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Outside Directors (as of March 31, 2017)NameReasons for ElectionAny Important Representation of Other EntitiesAttendance at Board of Directors Meetings (Attended/Convened in Fiscal 2016)Kunio ItoMr. Ito has extensive knowledge and a wealth of experience in corporate management cultivated over his years as a university professor (Accounting & Management) and as an outside director at other companies. He was nominated as an outside director to bring to bear his knowledge and experience when providing advice and recommendations regarding the Company’s business judgments and decision-making processes.- Adjunct Professor, Graduate School of Commerce and Management, Hitotsubashi University- Director, Center for CFO Education and Research, Hitotsubashi University- Special Appointed Professor, Chuo University Graduate School of Strategic Management- Outside Director, Sumitomo Chemical Company, Limited- Outside Director, Kobayashi Pharmaceutical Co., Ltd.- Outside Director, Seven & i Holdings Co., Ltd.- Outside Director, Toray Industries, Inc.13/13Takuo TsurushimaMr. Tsurushima served as a corporate leader at a number of companies, including as President & CEO of Tokyo Stock Exchange, Inc. He was nominated as an outside director to bring to bear his extensive knowledge of and experience in corporate management when providing advice and recommendations regarding the Company’s business judgments and decision-making processes.13/13Ken OkazakiMr. Okazaki possesses specialized advanced academic knowledge in the elds of environmental protection, energetics and thermal engineering. Mr. Okazaki was nominated as an outside director to bring to bear his knowledge and capability to provide appropriate supervision and advice in aid of the Company’s business operations.- Institute Professor, Tokyo Institute of Technology- Visiting Professor, World Premier International Research Center Initiative, Kyushu University13/13Outside Audit & Supervisory Board Members (as of March 31, 2017)NameReasons for ElectionAttendance at Board of Directors meetings(a)/ Audit & Supervisory Board meetings(b)(Attended/Convened in Fiscal 2016)Kesao EndoMr. Endo has extensive knowledge and experience as a certied public accountant. He was nominated as an Outside Audit & Supervisory Board Member based on his specialist perspective and highly independent status from management to bring to bear his knowledge and experience in the performance of audits.(a) 13/13(b) 14/14Keizo TannawaMr. Tannawa has extensive knowledge and experience as a management, organizational and human resources consultant in addition to as a corporate manager. He was nominated as an Outside Audit & Supervisory Board Member based on his specialist perspective and highly independent status from management to bring to bear his knowledge and experience in the performance of audits.(a) 12/13(b) 13/14Tomohiro KatayamaA lawyer and certied public accountant, Mr. Katayama has extensive knowledge and experience in the legal and nancial audit profession. He was nominated as an Outside Audit & Supervisory Board Member based on his specialist perspective and highly independent status from management to bring to bear his knowledge and experience in the performance of audits. (a) 9/9(b) 10/10Compensation• Basic Policy for Determining Compensation Paid to Directors and Audit & Supervisory Board MembersAkebono has formulated the basic policy for determining the compensation for Directors and Audit & Supervisory Board Members as follows.1. Acquire and develop talented human resources2. Motivate them to continuously improve corporate performance and value3. Maintain a high level of fairness and rationalityTo maintain an objective and fair compensation system for Directors, we have established a Director Compensation Advisory Committee, which reviews the basic matters relating to Director compensation. Based on the results of this review, the amount of compensation for each Director is allocated within limits approved by the Ordinary General Meeting of Shareholders.Compensation for Directors (excluding Outside Directors) consists of xed remuneration and performance-based remuneration. The xed portion is basic compensation for duties and is based on positions. The total amount of xed remuneration must be approved by the Ordinary General Meeting of Shareholders.The performance-based portion is determined based on the performance of the Company and individual Directors in the preceding scal year. The upper limit for performance-based remuneration is set at 100% of the xed portion. Of this amount 40% (cash) may be provided as short-term performance-based remuneration; 20% (subscription rights to shares) as medium-term performance-based remuneration; and 40% (subscription rights to shares) as long-term performance-based remuneration. The compensation for Outside Directors consists of xed remuneration only.The compensation for each Audit & Supervisory Board Member is determined through discussion by the Audit & Supervisory Board, within limits approved by the Ordinary General Meeting of Shareholders.Corporate Governance Systemthe pre-adjustment of the scal year’s activities policy, in arranging the monthly report meeting, and in the mutual distribution of the audit report, together with conducting joint audits. Furthermore, the Internal Audit Ofce and the independent auditor formulate audit plans related to assessments of internal control over nancial reporting. The results of these audit plans are discussed at meetings held from time to time on a regular basis, as necessary.AKEBONO REPORT 2017 40Part 3 Sustainable Management