Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

92

T&D Insurance Group Sustainability Report 2023

Governance and Internal Control

1. Corporate Governance
1-1

2-9

405-1

Basic Concept of Corporate GovernanceThe basic concept of corporate governance at the T&D Insurance Group is to pursue an efficient and transparent business management structure capable of implementing flexible and united Group management.
Based on this concept, T&D Holdings determines the Group’s business strategies, adequately allocatesGroup management resources, and sets capital policies. In addition, T&D Holdings properly identifies thebusiness risks of its seven direct subsidiaries centered on the three life insurance companies, together
with T&D United Capital, T&D Asset Management, Pet & Family Insurance, and All Right, to create a system for supervising Group management by thoroughly managing revenues and risks for the entire Group.
Meanwhile, the subsidiaries, which have their own business strategies, develop marketing strategies
leveraging their strengths and conduct business operations to fully demonstrate their autonomy andexpertise, thereby increasing the Group’s corporate value. In this way, the Group is committed to management that clarifies the respective roles and responsibilities of T&D Holdings and its direct subsidiaries.
For details about corporate governance, please see the Report Regarding Corporate Governance that T&D Holdings submitted to the Tokyo
Stock Exchange.
WEB

https://www.td-holdings.co.jp/en/company/governance/

and appropriateness of the appointment, dismissal, succession planning, and compensation of directors
and executive officers, thereby strengthening the corporate governance framework of T&D Holdings andthe Group by ensuring the transparency of management and enhancing accountability. In addition, an
Executive Management Board has been established to deliberate and resolve important matters related
to the management of T&D Holdings and the management control of the Group. In parallel, the Group
Strategy Board has been established to deliberate matters related to the Group’s growth strategy andother relevant and important matters from the perspective of the Group as a whole, in order to achievea sustainable improvement in the Group’s corporate value.

Corporate Governance Framework (April 2023)
Shareholders’ Meeting
Appointment
Dismissal

Nomination and Compensation Committee

ReportingOpinions
submitted

Appointment
Dismissal

Appointment
Dismissal

ReportingBoard of Directors
Auditing

Group Compliance Committee

Audit andSupervisory Committee

ReportingAssess the relevance ofthe financial audit

Audit and Supervisory
Committee OfficeGroup ERM Committee

ReportingPresident

Cooperating

Instruction
Reporting

1-2

Outline of Corporate Governance Framework

T&D Holdings shall make decisions on important business matters and oversee the execution ofbusiness through its Board of Directors. The Company has adopted a “company with an Audit andSupervisory Committee” system, and the Company shall audit and oversee the performance of directors’ duties through its Audit and Supervisory Committee, which is independent of the Board of
Directors. In addition, an executive officer system has been instituted to further strengthen business execution, and by clarifying oversight and execution responsibilities, the governance function of the Boardof Directors is reinforced. Furthermore, T&D Holdings has established a Nomination and Compensation
Committee as an advisory body to the Board of Directors. The Committee deliberates on the fairness

Instruction

Executive Management Board
Group Risk Management Committee

Group Strategy Board

External
auditing

Group Management Promotion Committee
Group DX Promotion CommitteeGroup
FinancialBusiness
Planning
Strategy Development
Department Department Department

Accounting
Department

Sustainability
PublicGeneralRisk
Promotion
RelationsAffairs
Management
Department Department Department Department

Each department

Internal
auditing

Internal
Auditing
Department

Independent Accounting Auditors

Group SDGs Committee

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

T&D Insurance Group Sustainability Report 2023

Third-party Opinion

Index

93
1. Corporate Governance

1-3

Corporate Governance Framework

2-10

2-11

2-15

Shareholders’ Meeting
The Shareholders’ Meeting is the highest decision-making entity of T&D Holdings. At the meeting, reports are made on the Group’s business and consolidated/non-consolidated financial statements for the
fiscal year. Resolutions are also made on important issues, which are stipulated in laws and ordinances
and the Articles of Incorporation, such as the appropriation of retained earnings and election of directors.
The Ordinary Shareholders’ Meeting is held in June once in every year.
Board of Directors(Roles and Responsibilities)
The Board of Directors of T&D Holdings shall make decisions on important business matters and oversee
the execution of business in accordance with laws and ordinances, the Articles of Incorporation, and theCompany’s relevant rules. In addition, as a company with an Audit and Supervisory Committee, some
important business execution decisions are delegated from the Board of Directors to the directors by
resolution of the Board of Directors pursuant to the provisions of the Articles of Incorporation. By doing
so, the Company aims to separate management and oversight from business execution in order tofurther strengthen the management function (deciding on management policies and overall strategy)
and oversight function of the Board of Directors and promote greater agility and efficiency in businessexecution. The Board of Directors met 16 times in fiscal year 2022.
(Composition)
The number of directors (excluding directors serving as Audit and Supervisory Committee members)
shall be no more than 9, and the number of directors serving as Audit and Supervisory Committee
members shall be no more than 5, as stipulated by the Articles of Incorporation. The Board of Directors
shall be made up of individuals representing a balance of knowledge, experience, and skills. They shallhave diverse backgrounds as befitting the expansive range of business domains in the life insurance
business, which is the core business of the T&D Insurance Group. In addition, T&D Holdings shall appoint two or more directors (excluding directors serving as Audit and Supervisory Committee members)
who concurrently serve at T&D Holdings and its directly owned subsidiaries. This shall be done from thestandpoint of facilitating adequate communication and prompt decision-making within the Group, alongwith bolstering Group-wide governance.
Furthermore, the Company shall appoint five outside directors with extensive experience and knowledge in their capacity as outside corporate managers, legal experts, accounting professionals, and soforth. The opinions of outside directors are properly reflected in the Group’s management policies anddevelopment of internal controls and other systems, as well as in the oversight of business execution.

Chairperson of theBoard of Directors

President

Directors

12

Men

11

Women

1

Outsidedirectors

5 (including one woman)

Activities ofoutside directors(Fiscal 2022)

For its outside directors, the Company appoints attorneys who are familiar withcorporate legal affairs, corporate managers with experience, such as partners
in foreign-owned consulting firms, and individuals with experience in corporate management, such as through service as a certified public accountant or
representative of a financial holding company. These directors express theiropinions as necessary at the Board of Directors meetings, while drawing on
their expertise and wealth of knowledge and experience. Additionally, as thechairperson or members of the Nomination and Compensation Committee,
which is an advisory body to the Board of Directors, they deliberate on mattersthat include the selection, appointment, dismissal (including successor planning), and compensation of executives of T&D Holdings and its directly owned
subsidiaries and then report their opinions to the Board of Directors. Activities
also include regular exchanges of views with the representative directors, theaccounting auditors, the heads of the departments under their supervision, andthe representative director and president of major subsidiaries.

(Effectiveness Evaluation)
The Company conducts an overall evaluation of the Board of Directors once a year based on the
self-evaluations of directors. In order to secure the Board’s effectiveness (including the voluntary
Nomination and Compensation Committee), the Company evaluates if the Board is functioning properly
to achieve results and how the Board is contributing to the improvement of corporate value in themedium- to long-term.

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

T&D Insurance Group Sustainability Report 2023

Third-party Opinion

Index

94
1. Corporate Governance

Summary of Evaluation of Effectiveness of the Board of Directors as a Whole in Fiscal 2022
Scope

For fiscal 2022, we conducted a survey (self-evaluations, etc.) and interviews
among the directors to analyze and evaluate the effectiveness of the entire Boardof Directors, including the voluntary Nomination and Compensation Committee.

Evaluation Method

In the survey, we verified the effectiveness of the Board of Directors throughmultiple-choice answers and written opinions on evaluation items related tothe composition, operation, discussion, and oversight functions of the Board of
Directors. The interviews confirmed the basis for the judgments of the evaluations given in the questionnaire and the issues of the Board of Directors.

Overview of Evaluation
Results

As a result of the analysis and evaluation, the following matters and other matterswere confirmed, and the Company has determined that the Board of Directors
has generally fulfilled the expected roles and is functioning effectively.
•The number of directors and the ratio of outside directors on the Board of
Directors are generally appropriate.
•F rom the perspective of Group management, there has been further progress indiscussions on business portfolios and capital costs.
• There has been progress in terms of the governance and oversight ofsubsidiaries.
• The quality of discussions of the Board of Directors has improved, including
more time being devoted to important agenda items.
•P rogress is being made on sharing the details of dialogue with investors internally and responding to issues.

Status of Responses
to Previous Issues

We recognize that steady improvements have been made by addressing theissues identified in the fiscal 2021 evaluation, such as enriching and deepening
discussions on Group management strategies, further promoting integrated
Group management, and improving the structure and creation of materials forbetter discussions by the Board of Directors.

Newly RecognizedIssuesIn addition, in terms of challenges facing the Board of Directors, we have identified the need for a more diverse Board of Directors in line with the management
strategy, a focus on ROE management with consideration for capital costs andcapital profitability, and stronger efforts toward advancing Group personnel matters that contribute to human capital improvement.

Initiatives in Response
to Current Issues

We will continue to work toward further enhancing the effectiveness of the Boardof Directors by addressing the issues identified in this effectiveness evaluation.

Audit and Supervisory Committee(Roles and Responsibilities)
The Audit and Supervisory Committee, as an independent body entrusted by shareholders, has roles
and responsibilities related to auditing and overseeing the performance of the duties of directors inaccordance with laws and ordinances, the Articles of Incorporation, and the Company’s relevant rules.
In accordance with its audit plans, the Audit and Supervisory Committee exchanges opinions with theaccounting auditors and Internal Auditing Department, inspects and examines important documents,
and conducts audits aimed at verifying the Company’s internal management system. In addition, theAudit and Supervisory Committee members attend important meetings of T&D Holdings, including themeetings of the Board of Directors, and audit the directors’ performance of their duties. In fiscal 2022,
the Audit and Supervisory Committee met 18 times.

Audit & Supervisory
Committee members

5

Men

4

Women

1

Outside Audit &Supervisory
Committee members

3 (including one woman)

Activities of Outside
Audit and Supervisory
Committee members(Fiscal 2022)

Outside directors serving as Audit and Supervisory Committee members makenecessary statements as appropriate at meetings of the Board of Directors andthe Audit and Supervisory Committee based on their wealth of experience andinsight as individuals with experience in corporate management, accounting
experts, and legal experts. In addition, through activities that include regularexchanges of views with the representative directors, the accounting auditors,
the heads of the departments under their supervision, and the representative
director and president of major subsidiaries, such outside directors strive to gain
an understanding of the Company’s business execution situation.

Selection of Directors(Process)
Candidates for directors are reviewed by the Nomination and Compensation Committee and appointed
by the Board of Directors. Candidates for directors who are Audit and Supervisory Committee members
are subject to approval by the Audit and Supervisory Committee.
(Criteria)
Directors are primarily required to have sufficient knowledge and experience to oversee the management of T&D Holdings in a proper, fair, and efficient manner, and to have earned the trust of society. In
addition to the requirements set forth above, outside directors must satisfy the independence criteria
established by the Company and the Tokyo Stock Exchange and must be recognized as being free fromthe risk of any conflicts with the common interests of shareholders.
Executive Management Board and Group Strategy Board
T&D Holdings has established an Executive Management Board and Group Strategy Board. The Executive
Management Board is composed of the chairman, president, executive vice president, and executive
officers, and it primarily discusses and resolves important matters related to the management of theCompany and Group. Meanwhile, the Group Strategy Board consists of the president, executive officers
in charge of the business planning units and financial strategy units, and the presidents of Taiyo Life andDaido Life, who are also members of the Company’s Board of Directors. The Group Strategy Board discusses matters related to the Group growth strategy and other important matters associated with them.
Executive Officer System
T&D Holdings has introduced an executive officer system for the purpose of bolstering its businessexecution capabilities. By sharply delineating responsibilities for oversight and execution, the Company
shall strengthen the governance function of the Board of Directors.

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

95

T&D Insurance Group Sustainability Report 2023

1. Corporate Governance

1-4

Participation in Management by Outside Experts

2-17

T&D Holdings and the Group’s three life insurance companies work toward ensuring adequate andtransparent business management through the participation of outside experts in some internal committees dealing with key management issues. In addition, the results of discussions by each committee, etc. are shared with the Board of Directors of each company and then used to gain an understanding of sustainability-related impacts, risks, and opportunities while also improving the collective
knowledge, skills, and experience of our highest governance entity related to sustainable development.
Sustainability Advisory Committee (T&D Holdings)<Outside members>Experts with knowledge of ESG in general<Main topics of deliberation>	Incorporating the perspectives of external experts and the latest trends toimprove the Group’s sustainability initiatives
Service Quality Improvement Committee (Taiyo Life)<Outside members>	Physicians, attorneys, person with relevant knowledge and experience,and experts in consumer issues<Main topics of deliberation>	Status of building framework for management of payments of insurance
and other benefits, adequacy of examinations of payments of insurance
and other benefits, ease of understanding insurance claim procedures,
adequacy of insurance and other benefit-payment processes, status ofcustomer feedback, and initiatives to improve operations utilizing customer feedback
Customer Feedback Council (Daido Life)<Outside members>	Physicians, attorneys, persons with relevant knowledge and experience,and experts in consumer issues<Main topics of deliberation>	Status of operations and adequacy and effectiveness of initiatives to improve customer service
Stewardship Committee (Daido Life)<Outside members>	Attorneys and experts in stewardship activities<Main topics of deliberation>	Enhancement of governance of voting process (e.g. prevention of conflicts of interest) and further enhancement of stewardship activities as awhole
Advisory Council for Insurance Payment (Daido Life)<Outside members>	Attorneys and experts in consumer issues<Main topics of deliberation>	Adequacy of insurance and other benefit-payment processes, adequacyof examinations of payments, status of customer feedback, and initiatives
improve operations
Service Supervision Committee (T&D Financial Life)<Outside members>	Attorneys, experts in consumer issues, and members of the media<Main topics of deliberation>	Initiatives aimed at ensuring an adequate framework relating to payment
of insurance and other benefits, protecting legitimate interests of policyholders and others, and improving customer satisfaction

Payment Assessment Committee (T&D Financial Life)<Outside members>	Attorneys<Main topics of deliberation>	Fair and accurate payment assessment for decision-making on payment
of insurance claims, etc.

1-5Nomination and Compensation Committee

2-10

2-18

2-20

In January 2015, T&D Holdings established a Nomination and Compensation Committee as a voluntary
advisory body to the Board of Directors. The committee scrutinizes the fairness and appropriatenessof director appointments and dismissals (including succession plans) and executive compensation toensure the transparency of management and improve accountability, thereby reinforcing the corporate
governance framework of the Company and the Group as a whole. The Nomination and Compensation
Committee scrutinizes the fairness and appropriateness of appointments and dismissals of ourCompany’s and direct subsidiaries’ directors, including succession planning, as well as their executive
compensation. The committee then reports its opinions to the Board of Directors. The Nomination andCompensation Committee is comprised of the Director and President of our Company and the outside
directors. To ensure independence and neutrality, a majority of its members are chosen from among
the outside directors. Moreover, the chairperson of the committee is selected from among the outside
directors by mutual vote of the committee members.

Main topics discussed by the Nomination and Compensation Committee (Fiscal 2022)

Nominations,etc.

• Succession plan(presidents and outside officers of the Company and its directly owned
subsidiaries)• Composition of our Board of Directors• Selection of directors not serving as Audit and Supervisory Committee members, directors serving as Audit and Supervisory Committee members, and candidates for directors
who are substitute Audit and Supervisory Committee members• Selection of outside directors to serve on the Nomination and Compensation Committee• Selection of the chairperson of the Nomination and Compensation Committee• Selection, appointment, and other matters of director candidates and Audit & Supervisory
Board member candidates at directly owned subsidiaries• Appointment of executive officers for both the company and direct subsidiaries

Compensation,etc.

• Evaluation results for directors not serving as Audit and Supervisory Committee members and executive officers for fiscal 2021
• Results of fiscal 2021 evaluations of representative directors of directly owned
subsidiaries• Executive treatment of the Company and its directly owned subsidiaries

Committee Member Attendance Record (Fiscal 2022)
Name

Position

Holding and Attendance
Situation

Naoki Ohgo (Chair)Outside Director

100% (14/14 meetings)

Kensaku Watanabe

Outside Director

92.9% (13/14 meetings)

Atsuko Taishido

Outside Director

100% (7/7 meetings)

Hirohisa Uehara

Representative Director
and President

100% (14/14 meetings)

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

96

T&D Insurance Group Sustainability Report 2023

1. Corporate Governance

1-6

to the Representative Director and President, the Audit and Supervisory Committee, and the Board ofInternal Audit System

Group Internal Auditing
Internal auditing is the task of evaluating the appropriateness and effectiveness of the internal management of the operating units and providing advice and recommendations with the aim of contributing to
the effective achievement of the organization’s management targets.
In the Group Basic Policy on Internal Audits formulated by the Board of Directors, T&D Holdings has
established a basic policy to ensure the effectiveness of the Group’s internal audit system. In accordancewith this policy, T&D Holdings and its directly owned subsidiaries have established internal audit units thatare independent from other operating units. As of the end of fiscal 2022, the number of employees in the internal audit units was 5 at T&D Holdings and 66 in total for the Group, including directly owned subsidiaries.
Functions and Roles
The Internal Auditing Department of T&D Holdings, in addition to conducting internal audits of eachdivision of the Company, grasps the status of the internal management system of the Group as a wholethrough monitoring of the internal audits implemented by its directly owned subsidiaries and othermeans. The Internal Auditing Department also provides guidance and advice as necessary to strengthen
the internal audit system of the Group as a whole.
In addition, the Company’s Internal Auditing Department verifies and evaluates the appropriatenessand effectiveness of the Group’s internal management system through internal audits, monitoring, andother means based on the internal audit plans resolved in the Board of Directors and reports the results

Outline of the Group’s Internal Audit System

Board of Directors: Internal Audit

Audit and Supervisory Committee

President
Operating units

Daido Life

1-7

Internal Control

Internal Control System
The T&D Insurance Group believes that it is important to work for the sustainable growth and improvement of the medium- to long-term corporate value of the Group predicated on protecting insurance
policyholders and the like by securing the soundness and compliance structure of the Group as a wholebased on the Companies Act, the Group’s Corporate Philosophy, and other factors.
With this in mind, T&D Holdings and its directly owned subsidiaries have established internal control
systems as required under Japan’s Companies Act. Moreover, the boards of directors of each company
continuously work to improve and strengthen their internal control systems, including by periodicallymonitoring the preparedness and operational status of these systems to confirm their adequacy andmaking revisions as necessary.
Response to the Internal Control Reporting System
With regard to the internal control reporting system pursuant to the Financial Instruments and ExchangeAct, the Group builds internal controls necessary for ensuring the trustworthiness of securities reports
and other financial reports. Managers personally evaluate and report on its effectiveness. Following thisprocess, a certified public accountant who is an outside Accounting auditor and a system auditor audit
the suitability of this assessment.

Internal Auditing Department
Audit & monitoring/
Guidance & advice

Taiyo Life

Directors. It periodically reports the status of the Group’s internal audits and other matters to the Audit
and Supervisory Committee and makes reports regarding the matters about which it has received directions from the Audit and Supervisory Committee and other matters. In addition, formulation of the internal
audit plans and the personnel reassignment, evaluation, and other matters of the General Manager of theInternal Auditing Department are deemed to be matters which require the prior consent of the Audit andSupervisory Committee.

T&D
Financial Life

T&D United
CapitalT&D Asset Pet & FamilyManagement Insurance

Internal audit units of each company

Operating units of each company

1-8

All Right

2-18

2-19

2-20

Executive Compensation, etc.
1. Policies Concerning the Determination of Executive Compensation
In its Basic Policy on Corporate Governance, T&D Holdings has established the policies regarding executive compensation enumerated below. The Policy may be amended or repealed by the Board of Directors
of T&D Holdings at its discretion.
For more information, please see our website.
WEB

Other Group companies

Executive Compensation

https://www.td-holdings.co.jp/en/csr/csr-policy/corporate.html

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

97

T&D Insurance Group Sustainability Report 2023

1. Corporate Governance2. Composition of Executive Compensation, etc.
T&D Holdings has designed its compensation system and compensation amounts to function as asound incentive for the Group to enhance its performance and corporate value over the medium- to longterm. The total compensation of directors (excluding outside directors and other part-time directors anddirectors serving as Audit and Supervisory Committee members) shall consist of monthly compensation
and bonuses that vary according to their roles and performance, and trust-type stock compensation
which delivers Company shares and utilizes a trust structure (non-residents of Japan are ineligible). The
Company regards corporate performance-linked compensation as not suitable for part-time directors,
including outside directors, who are independent from the execution of business, and directors serving
as Audit and Supervisory Committee members. Therefore, a fixed amount of compensation is paid.
Compensation
type

Payment
periodMonthly
compensation

Monthly

Bonus

Trust-type stockcompensation

YearlyAt thetime ofretirement

How the amount of executive compensation, etc. is calculated for each individual officer

Payment
methodThe Board of Directors has adopted a resolution that monthly
compensation and bonuses shall be set based on the amounts
calculated from the compensation table determined by the
Board of Directors and each officer’s individual evaluation within the limit established by the resolution of the Shareholders’Meeting and then finalized by our Company President after
deliberations among representative directors.*1
Monetary
Individual evaluations for each officer shall be conducted
payment
based on the evaluation of corporate performance and theevaluation of the division the officer is in charge of in accordance with the evaluation criteria established by the Boardof Directors. The Nomination and Compensation Committee
will then deliberate on the results and report its opinion to
the Board of Directors. Based on these results, the Board of
Directors will determine the individual evaluation results.
Trust-type stock compensation shall be granted to directors(excluding outside directors and other part-time directors,
directors serving as Audit and Supervisory Committee
members, and non-residents of Japan) in accordance withthe compensation table determined by the Board of Directors
based on points allotted in accordance with position.
At the time of retirement from the Company, officers
receive shares and monetary payments in accordance withthe accumulated points.
The system also has malus and clawback provisions.*2

70%
stock
30%
monetary
payment*1 To further improve the fairness, appropriateness, and management transparency when deciding how the amount of executive compensation, etc. is calculated for each individual officer, the Company revised the above policy on May 31, 2023. As a result, ever since June29, 2023, decisions related to paid monthly compensation and bonuses as well as individual evaluations have been handled as follows:
the Nomination and Compensation Committee deliberates on the matter and reports its opinion to the Board of Directors, and then the
Board of Directors passes a resolution.
*2 Malus and clawback provisions
The trust-type stock compensation system stipulates that if a grantee engages in an act of misconduct (e.g., significant neglect of
duties, violation of laws and regulations, leakage of confidential information, etc.) as determined by the Company prior to the date ofdetermination of beneficiary rights, the grantee shall not receive the Company’s shares or the proceeds of the sale of such shares. If the
grantee engages in misconduct after the date of determination of beneficiary rights, moreover, the system stipulates that the Company
can seek a reimbursement amount, obtained by multiplying the calculated number of basic shares by the calculated stock price.

3. How to calculate the evaluation of corporate performance and the evaluation of the division
the officer is in charge of
The weightings of the evaluation of corporate performance and the evaluation of the division the officer isin charge of are set according to the responsibilities of each officer in accordance with the criteria established by the Board of Directors and used to compute a weighted average. In the case of representative
directors, the evaluation of corporate performance shall be weighted 100%.

Calculation methods
Corporate performance
evaluation(see 4. for the key
performance indicators)• In order to clearly evaluate the degree of achievement toward corporate
performance, multiple key performance indicators determined based on theGroup’s medium- to long-term management strategies shall be used, alongwith an evaluation of corporate performance indicator, namely total shareholder return.
•K ey performance indicators are calculated by multiplying coefficients according to their achievement rates in each item.

Evaluation of division in
charge• Points are calculated for the division the officer is in charge of based on theexecution plan achievement status of each division, among other factors.

4. Key Performance Indicators for Corporate Performance Evaluations(Performance-Linked Indicators) <FY2022>
Key performance indicators for evaluating the corporate performance are shown below.
Regarding the financial performance indicators, the single fiscal year target achievement ratios andprogress toward achievement of the fiscal 2025 targets are evaluated based on the Group Long-Term
Vision formulated in fiscal 2021.
Single fiscal year evaluation topics
Evaluate the achievement ratios for the single fiscal year targets toward achievement of the fiscal
2025 targets.
Fiscal 2025 targets
Group adjusted profit¥130.0 billion

Value of new business¥200.0 billion
Single fiscal year
targets

ActualAchievement ratio

Group adjusted profit¥105.6 billion¥90.2 billion

85.4%

Value of new business¥168.4 billion¥167.0 billion

99.2%

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

98

T&D Insurance Group Sustainability Report 2023

1. Corporate GovernanceMedium- to long-term evaluation topics
Evaluate progress toward the achievement of the fiscal 2025 targets as an evaluation criterion.
Fiscal 2025 targets
Adjusted ROE

8.0%

ROEV

7.5%

• The actual adjusted ROE is 7.6%.
• The actual ROEV is 2.9%.
Market evaluation topics
Evaluation criteria and other criteria
Total shareholder
return (TSR)• Total shareholder return (TSR) is calculated based on actual results, thedegree of deviation from a benchmark of listed life insurance companies,
and other factors.

• The actual total shareholder return is 112.0% over five years.
(Note) The total shareholder return is calculated as follows.

• Five years: (Share price at the end of FY2022 + Cumulative total dividends per share from FY2018
to FY2022) / Share price at the end of FY2017
ESG evaluation topics
In addition to the above financial performance indicators, the following non-financial performanceindicators are evaluated.
Evaluation criteria and other criteria

6. Payment Ratio of Compensation by TypeWith regard to the composition of compensation for the Company’s officers, the ratio between
performance-linked compensation (monthly compensation and bonuses) and trust-type stock compensation has been set to ensure that it functions as a sound incentive for improving medium- to longterm performance and increasing corporate value. Monthly compensation, which is performance-linked
compensation, shall vary within a range between approximately 57% and 74% of the total compensation, commensurate with the duties of each position, while bonuses shall vary within a range between
approximately 14% and 21%, and trust-type stock compensation shall vary within a range between
approximately 10% and 22%.
Monthly compensation shall be a variable amount within the range between approximately 95% and105% of the standard evaluation, depending on the individual evaluations of each officer. Bonuses shallbe a variable amount within the range between approximately 60% and 140% of the standard evaluation, depending on the individual evaluations of each officer.

Compensation composition ratios
Performance-linked compensation
Monthly compensation approximately
57% and 74%

Customer satisfaction
level
Employee satisfactionlevel

5. Reflecting Corporate Performance Evaluations in Executive Compensation for Direct
Subsidiaries
We conduct corporate performance evaluations with the primary aim of ascertaining whether theCompany and its directly owned subsidiaries are managing their operations in line with the Group’s
strategic goals. The objective is to contribute to the stable and sustainable improvement of the corporate
value of the Group as a whole. The method we use for calculating individual executive compensation
amounts for the directors of our directly owned subsidiaries is consistent with these corporate performance evaluations for each such subsidiary, as determined by our Board of Directors.

• Evaluate the status of achievement with the level in the previous fiscal
year as the evaluation criterion.

Reduction of CO2
emissions• An actual customer satisfaction level and employee satisfaction level higher than the levels in theprevious fiscal year were achieved.
• A reduction in the actual CO2 emissions of 6.5% from the level in the previous fiscal year wasachieved.

Bonus approximately
14% and 21%

Stock compensation
Trust-type stock compensation
approximately
10% and 22%

7. Reasons for the Board of Directors’ determination that the details of individual compensationof directors for the current fiscal year are in line with the Policy
The Board of Directors confirms that the individual compensation details were calculated based on thecompensation table determined by the Board of Directors and the individual evaluation of each director
as deliberated by the Nomination and Compensation Committee, and judges that this calculation is inline with the Policy.

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

T&D Insurance Group Sustainability Report 2023

Management Control

Third-party Opinion

Index

99
1. Corporate Governance

8. Disclosure of Total Amount of Compensation by Officer Category and Type of Compensation(million yen)Monthly
compensation

Reserve for bonus

Category

Trust-type stockcompensation(the Board Incentive
Plan Trust)

Total amount ofcompensation

Numberof persons
paid

AmountNumberof persons
paid

AmountNumberof persons
paid

AmountNumberof persons
paid

AmountDirectors not serving as Audit
and Supervisory Committee
members(excluding outside directors)

6

123

3

40

3

42

6

207

Directors serving as Audit
and Supervisory Committee
members(excluding outside directors)

4

79

0

—

0

—

4

79

Outside directors not serving
as Audit and Supervisory
Committee members

3

22

0

—

0

—

3

22

Outside directors serving
as Audit and Supervisory
Committee members

4

37

0

—

0

—

4

37

Total

17

263

3

40

3

42

17

346

• The monthly compensation and bonus reserves of directors not serving as Audit and Supervisory
Committee members (excluding outside directors and other part-time directors) constitute performance-linked compensation, and the trust-type stock compensation constitutes non-monetary compensation. The total amount of performance-linked compensation, etc. for directors not serving as Audit
and Supervisory Committee members (excluding outside directors and other part-time directors) (fourpeople) is ¥145 million, and the total amount of non-monetary compensation is ¥42 million.
• Regarding the number of individuals who have received compensation and the total amounts, thesefigures include one director not serving as an Audit and Supervisory Committee member, who retired
at the conclusion of the 18th Ordinary General Meeting of Shareholders on June 28, 2022. They also
include three directors serving as Audit and Supervisory Committee members who resigned on June
28, 2022, and one director not serving as an Audit and Supervisory Committee member who resigned
on September 15, 2022. As of the end of fiscal 2022, we had seven directors not serving as Audit andSupervisory Committee members and five who were.
• The amount of trust-type stock compensation represents the cost accrued for the points granted
during fiscal 2022 based on the relevant system.
• Since there is no person with total consolidated compensation of ¥100 million or more, individual compensation amounts are not shown.

9. Resolutions of the General Meeting of Shareholders
Maximum amount of compensation for directors
In a resolution at the 16th Ordinary General Meeting of Shareholders held on June 25, 2020, the maximum amount of compensation for directors not serving as Audit and Supervisory Committee members
was set to ¥450 million per year, of which ¥40 million per year was for outside directors (at the conclusionof the Shareholders’ Meeting, there were 9 directors not serving as Audit and Supervisory Committee
members (including 2 outside directors)). This amount includes bonuses, and the total amount of bonuses per year has been determined by the Board of Directors. Apart from the compensation limit for directors not serving as Audit and Supervisory Committee members, another resolution at the 16th Ordinary
General Meeting of Shareholders held on June 25, 2020 set the maximum aggregate amount of trust
fund to be contributed for the trust-type stock compensation to ¥500 million for three consecutive fiscal
years. The total number of points to be granted to directors each fiscal year was limited to 215,000 points(one point is equivalent to one share in the Company). (At the conclusion of the Shareholders’ Meeting,there were 4 directors not serving as Audit and Supervisory Committee members eligible for trust-type
stock compensation.) At the 16th Ordinary General Meeting of Shareholders held on June 25, 2020, themaximum amount of compensation for directors serving as Audit and Supervisory Committee members
was set to ¥150 million per year (at the conclusion of the Shareholders’ Meeting, there were 5 directors
serving as Audit and Supervisory Committee members (including 3 outside directors)). Compensation is
set in consultation between the directors serving as Audit and Supervisory Committee members within
this limit.

1-9

Succession Plan

Succession Plan Formulation and Implementation
With an eye on the sustained growth and medium- to long-term value enhancement of our Group as wellas ensuring the stable continuation of business, our Board of Directors oversees the formulation andexecution of succession plans for the presidents of the Company and the three life insurance companies
that constitute our Group’s core business.
Our Nomination and Compensation Committee, for which the majority of the members are outside directors, plays an active role in the creation and execution of these plans, ensuring objectivity, timeliness,and transparency in the succession nomination process.
Development of Successor Candidates and Future Group Management Talent
In a concerted effort to systematically nurture successor candidates for the presidencies of the Company
and the three life insurance companies as well as future Group management talent for the Group, weundertake various initiatives that include rotation of executives and employees within the Group, dispatching individuals to external executive training programs, and conducting interviews with our outside
directors.

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

T&D Insurance Group Sustainability Report 2023

100

2. Disclosure of Information to Shareholders and Investors

Disclosure of Information to Shareholders and. Investors2
2-1

Shareholder Return Policy

T&D Holdings’ policy is to provide stable returns to shareholders as part of enhancing shareholder value,
while retaining sufficient internal reserves to ensure the management soundness of T&D Holdings and
its Group companies.

2-2

Information Disclosure

T&D Holdings works proactively to disclose information to all stakeholders so that they can understandthe current situation and future business development of the T&D Insurance Group.
Integrated Report
The Integrated Report is an annual report issued to investors, shareholders, and other stakeholders. It
provides a summary of financial, corporate, ESG, and other key information to enable our shareholders
and investors to understand the T&D Insurance Group.
Disclosure Documents
The disclosure documents of each company that have been produced in accordance with the Insurance
Business Act of Japan have been posted on our website.
Shareholder Newsletters
The newsletters that we have sent out to our shareholders reporting our business performance andcircumstances along with various topics have been posted on our website.

2-3

IR Activities

2-29

T&D Holdings proactively engages in IR activities based on the principles of timeliness, fairness, andaccuracy. It also works to make continuous and comprehensible information disclosure on the T&D
Insurance Group’s management environment, business strategies and financial situations. More specifically, we hold business results briefings, teleconferences, individual meetings for institutional investors,presentations for individual investors and actively engage in exchanging opinions with securities analysts. Valuable feedback from investors received through IR activities is regularly communicated to the
management team.
Main activities
Presentations for Individual Investors
We held briefing sessions for individual investors where the director in charge of IR, other officers andmanagers acted as presenters.
Presentations for Institutional Investors and Securities Analysts
We held conference calls chaired by the director in charge of IR for each quarterly earnings announcement and IR meetings by the president for each interim and yearly earnings report. The president and the
director in charge of IR also held individual meetings with institutional investors and securities analysts.
Presentations for Overseas Investors
For overseas institutional investors, mainly in Europe, United States, and Asia, the president and the
director in charge of IR conducted individual meetings and also participated in conferences for overseas
institutional investors held by securities companies.
IR Information Posted on Our Website
On our website, we have posted IR information for individual investors, financial information, timely
disclosure materials other than financial information, IR presentation materials, and video and audio
materials of IR presentations and teleconferences.

Annual Securities Report
Annual securities reports and suchlike made and submitted based on the provisions of the Financial
Instruments and Exchange Act have been posted on our website.

Group-internal IR activities (Group IR)
We promote Group-internal IR activities to share information on our Group’s direction and enhance market discipline. We mainly hold small meetings involving the management of the Company and Groupmanagers as well as briefing sessions for employees that utilize videos and e-learning.

For more details about these reports, please see “IR Library” under “Investor Relations” on our website.

For more details, please see “For Individual Investors,” “IR Library,” and “IR Events” under “Investor Relations” on our website.

WEB

https://www.td-holdings.co.jp/en/ir/document/

WEB

https://www.td-holdings.co.jp/ir/individual/ (Japanese only)
https://www.td-holdings.co.jp/en/ir/document/
https://www.td-holdings.co.jp/en/ir/event/Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

101

T&D Insurance Group Sustainability Report 2023

2. Disclosure of Information to Shareholders and Investors

2-4

Principal Shareholders (as of March 31, 2023)

Shareholders’ Meeting

T&D Holdings views the Shareholders’ Meetings as important opportunities for communicating with its
shareholders and endeavors to make these events sufficiently accessible and open to all shareholders.
Prior to each Shareholders’ Meeting, we strive to send out related materials as soon as possible, including sending out the convocation notice as early as possible (in early June), posting it on our website
before sending it out (in late May), and preparing and disclosing an English translation on our website
so that shareholders can sufficiently examine the items for resolution in advance. Furthermore, in accordance with the revised Companies Act (enforced on September 1, 2022), we comply with the electronic
provision system for Shareholders’ Meeting materials since fiscal 2023. In addition, we have introduced
an online electronic voting system to improve shareholder convenience.
At the Shareholders’ Meetings, a large screen is used to report on agenda items, displaying charts
and images. In the Q&A session that follows, the directors respond to questions and opinions fromthe floor respectfully and accurately, with the intention of enhancing shareholders’ understanding ofour business. Furthermore, in fiscal 2023 as well, we broadcast the Shareholders’ Meeting live on theInternet (which we started doing in fiscal 2021) so that distant shareholders could conveniently observe
the proceedings from their homes and other places.

2-5

Shareholders

2-1

Proportion of Shares Held (as of March 31, 2023)

Number of shares
held(1,000 shares)

Percentage of
total shares
outstanding(%)

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

84,605

15.43

Custody Bank of Japan, Ltd. (Trust Account)

35,201

6.42

JP MORGAN CHASE BANK 385632

21,1383.85

SSBTC CLIENT OMNIBUS ACCOUNT

12,643

2.31

STATE STREET BANK WEST CLIENT – TREATY 505234

9,787

1.78

JPMorgan Securities Japan Co., Ltd.

7,791

1.42

GOLDMAN, SACHS & CO. REG

7,222

1.32

JP MORGAN CHASE BANK 385781

6,757

1.23

AIG General Insurance Company, Ltd.

6,000

1.09

STATE STREET BANK AND TRUST COMPANY 505103

5,829

1.06

196,973

35.91

Name of shareholders

Total

Note: The Company holds 40,543 thousand shares of treasury stock, but this is excluded from the list of principal shareholders above. The
percentage of total shares outstanding is also calculated minus treasury shares.

Shareholder category

Financial
institutions

Financial
product
dealers

Number of shares held
(1,000 shares)

155,879

28,07897,364229,432

78,243

589,000

Proportion of shares
held (%)

26.47

4.77

16.53

38.95

13.28

100.00

Other
Foreign
Individuals
corporations corporations and others

Total