Materiality:

Strengths and initiatives to help

“Maintaining/enhancing the corporate base”
As the corporate philosophy of the Mandom Group, we consider that “Social Responsibility & Sustainability” is the sustainability of
the Mandom Group. With that in mind, we treat sustainable management aimed at resolving social and environmental issues (ESG
management + SDGs management) as a fundamental concept.
We will continue to develop as a company that is recognized by all stakeholders for its existence value, with the dynamism to survive inany era, and we will further strengthen our corporate foundation based on our management philosophy with advancing our Dedication
to Service (Oyakudachi) deeply and widely as the going concern.
In addition, in order to provide cosmetics and quasi-drugs that consumers can use safely and with peace of mind, we are working toensure conformity with Mandom safety standards (safe quality) and to achieve conformity with consumer satisfaction (reliable quality).

Providing High Quality and Peace of Mind
Reconfiguring Our Quality Assurance System and Quality Assurance Activities

48

established the Quality Assurance Committee through which
we unify the company-wide direction on quality.
Additionally, the officers in charge, director in charge ofoverall manufacturing and sales, director in charge of quality
assurance, director in charge of safety management andtechnical supervisors stipulated in the Pharmaceutical andMedical Devices Act (Act on Securing Quality, Efficacy and
Safety of Products Including Pharmaceuticals and Medical
Devices) work closely with each other to supervise andpromote quality assurance activities.
For a diagram of the Mandom quality management system,
please see the next page.
CSR Information
Consumer Issues > Promotion of Quality Assurance System▲

Regarding quality assurance for cosmetics and quasidrugs, Mandom works to assure fully satisfactory quality as
demanded by consumers from purchase to end of use. We
engage in quality assurance activities to improve the quality ofour products and services in all processes, including planning,
design and development, production, sales, and customer
handling.
In January 2014, we established the ISO 9001-based “Mandom
quality management system” (a system for quality assurance
activities that incorporate customer opinions), which we havesince operated as we pursue continuous improvement ofquality.
In order to continuously improve the effectiveness andreliability of this Mandom quality management system, weAnalysis of active ingredients in quasi-drugs

Confirmation of process operations

Confirmation of process operations

Visual inspection of products

Product sampling inspection

Microbiological inspection

Mandom Report 2023

Mandom quality management system (a system for quality assurance activities that incorporate customer opinions)

Production

Discovering customersʼ wants

About Mandom

Product Planning

Regulatory complianceMarketing research

ISO 22716 (Cosmetics GMP) conformity
Production Policy

Drafting and reviewing plan●●

Ordering of raw materials

Marketability Preference Functional superiority
Eco-friendliness Regulatory compliance●●●

Deliberation over content of plan
Acceptance of raw materials

Board of Directorsʼ Meeting

Quality check

Quality check Acceptance inspection

Approval for sale of new productCompliance with material standards

Preparation of content

Deliberation over validity of and challenges with draft plan
Timing of implementation: Upon inputting of plan
Implementing divisions: Product planning, production and design

Quality check Content inspection
Compliance with content standards

Design of content and container●

Safety Stability Functionality
Regulatory compliance●●●

Filling, packaging

Usability

Quality check Product inspection

Design of production methods

Compliance with product standards, deliverability screening

Selection of raw material suppliers●

Materiality●

Value Creation Story

Marketing strategy meetings (monthly)
Chairperson: executive officer in charge of marketing

Regulatory compliance Purchasing Policy

Delivery●

Product Design●●

Assurance of traceability through lot control
Management of retention samples

Middle-Range Planning

Officers in charge
Director in charge of overall manufacturing and sales
Director in charge of quality assurance
Director in charge of safety management
Engineer in charge

Performance for the Fiscal Year Ended March 31, 2022

New product development, product improvement

Customers
Consumers, retailers, distributors, trade partners,
investors, etc.

Publicity and Sales Promotion
Creation of advertising ● Creation of sales promotion tools
Information dissemination through website, social media, etc.
● Plan management and implementation of promotions, etc.
●●●

Communication with Customers
Regulatory compliance, privacy policy

Regulatory compliance
Conformance with voluntary standards of industry

Advertising is to be carried out based on the following guidelines.
Appropriate Advertising Guidelines including Cosmetics from theJapan Cosmetic Industry Association
https://www.jcia.org/user/business/advertising (Japanese Only)

Company Information

Gathering customer opinions,feedback to customers

●

Sales

(Inquiries, requests, adivice on quality, etc.)
Daily reports

In-store communication
Supply of information to distributors, retailers● Gathering of market information, etc.
●●

Collation and analysis of customer opinions
Requests to related divisions to consider improvements,
quality management reviews●

Regulatory compliance Sales Policy●

Mandom Report 2023

49

Materiality: “Maintaining/enhancing the corporate base”

Customer Inquiry System

Customer Inquiries in FY2022

We set up a Customer Relations Division in 1994 as a generalcontact point for communicating with customers, including theirsuggestions, requests and other feedback. After reviewing
the feedback received, we add information to the Frequently
Asked Questions (FAQ) & Inquiries section of our website aspart of our efforts to ensure the supply of information.
Furthermore, feedback is compiled in a database, and throughmutually attended internal meetings, is passed along to top
management and relevant departments to be integrated into
future product development and improvement.

Other

Purchasing methods

2,999 inquiries／30.2%
Non-productsuggestions andrequests

214 inquiries／2.2%

2,454 inquiries／24.7%

Customer Inquiries

Product suggestions
and requests

9,918 inquiries

319 inquiries／3.2%
How to use, Product functions

1,526 inquiries／15.4%

Opinions, Advice

2,406 inquiries／24.3%(Notes) 1. Does not include the number of inquiries received via chatbot.
2. Opinions, Advice: Includes 870 inquiries related to voluntary recalls.

Quality Assurance Div.
Consumers

Employees

Distributors

Information
providers

OverseasGroupcompanies

Requests, inquiries,etc.
・ Telephone
・ Email・ Mail・ Chatbot
・human-operated live chat・ Information provided
・ Inquiry content
・ Other information
・ Proposal/request information

Retailers・ Information provided
・ Inquiry content

Investigating
dept.

Report results
Confirm
information
Information
provision

Domestic Group companies
Responses

Requestinvestigation

Individual
dept.

Reportinformation

Management
decisionManagement
team▲

Top Page
Customer Support

Examples of Utilizing Customer Feedback
At Mandom, we share feedback from customers with top management and relevant departments, and work to express true customer
satisfaction.
The following presents our latest efforts making use of customer feedback.
LÚCIDO Perfect Skin Gel/Cream

Based on feedback regarding the label on the inner lid such as “The explanation is hard tounderstand” and “The characters are hard to see,” we changed the explanation to an easyto-understand one and gave the label content improved visibility.

LÚCIDO-L Hair Treatment Oil Frizz Care

We stated a “gel form” label to the product in response to feedback that the product did notlook how customers imagined.

LÚCIDO-L Oil Treatment Series

A customer commented, “It is difficult to see the remaining amount.” In response to this, we
improved the label by widening the gap to make it easier to see the remaining amount.

LÚCIDO-L Hair Styling Stick

A customer reported to us that opening the cap caused the stick inside to break, so westated “Please pull the cap up without twisting it” on the back side of the product.

GATSBY Styling Grease

Since inquiries about how to separate trash to be recycled have increased, the following
environmentally-friendly labeling is written on the product: “Bottle is plastic; Cap isaluminum.”

GATSBY Acne Care Water

Since inquiries about the product appearing blacker have increased because we changed
ingredients, the following is written on the top of the product: “Changed to environmentallyfriendly powder *Color may appear lighter, but this does not affect quality.”

GATSBY Body Hair Remover Foam Type

Since inquiries about use in delicate zones have increased, the following is written on theback of the product: “Please do not use on delicate zones.”LÚCIDO Ageing Care Refreshing Lotion

We stated a “gel-type” label to the product in response to feedback that the product did notlook how customers imagined.

FY2022

FY2021

FY202050

Mandom Report 2023

Corporate Governance
About Mandom

Corporate Governance Policy
The Mandom Groupʼs mission is co-existence, mutual growth and mutual creation with global
society. Consequently, to realize our core philosophy, we are dedicated to generating stableprofits by pursuing efficiency, while ensuring soundness and transparency. As a result, welook to achieve sustainable, steady growth together with consumers, society and otherstakeholders.

Value Creation Story

Efforts to Strengthen Corporate Governance
1985

1995

2000

2005

2010

2015

2020

Management Supervision and Auditing
Inviting independent external officers
Inviting external Audit &Supervisory Board members 1985

Inviting external directors

1995

Establishment of nominating committee

2008

Materiality

Establishment of a committee chaired by an independent external officer
2021

Changed the chairperson of the committee to an external director

Improvement based on annual evaluation and analysis
Evaluation of the effectiveness of the Board of Directors
Evaluation of the effectiveness of the Audit & Supervisory Board

2016
2019

Separation of supervision and execution
Introduction of executive officer system

2001

Enhancement of effectiveness and transparency
Abolition of advisors, honorary advisors, and counselors

Middle-Range Planning

2018

Compensation for Officers
Establishment of a committee chaired by an independent external officer
Establishment of compensation committee

2005

2021

Changed the chairperson of the committee to an external director

Ensuring objectivity and transparency of compensation for officers
Terminated retirement benefits for directors and corporate auditors

2005

Review of officersʼ compensation program
Introduced restricted stock compensation plan

Performance for the Fiscal Year Ended March 31, 2022

2018

Reinforcement of the System
Complied with Japanʼs Corporate Governance Code, and announced Corporate Governance Guidelines

2015

Promotion of sustainable management
Establishment of Sustainability Committee

2015 CSR Promotion Committee 2020

Compliance system
Establishment of the Mandom Groupʼs Code of Conduct
Introduction of Helpline System

1999 (revised 2002, 2007, 2011, 2014, 2018)2002

2007: Expanded coverage to business partners

The Company adopts an audit & supervisory board system,
where its compliance management is founded on strict audits
carried out by Audit & Supervisory Board members to ensure
the legality of the Companyʼs activities. Based on such policy,
the Company will strengthen its monitoring and advisory
functions by appointing more than one (1) external director in

Company Information

Corporate Governance System
the Board of Directors.
By adopting a system of supervisory and executional officers
in charge of specific operations and clarifying responsibilities
and delegating authority, we have created a system for theproactive and expeditious execution of operations.

Mandom Report 2023

51

Materiality: “Maintaining/enhancing the corporate base”

Corporate Governance System (as of June 23, 2023)
Top Decision-Making Body, Venue for Communicating with Shareholders

General Meeting of Shareholders
Advice/Recommendations
Transparent and fair
selection process
3 Nominating

Appointment/Dismissal

Decision-making/Supervision

Femaleratio

1 Board of Directorsʼ Meeting● Representative Director● External Directors● External Experts

Statutory
auditing

ProposalReport● External Directors

Authority delegation/
Supervision

External
ratio

ReportAppointment
Dismissal

Legal audits

External
ratio● Internal Directors

Committee

Femaleratio

Disclosure/Explanation

2 Audit &Advance discussion,mutual checks, monitoring

Supervisory
Board

6 Executive Board● Audit & Supervisory● Chairman

Board Members● President Executive Officer● External Audit &● Supervisory Executive Officers

Business execution

Supervisory Board
Members● Audit & Supervisory Board Members

President Executive Officer
Supervisory Executive Officers

Transparent and faircompensation system
4 Compensation

Technology

Committee● Representative Director● External Directors

Marketing● External Experts

Femaleratio

External
ratio

Domestic
Sales

Production

Human Resources/
General Resources

Overseas
Business

Corporate Planning/
Financing

ProposalReportSocial responsibility
7 Sustainability

Committee

Code of Conduct
Promotion Committee
Quality AssuranceCommittee

Executive Officers

ESG Executive Committee

Direction/
Management

Independent audits
Audit of internal
controls forfinancial reporting

Independent
Auditor

Total Risk Management
Committee

Authority delegation/
Supervision

Reporting, discussion,and mutual checks of business execution
5 Management Council

Statutory
auditing

Statutory
auditing

Internal control,
business audits

Internal Audit
Div.

Occupational Health and
Safety Committee

System construction/
Overall management

Information
provisionCompany-wide organizations(Group companies in Japan and overseas)

1 Board of Directorsʼ Meeting

The Board of Directors is comprised of directors and makes decisions
regarding important business execution matters based on a corporate
philosophy and corporate planning in addition to supervising the executionof business by directors and executive officers.
Representative Director and Chairman serves as Chair.

2 Audit & Supervisory Board

The Audit & Supervisory Board is comprised of Audit & Supervisory Board
members, who attend important meetings, such as Board of Directors andManagement Council meetings. Audit & Supervisory Board members also
exchange information with the Accounting Audit and Internal Audit Division
and audit the business execution of directors, etc. through hearing of eachdivision and affiliated company.
An Audit & Supervisory Board member serves as Chair.

3 Nominating Committee

The Nominating Committee is comprised of the Representative Director
and external directors. It is established as an advisory body to the Boardof Directors in order to ensure fairness and transparency of the process
when determining candidates for directors and Audit & Supervisory Board
members. This committee advises the Board of Directors on proposals
regarding candidates for director, Audit & Supervisory Board member andsupervisory executive officer.
An external director serves as Chair.

4 Compensation Committee

The Compensation Committee is comprised of the Representative Director
and external directors. It is established as an advisory body to the Boardof Directors in order to ensure transparency and fairness of the process
when determining officersʼ compensations. This committee advises theBoard of Directors on policies regarding compensation for directors andsupervisory executive officers.
An external director serves as Chair.

52

Mandom Report 2023

5 Management Council

The Management Council is comprised of officers of executive officer level
and higher. It performs decision-making and reporting related to businessexecution of the management strategy, primarily for the applicable fiscal
year. The Mandom Group promptly responds to changing businessenvironments by delegating business execution to the Management
Council.
The Representative Director & President Executive Officer serves as Chair.

6 Executive Board

The Executive Board is comprised of officers of supervisory executive
officer level and higher. It performs decision-making and reporting related
to business execution of the management strategy, primarily for the
medium- to long-term. The Executive Board also deliberates on efforts torealize VISION2027 as developed by the Company.
The Representative Director & President Executive Officer serves as Chair.

7 Sustainability Committee

The Sustainability Committee is comprised primarily of directors, Audit &Supervisory Board members, and supervisory executive officers. Whiledeveloping our approach for promoting the sustainability of the MandomGroup and holding discussions with relevant departments at committee
meetings and other meetings, this committee is strengthening our efforts
to contribute to the sustainable development of society.
The President Executive Officer & Director serves as Chair.

Skill Matrix of Directors and Audit & Supervisory Board Members
About Mandom

corporate value by proactively promoting diverse humanresources, including foreign nationals and female employees,
to officers and managerial positions to provide opportunities
for them to leverage their talents.
By appointing external directors and external Audit &Supervisory Board members who have no special interest
relationships with the Company and are highly independentof the Company, the Company aims to reinforce its corporate
governance and augment the Groupʼs overall management
quality. The Company has formulated the Standards for the
Independence of Independent External Officers shown below.
The external directors and external Audit & Supervisory Board
members of the Company satisfy these standards and theTokyo Stock Exchangeʼs independence criteria. The Company
has notified the Tokyo Stock Exchange that all of these
executives are independent officers.

Value Creation Story

Company Information
Company Profile > Corporate Governance >External Officers “Standards for the Independence of Independent
External Officers”▲

Mandom acknowledges the importance of a composition of
personnel with various business experiences and of diversity
when it comes to the composition of the Board of Directors
and the Audit & Supervisory Board. From the standpoint ofpromoting womenʼs contribution, we have had one female
external director since June 2019. Mami Ito was appointed
in June 2023. At our listed subsidiary in Indonesia, which is
our biggest subsidiary in the overseas business, there are six
Japanese directors and two directors who are foreign nationals(both of which are female) of the total eight directors.
In addition, five foreign nationals (including one of whom is anequity-method affiliate) have already served as representative
directors of overseas subsidiaries.
Mandom aims to become a global company, and while wecurrently do not have any foreign national directors or Audit& Supervisory Board members, we acknowledge this as animportant issue in order to promote diversity management.
Going forward, our policy is to lead innovation and realize new“Dedication to Service (Oyakudachi)” for society and improved

Materiality

Skill Matrix (as of June 23, 2023)
Field of experience*
Name

Corporateplanning

Globalbusiness

Marketing

Sales

Technology/
Production

Finance/
Accounting

Human
Resources/
GeneralResources

Legal affairs
and riskmanagement

ESG

DX and IT

●

●

●

●

[Directors]●

Ken
Nishimura●

YasuakiKameda●Shinichiro
Koshiba●●●●

Hitoshi
Tanii●

Mami Ito

●

●

●

●

●

●

●

●
●

●

●

●

Performance for the Fiscal Year Ended March 31, 2022

Independent External

ShigekiSuzuki●●

Middle-Range Planning

Motonobu
Nishimura

●
●

●

●
●

[Audit & Supervisory Board Members]

Takehiko
Ikehata

Independent External

Masahiro
NishioMikiharu
Mori

●
●

●
Company Information

Takeshi
Hibi

●

●

CPA

●

Attorney* Areas of practical or supervising experience. “Global business” means that the person was seconded by Mandom Corporation to its subsidiaries or affiliated companies where
he/she held a management position.
For independent external officers, this refers to experience in other companies.

Mandom Report 2023

53

Materiality: “Maintaining/enhancing the corporate base”

Message from Newly Appointed
External Director[Comments from Chairman Nishimura]
I would like to receive advice from a broad perspective basedon Ms. Mami Itoʼs eventful and unique career and management
experience to date. In addition, I am also looking forward to heradvice on the promotion of womenʼs activities as part of ourdiversity and inclusion promotion efforts.
Not only this, but she is also active in the media, sharing
her own experiences with younger generations. Therefore,
I would like her to have opportunities to talk directly with
our employees, and I hope that she will provide valuable
insights from an outside perspective as well as a great deal ofinspiration.
Along with strengthening our corporate governance, I
strongly hope that she will help us improve the overall qualityof management of the Mandom Group, a human-oriented
company with the corporate slogan of “BE ANYTHING, BE
EVERYTHING.” for all consumers.
[Message from Director Ito]
Hello, everyone.
I am Mami Ito, and I was appointed as a director at the General
Meeting of Shareholders on June 23, 2023. I look forward toworking for the Mandam Group.
I visited Mandomʼs head office several times before assuming
this position, but it was at the reception after the management
policy announcement on April 3 that I had a good conversation
with Mandomʼs employees. My honest impression at that time
was, “Lively, laughing and having fun!” I was relieved to findthat Mandam was considerably friendlier than I had imagined.
The atmosphere was full of “Come on in! Youʼre more thanwelcome!” and I was able to fit in even with people I had nevermet before. I felt comfortable being so warmly accepted. I
believe that Mandom has experienced several turning points in
its long history, but Mandomʼs strength is that it has grown by
taking advantage of change as an ally without fearing changes.
I think that is the origin of the friendly corporate culture.
In 2000, I became the Representative Director of NIHON
DENTO KOUGYO Co., Ltd., a surface treatment company
founded by my father. Although I am the daughter ofthe founder, my father had already passed away and myappointment as president was unexpected, so only a handfulof employees greeted me when I went to the office. On thecontrary, I started out in an environment so unwelcoming that
there were even employees who ignored me. The company
itself was on the verge of bankruptcy, so there was no sparkle
in the eyes of employees who sensed that the company
was fighting for survival, and the atmosphere was verysomber. Most of the employees were male baby boomers
and they were in a state of resignation, wondering what the
inexperienced daughter of the founder could do and thinking
that the company was doomed. I am a competitive person,
and the more opposition I faced, the more motivated I became.
However, it took time and effort to actually revive the company.
To put it simply, the reason why the companyʼs business had
deteriorated so much was because after my fatherʼs passing,
they failed to see the times as they were, and took no actionin the face of the reality. There may have been plenty ofopportunities, but I believe that this state was the result of not
taking action, just getting by, hating change, and refusing to54

Mandom Report 2023

take on new challenges.
There is nothing more foolish than refusing to accept someone,or rejecting them, because they are outside of your industry,
because they are a different gender, or because they do
not share your values. It is perfectly natural for people to bedifferent. It is precisely because people are not the same thatthey are fresh and can make new discoveries. Some people
have obvious skills that anyone can see are amazing, whileothers have amazing talents that are hard to see from thesurface. Everyone has different strengths and weaknesses. It
is important to recognize and respect each other because ofour differences.
Japan is a wonderful country. However, I believe that there
are still a high percentage of people who are too concerned
about their surroundings and do not like to be different fromothers. Is there still a strong culture of “the nail that sticks out
gets hammered down”? Perhaps Japan still has a culture that
refuses to recognize uniqueness as a wonderful thing. Perhaps
the importance of having your own ideas and asserting themwithout being dragged down by others has not yet spreadthroughout Japanese society. This may be one of the reasons
why Japan has yet to become a country where women canplay an active role. Part of the problem is that many policies
have been male-driven for many years. However, it cannot
be said that there are no problems on the part of the women
who have allowed this to happen. I think it was necessary for
women to have the courage to take action for the sake of theirjuniors and for the future, even though they may be criticizedfor doing so. Among developed countries, Japan is a backward
country in terms of diversity. However, as you all know, withthe birthrate declining, the survival of not only companies but
also the nation itself will be in jeopardy unless diversity andinclusion are promoted and diverse human resources play anactive role. The phase of wait and see, where we think thateven if we donʼt do anything, someone surely will, is over.
“Now is the time to act!”
By moving forward, we will inevitably meet others with similar
mindsets. Like an orchestra playing different instruments inbeautiful harmony, we can combine our different personalities

company so impactful that everyone remembers to enjoy lifein their own way. I have only been in office for a short time,and I am sure there are many things I do not yet understand.
However, I would like to fulfill my role as an external director by
drawing on my 23 years of experience as a business manager
and the sensitivity I have developed growing up in a biculturalenvironment.

About Mandom

to deliver a powerful and impactful message to the world.
My first impression of Mandom is not only that it has a cheerfulcorporate culture, but also that it is a company that makes
it possible for anyone to do what they want. I hope that thispositive impression of “BE ANYTHING, BE EVERYTHING!” will
not only spread within the company, but will also be conveyed
to the consumers who use Mandomʼs products. Through
Mandomʼs stance and values, I want to make Mandom a

Method of Determining Compensation Amounts for Company Officers
linked to medium- to long-term performance. Restricted Stockcompensation aims to further promote shared value withshareholders and provide an incentive to strive to continually
increase the Companyʼs corporate value.
Compensation for external directors is composed solely of
fixed compensation.
Compensation for Audit & Supervisory Board members is set
at an appropriate level that reflects their important role andresponsibility for conducting rigorous legal audits that form thebasis of compliance management for the Group, thereby
maintaining and improving corporate value. As the role andresponsibility of Audit & Supervisory Board members is toconduct rigorous legal audits unrelated to the Companyʼsoperating performance, their compensation is composed onlyof the fixed compensation portion, which is not affected byoperating performance.
The amount of compensation for directors is determined by aresolution of the Board of Directors within the limit ofcompensation approved at the General Meeting of
Shareholders based on the deliberation and report of theCompensation Committee, which is chaired by an independent
external director and of which more than half of the members
are from outside the Company (external officers and external
experts).

Value Creation Story

Materiality
Middle-Range Planning

In addition to ensuring soundness and transparency, theCompanyʼs compensation for directors is aimed at theappropriate pursuit of efficiency, leading to the achievement ofmanagement plans and the enhancement of corporate value.
To this end, the Company sets an amount of fixedcompensation to ensure steady devotion to their duties. In
addition, a certain amount of performance-linked variable
compensation is provided to serve as an incentive to a higher
level of motivation. The Companyʼs policy is to strike a balance
between these two.
The Company sets fixed compensation amounts at appropriate
levels by referring to third-party data. These amounts differ
according to executive rank and Group management
responsibilities.
Variable compensation is linked to single-year and medium- tolong-term performance at an appropriate ratio. Annual payment
amounts are set to reflect performance with reference to theCompanyʼs performance in the preceding fiscal year andachievement of planned targets, and to the business plan forthe current fiscal year (amounts paid to individual internal
directors are based on evaluation of their individual
performance). Restricted Stock compensation (in principle, theamount will correspond to compensation for performance of
duties in the first year covered by Middle-Range Planning) is

Appropriate Balance of Fixed and Performance-Linked Compensation (at time of standard evaluation)
Percentage ofcompensation

Evaluation
indicator(monetary)

Short-term performance-linked
compensation (monetary)

Approximately 60%

Approximately 31%

Performance evaluation based onachievement of single-year targets

Performance evaluation based on achievementof Middle-Range Planning targets

Paid as monthly
fixed compensation

Paid as bonus after
evaluating target achievement

Paid Company shares within three fiscal years
corresponding to Middle-Range Planning

One yearThree years (FY2021–2023)−−

Company performance
・Achievement rate for consolidated net
sales forecast in pertinent fiscal year
・Achievement rate for consolidated
operating margin forecast in pertinent
fiscal year
・Rate of dividend growth
Individual performance
・Evaluation of contributions−

Directors
Audit & Supervisory Board members
Supervisory Executive Officers

50% above or below standard
Directors (excluding external directors)
Supervisory Executive Officers

Company performance・Middle-Range Planning
Achievement rate for consolidated net
sales in final year
・Middle-Range Planning
Achievement rate for consolidated
operating margin in final year
・Achievement rate for consolidated
ROIC

Company Information

Eligible
persons(shares)
Approximately 9%

Set compensation level based on
responsibility(Representative Director only evaluated based on
Company performance)

Range of fluctuationof evaluation

Medium- to long-term
performance-linked
compensation

Performance for the Fiscal Year Ended March 31, 2022

Payment
methodPerformance
evaluation period

Fixed compensation

33% above or below standard
Directors (excluding external directors)
Supervisory Executive Officers
Executive Officers

Mandom Report 2023

55

Materiality: “Maintaining/enhancing the corporate base”

Amount of Compensation, etc. for Directors and Audit & Supervisory Board Members for FY2022
Total amount ofcompensation(Millions of yen)

Directors(external directors)

Category

Total amount by type of compensation (Millions of yen)

Number of eligible
officers

Fixed compensation

Performance-linked
compensation, etc.

Non-monetarycompensation, etc.

288
（ 24）

203
（ 24）

49
（−）

36
（−）

7
（ 3）

Audit & Supervisory Board Members(external Audit & Supervisory Board Members)

50
（ 14）

50
（ 14）

−
（−）

−
（−）

4
（ 2）

Total
(external officers)

339
（ 38）

253
（ 38）

49
（−）

36
（−）

11
（ 5）

(Notes) 1. The amount of monetary compensation for directors was resolved at the 89th Ordinary General Meeting of Shareholders held on June 23, 2006 to be no more than¥450 million per year. As of the close of said General Meeting of Shareholders, the number of directors was eight (including one external director).
Separately from the above compensation framework, a resolution was passed at the 101st Ordinary General Meeting of Shareholders held on June 22, 2018 that theannual amount of compensation under the Restricted Stock compensation plan shall not exceed ¥150 million and the maximum number of shares shall not exceed
39,000 shares per year (external directors are not eligible for the grant). This compensation amount is, in principle, based on the assumption that an amount equivalent
to the compensation for the execution of duties over the period covered by the Middle-Range Planning will be paid in a lump sum in the first year of the period coveredby the Middle-Range Planning. The number of directors (excluding external directors) as of the close of said General Meeting of Shareholders was five.
2. The amount of monetary compensation for Audit & Supervisory Board members was resolved at the 88th Ordinary General Meeting of Shareholders held on June 24,2005 to be no more than ¥70 million per year. As of the close of said General Meeting of Shareholders, the number of Audit & Supervisory Board members was four(including two external Audit & Supervisory Board members).

Policy Related to Stockholdings
The Group maintains a basic policy of strategically holding
shares of listed companies that it determines will contributeto the sustainable improvement of corporate value in theGroup from a medium- to long-term perspective due to thesynergies emerging from strengthening relationships throughstockholding. Each year, the Board of Directors verifies
whether the profit and risks that correspond to holding
each individual company stock are aligned with capital costs
and maintains a policy to comprehensively judge the logicof holdings. The Board of Directors will consider reducing
holdings if it determines that a stockholding is not logical. Even
if stockholding is logical, the Board of Directors will consider
selling as needed after considering a myriad of factors,
including free cash flows, investment plans, etc. Our policy is
to keep the amount recorded on the balance sheet for policy

stockholdings at less than 10% of net assets at the end ofeach fiscal year. However, it was 10.1% at the end of March
2023. The Companyʼs policy is to reduce by at least 30% by
the end of March 2024 compared to the end of March 2021.
Stockholding of shares is a matter for approval by the Boardof Directors. The Group publishes the purpose for holding
major stockholdings in the securities report. The Group judges
exercising voting rights for stockholdings based on whether
a decision will contribute to the improvement of shareholder
value for the Group and the alignment with the purpose of thisinvestment. The Group strives for constructive dialogue withthe company from the position of a shareholder and maintains
a policy to appropriately and strictly exercise voting rights toimprove mutual healthy corporate value and synergies.

Number of Companies with Stock Held and Amount on Balance Sheet
2020
2021
2022
2023
(Year ended March 31) (Year ended March 31) (Year ended March 31) (Year ended March 31)

Category

Trend of listed shares
Left axis: ■ Amount recorded on balance sheet(Millions of yen)

20,000Listed

24

18

14

13

Not
listed

7

6

6

6

Total

31

24

20

19

Listed11,158

8,976

6,247

7,195

Amountrecorded on
Notbalance sheet listed(Million of yen)

26

24

24

24

4,000

Total

11,184

9,000

6,271

7,219

0

Number ofcompanies

56

Mandom Report 2023

Number of companies(Companies)

24

16,00012,000

Right axis:

25

20

18
14

11,158

13

15

7,195

10

8,976
8,000

6,247

5

2020
2021
2022
2023
(Year ended March 31) (Year ended March 31) (Year ended March 31) (Year ended March 31)

0Evaluation of the Effectiveness of the Board of Directors
and items that need to be strengthened in future corporate
governance are identified as issues and items for improvement.
The following is a summary of our evaluation and analysis of
the effectiveness of the Board of Directors for the fiscal year
ended March 31, 2023 based on the Corporate Governance
Code (hereinafter the “CG Code”) [Supplementary Principle
4-11 3 ] in our Corporate Governance Guidelines (hereinafter
the “CG Guidelines”).

About Mandom

Since 2016, the Company has conducted an annual survey
on the effectiveness of the Board of Directors targeting
those participating in the Board of Directors (excluding thechairman). Based on the results of the survey, we believe thatthe effectiveness of our Board of Directors has been ensured
if the quantitative evaluation shows that the Board of Directors
has been appropriately implemented. In addition, items thatwere pointed out or suggested in the qualitative evaluation

Evaluation and Analysis Procedures and Quantitative Results
Value Creation Story

1. From January up through February 2023, a questionnaire was distributed to participants in the Board of Directors to determine whether
the Companyʼs Board of Directors is effectively fulfilling its role in accordance with the policies and other requirements of Section 4(Responsibilities of the Board) of the CG Code as stated in the CG Guidelines, and responses were obtained from all eligible participants.
2. Based on these responses, the Representative Director & Chairman, who is the Chairperson of the Board of Directors, interviewed eachinternal director to confirm their content.
3. The responses to the above questionnaire and the results of the interviews were provided to the participants of the Nominating
Committee, and after ensuring a period and opportunity for consideration by the participants, the Nominating Committee made a reportto the Board of Directors after careful deliberation.
4. Upon receiving the Nominating Committeeʼs report, the Board of Directors confirmed the results of its own evaluation and analysis of theeffectiveness of the Board of Directors based on an understanding and respect for the content of the report.

Materiality

The results were as follows: 67.0% for the highest evaluation (appropriate) (66.1% in 2021), 29.1% for the next highest evaluation(appropriate with some issues) (30.3% in 2021), and 2.6% for the lowest evaluation (not appropriate with many issues) (1.7% in 2021).

Items for Which Effectiveness Has Been Ensured
1 Based on the Mandom Mission Framework, the Board of Directors

has developed, revised as needed, and disclosed the Corporate
Governance Policy and Corporate Governance Guidelines throughconstructive discussions in prior deliberations at the Executive
Board and Management Council meetings.

Standards for the Independence of Independent External Officers. In
addition to complying with these standards, the Board of Directors
also invited persons capable of monitoring from an objective
perspective of a shareholder who possess a wealth of businessexperience and an understanding and knowledge of management.

the “Philosophy of Balance, Diversity, and Scope of the Board of
Directors” and the “Policies and Procedures Related to Appointment
of Directors” after receiving advice from independent external
directors and Audit & Supervisory Board members and conducting
constructive discussions, and has maintained the structure of theBoard of Directors in accordance with these policies.

Middle-Range Planning

2 The Board of Directors formulated and disclosed appropriate

3 The Board of Directors appropriately established and disclosed

Issues and Improvement Items
1 While the Nominating Committee and Compensation Committee,

2 It is believed that further reinforcing supervising functions forbusiness execution by the management team would produce
stronger linkage to actions to follow through differential analysis andreflections of progress in management plans.

Performance for the Fiscal Year Ended March 31, 2022

which are chaired by external directors , are being properly
operated, it is believed that clarifying policies and procedures would
result in increased transparency as well as deeper discussion withrespect to personnel affairs for and the development of officers andthe management team.

Examples of Specific Comments
Items for Which Effectiveness Has Been Ensured

Issues and Improvement Items
Regarding our long-term vision, it is believed that gaps havearisen with VISION2027 in aspects such as changes in the
management environment and the suitability of the companyʼsbusiness model in the COVID-19 and the post-pandemic world.
It is likely necessary to make revisions under the leadership ofthe Board of Directors.
[Supplementary Principle 4-1 2 ]● Perhaps personnel affairs for principal members of the
managerial team need to be handled with greater room to spare.
[Supplementary Principle 4-3 1 ]● The careers of external directors are the same with all of them
being management executives.
[Principle 4-7. Roles and Responsibilities of Independent
Directors]●

Mandom Report 2023

Company Information

The Nominating Committee, which is chaired by an external
director, is being properly operated, its reports are being
respected, and sufficient governance is being ensured.
[Supplementary Principle 4-3 4 ]● Exchanges of information with executive officers are being
conducted by external directors. There is a sense of this being
effective in demonstrating monitoring functions.
[Principle 4-6. Business Execution and Supervision of theManagement]● Effective in gathering information and ascertaining the current
situation, such as through informal discussions with executive
officers, quality meetings, and factory cost meetings. Regularmeetings to exchange information with Audit & Supervisory Board
members are highly meaningful.
[Supplementary Principle 4-13 3 ]●57