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.
This Committee consists of independent external directors and external corporate auditors who are observers who have the right to express their opinions on the content of the deliberations.
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 (areas of expected expertise and contributions) in embodying these business principles and conducting highly effective supervision over the management.

Necessary Attributes of the Board of Directors (Areas of Expected Expertise and Contributions)

The areas of expected expertise and contributions from individual Directors are as follows:

*The table below does not present all knowledge and expertise of Directors.
Name (* indicates Independent Outside Directors)	Areas of expected expertise and contributions
Name (* indicates Independent Outside Directors)	Corporate management	Compliance/ risk management	ESG/ sustainability	Business strategy/ marketing	Global	Technology/ IT/production	Finance/ accounting
Tetsuya Okamura		✓		✓	✓	✓
Shinji Shimomura	✓	✓	✓		✓	✓
Eiji Kojima		✓	✓	✓		✓
Kazuo Hiraoka		✓		✓	✓	✓
Toshihiko Chijiiwa		✓	✓			✓
Toshiro Watanabe		✓	✓				✓
Susumu Takahashi*	✓	✓	✓
Hideo Kojima*		✓	✓				✓
Akio Hamaji*	✓	✓	✓			✓	✓

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.
Compliance/ risk management	Under Sumitomo’s business philosophy, it will be required for the continued Company group’s sustainable development and improvement of corporate value, in order to promote risk management, taking into account compliance based on business principles and the ethics code.
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 External Directors and
Attendance in the Board of Directors Meetings

Susumu Takahashi: Mr. Takahashi has a high level of knowledge about economics and management, and also has a broad variety of practical experience in both the private sector and governmental bodies.
We expect Mr. Takahashi to give us useful advice as to our sustainable growth and improvement of our corporate value and oversee our management.
And we consider him to be an external director, as he plays a role through his active remarks on the Board of Directors and his activities as a member of the Selection and Nomination Committee and the Remuneration Committee.

Hideo Kojima: Mr. Kojima is a financial and accounting expert with many years of experience as a certified public accountant, and his abundant experience and extensive knowledge are extremely helpful to us.
We expect Mr. Kojima to give us useful advice as to our sustainable growth and improvement of our corporate value and oversee our management.
And we consider him to be an outside director, as he plays a role through his active remarks on the Board of Directors and his activities as the chair of the Selection and Nomination Committee and the Remuneration Committee.

Akio Hamaji: Mr. Hamaji has many years of experience as a corporate manager and is familiar with company management, and his abundant experience and extensive knowledge are extremely helpful to us.
We expect Mr. Hamaji to give us useful advice as to our sustainable growth and improvement of our corporate value and oversee our corporate management, and actually has those abilities. Thus, we consider Mr. Hamaji suitable as external director.

Attendance in FY2021

Name	Board of Directors
Susumu Takahashi	13 of 14 times in total (93%)
Hideo Kojima	14 of 14 times in total (100%)
Akio Hamaji	14 of 14 times in total (100%)

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

Takeo Wakae: Mr. Wakae is a law expert, and his abundant experience and extensive knowledge are extremely helpful to us.
We expect Mr. Wakae to conduct an effective audit into our management from an objective and independent position as the external corporate auditor.
And we consider him to be an external corporate auditor, as he plays a role through his active remarks on the Board of Directors and his activities as a member of the Selection and Nomination Committee.

Masaichi Nakamura: Mr. Nakamura is a financial and accounting expert with many years of practical experience as a certified public accountant, and has previously involved with company management as a representative director.
That abundant experience and his extensive knowledge are extremely helpful to us.
We consider that Mr. Nakamura will continue to conduct an effective audit into our management from his objective and independent position as the external corporate auditor.