SENKO HOLDINGS

Basic approach to corporate governance

The SENKO Group is a logistics group involved in highly public work that fosters people's development and supports their lives. We make every effort to ensure that all corporate activities thoroughly comply with laws, based on the awareness that good corporate governance is the foundation of business, as well as regarding governance as a high priority for management.

Corporate governance system

1. 1. Institutional design

   SENKO has elected to operate as a company with a Board of Corporate Auditors.

2. 2. Board of Directors

   The Company's Board of Directors meets at least once a month and deliberates on issues as required by laws and regulations as well as important management concerns in addition to being an organization that oversees the execution of business.
   
   In FY2023, the Board convened 14 times to consider topics including the Medium-Term Business Plan, management policies, the annual plan, M&As, important investment opportunities, implementation of sustainable management, and corporate governance (including to verify the suitability of cross-shareholdings and evaluate its own effectiveness).

3. 3. Nomination and Remuneration Advisory Committee

   In December 2022, we established the Nomination and Remuneration Advisory Committee, a majority of whose membership consists of outside directors, to enhance corporate governance by increasing the fairness, transparency, and objectivity of procedures related to director nominations, compensation, and similar tasks. The Committee deliberates matters related to those tasks in response to requests for advice from the Board of Directors and reports its findings to the Board.
   
   In FY2023, the Committee convened three times to consider topics including the determination of criteria for identifying and judging the skills needed to serve on the Board of Directors, the status of compliance with the Corporate Governance Code, and the remuneration system for officers and other personnel.

4. 4. Board of Corporate Auditors

   The Board of Corporate Auditors audits directors' performance of their responsibilities through such means as attendance at Board of Directors meetings and investigation of the status of operations in keeping with audit policies put in place by the Board of Corporate Auditors. We have established an Auditing Department to enhance the functions of the Board of Corporate Auditors.

5. 5. Committees

   In an effort to implement sustainable management throughout the Group, we have created Compliance, Risk Management, Environmental Promotion, and Social Value Improvement committees as well as a Sustainability Promotion Council to oversee them. We have also established an Internal Controls Committee to increase the sophistication of the Group's internal control activities and ensure their thorough implementation. The committee's responsibilities include oversight of the evaluation of the development and administration of the internal control system.

6. 6. Corporate Governance System diagram

   

Evaluation of the effectiveness of the Board of Directors

Since FY2018, the Board of Directors has analyzed and evaluated its own effectiveness by administering an anonymous self-assessment questionnaire about the effectiveness of the Board of Directors to all directors and corporate auditors.
The results of that questionnaire are summarized below.

Analysis and evaluation results
Based on the results of the questionnaire administered at the end of FY2023, there continue to be issues that require improvement in order to increase the effectiveness of the Board of Directors. In particular, we recognize that there is room for improvement in focusing deliberations on key issues, refining risk analysis, and enhancing discussions related to the directions taken by the company, for example in terms of management strategy.

Response to issues based on this analysis and evaluation
Based on these evaluation results, SENKO's Board of Directors will work to improve its effectiveness by working to address the following issues under study and further enhancing its oversight function with regard to agenda items brought before it:

·Clarifying discussion points and risks when deliberating agenda items
·Pursuing more dynamic discussions of the directions taken by the company, for example with regard to management strategy and medium- and long-term items
·Providing more information to outside directors