AKEBONO REPORT 2017

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3PARTSustainable ManagementBoard Evaluation Total Amount of Compensation Paid to Directors and Audit & Supervisory Board Members (Fiscal 2016)Amount of compensation (Millions of yen)Compensation by category (Millions of yen)Number of directors/Audit & Supervisory Board membersFixed remuneration (Cash)Performance-based remunerationShort-term (Cash)Medium-term (subscription rights to shares)Long-term (subscription rights to shares)Directors184184－－－9Audit & Supervisory Board members5151－－－7Total234234－－－16(Outside directors and Audit & Supervisory Board members) 4141－－－7*The above table includes two Directors and two Audit & Supervisory Board Members who retired at the close of the 115th Ordinary General Meeting of Shareholders held on June 17, 2016. As of the end of scal 2016, the Company had 7 Directors and 5 Audit & Supervisory Board Members. (1) Directors Fixed Remuneration ¥300 millionShort-term performance-based remuneration ¥120 million (excluding outside directors)Medium-term performance-based remuneration ¥60 million (excluding outside directors)Long-term performance-based remuneration ¥120 million (excluding outside directors)(2) Audit & Supervisory Board members Fixed remuneration ¥60 millionAkebono conducts a Board evaluation for the purpose of enhancing its effectiveness, with the ultimate aim of achieving sustainable growth as a Group and improving corporate value. The results of this evaluation in scal 2015 and initiatives to further improve its effectiveness are outlined below. ScopeThe Company’s directors and auditors (including outside directors and auditors)Survey TimeframeFrom mid-March to mid-April 2016Question Topics1. Structure of the Board of Directors2. Operation of the Board of Directors3. Duties and responsibilities of the Board of Directors (especially oversight functions)4. Support framework for outside directors5. Support framework for outside auditors6. Relationship with investors and shareholders7. One’s own contributions and other commentsAreas in need of improvement• Composition of internal directors (i.e., their balance of knowledge, experience, abilities and specialties) for sustaining corporate growth and improving corporate value over the longer term• Allocation of time to discuss corporate strategy and important matters at Board of Directors meetings, measures to enhance discussions (method of operation, provision of information by outside directors, etc.)• Improve administration of internal notication system, Board of Directors’ oversight of its operation• Appropriate and effective feedback of opinions from inves-tors and shareholders to Board of DirectorsAreas in good standing• Structure of Board of Directors(ratio of inside and outside directors)• Frequency of Board of Directors meetings• Establishment of the Director Nomination Advisory Committee and the Director Compensation Advisory Committee as bodies to assist the Board of DirectorsG 1. Method for Evaluating Board EffectivenessA survey was conducted using the following methods. 2. Effectiveness Evaluation and AnalysisFurther analysis and evaluation was performed based on the results of the survey, and the results were reported to and discussed by the Board of Directors. 3. Future Action to Improve EffectivenessAs a result to the effectiveness evaluation and analysis, a number of areas in need of improvement have been pointed out from the standpoint of ensuring effectiveness, despite having put in place systems for ensuring the effectiveness of the Board of Directors. (1) Enhance discussions of important matters by the Board of Directors(2) Feedback of investor and shareholder opinions to the Board of DirectorsGovernance｜Toward Sustainable GrowthUpper limits of annual compensation for directors and Audit & Supervisory Board Members upon resolution of the Ordinary General Meeting of Shareholders (annual amount)Corporate Governance System41 AKEBONO REPORT 2017