Governance Structure Corporate Information Governance Structure

OKI maintains a corporate auditor system, with the Board of Directors and the Audit & Supervisory Board. With an executive officer system in place, it strives to promote timely decision making processes by separating business execution and oversight.

It endeavors to improve the fairness and transparency of management by nominating outside directors to the Board as well as setting up a voluntary committee on nomination, remuneration, etc. so as to ensure effective supervision from an independent and objective standpoint.

Board of Directors

The Board of Directors in principle meets once a month but can call extraordinary meetings when necessary, and is responsible for deciding fundamental management policies and other important matters and overseeing business execution. To enhance management fairness and transparency, four of the Board's nine members (including one female member) are outside directors with a high level of independence. The chairman presides over meetings of the Board of Directors. To clarify management responsibility for each fiscal year, directors are appointed for single-year terms.

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Evaluation of the Effectiveness of the Board of Directors

OKI conducts evaluations and analyses to improve the effectiveness of the Board of Directors by recognizing, sharing, and improving the directions that the Board of Directors should take and the issues related to that direction.

[Method for Evaluating the Effectiveness of the Board of Directors]

The Board of Directors discussed methods for evaluating the effectiveness of the plan in FY2019. (November 2019)

1. We considered the introduction of a third party evaluation system, but we concluded that self-evaluation is appropriate for conducting research and evaluation in line with our company's circumstances. However, we will continue to consider the introduction of the third party evaluation system once a few years in the following fiscal year and beyond, as the third party evaluation system is useful in that the evaluation process can be compared with other companies.
2. As in the previous year, the assessment was conducted in three stages: a questionnaire survey, individual hearings, and deliberations at the Board of Directors. This applied to all Directors and Audit & Supervisory Board members. The Secretariat of the Board of Directors served as the secretariat.
3. The questionnaire was based on the previous year's questionnaire prepared based on "Corporate Governance Code" and "Implementation Guidelines for Corporate Governance System" (Ministry of Economy, Trade and Industry, or "METI"), and included new items related to "Practical Guidelines for Corporate Governance Systems (CGS Guidelines)" (METI). As a result, we asked about "roles and functions of the Board of Directors," "approaches to the utilization of Outside Directors," "approaches to the nomination and compensation of management members," and "ideal form of group governance."

[Results of Evaluation of the Effectiveness of the Board of Directors]

As a result of the FY2019 evaluation, it was confirmed that, although the effectiveness of its Board of Directors has been improving overall, there are still matters that need to be improved.

The details are as follows:

1. Improvements in FY 2019 in issues identified in the FY 2018 evaluation
   The status of issues identified in FY2018 was summarized as follows.
   • Issues implemented

   "Review of internal and external ratio of board members" and "Improving the effectiveness of internal controls at subsidiaries" were implemented.

   • Issues in progress

     Progress is being made in the preparation of the next medium-term management plan for "Deepening discussions on management strategies" "Introduction of segment management indicators, including cost of capital" and "Quantitative assessment of business portfolio."

   • Issues to be further promoted

     It was recognized that "Dialogue that enables investors to understand our growth strategy" should be emphasized based on the next medium-term management plan, and that "Development of a medium-term training curriculum for the development of successors to the president and candidates for directors, and supervision of progress" should be further promoted.

2. New issues identified in the FY2019 evaluation
   The following new issues were identified:
   • Verification of effectiveness of measures

     Verification of whether internal control improvement measures are functioning properly should be promoted mainly at subsidiaries, especially overseas subsidiaries.

   • Further improvement of the functions of the Board of Directors

     To increase the time for discussion, the operation of the Board of Directors should be streamlined. The opportunities to provide field information to outside directors should be increased, such as by increasing opportunities for communication between outside directors and the middle level.

OKI will strive to continuously improve the effectiveness of the Board of Directors with the goal of increasing corporate value.

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Audit & Supervisory Board

The Audit & Supervisory Board comprises four Audit & Supervisory Board members, two of which are outside Audit & Supervisory Board members with a high level of independence. Based on audit policies, methods, etc. decided at Audit & Supervisory Board meetings, Audit & Supervisory Board members attend Board of Directors' meetings and other important meetings, verify the content of reports received from directors, etc., and conduct investigations into matters concerning the Company's operations, financial status, etc. Collaborating closely with outside directors, the Internal Auditing Division, and the accounting auditors, Audit & Supervisory Board members audit the performance of duties by directors.

The OKI Group recognizes sustainable growth and increasing corporate value over mid- and long-term as its most important management priorities in earning the trust of its various stakeholders. To this end, we are working to bolster and enhance corporate governance based on our fundamental policies, including "enhancement of management fairness and transparency," "timely decision-making processes," and "full compliance and fortification of risk management."

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Executive Officer System

OKI appoints executive officers to implement operations in accordance with management policies determined by the Board of Directors so as to separate the functions of business execution and oversight of management and promote timely decision-making processes. Moreover, to assist the president in making decisions, the Company has established the Management Committee.

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Utilization of Voluntary Committees

OKI has established the Personnel Affairs and Compensation Advisory Committee as a voluntary committee to secure transparency in the decision-making processes for appointments of board members and executive officers and remuneration for them. Outside directors play leading roles on the committee. After deliberating from an objective perspective on appointments or dismissals of board members and executive officers as well as the structure and level of their compensation etc., the committee reports its findings to the Board of Directors.

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Internal Auditing

The Group Internal Auditing Division is tasked with internal auditing and it comprises 25 members, including one certified internal auditor and one certified fraud examiner. The division must accurately perceive the actual state of compliance risk management across businesses and functions in the OKI Group, and on that basis conduct internal audits for the purpose of identifying and preventing mistakes and errors as well as corruption in the operation of internal control systems with the goal of supporting operational improvements.

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Members of each Institution

( is chairperson, is advisor)

Title	Name	Board of Directors	Personnel Affairs and Compensation Advisory Committee	Audit & Supervisory Board
Chairman of the Board	Hideichi Kawasaki
Representative Director, President	Shinya Kamagami
Representative Director, Senior Executive Vice President	Masayuki Hoshi
Director, Executive Vice President	Masashi Tsuboi
Director, Senior Vice President	Masashi Fuse
Outside Director	Shigeru Asaba
Outside Director	Tamotsu Saito
Outside Director	Izumi Kawashima
Outside Director	Makoto Kigawa
Standing Audit & Supervisory Board Member	Sei Yano
Standing Audit & Supervisory Board Member	Toshiya Hatakeyama
Outside Audit & Supervisory Board Member	Hideo Shiwa
Outside Audit & Supervisory Board Member	Ryuichi Makino

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Changes in Corporate Governance Structure

		2014/6	2015/6	2016/6	2017/6	2018/6	2019/6	2020/6
Director	Total Number	7	8	7			9
	of which, Independent Outside Directors	1	2		3	4
	Chair	President		Chairman
	Term	2 years	1 year
Audit & Supervisory Board Member	Total Number	4
	of which, Independent Outside Audit & Supervisory Board Members	2
	Term	4 years
Voluntary Committees		Compensation Committee	Personnel Affairs and Compensation Advisory Committee

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