Corporate Governance[PDF:123KB]

CORPORATE GOVERNANCE

Corporate Governance

Basic Position on Corporate Governance

Based on its corporate philosophy, the Yamato Group	effectively utilizing the management resources of the
carries out business activities in accordance with the law	Group is one of the top priorities of management, and we
and social norms and actively promotes compliance man-	have implemented measures and bolstered management
agement. Striving to maximize corporate value by	systems as part of our corporate governance initiative.

Corporate Governance System (As of July 1, 2021)

CORPORATE GOVERNANCE

Management Structure

							Expertise and experience
			Nomination and			Human		Legal affairs
			Compensation	Corporate	Marketing and	resources	Finance and	IT and digital
Name	Position	Outside	and risk	Global
Committee	management	sales	and labor	accounting	technologies
			management
			member			management
Masaki Yamauchi	Chairperson of the
Board of Directors

Representative

Yutaka Nagao Director, Executive

Officer and President

Representative

Kenichi Shibasaki Director, Executive

Officer and Vice

President*

The Company is a Company with an Audit & Supervisory Board. In addition to important management decision- making and the supervision of business execution by the Board of Directors, Audit & Supervisory Board members and the Audit & Supervisory Board, which are independent from the Board of Directors, shall audit the status of the execution of duties by directors.

Also, to supplement the supervisory functions of the

Board of Directors, the Company established a Nomination and Compensation Committee comprising a majority of independent outside directors. At the same time, the Company has separated the supervision and execution of management and adopted an executive officer system to ensure even more prompt decision-making related to business execution.

Haruo Kanda	Director
Masakatsu Mori	Director
Mariko Tokuno	Director
Yoichi Kobayashi	Director
Shiro Sugata	Director
Noriyuki Kuga	Director

System	Company with an Audit & Supervisory Board
Number of directors	9
Outside directors	5
Number of Audit & Supervisory Board members	5
Outside auditors	3
Term of directors	1 year
Voluntary advisory committees	Yes (Nomination and Compensation
Committee)
Executive officer system in place	Yes
Independent auditor	Deloitte Touche Tohmatsu LLC

Composition of the Board of Directors, Audit & Supervisory Board, and Nomination and Compensation Committee

Yoshihiro Kawasaki	Full-time Audit &
Supervisory Board
	Member
Mamoru Matsuno	Full-time Audit &
Supervisory Board

	Member
Takashi Yamashita	Audit & Supervisory
Board Member
Ryuji Matsuda	Audit & Supervisory
Board Member

Yoshihide Shimoyama Audit & Supervisory

Board Member

*Representative Director from February 2022

Corporate Governance Framework

Outside directors

5 members (56% of all directors)

Outside Audit & Supervisory Board members		Outside directors
3 members (60% of Audit & Supervisory		4 members (67% of Nomination and
Board members)		Compensation Committee members)

General Meeting of Shareholders

Board of

Directors

Inside directors

4 members (44% of all directors)

Audit &

Supervisory

Board

Inside Audit & Supervisory Board members 2 members (40% of Audit & Supervisory Board members)

Nomination

and

Compensation

Committee

Inside directors

2 members (33% of Nomination and Compensation Committee members)

Elect

Elect

Elect

Audit &

Nomination and

Compensation

Supervisory

Coordinate

Audit

Board of Directors

Committee

Board

Independent

Report

Report

Legal

Make decisions / Supervise

Propose / Report

	Change in the Composition of the Board of Directors
	July 1, 2011				As of July 1, 2022
			Ratio of			Ratio of
			outside			outside
			directors			directors
	4 inside directors	33%		4 inside directors	56%
	2 outside directors			5 outside directors (including 1 female outside director)
054	YAMATO HOLDINGS CO., LTD.
Integrated Report 2021

Auditor

Executive

Management Committee

CSR Division

Advisor

Accounting

Conference

audit

Report

Propose / Report

Execute

Execute

business

business

Audit Division

Group Companies

Internal

audit

YAMATO HOLDINGS CO., LTD.

055

Integrated Report 2021

CORPORATE GOVERNANCE

Corporate Governance

Efforts to Improve Corporate Governance

Management Strategy

DAN-TOTSUThree-Year

DAN-TOTSUThree-Year

KAIKAKU 2019 for

YAMATO NEXT100

Plan HOP

Plan STEP

NEXT100

One Yamato 2023

2002-

2011-

2014-

2017-

2020- (YAMATO NEXT100)

2021- (One Yamato 2023)

Board of Directors and Audit & Supervisory Board

Implemented evaluation of effectiveness of the Board of Directors (June 2016)

Shortened the term of directors to one year (June 2003)

Appointed a female outside director (June 2017)

Transitioned to a structure in which outside directors made up one-third of all directors (June 2015)

Appointed outside directors (June 2005)

Transitioned to a structure in which outside directors

comprised one-half of all directors (June 2019)

Appointed outside members as the majority of

members on the Board of Directors (June 2020)

Appointed outside members as the majority of mem-

bers on the Audit & Supervisory Board (June 2020)

Committees, etc.

CORPORATE GOVERNANCE

						Attendance at meetings of
		Independent	Nomination and	Concurrent posts		the Board of Directors and/
	Name	Compensation	Overview of Reasons for Appointment and Expected Roles	or Audit & Supervisory
	officer	(As of June 24, 2021)
		Committee		Board during the fiscal year
						ended March 31, 2021
				• Representative of	The Company has elected Takashi Yamashita as an outside Audit &	Board of Directors:
	Takashi		-	Takashi Yamashita CPA Office	Supervisory Board member in order to draw on his expertise related	18 of 19 meetings
OutsideAudit & BoardSupervisorymembers	Yamashita		• Outside Director of Shin Nippon	to finance and accounting as a certified public accountant with	Audit & Supervisory
Yoshihide			• Outside Audit & Supervisory	experience as a member of the Board of Directors and an outside Audit	15 of 15 meetings
				Biomedical Laboratories, Ltd.	respect to the Company's audit structure.	Board:
						18 of 18 meetings
					The Company has elected Ryuji Matsuda as an outside Audit &	Board of Directors:
	Ryuji		-	• Attorney-at-Law of Matsuda Law	Supervisory Board member in order to draw on his sophisticated exper-	Audit & Supervisory
	Matsuda		Office
			tise as a lawyer with respect to the Company's audit structure.	Board:
						16 of 16 meetings
					The Company has elected Yoshihide Shimoyama in order to draw on his	Board of Directors:
	Shimoyama		-	Board Member of	& Supervisory Board member at other companies with respect to the	Audit & Supervisory
				NIPPON HUME CORPORATION	Company's audit structure.	Board:
					16 of 16 meetings

Board of Directors

				Established the Nomination and Compensation Committee (June 2005)
						Established the Compliance and Risk Committee (August 2006)
Corporate Structure and Other Systems and Initiatives				Abolished advisor position (June 2018)
		Introduced executive officer system (June 2004)		Established Corporate Governance Guidelines (September 2015)

Eliminated retirement benefit system for corporate officers (June 2004) Implemented corporate officer training (October 2015)

		Disclosed ROE target in medium-term management plan (January 2005)		Decided to revise officer compensation system
		Introduced performance-linked compensation system (April 2005)		and introduce a performance-linked,share-based
			compensation system (June 2020)
		Transitioned to a pure holding company (November 2005)
				Introduced succession plans (July 2006)

Concurrent Posts and Main Activities of Outside Directors and Outside Audit & Supervisory Board Members

			Nomination and			Attendance at meetings
		Independent	Concurrent posts		of the Board of Directors
	Name	Compensation	Overview of Reasons for Appointment and Expected Roles
	officer	(As of June 24, 2021)	during the fiscal year
		Committee
					ended March 31, 2021
				• Senior Advisor of International	Masakatsu Mori possesses abundant experience and considerable
				insight as a corporate manager, particularly in the fields of finance and
				University of Japan
				accounting, IT and digital technology, and global business. Accordingly,
				• Outside Director of Stanley
	Masakatsu			the Company has determined that utilizing this insight to furnish
			Electric Co., Ltd.
			oversight and advice from a managerial standpoint, particularly regard-	19 of 19 meetings
	Mori			• Outside Director of Kirin
			ing matters of management strategy, overall encompassing business
				Holdings Company, Limited
				execution, business strategy, financial strategy, and sustainability
				• External Statutory Auditor of
				strategy, will contribute to further enhancing our management struc-
				FAST RETAILING CO., LTD.
				ture, and for this reason, he has been elected as an outside director.
					Mariko Tokuno possesses abundant experience and considerable
					insight as a corporate manager, particularly in the fields of marketing
				• Outside Director of	and sales and global business. Accordingly, the Company has deter-
				mined that utilizing this insight to furnish oversight and advice from a
	Mariko			Happinet Corporation
			managerial standpoint, in addition to the standpoint of customers and	19 of 19 meetings
	Tokuno			• Outside Director of
			employees, particularly regarding business execution, business strategy,
				Mitsubishi Materials Corporation
				and human resource strategy, will contribute to further enhancing our
					management structure, and for this reason, she has been elected as an
					outside director.
Directors					Yoichi Kobayashi possesses abundant experience and considerable
				insight as a corporate manager, particularly in the fields of marketing
					and sales and global business. Accordingly, the Company has deter-
Outside	Yoichi			-	mined that utilizing this insight to furnish oversight and advice from a	19 of 19 meetings
Kobayashi			enhancing our management structure, and for this reason, he has been
				managerial standpoint, particularly regarding business execution,
					business strategy, and investment strategy, will contribute to further
					elected as an as outside director.
					Shiro Sugata possesses abundant experience and considerable insight
					as a corporate manager, particularly in the fields of marketing and
				• Outside Director of JSR	sales, IT and digital technology, and global business. Accordingly, the
				Company has determined that utilizing this insight to furnish oversight
	Shiro			Corporation
		(Committee	and advice from a managerial standpoint, particularly regarding busi-	19 of 19 meetings
	Sugata		• Outside Director of Yokogawa
		Chair)	ness execution, business strategy, increasing productivity, and cost
			Electric Corporation
				structure reform, will contribute to further enhancing our management
					structure, and for this reason, he has been elected as an outside
					director.
					Noriyuki Kuga possesses abundant experience and considerable insight
					as a corporate manager, particularly in the fields of personnel and labor
					management, finance and accounting, and global business. Accordingly,
	Noriyuki		-	-	the Company has determined that utilizing this insight to furnish	15 of 15 meetings
	Kuga		oversight and advice from a managerial standpoint, particularly regard-
					ing business execution, financial strategy, and corporate governance,
					will contribute to further enhancing our management structure, and for
					this reason, he has been elected as an outside director.

Note: Shiro Sugata took on the role of the chairman of the Nomination and Compensation Committee from June 24, 2021, taking over for Masakatsu Mori.

Roles and duties

The Board of Directors shall make important decisions concerning the Company's business and supervise the execution of duties by executive directors and executive officers.

The Board of Directors shall recognize the medium-term management plan as one of the commitments to shareholders and supervise the effectiveness of strategies, such as the Company's business portfolio and the optimal allocation of management resources, to achieve the goals of this plan. Moreover, the Board of Directors shall sufficiently analyze the initiatives aimed at realizing the goals of the medium-term management plan as well as the extent to which the plan's objectives are being achieved. In addition to providing explanations to shareholders, such analyses shall be reflected in future management plans.

The Board of Directors shall encourage executive officers to demonstrate a healthy entrepreneurial spirit and to not excessively avoid or curb risk, while at the same time establishing a framework that enables it to ensure accountability.

The scope of responsibility of each executive officer shall be decided and disclosed by the Board of Directors. Executive officers shall execute business in accordance with internal regulations.

Management

To allow Board of Directors meeting attendees the opportunity to prepare for meetings in advance, the Board of Directors secretariat shall send agenda items and related materials to directors well in advance of the meeting date and provide explanations in advance as needed.

The annual schedule of Board of Directors meetings as well as anticipated agenda items shall be decided in advance, and this information shall be provided to directors and Audit & Supervisory Board members.

The number of issues to be deliberated as well as the frequency of meetings shall be appropriately set, and the time of meetings shall be decided so as to allow sufficient time for deliberations.

As needed, meetings comprising Board of Directors

meeting attendees shall be held for the purpose of exchanging ideas, thereby encouraging lively debate.

Evaluation of effectiveness

To verify the effectiveness of the Board of Directors, the Company surveys all directors and Audit & Supervisory Board members on an annual basis regarding the composition and operational status of the Board of Directors. Based on the survey results, the Company carries out an evaluation on the Board's effectiveness in terms of such matters as the condition of the Board's operation and the state of deliberation held at Board meetings. From the fiscal year ended March 31, 2020, in addition to the survey, the chair (chairperson of the Board of Directors) has begun performing interviews to further enhance the usefulness of the evaluation.

Results of Evaluation for the Fiscal Year Ended March 31, 2021

In the effectiveness evaluation for the fiscal year ended March 31, 2021, the Company received an evaluation that the composition, management conditions, and deliberation conditions of the Board of Directors were largely appropriate as a system where the Board of Directors serves as the oversight function, and that a culture where attendees actively speak up and engage in unrestricted discussions at the Board of Directors meeting had taken hold.

Based on these results, the Company has confirmed that the Board of Directors has been able to display an effectiveness that contributes to securing sound management and achieving prompt and accurate decision-making and business execution, which are the Company's basic policies for corporate governance.

With regard to the medium-term management plan "One Yamato 2023," which was announced in January 2021, the Board of Directors conducted proactive exchanges of views and had exhaustive discussions on the effectiveness of this plan based on the changes to the external environment since the formulation of the transformation plan "YAMATO NEXT100." The Company will regularly monitor the progress of the medium-term management plan,

056	YAMATO HOLDINGS CO., LTD.
Integrated Report 2021

YAMATO HOLDINGS CO., LTD. 057 Integrated Report 2021

CORPORATE GOVERNANCE

Corporate Governance

including the impact of organizational restructuring, which was implemented in April 2021.

Going forward, the Company will further strengthen corporate governance to improve the soundness of the entire Yamato Group's management structure while

continuously working to maintain and improve the effectiveness of the Board of Directors for the execution of the growth strategies called for in the medium-term management plan "One Yamato 2023."

CORPORATE GOVERNANCE

Compensation of Directors and Audit & Supervisory Board Members

(Year ended March 31, 2021)

	Directors and Audit &	Total compensation and			Total by compensation category (Millions of yen)	Head count of eligible
	Supervisory Board members	other remuneration	Basic compensation	Performance-linked	Non-monetary	directors and Audit &
	(Millions of yen)	compensation	compensation, etc.	Supervisory Board members
Directors		284		249		35	-	4

Audit & Supervisory Board

Outside directors	69	69	-	-	5
Audit & Supervisory Board members	48	48	-	-	2
Outside Audit & Supervisory Board members	30	30	-	-	4

Roles and duties

The Audit & Supervisory Board and its members shall exercise their authority proactively, and they shall appropriately state their opinions at Board of Directors meetings as well as to members of senior management.

The full-time Audit & Supervisory Board members shall attend Board of Directors meetings and other important meetings related to the execution of business, express reasonable opinions, hold effective Audit & Supervisory

Board meetings, and ensure that information is shared and that members work together in a coordinated manner. The Audit & Supervisory Board shall regularly hold information exchange meetings for the purpose of sharing information with outside directors, thereby ensuring more robust gathering of information and encouraging teamwork.

	Amount of compensation and methods for calculation and	6. Timing of delivery and conditions
	determination	The Company pays its basic compensation (fixed compensa-
1. Basic compensation	tion) and short-termperformance-linked compensation (variable
The Company's compensation for directors is determined based	compensation) as monetary sums on a monthly basis, encom-
on the following factors.	passing twelve equal installments annually.
	A competitive level of compensation	7. Authority for decisions on compensation and other
· Provide rewards according to roles and responsibilities, as well	remuneration for individual directors
as performance, and set compensation at an adequate level to	Based on the policy for decisions resolved by the Board of
secure talented human resources	Directors, the Company has assigned Representative Director
	A compensation system emphasizing the improvement of	and President Yutaka Nagao as the authority for making deci-

Nomination and Compensation Committee

corporate and shareholder value	sions on the amounts of basic compensation (fixed compensa-
· Link compensation to business performance so as to motivate	tion) for individual directors and short-termperformance-linked
directors to achieve performance goals	compensation (variable compensation) so that he can assess

The Nomination and Compensation Committee shall comprise a majority of independent outside directors and internal directors and act as an advisory body to the Board of Directors. The committee shall deliberate on particularly important matters pertaining to nomination and compensation and present the results of these discussions to the Board of Directors in an effort to enhance management transparency.

The committee shall deliberate on matters related to the appointment or dismissal of directors, Audit & Supervisory Board members, and executive officers on the basis of business performance and multifaceted observations and

evaluations, verify the validity of such decisions, and present the results to the Board of Directors.

The committee shall propose several candidates to the Board of Directors, including candidates recommended by the serving representative to the Board of Directors, as successors to the representative director to the Board of Directors, following deliberation and based on multifac- eted observations and evaluations of candidates' track records, human nature, and other factors and verification of their appropriateness.

· Establish a compensation composition that promotes the	each of the directors while taking factors such as Companywide
sharing of common interests with shareholders by linking it to	business results into consideration. In order to ensure objectivity
corporate value over the medium to long term	and transparency, however, the representative director and
	A fair and equitable compensation system	president is to determine respective amounts of compensation
· Ensure that the process for determining compensation is	for individual directors, upon having taken into consideration
objective and highly transparent	findings reported by the Nomination and Compensation
2. Compensation structure	Committee, which is chaired by one of the outside directors,
The Company's compensation for directors consists of basic	who constitute a majority of its membership, based on the
compensation (fixed compensation), which takes compensation	committee's preliminary deliberations regarding amounts of
levels at other companies and other such factors into consider-	compensation and other remuneration for individual directors
ation, and performance-linked compensation (variable compen-	along with details regarding the calculation of such amounts.
sation). In addition, compensation for Audit & Supervisory Board	8. Revision of officer compensation system
members and outside directors consists exclusively of basic	The Company identified issues related to the officer compensa-
compensation due to the nature of their functional roles.	tion system, which were then reported to the Nomination and

Support Framework for Directors and Audit & Supervisory Board Members

3. Policy for determining basic compensation (fixed compensation)	Compensation Committee and discussed repeatedly in pursuit
Basic compensation (fixed compensation) is determined in	of the most optimal compensation system. In order to further
accordance with rank and title and based on responsibilities,	strengthen the motivation of the Company's officers to contrib-

The Company shall establish a support framework that enables it to provide necessary and adequate information at the necessary time to allow directors to effectively fulfill their roles and duties.

By participating in key business strategy meetings for the overall Group and by observing key Group business sites, including those overseas, participants are able to better understand the business strategies and provide opportunities to see how these strategies are being advanced.

As a system to help Audit & Supervisory Board members smoothly perform their duties, employees in the internal audit division shall be appointed to assist Audit & Supervisory Board members.

Audit & Supervisory Board members shall exercise their authority to perform investigations in accordance with the Companies Act. In addition, if a director or employee

discovers a fact that could potentially inflict marked damage on the Company, they shall immediately report this fact to an Audit & Supervisory Board member, even if there is no request to do so from an Audit & Supervisory Board member.

If a director or Audit & Supervisory Board member believes it to be necessary, they shall obtain advice from an outside expert at the Company's expense.

The internal audit division shall regularly hold meetings with the full-time Audit & Supervisory Board members, and provide audit reports in a planned manner to the Board of Directors and the Audit & Supervisory Board, thereby enhancing the provision of information to, as well as bolstering coordination with, outside directors and outside Audit & Supervisory Board members.

upon having considered compensation levels at other compa-	ute to the achievement of performance goals and the creation
nies and other such factors.	of medium- to long-term corporate value and sustainable
4. Policy for determining performance-linked compensation	growth, and to realize a competitive compensation level for
(variable compensation)	recruiting and retaining talented human resources, the Company
As benchmarks pertaining to performance-linked compensation,	has decided to revise its officer compensation system.
the Company uses operating profit to better link compensation	From the fiscal year ending March 31, 2022, the Company's
to corporate performance and also to achieve greater transpar-	compensation for directors consists of basic compensation
ency and objectivity.	(fixed compensation), short-termperformance-linked compensa-
5. Policy for determining mix of compensation and other	tion (variable compensation), and medium- to long-term perfor-
remuneration types for individual directors	mance-linked compensation (variable compensation). Outside
The mix of compensation types is such that the higher a direc-	directors receive only basic compensation (fixed compensation).
tor's position, the more weight is assigned to performance-	The Company is to make payment of its medium- to long-
linked compensation. The Company has opted for this approach	term performance-linked compensation under its performance-
upon having taken into account compensation levels at other	linked, share-based compensation system (share-based
companies, in part because this approach makes it possible to	compensation), approved per resolution at the General Meeting
further fuel motivation with respect to achieving performance	of Shareholders held on June 23, 2020. The Company will
targets, generating medium- to long-term corporate value, and	accordingly make calculations based on performance bench-
attaining sustainable growth, and also because the Company	marks for the fiscal year ending March 31, 2022 and grant
seeks to offer competitive compensation levels for recruiting	points (one point corresponds to one share) in June 2022.
and retaining talented human resources.

058	YAMATO HOLDINGS CO., LTD.
Integrated Report 2021

YAMATO HOLDINGS CO., LTD.	059
Integrated Report 2021

CORPORATE GOVERNANCE

Corporate Governance

CORPORATE GOVERNANCE

System for compensation of directors and Audit & Supervisory Board members (from the fiscal year ending March 31, 2022)

Type of Compensation			Objective and Overview	Performance
		Indicators
Fixed	Basic	Foster prudent execution of duties according to the scope of those duties	-
compensation			Compensation levels are determined with reference to trends at compensation benchmark companies.
			Set incentives for achieving diverse quantitative and qualitative performance goals	Operating
	Short-term			The basic amount, which is paid upon the achievement of targets, is set as a proportion of basic compensation accord-	revenues,
			ing to the scope of a director's duties (with consideration given to compensation benchmarks).	operating
	performance-
			Through this system, certain targets are set and compensation is paid according to the level of their achievement.	profit,
	linked compen-
			The specific amount to be paid is determined within a range of 0% to 150% of the basic amount, according to the level	profit attribut-
	sation
			of achievement of performance targets for the relevant fiscal year.	able to
	(incentives)
			The amount determined in each fiscal year is paid in monthly installments.	owners of
					parent, etc.
Variable			Align motivations for improving corporate performance over the medium to long term with the interests of shareholders
			The basic amount to be paid upon 100% achievement of targets is set as a proportion of basic compensation accord-
	Medium- to
			ing to the scope of a director's duties (with consideration given to compensation benchmarks).
	long-term
			The number of points (basic points) granted to directors upon 100% achievement of targets is calculated by dividing
	performance-			ROE, TSR, ESG
			the basic amount by the average of the closing prices of the Company's shares at the Tokyo Stock Exchange in the
	linked compen-			indicators,*
			month preceding the fiscal year in which the medium-term management plan starts.
	sation			etc.
			The specific number of points to be granted is determined within a range of 0% to 150% of the basic points, according
	(share-based
			to the level of achievement of indicators in the Company's medium-term management plan.
	compensation)
			In principle, medium- to long-termperformance-linked compensation is provided in a lump sum in the form of shares
				upon retirement.

* From the fiscal year ending March 31, 2022, the ESG indicator has been set as "greenhouse gas emissions."

9. Other

the facts, enact the necessary response and corrections, and promote measures to prevent a reoccurrence.

From an operational standpoint, we promote specific response procedures, processing methods, and risk-assessment criteria that are shared on a Groupwide basis. This enables us to prevent the overlooking of major risks by adopting a consistent management flow and response to all reports received. Furthermore, by clarifying the persons responsible for decision-making at the time reports are received and unifying relevant standards, we are improving our level of risk awareness. We prevent the reoccurrence of issues by formulating rules for holding verification meetings internally to ensure that we carry out an appropriate investigation and response. Additionally, we implement the standardized management of whistle-blowing information and the details of responses on a Groupwide basis, thereby allowing us to ascertain Groupwide trends and share examples of actual cases in a cross-organizational manner. Such information and details are reported regularly to the Board of Directors, helping to facilitate improvements across the Group.

To further reinforce our compliance management, the whistle-blower system was registered under the Whistleblowing Compliance Management System (WCMS) (declaration of conformity registration system) of Japan's Consumer Affairs Agency in July 2020.

WCMS symbol

Building Solid Relationships through Survey Results The Yamato Group conducts business partner questionnaires of contractors, and suppliers of equipment and other business necessities, as an initiative aimed at implementing and realizing its Corporate Stance. The results of these ­surveys are used to promote improvements and strengthen communication toward the development of strong and lasting relationships with our business partners.

A certain percentage of the monetary compensation shall be allocated to the purchase of shares of the Company through the Officers and Executives' Shareholding Association.

Policy on Cross-Shareholdings

Business Continuity Plan

The Company has a policy of owning stocks that are deemed meaningful based on comprehensive consideration from a medium- to long-term perspective of the relationship with the Group's businesses, the profitability of the Company, and the potential for creating new business opportunities, among other factors. A decision shall be made every year at the Board of Directors meeting concerning whether to continue holding the stocks based on careful consideration of various factors including previous business transactions with the Company and the market price of the shares, and after verifying the benefits and risks

associated with holding the stocks from a quantitative and qualitative perspective. The Company works to reduce the number of stocks it owns that are deemed to be of little significance.

In exercising the voting rights of shares held, the decision to support or oppose agenda items at the sharehold- ers' meeting shall be made on a case-by-case basis, with consideration given to the issuing company's enhancement of corporate value, the issuing company's compliance framework, and the possibility of a negative impact on the Group's business, among other factors.

As a corporate group that offers the TA-Q-BIN service as a part of social infrastructure, the Yamato Group has formulated a business continuity plan (BCP) to ensure that it can keep offering services in a steady manner even under unforeseeable circumstances. Based on the experience gained after the Great East Japan Earthquake and other disasters, we are anticipating various emergency scenarios in an effort to reinforce our crisis management system on a Groupwide basis.

We have also established the Yamato Group BCP Basic Policy, which is supported by the three pillars of giving the utmost priority to human life, aiming for the prompt

recovery of operations at each Group company, and meeting the expectations of local community members as a part of social infrastructure. Guided by this policy, we have determined various Groupwide standards and have created a wide range of manuals in accordance with the business continuity of each Group company.

Going forward, we will strengthen our response to dealing with damage from natural disasters such as earthquakes, for which damage is expected to be large in scale, and flooding caused by heavy rain and other factors. At the same time, we will promote extensive examinations of various risks that could impact our business continuity.

Compliance

	Strengthening internal control for the Group overall	Enhancing the whistle-blower system
	The Yamato Group has established an internal control	The Yamato Group has established a whistle-blower system
	system in order to promote a sound corporate culture in	to promptly discover and appropriately respond to law and/
	the Group as a whole and to enable employees to perform	or internal regulation violations. In addition to compliance-
	their duties effectively and efficiently without any misbehav-	related issues, such as corruption and human rights viola-
	ior or mistakes. Having stipulated its basic policy on the	tions, the whistle-blower system accepts reports on any
	internal control system in accordance with the Companies	action that violates internal regulations and the Group's
	Act, each Group company is working on strengthening inter-	Management Philosophy. In addition to conventional con-
	nal control.	tact points, such as the president, Compliance and Risk
	Additionally, in order to respond to the internal control	Committee members, and external lawyers, in February
	report system pursuant to the Financial Instruments and	2019 the Group established an independent contact point
	Exchange Act, we are promoting reviews of business rules	for Group companies, thereby securing an appropriate
	and the standardization of operations, checking whether	structure for whistle-blowing. The Group's whistle-blowing
	operations have been effectively performed in accordance	regulations protect the privacy of whistle-blowers and
	with the rules, and establishing a system to immediately put	ensure that they do not suffer any unfair treatment as a
	improvements in place should there be any shortcomings.	result of making a report. To create an environment that
	Internal control over the financial reporting of the	encourages whistle-blowing, the Group carries out investiga-
	Yamato Group as of March 31, 2021 was considered valid,	tions of all reports, whether whistle-blowers are anonymous
	and a report was submitted to the Kanto Local Finance	or provide their real name. When a report is made on an
	Bureau.	issue, the whistle-blower system works to promptly confirm
060	YAMATO HOLDINGS CO., LTD.
Integrated Report 2021

Accountability

The Yamato Group considers the explanation of corporate	established the Disclosure Policy in order to disclose and
and management data to shareholders, investors, and other	manage information in a more appropriate manner and
stakeholders to be an important corporate governance	enhance the reliability of that information.
issue and is committed to the speedy, accurate, and fair	The main investor relations activities are listed below.
disclosure of information. Furthermore, the Group has
Item	Number of times		Content
Settlement of accounts meetings for	4	The first-quarter meeting is held by telephone with the chief financial officer. Meetings for the second, third,
analysts and institutional investors		and fourth quarters are held with the president.
Visits by the president to investors	1 or more per year	The president or chairman makes regular overseas visits to investors in the United States, Europe, and Asia to
explain management policies.
in the United States, Europe, and Asia	to each region
Note: Conducted via teleconference from February 2020 on in light of the impact of the COVID-19 pandemic
Small meetings with the president	2 per year	Creating regular opportunities for direct dialogue with management
Management plan briefings and	2 or more per year	Creating regular opportunities to promote understanding of business operations
facility tours	Note: Since February 2020, certain briefings and tours have not been carried out in light of the COVID-19 pandemic.
		Integrated reports, financial results, news releases, securities reports, and quarterly reports; materials per-
Website for investor relations	-	taining to settlement of accounts meetings, convocation notices for the ordinary general meeting of share-
materials	holders, notices of resolution, and disclosure of voting results. Publication of most important information in
		two languages-Japanese and English-so that information can be communicated to foreign investors.
Establishment of IR department	-	Responsible for developing IR strategies to initiate dialogue with shareholders and other investors and
disclosing information
				061
			YAMATO HOLDINGS CO., LTD.
			Integrated Report 2021