Governance*The Corporate Governance Report is available on our website.

https://company.jr-central.co.jp/company/esg/governance/_pdf/governance.pdf

Based on its policy to ensure the most appropriate system for executing theduties of the Company, JR Central has appointed five outside directors andthree outside Audit and Supervisory Board members. The level of independenceof each outside director and outside Audit and Supervisory Board member isjudged in accordance with the criteria for independence established by the
Tokyo Stock Exchange, Inc. in order to ensure that the opinions provided areformed from an independent standpoint and are based on the high degree ofexperience and insight accumulated outside the Company.
From their independent standpoints and based on the high degree ofexperience and insight accumulated outside the Company, JR Central receives
opinions from outside directors at the meetings of the Board of Directors
and the Personnel Remuneration Committee, and from outside Audit and●JR Central’s Corporate Governance System

Main concurrent posts held by outside directors andoutside Audit and Supervisory Board members[As of March 31, 2023]

General Meeting of Shareholders
Selects

Name

Selects
AuditsSelects

Audit and Supervisory Board (Members)

Personnel Remuneration
Committee
Cooperates

Reviews
AuditsCooperates

Internal Audit (Audit Department, Transportation Safety Department)

Controls, Instructs

Audits

Subsidiaries, etc.

Reports

Taku
OshimaNGK Insulators, Ltd. Chairman and
Representative
Toho Gas Co., Ltd. Director
Aichi Employers’ Outside Director
Association
ChairmanTsuyoshi
NaganoKiba

ChairmanSeiko Group Corporation Outside Director
FUJIFILM Holdings Outside Director
Corporation

Taku
OshimaHe attended all 13 meetings of the Board of Directors held in FY2022. At the Board of Directors’
meetings, he has stated his opinions based on his experience in corporate management andother expertise. He also attended the meetings of the Personnel Remuneration Committee andexpressed opinions based on his extensive experience and deep insight. In addition, throughvarious briefing opportunities prior to Board of Directors’meetings, he has provided valuableadvice on economic and social developments and overall business management. Through theabove-mentioned activities, he has contributed to the maintenance and further development of
the sound management of the Company from the standpoint of an independent outside director.

Tsuyoshi
NaganoHe attended all 11 meetings of the Board of Directors after his appointment on June 23, 2022. At
the Board of Directors’meetings, he has stated his opinions based on his experience in corporate
management and other expertise. He also attended the meetings of the Personnel Remuneration
Committee and expressed opinions based on his extensive experience and deep insight. In addition,
through various briefing opportunities prior to Board of Directors’meetings, he has provided
valuable advice on economic and social developments and overall business management. Throughthe above-mentioned activities, he has contributed to the maintenance and further development of
the sound management of the Company from the standpoint of an independent outside director.

Auditor

Kiba

Hyojito Co.,Ltd.

OutsideDirector

Principal activity

Haruo
KasamaHirokoKunihiro
Nasu[FY2022]

He attended all 13 meetings of the Board of Directors held in FY2022. At the Board of Directors’
meetings, he has stated his opinions based on his experience as a public prosecutor and lawyer
and other expertise. He also attended the meetings of the Personnel Remuneration Committee
and expressed opinions based on his extensive experience and deep insight. In addition, throughvarious briefing opportunities prior to Board of Directors’meetings, he has provided valuableadvice on economic and social developments and overall business management. Through theabove-mentioned activities, he has contributed to the maintenance and further development of
the sound management of the Company from the standpoint of an independent outside director.

External

Audit and Supervisory Board Member

CENTRAL JAPAN RAILWAY COMPANY Integrated Report 2023

Although we introduced the corporate officer system in May 2003,
we adopted an executive system in June 2012 that is aimed at further
accelerating decision-making and enhancing discussions by the Board of
Directors and at further clarifying the roles of directors and corporate officers,
who are responsible for business execution, in order to appropriately respondto changes in the business environment surrounding the Company in a timely
manner. Audit and Supervisory Board members not only attend important
meetings, such as the Board of Directors’meetings and the Management
Meeting, but also perform rigorous audits based on plans formulated by
the Audit and Supervisory Board through audits of head office departments,
railway operation divisions, branch offices, field offices, subsidiaries, etc., aswell as examination of the state of business execution by directors, corporate
officers and employees through exchanges of opinions with them. To ensure
effective audits by Audit and Supervisory Board members, JR Central also
provides an assistant system whereby its employees are assigned as full-time
staff to support the work of the Audit and Supervisory Board members.
Internal audits are performed by the Audit Department on the overall workof JR Central, its major subsidiaries, and other related companies from theperspective of compliance, efficiency and effectiveness of business operation.
The audits are performed by such methods as checking business materials,
contracts and other documents, observing operations, and interviewing
related persons, and the results are reported to management. In addition, inorder to prevent operational and labor accidents, safety audits are performedby the Transportation Safety Department, the results of which are also
reported to management.
JR Central receives appropriate accounting audits that are based on
generally accepted audit standards by Deloitte Touche Tohmatsu LLC, which
has been appointed as its accounting auditor.
Audit and Supervisory Board members, internal audit departments, andthe accounting auditor cooperate with each other by exchanging information
periodically or as needed, and they receive necessary information fromeach department involved in internal control to confirm the status of
implementation of each item stipulated in the Fundamental Corporate
Governance Policies.

Audit and Supervisory Board Member

JR Central’s Board of Directors is composed of 13 directors (including fiveoutside directors, one of whom is female) and is chaired by the Company’s
Chairperson and Representative Director. JR Central also adopts an auditor
system, and its Audit and Supervisory Board consists of four members (threeof whom are outside auditors) (The figures are as of June 23, 2023).
The Board of Directors meets at least once a month, in principle, to makelegal and appropriate decisions upon fully discussing matters stipulated bylaw as well as important management matters. It also supervises the work of
directors. A Management Meeting is held for in-depth discussion of importantmanagement issues. Chaired the President and Representative Director,
the Management Meeting is attended by all full-time directors, Audit andSupervisory Board members, and some corporate officers. By deliberating on
a wider rage of management matters ahead of Board of Directors’meetings,
discussions at the subsequent Board of Directors’meetings are enhanced.
We request members of the Audit and Supervisory Board to attend
meetings of the Board of Directors, the Management Meeting and otherimportant meetings as we endeavor to ensure the legality of management
measures during the deliberation process. In addition to these initiatives, theeffectiveness of the entire Board of Directors is analyzed and evaluated basedon the self-assessment performed by each director and Audit and Supervisory
Board member. Based on these results, we discuss further enhancement of
the functions of the Board of Directors. Furthermore, JR Central strives toensure the appropriate execution of business by managing and providing
necessary management and guidance to subsidiaries, etc.
From the perspective of ensuring the enhancement of objectivity andtransparency in the determination of personnel changes, remuneration, etc.
of officers, JR Central established the Personnel Remuneration Committee(chaired by an outside director) consisting of a total of five members: four
independent outside directors and the President and Representative Director.
The Committee deliberates with the attendance of all of its members prior toresolutions at the Board of Directors meetings regarding personnel changes,
remuneration, etc. Resolutions made by the Board of Directors regarding thedetermination of personnel changes, remuneration, etc. are based on thecontent of deliberation by the Committee.

Tokio Marine Holdings, Inc.

INPEX CORPORATION

Name

External
AuditorToppan Printing
Co., Ltd.

Hiroko73

Corporate Data

Supervisory Board members at meetings of the Board of Directors and the
Audit and Supervisory Board. In addition, through the various opportunities tocomment on our operations prior to Board of Directors’meetings, they provide
us with valuable advice on economic and social developments and overallbusiness management.
The advice given by outside directors and outside Audit and Supervisory Board
members is utilized to perform audits by Audit and Supervisory Board members,internal audits, safety audits, and accounting audits, as well as to implement each
item stipulated in the Fundamental Corporate Governance Policies.
Each outside director and outside Audit and Supervisory Board member isregistered with the Tokyo Stock Exchange and Nagoya Stock Exchange as anindependent officer with no risk of conflict of interest with general shareholders.

Activity status of outside directors
and outside Audit and Supervisory Board members

Title

Haruo
KasamaAuditsOverview of corporate governance system

Name of othercompany, etc.

●

Director

AuditsDirector

Management Meeting
Head oﬃce, branch oﬃces, ﬁeld oﬃces

Cooperates

Accounting Auditor

President and Representative Director

Creating "Social Value"
Governance

JR Central strives to enhance its corporate governance to ensure the soundness,
efficiency and transparency of its business management, thereby ensuring longterm development of the company and continuous enhancement of corporate
value. We have announced our stance on, and the initiatives put in place inrelation to, the Corporate Governance Code in the Corporate Governance Report.*

Board of Directors

Generating "Economic Value"

Outside Directors and Outside Audit and Supervisory Board Members

Creating“Social Value” ーCorporate Governanceー

Corporate
Governance

Highlight

Business Strategy

He attended all 11 meetings of the Board of Directors after his appointment on June 23, 2022. At the Board of
Directors’meetings, she has stated opinions based on her experience as a freelance news anchor, teaching staff
at a university, a member of the Council of Transport Policy and other expertise. She also attended the meetingsof the Personnel Remuneration Committee and expressed opinions based on her extensive experience andbroad-ranged insight. In addition, through various briefing opportunities prior to Board of Directors’meetings,
she has provided valuable advice on economic and social developments and overall business management.
Through the above-mentioned activities, he has contributed to the maintenance and further development of thesound management of the Company from the standpoint of an independent outside director.

HajimeIshizuHe attended all 13 meetings of the Board of Directors and all 14 meetings of the Audit and Supervisory
Board held in FY2022. At the Board of Directors’and the Audit and Supervisory Board meetings, he
has expressed opinions based on his experience in transportation administration and other expertise.

Fumio
Yamashita

He attended all 13 meetings of the Board of Directors and all 14 meetings of the Audit and Supervisory
Board held in FY2022. At the Board of Directors’and the Audit and Supervisory Board meetings, he
has expressed opinions based on his experience in police administration and other expertise.

ShigeoKifujiHe attended all 13 meetings of the Board of Directors and all 14 meetings of the Audit and Supervisory
Board held in FY2022. At the Board of Directors’and the Audit and Supervisory Board meetings, he hasstated his opinions based on his experience as a public prosecutor and lawyer and other expertise.

Kunihiro
Nasu

He attended all 13 meetings of the Board of Directors and all 14 meetings of the Audit andSupervisory Board held in FY2022. At the Board of Directors’and the Audit and Supervisory Board
meetings, he has stated his opinions based on his experience as a lawyer and other expertise.

Ensuring the effectiveness of the Board of Directors and the Audit and Supervisory Board
The appointment of directors is conferred to General Shareholders Meetings
following a resolution of the Board of Directors concerning the appropriate
election of candidates deemed to be the most fitting for the role as selectedbased upon a general consideration of their abilities, knowledge, work
history, etc., irrespective of age, sex or nationality. The number of directors
elected, the division of their’roles are determined based on a comprehensive
consideration of the progress of ongoing projects in accordance with a policyof establishing the most appropriate system for the execution of the Company’s operations. From the perspective of ensuring the enhancement of objectivity
and transparency in the determination of personnel changes, etc. of officers,
JR Central established the Personnel Remuneration Committee (chaired by anoutside director) consisting of a total of five members: four independent outside
directors and the President and Representative Director. The Committee
deliberates with the attendance of all of its members prior to resolutions at
the Board of Directors meetings regarding personnel changes, etc. Resolutions
made by the Board of Directors regarding the determination of personnel
changes, etc. are based on the content of deliberation by the Committee.
The important concurrent positions held by directors and Audit andSupervisory Board members are as stated in the business reports and General
Shareholders Meeting Reference Materials. None of the concurrently held
positions hinder the directors’or Audit and Supervisory Board members’ability tofulfill the roles and responsibilities of such positions for the Company.
The Board of Directors meets at least once a month in principle, to makelegal and appropriate decisions upon fully deliberating matters stipulated bylaw as well as important management matters. It also appropriately supervises
the work of directors by holding discussions based on reports on businessexecution from the directors in charge of each operation. JR Central receives
valuable broad-view advice on management from outside directors, which istaken into consideration in regulating the management of the Company.
In addition, the Company analyzes and evaluates the effectiveness of theentire Board of Directors based on self-evaluation by each director and Audit andSupervisory Board member, and based on the results, the Company continues tomake efforts to further enhance the functions of the Board of Directors, such as
periodically reporting to the Board of Directors important matters in executing
the business of the Company, including the implementation state of internal
audits and the occurrence of train and labor accidents. Additionally, in order tofurther improve the effectiveness of the Board of Directors, the Company holds
conferences for opinion exchanges between outside directors and membersof the management concerning general issues of business management, andmeetings of outside directors exclusively consisting of outside directors.
Based on the above, the Board of Directors finds that the effectiveness ofthe entire Board of Directors is sufficiently ensured.
CENTRAL JAPAN RAILWAY COMPANY Integrated Report 2023

74

Business Strategy

Highlight

Generating "Economic Value"

Creating "Social Value"

Corporate Data

GovernanceCorporate Governance

Remuneration for officers
Directors’remuneration consists of fixed basic compensation paid on amonthly basis and a bonus paid in June each year. The basic compensation
amount is determined based on a comprehensive assessment of adirector’s position, length of service and other factors, while the bonus
amount is determined by mainly taking into consideration the businessperformance, including ordinary income, as well as shareholder return andother factors. The specific bonus amount for each individual is determinedin consideration of the degree of responsibility assigned to the director’s position, performance in ensuring safety, and performance of assigned
duties. The ratio of the basic compensation to bonus we use as a guide is
3 to 1. The operating performance for FY2022 and other fiscal years are as
described in the financial data on pages 31 to 34.
Outside directors’remuneration consists only of the fixed basic
compensation paid on a monthly basis.
The Board of Directors makes resolutions regarding the policy for
determining remuneration, etc. for these directors, and the determinationof specific amounts of remuneration, etc. for each individual is left to
the President and Representative Director who has knowledge of theperformance of duties assigned to each director. At the 25th Ordinary
General Meeting of Shareholders held on June 22, 2012, it was resolvedthat the total amount of remuneration for directors would be no more than
1.2 billion yen per year (of which the amount for outside directors would
be no more than 50 million yen per year). At the 35th Ordinary General
Meeting of Shareholders held on June 23, 2022, it was resolved that the
total amount of remuneration for outside directors would be no more than
100 million yen per year, and the President and Representative Director
decides the actual amounts within the range of this limit. The numberof directors at the conclusion of the 25th Ordinary General Meeting of
Shareholders held on June 22, 2012 was 14 (including three outside
directors). The number of directors at the conclusion of the 35th Ordinary
General Meeting of Shareholders held on June 23, 2022 was 12 (including
four outside directors).
The remuneration for Audit and Supervisory Board members consists
only of basic compensation, which is paid in a fixed amount every month,and the appropriate amount is determined through consultation among

M ain ac t ivit ies (FY 2 0 2 2 )the Audit and Supervisory Board members. At the 20th Ordinary General
Meeting of Shareholders held on June 22, 2007, it was resolved that the
total amount of remuneration for Audit and Supervisory Board members
would be not more than 250 million yen per year, and the actual amount isdecided within the range of this limit. The number of Audit and Supervisory
Board members at the conclusion of the relevant Ordinary General Meetingof Shareholders was five.
From the perspective of ensuring the enhancement of objectivity andtransparency in the determination of remuneration, etc. for officers, JR
Central established the Personnel Remuneration Committee (chaired by anoutside director) consisting of a total of five members: four independent
outside directors and the president and representative director. The
Committee deliberates with the attendance of all of its members prior toresolutions at the Board of Directors’meetings regarding remuneration,etc. for officers. Resolutions regarding the policy for determining
remuneration, etc. at the Board of Directors’meetings are made based on
the deliberations of the Committee. Delegated by the Board of Directors,
the President and Representative Director decides the specific amountsof directors’remuneration. Since the amount of remuneration for eachdirector is determined through the above-mentioned procedures, the Boardof Directors deems that the amounts conform with the decision policy.
Total amount of remuneration by officer category, total amount of
remuneration by type, and number of eligible officers [FY2022]
Category

Director

Basic compensation
Bonus
NumberNumberTotal
Total
of eligible amount of eligible amount(million yen)(million yen)officers
officers

Totalamount(million yen)

13

424

8

152

576

Audit and Supervisory
Board member

1

47

-

-

47

Outside officer

9

153

-

-

153

(excluding outside director)(excluding outside Audit andSupervisory Board member)

Note: Directors (excluding outside directors) and the Audit and Supervisory Board members(excluding part-time Audit and Supervisory Board members) have voluntarily returned 10% of theirbasic compensation from April 2022 to September 2022. The total amount of basic compensation
indicated in the table above includes the amount of compensation voluntarily returned.

Policy concerning cross-shareholdings
Our strategy for cross-shareholdings is based on a general considerationof the necessity thereof and is grounded in the belief that maintaining
and bolstering long-term and stable business relationships throughholding other companies’stock facilitate our operations and enhance
our corporate value over the medium to long term. If any of our crossshareholdings are deemed to be unnecessary in light of this policy, we
assess and divest from them.
Furthermore, our Board of Directors examines whether it is beneficial

to retain specific cross-shareholdings after scrutinizing them in light of themedium- to long-term economic rationale and future outlook, the purposeof continuing to own such cross-shareholdings, and other factors.
Moreover, in exercising the voting rights of cross-held shares, we
carefully examine the details of each agenda item and decide whether
to approve or disapprove, taking into consideration the improvement ofour corporate value over the medium to long term, and the sustainablegrowth of our business partners, etc.

Policy for promoting constructive dialogue with shareholders
JR Central positions the General Meeting of Shareholders as an important
opportunity for dialogue with shareholders and strives to improve the qualityof question-and-answer sessions in the meeting as a means of contributing
to sustainable growth and enhancing corporate value over the medium tolong term. Dialogue with shareholders in general is overseen by the General
Manager of the Administration Department, and questions, opinions andrequests from shareholders are responded to, to the extent reasonable, inthe form of an individual meeting or over the telephone, etc.
Of this, dialogue with institutional investors is overseen by the Director
General of the Corporate Planning Division, and the IR manager assigned to
the Business Administration Department of the Corporate Planning Division
is in charge of dialogue response. The Administration Department is mainly
in charge of dialogue (SR) with the voting rights managers of institutional
investors, with whom there is a commitment for constructive dialogue on an
individual basis. The IR team strives to further improve shareholder dialogue
by organically coordinating with related departments. It also strives toimprove dialogue measures by not only holding individual meetings but also75

CENTRAL JAPAN RAILWAY COMPANY Integrated Report 2023

implementing online meetings and facility tours, etc., where necessary, in
addition to holding quarterly financial briefings. Dialogue response is made,to the extent reasonable, together with senior management and directors or
Audit and Supervisory Board members, based on a general consideration of
the requests and interests put forth by the institutional investor.
We also focus on enriching provision of information to shareholders
by posting the information presented at financial briefings on TDnet andour website, and enhancing the content of the convocation notice of theGeneral Meetings of Shareholders. Furthermore, we work to ensure thatsufficient information concerning decisions made on important measures andimportant capital investments reaches as large a number of stakeholders
as possible, using the mass media to deliver detailed information at regularpress conferences held by the President and by presenting such information
to the press.
The content of dialogue with shareholders is reported to senior
management and, if necessary, feedback is provided to the Board of
Directors.

Based on the above-mentioned policy, we engaged in dialogue
with a wide range of domestic and overseas institutional investors towhom the Company’s management team and IR/SR staff responded,
regardless of the investment method of the institutional investor or
the field of responsibility of the person in charge, based on themes
such as our business content and specific initiatives related to ESG.
In addition to providing management with feedback on the content
of the dialogue, we also conduct surveys of institutional investors
after individual interviews and financial briefings. Upon analyzing the
feedback obtained and the needs of institutional investors, we work

to further enhance corporate governance and future dialogue byenriching disclosure and using the information for reconsidering thecontent of briefing materials.
- Number of dialogues held with institutional investors
and analysts:

205- Number of financial briefings and small meetings withinstitutional investors and analysts:

5- Number of items of feedback from institutional investors:

135

Fundamental Corporate Governance Policies
JR Central passed a resolution on the Fundamental Corporate Governance Policies* at its Board of Directors’meeting.
*Please refer to the following URL for the Fundamental Corporate Governance Policies.

URL

https://company.jr-central.co.jp/company/about/governance.html

Compliance & whistleblowing system
JR Central not only stipulates internal regulations based on laws
and other regulations but also conducts employee education onvarious occasions with the aim of thoroughly complying with laws andregulations when executing business. In addition, we have established
an internal reporting system that allows employees to report any
violations of laws and regulations during business operations,providing contact points both internally and externally. We makethorough efforts to protect whistleblowers by stipulating in the internal
regulations the non-disclosure of the whistleblower’s name, eliminationof any disadvantages caused by reporting, and allowing anonymous
whistleblowing, and to ensure that the system is disseminated througheducational opportunities available to all employees.

Risk management system
From the perspective of preventing railway operation accidents,
labor accidents, and disasters, JR Central has established the“Railway
Safety Promotion Committee,”etc. at the head office, the Shinkansen
and Conventional Lines Operations Divisions, branch offices and ineach area, establishing and promoting an integrated system for safetymeasures from the head office to field organizations.
We also manage a control center to respond to emergencies,
such as an accident or disaster, which plays a key role in information

communication, on call 24 hours a day in the Shinkansen and theConventional Lines Operations Divisions, establishing a fast-response
restoration system in which employees can be gathered at any
time according to the scale or impact of an accident or disaster.
Additionally, in preparation for emergencies, such as large-scaledisasters, we have established the Second General Control Centerfor the Tokaido Shinkansen, which has an alternative function to theGeneral Command Center.

Response to internal control related to financial reporting
Regarding internal control related to financial reporting, we periodicallyinvestigate the system and state of execution, etc. in accordance withthe basic framework established by the Business Accounting Council,

and confirm that internal control is effectively functioning. We also work
to maintain the level of internal control related to financial reporting by
providing feedback from the investigation to our operations.

Capital policy and approach to shareholder return
We will finance our projects by issuing corporate bonds andborrowing, in addition to a long-term loan totaling 3 trillion yen
acquired using the Fiscal Investment and Loan Program (FILP) to
promote the construction of the Chuo Shinkansen. We do not plan to
use treasury stock or pursue a capital increase at this point.
Given the nature of the railway business, which is managed froma long-term perspective, the specific dividend amount is determinedconsidering the business environment and operating results of eachfiscal year based on the Company’s consistent and basic policy
for the continuation of stable dividends. Regarding treasury stock,
we basically believe that shareholder returns through dividends
are appropriate, and at present, we have no plans to repurchaseadditional shares. It should be noted that when we say“from a longterm perspective,”we mean that we will not cut corners in taking
the necessary steps to ensure that our rail services continue tooperate steadily over the long term. For example, we will undertakesuch measures as large-scale renovations as well as derailment anddeviation countermeasures for the Shinkansen, along with working on
the Chuo Shinkansen, a large-scale long-term project. In order to gain
shareholder’s understanding toward the above approach, we believethat a basic policy of continuing stable dividends is necessary. Goingforward, we will maintain this principle of stable dividends during theconstruction of the Chuo Shinkansen.

CENTRAL JAPAN RAILWAY COMPANY Integrated Report 2023

76