Corporate Governance Report
CORPORATE GOVERNANCE

Electric Power Development Co.,Ltd.

Last Update:June 28, 2023

Electric Power Development Co.,Ltd.
Hitoshi Kanno, Representative Director President
Contact: 03-3546-9436
Securities code: 9513
https://www.jpower.co.jp/english/

The corporate governance of Electric Power Development Co.,Ltd. (the “Company”) is described below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Attributes, and OtherKey Information

1.

Basic Views
In accordance with its corporate philosophy, the J-POWER Group Corporate Philosophy, theCompany endeavors to enhance corporate governance on an ongoing basis in order to realize
sustainable growth and improve corporate value over the medium to long term. The Company
believes that sustainable growth and the enhancement of corporate value over the medium tolong term can be achieved only in cooperation with a wide range of stakeholders.
One important group of stakeholders is shareholders. The Company respects shareholder rights
in order to allow for proper collaboration with shareholders. The Company strives to engage indialogue with stakeholders in order to build relationships of trust. The Company has establishedthe Basic Policy on Corporate Governance, establishing its basic policy and stance with regards
to corporate governance. For more information about the Company's Basic Policy on Corporate
Governance, please refer to its website.

Reasons for Non-compliance with the Principles of the Corporate Governance Code
The Company complies with every principle based on Japan’s Corporate Governance Code.
Disclosure Based on each Principle of the Corporate Governance Code[Principle 1.4 Cross-Shareholdings]
The Company does not maintain strategic shareholdings unless such shareholdings are deemed
to serve a purpose.
Shareholdings are deemed to serve a purpose if they are judged to contribute to the Company's
sustainable growth and the medium-to long-term enhancement of its corporate value based on
the comprehensive consideration of their profitability, verified through properly ascertaining
expected returns and other effects, as well as their objectives, such as the development of joint
business and the need to maintain, strengthen, or build business relationships.
Every year, the Board of Directors evaluates the rationality and necessity of each strategic
1

shareholding from such perspectives as consistency with the objectives of said holdings and thebalance of the shareholding’s profitability against the Company’s cost of capital. Holdings foundto not serve a purpose are disposed of, with due consideration given to the market impact ofsuch disposal.
The Company exercises the voting rights of its strategically held shares based on carefulconsideration of the medium- to long-term enhancement of the corporate value of the Company
and the companies whose shares it holds as well as its objectives in holding such shares.
[Principle 1.7 Related Party Transactions]
In the event that the Company engages in a transaction with one of its Directors or major
shareholders*, the Company obtains the approval of the Board of Directors before thetransaction, and reports the results to the Board of Directors.
* “Major shareholder” refers to a shareholder with shares representing 10% or more of the voting
rights in the Company.
[Supplementary Principle 2.4.1 Ensuring Diversity of Human Resources]<Views on Ensuring Diversity>
In accordance with its corporate philosophy, the Company endeavors to enhance corporate
governance on an ongoing basis, in order to realize sustainable growth and enhance corporate
value over the medium-to-long term.
Furthermore, for the purpose of strengthening the Company’s initiatives in ensuring diversity,
an organization dedicated to diversity promotion has been established to integrate each functionof recruitment, training, personnel development, deliberation on the employment system, etc.
and thereby drive forward comprehensive and consistent initiatives toward the realization of“diversity and inclusion.”<Situation Surrounding the Achievement of Diversity, and Voluntary and Measurable Goals>
The Company has positioned senior employees as core human resources among employees in acareer-track positions and established a goal of the number of female, foreign, and mid-career
workers to be promoted by 2030 in terms of achieving diversity.
(1) Appointment of female employees to senior roles
To increase opportunities for female employees, the Company has been active in recruiting
female workers since fiscal 2016 with the goal of increasing the ratio of female workers in newhires to at least 10% (*1). As a result, the number of female employees on a global scale has
more than doubled over the past 10 years. In addition, as exemplified by the Company’s firstfemale Executive Officer appointed in April 2021, the scope of activities of its female employees
is expanding. To support the career development of female employees, the Company has
introduced, among other measures, a system of reduced working hours for childcare; a system
for reemployment of ex-employees who have left work for reason of childcare; and a type of leave
enabling each employee to, for example, accompany his/her transferred spouse. Furthermore,
the Company offers programs called CDPs (Career Development Programs) for Female2

Employees (*2) to enable them to continue their work and develop their careers even in the faceof temporary work restrictions caused by various events in their lives, which serve as references
for female employees and their superiors in considering their career development. With thefollowing goal, the Company will continue to strengthen its initiatives to promote opportunities
for female employees to play more active roles:
The Company will at least triple the number of female employees in senior roles by 2030 incomparison to the level in fiscal 2021 (24 female employees).
*1 With respect to new hires joining the Company in fiscal 2023 and later, the target ratio of
female workers in new hires has been revised to 20% or more.
*2 These CDPs refer to, among J-POWER Career Development Programs (CDPs) consisting of
the concepts of “personnel requirements,” “job rotation” and “career building support systems,”
a group of example CDPs by job type, which are specifically applicable to female employees.
(2) Appointment of foreign employees to senior roles
Based on our extensive experience in Japan, the Company has developed its overseas businessfor more than half a century, which has grown to be one of the Company Group’s core businesses
in terms of both generation capacity and profit contribution. The overseas subsidiaries of theCompany Group utilize locally employed workers for promotion of the Company Group’sbusinesses as a whole, and the following goal has been set for further expansion of the overseas
business:
The Company and its group companies will, by 2030, increase the number of foreign senior
employees from the level in fiscal 2021 (147 employees) according to the expansion of theoverseas business.
(3) Appointment of mid-career hires to senior roles
The Company has actively recruited mid-career workers for more than 30 years and has,
especially lately, exerted its efforts further in this regard from a viewpoint of ensuring diversity
and securing industry-ready human resources. As a result, the Company has appointed midcareer hires to officer positions and many management-level employee positions. The Company
will continue endeavoring to recruit mid-career workers with the aim of achieving the following
goal:
The Company will, by 2030, increase the number of senior employees appointed from among
mid-career hires by more than 1.5 times from the level in fiscal 2021 (110 employees).
<Policies on Human Resource Development and Internal Environment Development Toward
Ensuring Diversity>
In its human resource development, the Company aims to develop all of its employees as
independent professional human resources who can take on management challenges withknowledge in multiple specialized areas and a broad perspective.
As a specific measure to achieve the aim, the Company has introduced J-POWER Career
Development Programs (CDPs) based on the concepts of “personnel requirements,” “job rotation”
and “career building support systems,” through which various measures for human resource
development are implemented to improve the value of the Company as well as that of employees.
In addition, as part of its internal environment development in supporting diverse styles ofwork, the Company has introduced a telework system utilizing digital tools, a swing-time system(system in which each worker can voluntarily choose to start working up to two hours earlier orlater than his/her regular work starting time) addressing various work needs, an hourly-based
3

paid leave system, a reduced-time work system for childcare/nursing care, and a 65-years-of-age
mandatory retirement system. The Company is willing to continue engaging in further
development of its internal environments.
Other initiatives of the Company are presented in its “Integrated Reports.”
https://www.jpower.co.jp/english/ir/library/pdf/2022/22_18_e.pdf
https://www.jpower.co.jp/english/ir/library/pdf/2022/22_19_e.pdf[Principle 2.6 Roles of Corporate Pension Funds as Asset Owners]
In accordance with the Articles of Incorporation and the provisions of the Company’s basic
investment principles, the Company will take the measures listed below concerning theinvestment of the defined-benefit corporate pension funds so that payments to beneficiaries canbe reliably made in the future: (i) conduct regular monitoring of asset management conditions,and as necessary, review target allocation ratios that have been put into place; and (ii) the
Accounting & Finance Department will be in charge of asset management, and the Company
will aim to optimize the management of pension assets through the Asset Management
Committee composed of relevant departments.
[Principle 3.1 Full Disclosure]i) Company objectives (e.g., business principles), business strategies and business plans;
The Company has formulated and published the following documents on its website: the JPOWER Group Corporate Philosophy, the J-POWER Blue Mission 2050, and the J-POWER
Medium-Term Management Plan.
https://www.jpower.co.jp/english/company_info/philosophy/
https://www.jpower.co.jp/english/bluemission2050/
https://www.jpower.co.jp/english/ir/pdf/2104medium-termmanagementplan.pdf
jpower.co.jp/english/news_release/pdf/news230510_2e.pdfii) Basic views and guidelines on corporate governance based on each of the principles of the
Code;
The Company has formulated and published its Basic Policy on Corporate Governance on its
website.
https://www.jpower.co.jp/english/sustainability/governance/pdf/cg2306.pdfiii) Board policies and procedures in determining the remuneration of the senior managementand directors;
The amounts of remuneration of the individual management executives and Directors(excluding those who are Audit & Supervisory Committee Members) will be determined inaccordance with the policy for determining the remuneration of the Directors (excluding those
who are Audit & Supervisory Committee Members) and Executive Officers as well as Specially4

Appointed Officers for Audit, etc. as prescribed by the Board of Directors after deliberation by
the Nomination and Remuneration Committee.
iv) Board policies and procedures in the appointment/dismissal of the senior management andthe nomination of directors and kansayaku candidates; andWhen appointing members of the management executives and nominating candidates for
Directors, the Board of Directors appoints or nominates persons with abundant experience,
distinguished knowledge and advanced specialization who are deemed appropriate for selection
as a management executive or Director after deliberations undertaken based on therecommendations of the President. The President makes such recommendations on the basis ofdeliberation by the Nomination and Remuneration Committee.
In the event that there is any illegal or unjust act by a management executive or Director, orotherwise if circumstances arise in which it is deemed that there are serious impediments to thecontinuation of performance of his/her duties, the Board of Directors will decide whether todismiss or otherwise punish such management executives or Directors after deliberation by the
Nomination and Remuneration Committee.
v) Explanations with respect to the individual appointments/dismissals and nominations basedon iv).
A brief personal history of each candidate nominated for Director will be stated and disclosed in
the convocation notice of the general meeting of shareholders.
[Supplementary Principle 3.1.3 Initiatives on Sustainability]<Initiatives on Sustainability>

Under its corporate philosophy of “We will meet people’s needs for energy without fail and play
our part in the sustainable development of Japan and the rest of the world,” the Company isadvancing initiatives aimed at improving its corporate value from the standpoints of theenvironment, society, and governance.
The Company discloses details in this regard on its website and in its Integrated Reports.
https://www.jpower.co.jp/english/sustainability/
https://www.jpower.co.jp/english/ir/library/pdf/2022/22_02_e.pdf
https://www.jpower.co.jp/english/ir/library/pdf/2022/22_04_e.pdf
https://www.jpower.co.jp/english/ir/library/pdf/2022/22_13_e.pdf<Investments in Human Capital>

The Company regards each employee as a “human resource” responsible for the sustainable
development of society and the growth of the Company. The Company is developing humanresources that can take on the challenges of various management issues by supporting theindependent growth of diverse human resources through the fostering of a culture in which
5employees can continue to learn regardless of age.
The Company discloses details in this regard on its website and in its Integrated Reports.
https://www.jpower.co.jp/sustainability/contribution/human_resources/
https://www.jpower.co.jp/english/ir/library/pdf/2022/22_04_e.pdf
https://www.jpower.co.jp/english/ir/library/pdf/2022/22_17_e.pdf
https://www.jpower.co.jp/english/ir/library/pdf/2022/22_18_e.pdf<Investments in Intellectual Capital>

Toward the realization of a carbon-neutral and hydrogen society by 2050 as specified in the JPOWER Blue Mission 2050, the Company has invested in technological development, businesscreation, etc. to strike a balance between stably supplying energy and addressing the problem
of climate change.
The Company discloses details in this regard on its website and in its Integrated Reports.
https://www.jpower.co.jp/english/ir/library/pdf/2022/22_04_e.pdf
https://www.jpower.co.jp/english/business/thermal_power/
https://www.jpower.co.jp/english/ir/library/pdf/2022/22_08_e.pdf<Disclosure Based on TCFD Recommendations>
The Company endorses the TCFD and is accordingly making efforts to, through scenario
analysis, etc. in light of the TCFD’s recommendations, enrich the quality and quantity of
information that the Company discloses.
The Company discloses details in this regard on its Integrated Reports.
https://www.jpower.co.jp/english/ir/library/pdf/2023/23_12_e.pdf[Supplementary Principle 4.1.1 Clarification of the Scope of Matters Delegated to Management]
The Board of Directors makes decisions on basic management policies such as management
plans and other important items regarding management, as well as decisions on importantmatters regarding business execution that shall be made by the Board of Directors as prescribedby laws, regulations (excluding those set forth in Article 22 of the Articles of Incorporation) andthe Articles of Incorporation, and the criteria for such decisions shall be specified in the Boardof Directors Regulations and other internal regulations. Authority over other matters isdelegated to the Representative Directors, Executive Directors, Executive Officers and others.
[Principle 4.9 Independence Standards and Qualification for Independent Directors]
The Board of Directors has established the Company’s Criteria to Determine the Independenceof Outside Officers in accordance with the independence standards of independent officers
formulated by the Tokyo Stock Exchange.
The Company has disclosed relevant information in Appendix 2 of the Basic Policy on Corporate
Governance.
6https://www.jpower.co.jp/english/sustainability/governance/pdf/cg2306.pdf[Supplementary Principle 4.10.1 Mandates and Roles of the Members of the Personnel Advisory
Committee and the Remuneration Advisory Committee, and the Policy Regarding theIndependence of the Composition]
The Company has established a Nomination and Remuneration Committee (secretariat:
Secretarial Affairs Department) under the Board of Directors and with Independent Officers
acting as its key constituent members, in order to enhance the independence, objectivity andaccountability of the Board’s functions in nominating Directors and senior management andtheir remuneration. This committee is composed of at least three members who are officers(Directors) selected through acceptanceby the Board of Directors, and it is provided that its chairperson and the majority of its
members are Independent Outside Directors. This committee deliberates on the nomination of
Directors and senior management, their remuneration, and other matters whose deliberation isrequested by its members, and reports the results of its deliberations to the Board of Directors.
During fiscal 2022, six meetings of the committee were held.
[Supplementary Principle 4.11.1 Views on the Appropriate Balance Between Knowledge,
Experience, Etc. of the Board of Directors as a Whole, as Well as on Diversity and Appropriate
Board Size]
The Board of Directors is composed of Directors with abundant experience, distinguishedknowledge and advanced specialization, ensuring that a balance and diversity of knowledge,
experience and abilities is maintained as a whole. The Company shall have up to 12 Directors(excluding those who are Audit & Supervisory Committee Members) and up to four Directors
who are Audit & Supervisory Committee Members (hereinafter referred to as the “Audit &Supervisory Committee Members”); the total number of Inside and Outside Directors shall be
up to 16.
A skill matrix showing the diversity of Directors is included in the Notice of Convocation of the
41st Ordinary General Meeting of Shareholders.
https://www.jpower.co.jp/english/ir/pdf/shareholders71a.pdf[Supplementary Principle 4.11.2 Concurrent Positions of Directors and Audit and Supervisory
Committee Members]
The Company discloses information on the status of concurrent holding of positions as officers
of other companies by Directors and candidates, in the convocation notices of general meetingsof shareholders and in business reports in accordance with laws and regulations.
[Supplementary Principle 4.11.3 Analysis and Evaluation of the Effectiveness of the Board of7

Directors as a Whole]
Since fiscal 2015, the Company has been analyzing and evaluating the effectiveness of the Boardof Directors and discloses a summary of the results of the evaluation on an annual basis.
To improve the effectiveness of the Board of Directors, the Company strives to enhance thequality of discussions at monthly meetings of the Board of Directors and has implemented anumber of initiatives, including the following.
Enhancement of discussions on management strategy



Ensuring speedy executionUse of the Nomination and Compensation Committee

Initiatives to contribute to substantive improvements including the provision of information
outside of meetings of the Board of Directors, inspections of power plants and other facilities
by Outside Officers, and training for Inside Officers

Fiscal 2021 Initiatives
During fiscal 2022, the Company intensively engaged in the following initiatives in relation to
the issues recognized in the fiscal 2021 evaluation of effectiveness, while reliably implementing
its transition to a company with an Audit & Supervisory Committee.
[Transition to a company with an Audit & Supervisory Committee]- Delegation of decision-making authority over some important matters of business execution
from the Board of Directors to Directors- Amendments made to advance the delegation of authority in relation also to the decisionmaking authority of the President and that of other senior positions below the President[Further enhancement of discussions on management strategy]- Continuous exchange of views among all the members of the Board of Directors and holding of
small meetings (small discussion group meetings held between non-executive officers andExecutive Officers/relevant departments)[Accurate reflection of discussions held by the Board of Directors in business execution]- Listing of opinions raised by the Board of Directors and giving feedback- Promotion of initiatives to improve business execution on the basis of opinions exchanged
among all the Directors[Further improvement in the operation of the Board of Directors]- Review of materials submitted to the management conference structure- Improvement in the quality of explanations in meetings of the Board of Directors through the
involvement of responsible Executive Officers in the provision of preliminary explanations to
Outside Directors and through prior sharing of details covered in such preliminary explanations
Evaluation Method
The evaluation methods and processes for fiscal 2022 were as follows.
8(1) In February 2023, with the assistance of a third-party organization, a questionnaire survey
with the following question items was conducted on all the 16 officers including six Outside
Officers.
I. Composition of the Board of Directors
II. Operation of the Board of Directors
III. Discussion by the Board of Directors
IV. Monitoring function of the Board of Directors
V. Support system for Directors
VI. Dialogue with shareholders (investors)
VII. Summary(2) In March 2023, interviews were held to obtain opinions on the responses to the questionnaire
survey and on the initiatives for fiscal 2022.
(3) The aggregated results of (1) and (2) were discussed in the meeting of the Board of Directors
held on May 10, 2023.
(4) The results of the evaluation were determined in the meeting of the Board of Directors heldon May 24, 2023.
Evaluation Results- With no serious problem raised in the questionnaire survey and interviews, the evaluation
found that the effectiveness of the Board of Directors was secured.
- On the other hand, both the Inside and Outside Directors shared the awareness that thoroughdiscussions by the Board of Directors were essential for the Company’s future vision and toaddress its important management issues, in light of changes in the environment in which theCompany conducts business.
- Furthermore, the evaluation found that the Company’s transition to a company with an Audit& Supervisory Committee had been implemented properly based on sufficient discussions.
Nonetheless, some opinions suggested that the Board of Directors should focus more on
discussing the company-wide strategy and direction, given the purpose of the transition.
- On the basis of those perspectives, the Board of Directors confirmed the importance ofcontinuing and reinforcing the initiatives conducted up to the fiscal year concerned.
- With respect to the composition of the Board of Directors, some opinions suggested that thecurrent composition was appropriate, while there were other opinions holding that discussions
on the composition should be continued.
<Direction of Future Initiatives>- For fiscal 2023, it has been confirmed that it will be effective to implement specific initiatives
with the following matters treated as priorities: (1) further enhancement of opportunities forfree-spirited discussions; and (2) further improvements in the operation of the Board of Directors
9

in light of the transition to a company with an Audit & Supervisory Committee.
The Company will continue to strive to improve the effectiveness of the Board of Directors
through ongoing and further initiatives in addition to further enhancement of discussions at
meetings of the Board of Directors.

[Supplementary Principle 4.14.2 Training Policy for Directors and Audit and Supervisory
Committee Members]
In order to help Outside Directors to deepen their understanding of the corporate philosophy,
medium-term management plans, business, finances, organization, etc. of the J-POWER Group,
the Company will provide relevant information to them, as necessary. Opportunities are also
provided to inspect the Company’s facilities, in order to deepen their understanding of theCompany’s business. The Company will provide its Directors including Outside Directors with
opportunities and financial assistance to acquire the business, financial, organizational andother knowledge they need to appropriately exercise their roles and responsibilities.
[Principle 5.1 Policy for Constructive Dialogue with Shareholders] (Including Disclosures
Concerning the Situation Surrounding Dialogue with Shareholders and Other Relevant Details)
In order to achieve sustainable growth and improve corporate value over the medium to longterm, the Company has formulated a Policy regarding Constructive Dialogue with Shareholders
and Investors and has disclosed relevant information in Appendix 1 of the Basic Policy on
Corporate Governance.
https://www.jpower.co.jp/english/sustainability/governance/pdf/cg2306.pdf
The following is an outline of the dialogues held during fiscal 2022 on the basis of the policy, etc.
> Situation surrounding meetings:[For individual shareholders]Company information session: once (approx. 830 participants)
Facility tour: 4 times (web-based: approx. 250 participants, on-site: approx. 50 participants)[For institutional investors]
Financial results briefing: twice during the fiscal year
Small meeting: 6 times during the fiscal year
Individual meeting: approx. 170 times during the fiscal year
Facility tour: 5 times (on-site: approx. 20 participants)> Main responders: President and Chief Executive Officer / Executive Vice President (in chargeof Corporate Planning & Administration) / Executive Managing Officer (in charge of Corporate
Planning & Administration) / Director, Corporate Planning & Administration Department (incharge of matters related to IR/ESG)> Outline of the shareholders with whom dialogues were held: analysts involved in active
management, ESG analysts involved in passive management, persons in charge of exercising
voting rights, and individual investors in Japan and abroad> Main topics of dialogues and shareholders’ interests:10

- Status of financial results and financial projections (including shareholder returns)- Future business policies including those concerning domestic and international investment- Responses to the problem of climate change (CO2 emission reduction targets and details on
efforts toward such reduction, TCFD disclosures, etc.)- Effectiveness of the Company’s corporate governance (Outside Directors’ involvement, changes
before and after the adoption of the organizational structure of a company with an Audit &Supervisory Committee, etc.)> Feedback to the management:- Reporting to the Board of Directors quarterly on the results of IR/SR activities- Reporting to the President and the Director in charge of corporate planning in person, by email
or by other relevant means, as appropriate> Responses, outcomes, etc. based on dialogues- Updating of the 2030 CO2 emission reduction target- Enhancing TCFD disclosures (scenario analysis and the disclosure of financial impact)[Principle 5.2 Establishing and Disclosing Business Strategies and Business Plans] (Including
Disclosures Concerning Responses Toward the Realization of Management That Takes Account of the Cost of
Capital and Share Price)
The Company has engaged in holding dialogues with shareholders on the basis of understanding of its cost ofcapital and return on capital and will continue its efforts aimed at improving its corporate value.
Details on specific efforts for improving capital efficiency are available on page 17 of the Progress of JPOWER Medium-Term Management Plan (published on May 10, 2023).
https://www.jpower.co.jp/news_release/pdf/news230510_2.pdf
Meanwhile, with the awareness that its PBR has been below 1.0, the Company is considering ways to make
improvements by comprehensively taking into account its business environment and structure, and is planningto disclose its new medium-term management plan for fiscal 2024 onward.

11

2.

Capital Structure
Foreign Shareholding Ratio

20% or more but less than 30%

Status of Major Shareholders
Name or Company Name

Number of Shares Owned

Percentage (%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

22,111,500

12.08

Nippon Life Insurance Company

9,152,600

5.00

Custody Bank of Japan, Ltd. (Trust Account)

8,308,000

4.54

Mizuho Bank, Ltd.

5,155,680

2.82

J-POWER Employees Shareholding Association

4,960,860

2.71

JP MORGAN CHASE BANK 385635

4,189,900

2.29

Sumitomo Mitsui Banking Corporation, Ltd.

3,436,700

1.88

CGML PB CLIENT ACCOUNT/COLLATERAL

3,348,000

1.83

JP MORGAN CHASE BANK 380072

3,055,300

1.67

Fukoku Mutual Life Insurance Company

3,029,200

1.65

Name of Controlling Shareholder, if applicable(excluding Parent Companies)
Name of Parent Company, if applicable―
None

Supplementary Explanation
―

12

3.

Corporate Attributes
Listed Stock Exchange and Market Segment

Prime Market

Fiscal Year-End

MarchBusiness Sector

Electric Power & Gas

Number of Employees (Consolidated) as of the Endof the Previous Fiscal YearNet Sales (Consolidated) for the Previous Fiscal Year
Number of Consolidated Subsidiaries as of the Endof the Previous Fiscal Year

4.

1,000 or more
¥1 trillion or more
50 or more but fewer than 100

Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholder―

5.

Other Special Circumstances Which May Have a Material Impact on Corporate Governance
―

13

II.

Business Management Organization and Other Corporate Governance Systems regarding
Decision-making, Execution of Business, and Oversight1.

Organizational Composition and Operation
Corporate Governance System

Company with Audit & Supervisory Committee

Directors
Number of Directors Stipulated in Articles ofIncorporation
Directors' Term of Office Stipulated in Articles ofIncorporation16

1 yearChairperson of the Board

Chairperson (excluding those concurrently serving as President)

Number of Directors

16Election of Outside Directors

ElectedNumber of Outside Directors

6

Number of Independent Directors

6Outside Directors’ Relationship with the Company (1)Name

Relationship with the Company*

Attributes

Tomonori Ito

From another company

John Buchanan

From another company

Takashi Yokomizo

LawyerHiroshi Fujioka

From another company

Kiyoshi Nakanishi

From another company

Kimiko Oga

From another company

a

b

c

d

e

f

g

h

i

j

k

○

*Categories for “Relationship with the Company”.
(Use “○” when the director presently falls or has recently fallen under the category; “△” when the director fell under the category
in the past; “●” when a close relative of the director presently falls or has recently fallen under the category; and “▲” when a close
relative of the director fell under the category in the past.)
a. Person who executes business for the Company or its subsidiary
b. Person who executes business for a non-executive director of the Company’s parent company
c. Person who executes business for a fellow subsidiaryd. Person/entity for which the Company is a major client or a person who executes business for said person/entity
e. Major client of the Company or a person who executes business for said clientf. Consultant, accounting expert, or legal expert who receives large amounts of cash or other assets from the Company in addition
to remuneration as a director/company auditor
g. Major shareholder of the Company (in cases where the shareholder is a corporation, a person who executes business for the
corporation)h. Person who executes business for a client of the Company (excluding persons categorized as any of d, e, or f above) (applies
to director him/herself only)
i. Person who executes business for another company that holds cross-directorships/cross-auditorships with the Company (applies
to director him/herself only)
j. Person who executes business for an entity receiving donations from the Company (applies to director him/herself only)
k. Other14

Outside Directors’ Relationship with the Company (2)NameTomonori Ito

Membershipof Audit &Supervisory
Committee

Designationas
Independent
Director○

Supplementary Explanation of theRelationship

Reasons for Appointment
He has abundant experience in investment―banking business both inside and outside
Japan,

distinguishedknowledge

andcapability of addressing various management
issuesacquiredthrough

researchesinfinancial theory at graduate schools and has
also played appropriate roles to date as an
Outside Director of the Company. In the
expectation

that

he

will

contributetostrengthening supervisory functions overbusiness execution and will offer advice froma wide range of perspectives, the Company
regards him as well-qualified to serve as
Outside Director.
He

fulfilsboththerequirementsforindependent directors/auditors stipulated by
the Tokyo Stock Exchange and the “Criteria
to Determine the Independence of Outside
Officers”

established

by

the

Company.

Accordingly, the Company has appointed him
asan

Independent

Director/Auditor

inaccordance with the specifications of theTokyo Stock Exchange.
John Buchanan○

He has abundant experience in investment―

advisory business both inside and outside
Japan,

distinguishedknowledge

andcapability of addressing various management
issuesacquiredconcerning

through

corporate

researches

governanceatUniversity of Cambridge, and has also played
appropriate roles to date as an Outside
Director of the Company. For this reason, theCompany has nominated him as a candidate

15

to

serve

as

expectation

Outsidethat

heDirector
willincontributethetostrengthening supervisory functions overbusiness execution and will offer advice froma wide range of perspectives.
He

fulfilsboththerequirementsforindependent directors/auditors stipulated by
the Tokyo Stock Exchange and the “Criteria
to Determine the Independence of Outside
Officers”

established

by

the

Company.

Accordingly, the Company has appointed him
asan

Independent

Director/Auditor

inaccordance with the specifications of theTokyo Stock Exchange.
Takashi Yokomizo○

He has abundant experience in the legal―

profession and distinguished knowledge andcapability of addressing various management
issues as an attorney. For this reason, theCompany has nominated him as a candidate
to

serve

as

expectation

Outsidethat

heDirector
willincontributethetostrengthening supervisory functions overbusiness execution and will offer advice froma wide range of perspectives.
He

fulfilsboththerequirementsforindependent directors/auditors stipulated by
the Tokyo Stock Exchange and the “Criteria
to Determine the Independence of Outside
Officers”

established

by

the

Company.

Accordingly, the Company has appointed him
asan

Independent

Director/Auditor

inaccordance with the specifications of theTokyo Stock Exchange.
Hiroshi Fujioka○○

He has long had abundant experience, highly―

specialized

expertiseknowledgeinanddistinguishedadministrative

practices,

including at the Ministry of Finance, and has
fulfilled his appropriate role as an Outside

16

Audit & Supervisory Committee Member of
the Company. In the expectation that he willobservetheCompany’s

management

thoroughly, the Company regards him as awell-qualified candidate for the position of
Outside Director who also serves as Audit &Supervisory Committee Member.
He

fulfilsboththerequirementsforindependent directors/auditors stipulated by
the Tokyo Stock Exchange and the “Criteria
to Determine the Independence of Outside
Officers”

established

by

the

Company.

Accordingly, the Company has appointed him
asan

Independent

Director/Auditor

inaccordance with the specifications of theTokyo Stock Exchange.
Kiyoshi Nakanishi○○

He has abundant experience and highly―

specialized expertise

in

the

automobile

industry, as well as distinguished knowledge
as a corporate manager, and he has fulfilled
his appropriate role as an Outside Audit &Supervisory

Committee

MemberoftheCompany. The Company has nominated him
as a candidate to serve as Outside Director
serving as Audit & Supervisory Committee
Member in the expectation that he willobservetheCompany’s

management

thoroughly.
Hefulfilsboththerequirementsforindependent directors/auditors stipulated by
the Tokyo Stock Exchange and the “Criteria
to Determine the Independence of Outside
Officers”

established

by

the

Company.

Accordingly, the Company has appointed him
asan

Independent

Director/Auditor

inaccordance with the specifications of theTokyo Stock Exchange.
Kimiko Oga○○

Althoughthe17Company

She has abundant experience and highlycommissioned Ms. Oga in fiscal

specialized expertise in the information and2020 and fiscal 2021 to provide

communications

management-related advice anddistinguished knowledge as a corporate

other services with the aim ofmanager,obtaining

multifaceted

andappropriate role as an Outside Audit &objective

adviceandSupervisory

recommendations

she

has

Committee

as

well

fulfilled

Member

of

as
her
the

would

Company. The Company has nominated her

contribute to the enhancement of

as a candidate to serve as Outside Director

the

the

serving as Audit & Supervisory Committee

Company, the compensation for

Member in the expectation that she willthese services was less than four

observemillion yen, and the Company

thoroughly.

deems that there are no concerns

She

regarding her independence.

independent directors/auditors stipulated bycorporate

that

and

industry,

value

of

the

fulfils

Company’s

both

the

management

requirements

forthe Tokyo Stock Exchange and the “Criteria
to Determine the Independence of Outside
Officers”

established

by

the

Company.

Accordingly, the Company has appointed herasan

Independent

Director/Auditor

inaccordance with the specifications of theTokyo Stock Exchange.

Audit & Supervisory Committee
Composition of Audit & Supervisory Committee and Attributes of the Chairperson

Audit &
Supervisory
Committee

All Committee
Members

Full-time Members
4

Appointment of Directors and/or Staff to Support the
Audit & Supervisory Committee

2

Inside Directors

Outside Directors
1

3Committee Chair
Inside Director /Appointed

Matters Concerning Independence of Said Directors and/or Staff from Executive Officers/Reasons for Adopting Current
SystemIn addition to appointing Audit & Supervisory Executive Officer as employees to assist the Audit & Supervisory
Committee in conducting its duties, the Company has established an Office of Audit & Supervisory Committee
Members, which is independent from the chain of command of Directors, as a system for staff members working
for the Audit & Supervisory Committee. Full-time staff (five members) are assigned to the office to assist the Audit18

& Supervisory Committee with its audits and other relevant matters. Audit & Supervisory Executive Officer
and staff belonging to the Office of Audit & Supervisory Committee Members perform their duties independently
from the chain of command of Directors (excluding those who are Audit & Supervisory Committee Members).
Furthermore, the consent of the Audit & Supervisory Committee is required in relation to matters related to thepersonnel affairs of Audit & Supervisory Executive Officer, and full-time Audit & Supervisory Committee
Members are consulted with on matters concerning the personnel affairs of Audit & Supervisory Committee staff.
Cooperation among the Audit & Supervisory Committee, Accounting Auditors and Internal Audit Department
The Audit & Supervisory Committee and accounting auditors exchange information on their respective audit plans for the sakeof efficient auditing. In addition, the Audit & Supervisory Committee receives reports on quarterly review results, annual audit
results, etc. and other information on audits from accounting auditors and exchanges opinions with them. Furthermore, the Audit& Supervisory Committee and the Internal Audit Department, which is in charge of internal audits, mutually adjust theirrespective audit plans and carry out audits while exchanging between them information on the results of their audits conductedduring the fiscal year.

19Voluntary Established Committee(s)Voluntary Establishment of Committee(s) equivalent toNomination Committee or Remuneration Committee

Established

Status of Voluntarily Established Committee(s), Attributes of Members Constituting the Committee and the Committee
Chairperson
Committee’s
Name
Voluntarily
Established
Committee
Equivalent toNomination
Committee
Voluntarily
Established
Committee
Equivalent toRemuneration
Committee

All
Members

Full-timeMembers

InsideDirectors

OutsideDirectors

OutsideExperts

Other

Chairperson

0

2

3

0

0

Outside Director

Nomination
andRemuneration

5

Committee
Nomination
andRemuneration

5

0

2

3

0

0

Outside Director

Committee

Supplementary Explanation

The Company has established a Nomination and Remuneration Committee (secretariat:
Secretarial Affairs Department) under the Board of Directors and with Independent Officers
acting as its key constituent members, in order to enhance the independence, objectivity andaccountability of the Board’s functions in nominating Directors and senior management andtheir remuneration. This committee is composed of at least three members who are officers(Directors) selected through acceptanceby the Board of Directors, and it is provided that its chairperson and the majority of its
members are Independent Outside Directors. This committee deliberates on the nomination of
Directors and senior management, their remuneration, and other matters whose deliberation isrequested by its members, and reports the results of its deliberations to the Board of Directors.
During fiscal 2022, six meetings of the committee were held.
[Composition of the Nomination and Compensation Committee]
Chairman: Takashi Yokomizo, Independent Director
Hiroshi Fujioka, Independent Director, Audit & Supervisory Committee Member
Kiyoshi Nakanishi, Independent Director, Audit & Supervisory Committee Member
Toshifumi Watanabe, Representative Director, Chairman
Hitoshi Kanno, Representative Director, President

20This committee fulfills both the functions of a “voluntarily established committee equivalent to a nominationcommittee” and those of a “voluntarily established committee equivalent to a remuneration committee.”

Matters Concerning Independent Directors
Number of Independent Directors

6

Other Matters Concerning Independent Directors[Criteria to Determine the Independence of Outside Officers]
If an Outside Officer does not fall under any of the following paragraphs, he/she will be
determined to be independent by the Company:
1. any person who executed the business of the Company or the Company’s subsidiary in thepast;
2. any person whose major business partner (*1) is the Company or the Company’s subsidiary,or any person executing the business of such first mentioned person;
3. any major business partner (*1) of the Company or the Company’s subsidiary, or any person
executing the business of such partner;
4. any consultant, accounting professional or legal professional who has received a large amountof money (*2) and/or any other property other than officers’ remuneration from the Company or
the Company’s subsidiary (if the person who has received such property is a corporation,
partnership or any other organization, such person refers to a person who belongs to suchorganization);
5. any person who used to fall under any of paragraphs 2 to 4 above during the past ten years;or
6. any close relative of any of the persons listed in (1) to (4) below (excluding immaterial persons),(1) any person listed in paragraphs 2 to 5 above,(2) any person who executes the business of the Company or the Company’s subsidiary, or any
Director who does not execute the business of the Company or the Company’s subsidiary,(3) any auditor of the Company’s subsidiary, or(4) any person who used to be the Company’s Auditor or to fall under item (2) or (3) above
during the past ten years.
*1 “Major business partner” refers to a business partner whose annual amount oftransactions with the Company or the Company’s subsidiary during the past 3 fiscal years
accounted for over 2% of the total consolidated sales of the Company or that of the counterparty.
*2 “Large amount of money" refers to money received during the past 3 fiscal years with anannual average amount of ten million yen or more.
[(2) Criteria for Minor Transactions in Connection With the Attribute Information of
Independent Officers]21

In relation to the attribute information of Independent Officers, when a transaction associatedwith an Independent Officer fulfills the following criteria for minor transactions, the descriptionof applicable attribute information and a general explanation of the transaction are omitted.
1. In the case of an Independent Officer who currently executes or executed during the last 10
years the business of a current business partner of the Company or the Company’s subsidiary:
the annual amount of transactions between the Company or the Company’s subsidiary and thebusiness partner accounts for less than 1% of the total consolidated sales of the Company or thatof the counterparty during each of the fiscal year concerned and preceding fiscal year
2. In the case of an Independent Officer who is a current business partner of the Company or
the Company’s subsidiary: the annual amount of transactions between the Company or theCompany’s subsidiary and the Independent Officer is less than one million yen during each of
the fiscal year concerned and preceding fiscal year

22

Incentives
Implementation Status of Measures related toIncentives Granted to Directors

Introduction of Performance-linked Remuneration Scheme

Supplementary Explanation for Applicable Items

For the purpose of creating incentives for sustainable improvement of long-term performanceand increase in corporate value by enhancing the linkage of remuneration with company
performance and corporate value, the Company has based its officer remuneration structure forfull-time Directors (excluding those serving as Audit & Supervisory Committee Members) and
Executive Officers (excluding those concurrently serving as Directors) on the three parts of“monthly remuneration,” “performance-based remuneration” and “stock-based remuneration.”
The Company has set the total of the “performance-based remuneration” and “stock-based
remuneration” to roughly 30% of the entire remuneration.
The basic policy on remuneration is disclosed in Appendix 3 of the Basic Policy on Corporate
Governance.
https://www.jpower.co.jp/ir/pdf/cg_houshin2306.pdf
Persons Eligible for Stock Options―

Supplementary Explanation for Applicable Items―

Director Remuneration
Status of Disclosure of Individual Director’s

No Disclosure for any Directors

Remuneration

Supplementary Explanation for Applicable Items

The Company discloses, in its securities reports, the total amount of remuneration paid to
Directors other than those serving as Audit & Supervisory Committee Members, to Directors
who are Audit & Supervisory Committee Members, and to Auditors, by category. For fiscal 2022,
the amount of remuneration paid to Directors other than those serving as Audit & Supervisory
Committee Members was 412 million yen (including 28 million yen for Outside Directors); that
paid to Directors who are Audit & Supervisory Committee Members was 65 million yen(including 38 million yen for Outside Directors); and that paid to Auditors was 29 million yen(including 12 million yen for Outside Auditors).

23

Policy on Determining Remuneration Amounts andCalculation Methods

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods

The amounts of remuneration of the individual Directors (excluding those who are Audit &Supervisory Committee Members) will be determined in accordance with the policy for
determining the remuneration of the Directors (excluding those who are Audit & Supervisory
Committee Members) and Executive Officers as well as Specially Appointed Officers for Audit,
etc. as prescribed by the Board of Directors after deliberation by the Nomination andRemuneration Committee.
Support System for Outside Directors
Support is provided to Outside Directors in such forms as providing materials for the Board of
Directors’ meetings to them at least the day prior to each meeting date, and explaining to themmatters referred to the Executive Committee, which is an important management meeting body.
Also, opportunities for them to visit and inspect on-site facilities such as power plants arearranged.
The Secretarial Affairs Department and the Office of Audit & Supervisory Committee Members
serve as the contact points for Outside Directors (excluding those who are Audit & Supervisory
Committee Members) and Outside Directors who are Audit & Supervisory Committee Members,
respectively, supporting them in the execution of their duties, for example, through facilitationof communication and adjustment with parties inside the Company and through provision ofvarious information.
Status of Persons who have Retired as Representative Director and President, etc.
Information on Persons Holding Advisory Positions (Sodanyaku, Komon, etc.) after Retiring as Representative Director
and President, etc.

Name

Job title/
position

Masayoshi
KitamuraSpecialCounselor

Responsibilities
Provision of advice tothe management, andengagement in
activities involving
external organizations

Terms and Conditions of
Employment(Full/part time, with/without
remuneration, etc.)
Full-time and paid

Number of Persons Holding Advisory Positions (Sodanyaku, Komon, etc.)
After Retiring as Representative Director and President, etc.

Other Related Matters

24

1

Date whenformer role aspresident/
CEO ended
June 22,2016

Term
AnnualContract

The appointment of retired Representative Director Presidents, etc. to advisory positions, etc.
and their remuneration are determined by the President after consultation among
Representative Directors. Retired Representative Director Presidents, etc. are commissioned tohold advisory positions, etc. in accordance with internal rules, in order for the management tobe able to utilize, as necessary, advice from those advisory positions, etc. based on theirexperience of conducting business for the Company and their deep insight, and from the aspectof maintaining and improving the level of the Company’s social contribution through theirexternal activities, etc. related to the Company’s business. Advisory positions, etc. are notmembers of the Board of Directors and thus do not receive any report before or after any meetingof the Board of Directors on the matters subject to deliberation during the meeting or on theproceedings of such meeting, and do not hold any authority over the Company’s management
decisions or business execution.

2.

Matters Concerning Functions of Business Execution, Auditing and Supervision, Nomination, andRemuneration Decisions (Overview of Current Corporate Governance System)(Regarding Outside Directors)
The Company’s Outside Directors have abundant experience and distinguished knowledge andparticipate in the Company’s management-related decision-making from an independent
perspective on the basis of their professional knowledge and experience in their respective areasof expertise.
(Regarding the Audit & Supervisory Committee)
The Audit & Supervisory Committee of the Company audits the execution of duties by Directors
and carries out other relevant duties. In particular, its important role is to give opinions andadvice to Directors (excluding those who are Audit & Supervisory Committee Members) on thelegitimacy and appropriateness of the Company’s decision-making process from a neutral andobjective standpoint.
(System of business execution, auditing, supervision, etc.)
Ensuring Effectiveness of business execution The Board of Directors meets monthly in principle
and on an as-needed basis, with attendance of all of the Directors, including Independent
Directors. The Executive Committee meets weekly in principle, with attendance by all SeniorDirectors, Senior Executive Officers, and full-time Audit & Supervisory Board Members andAudit & Supervisory Executive Officer. This committee discusses matters subject to deliberationby the Board of Directors, significant company-wide matters related to business execution by
the President and Executive Vice Presidents based on policies decided by the Board of Directors,
and important matters related to individual business execution. In addition to the Board of
Directors’ delegation of certain decision making responsibilities for the execution of importantbusiness to Senior Directors in accordance with the Articles of Incorporation (excluding the25items of paragraph (5) of Article 399-13 of the Companies Act), as well as allocating functions by
the Board of Directors and the Executive Committee, the Company clarifies responsibility andauthority thereby ensuring accurate and prompt decision-making and efficient corporate
management by establishing a system in which Executive Officers, to whom authority isdelegated by Senior Directors, share responsibility for business execution.
Furthermore, Directors (excluding those who are Audit & Supervisory Committee Members)
have arranged an environment that facilitates smooth execution of such duties as the following
by Audit & Supervisory Committee Members: attending meetings of the Executive Committee,
J-POWER Summit, etc. and offering their opinions in such meetings; asking Directors(excluding those who are Audit & Supervisory Committee Members), Executive Officers, etc. fordetails on the situation surrounding the execution of duties; and conducting investigations on
various internal organizations and key group companies. Also, Directors (excluding those who
are Audit & Supervisory Committee Members) have arranged a system for the following mattersto be reported to the Audit & Supervisory Committee:
1. matters that may cause a significant loss to the Company;
2. the results of audits conducted by the department in charge of internal audits;
3. the situation surrounding consultation cases that the Compliance Consultation Points havereceived; and4. other matters necessary for the Audit & Supervisory Committee in the course of executing its
duties.
In addition, Audit & Supervisory Executive Officer are appointed as employees to assist the
Audit & Supervisory Committee in conducting its duties, and an Office of Audit & Supervisory
Committee has been established to assign full-time staff thereto for assisting the Audit &Supervisory Committee with its audits and other relevant matters. Audit & Supervisory
Executive Officer and staff belonging to the Office of Audit & Supervisory Committee Members
perform their duties independently from the chain of command of Directors (excluding those
who are Audit & Supervisory Committee Members). Furthermore, the consent of the Audit &Supervisory Committee is required in relation to matters related to the personnel affairs of
Audit & Supervisory Executive Officer, and full-time Audit and Supervisory Committee
Members are consulted with on the personnel affairs of Audit & Supervisory Committee staff.
The Company has concluded an agreement with Ernst & Young ShinNihon LLC as anaccounting auditor under the Companies Act and the Financial Instruments and Exchange Act
to undergo accounting audits conducted thereby. The Company’s accounting audit operations forfiscal 2022 were carried out by three certified public accountants, Mr. Morio Sato, Mr. Katsuhiro
Saito and Mr. Yasuo Maeda, who are designated limited liability partners of the aforementioned
auditing firm.

26

(Liability limitation contract with Directors (excluding those who are Executive Directors))
The Company has entered into a contract with Mr. Tomonori Ito, Mr. John Buchanan, Mr.
Takashi Yokomizo, Mr. Naori Fukuda, Mr. Hiroshi Fujioka and Kiyoshi Nakanishi, and Ms.
Kimiko Oga that limits their liability as Directors in accordance with Article 427, paragraph (1)of the Companies Act. The limit under that contract will be the amount prescribed by theapplicable laws and regulations.

3.

Reasons for Adoption of Current Corporate Governance System
Following the partial amendment of the Articles of Incorporation, which was approved at the70th Ordinary General Meeting of Shareholders held on June 28, 2022, the Company
transitioned to a company with an Audit & Supervisory Committee effective as of the same date.
Following the transition, we have established a system of mutual oversight among Directors
through the attendance at meetings of the Board of Directors of Outside Directors who
participate in the Company's management decision-making from an independent position.
The Board of Directors delegates the execution of important business to Directors to enable
speedy execution. At the same time, the Company is further improving the transparency andfairness of its management and strengthening its supervisory function by increasing the numberof Outside Directors with voting rights on the Board of Directors and through the Audit &Supervisory Committee's right to express opinions on Director nominations and compensation.
In fiscal 2019, the Company established a Nomination and Compensation Committee, more thanhalf the members of which are Independent Officers, to enhance the independence, objectivity
and accountability of the Board of Directors with regard to the nomination and compensation of
Directors and top management.
Furthermore, the execution of duties by Directors is constantly monitored through theircomments at meetings of the Board of Directors and other management meetings by the Audit& Supervisory Committee, which includes outside Audit & Supervisory Committee Memberswith abundant experience in such areas as the management of leading Japanese companies andthe execution of government policies. The Company believes this system allows for sufficient
corporate governance functionality.
In addition to the above, the Company has also established an Executive Committee.

27

III.
1.

Implementation of Measures for Shareholders and Other Stakeholders
Measures to Vitalize General Meeting of Shareholders and Facilitate Exercise of Voting Rights
Supplementary Explanation
Early Posting of Notice of the General Meeting

The Company sends out a notice approximately three weeks prior to the dateof Shareholdersof the relevant general meeting of shareholders.

Scheduling of the General Meeting of

The Company avoids so-called peak days when holding general meetings ofShareholders on a Non-Peak Day

shareholders.
The Company has adopted an electronic system for exercise of voting rights,

Electronic Exercise of Voting Rights

enabling voting rights to be exercised through the Internet by using a computeror mobile phone.

Participation in a Platform for the Electronic

The Company participates in the electronic voting platform for institutional

Exercise of Voting Rights and Other Initiatives

investors operated by the ICJ, Inc.

to Enhance Environment for Institutional
Investors to Exercise Voting Rights
Provision of Notice (or Summary of Notice) of

An English version of the convocation notice of each general meeting of

the General Meeting of Shareholders in English

shareholders is prepared and also published on the Company’s website.
The convocation notices of general meetings of shareholders are published on

Other

the Company’s website. Since 2016, convocation notices have been publishedon the website prior to the forwarding of their hard copies to expand the meansand period of communication of information.

2.

Status of IR-related Activities
Explanation by arepresentative
Supplementary Explanation

director or arepresentative
executive officer

Regular Investor Briefings held for Individual

The Company holds investor briefings and facility tours

Investors

for individual investors on a regular basis.

Regular Investor Briefings held for Analysts
and Institutional Investors

An outline of the Company’s management plan and of
financial results (second quarter and year-end) is explained
The President and officer in charge of IR hold individual

Investors

interviews with overseas investors.
The following information for investors is published in thesection “Investor Relations” on the Company’s website(https://www.jpower.co.jp/).
Topmessage;financialstatements;

securities

reports/quarterly financial results; materials for general
meetings of shareholders (convocation notices and noticesof resolutions); various presentation materials (forbriefings on financial results and briefings for individual
investors); integrated reports; newsletters for shareholders;etc.

Establishment of Department and/or Placementof a Manager in Charge of IR

Heldnormally twice a year by the President.

Regular Investor Briefings held for Overseas

Online Disclosure of IR Information

Held

The department that takes charge of IR and also serves as
an IR administration liaison department is Corporate
Planning Office, Corporate Planning & Administration

28

Held

Department.

3.

Status of Measures to Ensure Due Respect for Stakeholders
Supplementary Explanation
Establishment of Internal Rules Stipulating

Such internal rules are provided in the J-POWER Group Corporate Philosophy,

Respect for the Position of Stakeholders

the J-POWER Corporate Conduct Rules, and other relevant rules.

Implementation of Environmental Preservation

Details on the Company’s activities in this regard are reported in J-POWER

Activities and CSR Activities, etc.

Group Integrated Reports. J-POWER Group Integrated Reports are publishedon the Company’s website.

Formulation of Policies, etc. on Provision of

The Company has set down its policies, etc. in this regard in the J-POWER

Information to Stakeholders

Corporate Conduct Rules, the IR Information Disclosure Regulation and otherrelevant rules and discloses information on its website and through its press
releases in accordance with those policies, etc.

Other

Group employees as a whole have engaged in various activities to ensure theharmonious existence between dams, power plants and other facilities and theirsurrounding communities. Details on such activities are presented in J-POWERGroup Integrated Reports.

29

IV.
1.

Matters Concerning the Internal Control System
Basic Views on Internal Control System and Status of Development
As a basic principle for internal control system development, the Company formulated a basic
policy on the development of internal control systems (systems to ensure the appropriateness ofbusiness operations), has developed an internal control system in accordance with the basic
policy, and strives to properly operate the system.
1. “Systems necessary to ensure that the execution of duties by Directors complies with the laws,
regulations and the Articles of Incorporation” and “systems to ensure that the execution of duties
by an employee of the Company complies with laws, regulations and the Articles ofIncorporation”
Under the J-POWER Group Corporate Philosophy, Directors take the initiative to set examples
of honest and fair conduct in a determined spirit of legal compliance and based on a sense of
ethics and strive to ensure that such conduct is instilled in employees, in accordance with the JPOWER Corporate Conduct Rules. Moreover, the Company is determined to stand firm against
anti-social forces that threaten the order and safety of civil society, and thoroughly ensures thatits employees are aware of the Company’s stance and act accordingly.
In order to strengthen the supervisory function of the Board of Directors, the Company has
established the position of Chairperson that focuses on serving as a supervisory function
primarily as a Director, and appoints Outside Directors to participate in the Company’s
management-related decision-making from an independent standpoint.
Furthermore, for the purpose of ensuring proper business execution, the Internal Audit
Department carries out internal audits independently from other organizations, and also eachorganization conducts self-audits on its own business execution.
In order to promote compliance activities, the Company has established Compliance Action
Guidelines as criteria for individual employees, including members of the management, to more
specifically judge actions in terms of compliance when conducting business activities.
Company-wide compliance is overseen by the Representative Director Chairman. As a systemfor company-wide compliance promotion, an officer in charge of compliance is appointed to assist
the Representative Director Chairman and the Representative Director President and Chief
Executive Officer and to carry out compliance promotion operations. Also, the Compliance Action
Committee has been established to discuss company-wide compliance promotion measures,
evaluate their implementation statuses, and address issues related to compliance violations.
Furthermore, two task forces (Compliance Promotion Task Force and Facilities Safety Task
Force), the first of which is for company-wide compliance promotion activities and the other ofwhich is for autonomous safety activities based on the Company’s safety regulations, have been
established under the committee to promptly and accurately implement operations pertaining
to compliance promotion. Besides, the Company has set up Compliance Consultation Points in30

the Internal Audit Department and in an external law firm as consulting hotlines for theemployees of the Company and those of its subsidiaries to use when facing compliance issues.
These Compliance Consultation Points ensure the rigorous protection of employees seeking
consultation. For the operation of the consultation points, advice is received from outside
lawyers, and investigations, correction and other relevant actions are handled appropriately.
In addition to the development of those compliance promotion systems, the Company has
distributed a copy of the Compliance Pledge to each Director, Executive Officer and employee
and encourage them to carry it with them so as to raise their awareness of compliance.
For the purpose of enhancing transparency and accountability in corporate activities, theCompany has established a Disclosure Committee, thereby ensuring active and timely
disclosure of fair and transparent corporate information.
Furthermore, in order to ensure the reliability of its financial reporting, the Company has
developed and maintained an internal control system for the whole Company Group in relation
to financial reporting and evaluates the effectiveness of its internal control, in accordance withlaws, regulations and internal rules.
2. “Systems regarding retention and management of information in relation to the execution of
the duties of a Director”
Senior Directors and Executive Officers are required to report the situation surrounding theexecution of duties to the Board of Directors or Executive Committee on a periodic basis or atimely basis as required, to prepare meeting minutes concerning the reported details inaccordance with relevant laws, regulations and internal rules, and to properly retain andmanage such meeting minutes. Besides, other documents related to the execution of duties arealso properly prepared, retained and managed in accordance with internal rules.
3. “Rules and other systems related to management of the risk of loss”
With regard to risks in the execution of corporate activities, the Company thoroughly ensures
the identification of such risks and the implementation of risk avoidance measures through, forexample, mutual checks in the decision-making process, deliberations by various meetingbodies, and the development and maintenance of an emergency management system based oninternal rules even at ordinary times, and makes efforts to minimize the impact of losses
potentially caused by the occurrence of such risks.
4. “Systems to ensure that the execution of duties by a Director of the Company is performed
efficiently”
Ensuring Effectiveness of business execution The Board of Directors meets monthly in principle
and on an as-needed basis, with attendance of all of the Directors, including Independent
Directors. The Executive Committee meets weekly in principle, with attendance by all Senior
31

Directors, Senior Executive Officers, and full-time Audit & Supervisory Board Members andAudit & Supervisory Executive Officer. This committee discusses matters subject to deliberationby the Board of Directors, significant company-wide matters related to business execution by
the President and Executive Vice Presidents based on policies decided by the Board of Directors,
and important matters related to individual business execution. In addition to the Board of
Directors’ appointing of certain decision making responsibilities for the execution of importantbusiness to Senior Directors in accordance with the Articles of Incorporation (excluding
respective items in paragraph (5) of Article 399-13 of the Companies Act), as well as allocating
functions by the Board of Directors and the Executive Committee, the Company clarifies
responsibility and authority thereby ensuring accurate and prompt decision-making andefficient corporate management by establishing a system in which Executive Officers, to whom
authority is delegated by Senior Directors, share responsibility for business execution.
5. “Systems to ensure proper business activities in a business group comprised of the Company
and the subsidiary companies thereof”
For the management of affiliated companies, the Company’s basic policy is to aim for group-wide
comprehensive development based on the Company Group’s management plan. In addition to
managing affiliated companies in accordance with internal rules, the Company strives toenhance the appropriateness of business operations in its corporate group through the GroupManagement Committee. Furthermore, the Audit & Supervisory Committee and the Internal
Audit Department audit affiliated companies to ensure the appropriateness of business
operations in the corporate group.
6. “Particulars related to employees to assist with the duties of the Audit & Supervisory
Committee; particulars regarding the independence of such employees from Directors (excluding
those who are Audit & Supervisory Committee Members); and particulars related to ensuring
the effectiveness of instructions given by the Audit & Supervisory Committee to such employees”
In addition to appointing Audit & Supervisory Executive Officer as employees to assist the Audit& Supervisory Committee in conducting its duties, the Company has established an Office ofAudit & Supervisory Committee Members as a system for staff members working for the Audit& Supervisory Committee. Full-time staff (five members) are assigned to the office to assist the
Audit & Supervisory Committee with its audits and other relevant matters. Audit & Supervisory
Executive Officer and staff belonging to the Office of Audit & Supervisory Committee Members
perform their duties independently from the chain of command of Directors (excluding those
who are Audit & Supervisory Committee Members). Furthermore, the consent of the Audit &Supervisory Committee is required in relation to matters related to the personnel affairs of
Audit & Supervisory Executive Officer, and full-time Audit and Supervisory Committee
Members are consulted with on the personnel affairs of Audit & Supervisory Committee staff.
32

7. “Systems for the Directors (excluding those who are Audit & Supervisory Committee
Members), employees, etc. of the Company and the directors, employees, etc. of the Company’s
subsidiaries to report to the Audit & Supervisory Committee; other systems related to reportingto the Audit & Supervisory Committee; and systems for ensuring that persons who have madea report to the Audit & Supervisory Committee are not treated disadvantageously due to having
made the report”
The Directors (excluding those who are Audit & Supervisory Committee Members), employees,
etc. of the Company, and the directors, employees, etc. of the Company’s subsidiaries, report thefollowing matters to the Audit & Supervisory Committee, and it has been ensured that any
person who has made a report to the Audit & Supervisory Committee is not treateddisadvantageously due to the fact that the person made the report:
i. matters that may cause a significant loss to the Company;
ii. the results of any audits conducted by the department in charge of internal audits;iii. the situation surrounding any consultation case that any Compliance Consultation Point hasreceived; andiv. other matters necessary for the Audit & Supervisory Committee in the course of executing its
duties.
8. “Particulars related to policies concerning the procedure for advance payment or
reimbursement of expenses arising with regard to the execution of audit duties by Audit &Supervisory Committee Members (limited to the execution of duties associated with the Audit& Supervisory Committee) or concerning any other processing of expenses or obligations thatarise with regard to the execution of such duties”
A budget is allocated in advance for the expenses necessary for the execution of duties by Audit& Supervisory Committee Members (limited to those duties associated with the execution of theduties of the Audit & Supervisory Committee), and expenses incurred in urgent situations andextra expenses incurred are also reimbursed.
9. “Other systems for ensuring that audits by the Audit & Supervisory Committee are performed
effectively”
Directors (excluding those who are Audit & Supervisory Committee Members) have arranged
an environment that facilitates smooth execution of such duties as the following by Audit &Supervisory Committee Members: attending meetings of the Executive Committee, J-POWER
Summit, etc. and offering their opinions in such meetings; asking Directors (excluding those who
are Audit & Supervisory Committee Members), Executive Officers, etc. for details on thesituation surrounding the execution of duties; and conducting investigations on various internalorganizations and key subsidiaries. In addition, Directors (excluding those who are Audit &33

Supervisory Committee Members) have developed an environment that enables the Audit &Supervisory Committee to develop mutual cooperation with the Internal Audit Department andAccounting Auditors through, for example, the formulation of audit plans and the reporting ofaudit results. Furthermore, the Audit & Supervisory Committee may, where necessary, instruct
the Internal Audit Department to make reports, conduct investigations, and perform otherrelevant actions.
2.

Basic Views on Measures for Eliminating Anti-Social Forces and Status of Development
In the J-POWER Corporate Conduct Rules, the Company sets down its determination to standfirm against anti-social forces that threaten the order and safety of civil society. Furthermore,
the Company has established Compliance Action Guidelines as criteria for individual employees,
including members of the management, to more specifically judge actions in terms of compliancewhen conducting business activities, and thereby thoroughly ensures that its employees areaware any relationship with anti-social forces needs to be severed. Besides, the Company has
set up an internal contact department to handle any demands, etc. made by anti-social forces
and has thereby developed a system to promptly collect relevant information and properly
respond to such demands, etc. in cooperation with external specialized organizations.

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V.

Other

1.

Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Not Adopted

Supplementary Explanation for Applicable Items

The Company’s Board of Directors has adopted the following resolution as the Company’s “basic
policy regarding the way a person is to control the determination of financial and business
policies of the Company” under Article 118, item (iii) of the Regulations for Enforcement of theCompanies Act. In the more than half-century since the Company was founded in 1952 to help
augment thedomestic supply of electric power, it has continued to deliver low-cost, stable

power, and to build and operate a nationwide infrastructure of primary transmission lines,
contributing to the growth of our nation’s economy and improvement of the standard of living of
its citizens. During this period, the Company has continued to hold as its corporate philosophy
the mission to meet the peoples’ need for energy with an uninterrupted supply, and to contributeto the sustainable growth of Japan and the world, while making the coexistence of energy andthe environment the keynote of our business, working to build an attractive business with stable
growth, and continuing our never ending efforts to enhance the Company’s corporate value. The
business of the Company is most characterized by investment in power plants and other public
infrastructure and by recovering that investment through the long-term operation of thosefacilities. The Company believes that over the course of such long-term operation, it is throughcooperation with its many stakeholders, and its ability to deliver stable growth, that it is able tomaximize its corporate value.
While the Company hopes that its shareholders understand the unique characteristics of its
business, it also believes that its shareholders should naturally be free to exercise their own willin buying and selling the Company’s shares. Nevertheless, when it comes to large-scaleacquisition of the Company’s shares with the intent to acquire its management control, theDirectors of the Company, who serve under the shareholders’ mandate, also believe that a
response needs to be based on careful consideration of such acquisition in light of the Company’s
corporate value as well as of the collective benefits of the shareholders. As a result, in cases
where the shareholders and Directors have not been provided with sufficient time or information
to properly consider such a move, or when, upon consideration, it is determined that such an
attempt represents potentially serious damage to the collective interests of the Company’s
shareholders and consequently to its corporate value, the Company’s policy is to take suchmeasures as are appropriate to the extent allowed by the Companies Act and other relevantlaws and regulations.
2.

Other Matters Concerning the Corporate Governance System
The term of office for Directors (excluding those who are Audit & Supervisory Committee
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Members) has been set to one year, as resolved in the 70th Ordinary General Meeting of
Shareholders (held in June 2022). The term of office for those Directors who are Audit &Supervisory Committee Members has been set to two years, as resolved in the 70th Ordinary
General Meeting of Shareholders (held in June 2022).
END

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