▼Basic approach　▼Overview of our corporate governance structure　
▼Composition, purposes, and roles of committees and conference bodies　▼Skill Matrix of Directorspo　
▼Corporate Governance Report　▼Policy and procedure for nomination, election and dismissal of Directors　▼Toward the Realization of Highly Effective Governance　▼Effectiveness Evaluation for the Board of Directors 　▼Director Compensation　▼Basic Views on Internal Control System　▼Steps for the strengthening of governance

To meet the expectations of shareholders, business partners, employees, and other stakeholders and to enhance our corporate value, we recognize enhancement of our corporate governance structure as a vital issue in management and strive to practice transparent, fair, and efficient management.
Under this policy, we have established a basic framework and policy for corporate governance and, to achieve sustainable growth and enhance corporate value through the practice of governance, have established and operate our Corporate Governance Guidelines.

By selecting the form of a company with an audit and supervisory committee and establishing an Audit and Supervisory Committee composed of a majority of outside directors, we are working to strengthen our management supervisory functions and to enhance efficiency and mobility by delegating a considerable part of authority over business execution to directors.

Independence and Diversity of the Board of Directors

We recognize that ensuring independence and diversity in the composition of our Board of Directors is an important management issue in enhancing the effectiveness of the Board’s supervisory functions. The current composition is as follows.

Corporate Governance Structure

In order to continuously increase the effectiveness of governance, we clearly define the roles and responsibilities of each body. Under appropriate supervision by the Board of Directors, committees and meeting bodies are organically linked to pursue the soundness and efficiency of management. The main bodies of our company and their roles are as follows.

We identify the skills and experience required in light of our management strategy to realize sustainable enhancement of corporate value. In order to promote open and constructive discussions, and to make group decisions and supervise management, we appoint directors with diverse knowledge, experience, and capabilities, including consideration of gender and internationality.

Action to Implement Management that is Conscious of Cost of Capital and Stock Price

Disclosure based on the Corporate Governance Code

Japan’s Corporate Governance Code is a guideline summarizing the nature of corporate governance for listed companies in the form of principles. MARUBUN discloses information about matters required to be disclosed in accordance with this Code as follows.

Basic policies and procedures

The Company selects Director candidates who will contribute to the sustainable growth of the Company and the enhancement of its corporate value in the medium and long term under the selection criteria set out by the Board of Directors, comprehensively considering their personality, insight, capabilities, experience, track record and other factors. If a Director materially breaches laws, regulations or the Article of Incorporation or if it becomes clear that a Director does not meet the selection criteria, the Company shall consider dismissing them.

Reason for Appointment as Directors

Please see below for the reasons for the appointment of directors.

Criteria for independence of Outside Directors

The Company has established the criteria for independence under Article 436-2 of the Securities Listing Regulations of the Tokyo Stock Exchange to ensure the independence of the Outside Directors. If the Outside Directors meet the criteria, the Company will deem them independent of the Company.

(Criteria for independence)
1.An Outside Director has not been an executive of the Company or its subsidiaries (hereinafter the “Group”) in the past ten years
2.None of the following items apply to the Outside Director within the past three years:

　(i) Engaged in operations of a company that deals with the Group and accounts for more than 2% of the Company’s annual consolidated sales

　(ii) Been an executive of a company that deals with the Group and whose annual sales to the Group account for more than 2% of the company’s annual consolidated sales

　(iii) Been an executive of a financial institution from which the Group borrows an amount of money that is more than 2% of the Company’s consolidated total assets at the end of the latest fiscal year

　(iv) Been a professional, such as a lawyer, certified public accountant, tax accountant or consultant, who receives more than 10 million yen annually in cash or other property other than officers’ remuneration from the Group

　(v) Been a major shareholder of the Company (holding 10% or more of the total voting rights) or an executive of a major shareholder

　(vi) Been an executive of an organization that has received a donation of more than 10 million yen annually from the Group

　(vii) Been an executive of a company that exchanges officers with the Group 

　(viii) Been the spouse or a relative within the second degree of kinship of a person who is described in any of the items (i) to (vii) (limited to executive directors, executive officers, corporate officers or executives at the level of department head or higher)

We are striving to enhance our framework for sustainable corporate value enhancement by increasing the effectiveness of the Board of Directors and by ensuring that each committee fulfills its respective role and responsibilities, thereby ensuring management transparency and fairness. The main items deliberated intensively by each body during the current fiscal year are as follows.

■Main Deliberation Items of Bodies (FY2024 Results)

To ensure that the Board of Directors properly carries out its roles and responsibilities, every year we conduct an effectiveness evaluation aimed at identifying issues and areas for improvement of the Board of Directors and at enhancing its effectiveness.
Our evaluation of the effectiveness of the Board of Directors in FY2024 was as follows.

Evaluation items and processes

Our effectiveness evaluation is conducted through the following process.

Evaluation results and future issues

As a result of the FY2024 Board of Directors Effectiveness Evaluation, it was confirmed that the Board of Directors is functioning effectively as a whole. Main items receiving high evaluation and recognized future issues are as follows.

Basic policy and procedures for director compensation

Compensation, etc. for directors (excluding directors who are Audit and Supervisory Committee members) is set appropriately for the responsibilities and roles of directors engaged in the execution of business, and is of content and a level that contribute to the enhancement of corporate value and performance not only in the short term but also in the medium and long term. Compensation amounts are determined within the scope of compensation resolved at General Meetings of Shareholders, taking into account position and content of work, expected degree of contribution during the target period, consolidated performance, and other factors. The framework for the total amount of compensation, compensation structure, and calculation method is determined by the Board of Directors after obtaining advice and consent from the Nomination and Compensation Committee, which is composed of independent directors.

Compensation for individual Directors (excluding directors who are Audit and Supervisory Committee members) is determined by the President and Representative Director, appointed to do so by resolution of the Board of Directors, after obtaining advice and consent from the Nomination and Compensation Committee. The determination of the number of restricted shares to be allocated to each individual as compensation will be made by resolution of the Board of Directors.

The compensation of directors who are Audit and Supervisory Committee members, is determined after discussions by the Audit and Supervisory Committee, considering the nature of the directors’ duties from the perspective of ensuring independence and neutrality, and within the compensation framework resolved at the General Meeting of Shareholders.

Director compensation results

Based on the above policy and process, the results of director compensation for FY2024 are as follows.

Note: Total amount of Compensation, etc. for directors does not include the salaries of employees who concurrently serve as directors.

Remuneration system

Remuneration for the Company’s officers is based on their job positions, specifically their roles, authorities and responsibilities.

Remuneration for Directors (excluding Directors who are members of the Audit & Supervisory Committee) is comprised of fixed remuneration (base pay and position-based pay), performance-linked remuneration (performance-based pay), and stock-based compensation (restricted stock-based compensation). Directors who are members of the Audit & Supervisory Committee only receive fixed remuneration (base pay).

Out of the fixed remuneration, base pay is the basic remuneration determined by position, with officers holding the same positions receiving the same base pay, which shall be revised according to trends in the price of goods. Position-based pay received by each officer shall be based on the duties assigned to them.
Performance-linked remuneration (performance-based pay) is calculated using the Company’s results in the previous fiscal year and coefficients determined by officer type.
Stock-based compensation (restricted stock-based compensation) is intended for officers to share the advantages and risks of changes in the stock price with the shareholders and to increase the officers’ motivation to contribute to raising the stock price and enhancing corporate value. The Company shall grant a calculated certain percentage of performance-based pay as stock compensation. The eligible Directors shall make in-kind contributions for all the monetary claims, and in return shall receive common shares of the Company. The eligible Directors may not transfer, create a security interest on, or otherwise dispose of the common stock during a specified period. The Company shall acquire the shares without consideration in certain circumstances.

The percentage of Directors’ total remuneration that is performance-based compensation varies according to the results of the Company. The Company uses consolidated ordinary income, which reflects foreign exchange gains and losses, as an indicator in the calculation of performance-based compensation because foreign currencies account for a large percentage of the Company’s transactions.

The target for consolidated ordinary income, the calculation basis for performance-based compensation, in the fiscal year ended March 31, 2024 was 5,000 million yen. Actual consolidated ordinary income was 5,627 million yen.

Resolution of the General Meeting of Shareholders on remuneration for officers and others

The 68th General Meeting of Shareholders held on June 26, 2015 resolved to grant remuneration of 400 million yen or less annually to Directors (excluding Directors who are members of the Audit & Supervisory Committee) (this remuneration does not include their salaries as employees; the number of Directors set out in the Articles of Incorporation is ten or fewer, and the number as of the date of submission of the securities report was five).

At the 76th General Meeting of Shareholders held on June 28, 2023, the Company resolved to introduce a restricted stock-based compensation plan and grant monetary claims of 50 million yen or less annually to grant restricted stock-based compensation to Directors (excluding Directors who are members of the Audit & Supervisory Committee and Outside Directors) within the above limit. The resolution also stipulates that the total annual number of common shares of the Company that are issued or disposed of shall be a maximum of 100,000. Furthermore, at the 78th Ordinary General Meeting of Shareholders held on June 26, 2025, the Company received approval to revise the total amount of monetary compensation claims for the grant of restricted stock to the Eligible Directors to an annual amount of no more than 100 million yen.

The Company’s 68th General Meeting of Shareholders held on June 26, 2015 adopted a resolution to set the limit of remuneration for Directors who are members of the Audit & Supervisory Committee at 100 million yen per year (the number of Directors who are members of the Audit & Supervisory Committee set out in the Articles of Incorporation is five or fewer, and the number as of the date of submission of the securities report was four).

Activities conducted by the Nomination and Compensation Committee and the Board of Directors in the process of deciding the amount of officers' remuneration and other matters

Activities conducted by the Nomination and Compensation Committee and the Board of Directors in the process of deciding the amount of officers’ remuneration, among other matters, for the FY2024 are as follows.

(Nomination and Compensation Committee)
The Nomination and Compensation Committee held three meetings in the FY2024. It was requested that the committee discuss the allocation of remuneration to individual Directors and the parsonnel evaluation and provided advice.

(Board of Directors)
At a meeting held on June 26, 2024, the Board of Directors adopted a resolution about the remuneration for Directors (excluding Directors who are members of the Audit & Supervisory Committee) for the FY2024.

MARUBUN CORPORATION (“the Company”) has formulated and applies its “Basic Policy on Establishing Internal Control Systems,” as follows.

To enhance our corporate governance structure, we have undertaken the following initiatives.