Marui: Third Party Assessment of Board Effectiveness for FY2021







June 14, 2022

Company Name: MARUI GROUP CO., LTD.

Name of representative: Hiroshi Aoi,

President and Deputy Director

(Security code: 8252, Tokyo Stock Exchange,

first market)

Information: Atsushi Nagasao,

Director General, Department of Management Planning

(TEL: 03-3384-0101)

Third-party assessment of board effectiveness in fiscal 2021

We conducted our first third-party (Board Advisors Japan, Inc.) assessment of our board effectiveness in fiscal year 2021. Below is the summary of results.

1. Purpose of Third-Party Assessment

Our corporate governance guidelines state that an annual assessment of the effectiveness of the board of directors must be carried out in order to improve the functioning of the board of directors. Since the 2015 financial year, we have been carrying out the assessment on the basis of a self-assessment questionnaire for all directors and members of the Audit and Supervisory Board.

We had constantly worked to improve the effectiveness of the Board of Directors. However, in order to objectively assess the effectiveness of the board that promotes stakeholder management, we asked Board Advisors Japan, Inc. to rate us this time, as they are very skilled in such assessments.

2. Valuation methods

The specific methods used to assess the effectiveness of the Board of Directors in fiscal year 2021 are as follows. Board Advisors Japan, Inc. rated us based on their experience in conducting board effectiveness assessments and their expertise in corporate governance.

  1. Questionnaire survey of all directors and members of the Audit and Supervisory Board
  2. Third partyinterviews with all directors and members of the Audit and Supervisory Board (approximately one hour per person)
  3. Interviews with the Secretariat of the Board of Directors
  4. Review of documents and minutes of board meetings
  5. Consultation of the minutes of each meeting of the advisory committee

3. Summary of results

The summary of the results of the evaluation by a third party (Board Advisors Japan, Inc.) is presented in the attached document “MARUI GROUP CO., LTD. / Summary of the results of the evaluation of board effectiveness. administration for the 2021 financial year”.

Based on the results of the assessment, the board will discuss the issues raised. Details of our effectiveness measurement initiatives will be disclosed in our corporate governance report to be submitted in early July.

  • Reference: Presentation of Board Advisors Japan, Inc.

[Established] November 2018

[CEO]

Hideaki Tsukuda

[Main Businesses] A consulting firm providing corporate governance and leadership advisory services with the

mission to “support future leaders and contribute to the development of the Japanese economy and society”.

Support corporate governance and management reform of client companies, primarily through advisory board, board effectiveness evaluation, recruitment of outside directors, CEO succession planning, evaluation management, coaching and management development.

Attachment

Prepared by Board Advisors Japan, Inc.

MARUI GROUP CO., LTD. / Results Summary of the Board of Directors Efficiency

Valuation for fiscal year 2021

1. Conclusion

It has been confirmed that the Board of Directors (“Board”) of MARUI GROUP CO., LTD. practices autonomous and co-creative governance, and that the effectiveness of the board is ensured in an unequaled way.

  • Governance rooted in corporate culture, including values ​​and altruism, which overcomes dichotomies, is practiced.
  • “Six Stakeholder Governance” aimed at creating fundamental value is practiced.
  • Although the board includes directors representing specific shareholders, there are no concerns that could lead to conflicts of interest and the common interests of shareholders are pursued.

2. “Strengths” that Support Board Effectiveness

It has been confirmed that the effectiveness of the Council is supported at a high level in a balanced manner by the multiple “strengths” listed from (1) to (5) below.

(1) Outstanding leadership and management structure

  • Constructive and confrontational discussions of a medium and long-term perspectives are encouraged by the president, who is also chairman of the board.
  • The collection and management of data by executives is at a high level.

(2) Shrewd Outside Directors

  • Expertise, observation, management perspective and independence of mind are demonstrated by the outside directors as leading experts in their respective fields.
  • The outside directors have a high regard for the Marui group, led by the current chairman.

(3) Clear Board Objectives

  • There is a clear understanding by all directors of the purpose of the board and the direction of achieving “stakeholder management”.
  • There is consistency in the purpose, composition, agenda, discussions and functioning of the board.
    1. Preparation of the agenda for the board of directors
  • Efforts are made to reduce the agenda as much as possible so that Board meetings are devoted to strategic discussions.
    1. Conduct of board meetings and lively discussions
  • Board meetings are conducted in a manner that encourages discussion.
  • The “director’s camp” is used effectively to complement the quantity and quality of strategic discussions, and is highly valued by all directors.

3. “Challenges” for further improvement in efficiency

With a view to further improving the effectiveness of the Board, the following “challenges” (1) to (4) have been reported.

(1) Ensure the quality and quantity of mid-to long term strategic discussions

  • More time needs to be devoted to specific discussions on achieving the impact goals of the medium-term business plan, and longer-term and strategic perspectives.
  • The challenge is to get the Strategic Review Committee and the Sustainability Committee back on track and bring the discussions of the two committees to the Board of Directors in order to further increase the value of the company.

(2) Improve the appointment function

  • Definitions of the role and scope of the appointments and compensation committee, the personal qualities of the person sought as the next chairman, the methods of supply and training, and the link with the CMA (Co-Creation Management Academy) are mandatory.

(3) Improved compensation function

  • There is a need for further discussion on the design of impact objectives and ESG indicators, as well as the compensation of senior executives below the level of vice president and next-generation managers and examine the compensation function from the perspective of promoting great mid-career hires.

(4) Improving the “strengths” that support effectiveness

  • The current effectiveness of the board relies in large part on the presence of the current chairman and outside directors. Therefore, the challenges are to develop a system to carefully select a successor to the current president who is one of the strengths of the company, and to innovate the corporate culture.

Disclaimer

Marui Group Co. Ltd. published this content on June 24, 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unmodified, on Jun 24, 2022 06:25:04 UTC.

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