Selection and Nomination of directors

Process for Selection and Nomination of Executive Officers

We have the Selection and Nomination Committee to deliberate on candidates for directors and corporate auditors.
In order to ensure transparency and objectivity in the decisions of candidates for directors and corporate auditors, more than half of the members are independent outside directors, and one of them is the chairman.
This Committee is received requests by the Board of Directors, and deliberates on candidates for directors and corporate auditors based on the nomination policy, and reports to the Board of Directors.
The Board of Directors receives the report of the Committee and decides the candidates for Directors and corporate auditors to be submitted to the General Meeting of Shareholders. Candidates for corporate auditors are deliberated with the consent of the Board of Corporate Auditors.

Skills Matrix of the Board of Directors

Approach to Composition of the Company’s Board of Directors and Attributes Necessary for the Board of Directors

The Company Group shall have “Sumitomo’s business philosophy” as the basis of the management, and in the business principles, “We will aim to become a machinery manufacturer that continues to provide excellent products and services to the world” and “With integrity being a key principle in the Group, we will contribute towards society by gaining high respect and confidence from all stakeholders” as the corporate mission statement. The Company shall strive for sustainable development and improvement of corporate value through the resolution of social issues by providing excellent products and services globally, supported by solid technologies.
The composition of the Board of Directors shall be determined after considering the necessary attributes of the Board of Directors (primary areas of experience and expertise) in embodying these business principles and conducting highly effective supervision over the management.

Necessary Attributes of the Board of Directors (Primary Areas of Experience and Expertise)

The primary areas of experience and expertise held by individual Directors and Corporate Auditors will be as follows.

*The table below does not present all knowledge and expertise of Directors and Corporate Auditors.
	Name (* indicates Independent Outside Directors)	Primary Areas of experience and expertise
	Name (* indicates Independent Outside Directors)	Corporate management	Legal affairs/ compliance/ risk management	ESG/ sustainability	Business strategy/ marketing	Global	Technology/ IT/production	Finance/ accounting
Directors	Tetsuya Okamura		✓		✓	✓	✓
	Shinji Shimomura	✓	✓	✓		✓	✓
	Eiji Kojima			✓	✓	✓	✓
	Kazuo Hiraoka				✓	✓	✓
	Toshihiko Chijiiwa			✓			✓
	Toshiro Watanabe			✓				✓
	Tatsuro Araki		✓		✓		✓
	Susumu Takahashi*	✓	✓	✓		✓
	Akio Hamaji*	✓	✓	✓		✓	✓	✓
	Sumie Morita*			✓		✓	✓
	Yaeko Hodaka*		✓	✓		✓
Corporate Auditors	Hideo Suzuki		✓	✓				✓
	Shoji Uchida		✓		✓	✓
	Masaichi Nakamura*		✓	✓				✓
	Mio Minaki*		✓	✓

Reasons for Selecting Necessary Attributes of the Board of Directors

Item	Necessity and reasons for selection
Corporate management	In the midst of a substantially changing environment surrounding businesses, it will become necessary to indicate the direction of the Company (corporate strategies) and make quick business decisions, based on business principles, in order to respond to changes quickly, develop in a sustainable manner and improve corporate value.
Legal affairs/ compliance/ risk management	For the Company Group’s sustainable development and continued improvement of corporate value, based on Sumitomo’s business philosophy, it will be required to promote risk management, taking into account compliance based on business principles, the ethics code and the laws.
ESG/ sustainability	In the midst of emphasizing the role of companies for the realization of a sustainable society, it will become necessary to improve social value as a company while solving social issues, in order for the Company Group to develop in a sustainable manner and improve corporate value.
Business strategy/ marketing	It will be necessary to develop and implement realistic and specific business and marketing strategies in order to realize corporate strategies and achieve the Medium-Term Management Plan we commit to.
Global	Experience in global business, and extensive experience in understanding overseas cultures, environments, etc. will be necessary to continue providing excellent products and services to the world.
Technology/IT/ production	In order to be a machinery manufacturer that continues to provide excellent products and services to the world, it will be necessary to continue providing high-quality products and solutions, supported by solid technologies, and this will in turn require knowledge and experience in technology, IT and production.
Finance/ accounting	Knowledge and experience in finance and accounting will be required to realize accurate financial reporting, development of a resilient corporate structure, and growth investments that contribute to sustainable development and improvement of corporate value.

Independence Standards

We have established the "Independence Standards for External Officers" in order to ensure the independent external officers and strengthen the supervision functions of the Board of Directors.
Candidates for external officers are deliberated and reported by the Selection and Nomination Committee, which is received requests by the Board of Directors, based on this standard, and are decided by a resolution of the Board of Directors upon receiving the report.

Independence Standards for External Officers[PDF:82KB]

Reasons for Election of Independent Outside Directors and
Attendance in the Board of Directors Meetings

Susumu Takahashi: Mr. Susumu Takahashi possesses high-level knowledge in economy and management, and has broad experience of actual professional practice in both private sector and government institutions. The Company looks forward to Mr. Takahashi providing advice for its sustainable growth and the improvement of its corporate value, and his supervision of the Company’s management. Also, he has performed his duties through his proactive comments at Board of Directors meetings and through his activities as a member of the Nomination Committee and the Compensation Committee, so the Company has determined that he is qualified to serve as an Outside Director of the Company.

Akio Hamaji: Mr. Akio Hamaji has long experience of actual professional practice as a manager and is wellversed in corporate management. Such extensive experience and ample knowledge will be extremely useful for the Company. The Company looks forward to Mr. Hamaji providing advice for its sustainable growth and the improvement of its corporate value, and his supervision of the Company’s management. Also, he has performed his duties through his proactive comments at Board of Directors meetings and through his activities as the Chair of the Nomination Committee and a member of the Compensation Committee, so the Company has determined that he is qualified to serve as an Outside Director of the Company.

Sumie Morita: Ms. Sumie Morita has extensive experience of actual professional practice as a developer of products in the area of telecommunications and information networks. In addition, she has engaged in corporate management serving as Corporate Executive. Such extensive experience and ample knowledge will be extremely useful for us. We expect Ms. Morita providing valuable advice for its sustainable growth and the improvement of its corporate value, and her supervision of the Company’s management. Also, she has performed her duties through her proactive comments at Board of Directors meetings and through her activities as a member of the Nomination Committee and a member of the Compensation Committee, so the Company has determined that she is qualified to serve as an Outside Director of the Company.

Yaeko Hodaka: Ms. Yaeko Hodaka is well versed in law as an attorney-atlaw, and her extensive experience and knowledge in corporate law in particular will be extremely useful for the Company. The Company looks forward to Ms. Hodaka providing valuable advice for its sustainable growth and the improvement of its corporate value, and her supervision of the Company’s management. Also, she has performed her duties through her proactive comments at Board of Directors meetings and through her activities as a member of the Nomination Committee and a member of the Compensation Committee, so the Company has determined that she is qualified to serve as an Outside Director of the Company.

Attendance in FY2023

Name	Board of Directors
Susumu Takahashi	17 of 17 times in total (100%)
Akio Hamaji	17 of 17 times in total (100%)
Sumie Morita	13 of 13 times in total (100%)
Yaeko Hodaka	17 of 17 times in total (100%)

*It contains information as of the end of December 2023.
*For Ms. Sumie Morita, outside director, the attendance after her assumption of the office of director as of March 28, 2024 is shown.

Reasons for Election of Independent Outside Corporate Auditors and Attendance in the Board of Directors Meetings and the Board of Corporate Auditors Meetings

Masaichi Nakamura: Mr. Masaichi Nakamura is an expert on finance and accounting as a CPA with long experience of actual professional practice. In addition, he has experience in corporate management serving as Representative Director. Such extensive experience and ample knowledge will be extremely useful for the Company. The Company has determined that he continues to conduct effective audits of the Company’s management from an objective and independent standpoint as an Outside Corporate Auditor.

Mio Minaki: Ms. Mio Minaki has been active as a prosecutor, and after her retirement, as an attorney-at-law. Ms. Minaki’s extensive experience and knowledge cultivated through her long service in the judicial world will be extremely useful for the Company. The Company looks forward to Ms. Minaki conducting effective audits of the Company’s management from an objective and independent standpoint as an Outside Corporate Auditor. In light of Ms. Minaki’s abilities, the Company has determined that she is qualified to serve as an Outside Corporate Auditor of the Company.