67

Introduction

Financial &Non-Financial Strategy

Value Creation Story

Sustainability

Risk Management

Governance

Financial /Corporate Information

68

Part 5Governance69

Corporate Governance Strategy

71

Corporate Governance

Tsuchiyu Kokeshi Doll, Tsuchiyu Hot Spring,
Fukushima City, Fukushima Prefecture
Photo by Eiji Ueno
East Japan Operation Division
Coca-Cola Bottlers Japan Vending Inc.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

69

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Corporate Governance Strategy

Governance

Financial /Corporate Information70

Details of our corporate governancehttps://en.ccbj-holdings.com/corporate/governance/

Building a strong foundation
as a trusted and honest company
Tomokazu Usagawa
Executive Officer and CLO (Chief Legal Officer)
Coca-Cola Bottlers Japan Inc.

Boosting sustainable growth: Strengthening corporate governance throughenhanced effectiveness of the Board of Directors
Since the the business integration in 2017, we have implemented
several initiatives to strengthen our corporate governance. As acompany with an Audit & Supervisory Committee, we havefocused on enhancing the effectiveness of the Board of Directors
and reviewing the system for promoting active discussion. We
have also improved the audit and supervisory functions while
increasing operational flexibility. To align our directors’ interests withthose of our shareholders, we introduced a performance-based
stock incentive system in 2018. This will increase their motivation
to contribute to medium- to long-term corporate value and stock
price growth. We are also implementing measures andaddressing revisions based on Japan’s Corporate GovernanceCode. We will continue to promote initiatives to enhance ourcorporate governance system.

Enhancing corporate governance: Key initiatives and progress made2016

࡛ Adopted a company with Audit & Supervisory Committee structure

2017

࡛Established a Board of Directors system and an executive officer system

2018

࡛Reorganized the Group࡛Examined the pros and cons of cross-shareholdings and clarified strategy
࡛Introduced a performance-linked stock-based incentive compensation
system for executive officers
࡛Began analyzing and evaluating the effectiveness of the Board of Directors

2019࡛Reorganized the Group, and reviewed the executive officer system andreduced the number of officers
࡛Conducted a fundamental review of the Board of Directors Structure
Reduced the number of executive directors from four to two
Increased the number of outside directors from four to six
Hired three female directors(outside director ratio: 67%, female director ratio: 33%)
࡛Clarified dividend policy

2020

࡛Conducted a review of Board of Directors Structure
Increased the number of outside directors from six to seven(outside director ratio: 78%)2021

࡛Revised internal Corporate Governance Regulations(Strengthened corporate governance for transition to Prime Market)
࡛Established a skills matrix for the Board of Directors

2022࡛Introduced a chief officer system
࡛Transitioned to the Tokyo Stock Exchange Prime Market

Building a strong corporate foundation for sustainable growth:
The power of proactive legal support
Our vision is to continue to be the partner of choice for all
customers. We strive to be an honest and trustworthy company
for all our stakeholders, including customers, business
partners, shareholders, local communities, and employees.
In order to achieve this, as a division that plays a crucial rolein establishing a solid corporate foundation, our Legal Division has
three functions: Corporate Governance, Ethics and Compliance,and so-called Legal Affairs, and promote various initiatives in athree-pronged manner.
Another part of our vision is to triumph in the market
through sustainable growth. Recently, we have been facing

rapid changes in the business environment. To triumph andgrow in today’s market, we must continuously evolve as acompany. This type of sustainable growth and evolution is only
possible when there is a solid corporate foundation in place. To
achieve this, we aim to be a proactive legal division that
implements proactive corporate governance. This means not
only acting as a guardian but also demonstrating creation andnavigation skills to anticipate environmental changes andsupport appropriate risk-taking for bold strategies. We actively
seek opportunities for dialogue with stakeholders to increase
understanding and collaboration.

Stimulating discussion for sustainable growth through institutional design thatemphasizes diversity and separation of functions
Our company as an Audit and Supervisory Committee, that asa Board Committee, strengthens corporate governance. Our
goal is to increase management soundness, transparency,
efficiency, and enhance medium- to long-term corporate value
as well as shareholder value. Our Board of Directors and Audit& Supervisory Committee are diverse and include multiple
independent outside directors who facilitate transparent, fair,swift, and bold decision-making. These outside directors also
have voting rights and can state their opinions on director
nominations, remuneration, and other such important mattersat the General Meeting of Shareholders, further strengthening

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

management oversight. Additionally, we have introduced an
executive officer system to separate decision making andmanagement oversight functions from business executionfunction, allowing for swift execution while the Board focuseson critical management issues while at the same time ensuring
appropriate collaboration between directors and executive
officers. In this way, we have established a system that allows
the Board of Directors to concentrate on deliberation anddecision-making on critical management issues while executive
officers make management decisions on other matters andengage in swift business execution.

Driving corporate value: The power of stakeholder dialogue and collaboration
The cornerstone of our corporate governance is ourcommitment to honesty and trust, which we believe is essential
to building a strong foundation for sustainable growth. By
implementing a robust governance framework, our goal is tofoster open communication with our stakeholders, strengthen
management practices, and enhance transparency to drive
corporate value and increase shareholder value over the
medium to long term.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

71

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Corporate Governance (As of March 28, 2023)

Risk Management

Governance

Financial /Corporate Information

72

Details of our corporate governancehttps://en.ccbj-holdings.com/corporate/governance/

Fundamentals of corporate governance

Board of Directors

The basic policy of CCBJH is to increase management quality,transparency, and efficiency, while striving to enhance medium- andlong-term corporate value.
To further strengthen the governance structure, the Company
has put in place an audit and supervisory committee structure. The
Audit & Supervisory Committee, which is responsible for theCompany’s auditing, consists of multiple independent outside
directors. The Company’s management oversight function is further
strengthened by granting to these outside directors serving as Audit& Supervisory Committee members voting rights at meetings of theBoard of Directors and the right to state opinions at the General
Meeting of Shareholders on matters such as the nomination andremuneration of directors.
In addition, the Company has adopted the executive officer system
for the purpose of separating decision-making and management
oversight from business execution. By delegating some important
decisions on business execution to executive officers, the Company
endeavors to enrich discussion of particularly important matters at
meetings of the Board of Directors and expedite management
decision-making by the management team.

Corporate governance system
General Meeting of Shareholders
Election / Dismissal

Election / Dismissal

Election / Dismissal

Reporting / Stating opinion

Board of Directors

ReportingDirectors (excluding Directors serving on
the Audit & Supervisory Committee)

Directors serving on
the Audit & Supervisory Committee
Reporting executionof operation

Representative Directors
ReportingInternal Audit Office
Auditing

Auditing

Supervision / Reporting
Exchange opinions
Reporting
Cooperation
Auditing

Executive Officers
Group Companies

DivisionsAudit & Supervisory Committee*

Financial / Accounting Auditor

Selection / Supervision /Delegation of execution ofimportant operation

Reporting
Auditing / Determining proposals for election or dismissal
Cooperation* Consisting of outside directors serving on the Audit & Supervisory Committee, including independent outside directors

Structure of major meetings attended by the management team
When making decisions on important matters of the Company, the President and the Vice President with representative rights, or either of these andheads of functions including executive officers, engage in deliberation within major meeting structures and connect this to prompt decision making.
Examples of major meeting structures
ELT*1 Meeting

This meeting discusses major issues and strategic directions that span the entire company or multiple units.
In addition, the meeting reviews material implied risks and evaluates ways to control and mitigate these risks.

Executive S&OP*2 Meeting

Medium- to long-term strategic business decisions are made based on a series of demand and supply planningand financial information to optimize the entire supply chain in conjunction with sales operations.

Capital Committee

This committee conducts deliberation and progress management concerning capital investment plans, deliberation
and approval of capital investment projects, and post-execution verification, etc. of capital investments, for the
purpose of appropriate capital investment management.

SPVR*3 Operational Meeting

This committee is established for a regular reporting to the management about the major activities and strategies ofCoca-Cola Bottlers Japan Business Services Inc. Also, this committee evaluates the consistency of IT investment
based on IT strategy and discusses IT policy and DX projects of the entire group.

Ethics and Compliance
Committee

This committee engages in activities including awareness and education activities related to ethics and compliance,
operation of consultation desks, handling of other compliance-related cases, and examination and implementationof measures to prevent recurrence of problems.

Sustainability Committee

This committee discusses and puts together policies and strategies related to various sustainability-related issues,particularly climate change.

*1 Executive Leadership Team

*2 Sales and Operations Planning

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

The Company’s Board of Directors consists of nine directors,
including multiple independent outside directors, and holds regularmeetings once every three months in principle and extraordinary
meetings as needed. The Board of Directors resolves mattersconcerning basic management policies and other importantbusiness issues, as well as matters prescribed by law and by the

Articles of Incorporation and receives reports on the execution ofbusiness from directors. The Company also delegates a part ofdecision-making on important matters of business execution to
directors to further enhance deliberations on matters of special
importance in the Board of Directors and to speed up decisions by
the management team.

Evaluation of the effectiveness of the Board of Directors
Each year, the Board of Directors of the Company evaluates andanalyzes its effectiveness based on self-evaluation by directors
regarding the operation, support system, composition, etc.
Based on the self-evaluation conducted by the directors withthe advice of an external third-party organization, we have received
generally positive evaluations on the issues identified in theprevious year, such as business updates by major divisions andefforts to explain the contents of deliberations in advance, and we

recognize that the effectiveness of the Board of Directors as awhole is improving.
It has been confirmed that the Company will continue topromote ongoing efforts to further enhance discussions at theBoard of Directors meetings, and to proactively improve operational
aspects of the Board of Directors to further enhance and deepen
discussions in line with changes in the business environment.

Audit & Supervisory Committee
The Audit & Supervisory Committee, which is responsible for
auditing the Company, consists of four members, all of whom are
Outside Directors (Audit & Supervisory Committee members),
including several independent directors, and meet once every threemonths in principle, with special meetings as needed. In accordancewith the Audit & Supervisory Committee Standards for Audits basedon relevant laws and the Articles of Incorporation, the Audit &Supervisory Committee audits the execution of duties by directors,
executive officers, and employees by attending meetings of theBoard of Directors and examining the results of audits conductedby the division in charge of internal audits and the accounting auditor.
Audit Status
The Audit & Supervisory Committee’s main concerns are theformulation of audit policy, preparation of internal system, andconfirmation of its operation, audit report preparation,

reappointment of accounting auditors, agreement on remuneration
for accounting auditors, and providing opinions for the determinationof the appointment and remuneration of directors and others. The
Audit & Supervisory Committee met five times in 2022.
The members of the Audit & Supervisory Committee convey
their audit opinions objectively and neutrally using their broad
expertise and abundant experience, and they communicate theirforthright thoughts at the Board of Directors and the Audit &Supervisory Committee meetings. In addition, we believe that themembers of the Audit & Supervisory Committee are fully exercising
their supervisory and oversight function with respect to theCompany’s management by regularly exchanging perspectives on
the content with the Representative Director. The Audit & Supervisory
Committee includes a member who has abundant experience andknowledge in finance, accounting and accounting procedures,
including management of a finance-related consulting company.

*3 Systems & Processes + Value Realization Steering

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

73

Introduction

Financial &Non-Financial Strategy

Value Creation Story

Sustainability

Risk Management

Financial /Corporate Information

Governance74

Corporate Governance (As of March 28, 2023)

Executive compensation system

Compensation structure for executive directors (or directors)

Basic policy
CCBJH Group have designed our executive compensation system on the basis of the following policy. Executives subject to the system in
2022 are two executive directors, seven supervisory officers (directors who are Audit & Supervisory Committee members and outside
directors who are not Audit and Supervisory Committee members), and 10 executive officers.

Fixed compensation
Basic compensation

ҋ4VU[OS`WH`TLU[VMHUHTV\U[KL[LYTPULKIHZLKVUYLZWVUZPIPSP[PLZ

Retirement paymentsҋ(UHTV\U[LX\HS[V VMIHZPJJVTWLUZH[PVUPZHJJ\T\SH[LKL]LY``LHY^P[O[OLJ\T\SH[P]LHTV\U[calculated and paid upon retirement.
ҋ0U[OLL]LU[[OH[[OLPUKP]PK\HSOHZJH\ZLKZLYPV\ZOHYT[V[OL**)1/.YV\WVYOHZILLUZ\IQLJ[LK[V
disciplinary measures, the Company may reduce the amount paid or withhold payment. In addition, a
special increase may be made in recognition of particularly meritorious service. Reduction of amounts,
non-payment, and special increases undergo approval by the Board of Directors based on deliberationby the Audit & Supervisory Committee.

Overview of the executive compensation system
Targets

Basic policy

Decision-making process

Level

Executive directors
Executive officers

ҋ;OL*VTWHU`ZL[Z[OLSL]LSHUK
composition of compensation to enable
the hiring and retention of talented humanresources who are diverse in terms ofnationality, experience, etc.
ҋThe composition ratio will emphasize
performance-based compensation toprovide sufficient incentive to achieve
profitable growth.
ҋ;OLZ`Z[LT^PSSWYVTV[LPTWYV]LTLU[PU
medium- to long-term corporate value anda shared awareness of profit withshareholders.

ҋ0UVYKLY[VPUJYLHZL[OL[YHUZWHYLUJ`HUK
objectivity in compensation decision procedures,the content of compensation is discussed by the
Audit & Supervisory Committee, composed ofonly outside directors, based on policies
concerning the determination of compensation for
directors and within the total amount determinedat the General Meeting of Shareholders. Throughresolution of the Board of Directors, the setting ofcompensation is delegated to the representative
director, who determines the compensation foreach executive director, including the amount of
performance-based compensation.

ҋ*VTWLUZH[PVUPZKLJPKLKPUHJJVYKHUJL
with scale of responsibilities, utilizing datafrom compensation surveys performed byexternal research organizations and taking
into account the level of compensation
provided at companies such as domestic
and overseas similarly-sized companies incomparable industries, with the intent ofproviding a level of compensation thatenables recruitment and retention oftalented people who are highly diverse interms of nationality, experience, etc.

ҋ*VTWLUZH[PVUSL]LSHUKZ[Y\J[\YLIHZLKon role in management supervision andauditing.

ҋ*VTWLUZH[PVUMVYKPYLJ[VYZ^OVHYL(\KP[ Supervisory Committee members is proposed to
the Audit & Supervisory Committee and isdetermined through deliberation with directors
who are Audit & Supervisory Committee
members, within the total amount determined at
the General Meeting of Shareholders.
ҋ;OYV\NOYLZVS\[PVUVM[OL)VHYKVM+PYLJ[VYZ
compensation for outside directors who are not
Audit & Supervisory Committee members isdeliberated by the Audit & Supervisory
Committee based on policies concerning thedetermination of compensation for directors. The
setting of compensation is delegated to therepresentative director and president, whodetermines compensation within the total amountdetermined at the General Meeting of Shareholders.

ҋ;OL*VTWHU`THRLZ\ZLVM
compensation survey data from outside
expert organizations, etc. with reference
to compensation levels in domestic
companies of similar scale, and sets
levels in accordance with roles.

Supervisory officers

Compensation system for executive directors and executive officers
Compensation for executive directors and executive officers is composed of fixed compensation and variable compensation that varies withfactors such as corporate performance, to reflect responsibilities and contribution to corporate performance. The standard amount ofcompensation is set according to the scale of responsibilities. The larger the responsibilities, the higher the percentage of variable compensation.

Range of standard amounts of compensation: Image when basic compensation is set to 100
Fixed compensation
Basic compensation

Variable compensation

Retirement payments

100

10

Annual bonus

Around 30 to 85

Long-term incentives*

Around 15 to 100* Performance Share Units (PSU) and Restricted Stock Units (RSU)

Image of compensation structure (in case of Representative Director & President)
Fixed compensation

Variable compensation
Annual bonusҋ Provided as an incentive for achieving performance targets for each fiscal year at a certain time each year.
ҋ The target amount is set more or less in the range of 30% to 85% of base salary depending on their
responsibilities.
ҋ The amount of payment varies in the range of 0% to 150% of the target amount depending on the achievementof performance targets in each fiscal year (company-wide performance and individual evaluations).
ҋ Business income, sales volume, and revenue have been adopted as performance indicators to drive motivation
for achieving profitable growth in accordance with the policy for determining officer compensation, etc.

Long-term incentives*2

ҋ Two types of stock-based compensation systems, (1) PSU and (2) RSU, are adopted as long-term
incentives.
ҋ The standard amount for long-term incentives overall ((1)+(2)) is set more or less at 15% to 100% of basic
compensation, according to the scale of responsibilities. The PSU standard amount is set to 50% and the
RSU standard amount is set to 50% of the standard amount.
ҋ With regard to (2) RSU, additional grants (special RSU) for the purpose of retention and other factors may
be made for directors in addition to the above-mentioned basic RSU amount up to the compensation
limit detailed on the right, if deemed necessary by the Audit & Supervisory Committee.

(1) PSUҋ Provided as an incentive for achieving medium- to long-term performance targets.
ҋ The number of shares to be issued is determined within the range of 0% to 150% of the PSU standard
amount depending on the achievement of performance targets (only considering company-wide
performance) three years after the share units have been granted (with half of the shares to be issued
paid in cash for the purpose of allocating funds for the payment of tax obligations).
ҋ Consolidated ROE and growth rate of consolidated net revenue are used as metrics for creating
motivation for medium- to long-term improvement of corporate value in accordance with the policy for
determining directors’ compensation, etc.

(2) RSUҋ Provided for the purpose of aligning interests with shareholders, creating incentives to increase
corporate value, and strengthening retention of talented people.
ҋ A predetermined number of shares is issued at the time of retirement (with half of the shares to beissued paid in cash for the purpose of allocating funds for the payment of tax obligations).

Payment of compensation to directors in 2022
Directors’ Compensation

69%

31%

Under minimum
payment
Under standard
payment
Under maximum
payment

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

37%
30%

Total amount by type of compensation, etc. (million yen)

Executive category

Total amount ofcompensation, etc.
(million yen)

Basiccompensation*3

Retirement
payments

Annual bonus

Long-term
incentives*4

Other*5

Directors (except Audit &Supervisory Committee members)[of which, outside directors]

1,013
[43]

540
[43]

21
[—]

181
[—]

250
[—]

21
[—]

5
[3]

Directors (Audit & Supervisory
Committee members)[of which, outside directors]

72
[72]

72
[72]

—
[—]

—
[—]

—
[—]

—
[—]

4
[4]

Total
[of which, outside directors]

1,085
[115]

611
[115]

21
[—]

181
[—]

250
[—]

21
[—]

9
[7]

Number of
eligible directors

Total amount of compensation, etc. to persons for which total amount of compensation, etc. is 100 million yen or more
Name

RSU

The following are upper limits for thecompensation listed at left that is paid
to directors.
Compensation framework for directors(excluding directors who are Audit &Supervisory Committee members): Up
to an amount limited to 1,800,000
shares per year multiplied by themarket price at the time granted(approved through resolution of
Proposal No.5 at the 2022 General
Meeting of Shareholders of theCompany). (Number of directors at thetime of the resolution, excluding
directors who are Audit & Supervisory
Committee members: 5)*1 With regard to fringe benefits, the Company pays compensation for differences in tax rates between Japan and other countries, housing allowances, etc. based on CCBJHGroup internal rules, deliberated by the Audit & Supervisory Committee and approved by the Board of Directors, to support international assignments.
*2 At the 2022 General Meeting of Shareholders (held on March 28, 2023, Proposal No. 5), the introduction of a new long-term incentive (stock-based compensation) system wasapproved. Under this system, the Company’s shares are acquired through a trust funded by the money contributed by the Company, and these shares are issued to executive
directors. The maximum amount is 2,880 million yen in total for three fiscal years, and the maximum number of shares is 1,800,000 shares for those three fiscal years. There were
five directors (including two executive directors) as of the conclusion of the General Meeting of Shareholders, excluding directors who are Audit & Supervisory Committee Members.

Variable compensation

Base salary &retirement payments

The following are upper limits for thecompensation listed at left that is paid to
directors.
Limit on director compensation(excluding directors who are Audit &Supervisory Committee members): 850
million yen/year (approved throughresolution of Proposal No. 5 at the 2019
General Meeting of Shareholders of theCompany). (Number of directors at thetime of the resolution, excluding directors
who are Audit & Supervisory Committee
members: 5)
In case where the Audit & Supervisory
Committee has deliberated and deemed
it necessary, housing allowances andother fringe benefits may be paid within
the limit of 850 million yen*1.

Annual bonus &PSU at base amount

63%
70%

Annual bonus &PSU at maximum

Executive
category

Total amount by type of compensation, etc. (million yen)
Basiccompensation*3

Retirement
payments

Annual bonus

Long-term
incentives*4

Other*5

Total amount ofcompensation, etc.
(million yen)

Calin Dragan

Representative
Directors

317

14

127

182

14

655

Bjorn Ivar Ulgenes

Representative
Directors

179

7

53

68

7

315

*3 Basic compensation includes amount for fringe benefits (compensation for differences in tax rates between Japan and other countries, housing allowance, etc.), etc.
*4 Long-term incentives include PSU, RSU, and special RSU.
*5 Other refers to retention awards. Considering compensation levels in each country, rising prices, and the disadvantages caused by the differences between Japan and othercountries arising from the rapid depreciation of the yen, we paid a total of 21 million yen in cash as a retention award for 2022 in March 2023 to maintain motivation to leadthe transformation. The Audit and Supervisory Committee discussed and reviewed the appropriateness of the payment, and has deemed to be reasonable.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

75

Introduction

Financial &Non-Financial Strategy

Value Creation Story

Sustainability

Risk Management

Corporate Governance (As of March 28, 2023)

Financial /Corporate Information

Governance76

Details of our Management
https://en.ccbj-holdings.com/corporate/management/

Board Members

Attribution of Board members

Directors

Outside Directors

Executive
directors

Outsidedirectors

Independent
directors

22%

78%

56%

2

7

5

Outside directors in
Audit & Supervisory
Committee

Female directors

100%

33%

4

3

Nationalities

Age/Generation
40s

22%

70s

22%

6

Average58

years old

60s

11%

50s

44%
Calin Dragan
Representative Director, President
Calin Dragan has nearly three decades ofexperience working for Coca-Cola bottlers
globally, including Japan. Previously, heserved as President of The Coca-Cola
Company Bottling Investments Group.

Bjorn Ivar Ulgenes
Representative Director andVice President, CFO

Hiroko Wada
Outside Director
Independent Director

Bjorn Ivar Ulgenes has considerable financial
experience in Europe, the Middle East, Africa
and the Coca-Cola System in Japan.
Previously, he served as Deputy FinanceDirector, Central, East & West Africa Group,
The Coca-Cola Company.

Hiroko Wada has a wealth of experience inmarketing, management, and organizational / HRdevelopment in the consumer goods industry.
Previously, she has served as an executive
officer for The Procter & Gamble Company(U.S.) as well as CEO of Dyson Ltd. and Toys
“R” Us Japan, Ltd.

Outside Directors

Hirokazu Yamura
Outside Director
Independent Director

Celso Guiotoko
Outside Director
Independent Director

Hirokazu Yamura has worked for Coca-Cola
Bottlers Japan Inc. for around 15 years.
Currently, he serves as President and CEO ofMichinoku Coca-Cola Bottling Co., Ltd.

Celso Guiotoko has experience in IT andsupply chain with multinational corporations.
He has abundant management experienceand audit experience at Nissan Motor andNishimoto.

Hiroshi Yoshioka
Outside Director (serving on the Audit &Supervisory Committee)
Independent Director
Hiroshi Yoshioka developed management
experience and global knowledge at Sonyand previously served as an outside directorof Coca-Cola East Japan.

Assumptionof officeTerm ofoffice(Year)

Outsidedirectors

Audit &
Supervisory
Committee
members

Independent
directors

Calin Dragan

March 2019

1

—

—

—

Bjorn Ivar Ulgenes

March 2019

1

—

—

—

Hiroko Wada

March 20191—

Hirokazu Yamura

March 2020

1—

Celso Guiotoko

March 2023

1—

Hiroshi Yoshioka

March 2023

2

Nami Hamada

March 20192

Stacy Apter*

March 2023

2—

Sanket Ray*

March 2023

2—

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Globalbusiness

Food andbeverageindustry

Finance/
Audit

Sustainability
and CSV* Stacy Apter and Sanket Ray were appointed as Outside Directors serving on the Audit & Supervisory Committee at the 2022 Ordinary General Meeting of Shareholders held in March.
Note: Irial Finan and Vamsi Mohan Thati resigned as Outside Directors serving on the Audit & Supervisory Committee at the 2022 Ordinary General Meeting of Shareholders heldin March.

The Company assesses the expertise and experience possessed by directors based on the following criteria.
Items

Nami Hamada has a wealth of experience infinance and accounting, including leading her
own financial consulting firm. She has servedin management positions at Lehman
Brothers Japan Inc. and as an outside
director of Shimadzu Corporation and
MetLife Insurance K.K.

Corporate
management

Criteria for determining the necessary skills possessed by directors

Outside Directors

Nami Hamada
Outside Director (serving on the Audit &Supervisory Committee)
Independent Director

SkillsName

Stacy Apter
Outside Director (serving on the Audit &Supervisory Committee)

Sanket Ray
Outside Director (serving on the Audit &Supervisory Committee)

Stacy Apter has displayed strong leadership,particularly in the areas of global financial risk
supervision and corporate risk management,at the Coca-Cola Company and has global
management experience, including in terms
of providing support to the Board of
Directors. She currently serves as Vice
President, Treasurer and Corporate Financeat the Coca-Cola Company.

Sanket Ray has displayed strong leadership,particularly in commercial roles, at The
Coca-Cola Company and has global
management experience in the Asia region.
He currently serves as president of thecompany’s India and Southwest Asia Unit.

Criteria for(Applicable)

Corporate management• A person who has experience as a representative such as CEO or COO.

Global business• A person who has global business or equivalent knowledge as a division director or above.

Food and beverage industry• A person who has experience as a division director or above in a company handling beverages or food products,
or who has equivalent knowledge.

Finance/Audit

Sustainability and CSV• A person who has experience as a division director or above in a Finance / Accounting Division, or who has equivalent knowledge.
• A person who has a national qualification in finance and accounting, such as a CPA.

• A person who has experience as a director or above in Sustainability / CSV Division, or who has equivalent knowledge.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

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Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

78

Corporate Governance (As of March 28, 2023)

Appointment of outside directors

Policy regarding cross-shareholdings

Three of the Company’s five directors (excluding directors who are
Audit & Supervisory Committee members), and the four directors
who are Audit & Supervisory Committee members, are outside
directors.
As outside directors, the Company nominates persons whoare considered to contribute significantly to increasing thecorporate value of the Company. Moreover, if it has been
determined through investigation by the Company within thescope of reason that none of the criteria apply to the Company’s
outside directors, the Company will deem outside directors topossess sufficient independence from the Company.

Standards for determination of independence of outside directors
If none of the criteria below apply, the Company considers the director to havesufficient independence.
ҋ(ULTWSV`LLHUKVYL_LJ\[P]LVM[OL*VTWHU`HUKVYHZ\IZPKPHY`^P[OPU
the past 10 yearsҋ(WLYZVUHUKVYL_LJ\[P]L^OVOHKHZPNUPMPJHU[I\ZPULZZYLSH[PVUZOPW^P[O
the Company within the past one year*1
ҋ(ULTWSV`LLHUKVYL_LJ\[P]LVM[OLJVTWHU`^OVOHKHZPNUPMPJHU[business relationship with the Company within the past one year*1ҋ(JVUZ\S[HU[JLY[PMPLKW\ISPJHJJV\U[HU[H[[VYUL`L[J^OVOHZYLJLP]LKsignificant compensation from the Company other than executive
compensation within the past one year*2
ҋ(ULU[P[`VYL_LJ\[P]L[OLYLVM^OVOHZYLJLP]LKHZPNUPMPJHU[KVUH[PVUMYVT
the Company within the past one year*2ҋ(JSVZLYLSH[P]LVMHU`VM[OLHIV]L*3*1 If the transaction between the Company and the person and/or thecompany exceeds 2% of the Company’s consolidated revenue in thelatest fiscal year, this will be considered significant*2 If the annual amount of compensation or donation to the person/entity
exceeds JPY 10 million, this will be considered significant*3 Within the second degree of kinshipIn principle, it is the Company’s policy to refrain fromcross-shareholdings. However, there are cases in which theCompany acquires and holds such shares to create business
opportunities and maintain and strengthen its relationships with
Number of companies and the amount recorded in the balance sheet
Number of companies

Independent
outsidedirectors

Hiroko Wada
Outside Director

105

2,909

Stocks other than unlisted stocks

45

8,358

Brands that the Company increased the number of shares in 2022

Board meeting 7/7—

Unlisted stocks

Attendance

Board meeting 7/7

Celso Guiotoko
Outside Director

The Company has appointed Celso Guiotoko as a director (outside director) in order for him to utilize, for the management of theCompany, the considerable experiences and global knowledge he has gained thus far at Nissan Motor Co., Ltd. and NishimotoCo., Ltd. As no special vested interest exists between the individual and the Company, the Company deems that no risk of
conflict of interest with general shareholders exists and has appointed the individual as an independent director.

Attendance

Board meeting 7/7

Hiroshi Yoshioka has extensive management experience and global knowledge cultivated at Coca-Cola Bottler in Japan and at
Sony Corporation. He is expected to offer advice based on his abundant experience as a company manager and his knowledge,in areas of important management decisions of the Company, response to foreseeable risks, internal control systems, etc.
Accordingly, the Company has appointed him as an outside director who is an Audit & Supervisory Committee member. As no
special vested interest exists between the individual and the Company, the Company deems that no risk of conflict of interest
with general shareholders exists and has appointed the individual as an independent director.

Hiroshi Yoshioka
Outside Director(serving on the Audit &Supervisory Committee)
Attendance

Board meeting 7/7
Nami Hamada
Outside Director(serving on the Audit &Supervisory Committee)

Nami Hamada has extensive experience in finance and accounting, including managing a finance-related consulting company
herself, and has abundant experience and global insights cultivated on the corporate management team of Lehman Brothers
Japan as well as management oversight experience as an outside director of SHIMADZU CORPORATION and MetLife Insurance
K.K. She is expected to offer advice based on her abundant experience as a company manager and her knowledge in the field offinance, in areas of important management decisions, response to foreseeable risks, internal control systems, etc. Accordingly,
the Company has appointed her as an outside director who is an Audit & Supervisory Committee member. As no special vested
interest exists between the individual and the Company, the Company deems that no risk of conflict of interest with generalshareholders exists and has appointed the individual as an independent director.

Attendance

Board meeting 7/7
Audit and Supervisory
Committee meeting 5/5
Stacy Apter
Outside Director(serving on the Audit &Supervisory Committee)
New appointment—

Sanket Ray
Outside Director(serving on the Audit &Supervisory Committee)
New appointment—

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Stocks other than unlisted stocks

The Company proposes to appoint Hirokazu Yamura as a director (outside director) with the expectation that he will apply his
wealth of management expertise and global understanding obtained as Representative Director & President of Michinoku
Coca-Cola Bottling Co., Ltd. While the Company has the business relationship noted below with the corporate group of said
company, the transaction value is small and transaction prices and other conditions are conducted under appropriate conditions inthe same manner as with other business partners. The Company believes that its free business activities will not be hindered by the
corporate group of said company. Accordingly, as there is no risk of significant impact from said company, the Company deems
that no risk of conflict of interest with general shareholders exists and has appointed the individual as an independent director.
Relationship with the Company: The Company has a business relationship with Michinoku Coca-Cola Bottling Co., Ltd. that
includes buying and selling of products. (Sales, etc.: 0.4% of the consolidated revenue of the Company; Purchasing, etc.: 0.3%of the consolidated revenue of said company)

Hirokazu Yamura
Outside Director

Total amount spent to increase
the number of shares held (million yen)

Number of companies

13

Stacy Apter is Vice President, Treasurer and Corporate Finance at The Coca-Cola Company. She has displayed strong
leadership, particularly in the areas of global financial risk supervision and corporate risk management and has abundant
management experience as part of the company’s management team, including in terms of providing support to the Board of
Directors. She is expected to offer advice based on her abundant experience in finance and risk management, in areas ofimportant management decisions, response to foreseeable risks, internal control systems, etc. Accordingly, the Company has
appointed her as an outside director who is an Audit & Supervisory Committee member.
Relationship with the Company: The Company has concluded contracts concerning the production, sales, trademark usage, etc.
of Coca-Cola, etc., with The Coca-Cola Company.

Reason for increase in the number of shares

—

—

17

The Company increased the number ofshares of this company brand as it isa member of the shareholding association of
the counterparty company.

Reasons for appointment (Positions etc. are as of the time of appointment)
The Company has appointed Hiroko Wada as a Director (Outside Director) in order for her to utilize, for the management of theCompany, the considerable experiences and global knowledge she has gained thus far as officer at The Procter & Gamble
Company and as Representative Director at Toys“R”Us Japan Ltd. As no special vested interest exists between the individual
and the Company, the Company deems that no risk of conflict of interest with general shareholders exists and has appointed theindividual as an independent director.

Attendance

Total book value of shares (million yen)

Unlisted stocks

Reasons for appointment of outside directors
Category/Namebusiness partners and local communities. The Company shallevaluate and report on the cost of holding major cross-shareholdings
and the return on investment thereof in Board Meetings, and workon reducing the cross-shareholdings based on such evaluations.

Brands that the Company increased the number of shares in 2022
Number of companies

Total amount by selling and decreasing
the number of shares (million yen)

Unlisted stocks

5913

Stocks other than unlisted stocks

11

1,422
Securities Reporthttps://en.ccbj-holdings.com/ir/library/securities.php

Responsible dialogue with stakeholders through IR Activities
With the goal of timely and appropriate information disclosure and constructive dialog with shareholders and investors, we engage in a varietyof Investor Relations (IR) activities in which we explain our business strategies, business activities, financial and non-financial information, andother information through quarterly earnings presentations and IR meetings.
Main IR activities in 2022
Activity
Earnings Presentation

2022 results
Four times

Details
Quarterly earnings presentations were held by the President and CFO.
The briefing content is available via Webcast on the Company’s website.
(https://en.ccbj-holdings.com/ir/library/presentation.php)

IR meetings with analysts andinstitutional investors

About 250 times;
about 390 persons

Meetings and conference calls were held with analysts and institutional investors.
Top management took part as required.

Participation in domestic andoverseas conferences

Six times

Five times in Japan, and once overseas. Top management took part as required.

Other IR briefings

Four times

Held small meetings and IR briefings with participation by top management.

Delivery of video message
from the President

Four times

Video messages from the President were delivered to investors.
The latest video messages are available from the Investor Relations page of our website.
(https://en.ccbj-holdings.com/ir/)

Sanket Ray is president of the India and Southwest Asia Unit at The Coca-Cola Company. He has displayed strong leadership,particularly in commercial roles, at the company and has extensive management experience at the Company’s business units in
Asia. He is expected to offer advice based on his abundant experience as a global company manager, in areas of importantmanagement decisions, response to foreseeable risks, internal control systems, etc. Accordingly, the Company has appointed
him as an outside director who is an Audit & Supervisory Committee member.
Relationship with the Company: The Company has concluded contracts concerning the production, sales, trademark usage, etc.
of Coca-Cola, etc., with The Coca-Cola Company.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022