Governance Promotion System

Summary of Corporate Governance Structure

Type of Organization Company with corporate auditors
No. of Directors Ten including four independent outside directors
No. of the Audit & Supervisory Board Members Four including two independent outside Audit & Supervisory Board Member
Term of office for the Directors One year
Accounting Auditor Ernst & Young ShinNihon LLC
Notification of independent directors/corporate auditors (Japanese only).

Outline of Corporate Governance

We consider developing and strengthening corporate governance to be a key management issue. By strengthening corporate governance, we are aiming to realize the corporate philosophy, achieve the management plans, enhance the corporate value over the medium- to long-term, and achieve sustainable growth. In addition, to realize higher corporate value for all stakeholders, we consider aiming for efficient, fair, and highly transparent management to be the basic approach underpinning our corporate activities.

Based on this approach, the Board of Directors is working to develop management structures, organizations, and systems that will allow us to engage in appropriate and speedy decision making, strengthen the supervisory functions governing the decisions made, establish compliance systems, improve and reinforce internal control systems, and build healthy relationships with stakeholders.

In addition, the director in charge of the Corporate Management Headquarters oversees the management of the Company and its subsidiaries and affiliates in order to ensure thorough governance throughout the entire Group. In order to facilitate the smooth exchange of information and promote group activities, liaison meetings of subsidiaries and affiliates are held on a regular basis.

The director in charge of each subsidiary and affiliated company is responsible for establishing sustainability promotion system, compliance system, and risk management system in accordance with measures based on management plans and efficient business execution.

Corporate Governance Report

Corporate Governance SystemAs of November 1, 2024

Corporate Governance SystemAs of July 30, 2024

Business Management System

The Company has the Board of Directors to decide important matters concerning business operations, such as the decision of management plans, and resolution set by the law, regulations, and the articles of incorporation. It also monitors the management activities as well. This improves corporate value by responding dynamically to changes in the business and management environment.
The Company has in place the Corporate Management Council to discuss important matters concerning business operation for the purpose of rapid decision-making management and smooth business operation before the Board of Directors meetings. In addition, the Board of Executive Officers is established to share information about company management in order to achieve smooth business operation and strengthened cooperation.

Furthermore, the Board of Directors set up various committees to discuss the major management challenges of the Company. Specifically, the Board of Directors established the Nomination and Compensation Committee to confer about selection and remuneration of directors, the Risk Management Committee to manage risks in the business operation, the Compliance Committee to maintain the compliance structure and manage the issues, the Personnel Committee to confer about personnel utilization, the IT Committee to maintain IT environment, and the Sustainability Committee to promote sustainability initiatives.

In the business operation structure, Leopalace21 has put in place five headquarters comprise of: the Leasing Business Sales Headquarters, which oversees the Property Management Division and the Corporate Sales Division and is responsible for formulating and executing strategies to improve profitability; the Leasing Business Promotion Headquarters, which oversees the Leasing Business Promotion Division and is responsible for resolving issues in business promotion and planning new products and ancillary businesses the Corporate Management Headquarters which establishes and monitors the management strategies, increases inter-divisional synergy and supports smooth business operation; the Compliance Promotion Headquarters which aims to strengthen our legal compliance and monitors business risks; and the Construction Defects Response Headquarters which manages construction defects.
We also see the enhancement of audit functions as our critical management task, and will try to reinforce the management monitoring function by setting the Audit & Supervisory Board as a supervising body for directors' business operations, by electing outside directors, and by setting the Auditing Department which is responsible for internal audit functions.
With this structure in place to clarify responsibilities and authorities, we aim to continuously enhance our corporate governance.

Board of Directors

The Board of Directors operates with an emphasis on both ensuring the speed of management and enhancing the supervisory function. We think appropriate nomination of directors is important to improve the corporate value. Therefore, we incorporate in the decision process the deliberation at Nomination and Compensation Committee with membership including outside directors.
The Board of Directors holds regular meetings once a month, while extraordinary meetings can be called at any time as required, so that it can determine critical management matters, monitor business operation, and oversee directors' performance of duties.

Outside Directors

We elected outside directors to reinforce the supervising function and to receive objective advice for decision-making. The outside directors give various advices to improve corporate value by participating in essential meetings such as the Board of Directors meetings. We think decision based on an objective advice is important especially for nominating officer candidates and determining the remuneration of the officers. The Nomination and Compensation Committee is therefore composed of President and CEO, and outside directors.
In addition, the election of the outside directors is based on an independency standard we formulated. Please refer to the relevant part in our Corporate Governance Report.

Audit & Supervisory Board

The Audit & Supervisory Board, composed of four members including two outside members, emphasizes on monitoring the directors' performance of duties.
The Audit & Supervisory Board Members try to enhance the effectiveness of audits by attending important meetings such as the Board of Directors' meetings, conducting operational status investigations and regularly collaborating with the Auditing Department, accounting auditor and outside directors.

Reasons for election as a Director and Audit & Supervisory Board Member

Name
Title / position
Reasons for election as a Director and Audit & Supervisory Board Member
Bunya Miyao
Representative Director, President and CEO
Mr. Bunya Miyao has a background in overseeing all of the Company's group businesses, and has extensive experience in leading the Company's management, as well as strong leadership and decisiveness.He fulfills an appropriate role as Representative Director by taking important management decisions and supervising business execution. He has worked on stabilizing earnings structure and financial base, promoting structural reforms and DX, and resolving construction defects issues. It is judged that his strong leadership is essential to the Company's management, so the Company has elected him again as a Director.
Mayumi Hayashima
Director, Managing Executive Officer
Ms. Mayumi Hayashima has extensive experience and knowledge in the leasing business division, as well as in overseeing the legal compliance department and implementing cross-departmental measures. She fulfills an appropriate role as Director by taking important management decisions and supervising overall business execution and others, and she has worked to improve profitability. It is judged that her abundant knowledge is essential to the Company's management, so the Company has elected her again as a Director.
Naomichi Mochida
Director, Managing Executive Officer
Mr. Naomichi Mochida has abundant business experience in corporate sales and a high level of knowledge in finance, and fulfills an appropriate role as Director by utilizing the insight he has gained as Representative Director of an affiliated subsidiary that provides corporate housing agency services. It is judged that his knowledge and experience are essential to the realization of our high value-added services, so the Company has elected him again as a Director.
Shinji Takekura
Director, Executive Officer
Mr. Shinji Takekura has extensive business experience and track record in sales, as well as abundant knowledge from his experience overseeing the Corporate Management Headquarters and Compliance Promotion Headquarters. He fulfills an appropriate role as Director by taking important management decisions and supervising overall business execution and others, and has worked to build a medium- to long-term growth strategy. He also serves as the chairman of the Sustainability Committee and IT Committee and has worked to promote ESG strategies and DX. It is judged that his abundant experience and knowledge are essential to the Company's growth strategy, so the Company has elected him again as a Director.
Akio Yamashita
Director
Mr. Akio Yamashita has extensive work experience and a wide range of knowledge as an officer and employee of financial institutions, and he has a track record of handling numerous projects, including real estate-related business, real estate finance, urban redevelopment funds, management buyouts, and corporate rehabilitation as a representative of an investment fund. It is judged that his abundant experience and wide range of knowledge are essential to the corporate management and structural reforms of the Company, so the Company has elected him again as a Director.
Jin Ryu
Director
Mr. Jin Ryu has extensive work experience and a wide range of knowledge as an officer and employee of an investment fund, and he has a track record of handling real estate-related business, investments into companies,and corporate rehabilitation. At Board of Directors meetings, he has fulfilled an appropriate role in supervising business execution of the Company from a fair perspective. It is judged that his abundant experience and wide range of knowledge are essential to the Company's growth strategy, so the Company has elected him again as a Director.
Akira Watanabe
Outside Director
Mr. Akira Watanabe possesses expertise as an attorney at law and deep knowledge of corporate management accumulated as an outside director of other companies. He fulfills an appropriate role as lead Outside Director in supervising the business execution of the Company from an independent and fair perspective. Moreover, as the chairman of the Nomination and Compensation Committee, he has increased the transparency and objectivity of officer nomination and remuneration decision procedures. It is judged that his high level of expertise in legal affairs and compliance are essential for strengthening the functions of the Company's Board of Directors and enhancing corporate governance, so the Company has elected him again as an Outside Director.
Yutaka Nakamura
Outside Director
Mr. Yutaka Nakamura has been involved in quality management and environmental management in the housing industry for many years, and possesses experience in key positions in several organizations in the housing industry. Based on his abundant track record and deep knowledge, he fulfills an appropriate role as Outside Director in supervising the business execution of the Company from an independent and fair perspective. Moreover, as the chairman of the Company's Compliance Committee, he has worked to strengthen and enhance the Company's compliance system. It is judged that his expertise and experience in construction and technologies are essential to supervising and providing advice on the Company's business execution, so the Company has elected him again as an Outside Director.
Takumi Shibata
Outside Director
Mr. Takumi Shibata possesses broad insight as a corporate manager accumulated through his career, which includes important positions at a securities company and an asset management company, in addition to deep knowledge in asset management and finance. He also fulfills an appropriate role as Outside Director in supervising the business execution of the Company from an independent and fair perspective during the Board of Directors meetings and other meetings. It is judged that his high level of expertise is essential to realizing the structural reforms that the Company aims for and strengthening the functions of the Board of Directors, so the Company has elected him again as an outside Director.
Kan Ishii
Outside Director
Mr. Kan Ishii possesses broad insight and experience concerning corporate rehabilitation accumulated through his career, which includes important positions at an investment bank and serving as Trustee Representative of Japan Airlines. He also fulfills an appropriate role as Outside Director in supervising the business execution of the Company from an independent and fair perspective. It is judged that his high level of expertise is essential to realizing the structural reforms that the Company aims for and strengthening the functions of the Board of Directors, so the Company has elected him again as an Outside Director.
Jiro Yoshino
Outside Audit & Supervisory Board Member
Mr. Jiro Yoshino has held key position at Aioi Nissay Dowa Insurance Co., Ltd. and possesses extensive knowledge and experience from his career as a business manager of a listed company. Moreover, he has served as a full-time Audit & Supervisory Board Member at MS&AD Insurance Group Holdings, Inc., and has deep knowledge and experience as an Audit & Supervisory Board Member. For these reasons, it is judged that he can appropriately audit the execution of duties by the Company's Directors, and the Company has therefore elected him as an Outside Audit & Supervisory Board Member.
Kenichiro Samejima
Full-time Audit & Supervisory Board Member
Mr. Kenichiro Samejima has experienced overseeing the leasing business division of the Company and, as Executive Officer, overseeing the information systems department, and through those experiences, he possesses abundant knowledge about the Company's core business and a deep understanding in the Company's operations. Since assuming office as Audit & Supervisory Board Member in July 2020, he has appropriately supervised the duties of Directors, and it is judged that he will contribute to the growth and value improvement of the Group. Therefore, the Company has elected him again as an Audit & Supervisory Board Member.
Yoshitaka Murakami
Audit & Supervisory Board Member
Mr. Yoshitaka Murakami possesses expertise and abundant experience in finance, accounting, and taxation gained through his experience serving as First Deputy Commissioner of National Tax Agency and as Full-time Audit & Supervisory Board Member of Credit Saison Co., Ltd. for eight years. Since assuming office as Audit & Supervisory Board Member in July 2020, he has been conducting appropriate supervision of business execution from an independent and fair perspective. The Company expects that he will continue to contribute to monitoring and supervising the Company's management and therefore, the Company has elected him as an Audit & Supervisory Board Member.
Kazutaka Shimohigoshi
Outside Audit & Supervisory Board Member
Mr. Kazutaka Shimohigoshi has a high level of insight in accounting and taxation, which is required of an Outside Audit & Supervisory Board Member who is responsible for accounting audits. JP Consultants Group, of which he is Representative Director, is well versed in the field of asset succession and has been providing tax advice to the Company's property owners since aroud 2016, and is familiar with the Company's business model. Therfore, the Company has elected him as an Outside Audit & Supervisory Board Member.
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