Governance System and Structure

Basic Philosophy of Corporate Governance

Based on the founding spirit of “For People's Precious Life,” JMS recognizes that it is extremely important to accurately identify issues in the medical field, maximize management quality and corporate value by creating and providing new value that is truly useful in solving those issues, and maintain and develop appropriate relationships with all stakeholders, including our shareholders. We recognize that it is extremely important to maximize the quality of management and corporate value through the creation and provision of new and truly useful value. To this end, we consider it an important management issue to enhance corporate governance by operating a management control system that aims to improve the transparency, soundness, and efficiency of management.

Outline of Corporate Governance System and Reasons for Adoption of the System

At the Ordinary General Meeting of Shareholders held on June 27, 2023, a resolution was passed to amend the Company's Articles of Incorporation to change to a Company with Audit and Supervisory Committee. The transition to a Company with Audit and Supervisory Committee Member is intended to further strengthen and enhance corporate governance by strengthening the management oversight function of the Board of Directors and accelerating efficient management and decision-making. An overview of the Company's corporate governance structure is as follows.

The Board of Directors consists of President and Representative Director Ryuji Katsura as Chairperson, Chairman Hiroaki Okukubo, Vice President Yasuhiro Awane, Director Shogo Yanagida, Director Toru Sakoda, Director Raita Uematsu, Outside Director Kazuro Ikemura, Outside Director Shozo Ishizaka, Director Yoshio Kondo, Audit and Supervisory Committee Member Member, Outside Director Akira Mito, and Outside Director Director Yoshiharu Sagami. In principle, the Board of Directors meets once a month, not only to pass resolutions on statutory matters, but also to formulate important management policies and strategies that will lead to continued growth and enhance corporate value, and to supervise the execution of business operations. In addition, the Board of Directors has introduced an Executive Officer System, under which Executive Directors and Executive Officers manage the organization and make decisions based on the authority delegated to them by the Board of Directors. Executive Directors and Executive Officers commit the Board of Directors to targets to be achieved, and the Board of Directors supervises the process of achieving these targets. In addition, the Board of Directors, consisting of Directors (excluding Audit and Supervisory Committee Members) and Executive Officers, meets twice a month in principle to review issues related to business execution and to discuss important matters.

The Audit and Supervisory Committee consists of Full-Time Audit and Supervisory Committee Member Yoshio Kondo, Outside Audit and Supervisory Committee Member Akira Mito, and Outside Audit and Supervisory Committee Member Yoshiharu Sagami, and is independent and capable of conducting fair audits. In addition, the Full-Time Audit and Supervisory Committee Member attends meetings of the Board of Directors, as well as other important meetings such as the Board of Directors, to gather necessary information and to share a common understanding of management issues. In addition, Directors and employees promptly report to the Audit and Supervisory Committee Committee on matters that have a significant impact on JMS and the status of internal audits.

The Nominating and Review Committee is a voluntary advisory committee to the Board of Directors to ensure objectivity and transparency in the procedures for the appointment and dismissal of Directors with diverse backgrounds and expertise in order to ensure the Company's continued growth and increase in corporate value, and the Performance Evaluation Committee is a voluntary advisory committee to the Board of Directors to ensure objectivity and transparency in the procedures for verifying the results of performance evaluation of each Director based on the business results and achievement status of the Medium-term Management Plan and the appropriateness of the planned compensation amount. The Performance Evaluation Committee was established as a voluntary advisory body to the Board of Directors to ensure objectivity and transparency in the procedures for verifying the appropriateness of the results of the performance evaluation of each Director and the planned amount of remuneration based on the status of achievement of management results and the medium-term management plan, and to enhance corporate governance.

The Nominating and Deliberation Committee consists of Representative Director, President & CEO Ryuji Katsura, Outside Director Kazuro Ikemura, Outside Director Shozo Ishizaka, Outside Director Akira Mito, Audit and Supervisory Committee Member, and Outside Director Yoshiharu Sagami, a majority of whom are independent Outside Directors.

The Performance Evaluation Committee consists of Director, Audit and Supervisory Committee Member Yoshio Kondo, Outside Director Kazuro Ikemura, and Outside Director Akira Mito, a majority of whom are independent Outside Directors.

A schematic diagram of the Company's corporate governance structure is shown below.

Analysis and Evaluation of the Effectiveness of the Board of Directors as a Whole

An explanation of the analysis and evaluation of the effectiveness of the Board of Directors as a whole is provided below.

(1) Method of evaluation

In order to analyze and evaluate the effectiveness of the Board of Directors as a whole in fiscal year 2023, the Company conducted a questionnaire survey of all members of the Board of Directors (including Audit and Supervisory Committee Members and Outside Directors), giving a five-point rating for each evaluation item, and included an open-ended section to solicit opinions. The Board of Directors Secretariat compiled the results and reported them to the Board of Directors at its meeting held on April 16, 2024.

(Summary of the evaluation)
・Composition of Board of Directors
・The Board of Directors' operation
・Deliberations of the Board of Directors
・Director Training
・Provision of information between the Board of Directors and the Advisory Committee
・Self-evaluation of role on Board of Directors
・Other (free text)

(2) Summary of evaluation results

The Company's Board of Directors has determined that the effectiveness of the Board of Directors is generally adequate. In addition, a certain degree of improvement was seen in the quality and appropriateness of meeting materials in the operation of the Board of Directors, which was an issue addressed in the previous meeting. On the other hand, with regard to the training of Directors, the Company recognized the need to further enhance the training of Directors and Executive Officers as an issue.

(3) Future Actions

The Board of Directors will use the results of this evaluation and other factors to further optimize the materials by, for example, making them more to the point with the aim of stimulating discussion at Board of Directors meetings.

Training Policy for Directors and Corporate Auditors

The Company believes that Directors are appointed with sufficient experience and knowledge, but for the purpose of complementing this, the Company will provide opportunities for them to learn the knowledge necessary to fulfill their roles and responsibilities, as necessary. In addition, the Company will provide opportunities for outside directors and outside corporate auditors to understand the Company's business and other aspects of its operations.