Corporate Governance Structure

Fundamental Policies of Corporate Governance

The basic policy and purpose of our group’s corporate governance is to continuously enhance our corporate value by increasing transparency and ensuring the fairness and independence of our corporate management in order to establish "mutual trust" in relationship with all stakeholders, including our shareholders, customers, employee, clients and the local community.
Please access our website below for our Corporate Governance Guidelines, including our basic policy.

Outline of System of Corporate Governance and Reason for Adoption of such System

We, as a holding company, have adopted the Company with Audit and Supervisory Board system in accordance with the Companies Act for the purpose of ensuring the corporate governance of group companies, and have both the Board of Directors and the Audit and Supervisory Board monitor and audit the management and operation of the Company.
In addition, we have voluntarily established the Nomination of Directors Advisory Committee and Remuneration of Directors Advisory Committee as the advisory bodies to the Board of Directors, which are chaired by External Directors (Independent) and have External Directors (Independent) making up the majority of their members. In addition, as for important matters to be resolved at the Board of Directors and main management issues, etc. such as the Group’s management philosophy, management policy, medium- and long term management strategy, medium-term business strategy and allocation of management resources, which are positioned as the core, the Board of Directors consults with the Committee for Group Strategy, in which the Representative Director, President and CEO (Group CEO) acts as the Chair and all independent officers (External Directors (Independent) and External Audit and Supervisory Board Members (Independent)) attend to fully discuss from various perspectives and provide their advice.
The following diagram illustrates the outline of our corporate governance system (as of June 26, 2026).

Corporate Governance Structure

Overview and Composition of the Board of Directors, Advisory Committees, and Other Meetings

• The outline of the Board of Directors, the Audit & Supervisory Board and the committees established on a voluntary basis

Diversity of the Board of Directors and the Audit & Supervisory Board

Directors

• *The above list does not cover the entire knowledge and experience of the candidates.

Audit & Supervisory Board Members

• *The above list does not cover the entire knowledge and experience of the candidates.

External Directors and External Audit & Supervisory Board Members

The Company has five External directors and three External Audit & Supervisory Board members. We have elected those persons having extensive knowledge and experience as executives and persons having insight into investment and financial capital markets, to our External Directors, and each of such persons takes a role in improving the appropriateness of the decision made by the Board of Directors by giving objective and independent advice based on their long careers in each business area and extensive professional knowledge. Also, we have elected those persons who have experiences as business administrators in financial industry extensive knowledge from his experience as a member of the Policy Board of the Bank of Japan, independent attorneys at law or independent certified public accountants having a considerable degree of finance and accounting knowledge, to our External Audit & Supervisory Board Members. Each External Audit & Supervisory Board Member conducts a strict audit on the legality of Directors’ decision making and performance of their businesses from a technical perspective by maintaining high levels of independence.

• Criteria for independence of external director

Reasons for Election of External Directors and External Audit & Supervisory Board Members

Strengthening of the Functions of the Audit & Supervisory Board and Its Members

The Audit & Supervisory Board comprises two internal full-time Audit & Supervisory Board members and three external Audit & Supervisory Board members. Convening monthly to coincide with the meetings of the Board of Directors, the Audit & Supervisory Board also holds extraordinary meetings as required. The Audit & Supervisory Board prepares an audit report, determines appointment and removal of Standing Audit & Supervisory Board Members, audit policies, procedures of investigation on the conduct of the business, the assets, properties and matters regarding the execution of duties of Audit & Supervisory Board Members in accordance with the Companies Act. The Audit & Supervisory Board also examines matters to be resolved by the Audit & Supervisory Board such as matters regarding appointment and removal or non-reappointment of the accounting auditor, consent on the amount of remuneration, etc. paid for the accounting auditor, consent on appointment of Audit & Supervisory Board Members, examines the agenda of the Board of Directors in advance, exchanges information and opinions in relation to audit including the proceedings of the important meetings attended by the Standing Audit & Supervisory Board members, exchanges opinions with the Representative Director, and conducts hearings on the execution of duties with our executive Directors and the Directors of Wacoal Corp., our major subsidiary.
At meetings of the Audit & Supervisory Board, external Audit & Supervisory Board members communicate and coordinate extensively with full-time Audit & Supervisory Board members. For example, the latter provide the former with reports on the status of audits of operations and the details of discussions at important meetings. External Audit & Supervisory Board members also receive various types of reports from the independent auditor and departments engaged in internal control as well as audit internal control systems, including the appropriateness of financial reporting. With a view to heightening the effectiveness of audits, external Audit & Supervisory Board members engage in a range of other activities. For example, they attend important meetings other than those of the Board of Directors in light of discussions of the Audit & Supervisory Board and visit subsidiaries to conduct audits and investigative interviews.

Internal Control

Pursuant to the "Internal Audit Regulations," our Audit Office, the internal audit department, which is directly under the control of the Representative Director, President and CEO audits the legality and appropriateness of the execution of operations at the Company and our domestic and overseas subsidiaries, and evaluates the effectiveness of the internal controls, in light of their management and business objectives and relevant laws and regulations.
During the current fiscal year, as part of internal control activities related to financial reporting, we audited 9 divisions for their group-wide systems and initiatives and 35 sites for daily administrative operations.
In addition, for the purpose of ensuring that internal control over financial reporting functions effectively and that the relevant departments proactively improve and promote internal control, we have appointed a person in charge of promoting internal control, hold semi-annual meetings, and have established a system for sharing information on internal control.