Corporate Governance

Board of Directors

The Board of Directors consists of eight Directors (excluding Directors who are Audit and Supervisory Committee Members), including three External Directors (all of whom are Independent Officers), and four Directors who are Audit and Supervisory Committee Members, including three External Directors (all of whom are Independent Officers).
The External Directors (excluding Directors who are Audit and Supervisory Committee Members) comprise a corporate manager with professional insights as a certified public accountant and certified tax accountant, a lawyer with expertise and work experience in the real estate industry, and a business manager with broad insights and a wealth of experience at a think tank specialized in the real estate business as well as years of experience as an executive officer at a trust bank. These External Directors effectively exercise a strong check function to ensure the legality of the Directors' business execution, including providing opinions as necessary during the deliberation of agenda items.
The External Directors who are Audit and Supervisory Committee Members include a lawyer with professional expertise, a person with extensive experience as a consultant in information and communications as well as professional insights as a graduate school professor including human resource development, and a person with professional expertise in DX, extensive experience in formulating business strategies and developing new businesses, and broad insights as a business executive. These External Directors fulfill their oversight and audit functions over the Directors' business execution, including providing opinions as necessary during the deliberation of agenda items, in order to ensure the validity and appropriateness of the Board of Directors' decision-making.
In fiscal 2025, a total of 16 regular meetings of the Board of Directors, which are held once a month, were conducted. Extraordinary meetings of the Board of Directors are also held as necessary. At these meetings, important business executions, including the formulation of management plans and policies, were discussed and resolved based on internal regulations that specify matters required by laws and the Articles of Incorporation, matters authorized by resolutions of the General Meeting of Shareholders, and items to be submitted to the Board of Directors. Furthermore, reports on the status of important business executions and other significant matters were received as appropriate.

Appointments and Remunerations Committee

As an advisory body to the Board of Directors, the Company has established an Appointments and Remunerations Committee chaired by the Lead Independent External Director, comprising six Directors (excluding Directors who are Audit and Supervisory Committee Members) (three External Directors, the Representative Director Chairman, the Representative Director President, and one Non-Executive Director) and one External Director who is an Audit and Supervisory Committee Member. The Committee deliberates on the succession plan for the President and determines the individual compensation of Directors based on a resolution delegated by the Board of Directors, thereby enhancing the independence, objectivity and accountability of the Board of Directors' functions with respect to the appointment and compensation of Directors and other Officers. The Committee convened a total of six times in FY2025.

Governance Committee

As an advisory body to the Board of Directors, the Company has established a Governance Committee chaired by the Lead Independent External Director, comprising six Directors (excluding Directors who are Audit and Supervisory Committee Members) (three External Directors, the Representative Director Chairman, the Representative Director President, and one Non-Executive Director) and three External Directors who are Audit and Supervisory Committee Members.The Committee makes recommendations to continuously enhance the Company's overall corporate governance and improve corporate value, including deliberating on issues related to the transition to a company with an Audit and Supervisory Committee and challenges identified through questionnaire results regarding the effectiveness of the Board of Directors. The Committee convened five times in FY2025.

Audit and Supervisory Committee

The Audit and Supervisory Committee of the Company consists of four Directors who are Audit and Supervisory Committee Members, including three External Directors, all of whom are Independent Officers. The External Directors include a lawyer with professional expertise, a person with extensive experience as a consultant in information and communications as well as professional insights as a graduate school professor including human resource development, and a person with professional expertise in DX, extensive experience in formulating business strategies and developing new businesses, and broad insights as a business executive, thereby strengthening the business audit function in accordance with compliance-based management. In accordance with the division of duties, the Audit and Supervisory Committee attends important meetings and reviews important approval documents in order to understand the process of important decision-making and the status of business execution, and also conducts hearings and investigations into the status of business execution with the relevant departments, receives reports on business from subsidiaries and other entities as necessary, audits the business execution of Directors, and reports the results of such audits to the Directors. In addition, dedicated staff members are assigned to the Audit and Supervisory Committee's Office to assist in the duties of the Audit and Supervisory Committee.

Accounting Auditors

For FY2026, our financial audit was carried out by two certified public accountants, Seiji Yamamoto and Naohiko Sawabe, who are both from Ernst & Young ShinNihon LLC. We also have six other certified public accountants and 13 other staff involved in financial auditing.

Executive Officers

To expedite decision making in business operations and strengthen the functions of each division, the Board of Directors appoints 29 full-time executive officers who, like directors, serve one-year terms.

Management Meeting

To expedite decisions on important management policies and issues, the Management Meeting, composed of three executive Directors and four executive Officers and chaired by the President, is convened as needed (held 46 times in FY2025).

Our Corporate Governance Basic Policy stipulates that an evaluation is to be conducted to determine whether the Board of Directors is functioning properly, and a summary of the results is to be disclosed every year.

(1) Implementation Overview for FY2025
With the cooperation of external consultants, an anonymous questionnaire regarding the effectiveness of the Board of Directors was conducted targeting all Directors and Auditors who are members of the Board of Directors, using a method that facilitates eliciting individual opinions from the executives.

(2) Questionnaire Items
The content is aimed at understanding the improvement status of issues recognized in the previous questionnaire and the status of awareness regarding 'Composition and Operation of the Board of Directors,' 'Management Strategy and Business Plan,' 'Support System for Officers,' and 'Operation of the Appointments and Remunerations Committee (Advisory Committee at the Company's Discretion) ',etc.

(3) Summary of Questionnaire Results
The questionnaire, among other evaluations, received generally positive reviews, confirming that our Board of Directors has adequately secured effectiveness.
① Response Status to Issues from the Previous Evaluation
- Regarding the discussion on the number and composition of the Board of Directors, prior to the Board resolution on the transition to a Company with an Audit and Supervisory Committee, we held multiple discussions on the officer composition under the new institutional design, primarily through the Governance Committee, which is a voluntary advisory committee.
- To enhance deliberations and report contents regarding medium- to long-term management strategies, we have made employee engagement survey results a regular report and provided reports on environment and human capital, thereby striving to enrich agenda items related to medium- to long-term management strategies.
- To strengthen the PDCA cycle for management strategies and other matters at the Board of Directors, the Director in charge explained the key points discussed at the Management Committee and other meetings. We will continue to strive to enhance the content of these explanations.
② Main Issues in the Current Evaluation
- Enhancing explanations and deliberation time for medium- to long-term agenda items
- Explanations of discussion points from pre-submission meeting bodies, etc.

With these issues in mind, a governance committee chaired by the Lead Independent External Director and comprising a majority of external members deliberated on improvement measures, confirmed the results at the board of directors, and evaluated effectiveness.
We will continue to improve the identified issues and enhance effectiveness in the future.

Directors are persons with exceptional character, insights, abilities and abundant experience, as well as high ethical standards. Candidates for directors (excluding Directors who are Audit and Supervisory Committee Members) are determined considering the composition of the Board of Directors, including gender, age, skills, and other diversity considerations, and based on the candidates’ business achievements and performance of duties in previous fiscal years, among other factors. Candidates for directors (excluding Directors who are Audit and Supervisory Committee Members) are decided by the Board of Directors after receiving a report from the Appointments and Remunerations Committee, which is chaired by the Lead Independent External Director and in which a majority of the members are Independent External Directors. Candidates for Directors who are Audit and Supervisory Committee Members are decided by the Board of Directors after receiving a report from the Appointments and Remunerations Committee and obtaining the consent of the Audit and Supervisory Committee.
In the event that circumstances necessitate the dismissal of the president, other Directors or External Officers, the Appointments and Remunerations Committee will be consulted in a timely manner, and the Board of Directors will deliberate on the matter after considering the committee's report.

The company considers that External Directors are independent and that they are unlikely to have conflicts of interest with our general shareholders.
For the requirements for outside directors, see the Corporate Governance Policies and Standards (in Japanese).

We have a system in place for communicating and sharing information with External Directors, which includes holding preliminary briefings of board meeting proposals, taking into consideration the urgency and importance of the proposal.

Policy for Determining Officer Compensation

The compensation level of the Company's Directors (excluding Directors who are Audit and Supervisory Committee Members) is determined based on their position, their business performance, employee salary levels and a third-party survey of corporate management compensations in Japan. Compensation consists of monetary and stock-based compensation in order to provide incentives for short-term performance as well as for medium- to long-term improvements in corporate value.
Monetary compensation consists of fixed compensation and variable compensation based on position. The fixed compensation is paid monthly with a fixed amount.
Variable compensation aims to strengthen incentives for achieving short-term performance. It is calculated by multiplying the standard amount set for each position by a payment rate and is paid in two installments per year. The payment rate varies from 0% to 200%, depending on the payment determination value. This payment determination value is comprehensively determined based on financial indicators such as operating profit and net income, non-financial indicators such as GHG emissions reduction rate and employee engagement ratings, as well as the achievement level of action plans or departmental performance evaluations.
Compensation for outside directors and non-executive directors is limited to basic fixed compensation.
Stock-based compensation is intended to offer an incentive to increase corporate value over the medium to long term and to align the economic value of directors with that of shareholders. Restricted stock is granted to Directors who are Audit and Supervisory Committee Members and non-executive directors including outside directors, and the number of shares granted is determined annually by the Board of Directors based on a standard amount, according to position.
The approximate ratio of fixed compensation, variable compensation, and stock-based compensation paid to Directors is 6:2:2 for ordinary Directors.
The amount of monetary remuneration for each Director (excluding Directors who are Audit and Supervisory Committee Members) is determined by the Appointments and Remunerations Committee based on a resolution of delegation by the Board of Directors, in order to ensure objectivity and transparency in the evaluation and determination of remuneration for Directors (excluding Directors who are Audit and Supervisory Committee Members). The Committee is chaired by the Lead Independent External Director and consists of Independent Outside Directors (excluding Directors who are Audit and Supervisory Committee Members), the Representative Director and Chairman, the President, non-executive Directors, and one External Director who is an Audit and Supervisory Committee Member. The Committee determines the payment amounts after deliberation, including consistency with the decision-making policy resolved by the Board of Directors, and the Board of Directors has judged that the contents of these determinations are in line with the decision-making policy.
In addition, remuneration for Directors who are Audit and Supervisory Committee Members is fixed compensation paid in cash, and the method for determining such remuneration is decided through discussion among the Directors who are Audit and Supervisory Committee Members.
For details, refer to“Annual Securities Report for the 23th Fiscal Year(in Japanese)”

Our President is expected to possess the following qualities, and based on an objective evaluation of these qualities and the candidate, the Appointments and Remunerations Committee deliberates and selects successor candidates for the President.
(1) Is sincere and possesses high ethical standards, a strong sense of curiosity and drive to learn
(2) Possesses the ability to listen to others regardless of their positions
(3) Is quick and decisive, and ultimately takes responsibility when making decisions; has the courage to act and follow through on any matter
(4) Is able to flexibly respond to changes, to realize our corporate philosophy and corporate vision, and to contribute to increasing the value of the Tokyu brand

The Company acquires and holds shares issued by business partners in order to strengthen our business relationships and maintain good relations, thereby contributing to the enhancement of our corporate value.
We conduct an annual review of each publicly traded share we hold, using performance indicators for the most recent fiscal year to assess whether benefits obtained are sufficient relative to capital cost and whether there are risks that could lead to a decline in stock price. Additionally, we perform a quantitative analysis by examining actual performance indicators from the past fiscal years and projected indicators for the coming fiscal years to determine whether the benefits are sufficient relative to capital cost. Furthermore, a qualitative assessment is conducted regarding the future business relationship between the Company and the issuing company. Based on the results of these evaluations, the Board of Directors annually reviews whether the rationale for holding the shares remains valid, considering the economic rationality, future outlook and other factors in a comprehensive manner.
In principle, for shares that no longer fulfill their intended purpose or for which the rationale for holding is no longer valid, we will proceed with selling these holdings, after considering the circumstances of the issuing companies, market trends, and other factors, and strive to reduce them.

We set up a system to promote constructive dialogues with shareholders and investors, and at the same time establish IR policies and provide the necessary management-related disclosures in a timely and appropriate manner. For investors outside Japan, we are committed to providing the needed information disclosures in English.
In principle, dialogues with shareholders are carried out after discussions on how to respond by the President, the Director in charge of IR and other officers, taking into account the purpose and effects of such dialogues. Directors, including External Directors, will respond as needed.
Specifically, we engage in constructive dialogue with investors through financial results briefings and interviews, and disclose essential information to investors in a timely manner on our website and by other means. After major activities, a summary is made and issues are identified, and advice is obtained from outside supporting companies as necessary, while the Board of Directors receives reports on the state of dialogue with investors.