ Corporate management ■ Industry knowledge■ International experience

Date of Birth: December 2, 1957
April 1980	Joined the Tokai Bank, Ltd. (currently MUFG Bank, Ltd.)May 1999
General Manager, Ise Branch of the Tokai Bank, Ltd.
January 2001	General Manager, Anjo Branch of the Tokai Bank, Ltd.
January 2003	General Manager of Corporate Department, Corporate
Sales Division and General Manager of Nagoyako Branch,
UFJ Bank Limited (currently MUFG Bank, Ltd.)
January 2006	Senior General Manager, The Bank of Tokyo-Mitsubishi UFJ
Ltd.(currently MUFG Bank, Ltd)
February 2007	General Manager, Hamamatsu Branch of The Bank ofTokyo-Mitsubishi UFJ Ltd.
May 2009
Joined MST Insurance Service Co. Ltd.
April 2013	Senior Managing Director and General Manager of Nagoya
Corporate Sales Division of MST Insurance Service Co. Ltd.
April 2015	Managing Executive Officer and Deputy Division Manager
of Corporate SBU of TIS Inc.
Chairman and Director of TIS System Service Inc.

Training Policy for Directors and Audit & Supervisory Board Members
For directors and auditors, including external directors andexternal auditors, the Company will provide and arrange training opportunities that are appropriate for individual directors
and auditors and support the cost of such training. The objective of such training is to provide an opportunity to acquire necessary knowledge regarding the Group's businesses, financial

affairs and organization and to understand the duties andresponsibilities required of directors and Audit & Supervisory
Board Members when assuming office, as well as to continuously update these attributes during the term of office.

External Directors and External Audit & Supervisory Board Members
The Company has three external directors and three external
Audit & Supervisory Board Members. The determination of the
independence of external directors and external Audit &Supervisory Board Members is prescribed by the requirementsof the Companies Act as well as judgement criteria to ensure
the independence of external directors and external Audit &Supervisory Board Members as described below, with reference
to the rules and regulations of the Tokyo Stock Exchange.

Primary Activities of External Directors and External Auditors (Year ended March 31, 2019)
Attendance at Board of Directors
Name

Attendance rate

Primary Activities

100%

Attended all 17 meetings of the Board of Directors held in fiscal 2019

Fumio Tsuchiya

100%

Attended all 17 meetings of the Board of Directors held in fiscal 2019

Naoko Mizukoshi

100%

Taigi Ito
External Audit& Supervisory Muneaki Ueda
Board Members
Sadahei Funakoshi

94.1%

Attended 16 of 17 meetings of the Board of Directors held in fiscal 2019

94.1%

Attended 16 of 17 meetings of the Board of Directors held in fiscal 2019100%

Attended all 17 meetings of the Board of Directors held in fiscal 2019

External
Directors

Attended all 12 meetings of the Board of Directors held after her appointment
on June 26, 2018.

Attendance at Audit & Supervisory Board
Name

Taigi Ito

External Audit& Supervisory Muneaki Ueda
Board Members
Sadahei Funakoshi

Attendance rate

Primary Activities

91.7%

Attended 11 of 12 meetings of the Audit & Supervisory Board held in fiscal 2019

91.7%

Attended 11 of 12 meetings of the Audit & Supervisory Board held in fiscal 2019100%

Attended all 12 meetings of the Audit & Supervisory Board held in fiscal 2019

Summary of Content of Liability Agreements
In accordance with Article 427, Paragraph 1 of the Companies
Act, each of Audit & Supervisory Board enters into an agreement with the Company that limits legal responsibility for liability compensation as set forth under Article 423, Paragraph 1 of61

the same law.
The limit of liability compensation, based on these agreements, is an amount provided for in Article 425, Paragraph 1,of the same law.

The basic policy on officers’ compensation is to provide greater
incentive to improve business results through a system of compensation linked to measures of Company performance, andsuch amounts are determined through a decision by the Boardof Directors, based on discussion and suggestions by theCompensation Committee.
Compensation to Company directors consists of a basic
component, a performance-linked component and performance-linked stock incentive. Basic compensation is paid
according to the size of the role and scope of responsibilities ofeach position. Performance-linked compensation is determinedby the degree to which measures of corporate performance
have been achieved, on the basis of the management plan foreach fiscal year, and shall fall within a performance evaluation
coefficient of between 0% - 30% of basic compensation foreach position.
For the performance-linked stock incentive, the Board of
Directors established share delivery rules when the performance-linked stock incentive plan was introduced. Points are
granted to directors on a scale within 0% - 15% of base compensation set for each position according to the level ofachievement made toward reaching performance targets statedin the management plan as provided for in the rules. The number of shares delivered will correspond to the number of points
accumulated.

Compensation paid to external directors is limited to basic
compensation only, with no performance-linked component.
Compensation for Audit & Supervisory Board members is
decided through discussion by corporate auditors. From theperspective of maintaining a high degree of independence,compensation is not linked to business performance and consists solely of basic compensation.
Furthermore, to reflect medium- to long-term business performance, directors (excluding outside directors) are asked tocontribute at least a certain portion of their basic compensation
toward the purchase of treasury stock through the Company’s
share ownership plan for directors and officers, and they are
expected to retain such stock in full for the duration of theirtime in office so that the acquired stock shares value with allshareholders.
Note that TIS introduced this performance-linked stockcompensation system in fiscal 2019 for directors, executive officers and executive fellows (excluding external directors, nonexecutive directors and residents outside Japan) with theobjective being to make eligible directors more aware of theircontribution to enhanced business performance and improved
corporate value over the medium to long term and to aligntheir interests with those of shareholders.
Platform that Supports Value Creation Process(ESG Section)

Koichi Sano

Outline of Policy on Officers' Remuneration(1) Compensation rate by position
Base compensation

Performance-linked
compensation

Performance-linked stockcompensation

Directors (excluding non-standing
directors)

68%

21%

11%

External Directors

100%

—

—

Audit & Supervisory Board Members

100%

—

—

External Audit & Supervisory Board
Members

100%

—

—

(2) Process for determining executive compensationa.	Attainment of business plans formulated at the beginning of the fiscal year in accordance with the mid-term management plan is
confirmed by the Performance Evaluation Committee.
b.	The President and Representative Director evaluates the directors and Audit & Supervisory Board members at the meeting of the
Performance Evaluation Committee referred to in a. above.
c.	The Compensation Committee meets to consult on the results of the evaluation in b. above and amounts of compensation basedon the results of evaluation.
d.	The Board of Directors votes on whether to approve the amounts of executive compensation considered by the Compensation
Committee in c. above.
Performance-linked stock compensation is calculated in accordance with the Stock Issuance Regulations. The Board of Directors andthe Compensation Committee have no room for discretion.

62

(3) Activities of the Advisory Committee on Determination of Executive Compensation
The Compensation Committee met four times during the fiscal year under review to consider the appropriateness of the Company’scompensation based on a comparative analysis of the amounts of the Company’s executive compensation and executive compensation at other companies by a research firm, and the method of calculation and appropriateness of the amounts of performancelinked compensation. A proposal was put to the Board of Directors concerning executive compensation based on the results ofdeliberation by said body.
(4) Methods of calculation of performance-linked compensation and performance-linked stock compensation
Performance-linked compensation is determined based on a comprehensive assessment of the degree of attainment of corporate
performance indicators determined based on the management plan for each fiscal year. In fiscal 2019, performance-linked compensation was determined by applying a 30% performance evaluation coefficient based on the level of attainment in the previous fiscal
year of targets including Consolidated Sales, Consolidated Operating Income, and Consolidated ROE.
Previous fiscal year (Fiscal 2018, ended March 2018)

Corporate performance indicators

Estimates

ActualConsolidated Sales¥400,000 million¥405,648 million

Consolidated Operating Income¥30,000 million¥32,743 million

8.0%

9.9%

Consolidated ROE

Remuneration

Basic
remuneration

Performance-linked
remuneration

Performance-linked
Stock compensation

Directors(External Directors)

10
(4)

¥275
(¥27)

¥203
(¥27)

¥46
(−)

¥26
(−)

Audit & Supervisory Board Members(External Auditors)

6
(3)

68
(25)

68
(25)

−

−

(−)

(−)

Total
(External Directors and External Auditors)

16
(7)

344
(53)

271
(53)

46
(−)

26
(−)

(Millions of yen)

Notes: 1.	For the fiscal year ended March 31, 2019, compensation for directors does not include the employee portion for directors who serve concurrently as employees. The Company has not introduced a retirement benefit system for directors, and does not pay any directors’ bonuses.
2.	As of March 31, 2019, the Company has nine directors, including three external directors. The discrepancy between this number and thenumber of directors listed as recipients above is attributable the inclusion of three directors, one being an external director, who retired at
the conclusion of the 10th Annual General Meeting of Shareholders on June 26, 2018, and the inclusion of two directors who serve without compensation.
3.	As of March 31, 2019, the Company’s Audit & Supervisory Board comprises five members, three of whom are external. The discrepancy
between this number and the number of directors listed as recipients above is attributable the inclusion of one member who retired at theconclusion of the 10th Annual General Meeting of Shareholders on June 26, 2018.
4.	Limits on compensation (basic compensation and performance-linked compensation) for directors and members of the Audit & Supervisory
Board were approved at the First Annual General Meeting of Shareholders on June 25, 2009, with the limit on compensation for directors
set at ¥400 million per year (of which, external directors receive no more than ¥50 million) and that for members of the Audit &Supervisory Board set at ¥85 million.
5.	The performance-linked stock incentive is booked as an expense for six directors (excluding external directors and non-full-time directors) inthe current business year.
Note that this performance-linked stock incentive was approved by shareholders at the 10th Annual General Meeting of Shareholders on June
26, 2018, wherein the upper limit on the number shares is 61,300 per business year, to be delivered through a trust into which the Company
contributes up to ¥500 million in each specified period (three business years) for eligible directors (excluding external directors, non-full-time 		
directors), executive officers and executive fellows.

Method of calculation of performance-linked stock compensation

Nomination Committee, and Compensation Committee

Calculation formula
Number of shares granted (points*) = base amount x performance variation coefficient / unit acquisition price*Rounded down to the nearest decimal
Performance indicators

Consolidated Operating Income

Fiscal 2019 ended March 2019
Estimates

ActualCommittee’s Name, Composition, and Attributes of Chairperson
Nomination Committee
Remarks¥35,000 million¥38,044 million

10.2%

11.5%

Service Business Sales¥32,558 million¥35,393 million

Note 1

Employee Satisfaction

40.0%

43.0%

Note 2

Consolidated ROE

4

4

Inside Directors

1

1

Chairperson(5) Outline of performance-linked stock compensation system
An Executive Compensation BIP Trust (hereafter, “BIP Trust scheme”) was introduced as a performance-linked stock compensation
system by resolution of the 10th General Meeting of Shareholders held on June 26, 2018. Those eligible for benefits are directors(excluding external directors and non-executive directors), executive officers with portfolios, executive officers, and executive fellows(hereafter, “Directors, etc.”).
a. Organization of the BIP Trust schemeb. Total number of shares to be granted to Directors, etc.: 61,300 shares in one financial year (upper limit)c. Scope of individuals able to receive beneficiary rights and other rights under the BIP Trust scheme:	Individuals who have retired from being a Director, etc. and meet the beneficiary conditions specified in the Stock Issuance
Regulations.

Compensation Committee

All Committee Members
Outside Directors

Notes: 1.	Predefined as a target in the Stock Issuance Regulations based on operations selected for their contribution to the structural transformationof the Company on a non-consolidated basis. They do not represent service business sales on a consolidated basis.
2.	Determined by a questionnaire survey conducted by an outside organization. Satisfaction is scored based on the proportions of employees
who answered “often applies (4)” regarding “trust.”

63

Remuneration by type

Recipients(Persons)3

3

Inside director

Inside director

1. Method of selecting committee members
	Members of the Nomination Committee and the Compensation Committee are selected on the advice of the Nomination Committee, of which
the majority of members are independent external directors, and given final approval by the Board of Directors. Note that the chairman of bothcommittees is, at the present time, Toru Kuwano, president and representative director of TIS, and the other members of these committees are
independent external directors (Koichi Sano, Fumiya Tsuchiya and Naoko Mizukoshi).
2. Role of committee members(1) Role of members on Nomination Committee• Provide advice for selecting candidates to the position of director and matters related to the appointment of such individuals(2) Role of members on Compensation Committee• Provide advice on matters related to decisions on compensation for directors
3. Status of activities by committees (including frequency of meetings, major topics of discussion, attendance on a member basis)(1) Nomination Committee		In fiscal 2019, ended March 31,2019, the committee met three times, provided advice on the appointment and retirement of key individuals,
including directors, and presented proposals on changes to director composition, based on discussions by committee members.
		The committee also gave advice on approaches for a successor plan.
		The attendance ratio for members of this committee was 100% for everyone(2) Compensation Committee		In fiscal 2019, the committee met four times and discussed the appropriateness of the Company’s compensation package through a comparative analysis of director compensation amounts at other companies and at TIS, based on the findings of a research company, as well as theappropriateness of the calculation method used to determine performance-linked compensation. Proposals were made to the Board of
Directors on director compensation, based on the results of discussion by the committee. The attendance ratio for members of this committee
was 100% for everyone.
64

Platform that Supports Value Creation Process(ESG Section)

The amount of performance-linked stock compensation was determined by applying a performance-linked coefficient of 150%. Thiswas because Consolidated Operating Income, Consolidated ROE, and Service Business Sales (employed as indicators of corporate
performance in the Stock Issuance Regulations) and Employee Satisfaction (employed as an indicator of job satisfaction among
employees) exceeded the targets set for the fiscal year ended March 2019 (100% performance-linked coefficient when attained) bya wide margin.
These indicators were adopted as performance measurements for the following reasons, so as to ensure attainment of enhanced
corporate value as expected by the shareholders: Consolidated Operating Income, Consolidated ROE, and Service Business Sales
were adopted as financial indicators to encourage pursuit of business growth, and Employee Satisfaction was adopted as a nonfinancial indicator to encourage pursuit of higher job satisfaction among employees.

Remuneration for Directors and Audit & Supervisory Board Members (Year ended March 31, 2019)

Constructive Dialogue with Shareholders
TIS will actively engage in constructive dialogue with shareholders based on the IR Policy in order to contribute to theCompany's sustainable growth and the enhancement of its
medium- to long-term corporate value. In addition, theCompany will strive to develop a system to promote constructive
dialogue with shareholders. The director of the IR Department
will supervise dialogue with shareholders, consider response
methods with the President and Representative Director, executive officers in charge, and the IR Department and respond
appropriately. The IR Department will share information andexchange opinions in a timely manner based on respective specialist standpoints with relevant departments and support dialogue with shareholders through organic collaboration.
In relation to shareholders, TIS will strive to enhance meansof dialogue such as individual interviews as well as responses by

Takeover Defense Measures

telephone and the holding of business results briefings andsmall meetings, etc. Furthermore, in addition to actively conducting information disclosure, which will be the premise for
dialogue, the Company will strive to expand the contents of theIntegrated Report, which will be positioned as an effective toolfor dialogue.
TIS will share opinions, etc. put forward in constructive dialogue with capital market participants such as shareholders,investors and securities analysts within the Company throughreports, etc. to the Board of Directors, and use them in reviewing
the Company's management strategy, and for other purposes.
In the case of dialogue with shareholders, TIS will pay sufficient attention to the fairness of information disclosure andmanage internal information appropriately in accordance with
the Rules for Prevention of Insider Trading.

Strategically Held Shares
For cross-shareholdings with diminished significance, as
identified through the aforementioned method, TIS moves toreduce cross-shareholdings in accordance with basic policy.
2. P olicy on exercising voting rights relating to strategically held shares
TIS appropriately exercises voting rights for the listed shares in
its possession after comprehensively determining whether suchaction will contribute to sustainable corporate growth andhigher medium- to long-term corporate value of the TIS INTECGroup and investee company.
3. Relationships with strategic shareholders
If strategic shareholders of TIS indicate an intention regarding
the sale, etc. of TIS shares, we will respond appropriately without preventing such a sale. Moreover, we will not conducttransactions that lack economic rationality with strategic shareholders.

Numbers of stocks held by the Company for purposes other than portfolio investment and total amounts recorded in the balance sheet
Fiscal 2018, ended March 2018

Number of stocks
Total amount on balance sheet

Status of Internal Control System Operations
1. Status of compliance efforts(1)	TIS distributes the Group Code of Conduct Handbook to all
directors and employees in the Group. This handbook covers the Group Compliance Declaration and the Group Codeof Conduct. The Company constantly strives to instill a thorough understanding of compliance issues and practices,
implements training programs and awareness activities, andseeks to improve the effectiveness of learning opportunities.
	 For the internal reporting (whistleblower) system, helplines
are mentioned in the Group Code of Conduct Handbook as
well, and steps are taken to promote awareness of thesecontact points and to put them to effective use.
(2)	TIS established the Group Internal Control Committee to
identify compliance-related problems, discuss responses,
help directors and employees see the importance of compliance practices, and look into the content of internal reports
and offer advice on corrective measures. In addition, thecommittee checks on the progress of specific approaches,such as steps to improve the accuracy of working hour
management within the Group, efforts to promote education about issues such as harassment, and efforts to­establish compliance systems at overseas subsidiaries.
2. Status of efforts to ensure appropriate and effective
execution of business operations(1)	In principle, the Board of Directors convenes regularly once amonth and also meets at other times as necessary. Directors
strive to achieve swift and dynamic decision-making.
(2)	An executive officer system was introduced to expedite
management decisions by the Board of Directors andstrengthen the Board’s supervisory function. Directors delegate the execution of business to executive officers, and theexecutive officers who accept these duties provide specificinstructions and orders to and supervision of each associated department manager.

(3)	The Management Committee, which comprises full-time
directors and executive officers, meets twice a month to discuss important issues related to the overall execution ofbusiness by TIS and by the Group as a whole. Note that­full-time corporate auditors may sit in on meetings of theManagement Committee.
(4)	External directors and external corporate auditors, withknowledge and experience essential to appropriate business
operations, are appointed to enhance the supervision andmonitoring capabilities of the Board of Directors and­members of the Audit & Supervisory Board.
3. Status of efforts to control the risk of loss(1)	TIS classifies risks facing the Company and the Group underhazard risk, operational risk, financial risk and strategic risk,
according to Rules for Risk Management, and has systems
in place for risk management and accountability in theevent of a crisis.
(2)	TIS shares risk evaluation indicators and management formats to facilitate identification of risks facing the Company
and the Group and to underpin measures to reduce risks. In
addition, the Group Internal Control Committee formulates
risk management policy for the Group as a whole and verifies the implementation status of measures to control risk.
4. Status of efforts to ensure appropriate operations by
the Group
TIS undertakes management of Group companies using
an approval and reporting system, in accordance withManagement Rules for the Group. For the implementation status of key strategies at Group companies and respective business results, TIS holds quarterly Group business meetings andmonitors progress of strategy implementation.

Fiscal 2019 ended March 201988 stocks

87 stocks¥56,700 million¥44,423 million

Notes: 1.	Increase in number of stocks: 16 stocks were newly acquired focusing on startups with the objective of developing partnerships, etc. tofacilitate open innovation.
2. Decrease in number of stocks: Entire holdings of 17 stocks were sold off in accordance with the policy of reducing cross-shareholdings.

65

66

Platform that Supports Value Creation Process(ESG Section)

1. Policy and viewpoint regarding reduction of strategically held shares
TIS and other companies under the Group umbrella hold sharesin other companies only when management believes this is necessary for such purposes as establishing long-term, stable relationships with customers and promoting business that willcontribute to sustainable growth and higher medium- to longterm corporate value of the Company and the Group.
Each year, the Board of Directors reviews the relevance ofcross-shareholdings. It is corporate policy for any cross-shareholding that the Board of Directors deems to be of diminishedsignificance for cross-shareholding to be sold at the earliest
possible opportunity.
To determine relevance, TIS uses business-related revenue if
the issuing company is a customer of a Group company orannual transaction amount if the issuing company is a strategic
partner to calculate a percentage on a balance sheet basis, andmanagement will consider selling any issue with a ratio that
falls below a benchmark set by the Company.

TIS has not introduced takeover defense measures.

Business Risks

Risks with the potential to significantly impact the operations—management system. Level-specific training is also being

However, investments may not always deliver the planned

10. Intellectual property rights

business results and financial position—of the Group areenhanced to improve our management and technological capa-­outcomes due to factors such as unexpected changes in the

The Group applies for and obtains necessary patents on tech-

described below. Note that forward-looking statements men-bilities. Measures to enhance quality and facilitate adoption ofbusiness environment, and the Group’s business results may

nologies and business models and registers trademarks in Japantioned in these materials are based on information available toproduction innovations are additionally being implemented

be affected as a result.

and overseas to assist its business operations. Although care ismanagement as of June 25, 2019.

throughout the entire Group under the leadership of the Group

always taken to avoid infringing the intellectual property rights

Production Innovation Committee. As systems development is

7. Information securityof third parties, a claim for damages may nevertheless be made

1. Price competition and heightened competition

growing more sophisticated and complex and turnaround times

The Group may gain access to confidential information, includ-

against the Group for infringement of another company’s

Competition in the information services industry is fierce andare shortening, however, customer requirements may change ining personal information held by clients as well as information­intellectual property rights. The Group’s business activities andthe rising number of entrants from other industries may further

the course of a project and necessitate extra work in order toon clients’ systems and technologies, in the course of develop-

results may be affected if this occurs.

increase price competition. The Group seeks to distinguish itself

achieve the planned level of quality or complete the projecting and running systems for them. Efforts are made to properly

from its competitors by adding greater value to the information

during the development period. If this occurs, considerably

manage information in accordance with the TIS INTEC Group

11. Natural disasters

services that it provides and by improving productivity. However,higher than expected costs may be incurred.

Information Security Policy. However, the Group’s business

The Group offers outsourcing and cloud services through data

the Group’s business activities and results may be affected if
price competition is greater than expected.

activities and results may be affected if such information iscenters and other large IT facilities. These facilities are equipped

numerous companies for various reasons, including in order toleaked, altered, or otherwise affected by such means as a com-with various systems and structures to deal with a range ofWe also outsource some systems development work to
gain access to more production capacity, improve production

puter virus or unauthorized access, and a claim for damages is

disasters. However, the Group’s business activities and results

2. Legal systems and complianceefficiency, or make use of other companies’ technologicalmade against the Group or the Group suffers damage to its

may be affected in the event of a longer than anticipatedGroup companies pursue their business activities in line withresources. While we make every effort to work with partners of

reputation as a result.

power outage, major natural disaster, international conflict, act

prevailing laws and regulations in Japan and overseas.

good standing in Japan and overseas, the Group’s businessIndividual companies have established their own complianceactivities and results may be affected if the productivity or qual-

8. Human resources

systems and pursue rigorous legal compliance in accordance

ity of work produced by a partner does not meet expectations

The Group relies heavily on human resources and its businesswith the Group’s basic policy on CSR. However, the Group’s

and project management is impeded with risk of damages from

activities are significantly influenced by its ability to attract,

12. Securities portfolio

business activities and results may be affected if legal violations

clients as a result.

retain, and train people capable of providing specialized, highFor the sustainable growth and higher corporate value on aof terrorism, serious crime, or similar event that interrupts thesmooth running of data center operations.

groupwide basis, the Group holds stocks to build stable andand retain talent by such means as creating a corporate culture,long-term relationships with suppliers and promote sales, and3. Overseas business

The Group delivers 24/7/365 outsourcing and cloud services via

personnel systems, and office environment that allow diversebonds to utilize surplus capital. Every effort is made to ensure

As part of its growth strategy, the Group seeks to expand its

data centers and other large IT facilities. Developing these ser-individuals to maximize their potential, and it places a focus

the security of these investments by checking the financial sta-presence overseas, especially in the ASEAN region. Overseas

vices requires large outlays, ranging from initial investment inon development of human resources by, for example, helping

tus, performance, and credit rating of the issuers and other rel-business can be affected by a variety of factors, including global

equipment to ongoing investment in keeping this equipment

employees to acquire qualifications, systematizing training pro-evant ­factors. However, the Group’s business activities andeconomic trends, exchange rate movements, legal regulations

running. Although we track business projects and recover capi-

grams, and setting targets for the number of days that training

results may be affected in the event of marked fluctuations inpertaining to investment and competition, business practices,

tal invested, business results may be adversely affected if capac-

should be provided. However, the Group’s business activities

the stock market that lead to accounting losses or other suchand labor-management relations. Steps are being taken to

ity utilization is particularly low due to weaker than expected

and results may be affected if recruitment, retainment, and­consequences.

strengthen risk management of overseas business by, among

demand. In addition, although system operations are being

training of talented personnel does not proceed than expected.

other things, having overseas group companies and operations

continuously improved in adherence to our quality manage-

work hand in hand with TIS’s core organizations to keep a close

ment system, the Group’s business activities and results may be

9. Technological innovation

INTEC Inc., a consolidated subsidiary of the Company, is cur-track of circumstances and consult promptly on countermea-

affected if disruptions caused by hardware failures or humanIn the information services industry, providers must respond

rently in litigation with Mitsubishi Shokuhin Co., Ltd., whichsures. However, the Group’s business activities and results may

error prevent delivery of the level of service agreed with clients.

quickly to advances in information technology and to changing

filed a claim for compensation in connection with services(Reference information)market needs that parallel these advances. The Group is con-including systems development provided by INTEC Inc. (Amount

6. Investment

stantly exploring and researching information technologies,of compensation demanded: 12,703 million yen; date the com-

4. System development

The Group invests in businesses (including startups) in Japanproduction, development technologies, and other relevant

plaint was received: December 17, 2018).

The Group provides information system services and contracted

and overseas with the aim of achieving business growth andfields to improve its ability to respond to market needs. Given

development services to other companies. Quality control andacquiring cutting-edge technologies, and it also invests in soft-the pace of innovation in a wide range of fields, however,productivity are being continually improved by thoroughlyware to develop services. Investment decisions are made in line

the Group’s business results may be affected if it responds

reviewing project proposals and processes. These reviews arewith business plans after careful consideration, and progress­inadequately.

conducted by dedicated teams in accordance with our quality

is periodically confirmed once an investment has been made.

be affected if these risks materialize in an unexpected form.

67

68

Platform that Supports Value Creation Process(ESG Section)

value-added services to clients. The Group endeavors to attract

5. System operation

occur or additional laws or regulations are put into force.