To remain deserving of the firm trust and confidence society has placed in it, Rengo’s goal is timely and accurate information disclosure combined with sound and highly transparent management with the mission of solving social issues through packaging. In keeping with our fundamental philosophy whose essence is “The truth is in the workplace,” we are enhancing corporate governance by strengthening the current system of directors and Audit & Supervisory Board members while delegating authority and accelerating decision-making. In response to the Corporate Governance Code, we have disclosed our approaches to corporate governance in the form of a Corporate Governance Report to the Tokyo Stock Exchange. The most recent report was submitted on June 30, 2023. Considering the purpose of the Corporate Governance Code, we are continuing to work toward sustained growth for our company and improving our corporate value in the medium- to long-term.

In nominating candidates for directors and Audit & Supervisory Board members, Rengo nominates persons who have a wealth of experience, high levels of insight and expertise conducive to effective corporate governance, sustainable growth, and medium- to long-term corporate value improvement. The Nomination Committee, a consultation body for the Board of Directors, deliberates on the nomination before the Board thoroughly deliberates on the matter and nominates the candidates. Candidates for Audit & Supervisory Board members are nominated with the consent of the Audit & Supervisory Board.

Rengo’s Board of Directors hold not only regular meetings but extraordinary meetings as necessary. The Board makes decisions on matters stipulated by laws and regulations and important managerial matters, as well as constantly supervises the status of business execution.
In FY3/2023, nine regular Board of Directors Meetings were held, where the Board deliberated on 50 items to be resolved or approved and 46 items to be reported.
At the Board of Directors Meetings, outside directors and outside Audit & Supervisory Board members have made suggestions to further enhance the Board functions. Steady efforts are underway for the enhancement.

Regarding the effectiveness of the Board of Directors, Rengo works to enhance the functions of the Board by conducting an annual questionnaire survey (self-evaluation) of directors and Audit & Supervisory Board members including outside officers followed by the report and discussion about the results of its analysis at a Board of Directors Meeting.
Based on the results of the FY3/2023 questionnaire survey, it was confirmed that the overall effectiveness of the Board is being maintained. Directors and Audit & Supervisory Board members have provided constructive input and suggestions regarding improvements to the composition, roles, and operation of the Board, and have shared issues facing the Board.
Discussions and efforts are underway to put these input and suggestions into practice.
We will continue to work to enhance the functions of the Board by regularly analyzing and evaluating its effectiveness.

As of June 29, 2023, Rengo’s Board of Directors consisted of 10 directors. In nominating directors, we comprehensively evaluates candidates’ experience, knowledge, and expertise and makes holistic decisions. To ensure the effectiveness of supervision and practical discussions among the directors, we nominate directors with an eye towards the overall balance and diversity of the Board of Directors.
Furthermore, Rengo has appointed four independent outside directors, thus allowing for opinions stated from an independent stance during discussions at the Board of Directors Meetings. In addition to meeting the criteria for outside directors in accordance with the Companies Act and satisfying the qualifications for independent directors/auditors with no potential conflicts of interest with ordinary shareholders stipulated by the Tokyo Stock Exchange, candidates who can contribute to sustainable growth and increasing corporate value over the medium- to long-term are selected as outside directors.
One of our 10 directors is a female outside director. With this appointment, outside directors now account for one-third or more of the Board of Directors and the diversity of its membership has also been ensured.
Three outside Audit & Supervisory Board members have been appointed, and they will fulfill their roles and duties independently, making full use of their high-level of specialist knowledge and broad experience, as well as offering an appropriate level of input at the Board of Directors Meetings.

Rengo has established a Nomination Committee and a Remuneration Committee as voluntary consultation bodies for the Board of Directors. Each of these committees consists of three or more directors appointed through the Board’s resolution, a majority of whom are outside directors, and the position of chair in each committee is held by an outside director.
To strengthen the independence, objectivity, and accountability of the Board functions with appropriate engagement of and advice from outside directors, the Nomination Committee and the Remuneration Committee meet regularly and deliberate on such matters as the appointment and dismissal of directors and other officers and remuneration of them respectively, in response to consultation by the Board.

Rengo has adopted a remuneration system for directors that is linked to medium- to long-term performance in order to provide healthy incentives for achieving sustainable growth. We also provide stock compensation, appropriately set the ratio of cash remuneration to stock compensation, and have a shareholders’ association made up of officers so that the company is managed with an eye towards increasing corporate value.
The amount of remuneration for directors is determined within the scope of the total amount of remuneration (including the amount of remuneration based on the stock compensation plan) approved by the General Meeting of Shareholders. In determining the remuneration level, consideration is given to social trends in director remuneration, our business performance, balance with employee salaries, and other matters that should be taken into account. Directors’ remuneration consists of basic remuneration, performance-based remuneration (bonuses), and non-monetary remuneration (stock compensation). To ensure the independence and other points of view, remuneration for outside directors consists solely of basic remuneration.
Basic remuneration is paid monthly as fixed monetary remuneration. The amount is determined in accordance with the rank of executive officers as which the recipients serve concurrently. Performance-based remuneration is paid in the form of monetary bonuses. The amount is determined in accordance with the rank of executive officers as which the recipients serve concurrently, with consideration given to business performance for the fiscal year (mainly operating income and ordinary income) and with other factors. If the company decides to pay performance-based remuneration, the payment is made at a certain timing after the end of the relevant fiscal year.
Stock compensation in the form of board benefit trust constitutes non-monetary remuneration. The number of shares granted is equivalent to the number of points given in accordance with the rank of executive officers as which the recipients serve concurrently, and is set within the scope of the upper limit of cash contributed by the company and the maximum number of points given to eligible directors, which have been approved by the General Meeting of Shareholders. Shares are granted to eligible directors at a certain timing after their retirement (after their retirement as executive officers if they continue to serve as executive officers).
The details of remuneration for individual directors are determined by resolution of the Board of Directors, after deliberation by the Remuneration Committee, a consultation body for the Board.

To build and strengthen stable, long-term relationships with business partners, Rengo may acquire and hold their shares if doing so is considered conducive to the company’s sustainable growth and medium- to long-term corporate value improvement. All cross-shareholdings are reviewed in terms of effectiveness, such as medium- to long-term economic rationality and contribution to the maintenance and strengthening of comprehensive relationships with business partners. The outcome of the review is reported to the Board of Directors. We consider reducing cross-shareholdings that are found, in the review process, to have lost significance, after examining whether the risks and benefits of holding the shares are worth the cost of shareholder’s equity.

Rengo proactively engages in succession planning for the CEO and other officers by appointing and nominating senior executives and directors at the Board of Directors Meetings. We provide appropriate supervision so that sufficient time and resources are invested systematically in the development of successor candidates.