Corporate Governance/Internal Control System

Taiyo Holdings's corporate governance system is centered on the Board of Directors and the Board of Corporate Auditors. The Board of Directors deliberates and passes resolutions concerning all important matters, and supervises the execution of duties by the CEO.

We have also adopted a system of executive officers to energize the Board of Directors and speed up the execution progress. Executive officers are granted an extensive scope of decision-making authority for carrying out their duties, and it is believed that this will enable rapid decision-making.

In addition, a discretionary Compensation Advisory Committee was established as an advisory body to the Board of Directors in order to ensure objectivity and transparency in director and executive officer compensation. A discretionary Nomination Advisory Committee was also established to ensure objectivity and transparency in nominating directors and corporate auditors. The results of resolutions of both of these bodies are reported to the Board of Directors. Majorities of both the Compensation Advisory Committee and Nomination Advisory Committee are outside members, and the chairmen are selected from among the outside members.

The Office of Internal Controls implements audits on all Taiyo Holdings departments and subsidiaries based on the annual audit plan approved by the Board of Directors. The results of audits are reported to the Board of Directors and auditors, and opinions are exchanged. In addition, meetings with accounting auditors regarding accounting audits are held, and information is exchanged.