Governance System
In FY2019, IDEC transitioned to a Company with an Audit and Supervisory Committee.
Furthermore, we established a voluntary Nominating Committee in FY2022 and a voluntary Remuneration Committee in FY2023, thereby enhancing the
transparency and objectivity of management.
In addition, we have continuously conducted Board effectiveness evaluations since 2015 and operate a highly effective Board of Directors, reflecting the active engagement and contributions of our independent Outside Directors. Furthermore, we continue to enhance governance effectiveness through initiatives such as the revision of our executive compensation system in FY2024.
Key Features of Governance at IDEC
As of the end of June 2026, our Board of Directors consists of six independent outside directors and four internal directors, with outside directors accounting for 60% of the board, representing a majority. In addition, all outside directors are designated as independent directors, and female directors account for three members, representing 30% of the board. In this way, the ability of directors—both internal and external—with diverse expertise and backgrounds to engage in open and constructive discussions constitutes a key feature of our governance.
Furthermore, in 2025, we changed the chairpersons of the Nominating and Remuneration Committee and reconstituted the committee to consist solely of outside directors. Through this structure, the committees provide recommendations to the Board of Directors from an independent standpoint, thereby establishing a governance framework that ensures effective oversight.
Nominating Committee
The Company established the Nominating Committee in 2021, and operates that as non-statutory advisory bodies to the Board of Directors. The Nominating Committee considers and deliberates over the nomination of candidates for director, plans to cultivate candidates for the next-generation of top management and succession plans.
The members of committee comprise directors selected by the Board of Directors, and the committee has been composed solely of outside directors.
■ Policy and procedure for director appointment and dismissal
The process of selecting candidates for directorships is based on a skills matrix outlining the expected skills and other requirements. The Nominating Committee recommends candidates to the Board of Directors on the basis of the skills matrix review, and the nominations are made part of the agenda of the General Meeting of Shareholders through voting at a Board of Directors attended by a majority of independent outside directors.Directors who are deemed to no longer possess the expected skills and qualities of their position are considered for dismissal. Also, if a director is found to have violated laws, regulations, the articles of incorporation, or otherwise be unfit for the discharge of their duties, the Board of Directors, acting on a report by the Nominating Committee, votes on whether to include a proposal for the director’s dismissal in the General Meeting of Shareholders agenda. This vote must be made at a meeting attended by a majority of independent outside directors.
Remuneration Committee
The Company established the Remuneration Committee in 2022. The Remuneration Committee considers and deliberates matters related to the remuneration system and regulations, and makes remuneration decisions in accordance with the system. This committee also reports to the Board of Directors.
The members of committee comprise directors selected by the Board of Directors, and the committee has been composed solely of outside directors.
Efforts to evaluate effectiveness
In order to improve the effectiveness of the Board of Directors, an evaluation of all directors except the CEO has been conducted using a questionnaire method every year since FY2016.
A third-party organization has conducted the questionnaire survey and analyzed the responses since FY2022. The results of their evaluation are reported to the Board of Directors, whose members share the issues identified and continuously strive to make improvements.
Internal control and group governance
To ensure the credibility of our Group’s financial reporting, we have established the Internal Control Policy on Financial Reporting and clearly defined our Group-wide system for implementing that policy, in line with standards for assessing internal controls on financial reporting.
We have established a framework under which process owners and control owners are appointed in each division and Group company, enabling continuous self-auditing by divisions and Group companies and independent monitoring by the Internal Audit Department.
Through these efforts, we continuously verify the effectiveness of our internal control and strive to enhance governance across the entire Group.
The results of our internal control evaluations based on these activities are reported annually to the Board of Directors. For FY2026, internal controls over financial reporting at IDEC and its group companies in FY2026 were assessed as effective.
With respect to group companies, management is conducted in accordance with the ‟Regulations for Management of Affiliated Companies,ˮ established by the Strategic Planning Division.
Certain matters of business execution are subject to prior approval by IDEC’s Board of Directors or Top Management Meeting. In addition, IDEC’s functional departments provide guidance and support to group companies as appropriate, establishing a solid management foundation, fostering the improvement and stabilization of operations.
Furthermore, the Global Finance Division appropriately monitors the management conditions of the Group companies on a monthly, quarterly, and annual basis and provides timely reports to management.
