Under the holding company structure, Nichirei Group’s operating companies engage in a wide range of businesses, including processed foods, marine, meat and poultry products, temperature-controlled logistics, and biosciences. In pursuit of sustainable growth and the enhancement of corporate value over the medium to long term, the Company’s Board of Directors formulates Group strategies and supervises the business execution of operating companies.
The holding company adheres to the principles of the Corporate Governance Code and views the achievement of fair and transparent management as an important management issue. Accordingly, under the supervision of the Board of Directors, we will continue to strengthen governance by promoting appropriate resource allocation, speeding up decision-making and ensuring thorough compliance.
In addition, we have established ourselves as a company with an Audit & Supervisory Board system, an institutional design specified in the Companies Act of Japan.

Specific Discussions at Board of Directors’ Meetings

In pursuit of sustainable growth and enhancement of corporate value over the medium to long term, the Company’s Board of Directors formulates the Group’s strategies and supervises the execution of business at operating companies. Specific matters discussed during FY2024 were as follows. Additionally, the details of discussions on underlined items is included.

Election and Term of Office of Directors

The Board of Directors comprises up to 11 members, appointed to one-year terms in order to enhance flexibility in response to changes in business conditions. Resolutions to appoint directors must be approved by a majority of shareholders, with at least one third of those shareholders who have voting rights in attendance. To improve transparency and strengthen supervisory functions, five of the current 11 directors are outside directors. The Board meets at least once a month. The Board of Directors is chaired by the Representative Director and Chairman, who also serves as an executive officer. Together, the Representative Director and Chairman and the Representative Director and President oversee the Group’s overall execution of business.

Audit & Supervisory Board Member System and Role of Audit & Supervisory Board meetings

Nichirei has adopted the audit & supervisory board member system. Of the five audit & supervisory board members, three are outside audit & supervisory board members, of whom one has experience at a financial institution, another is an experienced attorney, and the third has worked at a government agency. Audit & Supervisory Board meets once a month, in principle, convening additional meetings as necessary. Nichirei has established a framework to enhance the supervisory functions of audit & supervisory board members, allowing for the effective use of audit & supervisory board members, and strengthening the supervisory role of management.

Independent Outside Directors and Outside Audit & Supervisory Board Members

The Company adheres to its Criteria for Independence when appointing outside directors and outside audit & supervisory board members designated by the Company as independent directors/audit & supervisory board members. A vested interest in Nichirei is denied outside directors and their close relatives, as well as outside audit & supervisory board members and any companies or organizations of which they are directors or that they serve in other important positions.

Skill Matrix

The Nichirei Group believes that in order for the Board of Directors to effectively fulfill its roles and responsibilities, it must be composed of both inside and outside members with sufficient knowledge and experience in fields related to business management. We have designated the following knowledge and experience as important from a corporate management perspective. In addition to having appropriate experience in all of the following areas, the Company selects director candidates based on the areas in which the Company has particular expectations.

■Experience and Skills

		Corporate Management	ESG/ Sustainability	Global	Research & Development	Marketing	Human Resources Strategy	DX	Financial Accounting/ Finance	Legal Affairs/ Compliance
Directors		●	●	●	●		●			●
		● (Processed foods)		●	●	●
		● (Marine, meat and poultry products)		●		●
			●	●			●		●	●
			●	●			●	●
		● (Logistics)		●		●		●
			●	●					●
		●	●		●	●	●
		●	●	●					●
			●	●			●
			●	●				●
Audit & Supervisory Board Members			●		●					●
			●							●
			●							●
				●					●
			●	●

• * The above list does not represent all the knowledge, experience, and abilities possessed by each director and auditor.

Succession Plan

The Company positions the succession plan for the Group’s senior management, including the president, as one of its most important issues and pursues it from a medium- to long-term perspective based on the corporate management philosophy. Specifically, the Nominating Advisory Committee, which is chaired by an outside director, carries out training, monitoring, and selection of successor candidates according to the selection process, and reports its findings to the Board of Directors based on thorough discussions. Based on the Nominating Advisory Committee’s report, the Board of Directors approves and adopts the proposed new structure for the Group’s senior management.

• * In steps ③ to ⑤, 360-degree surveys, human resource assessments by outside organizations, and interviews by outside directors are used to decide on the final candidates.

Officer Remuneration System

Design of the remuneration scheme for directors and executive officers incorporates the opinions of a third-party organization. Remuneration comprises a base remuneration component and a bonus component. Base remuneration is paid at a fixed rate determined in accordance with a remuneration schedule. Bonuses are paid according to the concept of productivity-linked bonuses, based on the results of the Nichirei Group, the performance-budget achievement rate of the relevant officer’s business area, and an individual qualitative assessment. Outside directors receive base remuneration only; they are not paid a bonus. Nichirei has established a Remuneration Advisory Committee which meets, in principle, once a year to deliberate on such topics as the remuneration system, remuneration levels, and the validity of remuneration, before reporting its findings to the Board of Directors. The committee comprises the Representative Director and President, a audit & supervisory board member, and outside directors. Officer remuneration is determined by the Board of Directors. The total amount of remuneration and bonuses paid to directors must be within the limit resolved at a General Meeting of Shareholders.

①Policies and Methods for Determining Officer Remuneration

The policy for determining individual director remuneration is for the Remuneration Advisory Committee to discuss the appropriateness of each director’s remuneration each fiscal year and for the decision to be made by the Board of Directors. In these discussions, the Remuneration Advisory Committee reflects changes in the management environment and the opinions of shareholders and investors, and obtains information necessary for discussion from third-party agencies with extensive global knowledge and experience.

②Changes in Policies for Determining Officer Remuneration

Following the deliberations of the Remuneration Advisory Committee during the current fiscal year, the Board of Directors has determined that the current remuneration system for directors (and other officers) is generally appropriate. On the other hand, expectations for role of outside directors have increased in recent years, and we need to acquire capable outside human resources with diverse backgrounds. In response to the need, we have changed the remuneration market survey data we refer to when determining the remuneration levels of outside directors from “remuneration levels of companies similar in business type and size to ours” to “remuneration levels of companies similar in size to ours (all industries).” In addition, “Chairperson’s allowance” is added when an outside director assumes the position of the chairperson of the Nomination Advisory Committee or the Remuneration Advisory Committee. There are no other significant changes to the policy for determining directors (and other officers) remuneration for FY2025.

Policies for Determining Officer Remuneration

①Basic Policies

②Remuneration Composition and Levels

Remuneration for Directors Other Than Outside Directors

Basic (fixed) remuneration consists of role-based remuneration and a director allowance, and variable remuneration consists of performance-linked bonuses and stock compensation. Remuneration levels are set at appropriate amounts with reference to objective compensation market survey data (compensation levels of companies competing with the Group in terms of business and human resources, including those in the food and logistics industries), taking into consideration the responsibilities and number of directors, changes in the business environment going forward, and the opinions of third-party organizations.

Remuneration for Outside Directors

Outside directors shall be paid only a base remuneration (fixed remuneration). Base remuneration consists of “Basic remuneration,” which is paid in a uniform amount to all outside directors as a members of the Board of Directors, and “Chairperson’s allowance,” which is additionally paid to the chairperson of the Nominating Advisory Committee or the Compensation Advisory Committee. The level of remuneration shall be set at an appropriate amount, taking into consideration the time and effort spent by each outside director to fulfill their expected roles and functions, as well as objective remuneration market survey data (remuneration levels of companies similar in size to ours (all industries).

③Performance-Linked Bonuses

The amount to be paid to each individual as a performance-linked bonus varies within a range of 0% to 200% of the base amount for each position, depending on the achievement of Company-wide, business and individual performance targets.

Amount of individual bonus = Base amount by position × Performance evaluation coefficient (0–200%)
The performance evaluation coefficient is a weighted average of the evaluation coefficients of each key performance indicator (KPI).

• * For ESG third-party evaluation, we utilize the assessments of multiple ESG assessment organizations to ensure objectivity and fairness. Specifically, we utilize the following three types of assessment.

④Procedures for Determining Remuneration

In order to ensure the appropriateness and objectivity of the matters related to remuneration for individual directors, the Board of Directors shall make decisions on such matters after deliberations and reports by the Remuneration Advisory Committee, which is comprised mainly of independent outside directors. In its deliberations, the Remuneration Advisory Committee shall take into account changes in the management environment and the opinions of shareholders and investors, and shall properly obtain information necessary for its deliberations from an objective and professional standpoint.
In the process of determining the performance-linked bonuses to be paid to each individual, the individual performance targets and evaluations shall be drafted by the representative director and president, who is delegated by the Board of Directors, after interviewing each director, and shall be decided by the representative director and president after deliberation by the Remuneration Advisory Committee. The determined individual performance targets and evaluation results shall be reported to the Board of Directors in a timely and appropriate manner to ensure the objectivity and fairness of the evaluation. The final bonuses to be paid to each individual shall be drafted by the representative director and president, and decided by the Board of Directors after deliberation by the Remuneration Advisory Committee.
The details of officer remuneration for FY2024 are presented in the 106th Annual Securities Report.

⑤Other important matters

In the event of a deterioration in the Company’s business performance, or in the event of quality problems, serious accidents, or scandals that damage the Company’s corporate value or brand value, the Company may reduce or deny the remuneration, etc., to directors.
With respect to the performance-linked bonuses, when factors that should be taken into account as temporary special factors that were not assumed when the targets were set at the beginning of the fiscal year arise, performance may be evaluated after eliminating the effects of such factors, and the bonuses paid to each individual director may be calculated.
With respect to the performance-linked bonuses, in the event that a director violates the law or his/her duty of care or fidelity as a director before the bonus is paid, or in the event that such a violation is discovered within 2 years after the bonus was paid, or in the event of other similar events, the director’s right to receive the bonus, who related to such violation, shall be extinguished, and the Company may request to return the bonus actually paid.
Remuneration for executive officers who do not concurrently serve as directors shall be determined in accordance with the Company’s policy for determining such remuneration for directors.

Notes:

• 1.The above table includes 1 director who retired at the close of the 105th Ordinary General Shareholders Meeting held on June 27, 2023.
• 2.The total amount of remuneration, etc. above is stated as the total amount of remuneration, etc. borne by the Company (Total amount of remuneration paid or to be paid, or expenses, etc. borne by the Company). The amounts in parentheses for Directors (excluding outside directors) and Total are the total amount of consolidated remuneration, etc. to be borne by the Company and its subsidiaries.
• 3.The above “Base remuneration” amount is the total amount of remuneration, etc. paid in FY2024 (all monetary remuneration).
• 4.The above “Performance-linked bonuses” amount is estimated bonus payments for FY2024 (amount based on the results of FY2024 performance and other factors, and expected to be paid in June 2024 or later) add the difference between estimated bonus payments for FY2023 at the time of filing of the annual securities report for the previous fiscal year and the amount actually paid after June 2023 (all monetary remuneration).
• 5.The amount of “Restricted stock compensation” above is the total amount expensed in FY2024. In FY2024, the Company granted monetary compensation claims to 6 directors (excluding outside directors) and had all such claims contributed in kind to the Company, resulting in the delivery of 23,439 shares of common stock of the Company as stock compensation. The delivery of such shares is subject to the condition that they do not transfer the shares until they retire from the positions as directors of the Company.
  * The Company has introduced a restricted stock compensation plan similar to that for directors for executive officers who do not concurrently serve as directors, and 9,614 shares of the Company's common stock were delivered to 4 executive officers in FY2024.
• 6.The maximum amounts of remuneration, etc. for directors and Audit & Supervisory Board members approved at the General Shareholders Meeting are as follows.

• *The maximum amount of remuneration, etc. for directors does not include salaries as an employee for directors who concurrently serve as employees.

Evaluations of Effectiveness of the Board of Directors

As necessary, and with the assistance of outside experts, the Company conducts analyses and evaluations of the Board of Directors’ activities to ensure its decision-making is effective. Summaries of the results are subsequently disclosed.

Support System for Outside Directors (Outside Audit & Supervisory Board Members)/ Policy for Training Directors and Audit & Supervisory Board Members

Nichirei distributes materials for use at Board of Directors meetings to each director and Audit & Supervisory Board member at least three days in advance of meetings in order to ensure meaningful discussions.
When internal communication and coordination are required to accurately provide Company information in response  to instructions from independent outside directors or independent outside Audit & Supervisory Board members, the secretary in charge acts as the contact point in order to ensure necessary coordination with relevant departments.
Newly appointed directors and Audit & Supervisory Board members are given training as necessary on the Companies Act and other related laws, management strategy, financial analysis and other such matters. Additional training on legislative revisions and management issues is provided as necessary after new members assume office. Moreover, explanations of the Group’s businesses and tours of the major facilities are provided to outside officers as necessary.

Approach to Cross-Shareholdings

Cross-shareholdings are only utilized when it is determined that they will contribute to improving the Company’s corporate value: for example, by maintaining and strengthening trade and cooperative relationships. In addition, every year the Board of Directors reviews the economic rationale of individual shareholdings of this type from a medium- to long-term perspective. If the importance of a particular shareholding is determined to have diminished, the shares are sold. In conducting such reviews, the Board of Directors carefully examines and makes a comprehensive judgment on whether the benefits, such as profits from transactions, and dividends or risks are commensurate with the cost of capital, followed by consideration of a qualitative evaluation of the strategic importance of the shareholding.
In regard to the exercise of voting rights for cross-shareholdings, the Company will review all the details of the relevant proposals in the investee company’s shareholders meeting agenda, and if any of the following apply to the investee company, the Company will make a decision after careful examination on a case-by-case basis:
(1) The investee has engaged in acts that will lead to a loss of shareholder value
(2) The investee’s performance or stock price has deteriorated significantly
(3) There are other serious doubts with respect to agreeing to the proposal