Corporate Governance

Basic Approach
Rather than simply pursuing profit, Takara Leben strongly believes that it must comply with laws and corporate
ethics and carry out its duties as a responsible member of society.
While maintaining close relationships with customers, shareholders, and employees—our core stakeholders—
we continuously consider how we can deliver further satisfaction. In addition, we believe that reflecting the
feedback received from various other stakeholders in our business while responding in ways that keep in mind
what our company should achieve, and for whom, will lead to sound and efficient business management as agoing concern.
Furthermore, by not limiting ourselves to a systematic check and balance function but, rather, by rooting
ourselves in indexes and systems, we will ensure that the check and balance across the entire company willfunction in sync with each personʼs awareness.

Corporate Governance System
In addition to prudent and swift decision-making by the Board of Directors, Takara Leben has built a system toensure management proprieties, such as appropriate mutual supervision by directors of the state of businessexecution as well as audit and supervision by auditors of directorsʼ state of business execution. We have also
introduced an executive officer system to clarify the management supervisory roles of directors and thebusiness execution responsibilities of executive officers.

Ordinary General Meeting of Shareholders
Election

Nomination Committee

Audit

Board of Directors(including outside directors)

AdviceCompensation Committee

Audit & Supervisory Board(outside auditors)

Collaboration

Audit

Election/Supervise

Reports

Representative Director
Compliance &Risk Management
Committee

Election

Election

AdviceReports

Reports
Reports
Collaboration

Business
Departments
Executive
Officers Reports Administrative
Departments

Direction

Audit

Audit
Collaboration

Internal Audit Office

Reports

Audit

Audit
Audit

Subsidiaries and Affiliates
Leben Community Co., Ltd.
Takara Leben Tohoku Co., Ltd.
Takara Leben West Japan Co., Ltd.
Takara Asset Management Co., Ltd.

Accounting
AuditorTakara Leben Realnet Co., Ltd.
Leben Zestock Co., Ltd.
Leben Trust Co., Ltd.

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Takara PAG Real Estate Advisory Ltd.
Leben Clean Energy Co., Ltd.
Leben Home Build Co., Ltd.

Corporate Governance System Trends
There are 12 directors, four of whom are independent outside directors with diverse backgrounds. The term ofoffice of directors expires at the conclusion of the annual general meeting of shareholders relating to the last
fiscal year ending within one year of their election. In fiscal year 2021, the Board of Directors held 21 meetings.
The Company has three corporate auditors, three of whom are independent outside corporate auditors, andhas established a system that enables it to adequately fulfill its management oversight function from theoutside. The Board of Corporate Auditors held 14 meetings in fiscal year 2021.

FY

Form of Organization

Total Number of
Directors

Number of Outside
Directors

Total Number ofAuditors

Number of Outside
Auditors

FY2016Company with Audit &Supervisory Board

10

2

3

3

FY2017Company with Audit &Supervisory Board

10

3

3

3

FY2018Company with Audit &Supervisory Board

11

3

3

3

FY2019Company with Audit &Supervisory Board

13

3

3

3

FY2020Company with Audit &Supervisory Board

13

4

3

3

FY2021Company with Audit &Supervisory Board

12

4

3

3

FY2022Company with Audit &Supervisory Board

12

4

3

3

Board of Directors
Takara Leben has appointed 12 directors, four of whom are outside directors. All four outside directors havebeen designated as independent officers. In addition to carrying out prudent and swift decision-making,directors mutually supervise the status of business execution at Board of Directorsʼ meetings, which, inprinciple, are held once a month, and also at extraordinary board meetings which are held on an as-required
basis.
Auditors are always in attendance at the Board of Directorsʼ meetings and state their opinions as necessary.
At the same time, auditors work closely with outside directors and, as necessary, audit and oversee the runningof the Board of Directorsʼ meetings and the status of business execution. Also in attendance at the Board of
Directorsʼ meetings are executive officers, the head of the Internal Audit Office, and the heads of otherdepartments who have received requests from the Board of Directors based on internal regulations and who
express their opinions on each issue or reporting matter.
The Takara Leben Executive Committee, which deliberates on management issues, and the Sales Conference,
which discusses the progress of sales, both meet once a month. In addition to sharing the achievement statusof management targets at these and other meetings, the Company gleans information on problem areas andissues in the form of performance reports from each department and deliberates important matters relating tooverall management. The content of those reports is raised at the Board of Directorsʼ meetings on an asrequired basis.

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Evaluating the Eﬀectiveness of the Board of Directors
With respect to the effectiveness of the Board of Directors as a whole in fiscal year 2021, an anonymousquestionnaire was sent to all directors and auditors, including outside directors, with the assistance of an
outside consulting organization, and, based on the responses to the questionnaire, the Board of Directors
analyzed and evaluated its own effectiveness. The questionnaire generally revealed a positive evaluation,
confirming that the effectiveness of the Board of Directors has been secured. In addition, improvements havebeen made in such areas as “diversity in the composition of the Board of Directors” and “provision of
information necessary for discussion,” which were identified as issues in the previous yearʼs evaluation of theeffectiveness of the Board of Directors. Future issues identified include enhancing discussions on management
strategy, including the Group-wide crisis management system and investment in human capital, as well as
reflecting the opinions of shareholders and other investors. We will continue to fully examine the issues
identified and make ongoing efforts to enhance the functions of the Board of Directors.

Executive Remuneration
Directorsʼ remuneration is determined on the basis of the degree of each directorʼs contribution to businessexpansion and improvement in corporate value towards sustainable growth. The limit of the annual amount of
remuneration is deemed to be \600 million (not including, however, the employee portion of the salary), and thelimitation of the special stock option remuneration to \600 million annually is decided by a resolution at theOrdinary General Meeting of Shareholders. Auditorsʼ remuneration is limited to an annual amount of \60 million
or less.

Audit & Supervisory Board
As a check and balance system on decision-making, all three auditors of Takara Leben are outside corporate
auditors. Each auditor has the requisite background, experience, and mettle to objectively carry out
assessments and verifications.
Besides audits for Takara Leben, the auditors are involved in audits of our Group companies, such asattending their board meetings and interviewing their directors, maintaining firm relationships with thesecompanies. Furthermore, the auditors and the accounting auditor work to further improve the effectiveness andefficiency of audits by understanding and adjusting each otherʼs annual schedules, going together to events
such as ground inspections and checks on show rooms, and exchanging information as appropriate.
Takara Leben has also established guidelines on internal audits and established an Internal Audit Office as
an independent organization reporting directly to the representative director to enhance and strengtheninternal audits. In the proposal and execution of the internal audit plan, the office coordinates the schedules ofauditors and the accounting auditor and adjusts the scopes of audits to seek the efficient operation of various
functions. Auditors accompany and witness operation audits conducted by the Internal Audit Office and work on
building an effective and efficient audit system by means such as verifying the scope of the audit and collecting
opinions as appropriate.

Nomination and Remuneration Committees
We have established the Nominating Committee and the Compensation Committee as voluntary advisory bodies
to the Board of Directors for the purpose of enhancing objectivity and transparency in the decision-making
process regarding personnel matters and compensation of directors, etc. and further improving andstrengthening the corporate governance system by ensuring appropriate opportunities for involvement andadvice by outside directors. Each committee consists of three or more directors selected by resolution of theBoard of Directors, at least half of whom are independent outside directors. The chairperson of each committee
is selected by a resolution of the Board of Directors. In addition, each committee deliberates and reports
mainly on the matters listed below, based on the advice of the directors.

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Nomination Committee(1) Matters relating to the nomination of candidate directors, executive officers, and others;(2) Matters relating to the nomination and succession of the representative director;(3) Matters relating to basic policies and criteria on the nomination of directors and others; and(4) Other matters referred to the Nomination Committee by the Board of Directors.
Remuneration Committee(1) Matters relating to the remuneration of directors and executive officers;(2) Matters relating to basic policies and criteria on the remuneration of directors and others; and(3) Other matters referred to the Remuneration Committee by the Board of Directors.

Message from an Outside Director
We interviewed Kenji Kawada, who has served as an outside directorof Takara Leben since 2017, about how he regards the new MediumTerm Management Plan, initiatives to enhance the governancesystem, and the roles of directors.
With his many years of involvement in the management of financial
and business firms, Mr. Kawada has a wealth of experience inbusiness management and governance system building, including his
appointment as Representative Director and President of Resona
Holdings in 2003, where he led the effort to become the first
financial institution in the banking industry to make the shift to a
Company with three Committees system.

Kenji Kawada
Director (Outside)

The full text can be found here.

512KB

Excerpted from the Annual Report 2021

Corporate Governance Report
Corporate Governance Report

588KB

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Compliance

Compliance Basic Policy
The basic policy provides that in order to comply with our CSR, all organizations, oﬃcers, and employees of the
Takara Leben Group shall comply with laws, regulations, and social norms as well as separately establishedethics rules and shall strive to serve as an example for society.

Internal Whistle-Blowing System (Help Line)The Takara Leben Group has established an internal whistle-blowing system (helpline) as a means of reportingor consulting on issues such as harassment and compliance violations. The previous whistle-blowing system
was reviewed in August 2018, and we outsourced responses to inquiries to a law firm with which the Group has
not conducted business in the past to serve as an outside consultation desk; moreover, we established an
independent internal consultation desk that directs inquiries to the corporate auditors. We reinforced theprotection of reporting individuals, the subjects of reports, persons who cooperate with investigations, andothers by establishing a mechanism to prevent access to information concerning consultations and reports byinvolved directors and taking other measures. We are working to strengthen compliance management throughthe early detection and rectification of improper conduct and other issues.

ハラスメント
職場でコンプライアンス 解決できない
ルール違反はヘルプラインへ！
ヘルプラインハラスメント・コンプライアンス ヘルプラインとは、自身や周りで起きているハラスメント・コンプライアンス違反などに関する問題の相談・通報を受け付ける窓口です。疑義レベルでも結構です。
自らの行動が規範に反すると思われる場合、進んで連絡した人には、
その背景・状況等を十分に考慮した上で情状を斟酌します。勇気ある行動をお願いします。

通報者・被通報者・調査協力者や情報の保護は、最優先されます。

Pocket-size card

Outside consultation desk

Whistle-blower

Law firm

Investigationof the facts andconsideration Takara Leben Board of Directorsof disciplinary
Subject of report is an officer
measures● Outside consultation desk
Report ofResults
independent from the Company
Persons with whom the
TakaraLeben
Disciplinary
Committee
company has entered into ● Female attorneys are also
ReportSubject of report is not an officer
available for consultation
Consultation Whistle-blower
employment agreements;
desk thatnamely, officers,
Takara Leben
Takara Leben
received
employees,
CR Committee*
CR Committee*
Group company president or
consultations
the reportseconded
Reportcorporate auditor
and reports
Members● Response in accordance with
employees, temp
Report ofReport ofReport of
the rules of the relevant
ReportDirectors
employees, and others
Internal consultation desk
Results
Results
Results
Group company
Corporate auditors
including those of●
Takara Leben
Timely reports to the Takara Leben
Group companies
corporate auditors
CR Committee* concerning the status● Former employeesof monitoring of the whistle-blower
In the case of● Trading partners
consultations andTarget●reports relating
to Group
companies■ Whistle-blowers can select the meansof reporting and to whom to report■ Anonymous consultations are accepted■ A report is not made to theindividual(s) relating to thereported matter

Monitoring■ Confirmation that the whistle-blower

is not subjected todisadvantageous treatment

16* Compliance and Risk Management Committee

Employee Awareness-Raising
Takara Leben administers compliance education on a variety of themes to employees and strives tocreate a corporate culture of legal and regulatory compliance and respect for human rights.

Personal Information Protection
We consider the protection of personal information to be part of our CSR, and we have established amanagement system for the appropriate protection of personal information. To ensure that all employees
handle valuable personal information appropriately while carrying out their business duties, we havecreated a personal information protection manual, distribute a personal information usage and protection
handbook, and make all employees thoroughly aware of basic knowledge and rules. We also provide
internal training led by instructors that are legal experts.

Preventing Unfair Business Dealings
We actively carry out specialized training to ensure that all transactions with customers are fair. The
training, which addresses conflicts of interest, aims to ensure that basic principles are thoroughly
implemented and introduces numerous case examples to expand the knowledge of attendees.
Furthermore, we strive to foster greater understanding of laws such as the Real Estate Brokerage Act,
the Consumer Contract Act, and the Act against Unjustifiable Premiums and Misleading Representations.

Harassment Prevention
Takara Leben conducts ongoing employee training to ensure that each and every employee is aware ofharassment and to create a corporate culture that prevents harassment. Harassment training, mainly for
managers, focuses on themes such as “laws related to power harassment,” “communication in theworkplace,” and “anger management,” to instill the basic concepts and specific actions needed toeliminate harassment. In addition, we actively hold online training sessions for not only Takara Leben
employees but also managers of Group companies to create a Group-wide culture that does not tolerate
power harassment.

Dealing with Anti-Social Forces
The Takara Leben Groupʼs basic policy against anti-social forces is to adopt a firm stance in dealing with them.
In addition to actively participating in activities to eliminate organized crime under the guidance of our legal
advisor, we collaborate with external specialized agencies, such as local police stations and legal advisors, toestablish a system to deal with anti-social forces.
With regard to our trading partners, we are also thorough in implementing measures for the elimination ofanti-social forces through steps such as exchanging memoranda on severing ties with such forces and including
clauses on their elimination in our various contracts and agreements.

Social Media Policy
The Takara Leben Group sees social media as an effective means of strengthening relationships with various
stakeholders and has formulated a Social Media Policy as a guideline on proper use. We comply with laws,
regulations, the Takara Leben Code of Conduct, and rules established by individual Group companies, and, as amember of society with good judgment, we use social media with responsibility for our conduct and strive toengage in communications through effective information disclosure with an awareness and understanding of
our responsibilities regarding the dissemination of information and responses on social media.
With regard to business-related and personal use of social media by employees, we have also established a
Privacy Policy and Guidelines on the Protection of Personal Information.

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Privacy Mark System Contributor
Leben Community was granted the Privacy Mark in January 2008 and has been working on and updating themanagement and operation of personal information. In January 2020, we received a letter of appreciation fromthe Japan Information Processing Development Corporation (JIPDEC) for our efforts over the years to maintainand improve our own personal information protection management system (PMS) and for our contribution to thepromotion of the Privacy Mark System. We also focus on training our employees to raise their awareness of thehandling of personal information and to apply this awareness to their work. In fiscal year 2021, we conductedtraining on “Case Studies of Personal Information Leakage Accidents in Condominium Management” and“Overview of New PMS Standards.”

Political Contributions
The Takara Leben Group complies with the Political Funds Control Act and does not make politicalcontributions.

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Risk Management

Policies
The fundamental risk management policies of the Takara Leben Group are to ensure the safety of customers,
business partners, officers, employees, and their family members, fulfill our social responsibilities, protect the
global environment, maintain ongoing business activities, and raise corporate value. To this end, we identify
and manage individual risks. We have established the Compliance & Risk Management Committee as a body tocarry out these measures, and we implement comprehensive risk management throughout the Group.

Management Structures
The Takara Leben Group has established a Compliance & Risk Management Committee chaired by thepresident. The Committee verifies and reports on all business-related risks, deliberates and makes decisions on
measures and management to avoid or mitigate risks, and takes comprehensive measures to strengthen internal
controls and prevent misconduct, non-compliance, and other similar incidents in the entire business
management including financial reporting. In addition, subcommittees—such as for business strategy, finance,
IT & administration, and compliance— are established as necessary to set up systems that make proactive
proposals appropriate to the management of individual risks. Furthermore, the scope of deliberations withineach subcommittee is reported to and verified by the Compliance & Risk Management Committee asappropriate, in accordance with the Compliance & Risk Management Committee Rules. These matters are also
reported to the Board of Directors as necessary, forming a structure for timely decision-making in preparation
for the occurrence of risks.

Compliance & Risk Management Committee
Risk management in a broad sense
Risk management in a narrow sense(Risk Prevention Measures)

Crisis Management

Risk Control

BCP

19

CrisisManagement
Rules

CompliancePreventive Approach to Risk
In order to respond promptly to the occurrence of emergency situations such as corporate scandals, accidents,
natural disasters, administrative action, serious criminal conduct by employees, and so on, the Takara Leben
Group has established crisis management structures and adopted Crisis Management Rules and a Crisis
Management Manual. The Crisis Management Rules define crises and specify procedures from initial responses
to the formation and disbanding of response organizations. There are also two sets of detailed crisis control
rules regarding crisis responses and disaster countermeasures.
With regard to crisis responses, the Rules specify crisis management levels, responsibilities and authority,and information-sharing lines, as well as responsive measures to be implemented as disaster countermeasuresduring a disaster.
In addition, each division works with the division responsible for crisis management to formulate risk
recovery and prevention plans and makes reports to the Compliance & Risk Management Committee at its
monthly meetings. As a part of our business continuity planning (BCP), we adopt a preventive approach to risk
management, including the preparation of manuals for the continuation and recovery of business operations in
the event of an emergency situation.

Business Risks
Natural disasters such as earthquakes
Legal restrictions
Overreliance on borrowed funds
Eﬀects of purchaser attitudes
Eﬀects of housing loans
Eﬀects of supply trends
Eﬀects of competition, etc.
Subcontractors
Opposition from neighboring residents when condominiums are constructed
Possibility of litigation, etc.
Personal information

Response to New Coronavirus Infections
Basic Stance on Response
To protect the health, safety, and security of our employees, their families, and customers and to ensure thecontinuity of our business, Takara Leben is promoting the “Basic Policy for Responding to Outbreaks of New
Coronavirus Infections,” led by the Crisis Management Committee.
In the event that an employee is confirmed to be infected, a report is made to the local public health center,and a system has been established whereby the head of each division reports the case to the general managerof the division and the General Affairs Section of the General Affairs Department. In the event that an officer is
infected, the General Manager of the General Affairs Department is to report to the Crisis Management
Committee as appropriate.
For employees and executives who are confirmed to be infected, the rules clarify when they are able to return
to work after hospitalization or home stay under the direction of the public health center. In addition, thesystem addresses cases such as “an infected person is confirmed in the section but you are not identified as aclose contact by the competent public health center,” “a business partner tested positive,” or “a cold or othersymptoms occur and the doctor determines that the possibility of Covid-19 is low” and specifies the details of
responses, such as taking PCR tests, staying at home, and working from home. In addition, offices where
infected persons have been found are disinfected as necessary, in accordance with the judgment of the local
health center, office administrator, and our company.

20Company-wide System
Takara Leben has created a flowchart regarding “actions to take if you feel a cold or feel unwell or if you test
positive in a PCR test” and “criteria for determining whether you are a close contact person if a family member
living with you tested positive” in an effort to prevent the spread of new COVID-19 infections.
In the model rooms, which are the points of contact with customers, each staff member strictly adheres to“confirmation of being negative by PCR test” and “taking a PCR test or prompt consultation with a medical
institution when getting a positive test result or having COVID-19 symptoms.” In addition, since basic infection
control measures such as “wearing masks and gloves,” “regular ventilation,” and “sterilization of equipment”
are thoroughly implemented in the model rooms, it is our policy that customers who were served before testing
positive will not be considered to have been in close contact unless the health center judges them to be a close
contact.

Employee Initiatives
To reduce the risk of infection among employees, we continue to implement a variety of measures, including
telework and flexible work schedules.
Since January 2022, when infection began to spread again due to the mutated strain (Omicron), we haveadopted a work system that conforms to the emergency declaration for all employees working at the head
office, branch offices, sales offices, and each office (model rooms), based on the judgment that “the number of
infected persons is likely to increase for some time to come.” In addition to allowing shortened working hours(five hours within normal working hours), based on the judgment of each division, we prohibit business trips inprinciple and promote web conferencing with people outside the company and short in-house meetings with aminimum number of people. In addition, we prohibit, as a rule, the holding of dinners, farewell parties, andparticipation in outside events that are considered a high risk for infection and encourage employees to refrainfrom having lunch or dinner outside the company with two or more people.

Initiatives in the Value Chain
Since August 2020, employees who trip for participating in previews and information sessions in regional areasfrom the Tokyo metropolitan area (Tokyo, Kanagawa, Saitama, Chiba), where the number of infected people ishigh, have been required to prove their negative status by PCR and antigen tests, in an effort to alleviate
customer concerns.
In addition, in June 2021, the Group introduced “vaccination leave” to encourage employees to receive
vaccinations that will not only improve their own health, but also provide peace of mind to their families andcustomers. Besides taking off the day of vaccination itself, employees who feel ill due to adverse reactions cantake leave the day after vaccination. We have encouraged employees who do not receive the vaccination toundergo antigen testing by covering the cost.
Furthermore, we support the prevention of infection at home. If an employee or a family member living withhim/her tests positive, we subsidize the cost of hotel accommodation and other expenses for voluntary
quarantine.

21