Business Strategy

Excerpt of Corporate Governance Report (as of November 8 , 2023)
JR Central has announced its stance on, and the initiatives
it has put in place, in relation to the Corporate Governance
Code (hereafter,“the Code”) found within Corporate
Governance Report*.

Further, The reasons for not implementing the principlesof the code and matters disclosed based on each principleof the code are as follows.

* Corporate Governance Report can be found on the Japan Exchange Group, Inc. website.

Principle 4-1
Roles and
responsibilities of theBoard of Directors (1)Supplementary
principle• Although we do not formulate such medium-term management plans and pursue numericaltargets, we have engaged in the railway business from a long-term perspective. Specifically,
long-term capital investments such as the ongoing construction of the Chuo Shinkansen andlarge-scale renovation works, anti-earthquake measures and rolling stock update plans for
the Tokaido Shinkansen are decided from a long-term perspective and implemented steadily.
Other major initiatives are also being promoted steadily, with plans and results announced
as appropriate. We announce our annual earnings plan, priority measures and capital
investment plan in light of the current management environment and continue to reinforce
our management base steadily to maintain sound management through efficient business
operation, based on the premise of ensuring safe and reliable transportation.

Principle 5-2
Establishing and Disclosing
Business Strategies andBusiness Plans

Disclosu r e based on C or por at e G ov er nanc e C o d e p ri n c i p l e s
General principle

Supplementary
principle

Disclosed contents[1] Policy concerning cross-shareholdings
Our strategy for cross-shareholdings is based on a general consideration of the necessity
thereof and is grounded in the belief that maintaining and bolstering long-term and stablebusiness relationships through holding other companies’stock facilitate our operations andenhance our corporate value over the medium to long term. If any of our cross-shareholdings
are deemed to be unnecessary in light of this policy, we assess and divest from them.

Principle 1-4
Cross-shareholdingsG eneral Employer Action Plans in Accordance with the Act for Measures to Support theDevelopment of the Next Generation
URL

Related party transactions

JR Central believes that it is extremely important for management to employ diverse humanresources and maximize their abilities for sustainable corporate growth. Based on this belief, sex,
nationality, etc. are not considered in recruiting employees.
Upon amendment of the Labor Standards Act, which prohibited late-night work by women in
principle, in 1997, we started recruiting female employees in a large scale. Since then, the Company
has appropriately evaluated aptitudes and abilities of employees without distinction between men andwomen and promoted them to appropriate positions based on the evaluation. As a result, the number
Principle
Supplementaryof female employees as of the end of FY2022 was 2,325 (including 136 in management positions).
principle
Ensuring internal diversity
A female employee was appointed as a Corporate Officer in June 2021 and another female wasincluding the utilization of
appointed as a Director in June 2022 for the first time in the Company’s history. Female employees
2-4 1
are active in many fields, including as Department General Managers and Section Managers.
women
To further promote women’s empowerment, the Women’s Empowerment Project team has beenin place since FY2020 directly under the General Manager of the Personnel Department. To improve
the quality of human resources, it is necessary to create a company where all employees, regardlessof gender, can feel motivated and fully exercise their abilities. Especially as a railway company, toprovide services that satisfy diverse customers, JR Central believes that it is important to allow diverse
employees to share ideas and exercise their abilities to the fullest regardless of their gender.

2-4

77 CENTRAL JAPAN RAILWAY COMPANY Integrated Report 2023

https://company.jr-central.co.jp/others/action_plan/_pdf/nurturing.pdf

At the same time, JR Central has been working to establish an environment in which employees
can feel motivated and fulfilled in their work and play active roles for a long time and to improve
Principle
Supplementary
their working conditions. For example, we have established a childcare leave period thatprinciple
Ensuring internal diversity
exceeds the statutory period, a system to allow flexible work arrangements, a re-employment
including the utilization ofsystem for employees who quit due to childcare, etc., and a system to treat employees as
2-4 1
women
having worked during their period of childcare leave in qualification for taking promotion exams.
Various subsidy programs have also been established. Going forward, in order for all employees,
regardless of gender, to be motivated to work with enthusiasm in active roles over many years,
JR Central will make further efforts to enhance various programs.
Details of our human resource initiatives, including ensuring diversity, are provided in“Initiatives
for Human Resources to Support JR Central’s Sustainable Growth”of the Integrated Report. So
please refer to the URL below.
Integrated Report:https://global.jr-central.co.jp/en/company/ir/annualreport/index.html
JR Central has worked to secure human resources with the necessary skills and aptitudes to support
its future business, regardless of nationality, etc. Therefore, we do not see ourselves in a position to
set specific measures or targets regarding promotion of foreigners to managerial positions.
Since most of the railway skills are improved to higher levels only through accumulation ofexperience, for which long-term employment is useful, we do not conduct large-scale midcareer recruitment. Therefore, we are not in a position at this moment to set measures or targets
regarding promotion of mid-career hires to managerial positions. However, if the need arises forvarious measures due to changes in the business environment surrounding our company, we willconsider the matter depending on the situation at that point.

2-4

Principle 2-6
Roles of Corporate Pension
Funds as Asset Owners

This principle does not apply to the Company since it does not adopt a defined benefit pension plan.
The Company adopts a defined contribution pension plan. Since management of said plan affects theasset formation of employees enrolled in the plan, the Company provides appropriate education on
asset management.
[1]• The Company was established as part of the reform of Japanese National Railways(JNR) in 1987 with the mission of maintaining and developing the Tokaido Shinkansen,
Japan’
s main transportation artery linking Tokyo, Nagoya and Osaka, and the network of
conventional lines in the Tokai area centered on Nagoya and Shizuoka in an integrated
manner into the future. We have also established a management philosophy of“contributing
to the development of Japan’s main transportation artery and social infrastructure”as the
direction to aim for as our business is set to expand in the future such as by operating
three generations of railways: conventional lines, the Tokaido Shinkansen, and the Chuo
Shinkansen. This management philsophy can be found on our website.

[2] Assessmant of cross-shareholdings
Our Board of Directors examines whether it is beneficial to retain specific crossshareholdings after scrutinizing them in light of the medium- to long-term economic rationale
and future outlook, the purpose of continuing to own such cross-shareholdings, and otherfactors.

Transactions by directors that would constitute competition with the Company or transactions
between directors and the Company require the approval of and reporting to the Board of
Directors in accordance with laws and regulations and the Rules of the Board of Directors.
The existence of related party transactions between directors and their close relatives and theCompany is checked with the directors on a regular basis each year.

Corporate Data

URL

[3] Criteria for exercising voting rights
In exercising the voting rights of cross-held shares, we carefully examine the details of eachagenda item and decide whether to approve or disapprove, taking into consideration the
improvement of our corporate value over the medium to long term, and the sustainablegrowth of our business partners, etc.

Principle 1-7

Creating "Social Value"

Positive Action Plan for Promoting Women’s Empowerment
https://company.jr-central.co.jp/others/action_plan/_pdf/woman.pdf

Disclosed contents• In the railway business, which is our core business, the most important issue is to ensure
safe and reliable transportation. Hence, our daily business, employee training, and capital
Supplementary
investment are conducted with the highest priority on ensuring safe and reliable transportation.
Therefore, we do not adopt a method of formulating a medium-term management plan
principle
covering our entire business and seeking to achieve management targets for a cross section of
4-1 2
our business as of the end of the plan.

Generating "Economic Value"

Based on this belief, after repeated discussions, the Women’s Empowerment Project hasestablished the“positive action plan for promoting women’s empowerment”and the“General
Employer Action Plan based on the Act on Advancement of Measures to Support Raising NextGeneration Children.”The positive action plan shows numerical targets for the period fromFY2021 to FY2025, such as raising the hiring rate of women to 25% or more and increasing thenumber of female managers (those in positions of Assistant Manager and Supervisor levels or
higher) to 1.5 times that of the end of FY2020 level, and efforts are being made to achieve them.
For details of the numerical targets and the human resource development initiatives based on
the targets, please see below.

T he r e ason s for not i m pl em ent ing t he pr i n c i p l e s o f th e C o d eGeneral principle

Highlight

URL

https://global.jr-central.co.jp/en/company/about/outline.html• JR Central’s basic policy is to continue to fulfill its aforementioned social mission stably
and sufficiently over the long term by continually working to provide services that will bechosen by customers and improving business efficiency, with ensuring safe and reliabletransportation as its top priority. This basic policy is described in the“Business Strategy”
section of our Integrated Report , which can be found at the following link.

Principle 3-1
Full disclosure

Integrated Reporthttps://global.jr-central.co.jp/en/company/ir/annualreport/

URL• The specific measures to be implemented this fiscal year based on this basic policy aredescribed in“Key Measures and Capital Investment,”which can be found at the following link.
Key Measures and Capital Investment
https://global.jr-central.co.jp/en/company/ir/capital-investment/

URL[2] Our basic approach to corporate governance is described in“I 1. Basic Approach”of this report.
[3] Our policies and procedures in determining the remuneration of directors are describedin the“Disclosure of policy for determining the remuneration amount and its calculation
method”section of“II 1. Organizational Composition and Operation”of this report.
[4] The appointment of directors and Audit and Supervisory Board members is conferredto General Meetings of Shareholders following a resolution of the Board of Directors
concerning the appropriate election of candidates deemed to be the most fitting for therole as selected based upon a general consideration of their abilities, knowledge, work
history, etc., irrespective of age, sex or nationality, based on a policy of ensuring the mostappropriate system for conducting the Company’s business. The appointment and dismissalof representative directors are carried out from the same perspective as the above inaccordance with laws and regulations and the Rules of the Board of Directors.
CENTRAL JAPAN RAILWAY COMPANY Integrated Report 2023

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Business Strategy

From the perspective of ensuring the enhancement of objectivity and transparency in thedetermination of personnel changes, etc., of officers, JR Central established the Personnel
Remuneration Committee consisting of a total of five members: four independent outside
directors and the President and Representative Director. The Committee deliberates with theattendance of all of its members prior to resolutions at 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.
[5] Candidates for director and Audit and Supervisory Board member are elected appropriately
in light of their work history, etc., described in the General Shareholders Meeting
Reference Materials.The Company makes the necessary disclosures concerning changes in
representative directors in accordance with the criteria for timely disclosure established by
the Tokyo Stock Ex change, Inc.
[1] Initiatives on sustainability
Our specific initiatives on sustainability are described in the following sections, subsections and other parts of the Integrated Report as well as in our Securities Report:“Positive
Cycle of‘ESG Management’,”“JR Central’s‘ESG Management’,”“Building safe and resilient
infrastructure,”“Building Relationships with Material Suppliers,”“Improving the Convenienceof Facilities (Use of Barrier-Free Designs, Etc.),”“Cooperation with Local Communities,”“Contribution to Global Environment Preservation.”

Principle 3-1

Principle 4-11
Premises for ensuring
the effectiveness of
the Board of Directors
and the Audit andSupervisory Board

Supplementary [3] Climate change-related risks and opportunities
Regarding climate change, JR Central and the JR Central Group are working to reduce
principle

3-1 3

CO2 emissions further, aiming to achieve net zero emissions in 2050 based on theJapanese government’s 2050 carbon-neutrality policy, as well as reduce emissions
by 46% in FY2030 compared to FY2013 levels. We have also expressed our supportof the TCFD recommendations in May 2021 and will analyze climate change-relatedrisks and opportunities to support stable business operations over the long term while
contributing to the realization of a sustainable society. For further details, see“JR Central’s‘ESG Management’”and“Targets toward carbon neutrality and initiatives for the TCFD’srecommendations.”
Our Integrated Report can be found at the following link.
The Integrated Report can be found at the following
https://global.jr-central.co.jp/en/company/ir/annualreport/

Principle 4-14
Director and Audit andSupervisory training

URL

Our approach to global environment conservation can be found at the following
https://global.jr-central.co.jp/en/company/environment/

URL

Principle 4-1
Roles and responsibilitiesof the Board of Directors(1)

Principle 4-9
Independence standards
and qualification for
Independent Directors

Principle 4-10
Utilization of arbitrary
mechanism

Principle 4-11
Premises for ensuring
the effectiveness of
the Board of Directors
and the Audit andSupervisory Board

The Board of Directors makes decisions on matters stipulated in laws and regulations andthe Articles of Incorporation, matters delegated by the General Meeting of Shareholders, andSupplementary important matters concerning business execution. The specific matters are set forth in the Rulesof the Board of Directors.
principle
Furthermore, the Board of Directors designates the division of duties among directors and4-1 1
the responsibilities of corporate officers. It also defines the matters under the control of thedepartments and the authority of the departments according to the internal rules to clarify thescope of delegation to directors and corporate officers.
The level of independence of each outside director and outside Audit and Supervisory Board
member is judged in accordance with the criteria for independence established by the Tokyo
Stock Exchange in order to ensure that the opinions provided are formed from an independent
standpoint and are based on the high degree of experience and insight accumulated outside theCompany.
From the perspective of ensuring the enhancement of objectivity and transparency in thedetermination of personnel changes, remuneration, etc., of officers, the Company has establishedthe Personnel Remuneration Committee consisting of a total of five members: four independent
outside directors (Haruo Kasama, Taku Oshima, Tsuyoshi Nagano, Hiroko Kiba) and the President
Supplementary
and Representative Director (Shunsuke Niwa). The Committee deliberates with the attendance
principleof all of its members prior to resolutions at Board of Directors meetings regarding personnel
4-10 1 changes and remuneration, etc. Independent outside directors provide opinions based on theirexperience as corporate managers, public prosecutor and lawyer. Resolutions made by the
Board of Directors regarding the determination of personnel changes, remuneration, etc., arebased on the content of deliberation by the Committee. The secretariat is established in the
Secretarial Department.
The appointment of directors is conferred to General Meetings of Shareholders following a
resolution of the Board of Directors concerning the appropriate election of candidates deemed
to be the most fitting for the role as selected based upon a general consideration of theirabilities, knowledge, work history, etc., irrespective of age, sex or nationality. The number of
directors and the division of their roles are determined based upon a general consideration of
Supplementary the progress of ongoing projects under a policy of establishing the most appropriate system for
conducting the Company’s business.
principle
From the perspective of ensuring the enhancement of objectivity and transparency in the
4-11 1 determination of personnel changes, etc., of officers, the Company has established the Personnel
Remuneration Committee consisting of a total of five members: four independent outside
directors and the President and Representative Director. The Committee deliberates with theattendance of all of its members prior to resolutions at Board of Directors meetings regarding
personnel changes, etc. Resolutions made by the Board of Directors regarding the determinationof personnel changes, etc., are based on the content of deliberation by the Committee.

79 CENTRAL JAPAN RAILWAY COMPANY Integrated Report 2023

Generating "Economic Value"

Creating "Social Value"

Corporate Data

The directors’skills are disclosed in the form of a Skills Matrix.
To achieve our management philosophy of“contributing to the development of Japan’sSupplementary main transportation artery and social infrastructure”at a higher level, the skills consist of thefollowing seven, which are useful for fulfilling directors’roles of determining business execution
principle
and supervising directors’execution of duties, in light of the nature of our business: corporate
4-11 1 management, business strategy; governance, compliance; personnel, education, labor affairs;
finance, accounting; technological development, environment; railway safety; and community
relations, international aspects.

[2] Investments in human capital and intellectual property
Investments in human capital and intellectual property are described in“Initiatives for humanresources to support JR Central’s sustainable growth”and“Promotion of Technological
Development”of our Integrated Report.

Full disclosure

Highlight

Principle 5-1
Policy for constructive
dialog with shareholders

Supplementary Important concurrent positions held by directors and Audit and Supervisory Board members
are as stated in the business reports and General Shareholders Meeting Reference Materials.
principle

4-11 2

None of the concurrently held positions hinder the directors’or Audit and Supervisory Board
members’ability to fulfill the roles and responsibilities of such positions for the Company.

The Company’s Board of Directors meets at least once a month, in principle, to make decisions
on not only legally required matters but also important management manners in a lawful andappropriate manner after providing thorough explanation of the purpose and progress ofmeasures and discussing them fully. The status of directors’execution of duties is also reported
as necessary by the director in charge of each duty and is supervised appropriately. Outside
directors provide effective advice on management from a higher perspective and bring discipline
Supplementary to management.
The Board of Directors analyzes and evaluates the effectiveness of the entire Board based onprinciple
self-evaluation by each director and Audit and Supervisory Board member. Based on the results
4-11 3 of the analyses and evaluations, the Company works to further enhance the functions of theBoard. Additionally, in order to improve the effectiveness of the Board of Directors, roundtablediscussions are held between outside directors and members of management to exchange
opinions on general management issues, and outside director meetings consisting solely ofoutside directors are conducted.
Based on the above, the Board of Directors finds that the effectiveness of the entire Board of
Directors is sufficiently ensured.
The Company’s directors and Audit and Supervisory Board members not only possess
sufficient ability and insight to fulfill their roles and responsibilities but also carry out their duties
responsibly while striving voluntarily to improve their expertise through efforts such as actively
Supplementary
participating in external training programs to fulfill the mandate given by shareholders.
principle
Necessary measures are taken to ensure that the directors and Audit and Supervisory4-14 2 Board members appropriately fulfill their responsibilities, such as notifying the details of any
amendments in relevant laws and regulations at meetings and providing training opportunities
to share the Company’s management issues to enable the Company to make appropriate
decisions.
[1] Policy and promotion structure for dialogue
The Company has established the following Policy for Promoting Constructive Dialogue with
Shareholders.
• The Company positions General Meetings of Shareholders as an important opportunity
for dialogue with shareholders and strives to enhance question and answer sessions inorder to contribute to sustainable growth and an increase in corporate value over the
medium to long term. Dialogue with shareholders in general is overseen by the head of
the Administration Department, and shareholders’questions, opinions and requests are
addressed in individual meetings and phone calls to the extent reasonable.
• Dialogue with institutional investors is overseen by the Director General of the Corporate
Planning Division, with the IR staff assigned to the Supervision Department of the Corporate
Planning Division responsible for dialogue. The Administration Department is mainly incharge of dialogue (SR) with the voting rights managers of institutional investors. All the
relevant personnel are committed to constructive dialogue. We strive to enhance thecontent of dialogue by collaborating organically with different departments of the Company.
Furthermore, in addition to individual meetings, we have been enhancing our means of
dialogue by holding quarterly results presentations, online conferences, facility tours, andother events as needed. Upon engaging in dialogue, the wishes and interests of institutional
investors are taken into consideration comprehensively and are addressed to the extent
reasonable, including by senior management, directors, and Audit and Supervisory Board
members.
• In addition to releasing information on results presentations on TDnet and the Company’swebsite, we strive to enhance the provision of information to shareholders through efforts
such as increasing the contents of convocation notices of General Meetings of Shareholders.
We also strive to ensure that sufficient information is widely available to more stakeholders
through the mass media by disclosing information on important measures and important
capital investment decisions in detail through the President’s regular press conferences andpress releases.
• The content of dialogue with shareholders is reported to senior management and, if
necessary, feedback is provided to the Board of Directors.
• No insider information is communicated in our dialogue with shareholders. We have set
the period beginning 14 days prior to the quarterly results announcement date as a“quiet
period”when we refrain from dialogue concerning results information.
[2] Track record
Based on the above-mentioned policy, we engaged in dialogue with a wide range ofdomestic and overseas institutional investors to whom our management team and IR/SR staff
responded, regardless of the investment method of the institutional investor or the field ofresponsibility of the person in charge, based on themes such as our business content andspecific initiatives related to ESG.
In addition to providing management with feedback on the content of the dialogue, we
also conduct questionnaire surveys of institutional investors after individual meetings andresults presentations. Upon analyzing the feedback obtained and the needs of institutional
investors, we work to further enhance corporate governance and future dialogue by enriching
disclosure and using the information for reconsidering the content of presentation materials.

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