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Corporate Governance

Corporate Governance Structure

The SWCC Group is working to increase the efficiency and speed of business execution by substantially delegating authority for business execution to Corporate Officers, while promoting the strengthening of auditing and supervisory functions centered on the Audit & Supervisory Committee.
In addition, by having clearly defined the authority and responsibility of the persons responsible (Corporate Officers in charge) for respective segments that are aligned with our business segments, we are promoting further enhancements to the revenue structure, which is no longer defined by individual business operating companies, and efficient management based on the performance indicator Return On Invested Capital (ROIC) and others.

Corporate Governance Report

・Corporate Governance ReportPDF（Last Update: June 25, 2025）

Corporate Governance Structure Diagram (as of April 1, 2025)

Corporate Governance System Diagram

Business Continuity Management (BCM)

Through business continuity management (BCM), the SWCC Group prepares for risks such as natural disasters and system failures as we advance initiatives aimed at fulfilling our social responsibility through the stable supply of products to business partners. We also conduct verification and review of our business continuity planning (BCP) manual to respond swiftly to changes in the business environment and maintain the continuity of our business. In fiscal year 2024, we reviewed hazards that require countermeasures at all Group locations and updated the BCP manual, focusing on both hazards and measures against infectious diseases. We have implemented these measures. Additionally, in fiscal year 2025, we will verify the effectiveness of the manual and conduct site inspections. Risks that threaten business continuity have increased and diversified in recent years, encompassing climate change, cyber attacks, geopolitical risks, contagious diseases, and more. As a group of companies that contribute to social infrastructure, the SWCC Group positions the management and reduction of risk as a key management issue and engages in ongoing related activities throughout the Group.

Initiatives by the Board of Directors and by committees

Board of Directors FY2024 convened 21 times

presidentPresident In-houseIn-house OutsideOutside

Purpose and authority Composition
To deliberate and decide on matters regarding the management policies and business execution of the Company and its Group companies, and to supervise and ensure that the execution of directors' duties is duly and efficiently conducted.
Matters discussed
  • Reporting and deliberation on the progress of the Mid-Term Management Plan and the status of business execution during the current fiscal year
  • Reporting and deliberation on M&A to strengthen the business portfolio in light of the business environment and competitive situation
  • Reporting and deliberation on the status of dialogues with shareholders (investors) through IR activities, etc.
  • Reporting and deliberation on compliance and risk management issues for the Group overall
  • Reporting and deliberation on initiatives to address sustainability issues, including environmental initiatives
  • Reporting and deliberation on the evaluation of the effectiveness of the Board of Directors (questionnaire survey based on advice from outside bodies)
 2 directors
President In-house
5 directors who are
Audit and Supervisory
Committee members
Outside Outside Outside Outside In-house

Audit and Supervisory Committee FY2024 convened 17 times

Purpose and authority Composition
To audit and supervise the execution of directors' duties through monitoring and verification of the internal control system and through effective cooperation with accounting auditors, the internal audit department, and other departments, in accordance with the audit policy and plans set forth by the Audit and Supervisory Committee.
Matters discussed
  • Formulating audit policies and audit plans
  • Evaluation of accounting auditors and determination of appropriateness of reappointment
  • Preparing audit reports
 5 directors
Outside Outside Outside Outside
In-house

Nominating and Compensation Committee FY2024 convened 7 times

Purpose and authority Composition
Following consultation with the Board of Directors, the Nominating and Compensation Committee deliberates and reports on matters related to nominations, such as succession planning and the nomination of candidates for directors and executive officers, and on matters related to compensation, such as the determination of the structure and systems for directors and senior management and the amounts of individual compensation. 4 directors
Outside Outside Outside Outside

Approach to the composition of the Board of Directors

Our basic approach to corporate governance is based on the SWCC Purpose, which serves as a guidepost to align the SWCC Group's raison d'etre, management, and employees along the same path, and on the recognition that the speed and efficiency of management and the accompanying enhancement of monitoring functions are universal corporate challenges. In accordance with this policy, in appointing directors we seek people who exhibit excellent character and insight and who can supervise and manage the Company. It is also our policy to appoint members with diverse backgrounds in order to cover a wide range of knowledge and expertise that we consider important to our Company.
Based on the above policy, in the Board of Directors we require experience in corporate management as well as knowledge and insight related to sustainability in order to further promote initiatives aimed at resolving social issues. We select a balanced lineup of persons who have abundant knowledge and experience in fields such as international affairs, accounting, finance, and technology. We will continue to review the skills required for the Board of Directors in accordance with changes in management policies and strategies.

Directors' skill matrix

Takayo
Hasegawa		 Tetsuo
Komata		 Yuji
Sakakura		 Takashi
Mukuno		 Minako
Nishimura		 Koji
Naito		 Kumiko
Baba		 Futoshi
Yamaguchi
Corporate management Required Skills
Corporate
management
Sustainability Sustainability
Sales Sales
Overseas business Overseas
business
Accounting and finance Accounting
and finance
Technology Technology

Reasons for selection of skills

Skills Reasons for selection
Corporate management Corporate management
Directors who possess robust knowledge and experience related to corporate management and who can promote the sustainable growth of the SWCC Group's corporate value are essential in achieving the goals of the Change & Growth SWCC 2026 Rolling Plan 2024 Mid-Term Management Plan.
Sustainability Sustainability
Directors who possess robust knowledge and experience concerning the environment, society, and the strengthening of corporate governance are essential in working to promote social problem-solving business, achieve a sustainable society, and enhance our corporate value on the foundation of the technologies and experience built up in our business under the SWCC Purpose.
Sales Sales
Directors who possess robust knowledge and experience in assessing and analyzing market trends and formulating sales strategies are essential in providing high value-added products.
Overseas business Overseas business
Directors who possess experience in overseas business management and robust knowledge and experience concerning overseas business environments are essential in sustainably growing our overseas businesses.
Accounting and finance Accounting and finance
Directors who possess knowledge and experience of accounting and finance are essential in carrying out growth investments aimed at sustainable enhancement of corporate value, as well as in promoting management that will improve capital efficiency based on the key management indicator of return on invested capital (ROIC).
Technology Technology
Directors who possess robust knowledge and experience concerning technology are essential in creating products of suitable quality, conducting wide-ranging research and development including basic research, creating new business models, promoting DX, etc.

Reasons for the selection of inside directors and outside directors

Name Reasons for selection
Takayo
Hasegawa		 Over many years, he has significantly increased corporate value through excellent management skills and leadership. He has extensive business experience, achievements, and insight as a manager, and as further contributions are expected from him in the future, he has been reappointed as a director.
Tetsuo
Komata		 Starting April 2025, he will assume the position of CEO, Executive President, and Representative Director of our company, driving our business forward to achieve the Mid-Term Management Plan "Change & Growth SWCC2026 Rolling Plan 2024" and looking ahead to sustainable growth beyond that. He possesses extensive experience and achievements in overall management, and, based on our judgment that he can continue to contribute to enhancing the corporate value of the SWCC Group, we have reappointed him as a director.
Yuji
Sakakura		 Having cultivated extensive insight into management through his careers as an executive in finance-related operations at a general trading company, a securities company manager, and Chief Financial Officer at an M&A advisory firm, we expect further reinforcement of SWCC Group's corporate governance by having him audit and supervise our management based on such experience and insight, and have therefore reappointed him as an external director.
Takashi
Mukuno		 He has experience and achievements in global corporate management, including in business planning at listed companies and as a top executive at one our overseas subsidiaries. Utilizing his extensive experience and achievements, he appropriately fulfills his duties as an Audit and Supervisory Committee member from a global management perspective. He was appointed as an outside director who is an Audit and Supervisory Committee member based on the expectation that he will provide accurate recommendations and oversight of execution concerning the Company's business from a neutral and objective standpoint.
Minako
Nishimura		 She possesses extensive experience primarily in human resource development and career advancement, as well as high-level insights as a corporate manager. With the expectation that, from an independent standpoint, she will appropriately fulfill her duties in discussions regarding the promotion of diversity and initiatives for the development of the next generation, we have reappointed her as an outside director.
Koji
Naito		 He has a wide range of experience and accomplishments in corporate management, including serving as a Representative Director of a listed company. He has been selected as an outside director in the expectation that, by utilizing his extensive experience and profound insight into management, he will provide advice on management, make precise recommendations regarding our company's business, and supervise execution.
Kumiko
Baba		 She has a wide range of experience and achievements, including experience as an auditor at a listed company, as well as in business planning, finance, and accounting. Making full use of her abundant experience and achievements, she has been appointed as an outside director who is an Audit and Supervisory Committee member, in the expectation that she will provide appropriate recommendations and oversight of execution concerning the Company's business from a neutral and objective standpoint.
Futoshi
Yamaguchi		 He possesses extensive experience and a track record centered on the Accounting & Finance Department, and has been deeply involved in corporate management of the Company and Group companies as a director. Based on his background and insight, the Company has selected him as a director who is an Audit and Supervisory Committee member in the expectation that he will continually provide counsel and supervision of execution concerning management issues of the Company from an objective standpoint.

Evaluation of the effectiveness of the Board of Directors

We conduct analysis and evaluation of the effectiveness of the Board of Directors each fiscal year to verify that the Board functions properly. Specifically, based on the answers to the questionnaire for all directors, the Board of Directors shares the evaluation findings and identified issues, and holds constructive discussions on the ideal state of the Board.
Analysis and evaluation during the current fiscal year were conducted in the following manner, with input from an outside body. First, we conducted a survey targeting all directors who are members of the Board of Directors. Anonymity was ensured through direct responses to the outside body. The questionnaire covered multiple perspectives, including the management, deliberation, and monitoring functions of the Board of Directors, the performance of outside directors, and the operation of the Nominating and Compensation Committee as well as the Audit Committee.
As a summary of the evaluation results, firstly regarding the operation of the Board of Directors, it has been found that the Board's members are diverse in terms of knowledge, experience, expertise, career background, age, and gender; that a sufficient frequency of Board meetings is ensured; and that discussions and exchanges of opinions are not merely formal but conducted freely, openly, and constructively. Findings also indicate that sufficient discussions are held with consideration for profitability and capital efficiency when determining management strategy and management plans. Findings further show that dialogue with shareholders (investors) through IR activities, etc. is sufficiently discussed as a matter for deliberation by the Board of Directors, with appropriate feedback provided to the Board.
In addition, with regard to the external directors, evaluation results indicate that they actively provide advice or ask effective questions to the Board of Directors from a specialized perspective regarding performance, and that they take responsibility for their own statements in Board meetings, making concise and highly value-added contributions. In addition, regarding the operation of the Nominating and Compensation Committee, evaluation results have shown that it plays an important role in matters related to nomination and compensation, that the Secretariat's preparations and proposals function effectively, and that an environment has been established where each committee member can freely exchange opinions. Evaluation findings confirm that the Audit and Supervisory Committee formulates appropriate auditing policies and plans, engages in accounting audits, etc., addresses individual matters stipulated in laws and regulations, conducts sufficiently deep and frequent audits of whether internal control systems are properly constructed and operated, and, with independence and audit effectiveness taken into account, conducts interviews with executive officers, etc. necessary to the performance of its duties, with appropriate frequency.
Accordingly, as the findings of all evaluations were generally favorable, the Company has determined that, on the whole, the Board of Directors is functioning appropriately and that its effectiveness is ensured.
On the other hand, concerning the management of the Board of Directors, challenges have been identified with respect to further enhancing the system supporting the provision of information and materials to the Board, supervising and monitoring the construction and operation of internal control systems for the entire Group including subsidiaries as part of the Board's monitoring function, and ensuring appropriate opportunities for discussions related to investments in human capital and intellectual property and topics concerning personnel at Board meetings.
In the future, the Company's Board of Directors will take prompt action on such issues after sufficient examination based on the effectiveness evaluation, and will continue to make efforts to enhance the functions of the Board of Directors.

Main evaluation items and evaluation findings for FY2024

Evaluation items

Vision for the Board of Directors
Monitoring functions of the Board of Directors
Training
Composition of the Board of Directors
Performance of internal Directors
(excluding Audit and Supervisory Committee Members)
Dialogues on shareholders (investors)
Operation of the Board of Directors
Performance of outside directors
Operation of the Nominating and
Compensation Committee
Deliberations by the Board of Directors
Support system for Directors
Audit and Supervisory Committee

Findings of evaluation

Operation of the
Board of Directors etc.		 •The composition of the Board of Directors ensures diversity
•The frequency of meetings is adequately ensured
•Discussions and exchanges of opinions are conducted in a free, open, and constructive manner, not in a formalistic way
Deliberations by the
Board of Directors		 •Sufficient discussions are conducted with profitability and capital efficiency in mind when making decisions on our Management Strategy and management plans.
Dialogue with
shareholders		 •The status of dialogue with shareholders (investors) through IR activities and other means is appropriately provided as feedback to the Board of Directors and sufficiently discussed as a matter for deliberation by the Board of Directors.
Performance of
outside directors		 •As part of supervising business execution, appropriate remarks and points are made from a broad perspective (without dwelling too much on details) from the standpoint of our Management Strategy, management plans, and risk management.
•Members of the Board of Directors take responsibility for their own statements and make concise and high-value-added contributions.
Operation of the
Nominating and
Compensation
Committee		 •Plays an important role in nominations and remuneration matters
•Secretariat preparations and proposals are functioning sufficiently
•An environment where each committee member can freely exchange opinions is provided
Audit and
Supervisory
Committee		 •Appropriate auditing policies and audit plans are formulated. Also, in addition to individual matters stipulated by laws and regulations and accounting audits, it is ensured that there is auditing at the sufficient depth and frequency on whether or not the internal control systems are properly constructed and operated.
•Taking into account both independence and audit effectiveness, interviews with executive officers and the like are conducted at a necessary and appropriate frequency for the performance of duties.

The Board of Directors overall functions properly and its effectiveness is ensured

Issues to be addressed in FY2025

Operation of the Board of
Directors		 Further enhancement of the system supporting the provision of information and materials to the Board of Directors
Monitoring functions of the Board of Directors Supervision and monitoring of the development and operation of the internal control system for the entire group, including subsidiaries
Deliberations by the Board of Directors Appropriate opportunities for discussion on investments in human capital and intellectual property, and on human resources matters

Further enhancement of the functions of the Board of Directors

Independence Criteria for Outside Officers

Outside officers and outside officer candidates are deemed to be independent if, following investigation by the Company as far as is reasonably practicable, they are deemed not to fall under any of the following categories.

a An executive*1 of the Company or its subsidiary (hereinafter collectively referred to as the "Group") or a person who was an executive of the Group in the past 10 years;
b An entity for whom the Group is a major trading partner *2 or an executive thereof;
c An entity which is a major trading partner *3 for the Group or an executive thereof;
d A major shareholder which owns, directly or indirectly, 10% or more of all voting rights of the Company or an executive thereof;
e A person who belongs to an audit corporation that serves as the Group's accounting auditor;
f An attorney, certified public accountant, tax accountant, or other consultant who has received significant amounts*4 of monetary consideration or other property benefits from the Group, excluding officer remuneration;
g A person who belongs to a law firm, audit corporation, tax accountant corporation, consulting firm or other corporation, or an association or other group that has received significant amounts of monetary consideration or other property benefits from the Group, or a person who has received significant amounts of donations or assistance from the Group, or a director or other executive of a corporation or an association or other group which has received significant amounts of donations or assistance from the Group;
h A person who falls under any of b. to g. in the past 3 years;
i A close relative*5 of a person who falls under any of b. to g.

*1. The term "executive" means an executive director, an executive, an executive officer, or any other employee in a senior management position.
*2. The term "major trading partner" means a partner who conducted transactions with the Group in the most recent business year in an amount exceeding 2% of the consolidated sales of such entity, or a financial institution whose loan amount to Group exceeds 2% of the Group's consolidated total assets as of the end of the most recent fiscal year.
*3. The term "entity which is a major trading partner" means a partner who conducted transactions with the Group in the most recent business year in an amount exceeding 2% of the consolidated sales of the Group.
*4. The term "significant amounts" means the following amounts annually on average in the past three years: for individuals, 10 million yen or more; and for corporations or other groups, more than 2% of their consolidated sales or total revenues.
*5. The term "close relative" means a spouse or a relative within the second degree of kinship.

Attendance at meetings FY2024

Member Board meetings(21) Audit Committee(17)
(Times) (%) (Times) (%)
Outside Director
(Audit and Supervisory
Committee Member)
Yuji Sakakura		 21 100 17 100
Outside Director
(Audit and Supervisory
Committee Member)
Seiichiro Ichikawa		 21 100 17 100
Outside Director
(Audit and Supervisory
Committee Member)
Takashi Mukuno		 21 100 17 100
Outside Director
(Audit and Supervisory
Committee Member)
Minako Nishimura		 21 100 17 100

Succession Planning

The Company has defined an ideal candidate profile for the president and corporate officers. We have also formulated and are implementing the SWCC Next Generation Business Leader Succession Plan, which consists of three programs, for the systematic development of candidates.

Ideal Candidate Profile for SWCC Corporate Officers
Succession Plan
Three Programs Covered by the SWCC Next Generation Business Leader Succession Plan
SWCC DIRECTOR'S
Seminars
Participants Selected from employees aged around 30 Purpose To provide human resources with the potential to be future business leaders with the perspectives needed for management. Overview Participants attend seminars delivered by outside directors and engage in group discussions.
The output of these seminars is the recommendations each group is required to make to the management team.
Participants are given advice by the president and outside directors on managing and developing these recommendations.
"Next-next" Generation
Management Cram School
Participants Selected from employees in their late 30s Purpose To acquire the basic knowledge necessary for business leadership through practice. Overview After being taught the basic knowledge needed for management (business leadership, finance and accounting, governance, management strategy, etc.) by outside lecturers, participants put their learning into practice through action learning and make business proposals to the management team.
Next Generation Business Leader
Development Training
Participants Selected from employees in their 40s or 50s Purpose To select Executive Officers and Fellows from those who complete this training Overview Under the guidance of guest speakers, participants engage in groupwork, including devising medium-term or 10-year strategies for SWCC's actual business.

The process of selecting next-generation business leaders is a two-tiered process targeting next-generation business leader candidates and next-next generation business leader candidates. Next-generation business leader candidates are a talent pool from which human resources who can be entrusted with the management of group companies as early as tomorrow are expected to emerge, while next-next generation candidates are a talent pool from which next-generation business leader candidates can be expected to be selected within five years or so.

Cross shareholdings

As a general principle, our company has adopted a policy of not holding strategic shareholdings, and we have been taking measures to reduce the ratio of strategic shareholdings to consolidated net assets to less than 10% by the end of March 2025. With regard to individual strategic shareholdings, we limit our holdings to cases where it is judged to contribute to maintaining and enhancing the SWCC Group's medium- to long-term corporate value, and after thorough dialogue with business partners, we will continue to work on reducing strategic shareholdings in the future.

Cross shareholdings

Note:

The number of stocks and the ratio of the amount recorded in the balance sheet at the end of the year to consolidated net assets is for SWCC Showa Holdings Co., Ltd. and SWCC Showa Cable Systems Co., Ltd., the consolidated subsidiaries with the largest amounts of investment shares recorded on the balance sheet. In addition, the Company absorbed SWCC Showa Cable Systems Co., Ltd. on April 1, 2023, and changed its trade name to SWCC Corporation.

Directors Compensation or Remuneration

Overview of the Policy for Determining Individual Directors' Compensation

The compensation of directors is determined by the Board of Directors based on deliberations and recommendations from a voluntary Nomination and Compensation Committee composed of independent outside directors. In making compensation decisions, the Board ensures consistency with the established policy and respects the committee's recommendations. Additionally, compensation levels are set with reference to external benchmarks based on surveys conducted by specialized external organizations.


The compensation for executive directors consists of the following three components:

  • Fixed compensation
  • Short-term incentive compensation (linked to annual performance)
  • Long-term incentive compensation (restricted stock compensation)

    • This structure is designed to appropriately reward performance from both short- and long-term perspectives. On the other hand, non-executive directors and directors who are members of the Audit and Supervisory Committee receive fixed compensation only, without any incentive-based components, as their role focuses on oversight rather than business execution.

    Compensation Structure

    Compensation for directors (excluding non-executive directors and directors who are members of the Audit and Supervisory Committee) consists of fixed compensation, performance-linked compensation, and restricted stock compensation. The compensation structure for fiscal year 2025 is as follows.

    Type

    Percentage*1

    Contents

    Fixed

    Remuneration

    		 100

    It consists of basic compensation and role-based additional compensation according to each director's duties and responsibilities.
    The basic compensation corresponds to the position, its importance, and complexity.

    　

    Performance-Linked
    Remuneration

    		 55

    Short-term incentive cash payments are based on achievement against operating profit and ROIC targets (set at 105% of initial forecasts),
    plus ESG indicators such as renewable energy adoption, CO₂ emissions, injury frequency rate, and engagement score.

    The indicators, formulas, and performance linkage mechanism are as follows.



    1.Company Performance Indicators

    Compensation is paid based on the achievement rates of operating profit (A) and ROIC (B) as follows:

    · Operating Profit Achievement Rate (A) = (Actual Operating Profit÷ Target Operating Profit) × 100%

    ·ROIC Achievement Rate (B) = (Actual ROIC÷ Target ROIC) × 100%



    2.ESG-Related Indicators

    Compensation is paid according to the number of achieved targets among the 　following: internal adoption rate of renewable energy (C),
    greenhouse gas (CO₂) emissions (D), lost time injury frequency rate (E), and engagement score (F).



    3.Reason for Selecting Indicators

    Operating profit achievement rate is set as a profitability indicator, and ROIC achievement rate as a capital efficiency indicator. For ESG-related indicators,
    the company identifies material social issues and prioritizes key themes with specific action plans and KPIs. Among these, the internal adoption rate
    of renewable energy, CO₂ emissions, lost time injury frequency rate, and engagement score are selected as important ESG indicators.
    Achieving these targets is expected to enhance corporate value.



    4.Formula

    Annual performance-based compensation = Fixed compensation × (Annual target achievement for company performance (A × 50% + B × 50%)
    + Annual target achievement for ESG indicators (based on number of achieved items among C, D, E, and F))


    5. Annual Target Achievement (Proportion and Mechanism)

    Annual target indicators

    Target

    Prppotion
    *2

    Payout Rate

    Company performance

    · Operating income

    25.7 billion yen
    (Published figure: 24.5 billion yen)

    25%

    0-150%

    Company performance

    · ROIC

    12.9%
    (Published figure: 12.3%)

    25%

    0-150%

    ESG-Related

    · Internal adoption rate of renewable energy *3

    · Greenhouse gas (CO2) emissions

    · Lost time injury frequency rate

    · Engagement score

    30%
    50% decrease compared to fiscal year 2013
    0.23 or less
    45

    5%

    0-125%


    Restricted Stock-based Compensation

    27.5

    Restricted stock compensation is allocated as a fixed proportion of the fixed compensation.

    No restricted stock compensation is granted to non-executive directors (including those serving on the Audit and Supervisory Committee).
    Note:

    1. The ratio of annual performance-based compensation is shown assuming a 100% payout rate.
    2. The propotions of corporate performance and ESG-related indicators, which are annual target metrics, are shown assuming a 100% payout rate.
    3. Renewable energy includes energy derived from non-fossil sources.
    4. The performance-based compensation for the Chairman of the Board is calculated as 45% of the fixed compensation, and the compensation for the grant of restricted stock is set at an amount equivalent to 50% of the value obtained by applying 55% to the fixed compensation, regardless of position.

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