ESG Management Undertaken by the Sumitomo Rubber Group

Corporate Governance
Basic Perspective

Reasons for Adopting the Current Corporate Governance Structure
Remuneration Committee, an advisory body to the Board of Directors.
The majority of committee membership is accounted for by independent officers, with an Independent Outside Director acting as thecommittee chair. This committee is tasked with improving the objectivity and transparency of officer candidate selection and other key
procedures. Moreover, we have appointed four Independent Outside
Directors and distribute questionnaires targeting Directors and Audit &Supervisory Board Members to identify issues to be addressed going
forward. The implementation of these and other measures ensuresthat the Board of Directors’ effectiveness is continually enhanced.

Corporate Governance Structure

A Company with an Audit &Supervisory Board

Directors(Outside Directors)

11 (4)

Audit & Supervisory Board
Members (Outside Audit &5 (3)Supervisory Board
Members)
Term of Directors

1 yearExecutive Officer System

Yes

Number of Board of
Directors Meetings Held

14

Number of Audit &Supervisory Board
Meetings Held

12

Advisory Body to theBoard of Directors

Nomination andRemuneration Committee

Officer Remuneration
SystemFixed remuneration, shortterm performance b­ asedremuneration and mediumto long-term incentives

Accounting Auditor

KPMG AZSA LLC(As of March 28, 2023)

General Meeting of Shareholders
ReportAppointment/Dismissal

Appointment/
Dismissal

3. Audit & Supervisory Board

Chair: Outside Director (Business Execution Supervision)

Consult

7 Internal Directors /4 Outside Directors

AdviseBusiness
Execution

Report2. Nomination and Remuneration Committee
Committee Chair: Outside Director (Independent Officer)
2 internal members / 7 outside members

Accounting Auditor

Cooperation

Audit
Cooperation

Appointment/
Supervision

President(Legal Audit) (Validity Audit)
2 internal members / 3 outside members

ReportCooperation

Audit Department(Business Audit)(Internal Control Audit)

Cooperation

ReportInternal Audit

Executive Officers
Each Business Operation Division and Group Company
ReportAccounting Audit
Guidance

Human Resources & General Affairs HQ, Accounting & Finance HQ, International Business
Development & Administration Dept., Legal Dept. and Sustainability Management Promotion HQ
ReportInstruction/Guidance

Cooperation

5. Corporate Ethics Committee (Legal Compliance),
6. Risk Management Committee and 7. Sustainability Promotion Committee

Advice“Our Philosophy” / Corporate Code of Conduct

77

Integrated Report 2023

Introduced an Executive Officer System
Promoted separation between management supervision and business execution andclarified responsibilities and authorities to be borne by each business in order todevelop an agile management structure capable of swiftly adapting to changes in theenvironment

2004

Established a “Compliance Consultation Office” under the President’s direct supervision and appointed an external lawyer to serve as an external contact for consultation, with the aim of ensuring the earlier detection of corporate misconduct

2006

Established the Basic Policy on the Internal Control System (the basic policy for asystem that performs the functions necessary to ensure the ongoing propriety ofbusiness)

2013

Initiated meetings with institutional investors
Began holding exchanges of opinions with institutional investors regarding corporate
governance in order to further enhance corporate value

2015

Initiated the adoption of the Corporate Governance Code2015

Established the Nomination and Remuneration Committee
Voluntarily established the Nomination and Remuneration Committee, an advisory
body to the Board of Directors, to secure the transparency and objectivity of procedures for nominating officer candidates and determining officer remuneration

2016

Began conducting questionnaires to evaluate the Board of Directors’ effectiveness(in 2021, conducted third-party evaluation for the first time)

2020

Began issuing the Integrated Report

2020

Established “Our Philosophy,” a corporate philosophy structure2021

Formulated a skill matrix for Directors and Audit & Supervisory Board Members
Formulated a skill matrix that lays out the skills Directors and Audit & Supervisory
Board Members need for the Company to achieve the goals of the Midterm Plan

2022

Introduced a stock-based remuneration system designed to offer the Company’s
shares with transfer restrictions

All Directors and Audit & Supervisory
Board Members: 100% attendance

Objectives and roles:• Determine corporate philosophy, medium- to long-term management plans and other mattersrelated to basic policies for corporate management• Supervise the execution of Directors’ duties• Formulate the basic policy for, and monitor the status of, internal control
Main activities in 2022:• Deliberated on and determined the content of the new Midterm Plan
• Monitored the status of business execution on a global basis and made decisions to ensure timely
and appropriate response• Confirmed the status of cross-shareholdings and promoted initiatives to reduce such shareholdings• Conducted questionnaires to confirm the Board of Directors’ effectiveness and determined
responses to the issues identified via these questionnaires

12 meetings in fiscal 2022
3 Audit & Supervisory Board

Cooperation

Cooperation

3 meetings in fiscal 2022

4 Management Meeting

24 meetings in fiscal 2022

Facilitator: Officer in charge of the Corporate Planning
Participants: Internal Directors and Executive Officers appointed by President, etc.
Objectives and roles:• Make swift management judgments based on deliberation or reports on important management matters

5 Corporate Ethics Committee

4 meetings in fiscal 2022

Chair: Representative Director and President
Objectives and roles:• Assess, analyze and evaluate compliance risks• Plan and implement compliance training• Investigate root causes of violations and formulate measures to prevent recurrences while disseminating these measures throughout the Sumitomo Rubber GroupAll committee members: 100% attendance

Chair: Independent Outside Director
Objectives and roles:• Deliberate on proposals to be submitted to the General Meeting of Shareholders regarding the selection or dismissal of Directors and Audit & Supervisory Board Members in response to requests for
consultation from the Board of Directors and provide advice to the latter• Deliberate on the content of director and executive officer remuneration to be paid to individual recipients in response to requests for consultation from the Board of Directors and provide advice to the latter
Main activities in 2022:• Deliberated on and determined a draft proposal on Director and Audit & Supervisory Board Member
candidates as well as new Executive Officer candidates• Deliberated on and determined a draft proposal on director and executive officer remuneration• Deliberated on and determined a draft proposal on the content of stock-based remuneration (granting of the Company’s shares with transfer restrictions) for Directors, excluding Outside Directors

Legal Counsel

Cooperation

Compliance Consultation Office (Corporate Ethics Help Line)

2003

Note: In March 2023, an Outside Director was appointed as Chairman

2N omination andRemuneration Committee

4. Management Meeting(Business Execution)(Establishment of Business Plans)

Established “Rules Concerning Systems & Organizations for the Promotion of
Corporate Ethics” and “Corporate Code of Conduct” while instituting the “Corporate
Ethics Committee”

Chair: Chairman of the Board (non-executive)

Appointment/Dismissal

Audit

1. Board of Directors

2003

14 meetings in fiscal 2022
1 Board of Directors

Report2020

We adopted a Company with an Audit & Supervisory Board governance system and consider the audit functions the Audit &Supervisory Board and its members currently provide to be a matterof critical importance to the development of an integrated management framework encompassing the entire Sumitomo Rubber Group.
These functions are also essential to strengthening our relationshipof trust with society and enhancing the transparency of the Group’s
overall governance and business operations.
As part of its efforts to enhance corporate governance, since 2016
the Group has voluntarily maintained the Nomination andOrganizational design2010➁ Strive to improve corporate value via sound collaboration with abroad range of stakeholders➂ Disclose the Company’s financial and non-financial information inan accurate and timely manner➃ Work to enhance the content of discussions undertaken by the
Board of Directors regarding management policies, medium- tolong-term business planning and other matters related to the general direction of the Company by establishing the Management
Meeting, which is tasked with deliberating a large proportion ofbusiness execution matters. In addition, strive to secure fairness
in the Board of Directors’ operations via rigorous audits by standing and outside Audit & Supervisory Board members as well as
the objective supervision offered by independent outside directors➄ Endeavor to achieve the sustainable improvement of corporate
value via engagement in shareholder dialogue

History of Changes in the Governance System
2000

Sumitomo Rubber Industries’ basic management policy is toenhance not only its economic value but also its societal value andto contribute to the development of a sustainable society by ensuring that “Our Philosophy” is the foundation for all decision making
and the starting point for all actions. Under this policy, the Company
considers the enhancement of corporate governance to be one of its
major management objectives.
We are thus engaged in initiatives aimed at realizing this objective
and, to this end, endeavoring to secure overall management efficiency,
strengthen the relationship of trust between us and society andimprove the Company’s operations in terms of fairness and transparency. Based on the above convictions, we have established thefollowing five basic approaches in terms of the further enhancementof corporate governance.
➀ Develop an environment that protects the rights of shareholders
and helps them exercise such rights

Overview of the Governance
Structure (Fiscal year ended December 31, 2022)

All Audit & Supervisory Board Members:
100% attendance

Chair: Standing Audit & Supervisory Board Member
Objectives and roles:• Audit the execution of Directors’ duties• Audit financial statements and business reports
Main activities in 2022:• Conducted audits of the status of business execution on a global basis in accordance with audit
plans and contributed audit observations• Shared information regarding agenda items to be submitted to the Management Meeting• Conducted trilateral audits based on collaboration with the internal audit office and the Accounting Auditor

6 Risk Management Committee

2 meetings in fiscal 2022

Chair: Representative Director and President
Objectives and roles:• Investigate and confirm whether business and other risks are properly recognized and addressed,
thereby providing supervision over risk management activities• Investigate and confirm whether the Company’s risk management system is functioning effectively

7S ustainability Promotion
Committee

2 meetings in fiscal 2022

Chair: Director in charge of ESG
Objectives and roles:• Strengthen governance over ESG management by conducting a management review• Share important Company-wide issues• Review progress status of the Long-Term Sustainability Policy

Integrated Report 2023

78

ESG Management Undertaken by the Sumitomo Rubber Group

Corporate GovernanceDirectors, Audit & Supervisory Board Members and Executive Officers (as of March 28, 2023)
Directors

Satoru Yamamoto

Hidekazu Nishiguchi

Kiyoshige Muraoka

Masatsugu Nishino

Naoki Okawa

Yasuaki Kuniyasu

Representative Director,
President and CEO (President)

Representative Director(Managing Executive Officer)

Director(Senior Executive Officer)

Director(Senior Executive Officer)

Director(Senior Executive Officer)

Director(Senior Executive Officer)

Born June 14, 1958
Number of Shares of theCompany Held 37,530

Born December 8, 1960
Number of Shares of theCompany Held 22,700

Born February 21, 1961
Number of Shares of theCompany Held 7,300

Born February 8, 1962
Number of Shares of theCompany Held 15,600

Born July 9, 1961
Number of Shares of theCompany Held 10,300

Born September 4, 1969
Number of Shares of theCompany Held 1,000

Career Summary and Position at the Company
April 1982
Joined the Company
March 2019	Representative Director, President and CEO(President) of the Company (incumbent)

Career Summary, Position at the Company and Duties
April 1983
Joined the Company
March 2023	Representative Director (Managing Executive
Officer) of the Company (incumbent)[Duties] Supervision of Tire Business and Automotive System
Business

Career Summary, Position at the Company and Duties
April 1985
Joined the Company
March 2022	Director (Senior Executive Officer) of theCompany (incumbent)[Duties] S upervision of Technology and Production, Intellectual
Properties, and Research & Development

Career Summary, Position at the Company and Duties
April 1984
Joined the Company
March 2022	Director (Senior Executive Officer) of theCompany (incumbent)[Duties] Supervision of Sports Business, Hybrid Rubber
Products Business, Human Resources and General
Affairs, ESG, Legal Affairs and Purchasing

Career Summary, Position at the Company and Duties
March 2019 Joined the Company
March 2022	Director (Senior Executive Officer) of theCompany (incumbent)[Duties] Supervision of Financial Strategies and Accounting

Ikuji Ikeda

Keizo Kosaka

Mari Sonoda

Takashi Tanisho

Misao Fudaba

Director

Outside Director

Outside Director

Outside Director

Outside Director

Born November 7, 1956
Number of Shares of theCompany Held 63,800

Born December 11, 1945
Number of Shares of theCompany Held 0

Born July 24, 1959
Number of Shares of theCompany Held 0

Born February 26, 1949
Number of Shares of theCompany Held 0

Born February 23, 1956
Number of Shares of theCompany Held 0

Career Summary and Position at the Company
April 1979
Joined the Company
March 2019	Representative Director and Chairman of theBoard of the Company
March 2020 Chairman of the Board of the Company
March 2023 Director of the Company (incumbent)

Career Summary and the Status of Significant Concurrent Positions
April 1970	Admitted to the bar and joined Irokawa Law Office
April 1995	Vice President of Osaka Bar Association
January 2001	Irokawa Law Office Representative Partner
June 2006	Outside Audit & Supervisory Board Member of
Toyo Aluminum K. K. (incumbent)
March 2009	Outside Director of the Company (incumbent)
June 2012	Outside Audit & Supervisory Board Member ofSekisui Plastics Co., Ltd. (incumbent)
June 2016	Outside Audit & Supervisory Board Member ofTechno Associe Co., Ltd. (incumbent)
January 2020	Chairman of Irokawa Legal Professional
Corporation (incumbent)
June 2020	Outside Audit & Supervisory Board Member of
SEIREN CO., LTD. (incumbent)

Career Summary and Positions
April 1982	Joined the Ministry of FinanceJuly 2010	Director of the Non-Administrative Asset
Utilization and Disposition Policy Division,
Financial Bureau, Ministry of FinanceJuly 2012	Director General of General Affairs Division,Federation of National Public Service Personnel
Mutual Aid Associations
January 2014	Secretary-General of Secretariat, Specific
Personal Information Protection Commission
January 2016	Secretary-General of Secretariat, Personal
Information Protection Commission
March 2021	Outside Director of the Company (incumbent)

Career Summary and the Status of Significant Concurrent Positions
April 1973	Joined Hitachi Zosen Corporation
April 2013	Representative Director, President & Chief
Operating Officer of Hitachi Zosen Corporation
April 2016	Representative Director, President & Chief
Executive Officer of Hitachi Zosen Corporation
April 2017	Representative Director, Chairman of the Board &President of Hitachi Zosen Corporation
April 2020	Representative Director, Chairman of the Board &Chief Executive Officer of Hitachi Zosen Corporation
April 2022	Representative Director, Chairman of the Board of
Hitachi Zosen Corporation
March 2023	Outside Director of the Company (incumbent)
April 2023	Director and Senior Corporate Advisor of Hitachi
Zosen Corporation
June 2023	Senior Corporate Advisor of Hitachi Zosen
Corporation (incumbent)

Career Summary, Position at the Company and Duties
April 1992
Joined the Company
March 2023	Director (Senior Executive Officer) of theCompany (incumbent)[Duties] Supervision of Corporate Strategy and Digital
Transformation (DX) and General Manager of Corporate
Planning Department

Career Summary and the Status of Significant Concurrent Positions
April 1979	Joined Daicel Corporation
June 2006	Executive Officer, Deputy Head of Corporate
Support Center of Daicel Corporation
June 2008	Head of Raw Material Purchasing Center ofDaicel Corporation
June 2010	Representative Director, President andCEO of Daicel Corporation
June 2019	Chairman of the Board of Directors of Daicel
Corporation
June 2022	Advisor of Daicel Corporation (incumbent)
March 2023	Outside Director of the Company (incumbent)

Audit & Supervisory Board Members

Executive Officers
Senior Executive Officers

Kazuo Kinameri

Hiroki Ishida

Morihiro Murata

Asli M. Colpan

Hirofumi Yasuhara

Standing Audit &Supervisory Board Member

Standing Audit &Supervisory Board Member

Outside Audit &Supervisory Board Member

Outside Audit &Supervisory Board Member

Outside Audit &Supervisory Board Member

Takanori Aoi
Tomohiko Masuta
Eiichi Masuda

Born August 15, 1956
Number of Shares of theCompany Held 40,294

Born July 11, 1958
Number of Shares of theCompany Held 51,800

Born July 20, 1946
Number of Shares of theCompany Held 7,800

Born October 25, 1977
Number of Shares of theCompany Held 0

Born August 28, 1956
Number of Shares of theCompany Held 0

Executive Officers

Career Summary, Position at the Company and Duties
April 1979	Joined the Company
March 2015	Representative Director and President of
Dunlop Sports Co. Ltd.
March 2018	Representative Director (Vice President) of theCompany
March 2023	Standing Audit & Supervisory Board Member of
the Company (incumbent)

Career Summary, Position at the Company
February 2010	Joined the Company
March 2011	Director (Senior Executive Officer) of theCompany
March 2022	Standing Audit & Supervisory Board Memberof the Company (incumbent)

Career Summary and the Status of Significant Concurrent Positions
December 1970	Joined Arthur Young Tokyo OfficeNovember 1974	Registered as a certified public accountant(incumbent)
July 2002	Representative of Asahi KPMG
Tax Accountant Corporation
January 2004	Representative Partner of KPMG
Tax Accountant Corporation
April 2006	Representative of Morihiro Murata
Accounting Office (incumbent)
June 2011	Outside Audit & Supervisory Committee
member of Kagome Co., Ltd.
March 2012	Outside Director of the Company (incumbent)
March 2016	Outside Director (Audit & Supervisory
Committee member) of Kagome Co., Ltd.,
Outside Audit & Supervisory Board memberof Kokuyo Co., Ltd.

Reasons for the Selection of Independent Outside Directors

79

Career Summary and the Status of Significant Concurrent Positions
April 2008	Program-Specific Associate Professor at Kyoto
Center for Japanese Studies, Columbia University
October 2012	Visiting Scholar at Reischauer Institute ofJapanese Studies, Harvard University Visiting
Associate Professor at Massachusetts Instituteof Technology (MIT) Department of Political
Science and Sloan School of Management
July 2015	Outside Director of GOURMET KINEYA CO., LTD.
March 2018	Outside Audit & Supervisory Board Member of
the Company (incumbent)
April 2018	Professor at Graduate School of Economics,
Kyoto University (incumbent), Professor at
Graduate School of Management, Kyoto
University (incumbent)
March 2019	Outside Director of NISSHA Co., Ltd. (incumbent)

Toshihiko Komatsu
Kenji Saito
Takuzo Iwata
Jiro Kawase
Hiroshi Hamada

Yoichi Mizuno
Kiyoshi Ikawa
Shingo Sakashita
Susumu Tanaka
Masahiro Tsuzaki

Reasons for the Selection of Independent Outside Audit & Supervisory Board Members

Name

Reasons for selection

Name

Keizo Kosaka

Mr. Keizo Kosaka, a representative of Irokawa Law Office, boasts expertise in corporate legal affairs along with experience in corporate management gained as an outside member of audit & supervisory boards of TOYO ALUMINIUM K.K., Sekisui Kasei Co., Ltd., TECHNO ASSOCIE Co., Ltd. and SEIREN CO., LTD. As he makes fulluse of his knowledge and experience to provide the Company with invaluable opinions and suggestions from an objective point of view, he is well-suited to serve as
Director and conforms with the Company’s policy on the selection of Directors and Audit & Supervisory Board Members. The Company thus appointed him based on its
judgement that his presence on the Board of Directors will help improve its corporate governance.

Morihiro Murata

Mari Sonoda

Ms. Mari Sonoda has held important positions at the Ministry of Finance and elsewhere and has gained wide-ranging expertise in finance, fiscal affairs and policy-making
as well as extensive experience in developing personal information protection systems, including My Number, the national identification number. The Company concluded
that Ms. Sonoda is well-suited to serve as a Director and conforms with the Company’s policy on the selection of Directors and Audit & Supervisory Board Members.
The Company thus appointed her based on its judgement that her presence on the Board of Directors will help improve its corporate governance.

Takashi Tanisho

Mr. Takashi Tanisho has experience as the Representative Director, President, and Chairman of Hitachi Zosen Corporation, which operates globally in the environmental
field, including in areas involving energy, water and decarbonization, and has gained extensive experience and broad insights as a manager. In particular, he boasts
abundant business experience with regard to manufacturing technology and management strategy. Mr. Tanisho is well-suited to serve as a Director and conforms with
the Company’s policy on the selection of Directors and Audit & Supervisory Board Members. The Company thus appointed him based on its judgement that his presence on the Board of Directors will help improve its corporate governance.

Misao Fudaba

Mr. Misao Fudaba, having served as President and Chairman of Daicel Corporation—a global operator involved in the manufacture and sale of chemical products andhigh-performance materials—possesses extensive experience and management insight. In particular, he boasts abundant business experience in the fields of businessand financial strategies. Mr. Fudaba is well-suited to serve as a Director and conforms with the Company’s policy on the selection of Directors and Audit & Supervisory
Board Members. The Company thus appointed him based on its judgement that his presence on the Board of Directors will help improve its corporate governance.

Integrated Report 2023

Career Summary and the Status of Significant Concurrent Positions
April 1979	Joined Matsushita Electric Industrial Co., Ltd.
(currently Panasonic Holdings Corporation)
June 2008	Director of PanaHome Corporation (currently
Panasonic Homes Co., Ltd.)
June 2012	Representative Director, President of the above
company
June 2015	Senior Audit & Supervisory Board member ofPanasonic Corporation (currently PanasonicHoldings Corporation)
June 2019	Outside Auditor of Santen Pharmaceutical Co., Ltd.
March 2020	Outside Audit & Supervisory Board Member of
the Company (incumbent)
June 2020	Outside Auditor of Hitachi Zosen Corporation(incumbent)
June 2023	Outside Director of Sumitomo Densetsu Co., Ltd.
(incumbent)

Hideaki Kawamatsu
Yasuo Watanabe
Hiroshi Matsui

Reasons for selection
As a certified public accountant and tax accountant, Mr. Morihiro Murata boasts considerable knowledge of finance and accounting and has gained experience in auditing andcorporate management as an Outside Director (Audit & Supervisory Committee member) of Kagome Co., Ltd., and as an Outside Audit & Supervisory Board member of
Kokuyo Co., Ltd. As an Outside Audit & Supervisory Board Member of the Company, he draws on his knowledge and experience to express opinions on the execution of business by Directors from an objective viewpoint while providing suggestions related to the enhancement of the Company’s corporate governance and the formulation of the new
Midterm Plan. Mr. Murata is well-suited to serve as a member of the Company’s Audit & Supervisory Board and conforms with its policy for the selection of Directors and Audit& Supervisory Board Members. Accordingly, the Company appointed him based on its judgement that his presence will contribute to the reinforcement of its audit system.

Asli M. Colpan

Ms. Asli M. Colpan has extensive knowledge in corporate management based on her advanced academic knowledge as a university professor specializing in management strategy and corporate governance as well as practical experience of corporate management as an Outside Director of both GOURMET KINEYA CO., LTD. and
NISSHA Co., Ltd. She expresses her opinions as an Outside Audit & Supervisory Board Member on the execution of business by Directors from an objective viewpoint,reflecting her experience in addition to providing suggestions related to the enhancement of the Company’s corporate governance and the formulation of the new Midterm
Plan. Ms. Colpan is well-suited to serve as a member of the Company’s Audit & Supervisory Board and conforms with its policy for the selection of Directors and Audit &Supervisory Board Members. Accordingly, the Company appointed her based on its judgement that her presence will contribute to the reinforcement of its audit system.

Hirofumi Yasuhara

Mr. Hirofumi Yasuhara has gained experience in corporate finance and business management as the Representative Director, President of PanaHome Corporation (currently Panasonic Homes Co., Ltd.); as a Senior Audit & Supervisory Board Member of Panasonic Holdings Corporation; and as an Outside Auditor of both Santen
Pharmaceutical Co., Ltd. and Hitachi Zosen Corporation. Leveraging his extensive experience, he expresses his opinions as an Outside Audit & Supervisory Board
Member on the execution of business by Directors from an objective viewpoint in addition to providing suggestions related to the enhancement of the Company’s corporate governance and the formulation of the new Midterm Plan. Mr. Yasuhara is well-suited to serve as a member of the Company’s Audit & Supervisory Board and conforms with its policy for the selection of Directors and Audit & Supervisory Board Members. Accordingly, the Company appointed him based on its judgement that his
presence will contribute to the reinforcement of its audit system.

Integrated Report 2023

80

ESG Management Undertaken by the Sumitomo Rubber Group

Corporate GovernanceConcepts regarding the Balanced Distribution of Specialist Strengths among Membersof the Board of Directors and Its Compositional Diversity, etc.
At Sumitomo Rubber Industries, the competencies required ofafter being deliberated by the Nomination and Remuneration

Directors and Audit & Supervisory Board Members in their areas ofCommittee, with due consideration given to the business environ-

specialty have been mapped out in the form of a skill matrix. Our

ment, the Company’s management plan and characteristics of its

intention in adopting the skill matrix is to enable the Board ofbusiness. Through this process, we have identified up to four items

Directors to properly engage in decision making and fulfill its man-per individual to determine strengths required of each Director andagement supervisory functions and thereby realize “Our Philosophy”—

Audit & Supervisory Board Member in his/her area of specialty. The

our corporate philosophy structure—address medium- to long-term

selection of candidates for Directors and Audit & Supervisory Board

priority issues (materiality) via the promotion of ESG management

Members is thus informed by the skill matrix to form an optimallyand execute the new Midterm Plan announced in February 2023.

sized, well-functioning Board of Directors with a balanced portfolio of

Each skill matrix item has been determined by the Board of Directors

specialists in diverse fields.

Reasons for Adopting Skill Matrix Items
Skill Item

Reasons for adoption

Corporate Management
and Business Strategy

For the Company to create joy and well-being for all, securing members of Board of Directors equipped with the skills needed to formulate sustainable growth strategies, including those supported by ESG management, is essential. Such individuals must be seasoned corporate managers with robust track records. In order to achieve further improvement in economic and societal value, theCompany also considers it important to create new value. To this end, the Company strives to secure Board members capable ofquickly detecting changes in the business environment and pursuing new possibilities that transcend the scope of its existing businesses, backed by robust skills and expertise related to the formulation of business portfolio strategies and the execution of organizational reforms.

Production andTechnology

To deliver joy and well-being to customers, the Company’s Board of Directors must be supported by members equipped with a wealthof expertise in the cutting-edge technologies the Sumitomo Rubber Group has accumulated via an unflagging pursuit of technologicalinnovation. The Board members are also expected to have skills and expertise related to the manufacture of products that are friendly
to people and the environment to realize a sustainable, recycling-oriented society.

International Business

For the Company to take full advantage of our global business framework, the Board of Directors must include members who have
expatriate experience as representatives of overseas subsidiaries or other similar positions and are equipped with skills and expertise
related to overseas business management.

Sales and Marketing

On a global basis, the Company aims to market advanced products created via the use of proprietary cutting-edge technologies whileconstantly delivering a stream of high-value-added products aligned with the rapid shift to electric vehicles (EVs). By doing so, theCompany will create value that goes beyond the expectations of customers and society. To this end, the Company’s Board of Directors
must include members equipped with skills and expertise related to market trend analysis and the formulation of marketing strategies.

Legal and Governance

The Company considers a proper governance system to be a foundational business platform supporting the continued pursuit of global
expansion. The Company also strives to improve the effectiveness of management supervision over the entire Group. Therefore, theCompany needs to secure Board members equipped with knowledge of legal affairs as well as skills and expertise related to corporate
governance and risk management.

Financial Strategy
and Accounting

For the Company to maximize corporate value through efficient capital management, securing Board members equipped with skills
and expertise related to the formulation of optimal financial and capital strategies is essential as these strategies will, in turn, support
accurate financial reporting, solidify the Company’s financial base and promote growth investment (including M&A) aimed at securing
sustainable growth in corporate value along with enhancing shareholder returns.

DX and IT

For the Company to realize innovation as defined under our Purpose, establishing a data-driven corporate culture supportive of theactive utilization of AI and IoT is a matter of great importance. Therefore, the Company’s Board of Directors must include members
who have multifaceted track records in spearheading innovation and are equipped with skills and expertise related to the digital technology field.

Skill Matrix for Directors and Audit & Supervisory Board Members

NameYears in
OfficePosition*1

Corporate
Management
and Business
Strategy

Production
andTechnology

International
Business

Sales andMarketing

Financial
Legal and
Strategy andGovernanceAccounting

Fiscal 2022 Status of
Attendance
DX and IT

Board ofDirectors
meetings

Audit &
Supervisory
Board
meetings

Satoru Yamamoto

Representative Director,
President and CEO(President)

8 years

14/14—

Hidekazu Nishiguchi

Representative Director(Managing Executive
Officer)

2 years

14/14—

Kiyoshige Muraoka

Director(Senior Executive Officer)

1 year11/11—

Masatsugu Nishino

Director(Senior Executive Officer)

1 year

11/11—

Naoki Okawa

Director(Senior Executive Officer)

1 year

11/11

—

—

—

16 years

14/14—

Yasuaki Kuniyasu

Policy of Election and Dismissal Standards for Directors and Audit & Supervisory Board Members

Director
Newly(Senior Executive Officer) appointed

Ikuji Ikeda

Director

Keizo Kosaka

Outside Director*

14 years

14/14—

Mari Sonoda

Outside Director

2 years

14/14—

Takashi Tanisho

Outside Director

Newly
appointed——

Misao Fudaba

Outside Director

Newly
appointed——

Kazuo Kinameri

Standing Audit &Supervisory Board
Member*3

Newly
appointed

14/14

—

Hiroki Ishida

Standing Audit &Supervisory Board
Member

1 year

14/14

12/12

Morihiro Murata

Outside Audit &Supervisory Board
Member11 years

14/14

12/12

Asli M. Colpan

Outside Audit &Supervisory Board
Member

5 years

14/14

12/12

Hirofumi Yasuhara

Outside Audit &Supervisory Board
Member

3 years

14/14

12/12

2

Note: Up to four skill categories are presented per individual in line with the Company’s expectations regarding their contributions in their respective areas of specialty. The above matrix does
not fully describe the business experience and expertise possessed by each individual.
*1 The position in parentheses is the position held as an Executive Officer of the Company.
*2 Chairman of the Board, Chair of the Nomination and Remuneration Committee*3 Chair of Audit & Supervisory Board

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Integrated Report 2023

Sumitomo Rubber Industries, Ltd. (the “Company”) shall follow
the policy and standards set forth below in selecting and dismissing Directors and Audit & Supervisory Board Members (“Officers”).
Proposals for selecting and dismissing Directors are deliberated
and determined by the Board of Directors based on the rigorous
deliberations and reports of the Nomination and Remuneration
Committee. Proposals for the selection or dismissal of Audit &Supervisory Board Members shall be decided by the Board of
Directors with the consent of the Audit & Supervisory Board.
Thereafter, a proposal for each candidate will be submitted to theGeneral Meeting of Shareholders.
(1) Basic Policy
Officer candidates shall have the ability, motivation, and experience to effectively fulfill their roles and responsibilities on the
Board of Directors and be capable of contributing to the improvement of the Company’s corporate governance and solution ofsocial issues through the Company’s business.
(2) Election Standards
The Company’s officers must meet the following conditions.
1) Possess a deep understanding of the Company’s corporate
philosophy, “Our Philosophy,” and embody it in their duties
2) Demonstrate the ability to view the overall Group objectively
and to analyze and judge the Group in light of changes in thesurrounding environment3) Make every effort to improve the Company’s corporate value
over the medium to long term in accordance with theCompany’s management policy4) Collectively possess expertise in the fields of corporate management and business strategy, production and technology,international business, sales and marketing, legal and governance, financial strategy and accounting, DX and IT, which are
the items specified in the skill matrix of the Company’s Boardof Directors. They must have a sufficient track record in suchfields of expertise, and their election must ensure a balanced
and diverse skills matrix on the Company’s Board of Directors5) Outside officers must be persons suitable to act as management executives of the Company from the perspective of promoting the sustainable growth of the Company and enhancing
its corporate value over the medium to long term.
(3) Dismissal Standards
The Company shall review the dismissal of any Company officer
when said officer fails to properly fulfill the roles and responsibilities required of them. (This includes any of the grounds for disqualification as stipulated by law, when an officer commits an act
that offends public order and morals, when an officer is unable tocontinue to perform their duties due to health reasons or for any
other reason, etc.)

Integrated Report 2023

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ESG Management Undertaken by the Sumitomo Rubber Group

Corporate GovernanceInitiatives to Enhance the Effectiveness of the Board of Directors’ Operations
The Board of Directors’ Operations
To ensure that agenda items submitted to the Board of Directors are
fully examined and discussed, we provide Outside Directors andOutside Audit & Supervisory Board Members with materials describing these items and presentations prior to each meeting based on
their questions about said items. Also, the content of discussions at
the Management Meeting is shared with the above individuals. With
regard to decision making on management matters of particularimportance and requiring discussion at the Board of Directors,
Executive Officers in charge of such matters occasionally provide
prior briefings outlining agenda items. These are but a few examplesof our initiatives to enhance the content of discussions undertakenby the Board of Directors.

Training for Directors and Audit &Supervisory Board Members
The Company encourages Directors, Audit & Supervisory Board
Members and Executive Officers to participate in external executive
training at its own expense. By doing so, we ensure that these individuals are fully equipped with the knowledge necessary to serve as
members of a key decision-making body of a listed company. We also
hold guidance briefings for newly appointed internal Directors, inviting
external specialists to deliver lectures to help said individuals acquire an
in-depth understanding of their roles and responsibilities as Directors.
Furthermore, we provide individuals who are newly appointed as outside officers with opportunities to be briefed on such topics as theSumitomo Rubber Group’s business outline, its operating results andchallenges it is currently facing, thereby enhancing their ability to present well-informed advice on improving the Company’s standing.

Main topics of discussion at Board of Directors meetings in 2022 (agenda items)• Tangible issues confronting each execution department and the status of response• Response going forward in light of the results of the questionnaire on the effectiveness of the Board of Directors• Status of the Risk Management Committee, Corporate Ethics Committee andSustainability Promotion Committee• Disposal of a portion of cross-shareholdings

Conducting Questionnaires regarding the Board of Directors’ EffectivenessFiscal 2016 to 2020

Fiscal 2021

Fiscal 2022

• Evaluation methods
Questionnaires targeting the Board members were sent out
by the secretariat. The completed questionnaires were analyzed for quantitative data, while comments from respondents regarding qualitative matters were similarly
consolidated. Based on the results, we identified issues
and implemented countermeasures.

• Evaluation methods
Questionnaires targeting and interviews with members of
the Board of Directors were conducted by an external
assessment firm (an independent third party). The Board of
Directors received and deliberated on a report from said
assessment firm at its meeting held in December 2022.

• Evaluation methods
The secretariat conducted questionnaires targeting members of the Board of Directors and analyzed their quantitative assessments as well as qualitative comments to
identify issues to be addressed.

• Main initiatives•Raising the monetary criteria for tabling an item at a
Board of Directors meeting• Earlier provision of materials•Prior acceptance of questions with regard to agenda
items and provision of answers, etc.

• Main initiatives• Further review of criteria for tabling an item at a Board of
Directors meeting• Enhancement of opportunities for information sharing
involving outside directors• Evaluation results
Improvement was confirmed in both of the following items,
which were identified as issues in the course of the fiscal
2021 evaluation.
• More time for discussions at the Board room must be
secured• More complete information needs to be provided to outside officers in advance• Main issues• Enhancement of opportunities for discussions regarding
important themes• Enhancement of opportunities for information sharing
related to IR/SR activities

The Board of Directors’ activity policy for fiscal 2023
The Board of Directors will properly engage in decision making and fulfill management supervisory functions while pursuing improvement in corporate value by realizing “Our Philosophy,” the Group’s corporate philosophy structure, addressing
medium- to long-term priority issues (materiality) via the promotion of ESG

management and executing the new Midterm Plan.
Specifically, in fiscal 2023, the Board of Directors intends to focus on deliberating
the “Selection & Concentration of Existing Lines of Business” and “Laying Groundwork
for Growing Lines of Business,” key initiatives under the new Midterm Plan.

TopicsHolding in-depth discussions with the participation of all outside officers Intensively deliberating on management issues at offsite meetings
Sumitomo Rubber Industries is proactively promoting measures to enhance theeffectiveness of its Board of Directors with the objective of achieving medium- tolong-term improvement in corporate value. As part of these efforts, the Board of
Directors held offsite meetings in June 2022. These meetings were intended to facilitate in-depth discussion regarding the Midterm Plan and other key management
issues by allowing participants to engage in the free exchange of opinions in alternative settings with atmospheres that differ from that of the regular venue used for
Board of Directors meetings.

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Integrated Report 2023

Matters Related to Remuneration and the Company’s Policies for Determining Its Calculation Method➀Basic policy
With regard to the remuneration of officers (Directors and Executive Officers),
the Company’s basic policy is to adopt a remuneration system that is linked tothe interests of shareholders, so that it effectively functions as an incentive
package rewarding members for their efforts to sustainably enhance corporate
value. The Company also ensures that the remuneration of individual recipientsis set at an appropriate level in light of their respective responsibilities.
Specifically, remuneration for Directors (excluding Outside Directors) and
Executive Officers consists of a basic salary constituting a fixed portion andbonuses constituting a performance-based portion. Except for Outside
Directors, Directors are also granted stock-based remuneration as medium- tolong-term incentives. For Outside Directors who assume management supervisory functions, the Company furnishes only a basic salary with a view toensuring their professional independence.
➁Policy for the determination of the amount of basic salary for each recipient

Basic salary is a fixed amount paid monthly and is determined based on each
recipient’s position, responsibilities and years in office and in accordance withbasic salary tables determined after comprehensively taking into consideration
the level of remuneration at peer companies, the business performance of theCompany, salary levels for employees and other factors.

➂Policy for the determination of the content, amount of and calculation• Introduction of stock-based remuneration (granting of restricted shares)• Divestment of assets• System investment toward the realization of business management powered bydigital innovation• Formulation of a sustainability vision• Formulation of the new Midterm Plan

• Evaluation results
The Company’s Board of Directors is equipped withstrengths in (1) enhanced information sharing involving outside officers and (2) securing diversity, and it was confirmedthat the overall effectiveness of its operations is robust.

Remuneration of Directors and Audit & Supervisory Board Members

Based on conclusions reached via regular Board of Directors meetings, participants in offsite meetings were able to launch fresh discussions with a new perspective. This, in turn, enabled all officers to gain a solid understanding of the
topics related to increasing corporate value.
Going forward, we will hold offsite meetings and otherwise implement necessary
measures to strengthen Group governance undertaken by the Board of Directors
and other bodies. In this way, we will strive to achieve medium- to long-term
improvement in corporate value.

methods for short-term performance-based remuneration
To enhance recipients’ awareness of their duty to improve business performance each business year, short-term performance-based remuneration ispaid in cash in a way that reflects performance indicators. An amount corresponding to the degree to which performance indicators have been met ispaid at a predetermined time each year.
When determining the amount of performance-based remuneration, theCompany selects business profit, profit attributable to owners of the parent
company and other performance indicators considered particularly importantin light of its corporate strategy. The target values for these indicators are
determined when midterm plans are formulated in a way that is consistent withsaid plans and revised as necessary in accordance with changes in the environment, taking into consideration any recommendations from the Nomination
and Remuneration Committee.
When determining the allocation of remuneration to each individual, the individual’s position, operational duties, level of responsibility, level of achievementof key targets within departments under his or her supervision, level of contribution to business performance and other factors are taken into account froma medium- to long-term perspective.

➃Policy for the determination of the content and amount of medium-to long-term incentives
Medium- to long-term incentives are designed to motivate recipients to strive forthe sustainable improvement of the Company’s corporate value. At the sametime, these incentives are intended to promote the sharing of value between
Directors and shareholders. Accordingly, recipients are granted the Company’s
shares with transfer restrictions with the restrictions enforced until said recipients step down from the post of Director due to reasons deemed just andapproved by the Board of Directors. The determination of the number of shares
granted is based on the position held by the recipient with reference to a stockbased remuneration table formulated with comprehensive consideration of thelevel of remuneration at peer companies, employee salaries and other factors.

Fixed remuneration(Basic salary)

Short-term
performance-based
remuneration(Bonus)Medium- tolong-term incentives(Stock-based
remuneration)

Directors

72-95%

0-20%

5-8%

Officers other than
Directors

80-100%0-20%−

Position➄Policy for the determination of composition of remuneration for indi-vidual recipients
With regard to the proportional composition of remuneration for Directors(excluding Outside Directors) and Executive Officers by type, the compositionof each type of remuneration is engineered to ensure that the weighting of
performance-based incentives is higher for individuals in higher positions than
it is for those in lower positions. This determination is benchmarked against
the remuneration levels of companies of a similar business scale to theCompany or in a related industry or with a similar business format. This composition is also discussed by the Nomination and Remuneration Committee.
The Representative Director and President, to whom the Board of Directors
has delegated authority over the matter stipulated in ⑥ below, determines thedetails of remuneration for individual recipients in a manner that honors recommendations from the Nomination and Remuneration Committee and within thescope of the proportional composition set forth in such recommendations foreach type of remuneration.
Furthermore, as a general rule regarding the proportional composition of eachtype of remuneration, fixed remuneration (basic salary), short-term performance-­
based remuneration (bonus) and medium- to long-term incentives (stockbased remuneration) account for 75%, 20% and 5%, respectively, of total
remuneration for Directors except for Outside Directors. As for remuneration
for Executive Officers, fixed remuneration and short-term performance- based
remuneration account for 80% and 20%, respectively. (The above proportions
are premised on the full achievement of performance indicators.)
Notwithstanding the foregoing, the amount of performance-based remuneration
may fluctuate due to such factors as consolidated business profit. Accordingly,
proportional composition can fluctuate within the range presented below.

➅Matters related to the delegation of authority over the determinationof details of remuneration for individual recipients
With regard to the determination of remuneration for individual recipients, via aresolution, the Board of Directors delegates authority over the details of such
remuneration to the Representative Director and President. Based on thisauthority, the Representative Director and President determines the amount ofbasic salary for officers and allocates bonuses to each based on his evaluationsof operating results achieved by businesses under the recipient’s supervision.
The Board of Directors strives to ensure that the above authority is properly
exercised by the Representative Director and President and, to this end, consults with the Nomination and Remuneration Committee to obtain its recommendations, including a draft outlining remuneration packages. The
Representative Director and President, to whom authority is delegated as
explained above, is requested to determine the matter in accordance with said
recommendations from the committee.

Total Amount of Remuneration by Officer Category, Total Amount of Remuneration by Remuneration Typeand the Number of Recipients
Total amount of
remuneration(millions of yen)

Number of recipients

Directors (excluding Outside Directors)

441

11

Audit & Supervisory Board Members(excluding Outside Members)

54

3

Outside Members

73

7

Officer category

Note: The above number of recipients includes four Directors and one Audit & Supervisory Board Member
who stepped down from their positions on March 24, 2022.

➀T he resolution passed at the General Meeting of Shareholders

regarding remuneration
The limits on the total amount of remuneration for Directors and Audit &Supervisory Board Members have been set based on a resolution by the 123rd
Ordinary General Meeting of Shareholders held on March 26, 2015, as detailed
below: Directors: up to ¥800 million per year (of this amount, remuneration for
Outside Directors: up to ¥70 million per year); Audit & Supervisory Board
Members: up to ¥100 million per year. In addition, at the time of the above resolution, the Board of Directors consisted of 11 Directors (including two Outside
Directors), while the Audit & Supervisory Board consisted of five Members(including three Outside Audit & Supervisory Board Members). Subsequently,
the limit on the total amount of stock-based remuneration to be granted to
Directors (excluding Outside Directors) separately from the above-mentioned
remuneration, has been set based on a resolution by the 130th Ordinary General
Meeting of Shareholders held on March 24, 2022, to furnish incentives to therecipients in the form of the Company’s shares with transfer restrictions. Basedon this resolution, the limits on such remuneration have been set at ¥40 million
and 20,000 shares, respectively, in terms of the value and number of shares thatcan be granted annually. At the time of said resolution, the Board of Directors
consisted of seven Directors (excluding Outside Directors).

➁A ctivities undertaken by the Nomination and Remuneration

Committee and the Board of Directors in the process of determining
remuneration to be paid for the most recent fiscal year
The Nomination and Remuneration Committee met on July 28, 2022,
November 30, 2022 and January 30, 2023 with the attendance of all members, including the committee chair to discuss the Company’s remuneration
system, the level of remuneration paid under said system as well as theamount of basic salaries and bonuses and the appropriateness of these matters. Based on recommendations formulated by the committee, the Board of
Directors met on February 28, 2023 to discuss the amounts to be awarded as
bonuses, thereby determining the full details of remuneration.
Integrated Report 2023

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ESG Management Undertaken by the Sumitomo Rubber Group

Corporate Governance

Basic Policy on the Internal Control System
The Company established the Internal Control System, a system that
performs the necessary function of ensuring the propriety of businessundertaken by the Sumitomo Rubber Group (Sumitomo Rubber
Industries and its subsidiaries as defined by the Article 2, Paragraph 3of the Companies Act).
As it aims to continue to enhance its Internal Control System, theCompany has made it a rule to submit any proposal for the revision of
the following matters to the Board of Directors.
(1) A system to preserve and manage information concerning
the execution of business by the directors
Information concerning the execution of business by directors, such as
documents on proposals or decisions, shall be recorded and managed
appropriately in accordance with the Regulations Concerning
Preservation of Documents. The directors and Audit & Supervisory
Board Members shall be permitted to view these records at all times.
(2) R ules concerning the risk management of loss and other systems
Management risks involving product quality, law, the environment, credit,
accidents, disasters, etc., that may materially and adversely affect ourbusiness activities, shall be addressed by the relevant division and/or
subsidiary in advance, via the analysis of those risks and the planning ofcountermeasures in accordance with the Regulations Concerning Risk
Control, which define risk management methods for the entire
Sumitomo Rubber Group. These risks shall be then referred to theManagement Meeting and other bodies for discussion. If necessary,advice and guidance may be sought from professionals, including legal
counsel, in analyzing and planning countermeasures for such risks.
Any risk affecting the Group as a whole shall be addressed by individual departments under the administrative divisions overseeing theirbusiness operations in coordination with other relevant departments
and subsidiaries.
The Risk Management Committee shall oversee Groupwide risk
management activities and, on an as necessary basis, investigate andconfirm whether the risk management system is functioning effectively.
If any material risk affecting the Sumitomo Rubber Group as a wholeemerges or is expected to emerge, the President shall establish a risk control headquarters pursuant to the Regulations Concerning Risk Control.
(3) A system to ensure the efficient execution of business bydirectors
In order to ensure that the directors and managerial personnel may
execute their business properly and efficiently, their duties, authority
and relevant departments to be placed under their supervision, alongwith operations conducted by these departments, shall be specificallydetermined in accordance with the Regulations Concerning the
Allocation of Responsibility and Duties. Each subsidiary shall develop asimilar organizational structure and reporting lines.
Furthermore, an Executive Officer System shall remain in place toensure flexible business execution in response to the changing environment and customer needs.
With respect to the performance and efficiency of each division andsubsidiary, a midterm management plan shall be drawn up, targets shallbe set at budget meetings (and reviewed as necessary) and the statusof achievement regarding those targets shall be reported, reviewed andanalyzed on a monthly basis at the Group’s performance meetings.
For all business operations undertaken by the Sumitomo RubberGroup, we shall actively utilize IT and digital technology to enhance efficiency in the execution of business.
(4) A system to ensure the execution of business by directors
and employees is in compliance with law/regulations and the
Articles of Incorporation
The Company ensures that the corporate philosophy of the Sumitomo
Rubber Group, “Our Philosophy,” is the foundation for all decision-­making and the starting point for all actions. Our corporate Code of
Conduct, as well as various compliance manuals, shall be widely distributed, with top management clarifying its principles. Moreover, it shallbe made thoroughly clear to all Sumitomo Rubber Group members thatcompliance with laws and corporate ethics constitutes the basic foundation of management.

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Integrated Report 2023

(Translation of original full text)

The Corporate Ethics Committee, chaired by the President, shallidentify, analyze and evaluate those compliance risks affecting theGroup as a whole in addition to planning and conducting necessary
training. The Committee shall also work to ascertain the cause of any
violation, propose measures to prevent their recurrence and ensure
thorough familiarization with these matters throughout the Group.
A Corporate Ethics Help Line shall be established to allow employees, et al., to directly report and consult on any actions that are questionable in light of corporate ethics. Information received by the
Corporate Ethics Help Line shall be reported to the Corporate Ethics
Committee, which, in turn, shall assess the situation and adopt thenecessary measures.
The Sumitomo Rubber Group’s Corporate Code of Conduct shallstipulate that any ties with antisocial forces must be severed, with theaim of securing a structure that refuses any requests from such forces.
(5) A system regarding reporting on the execution of business bydirectors at subsidiaries to the Company
Each business division shall periodically receive reports from the directors of each subsidiary under its supervision with regard to their performance targets and the achievement of such targets. Pursuant to theRegulations Concerning Management of Subsidiaries, such division
shall also receive reports from each subsidiary on an as necessary basis
regarding risk management, compliance and other specific matters thatneed to be reported to and discussed at the Company’s Management
Meeting and its Board of Directors so that directors at such subsidiaries
may directly deliberate these matters with Directors at the Company.
(6) A system to ensure adequate financial reporting
The Company shall strive to maintain the Internal Control System inaccordance with the Financial Instruments and Exchange Law andassessment/audit standards and implementation standards prescribedby the Financial Services Agency as well as to enhance systems toensure adequate financial reporting by the Sumitomo Rubber Group.
(7) Establishment of a position to assist the duties of Audit &Supervisory Board Members at the request of such members
An employee shall be selected to work as an Audit & Supervisory Board
Members’ dedicated assistant to support them in the execution of theirduties. This individual shall operate solely based on instructions by
Audit & Supervisory Board Members.
The opinion of the Audit & Supervisory Board shall be sought inadvance prior to carrying out personnel changes and evaluating theperformance of this individual.
(8) Systems to allow directors and employees to report to Audit& Supervisory Board Members and to allow other reports to
be made to such members
Standing Audit & Supervisory Board Members shall participate inManagement Meetings and other important meetings to accurately
assess the status of the Sumitomo Rubber Group.
Important matters involving risk management shall be reported
directly by directors or heads of divisions to Audit & Supervisory Board
Members as necessary.
Matters reported to the Corporate Ethics Help Line (excluding minor
problems) shall be reported to the Audit & Supervisory Board. In accordance with “Regulations on Corporate Ethics Activities,” which apply to
all Group companies, the Company shall establish a structure that prohibits anyone from disadvantageously treating persons who report to
the Corporate Ethics Help Line or Audit & Supervisory Board Memberson the grounds of such reporting and protects the confidentiality of
their identities.
(9) Other systems to ensure effective audit coverage by Audit &Supervisory Board Members
Audit & Supervisory Board Members shall be given opportunities toreceive explanations from the Sumitomo Rubber Group’s directors anddivision heads as necessary.
The Company shall reimburse expenses, including incidental expenses, incurred by Audit & Supervisory Board Members in the course of
the execution of their duties to a reasonable extent.

Risk Management
Management risks involving product quality, law, the environment,
credit, accidents, disasters, etc., that may materially and adversely
affect our business activities, shall be addressed by the relevant division and/or subsidiary in advance, via the analysis of those risks andthe planning of countermeasures in accordance with the Regulations
Concerning Risk Control, which define risk management methods forthe entire Sumitomo Rubber Group. These risks shall be thenreferred to the Management Meeting and other bodies for discussion.
If necessary, advice and guidance may be sought from professionals, including legal counsel, in analyzing and planning countermeasures for such risks.

Any risk affecting the Group as a whole shall be addressed by individual departments under the administrative divisions overseeing
their business operations in coordination with other relevant departments and subsidiaries. The Risk Management Committee shalloversee Groupwide risk management activities and, on an as necessary basis, investigate and confirm whether the risk management
system is functioning effectively.
If any material risk affecting the Sumitomo Rubber Group as awhole emerges or is expected to emerge, the President shall establish a risk control headquarters pursuant to the Regulations
Concerning Risk Control.

Groupwide Risk Management System
Board of Directors
Managing risks related to business strategy

Risk Management Committee
Chairperson: President
Members: Officers in charge of three regional block headquarters, human resources & general affairs, legal affairs, accounting &finance, corporate planning, international business, digital planning, logistics, production planning, production, R&D,
automotive system business, material development, tire technologies, original equipment tire sales, replacement tire
sales, hybrid rubber products business and sports business• Receives reports on the effectiveness of risk management, confirms/considers improvements• Receives reports on incidents and measures to prevent recurrence, etc., submits countermeasures or proposals for countermeasures to the Committee agenda• Matters related to control of Group risk management activities

Departments
Subsidiaries
under jurisdiction

Risk Management Committee Secretariat
Audit, General Affairs, Legal, Accounting & Finance, Procurement, Corporate Management Planning &Administration, International Business Development & Administration, Digital & Information
Technology and Production Planning departments• Investigations/checks on the state of risk management in departments and Group companies• Reports to Committee on problems related to deficiencies and effectiveness of risk management system• Storage/management of Risk Management Committee records• Formulation and promotion of BCP, support for departments formulating BCPs

Main Initiatives in Fiscal 2022
Based on the Company’s Regulations Concerning Risk Control, the Risk Management
Committee met twice to supervise risk management activities vis-à-vis risks affecting theSumitomo Rubber Group as a whole. The committee also confirmed that the risk management system for the entire Group is functioning effectively.
Furthermore, in order to counter the emergence of geopolitical risks overseas, theCompany established the risk control headquarters led by the President and implemented
other initiatives to minimize said risks’ impact on the Group’s overall business management and operating results. These initiatives included securing the safety of employees
and their families, supporting their livelihoods, assessing the impact on supply chain andimplementing risk countermeasures, with each business division and administrative
departments with specific functions acting in collaboration with said headquarters.
We have also launched discussions regarding the possible impact of conflict in Taiwan

and our response to it.
In addition, in the face of the global COVID-19 pandemic, we have continually striven tominimize the pandemic’s overall impact on the Group’s facility operations and its businessresults, with the risk control headquarters led by the President playing a central role.
Specifically, the Company placed the utmost priority on ensuring the safety of employees
and their families while introducing countermeasures to prevent COVID-19 infections andupdating procedures for response to the emergence of cases of infection. Moreover, theCompany strove to collect information from supply chains to assess their status andhelped them introduce robust measures to prevent infection. These endeavors were carried out under the leadership of the risk control headquarters via collaboration involving
each business division and administrative departments with specific functions.

Business Continuity Plans (BCPs)
Having directly experienced fallout from the Great Hanshin-Awaji Earthquake and theGreat East Japan Earthquake, the Sumitomo Rubber Group has developed BCPs by
drawing on takeaways from these two major earthquakes.
Specifically, we completed the formulation of well-thought-out BCPs encompassing our
Head Office, overseas and Japan-based factories and domestic subsidiaries to protect humanlife as well as to facilitate the early resumption of product deliveries to customers at times of
emergency. We also conduct periodic drills to enhance the effectiveness of these BCPs.
Also, aware of the growing magnitude of the threats of typhoons, heavy rains and othernatural disasters that have been striking the country in recent years, we have upgraded thecontent of BCPs by incorporating lessons learned in the course of disaster responses. For
example, in fiscal 2019 we established standards for exempting employees from attendance at or allowing them to leave early from their workplaces when public transportation
is disrupted by an earthquake or when evacuation is instructed by government agencies
due to heavy rains or flooding. We have also provided employees with a renewed version of
the Basics of What to Do When a Disaster Strikes handbook, which incorporates theabove standards to ensure robust employee understanding of these matters.

Since fiscal 2020, we have striven to counter fallout from the global COVID-19 pandemic.
With the establishment of a risk control headquarters led by the President, we have implemented initiatives to help ensure the safety of Sumitomo Rubber Group employees athome and abroad and their families while promoting countermeasures to prevent infection
with the virus. Drawing on this experience, we incorporated pandemic countermeasures
into the BCPs for our key bases, including domestic bases as well as affiliates at home
and abroad, further upgrading the content of these plans.
In fiscal 2022, we also upgraded the BCPs to be executed in the case of war in light ofgrowing geopolitical risks overseas. This upgrade was informed by fresh discussions
regarding how to secure the safety of expatriates and local employees at times of emergency and how to continue sales, logistics, raw material procurement and other essential
activities, drawing on takeaways from our response to past incidents.
Looking ahead, we will develop a more robust structure capable of keeping our BCPs
up-to-date from the perspectives of ensuring the safety of employees and securing business continuity.

Integrated Report 2023

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ESG Management Undertaken by the Sumitomo Rubber Group

Corporate GovernanceComplianceTransparency with Respect to Taxes

In the Sumitomo Rubber Group, we believe that “legal compliance andthe upholding of corporate ethics form the cornerstone of a company’ssurvival and are crucial to long-term corporate vitality and competitiveness.” To ensure that this belief is embraced by all, we formulated the“Regulations on Corporate Ethics Activities” and the “Sumitomo
Rubber Group Code of Conduct” in February 2003. These principles
are continually enforced, informing our efforts to develop a compliance structure for the entire Group and foster compliance awarenessamong employees. In addition, in 2004 we established a Compliance
Consultation Office offering an in-house point of contact and havecommissioned an external lawyer to serve as an external contact.
Furthermore, we provide all employees with a compliance card fea-

Structure of Compliance Initiatives
Board of Directors
Periodic reporting

Audit &
Supervisory Board

Corporate Ethics
Committee

Notification asnecessaryturing a message designed to instill compliance awareness as well

Cooperation asnecessary

2050,” our Long-Term Sustainability Policy outlining initiatives to be

the target year set at 2025.

undertaken by 2050. Under this policy, we work to align our business operations from the perspective of not only enhancing our eco-Tax Policy

nomic value but also our societal value so that we can constantly

As a global enterprise that is dedicated to observing and respecting

create new value. In these ways, we will help realize a sustainable

all applicable laws and regulations, engaging in fair and transparent

society and remain a company deserving stakeholder trust.

reporting lines within the job hierarchy. We have thus developed a

Sumitomo Rubber Group officers and employees as well as business partners

Directconsultation

structure capable of ensuring the early detection of misconduct.

Meetings

Organization

the Sumitomo Rubber Group (hereinafter, “our Group”) has made it its
basic management policy to continue producing new value that will
make customers’ lifestyles more pleasant and attractive while pursu-

the compliance reporting line, which operates outside the regular

Directconsultation

reporting. In this way, we ensure that every employee knows about

In August 2021, we announced “Driving Our Future Challenge

website. Also, we are promoting global strategies for tax affairs, withand society and earning the trust and respect of our stakeholders,External contact
Dojima Law Office• Feedback on consultation items• No disadvantageous treatment
resulted from consultation• Confidentiality of person seeking
consultation maintained

as the abovementioned office’s contact information to facilitate

In 2022, the Company disclosed its “Tax Policy” on its corporate

business activities, contributing extensively to local communities

Corporate Ethics Help Line
Compliance
Consultation Office

ESG-Based Business Management Structure

Sustainability
Promotion
Committee

Board of Directors

ing the ongoing enhancement of corporate value for stakeholders.
Sustainability Promotion Committee

One aspect of this basic management policy is our Group’s dedication to fulfilling our tax obligations in an appropriate and ethical

Chair: Directors in charge of ESG

manner so that we may contribute to the development of the local

Members: Officers in charge of each divisionand regional communities in which we operate.

Secretariat: Sustainability Management Promotion HQ
Human Resources & General Affairs Dept.

• Our Management of Tax Risks

execution of business of our Group. Management risks that may

course of their business activities from the aspect of legal and regulatory

adversely and materially affect the business activities of the Group

compliance.

shall be addressed by the relevant division and/or subsidiary incountermeasures in accordance with corporate regulations concern-

Group are expected to act in accordance with this Code of Conduct.

ing risk control, which stipulate risk management rules for the entire
The Code of Conduct is translated into the eight languages listed below.

Group. Furthermore, we have also established and implemented a

All versions can be accessed on the Company’s corporate website.

system of checks to ensure that our business activities are fair andhonest while striving to minimize our Group’s tax risks. If necessary,• Japanese• Thai• Turkish• English• Indonesian• Spanish• Chinese• Vietnamese

A total of 58 individuals across the Groupadvice and guidance may be sought from professionals, including
Compliance card
Provided to all employees

our tax advisors, in analyzing and planning countermeasures against

To promote ESG management, we employ a two-layer structuresuch risks.

consisting of the Sustainability Promotion Committee and meetings• Our Approach to Tax Planning
Main Initiatives in Fiscal 2022

Our Group engages in tax planning activities that appropriatelyreflect economic entities and are in full accordance with OECD

While the Board of Directors met 14 times to exercise supervision over compliance matters, the Audit & Supervisory Board met 12 times to conduct audits to

Guidelines as well as the relevant laws and regulations of the various

confirm that the execution of business by Directors was in conformity with laws, regulations and the Company’s Articles of Incorporation. Also, the Corporate

countries in which we operate. Furthermore, our Group has pledged

Ethics Committee, tasked with deliberating compliance issues for the Sumitomo Rubber Group, met four times to implement countermeasures against compli-that we will neither exploit tax havens as a means of avoiding taxa-

ance and risk management issues affecting the Group as a whole. This committee also strove to ensure that each case reported via the Corporate Ethics Help
Line was properly handled.
In addition, in fiscal 2022 we updated our Code of Conduct for the first time in five years to prevent the recurrence of the improprieties that emerged in 2021.
The updated version now includes case studies featuring a variety of business settings and expanded explanations of quality management. Also included in thetion nor engage in business dealings whose primary aim is the
reduction of our tax burden.

of personnel in charge of promoting sustainability.
The Sustainability Promotion Committee meets twice a year tostrengthen governance over ESG management by conducting amanagement review. With the Director in charge of sustainability
serving as the committee chair, officers in charge of each division are
appointed as committee members.
In 2022, the committee was convened in February and July.
Through these meetings, the committee examined reports on thestatus of ESG management being promoted across the Company,• Our Relationship with Tax Authorities

initiatives under our Long-Term Sustainability Policy (e.g., carbon

Our Group considers daily communication with every stakeholder toneutrality, diversity & inclusion, governance) and sustainability-related

be an essential aspect of staying on top of the responsibilities of ouractivities being undertaken by 10 divisions in Japan and overseas.

Code of Conduct is translated into the local languages of regions in which the Company operates bases and is disseminated by heads of each base in order toGroup. Our Group hopes to maintain trust-based relationships with

Upon the close of each meeting, conclusions reached by the com-secure the understanding of employees around the globe. Every October, which is designated as a Corporate Ethics Awareness Month, we hold annual lecture

Tax authorities through the appropriate disclosure of all pertinent

mittee were reported to the Board of Directors, while all employees

sessions focused on corporate ethics. In fiscal 2022, these sessions addressed topics related to the revised Act on Childcare Leave, Caregiver Leave and Other

information in a timely manner and fully intends to enhance thewere updated about the topics related to ESG.

Measures for the Welfare of Workers Caring for Children or Other Family Members, in particular encouraging male employees to play a greater role in child rearing.

transparency of our operations. We will also file tax returns and pay

In addition to the activities described above, each business division continued working to raise corporate ethics awareness among employees by, for example,

Meetings of personnel in charge of promoting sustainability weretaxes on time in accordance with all relevant laws and regulations

launched in 2022 and have since been convened three times towhile working with Tax authorities to cooperate with official requests

ensure the robust sharing of sustainability-related information amongby promptly providing all requested information.

all Group members and to promote ESG management.

Code of Conduct booklet is a page informing employees about the Compliance Consultation Office and how to contact it. To increase the page’s visibility, its
placement in the booklet was changed and we began newly incorporating articles selected with the principle of dealing with the bad news first in mind.
Moreover, a QR code printed on the Code of Conduct booklet enables employees to access the Code of Conduct via their smartphones. As stated above, thestriving to help improve their understanding of “Our Philosophy,” our corporate philosophy, and the “Sumitomo Business Philosophy.”87

Affiliates

advance through the analysis of said risks and the planning ofMoreover, our business partners in transactional relationships with the

Personnel in charge of promoting sustainability

Corporate Planningand Administration

basic stance they should take and the mindset they should adopt in the

Meetings ofpersonnel incharge ofpromotingsustainability

Industrial Products

and fully implemented the necessary framework to ensure the proper

Sports BusinessBy a resolution of our Board of Directors, our Group has establishedemployees with specific, easy-to-understand guidelines regarding theTire Business

Our Code of Conduct provides all Sumitomo Rubber Group officers andIntegrated Report 2023

Integrated Report 2023

88

ESG Management Undertaken by the Sumitomo Rubber Group

Corporate GovernanceInitiatives for Society

Stakeholder Engagement

Promoting Mutual Prosperity with Regional Communities through Social Contribution Activities

Sumitomo Rubber Group Stakeholders
Customers

Local communities

Shareholders
and investors

Sumitomo
RubberGroup

Business partners

Aware of the social responsibilities incumbent on the Sumitomo RubberGroup, we always work to assess what is expected of us and reflect
such expectations in our business activities. To this end, regular communication with our stakeholders is indispensable.
As we globalize our business, we welcome a diverse range of new
stakeholders around the world. We strive to demonstrate integrity in all ourbusiness activities so that we can earn the trust of all our stakeholders.

Employees

Sumitomo Rubber Industries CSR FundThe Sumitomo Rubber Industries CSR Fund was established to provide
financial support to NPOs engaged in activities in regions where wehave bases in order to solve global environmental and social problems.
Following its establishment in 2009, the Fund began providing

donations in 2010 to eight organizations, including environmental
advocates, traffic safety groups, disaster aid groups and others striving to resolve region-specific social issues. In fiscal 2022, a total of¥14.70 million was donated to 56 organizations.

Number of Recipients of Donations Offered by “Sumitomo
Rubber Industries CSR Fund” and Total Donation Amount

Ratio of Enrollment in the CSR Fund (December 2022)

Total donation amount

Number of recipients (groups)(Thousands of yen)

(Recipients)

18,00054

Measures to Promote Constructive Dialogue with Shareholders
The Company will conduct dialogue with shareholders with the aim ofenhancing its corporate value based on the following policies:➀ The Company strives to realize dialogue in line with the interests of various stakeholders, with the officer in charge of accounting and financeand the officer in charge of general affairs playing central roles in investor relations (IR) and shareholder relations (SR), respectively.
➁ T he Company’s relevant departments engage in organic, cross-­
sectional coordination in order to support constructive dialogue withshareholders, institutional investors and other stakeholders. As part of
IR activities, we disclose various data via the IR section of theCompany’s corporate website while, in 2022, establishing the IR Office.
The Company also hosts IR briefings for analysts and institutional investors. In terms of SR activities, the Company issues various publications
for shareholders and prepares integrated reports to provide updates on

Shareholders and investors

the status of its business operations, ESG management and other matters while maintaining direct engagement with institutional investors. In
these ways, the Company strives to improve its corporate value.
➂ The Company considers the opinions gleaned through dialogue withshareholders and investors valuable to the further enhancement of its
corporate value. Accordingly, these opinions are periodically reported
to the senior management and the Board of Directors. This enables theBoard to deliberate on the necessity of acting on said opinions andstudy measures for doing so.
➃ The Company carries out surveys of the actual owners of its shares todetermine the details of its shareholder composition. Results of thesesurveys enable us to take a more proactive approach to IR and SR
activities and promote effective shareholder communications.

15,00047
39

12,000

9,000

6,000

3,000

27

29

32

30

32

8,000
8,050

6,940 6,960

35

57

14,10013,14056

60

14,700 50

11,090

8,930

40

30

Number of employees(non-consolidated)

8,037

7,850

17 5,500
3,510

0Number ofindividuals
enrolled

42%
3,404

20

10

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

(FY)

Results of 2022 Activities
Targets
Institutional investors and analysts
IR

SR

Methods

Note: Financial results briefings, including smallgroup meetings, were held on 126 occasions. These included 46 meetings held
for overseas investors and analysts.

• Details of quarterly operating results and dividends• Future outlook on operating results• Content of and progress under the Midterm Plan, etc.

12 institutional investors

Individual online interviews• Initiatives to achieve our reduction targets for CO2 emissions• Initiatives to achieve KPIs regarding the ratio of female managers• Independence of outside officers, etc.

(10 domestic institutions and two foreign institutions)Sound Labor-Management
Relations

Employees

The Company and the Sumitomo Rubber Trade Union (which had 5,799 general members as of December 31, 2022, excluding officers or managers)
maintain good relations based on the sharing of information by management
and an approach of prior consultation. We believe that the growth of theCompany and the pursuit of employee happiness are objectives shared bylabor and management, and we have a history of productive discussions atthe various labor-management committees. For example, we engage in activities in which labor and management are united in the pursuit of their objectives, such as when we organized a Labor-Management Wages Study Group
comprising personnel from the union leadership and the Company’s Human
Resources Department, with the aim of reviewing the human resources system
and working conditions and have maintained it ever since.
In fiscal 2022, this study group was responsible for such initiatives as the
upward revision of premiums to be paid to employees who have been transferred away from their primary areas of residence and are living unaccompanied
by family along with the relaxation of conditions applied to employees eligible toreceive such premiums as well as the relaxation of conditions for the granting ofspecial leave due to the accumulation of expired leave in order to help meet
employee’s daily living needs. The study group also launched discussions
regarding what the Company’s human resources system should look like.
In fiscal 2023 , we will continue our efforts to promote workstyle reforms andmove ahead with various activities, with labor and management continuing towork in cooperation.

89

Examples of themes• Results briefings• Small-group meetings• Individual interviews(held mainly online)

Integrated Report 2023

Building Relationships
with Customers

Customers

To prevent the occurrence of traffic accidents attributable to poor tirecondition, for the 15 years since 2008 we have sponsored DUNLOPNationwide Tire Safety Inspections. As of the end of 2022, the total number of cars inspected amounted to 113,000.
In 2023, this inspection campaign, held throughout Japan at Tire Selectstores, which are Dunlop tire outlets, started on April 8, designated as the“Tire Day” by the Japan Automobile Tyre Manufacturers Association, and lasted for 16 days. Through this annual campaign, we conduct various tire
inspections, including measuring tire pressure and checking remaining tread
depth as well as for any other damage to the tire. In addition to providing customers with professional inspections, we have utilized the aforementioned
campaign period to raise driver awareness of the importance of tire inspections by distributing leaflets at storefronts.
Furthermore, we endeavored to facilitate the widespread recognition of the need for periodic tire
inspections and maintenance via the official X (previously Twitter) account of the Company’s directly managed stores, websites run by each store and othersocial networking service (SNS) outlets. Looking
ahead, we will continue to provide tire inspections sothat our customers can enjoy safe and secure driving.

The Shirakawa Factory Receives the 11th Green Society Contributor Award —Continuously Engaging inGreenery Activities and Contributing to Regional Societies for about 50 Years since Its Launch
The Shirakawa Factory was chosen by the Organization forLandscape and Urban Green Infrastructure to receive the 11th GreenSociety Contributor Award in recognition of its engagement in excellent greenery management and other endeavors. Under a program
sponsored by this organization, a Green Society Contributor Award isgiven to corporations who are outstanding in terms of their contributions to regional societies and the improvement of the environments
surrounding their operations through the development of greenery.
Over the 50 years since its launch, the factory has engaged in greenery promotion activities via the development of a “GENKI Forest”
under slogans of “harmony with nature,” “no environmental pollution”
GENKI Forest
Tree planting activity undertaken on Mount
Akazura (sponsored by Fukushima Prefecture)and “deep roots in communities.” Moreover, the factory has maintained biotopes within its premises to preserve biodiversity. Also, thefactory allows employees to participate in volunteer activities while making donations and otherwise contributing to the well-being of regionalsocieties and striving for carbon neutrality. The giving of this award suggests that the factory’s ongoing engagement in the initiatives describedabove is highly appreciated.

Donations / Co-Sponsorship
As we aim to give back to society, we proactively make donations to and co-sponsor local events inregions in which we have bases. In Japan, we are a co-sponsor of the “STOP! DRUNK DRIVINGPROJECT” and have maintained our status as a special co-sponsor for the DUNLOP KOBE OPEN, awheelchair tennis tournament, since 1994. Overseas, we donated uniforms to sports facilities forpeople with disabilities in Turkey while, in the Philippines, making donations to homes for elderly people.
In China, we donated funds to support beautification projects. As exemplified above, we strive tocontribute to society through donations and co-sponsorship in regions across the globe.

Integrated Report 2023

90