Corporate Governance Report in Japanese (updated December 27, 2023)：https://www.kingjim.co.jp/ir/library/governance_report.html The Company acquires and maintains cross-shareholdings only when they are judged to contribute to increasing its corporate value over the medium to long term, considering a comprehensive range of factors such as the need to maintain and strengthen relationships with business partners, the necessity from a business management standpoint, and the economic rationality. The Board of Directors performs an annual review of the holding purpose of cross-shareholdings on an individual stock issue basis. Stock issues that are judged to have insignificant holding purpose are sold, considering factors such as the effect on markets. As a result, the Company has sold 11 stock issues since 2015.
In terms of the review methods, the Company has reviewed the economic rationality of cross-shareholdings since the fiscal year ended June 2019 by comparing the holding benefits (dividend income and profit from business transactions) and the Company’s cost of capital for each individual stock issue. Concurrently, the Company judges the suitability of holding a stock issue by considering a comprehensive range of factors, such as the need to maintain and strengthen business relationships and the necessity from a business management standpoint.
The Company determines how it will exercise the voting rights attached to cross-shareholdings on a proposal-by-proposal basis, considering a comprehensive range of factors such as whether or not it can expect the corporate value of the Company and the investee company to increase in the medium to long term. The Company will not approve any proposal that will hurt shareholder value.
In accordance with laws, regulations and the Board of Directors’ Regulations, the Company requires any transactions involving conflicts of interest between the Company and its Directors to be reported to and approved by the Board of Directors. The Company conducts a survey on related party transactions for all Directors at the end of each fiscal year to understand and monitor the details of transactions. ＜Views on Ensuring Diversity＞
The Company’s policy is to actively recruit and appoint talented human resources regardless of their gender, nationality, date of hire or other attributes.
Given its wide range of business activities and product categories, the Company recognizes that the abilities and contributions of women, not just those of men, are crucial. As the first step toward ensuring diversity, the Company is developing a program to promote female career advancement and is actively seeking to appoint women as managers.
＜Voluntary and measurable goals for ensuring diversity and status of progress＞
In terms of female managers, the female manager ratio is currently 10.0% (8 out of 80 people). Considering the purport of the Act on Promotion of Women’s Participation and Advancement in the Workplace, among other factors, the Company aims to raise this ratio to 20% of the whole by 2030. Moreover, in terms of female officers, the Company has appointed 5 Directors, 1 Auditor, and 1 Executive Officer. In addition, the ratio of women among independent external officers is 71.4% (5 out of 7 people). The female recruitment ratio among the recruitment of new graduates for the past 5 years is 50.0%.
The Company does not have any non-Japanese individuals who are currently serving in manager positions. When recruiting non-Japanese individuals or promoting them to manager positions, the Company conducts selection and promotion based on the same standards as those applied to Japanese individuals, without setting a recruitment/promotion quota for non-Japanese individuals. The Company will maintain this policy going forward. At overseas subsidiaries, it has promoted numerous employees with local nationalities to officer positions equivalent to the position of Director, General Manager, and Section Manager, and it intends to continue proactively promoting employees to such positions.
The manager ratio for mid-career recruits already stands at a high level of 26.3% (21 out of 80 people). A corporate culture that enables people to succeed based on individual ability, regardless of attributes such as whether they joined as a new graduate or mid-career recruit, has firmly taken root in the Company. Therefore, the Company plans to continue to promote personnel based on ability.
＜Policies on human resource development and internal environment development to ensure diversity and implementation status＞
The Company strives to develop an environment in which individual employees can demonstrate their abilities to the fullest extent possible.
With regard to the promotion of women to managerial positions, the difference in average service years between men and women caused by retirement due to marriage, childbirth and childcare has been identified as an issue, and efforts are being made to address this issue. The Company is taking steps such as conducting interviews before and after maternity and childcare leave, distributing e-mails with company information to those who have acquired maternity or childcare leave and providing materials that summarize the in-house systems and procedures from obtaining maternity and childcare leave to returning to work. In other areas, the Company is promoting initiatives to ensure diversity, such as establishing human resource development and internal environment development policies, encouraging men to acquire childcare leave, promoting the employment of people with disabilities, and introducing a telework shift system.
The Company already provides distance learning courses for those in manager positions. Looking ahead, the Company will consider introducing new programs such as training for manager candidates, with a view to encouraging the promotion of women, non-Japanese individuals, and mid-career recruits to manager positions.
The Company has introduced a defined benefit corporate pension plan and a defined contribution corporate pension plan, as its corporate pension plans. It has established a Basic Policy on Pension Asset Management for pension asset management in the defined benefit corporate pension plan, with the aim of managing the pension assets stably over the long term. Moreover, the internal departments responsible for pensions plan receive reports every quarter from the pension management institutions and properly manage the status of asset management, while working to foster specialized human resources through participation in asset management seminars and other means. i. Management Philosophy and Management Plan
The Management Philosophy and The medium-term management plan is disclosed on the Company’s website.
▪Management Philosophy
Website：https://www.kingjim.co.jp/english/about/corporate/philosophy.html
▪Medium-Term Management Plan
Website：https://www.kingjim.co.jp/english/ir/management/strategy.html

ii. Basic approach and policies on corporate governance
The Company’s basic approach to corporate governance is set forth in Item 1. of “Basic Approach on Corporate Governance, and Capital Structure, Corporate Attributes and Other Basic Information” in this report. In addition, the reasons for selecting the current corporate governance structure are outlined in “3. Reasons for Selecting the Current Corporate Governance Structure” under “Overview of Business Management Organization and Other Corporate Governance Structure Related to Managerial Decision-Making, Business Execution, and Management Supervision” in this report.

iii. Policies and procedures in determining the remuneration of the senior management and Directors
The remuneration of Directors (excluding External Directors) comprises base remuneration, which is fixed remuneration; bonuses, which are performance-linked remuneration; and stock remuneration. In light of their roles, External Directors and Auditors receive only base remuneration (fixed remuneration). Details are provided in “Disclosed Details of Policy for Determining Amount and Calculation Method of Remuneration” in “Remuneration for Directors” within “1. Items Related to Organizational Structure and Operations, etc.” under “Overview of Business Management Organization and Other Corporate Governance Structure Related to Managerial Decision-Making, Business Execution, and Management Supervision” in this report.

iv. Policies and procedures for the appointment and dismissal of senior management and nomination of Director and Auditor candidates
When nominating Director or Executive Officer candidates, people with excellent personal character and knowledge who have accomplished results in their duties, who are well versed in corporate management, and who have a high degree of specialization, are selected as candidates. When nominating Auditor candidates, those with excellent character and knowledge who have a high degree of specialization are selected as candidates. Furthermore, the Company will dismiss Directors and Auditors who engage in misconduct, serious violations of laws and regulations, or breaches of the Articles of Incorporation while performing their duties.
The Nomination and Compensation Committee, which is an advisory body to the Board of Directors, considers the candidates for election and dismissal of the Company’s Directors, Auditors and Executive Officers, and then proposes such candidates to the Board of Directors. After they have been discussed and approved by resolution of the Board of Directors, the candidates for election or dismissal of Directors and Auditors are ultimately put forward to the General Meeting of Shareholders as a proposal and determined. When electing Auditor candidates, the Company obtains the consent of the Board of Auditors.

v. Explanation of the election, dismissal, and nomination of individual candidates
Explanations of the election and nomination of individual candidates for Director or Auditor are stated in the proposals on election and nomination in convocation notices.
Notice of the 75th Annual General Meeting of Shareholders：https://www.kingjim.co.jp/english/ir/upload_file/m003-m003_03/20230823ir_75syousyuuE.pdf
Under its Management Philosophy, “DEVELOPING ORIGINAL PRODUCTS AND CREATING A NEW CULTURE TO CONTRIBUTE TO SOCIETY,” the Company is striving to implement its management strategy. It engages in the following efforts regarding sustainability, investments in human capital and intellectual property, and response to climate change.

・Initiatives on Sustainability
In order to promote the improvement of sustainability, the Company has set forth the Basic Sustainability Policy of the KING JIM Group and has disclosed it on its website.
Website: https://www.kingjim.co.jp/english/sustainability/policy/policy.html

Furthermore, based on the Basic Sustainability Policy of the KING JIM Group, the Company has established a Sustainability Committee as an organization spanning various departments, in order to promote initiatives to improve sustainability. The Committee formulates sustainability policies and activities, and promotes the improvement of sustainability in collaboration with departments and group companies.

Based on its management philosophy and the concept of sustainability, the Company identified in 2022 four materiality (priority issues): “Social contribution via the development of original products,” “Environmental consideration,” “Promotion of diverse human resources,” and “Enhancement of governance” where its business activities are highly relevant to social issues from the perspective of ESG. The Company then selected and disclosed important themes to associate with them.

The Company associates the identified materiality (priority issues) with SDGs, and is working to resolve the materiality (priority issues).

Annual Securities Report in Japanese (75th Term):

https://www.kingjim.co.jp/ir/upload_file/m005-m005_02/75th_yuukasyoukenhoukokusyo.pdf

Website: https://www.kingjim.co.jp/english/sustainability/policy/materiality.html

・Investments in Human Capital

The Company strives to develop an environment in which diverse personnel can fully demonstrate their abilities. To this end, the Company has put in place telework system, staggered work shifts, and various leave programs, as well as enhanced human resource development programs that support the growth of each employee. Furthermore, the Company has stated in its medium-term management plan that it will allocate human capital to growth fields as part of efforts to expand businesses in those fields.

・Investments in Intellectual Property

The Company views breaking free from a revenue structure dependent on filing tools as a management challenge. To establish a third pillar of operations alongside KING FILE and TEPRA in the stationery and office products business, the Company will proactively invest in developing new businesses and next-generation products. Furthermore, the Company is working to acquire intellectual property rights to protect the rights to its original and wide-ranging product lines, which have been created through a flexible development system, one of the Company’s strengths.

・Responding to Climate Change

Considering the response to climate change as one of its priority management issues, the Company announced its endorsement of the TCFD (Task Force on Climate-related Financial Disclosures) recommendations in June 2023. Based on the TCFD framework, the Company discloses the information regarding its response to climate change.

Annual Securities Report in Japanese (75th Term):

https://www.kingjim.co.jp/ir/upload_file/m005-m005_02/75th_yuukasyoukenhoukokusyo.pdf

Website: https://www.kingjim.co.jp/english/sustainability/env/climate_change.html

In accordance with internal regulations (Board of Directors’ Regulations, Job Authority Regulations, etc.), the Board of Directors makes decisions related to matters that require a Board of Directors resolution pursuant to laws and regulations and the Articles of Incorporation, important management matters, and important business execution. The scope of matters delegated to management by the Board of Directors is set forth in the Job Authority Regulations and the Segregation of Duties Table.
Moreover, the Company introduced an Executive Officer system in 2003. As a result of reinforcing corporate governance and re-examining the duties and roles of Directors and Executive Officers, the Company revised its Executive Officer system on September 17, 2020, for the purpose of expediting management decision-making, enhancing business execution functions, and bolstering the Board of Directors’ supervisory functions. The Executive Officers report to the Board of Directors on the status of business execution and important matters, including operations of the Company and its subsidiaries, and the Directors and Auditors conduct supervision and audits.
The Company has established independence criteria for external directors and external auditors. These criteria meet the independence standards for independent officers provided for by the Tokyo Stock Exchange, in addition to the requirements of the Companies Act. The Company’s independence criteria are disclosed in convocation notices and the annual securities reports.
Notice of the 75th Annual General Meeting of Shareholders：https://www.kingjim.co.jp/english/ir/upload_file/m003-m003_03/20230823ir_75syousyuuE.pdf
The Company has established the Nomination and Compensation Committee as an advisory body to the Board of Directors to ensure the objectivity and transparency of the determination process for the election and dismissal of candidates for Director and Auditor, as well as their remuneration. The Nomination and Compensation Committee is a voluntary committee that fulfills the roles of both a nomination committee and a compensation committee, meeting around five times per year.
＜Mandates and Roles of the Nomination and Compensation Committee＞
▪Unless otherwise provided for in the Articles of Incorporation, the Nomination and Compensation Committee, as an advisory body to the Board of Directors, considers and proposes the following matters to the Board of Directors:
(1) Proposals on the election and dismissal of candidates for Director or Auditor to the General Meeting of Shareholders
(2) Election and dismissal of candidates for the Representative Director and President & CEO and his or her successor
(3) Election and dismissal of candidates for Representative Directors other than the individual in the preceding item (2)
(4) Election and dismissal of Executive Officer candidates
(5) Policy on the remuneration of Directors, Auditors, and Executive Officers, etc.
(6) Total amount of remuneration of Directors, etc.
(7) Individual remuneration, etc. of Directors, Auditors, and Executive Officers
(8) Matters deemed necessary by the Nomination and Compensation Committee in relation to the preceding items
▪The Nomination and Compensation Committee is delegated by the Board of Directors to determine the individual remuneration, etc. of Directors (limited to base remuneration and bonuses).
The Nomination and Compensation Committee discusses items such as the election of Director, Auditor and Executive Officer candidates, the preparation of the skills matrix of Directors, and the formulation of succession plans. These items are discussed from various viewpoints, including diversity in skills, gender, and other factors. Through these activities, the Nomination and Compensation Committee provides appropriate participation and advice.
＜Views on the Independence of the Committee Structure＞
The Nomination and Compensation Committee is composed of Directors selected by the Board of Directors, and has 4 or more members, at least half of whom are External Directors as provided for by the Nomination and Compensation Committee Regulations. Currently, the Nomination and Compensation Committee comprises 5 members, specifically 3 External Directors (Keiko Kakiuchi, Katsuya Hirokawa, Mizuho Iwaki) and 2 Internal Directors (Akira Miyamoto, Shinichi Harada). Furthermore, External Director Keiko Kakiuchi has been named as the Chair of the Nomination and Compensation Committee to ensure independence.
The Board of Directors will strive to ensure a balance and diversity of knowledge, experience and abilities across the Board as a whole, while maintaining an appropriate Board size, in order to ensure management transparency, adapt to shifts in a tumultuous business environment, and support diversity.
The policy and procedures on the election of Directors are outlined in “Principle 3.1. Full Disclosure” in this report.
Furthermore, considering discussions in the Nomination and Compensation Committee, Management Conference, and Board of Directors, the Company produces and presents in the Convocation Notice a skills matrix that lists the primary skills, experience, knowledge, etc. of each Director. Concurrent positions of Directors and Auditors are limited to a reasonable scope that allows them the necessary time to properly fulfill their roles and duties. Details on concurrent positions are disclosed in annual securities reports and other disclosure materials.
Please refer to Part 1, Section 4-4 of the Annual Securities Report.
The Company conducts a questionnaire on the effectiveness of the Board of Directors covering all participating members of the Board of Directors, to enhance the functions of the Board of Directors as a whole. The questionnaire has been conducted 8 times (every June) since 2016.
The Company has implemented improvement actions as necessary based on the questionnaire results. Considering the following factors, it has been concluded that the Board of Directors’ effectiveness is sufficiently secured.
▪It has been determined that there are no problems with the level of management and supervision provided by the current Board of Directors, given that all respondents who were asked about the level of management and supervision by the Board of Directors offered positive comments.
▪It has been determined that the Board of Directors is managed appropriately as a whole, given that the respondents offered positive comments in almost all items about questions on the Board of Directors’ management decisions. To ensure that Directors and Auditors can fully exercise their management supervision and auditing functions, the Company’s policy is to provide opportunities for Directors and Auditors to obtain necessary knowledge through such means as attending lectures by external experts on management and compliance, or on specific fields, as needed. Furthermore, the Company has provided External Directors and External Auditors with opportunities to learn about a wide range of operations by, for example, attending internal meetings and visiting overseas and domestic subsidiaries. In addition, the Company has held study sessions taught by newly appointed external officers. It has enabled the External Directors’ and External Auditors’ specialized knowledge to be shared within the Company.
When appointed, External Directors and External Auditors attend seminars taught by various in-house department managers to expand their knowledge of the Company’s management strategy, business activities, and medium-term management plan, among other matters. In addition, the Company distributes and explains materials for Board of Directors meetings in advance, provides relevant information, and takes other steps to improve discussions in Board of Directors meetings.
Various IR-related departments (General Affairs Department, Accounting Department, Corporate Planning Department, and Public Relations & Advertising Section) of the Company collaborate to conduct dialogue with shareholders. The General Manager of the Administration Division manages the development of systems and initiatives to foster constructive dialogue with shareholders, with the aim of achieving sustainable improvement of corporate value.
In addition to individual meetings, the Company strives to provide thoughtful explanations in response to questions and opinions received at the General Meeting of Shareholders, and to enhance dialogue with institutional investors through activities including detailed briefings by the Representative Director and President & CEO at earnings presentations (video streaming) held twice a year. It also provides information via its website and business reports.
Moreover, opinions and management issues gathered from shareholders and other investors through IR activities are appropriately communicated to senior management through the Board of Directors and other forums and used to enhance the quality of management.
When conducting dialogue, the Company adheres to fair disclosure rules and strictly manages undisclosed insider information in accordance with internal regulations.
Please refer to the CFO message on pages 21-22 of the Integrated Report 2023 for information on actions for achieving management with consciousness of capital cost and stock price.

Integrated Report 2023：https://www.kingjim.co.jp/english/ir/library/integrated_report.html