Status of External Executives

By appointing external directors and external Audit & Supervisory Board members who have no special-interest relationships with the Company and are highly independent of the Company, the Company aims to reinforce its corporate governance and augment the Group's overall management quality.
The Company has formulated the Standards for the Independence of Independent Outside Executives shown below.
The above-mentioned external directors and external Audit & Supervisory Board members satisfy these standards and the Tokyo Stock Exchange's independence criteria. The Company has notified the Tokyo Stock Exchange that all of these executives are independent executives.

Standards for the Independence of Independent Outside Executives

The Company has formulated the following standards related to independence with respect to its selection of candidates as independent outside executives (external directors and external Audit & Supervisory Board members designated by the Company as independent outside executives).

Further Information

Candidates must satisfy the various conditions for external directors and external Audit & Supervisory Board members based on the Companies Act. Individuals to whom additionally none of the following apply are considered to satisfy the Company's independence standards.

  1. A person executing the business (*1) of the Company or an affiliated company (*2) of the Company (below, referred to collectively as the "Mandom Group")
  2. An entity that is a major supplier (*3) of the Mandom Group or a person executing the business (*1) of such an entity
  3. A major customer of the Mandom Group (*4) or a person executing the business (*1) of such a partner
  4. A major shareholder that holds 10% or more of the total voting rights of the Company, either directly or indirectly, or a person executing the business (*1) of such a shareholder
  5. An entity in which the Mandom Group holds 10% or more of the total voting rights, either directly or indirectly, or a person executing the business (*1) of such an entity
  6. An entity that has received annual donations of ¥10 million or more from the Mandom Group in the most recent business year or an entity that belongs to such a corporation or other organization
  7. A consultant, accountant or legal professional who receives a large amount of monetary consideration or other property (*5) other than executive compensation from the Mandom Group (or, if the party receiving such property is a corporation or other organization, a person who belongs to that organization)
  8. A person who belongs to the audit firm that is independent auditor for the Mandom Group
  9. If a person executing the business (*1) of the Mandom Group serves as an external executive of another company, a person executing the business(*1) of that company
  10. People to whom item 1 above has applied in the past
  11. People to whom one of items 2 to 9 has applied in the past year
  12. The spouse, second-degree or closer relative, cohabiting relative or person who shares the livelihood of any of those below
    1. A director, Audit & Supervisory Board member or important person executing the business (*6) of a company in the Mandom Group
    2. A person to whom the above items 2 to 5 or 9 apply (if a person executing business, only if an important person executing the business (*6))
    3. An individual or, if a person who belongs to a company or other organization, an important person executing the business (*6), to whom the above item 6 applies
    4. An individual or, if a person who belongs to a company or other organization, an important person executing the business (*6), to whom the above item 7 applies
    5. A certified public accountant and important person executing the business (*6) belonging to an audit firm to which the above item 8 applies
*1

Person executing business: A director (excluding external director), trustee (excluding external trustee), operating officer, corporate operating officer or employee executing operations for a company or other organization

*2

Affiliated company: An affiliated company as provided in Article 2-3-22 of the Ordinance on Company Accounting

*3

Entity that is a major supplier of the Mandom Group:

  1. A business partner group (business partner or its affiliated company (*2)) that provides products or services to the Mandom Group, with such business partner group providing to the Mandom Group in the most recent business year products or services that account for more than 2% of that business partner group's consolidated net sales in the most recent business year or the current business year
  2. A business partner group whose financing provided to the Mandom Group as of the close of the most recent business year exceeds 2% of consolidated total assets of the business partner group as of the end of its most recent business year
*4

Major customer of the Mandom Group:

  1. A customer to which the Mandom Group provides products or services and for which the products or services provided by the Mandom Group account for more than 2% of consolidated net sales of the Mandom Group in the most recent business year or the current business year.
  2. A business partner group to which the Mandom Group provides financing that exceeds 2% of consolidated total assets of the Mandom Group as of the close of the most recent business year
*5

Large amount of monetary consideration or other property:
For an individual, monetary consideration or other property corresponding to ¥10 million or more per year; if a company or other organization, monetary consideration or other property corresponding to 2% or more of that organization's total annual revenue

*6

Important person executing the business: Persons executing the business in item (*1) above who are senior executives (general manager class) or higher

Message from External Director

Hitoshi Tanii
External Director
Chairman of the Nominating Committee,
Chairman of the Compensation Committee

Profile

Q1. — What achievements have been made since you were appointed chairperson of the Nominating Committee and the Compensation Committee, and are there any outstanding issues that need to be addressed?

Also let us know if there are any other changes that you have made conscious effort to achieve.
It has been two years since I was appointed chairperson of the Nominating Committee and the Compensation Committee. The first thing we achieved was reinvigorating the members that make up the Board of Directors and inviting external directors with experience in corporate management. As a result of in-depth discussions and deliberations on the structure the management and business execution system for the 14th Middle-Range Planning “MP-14,” I am proud to have accomplished a reinvigorated and highly effective management team. A result we achieved for the Compensation Committee was that we verified that compensation is properly based on performance. In my capacity as the chairperson managing the running of the committee, I have focused on fostering an atmosphere conducive to more open and frank discussions. One of the current issues that I believe we are facing is that we need to examine and discuss a compensation system that is linked effectively to performance as a means of shifting toward more aggressive management going forward.

Q2. — “MP-14” has been announced, but given the current issues, what are your thoughts on the appropriateness of the key initiatives of the Basic Management Policies and numerical targets of MP-14?

We carefully designed MP-14 across various areas in preparation for the 100th anniversary of Mandom that we will be celebrating in the final year of MP-14. While MP-14 may at first glance seem like an aggressive plan for a company still suffering from the effects of COVID-19, I believe the plan is achievable with the new management team, as it actively addresses core factors of its existence such as D2C initiatives and redefining brands, and fosters an atmosphere that encourages the forging of a new era without the constraints of the past.

Q3. — You scheduled an opportunity for dialogue for the first time last year in response to a request from institutional investors. What was your impression of this meeting did you find it helpful?

I think that having the opportunity for dialogue with external institutional investors was a very valuable experience. It was a good opportunity to gain the objective insight of the company from the perspective of independent directors, and provided a great window into the expectations of our investors, including their harsh views of the company. Our management team recognized the importance of creating more opportunities like having this dialogue to lend an ear directly to our shareholders and investors.